Exhibit 2.2
DATED the 9th day of July, 2001
(1) QUAD EUROPE LIMITED
(2) TYCO ELECTRONICS UK LIMITED
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SALE AND PURCHASE AGREEMENT
for the purchase by Tyco Electronics UK Ltd of
the business and assets of Quad Europe Ltd
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INDEX
TABLE OF CONTENTS
1. DEFINITIONS..................................................... 1
2 AGREEMENT FOR SALE.............................................. 6
3 EXCLUDED ASSETS................................................. 8
4 VALUE ADDED TAX................................................. 8
5 PURCHASE PRICE.................................................. 9
6 COMPLETION..................................................... 10
7 POST COMPLETION OBLIGATIONS.................................... 11
8 BOOK DEBTS..................................................... 11
9 EMPLOYEES...................................................... 12
10 RISK AND TITLE................................................. 13
11 APPORTIONMENTS................................................. 14
12 MUTUAL INDEMNITIES............................................. 14
13 FURTHER ASSURANCE.............................................. 15
15 COMPETITION.................................................... 18
16 POST COMPLETION ENFORCEABILITY................................. 19
17 NON-ASSIGNABILITY.............................................. 19
18 NOTICES........................................................ 19
19 ENTIRE AGREEMENT............................................... 19
20 INVALIDITY..................................................... 19
21 WAIVER......................................................... 19
22 ANNOUNCEMENTS.................................................. 20
23 SET OFF........................................................ 20
24 CONDUCT OF BUSINESS IN THE INTERIM PERIOD...................... 19
25 CONDITION PRECEDENT............................................ 20
26 GOVERNING LAW.................................................. 23
SCHEDULE 1 EMPLOYEES............................................... 24
SCHEDULE 2 WARRANTIES...............................................27
SCHEDULE 3 EXCLUDED ASSETS
SCHEDULE 4 THE CONTRACTS
THIS AGREEMENT is made on the 9th day of July, 2001
BETWEEN:-
(1) QUAD EUROPE LIMITED, a company incorporated in England with
registered No. 2405486 whose registered office is at ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("the Seller"); and
(2) TYCO ELECTRONICS UK LIMITED, a company incorporated in England with
registered No 550926 whose registered office is at ▇▇/▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("the Buyer").
BACKGROUND:
The Seller carries on the Business (as defined below) and has agreed to sell the
Assets (as defined below) to the Buyer with a view to the Buyer carrying on the
Business as a going concern in succession to the Seller on the terms of this
Agreement.
IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1. In this Agreement (which terms shall include the Schedules), the
expressions set out below shall, unless the context otherwise requires,
have the respective meanings given in this Clause:
"the Accounts" means the unaudited management accounts of the Seller in respect
of the Business comprising of a balance sheet as at, and a profit and loss
account for the 5 month period ended on, the Accounts Date;
"the Accounts Date" means 28 February 2001;
"agreed form" means in a form agreed between the respective parties as at the
date hereof and initialled by or on behalf of them for identification purposes;
"Associate" means in connection to either party, all its related
companies;
"the Assets" means the assets agreed to be sold pursuant to Clause 2;
"the Book Debts" means the book debts and other amounts owing to the Seller as
at the Completion Date (whether then due and payable or not) appearing in the
books of account of the Seller together with all retention of title rights (if
any) of the Seller in relation thereto and including amounts due from HM Customs
and Excise in relation to VAT bad debt relief and unrecovered VAT paid by the
Seller;
"the Business" means the entire business of surface mount technology and
advanced packaging assembly solutions and reflow oven business as carried on by
the Seller from the Property;
"Buyer's Accountants" means Messrs PricewaterhouseCoopers of Abacus
Court, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇;
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"Claims" means all and any actions, awards, losses, damages, proceedings, costs
charges, demands, claims, expenses and liabilities and shall include, without
limitation, any compensation payments and interest properly incurred on any of
the foregoing;
"Completion" means completion of the sale and purchase of the Business and the
Assets in accordance with the terms of this Agreement;
"Completion Date" means the close of business on the date on which the North
American Agreement is completed in accordance with its terms;
"Computer Data" means all databases, computer files, records (in whatever medium
stored) and history relating to the Customer Agreements to allow the Buyer to
discharge its future obligations under the Customer Agreements and take the
benefit of those agreements;
"the Contracts" means the Customer Agreements, the Supply Contracts, the
Distribution Agreements the Lease Agreements and such other contracts as are
listed in Schedule 4 but, for the avoidance of doubt, excluding any such
contracts which are Excluded Assets;
"the Creditors" means the aggregate amounts owing by the Seller to its trade
creditors in the ordinary course of the business as at the Completion Date;
"Customers" means all persons whose details are set out in the
computerised customer database of the Business as at the date hereof;
"Customer Agreements" means those contracts, arrangements, engagements,
unfulfilled purchase orders and trading relationships with Customers which are
ongoing as at Completion for the provision of goods and services to Customers
(whether in writing or oral) including any Maintenance Contracts with such
Customers and which are either listed in Schedule 4 or have been entered into
during the Interim Period;
"Debtors" means and includes each and any party from whom any Book Debt
is due;
"the Deed of Assignment" means the deed of assignment to be entered into by the
Seller and the Buyer pursuant to Clause 2.3.3 of this Agreement in the form of
the draft deed of assignment annexed hereto
"the Deed of Covenant" means the deed of covenant to be entered into by the
Buyer in favour of the Landlord pursuant to Clause 2.3.3 of this Agreement in
the form of the draft deed of covenant annexed hereto
"the Disclosure Letter" means the letter of even date herewith from the
Seller to the Buyer;
"Distribution Agreements" means all distribution or representative
sales contracts or arrangements of the Seller in relation to the
Business;
"the Employees" means each and all of those persons identified in
Schedule 1;
"Encumbrance" includes any interest of any person including, without prejudice
to the generality of the foregoing, any fixed security, debenture, mortgage,
standard security, charge, assignation, pledge, lien, deposit by way of
security, ▇▇▇▇ of sale, lease, hire-purchase, credit-sale and other agreements
for payments on deferred terms, right to acquire, option or right of
pre-emption, encumbrance, security interest, title retention or other right of
retention or any other security or arrangement whatsoever;
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'Environment' means the environment as defined in section 1(2) of the
Environmental Protection ▇▇▇ ▇▇▇▇.
'Environmental Consent' means any consent, approval, authorisation, permit,
exemption, filing requirement, license or regulation from time to time required
by the Seller in relation to the Business pursuant to any Environmental Law.
'Environmental Law' means any common or statutory law, regulation, directive,
treaty, code of practice, circular, guidance note and the like, in each case of
any jurisdiction, in force or enacted relating to Environmental Matters
applicable to the Business.
'Environmental Matters' means any of the following: (a) any generation, deposit,
disposal, keeping, treatment, transportation, transmission, handling, or
manufacture of any Dangerous Substance; (b) nuisance, noise, defective premises,
health and safety at work or elsewhere; and (c) the pollution, conservation or
protection of the Environment whether relating to 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.
'Environmental Warranties' means the Warranties set out under the heading of
'Environmental Matters' in Schedule 2.
'Excluded Assets' means those assets of the Seller listed or otherwise mentioned
in Schedule 3.
"the Goodwill" means the goodwill of the Seller relating exclusively to the
Business together with the benefit of all rights (so far as the Seller can
assign the same) against third parties in respect of the Assets which arise as
from the Completion Date (but for avoidance of doubt this does not include the
benefit of any such rights which relate to the period before Completion Date and
the Liabilities) and together also with the exclusive right for the Buyer (so
far as the Seller can transfer the same) to represent itself as carrying on the
Business in succession to the Seller and to use the Name as hereinafter
provided;
"ICTA" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"the Intellectual Property Rights" means all intellectual property rights of the
Seller relating to the Business including without limitation, patents, trade
marks, registered designs, copyrights and licences and the copyright in all
drawings, plans, specifications and designs owned by the Seller and exclusively
used in or for the purposes of the Business and all know-how and confidential
information so owned and used;
'Interim Period' means the period commencing on the exchange of this Agreement
and ending on the earlier of Completion and lapse or termination of this
Agreement;
"Know-How" means the know-how of the Seller relating exclusively to the Business
(including all trade secrets, information, catalogues, manuals, trade literature
and customer lists and records of the Seller in connection therewith);
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"the Landlord" means HSBC Bank Pension Trust (UK) Limited or such other owner
from time to time of the reversionary interest in the Property
'the Lease' means the lease of the Property to the Seller dated 23
August 1994;
`Lease Agreements' means those contracts and other contractual arrangements
entered into by or on behalf of the Seller in the ordinary course of the
Business and remaining unperformed as at the Completion Date pursuant to which
tangible assets used by the Seller in or in connection with the Business at that
date (together the `Leased Assets') have been supplied to or are held by the
Seller on hire or other rental, lease, licence, hire purchase or on other such
terms that title thereto does not pass or has not passed to the Seller (but
excluding any such contract or contractual arrangements in respect of any Assets
which would have been owned by the Seller but for any retention of title or like
clause) as listed in Part 5 of Schedule 4.
"Liability" includes (without limitation) all Claims, liabilities, obligations
and debts of the Seller on the Completion Date which relate to the Business;
"the Maintenance Contracts" means the maintenance contracts identified in Part 2
of Schedule 4;
"the Name" means collectively "Quad", "Quad Europe", "Quad Systems" and "Quad
Care";
"the North American Agreement" means the agreement dated 31 May 2001 between
Tyco Electronics Corp. (1) and Quad Systems Corporation (2) for the purchase by
Tyco Electronics Corp. of the business and assets of Quad Systems Corporation as
more particularly described in that agreement including for avoidance of doubt
the "Holdback Agreement" as therein defined.
"the North American Price" means the aggregate price paid by the Buyer to the
Seller under the North American Agreement;
"North America Warranty Claim" means any claim made by Tyco Electronics
Corp. under the North American Agreement pursuant to the warranties and
representations contained therein;
"the parties" means the parties to this Agreement;
"the Parent Company" means Quad Systems Corporation;
"Planning Acts" means the Town and Country Planning ▇▇▇ ▇▇▇▇, the Planning
(Listed Buildings and Conservation Areas) ▇▇▇ ▇▇▇▇, the Planning (Hazardous
Substances) ▇▇▇ ▇▇▇▇, the Planning (Consequential Provisions) ▇▇▇ ▇▇▇▇, the
Planning and Compensation ▇▇▇ ▇▇▇▇ and all other statutes containing provisions
relating to town and country planning;
"the Products" means all goods sold or provided by the Seller in the
course of the Business up to and including the date of Completion;
"the Property" means the leasehold premises situated and known as ▇▇▇▇
▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ Road, Cressex Business Park, High Wycombe,
Buckinghamshire;
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"Purchase Price" means the aggregate consideration for the transfer of
the Business and the Assets as provided in Clause 5;
"the Regulations" means the Transfer of Undertakings (Protection of Employment)
Regulations 1981;
"the Seller's Accountants" means Messrs Ernst & Young of ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
"the Seller's Solicitors" means Messrs Gouldens of ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇;
"the Seller's Solicitors Bank Account" means the client account of the Seller's
Solicitors at C Hoare & Co, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, account number
▇▇▇▇▇▇▇▇, Sort Code 15-99-00, "Gouldens US$ Account";
"Supply Contracts" means those contracts and accepted orders placed by or on
behalf of the Seller for the supply to the Seller of goods and/or services in
connection with the Business which remain at Completion to be performed in whole
or in part and are either listed in Schedule 4 or have been entered into during
the Interim Period;
"Taxation" or "Tax" includes (without limitation) corporation tax, advance
corporation tax, income tax, capital gains tax, the charge under section 601(2)
of ICTA, value added tax, the charge to tax under Section 419 of ICTA, customs
and other import duties, inheritance tax, stamp duty, stamp duty reserve tax,
capital duties, national insurance contributions, local authority council taxes,
petroleum revenue tax, foreign taxation and duties, and any payment whatsoever
which the Seller may be or become bound to make to any person as a result of the
operation of any enactment relating to any such taxes or duties, and all
penalties, charges and interest relating to any of the foregoing or resulting
from a failure to comply with the provisions of any enactment relating to
taxation;
"VAT" means value added tax;
"the Warranties" means the warranties set out in Clause 14 and
Schedule 2 and any other warranties expressly set out in this Agreement;
"working days" means any days except Saturdays, Sundays and any public
holidays in England;
"Work in Progress" means the right to ▇▇▇▇ all work carried out by the Seller in
relation to the Business prior to Completion that has not been billed as at
Completion and hence not included in the Book Debts, all stock-in-trade held by
the Seller in connection with the Business as at Completion and any prepayments
made and other amounts paid by the Seller in respect of the Business and
attributable in whole or in part to the period after Completion;
1.2 In this Agreement (which expression includes the Schedules), unless the
context otherwise requires:
1.2.1 references to:
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(a) a `person' shall be construed to include any individual, firm,
body corporate, government or state, association or partnership
(whether or not having a separate legal personality);
(b) any documents being `in the agreed form' shall mean in a form
which has been agreed by the parties and for identification
purposes signed by them or on their behalf by their solicitors;
(c) this `Agreement' or any other document or to any specified
provision of this Agreement or any other document are to this
agreement, that document or that provision as in force for the
time being and as amended from time to time in accordance with
the terms of this agreement or that document or, as the case may
be, with the agreement of the relevant parties;
(d) `indemnify' and `indemnifying' any person against any
circumstance shall be deemed to include indemnifying and keeping
indemnified at all times, defending and holding him harmless from
all Claims from time to time made against that person and all
loss or damage and all payments, costs, expenses and other
liabilities made or incurred by that person as a consequence of
or which would not have arisen but for that circumstance;
(e) `related company' in relation to any company shall mean any
subsidiary or holding company of that company or any subsidiary
of that holding company (`holding company' and `subsidiary' as
used in this Agreement bearing the respective meanings ascribed
to those terms by Section 736 of the Companies Act 1985);
(f) any statutes, statutory provisions, regulations, directives or
treaties or any particular statute, statutory provision,
regulation, directive or treaty shall include any amendment,
modification, consolidation or re-enactment in force from time to
time and any statutory instrument or regulations made under it;
and
(g) Clauses and Schedules are to Clauses and Schedules of this
Agreement and references to paragraphs are references to
paragraphs of the Schedule in which they appear.
1.2.2 references to one gender include all genders;
1.2.3 except as set out in Clause 1.1, words and expressions defined in
the Companies ▇▇▇ ▇▇▇▇ and ICTA shall have the same meanings
attributed to them by those Acts;
1.2.4 `Sterling' and the sign `(pound)' mean pounds sterling in the
currency of the United Kingdom and `dollars' and the `$' sign mean
the lawful currency of the United States of America;
6
1.2.5 the index and headings are for convenience only and shall not affect
the construction of this Agreement;
1.2.6 general words shall not be given a restrictive meaning:
1.2.6.1 if they are introduced by the word `other' by reason of the fact
that they are preceded by words indicating a particular class of
act, matter or thing; or
1.2.6.2 by reason of the fact that they are followed by particular
examples intended to be embraced by those general words; and
1.2.7 where any statement is qualified by the expression `so far as the
Seller is aware' or `to the best of the Seller's knowledge and
belief' or any similar expression it shall be deemed to mean that
the officers of the Seller have no actual knowledge that the
Warranty is untrue in any material respect.
2 AGREEMENT FOR SALE
2.1 The Seller shall sell with full title guarantee, save in respect of
trading stock disposed of in the ordinary course of business or assets
acquired subject to retention or reservation of title by the supplier or
manufacturer, which assets are sold subject to any such rights, and free
from all Encumbrances (other than Encumbrances such as liens or licences
arising in the ordinary course of business), the Business and the
following Assets to the Buyer and the Buyer (with a view to carrying on
the Business as a going concern in succession to the Seller) shall
purchase with effect from the Completion Date:
2.1.1 the full benefit, subject to the burden insofar as it relates to the
period following the Completion Date, which the Seller has in all
the Contracts;
2.1.2 the Goodwill;
2.1.3 all lists of Customers and customer enquiries and confidential
information concerning the Business, the benefit of all tenders and
quotations given to customers for the supply of services or Products
by the Seller including for the avoidance of doubt the Work in
Progress and all books, records and documents including without
limitation all Customer files and Computer Data relating exclusively
to the Customer Agreements and Debtors and the Business;
2.1.4 the Property;
2.1.5 the Intellectual Property Rights;
2.1.6 the Work in Progress;
2.1.7 all cars, plant and equipment;
2.1.8 subject to Clause 3, all other property, assets and rights of the
Seller used in or principally for the purposes of the Business or in
connection with the Assets or any of them.
7
2.2 The sale and purchase described in Clause 2.1 shall take effect in
accordance with the provisions of that Clause notwithstanding that:
2.2.1 the Seller does not, and could not reasonably be expected to, know
about any such Encumbrances; or
2.2.2 at the time of transfer any such Encumbrances are within the actual
knowledge or their existence is a necessary consequence of facts for
within the actual knowledge of the Buyer;
2.2.3 and the covenants implied by Sections 2 and 3 of the Law of Property
(Miscellaneous Provisions) ▇▇▇ ▇▇▇▇ shall be deemed to be modified
accordingly.
2.2.4 the Seller and the Buyer acknowledge and declare that the assignment
of the Property is made without the formal consent of the Landlord
and is, therefore, made in breach of the alienation provisions
contained in the Lease and that the covenants given on behalf of the
Seller in transferring the Property with "full title guarantee" are
modified accordingly.
2.2.5 the Seller and the Buyer acknowledge that the original Lease and any
related title documents relating to the Property have been misplaced
by the Seller and cannot be handed over to the Buyer on Completion
2.3 The Seller and the Buyer agree to use all reasonable endeavours to obtain
the formal consent of the Landlord to the assignment of the Lease as soon
as possible after the date hereof and, in particular:-
2.3.1 The Seller and the Buyer agree to enter into a Licence to Assign the
Lease with the Landlord in such form as the Landlord reasonably
requires and the Seller and the Buyer shall each be responsible for
their own costs in this regard and shall jointly be responsible for
any Landlord's costs which are demanded by the Landlord as a
pre-requisite to granting its consent.
2.3.2 In order to obtain the Landlord's consent to the assignment
of the Lease, the Buyer agrees to
2.3.2.1 Either:-
(a) procure that Raychem Limited (Company Number 00674709) or
such other suitable guarantor, as reasonably requested by the
Landlord, enters into a guarantee agreement to act as
guarantor for the tenant's covenants contained in the Lease in
such form as the Landlord reasonably requires; or
(b) provide to the Landlord such sum by way of rent deposit
(being not less than such sum as equates to one year's rent
under the Lease) and to enter into a rent deposit deed with
the Landlord in such form as the Landlord reasonably requires.
2.3.2.2 Enter into such other documents as the Landlord reasonably
requires.
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2.3.3 The Seller and the Buyer shall enter into the Deed of Assignment on
Completion and the Buyer shall enter into the Deed of Covenant on
Completion
2.4 The risk of any damage to or destruction of or affecting the
Property passes to the Buyer on the date hereof
3 EXCLUDED ASSETS
3.1 Save as expressly provided herein all other assets of the Seller used in
the Business are excluded from the sale hereby agreed upon. Without
prejudice to the generality of the foregoing, the Excluded Assets shall be
excluded from this sale and purchase.
4 VALUE ADDED TAX
4.1 All sums payable by the Buyer hereunder are exclusive of any VAT which
shall if properly chargeable be payable in addition to the purchase price
specified in this Agreement.
4.2 The parties intend that section 49(1) of the Value Added Tax ▇▇▇ ▇▇▇▇
("Section 49(1)") and Article 5 of the Value Added Tax (Special
Provisions) Order 1995 ("Article 5") will apply to the transfer of the
Business and the Assets and to that intent:
4.2.1 the Buyer warrants its intention to use the Assets in carrying
on the Business and that it will on Completion be a taxable
person for VAT purposes;
4.2.2 the Seller and the Buyer agree to use all reasonable
endeavours to secure that the transfer of the Assets under
this Agreement is treated as neither a supply of goods nor a
supply of services pursuant to the provisions of Article 5;
4.2.3 If HM Customs and Excise determines that this transaction is
one on which VAT is properly payable then upon presentation by
the Seller of appropriate VAT invoices the Buyer shall pay VAT
together with any interest and penalties charged thereon on
all relevant items sold pursuant to the terms of this
Agreement, payment to be made five working days before the
last date upon which the Seller will be required to account to
H M Customs & Excise for the VAT in question or, if later,
upon delivery by the Seller to the Buyer of an appropriate VAT
invoice for the transfer of the Assets and a copy of the
confirmation from H M Customs & Excise;
4.2.4 The Seller shall deliver to the Buyer such records and the
Buyer hereby undertakes to preserve the records referred to in
Section 49(1) for such period as is required by law and shall
during that period, or such longer period as it retains such
records, permit the Seller or its agents reasonable access to
them in the United Kingdom during normal business hours upon
reasonable notice being given by the Seller to inspect or make
copies of them and shall not cease to retain such records
without first giving the Seller or its agents a reasonable
opportunity to inspect and remove and copy such of them as the
Seller wishes;
4.2.5 The Buyer may fulfil its obligations under Clause 4.2.4 by
procuring that a future transferee of its businesses or any
other person preserves the records and permits the Seller such
access as is mentioned in Clause 4.2.4 in which case the Buyer
shall notify the other of the name, address and other relevant
details of that person;
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4.3 If the Buyer pays VAT but it is then determined that no VAT should have
been charged, the Seller shall within 15 working days of a written demand
from the Buyer repay to the Buyer the full amount of any VAT erroneously
paid.
5 PURCHASE PRICE
5.1 The consideration for the sale by the Seller to the Buyer of the Business
and the Assets shall be, the aggregate sum of US$562,500 (Five hundred and
sixty two thousand five hundred United States dollars) (the
"Consideration") which shall be apportioned between the Assets as
follows:-
(a) for the Goodwill, the sum of US$ 1
(b) for the Know-How, the sum of US$ 1
(c) for the Contracts, the sum of US$ 5,625
(d) for the Property, the sum of US$123,750
(e) for the lists and other matters
and assets referred to in
Clause 2.1.3 and 2.1.7, the sum of US$ 1
(e) for the Intellectual Property Rights,
the sum of US$ 1
(f) for the Work in Progress, the sum of US$ 433,121
Total US$ 562,500
5.2 The Buyer shall be permitted to adjust the Purchase Price up or down in
accordance with the adjustment referred to in section 2.5 of the North
American Agreement. Such adjustment shall be an adjustment to the sum
allocated to the Work in Progress in Clause 5.1.
5.3 Wherever in this Agreement there is any obligation on the Buyer to make a
payment to the Seller, then the Buyer shall be deemed to have fulfilled
this obligation by telegraphically transferring the amount to be paid to
the Seller's Solicitors' Bank Account. Payment to the Seller's Solicitors
Bank Account shall constitute a good receipt of all sums due from the
Buyer and a complete discharge of the Buyer's payment obligations
hereunder; the Buyer shall not be concerned to see that the funds are
applied to the Seller.
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6 COMPLETION
6.1 Completion of the sale and purchase hereby agreed shall take place on the
Completion Date at the offices of the Buyer when the Seller shall deliver
or procure delivery to the Buyer or as it may direct:
6.1.1 an assignment of the Goodwill in agreed form and duly executed
by the Seller;
6.1.2 all the Assets which are capable of passing by delivery
together with all relative documents of title;
6.1.3 duly executed assignments of the Property and licences to
assign in agreed terms together with the Lease and all the
deeds and documents relating thereto in accordance with the
schedules of title deeds in agreed form;
6.1.4 deeds in a form approved by the Buyer, duly executed by the
relevant chargees, unconditionally releasing the Business and
the Assets from the security of all charges existing in
relation to the Business and the Assets, (including without
limitation those charges details of which are set out in the
Disclosure Letter);
6.1.5 such other documents and things as the Buyer may reasonably
require to perfect its title to the Assets or to give effect
to this Agreement;
6.1.6 the originals of all the Contracts (where they are in the
possession of the Seller) and outstanding order book held by
or on behalf of the Seller and the originals of all other
papers and materials relating to the Customers held by or on
behalf of the Seller including without prejudice to the
foregoing the Computer Data and the details of the Work in
Progress, uncompleted sales and purchase orders, quotes and
tenders of the Business and all information reasonably
necessary to enable the Buyer to carry on the Business in
succession to the Seller;
6.2 Subject to the Seller complying with its obligations under clause 6.1, the
Buyer shall at Completion deliver to the Seller counterparts of the
documents referred to above and pay to the Seller's Solicitors the
Purchase Price by way of telegraphic transfer to the Seller's Solicitors'
Bank Account.
6.3 Notwithstanding Completion, this Agreement shall, so far as it remains to
be performed, continue in full force and effect and the parties hereby
undertake with each other to execute and do and use all reasonable
endeavours to procure to be executed and done by all the necessary parties
(if any) from time to time at the request and expense of the Buyer all
such deeds documents assurances acts and things as may be necessary or
requisite for effectually vesting the Business and the Assets hereby
agreed to be sold in the Buyer and for giving full effect to this
Agreement.
7 POST COMPLETION OBLIGATIONS
7.1 Following Completion the Buyer shall assume, perform and discharge the
outstanding obligations at Completion of the Seller under the Contracts
relating to the period after the Completion Date and shall indemnify the
Seller against all Claims and Liabilities howsoever arising in respect of
any breach or non-performance of this Clause.
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7.2 Subject to Clause 7.3, the Seller undertakes:
7.2.1 to pay all debts and liabilities and to observe and perform
all duties and obligations relating to the Business, the
Contracts and any of the Assets hereby agreed to be sold
arising prior to Completion other than at the express request
of the Buyer; and
7.2.2 to indemnify the Buyer against all Claims and Liabilities
howsoever arising in respect of any breach or non-performance
of the foregoing undertaking.
7.3 The provisions of clause 7.2 shall not apply to any matter covered by the
Maintenance Contracts or any claim for defective workmanship or alleged
fault, defect or error whatsoever arising from goods supplied or services
provided prior to Completion.
7.4 For a period of twenty-four months after Completion, the Seller and the
Buyer shall prepare cash book and sales ledger reconciliations every three
months basis and shall account to each other for the monies respectively
held in trust for one another pursuant to the provisions of clause 8.
7.5 Within thirty days immediately following Completion, the Seller shall
change and procure that its subsidiary companies change their respective
names to new names which do not contain the words "Quad Europe", "Quad",
"Quad Systems" or "Quad Care" or any colourable imitation thereof. The
Seller shall give, and procure that its subsidiary companies give
reasonable co-operation to the Buyer in terms of submitting the requisite
returns to Companies House relative to such changes of name to enable the
Buyer to simultaneously change the name of companies to be designated by
the Buyer to names incorporating any of the aforementioned words.
8 BOOK DEBTS
8.1 The Book Debts shall remain the property of the Seller and to facilitate
their collection procedures will be agreed between the parties during the
Interim Period.
8.2 The Buyer shall forthwith on receipt of the same pay to the Seller any
amounts received by the Buyer after Completion from Debtors in respect of
any period up to and including the Completion Date and, pending such
payment, shall hold any such amounts in trust for the Seller.
8.3 The Seller shall forthwith on receipt of the same pay to the Buyer any
amounts received by the Seller after Completion from Debtors in respect of
any debt due to the Buyer in respect of the period commencing after the
Completion Date and pending such payment shall hold such amounts in trust
for the Buyer.
8.4 Any sum received by the Buyer in respect of the Business within two years
after the Completion Date which is not attributable to or cannot
specifically be appropriated by the Buyer to a particular transaction
shall (subject to written agreement between the parties to the contrary)
be appropriated first to the Book Debts (if any) then due to the Seller
from the Debtor and subsequently to any debts due to the Buyer in respect
of transactions entered into following Completion. Any such sum received
after the period of two years following the Completion Date shall be
appropriated to any debts due to the Buyer in respect of transactions
entered into following Completion and the Buyer shall cease to be under
any obligation to the Seller in respect thereof.
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9 EMPLOYEES
9.1 It is hereby agreed and acknowledged that the sale and purchase hereby
agreed is a relevant transfer within the meaning of the Regulations and
with effect from Completion and thereafter the Buyer shall perform and
discharge all obligations of the employer under the relevant contract of
employment for each Employee and the Buyer shall indemnify the Seller all
times against all Claims incurred sustained or paid by the Seller in
connection with any claim by any Employee whatsoever and howsoever
arising.
9.2 All salaries and other emoluments, including holiday pay, tax and National
Insurance payments and contributions to retirement benefit schemes,
relating to the Employees shall be borne by the Seller up to and including
the Completion Date and by the Buyer thereafter and all necessary
apportionments shall be made pursuant to the provisions of Clause 11.
9.3 The Seller shall indemnify the Buyer against all Claims or Liabilities
incurred, sustained or paid by the Buyer and arising out of or by reason
of the failure of the Seller to inform and consult the employee
representatives and/or the trade union representatives of the Employees in
accordance with the Seller's obligations under the Regulations and, in
particular, in accordance with regulation 10 thereof.
9.4 The Buyer shall indemnify the Seller against all Claims incurred sustained
or paid by the Seller and arising out of or by reason of the failure of
the Buyer to inform and consult employee representatives and/or trade
union representatives of the Employees in accordance with the Buyer's
obligations under the Regulations and, in particular, in accordance with
regulation 10.
9.5 The Seller shall indemnify the Buyer against all Claims or Liabilities
incurred, sustained or paid by the Buyer arising out of or by reason of:
9.5.1 any claim by any Employee in respect of any industrial injury
suffered by or caused to a Employee at any time before
Completion; and/or
9.5.2 any other liability of the Seller in respect of any breach by
them of the Employees' contracts of employment or their
employment rights arising prior to Completion; and/or
9.5.3 without prejudice to Clause 9.5.2, all P.A.Y.E and NIC
liabilities due in respect of any Employee for any period pre
Completion Date (including in respect of all accrued holiday
leave as at that date).
10 RISK AND TITLE
10.1 Risk in and title to the Assets shall pass to the Buyer immediately upon
Completion taking place in accordance with Clause 6.
10.2 The Seller shall take all reasonable steps and co-operate fully with the
Buyer to ensure that it obtains the full benefit of the Business and of
the Assets and shall execute such documents and take such other steps (or
use all reasonable endeavours to procure other necessary parties so to do)
as are necessary or appropriate for vesting in the Buyer all its rights
and interests in the Assets including but not limited to the grant
transfer or renewal of any licences, permissions or consents required for
the proper and lawful conduct of the Business after the Completion Date.
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10.3 Insofar as the Assets comprise the benefit of contracts which cannot
effectively be transferred by the Seller to the Buyer without the consent
of a third party or except by an agreement of novation, the Seller and the
Buyer shall co-operate to do everything they reasonably can to procure the
said contracts to be novated or to obtain any such consent as aforesaid
and unless and until consent has been obtained or the relevant contract
has been novated, the Buyer shall for its own benefit and to the extent
that the contract permits perform on behalf of the Seller (but at the
Buyer's risk and expense) all the obligations of the Seller arising after
Completion and shall indemnify the Seller against all Claims and
liabilities which may be incurred by the Seller as a result of any act,
neglect, default or omission on the part of the Buyer in performing or
complying with any such obligation of the Seller including for the
avoidance of doubt any obligations of the Seller which the relevant
contract does not permit to be performed by the Buyer which falls to be
performed after Completion provided however that nothing contained in this
Clause 10.3 shall confer on the Buyer the right to rescind this Agreement
or make any other claim whatsoever against the Seller if the Seller is
unable to procure that any or all of the said contracts be novated or to
obtain any such consent as aforesaid and provided further that the Seller
shall forthwith pay to the Buyer all sums received under such contracts
other than sums paid to the Seller in respect of work carried out by the
Seller prior to Completion and shall not agree to the termination or
variation of the same without the Buyer's prior written consent.
10.4 The Seller shall indemnify the Buyer against the excess of all Claims and
Liabilities over US$ 165,000 in respect of:
10.4.1 any act or omission on the part of the Seller in relation
to the Customer Agreements prior to Completion; and
10.4.2 any defective workmanship or alleged fault, defect or error
whatsoever arising from goods supplied or services provided
by the Seller prior to Completion.
Save to the extent that any such liability is covered by the
Maintenance Contracts
11 APPORTIONMENTS
11.1 All periodical payments and other outgoings relating to or payable in
respect of the Assets (including without limitation the Lease Agreements
and the Supply Contracts) for the period up to and including the
Completion Date shall be borne by the Seller and thereafter the same shall
be borne by the Buyer.
11.2 All salaries, wages and other emoluments and all statutory contributions
and all income tax deductible under PAYE for which the Seller is
accountable and all other normal employment costs in respect of the
Employees shall be borne by the Seller in respect of the period up to and
including the Completion Date and shall be borne by the Buyer thereafter.
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11.3 All periodical payments receivable in respect of the Customer Agreements
up to and including the Completion Date shall belong to, and be payable to
the Seller and after the Completion Date shall belong to and be payable to
the Buyer.
11.4 Where any amounts fall to be apportioned under this Agreement the Seller
shall provide the Buyer with full details of the apportionments, together
with supporting evidence and in the absence of dispute the appropriate
payments shall be made by or to the Seller on Completion. If the amount of
any apportionment is in dispute then the provisions of Clause 11.5 shall
apply for resolving the dispute and the amount determined in accordance
with that Clause shall be paid within fourteen days of the determination.
11.5 If the Seller and the Buyer are unable to agree any amount to be
apportioned pursuant to this Clause 11 within fourteen days of the said
production of full details by the Seller then the dispute shall be
resolved by an independent accountant to be appointed by the Seller and
Buyer or (in default of their agreement upon his appointment within
twenty-eight days of the said production of full details by the Seller) by
or on behalf of the President for the time being of the Institute of
Chartered Accountants in England and Wales. In making his determination
(the expense of which shall be borne equally by the Seller and the Buyer)
such accountant shall act as an expert and not as an arbitrator and his
decision shall be binding upon the Seller and the Buyer except in the case
of manifest error.
12 MUTUAL INDEMNITIES
12.1 Save as expressly provided in this Agreement, the Seller shall be solely
responsible for all the Liabilities, will duly discharge and pay all
Liabilities and/or debts in connection with the Business and the Assets
arising/incurred or due in respect of the operation of the Business by the
Seller up to and including the Completion Date (even though they may only
come to light after Completion) and will at all times hereafter indemnify
and at all times keep indemnified the Buyer from and against all Claims in
respect of such liabilities and/or debts.
12.2 The Buyer will duly discharge and pay all liabilities and/or debts in
connection with the Business and the Assets arising/incurred or due in
respect of the operation of the Business after the Completion Date and
will at all times hereafter indemnify and at all times keep indemnified
the Seller from and against all Claims in respect of such liabilities
and/or debts.
13 FURTHER ASSURANCE
13.1 The Seller undertakes with the Buyer that each of them will at the request
of the Buyer continue after Completion to provide the Buyer with such
information and assistance (insofar as they are able) as the Buyer may
reasonably require relating to the Business including passing on promptly
to the Buyer any trade enquiries and orders relating to the Business which
are received by the Seller after Completion.
13.2 For the avoidance of doubt, the Buyer shall, subject to Clause 13.3, at
all times remain liable for the payment of stamp duty and any interest or
penalties relating thereto payable on this Agreement and any of the
documents relating to it and the Buyer shall in no circumstances be
entitled to claim such amount as is paid or it is liable to pay in stamp
duty and any interest or penalties relating thereto from the Seller.
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13.3 The Seller shall, within five working days of the Buyer providing the
Seller with a true copy of a letter or notice from the Inland Revenue
Stamp Office stating the amount of Stamp Duty chargeable on this Agreement
and any agreements or instruments to be executed pursuant to this
Agreement, provide the Seller with a cheque representing payment of an
amount equal to half the amount of Stamp Duty so chargeable and made
payable to the Inland Revenue Stamp Office, provided that if the Buyer at
any time agrees with the Inland Revenue that a lesser amount be chargeable
as Stamp Duty, it shall reimburse the Buyer an amount equal to half the
difference between such lesser amount and the amount represented by the
cheque provided by the Seller pursuant to this Clause.
14. WARRANTIES
14.1 The Seller warrants to the Buyer that, save as set out in the Disclosure
Letter, the Warranties are true and accurate in all material respects. The
Warranties shall be deemed to be repeated immediately before Completion
with reference to the facts and circumstances then existing except for
changes to such facts and circumstances permitted and/or contemplated by
or pursuant to this Agreement and the North American Agreement.
14.2 The Buyer hereby acknowledges that no reliance has been placed by the
Buyer on any representation or warranty (whether express or implied and
whether written or oral) relating to the Business and the Assets other
than the Warranties and accordingly all representations and warranties
(whether express or implied, statutory or otherwise) on the part of the
Seller other than the Warranties are hereby excluded.
14.3 Notwithstanding any other provision in this Agreement, the Buyer shall not
be entitled to nor shall it make any Claim against the Seller for any
breach of the Warranties unless:
14.3.1 the bona fide amount of such Claim when aggregated with
(a) the bona fide amount of any other Claim which has been so made
(including also any claims that would have been made but for
the provisions of this Clause 14.3); and
(b) any North American Warranty Claim;
exceeds $250,000 and in such event the Seller shall only be liable
for the amount by which such claim exceeds $250,000 and such Claim
has been notified in writing to the Seller on or before 31 March 2002
in each case giving sufficient details of such claim including the
Buyer's bona fide estimate of the amount thereof. Any such claim (if
it has not been previously settled or withdrawn) shall be deemed to
have been withdrawn unless legal proceedings in respect of it have
been commenced by both being issued and served within six months of
such notification to the Seller and in any event before 31 March
2002.
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14.4 The maximum aggregate liability of the Seller in respect of Claims for
breach of the Warranties shall not exceed the aggregate of the Purchase
Price, and North American Price less the aggregate of all North American
Claims.
14.5 No liability shall arise under the Warranties if and to the extent that:
14.5.1 the Claim in respect thereof arises or is increased as a
result of or would not have arisen but for any legislation
not in force at Completion or any retrospective change in
the law after the date hereof or any retrospective increase
in the rate of taxation in force at the date hereof;
14.5.2 such breach or claim is attributable in whole to any
voluntary act, omission, transaction or arrangement of the
Buyer or person deriving title from it after Completion
which is otherwise than in the ordinary course of business;
14.5.3 the Buyer is able to recover the sum claimed from any third
party and has effected recovery but for the avoidance of
doubt the Seller shall only be liable in these
circumstances where the Buyer has used all reasonable
endeavours to effect recovery from any such third party but
has not been able to do so;
14.5.4 the Claim arises out of anything done prior to Completion
at the express request of the Buyer or with the Buyer's
prior written approval provided that the nature and extent
of the matter to which Buyer's approval has been sought was
fully disclosed;
14.5.5 the Buyer is insured for loss giving rise to the Claim and
could be expected to recover such loss after using its
reasonable efforts provided that in applying this exclusion
to any given loss, the Seller shall, subject to the other
parts of this clause 14, be liable in respect of any
deductible applicable to the relevant insurance policy;
14.5.6 the Claim is the subject of a provision or reserve in the
Accounts; or
14.5.7 in relation to product liability claims, the Buyer has
recouped its losses under the indemnity under Clause 10.4
14.7 Each of the Warranties is without prejudice to any other Warranty and,
except where expressly stated, no Clause contained in this Agreement
governs or limits the extent or application of any other Clause and the
Warranties shall not in any respect be extinguished or affected by
Completion.
14.8 The Buyer shall not be entitled to make any claim under the Warranties in
respect of anything arising directly from any transaction, matter or thing
fairly disclosed in the Disclosure Letter.
14.9 The Buyer shall permit the Seller upon its providing an indemnity
satisfactory to the Buyer acting reasonably to have the conduct of all
proceedings against third parties relating to a claim under this Agreement
including the appointment of solicitors or other professional advisers and
making any settlement or compromise thereof provided that (as the Seller
hereby undertakes and agrees):
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14.9.1 if the Buyer shall in writing so require the Seller shall
procure that the Buyer is promptly sent copies of all
communications and other documents, written or otherwise
pertaining thereto transmitted to the other party thereto
or their agents or professional advisers (including
pleadings and any opinion of counsel relating to the
proceedings against third parties);
14.9.2 the Seller shall make no settlement or compromise for the
said claim without the prior written approval of the Buyer
(such approval not to be unreasonably withheld or delayed);
14.9.3 where a claim under the Warranties is or may be affected by
the outcome of a dispute with a third party the Buyer shall
procure that the Seller is fully informed about such
dispute and, so far as is reasonably practicable, procure
that such dispute is conducted, negotiated, settled or
litigated in accordance with the wishes of the Seller
subject to the Seller giving timely instructions and
providing reasonable security for the Buyer's costs and
expenses PROVIDED ALWAYS that if the Buyer reasonably
determines that the goodwill of the Business might be
harmed by the conduct negotiation settlement or litigation
of a dispute in accordance with the Seller's wishes or by a
dispute not being settled or compromised it shall be
entitled (in its absolute discretion)to disregard the
wishes of the Seller.
14.10 If any payment is made by the Seller and accepted by the Buyer in full
settlement of any claim under this Agreement and the Buyer subsequently
recovers or procures the recovery from a third party of an amount which is
referable to that claim the Buyer shall forthwith pay or procure repayment
to the Seller of the amount recovered from the third party or of such part
thereof as is not required to secure full settlement of the claim after
deduction of all reasonable expenses incurred by the Buyer of recovery.
14.11 The Buyer shall take reasonable steps to mitigate its loss consequent on
any breach of any of the Warranties.
14.12 For the purpose of Clauses 14.3 and 14.4, to ascertain (a) the Dollar
equivalent of a claim under this Agreement and/or (b) the Dollar
equivalent of the Purchase Price, there shall be applied the rate at which
Sterling (on the date the Buyer makes any claim under the Warranties) are
converted into Dollars as calculated by reference to the Exchange Cross
Rate Table as published in the Financial Times (London edition) prevailing
in the case of (a) the date upon which the Buyer claims against the Seller
and in the case of (b) the date of this Agreement (or if such Exchange
Cross Rate Table is not published on any such date, the next following
date on which it is published).
14.13 The amount or amounts of any successful claim for breach of Warranty shall
be deemed to constitute a reduction in the Purchase Price.
14.14 None of the information supplied by or on behalf of an Employee to the
Seller or to the Seller's agents or advisers (including without limitation
the Seller's Solicitors) in connection with the Business constitutes a
warranty as to its accuracy by an Employee to the Seller, and the Seller
waives each and every claim against each Employee which it might otherwise
have in respect of such information except in the case of fraud.
14.15 None of the provisions contained in this Clause 14 which have (or would
have but for this Clause 14.15) the effect of limiting the Seller's
liability in relation to a claim under the Warranties), shall apply in
respect of any such claim if that claim (or the delay in discovering it)
is the consequence of fraud by the Seller or any Seller Associate or
officer or employee or former officer or employee of the Seller or of any
Seller Associate.
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15 COMPETITION
15.1 In this Clause:
15.1.1 "the specified period" means the period of five years
beginning on the Completion Date and;
15.1.2 "the specified area" means the United Kingdom and/or Eire.
15.2 The restrictions contained in Clause 15.3 are considered reasonable by the
parties and necessary for the protection of the Goodwill but in the event
that any such restriction shall be found to be void but would be valid if
some part thereof were deleted or modified such restriction shall apply
with such modification as may be necessary to make it valid and effective.
15.3 In consideration of the purchase of the Business by the Buyer, the Seller
shall not and the Seller shall procure that none of its Associates shall:
15.3.1 either solely or jointly with or on behalf of any other person
directly or indirectly carry on or be engaged or concerned or
interested in the trade or business which develops, manufactures,
prepares, sells, installs or distributes products or performs
services in competition with the Business, during the specified
period within the specified area. For the purposes of this clause
15.3.1, ownership of securities of a company whose securities are
publicly traded under a recognised securities exchange not in
excess of 10 per cent of any class of such securities shall not be
considered to be in competition with the Buyer;
15.3.2 for the specified period directly or indirectly solicit or entice
or endeavour to solicit or entice away from the Buyer any of the
Employees;
15.3.3 at any time after the Completion Date divulge to any third party
or make use of any financial technical or other confidential
information concerning the Business or its customers or trade
connections;
15.3.4 at any time after the Completion Date make use of the Name or any
colourable name or expression for as long as the Name and the
Goodwill is vested in the Buyer or one of its Associates;
15.3.5 for the specified period directly or indirectly solicit or
endeavour to solicit the business of any person who at anytime
within two years before Completion Date had been a customer of the
Business where such business competes with the Business.
15.4 The restrictions set out in this clause 15 shall not apply to any
corporation or other business entity which shall be the surviving or
resulting corporation following a merger or consolidation in which the
Seller is a consituent corporation so long as such corporation or other
entity, following such merger or consolidation, is not directly or
indirectly controlled or operated by the persons who directly or
indirectly controlled the Seller on Completion or immediately before any
such merger or consolidation.
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16. POST COMPLETION ENFORCEABILITY
16.1 Completion of this Agreement will not affect any provision of it which is
either expressly or by implication to come into or continue in force or to
be enforceable after Completion.
17. NON-ASSIGNABILITY
17.1 This Agreement shall not be assignable by any party without the written
consent of the other, provided that the Buyer can assign this Agreement
without the Seller's consent to any Associate of the Buyer.
18. NOTICES
18.1 Any notice or other document to be given hereunder may be served
personally or sent by first class recorded delivery post to the party to
be served at that party's registered office for the time being, marked for
the attention of, in the case of the Seller, ▇▇▇▇ ▇▇▇▇▇ and in the case of
the Buyer, ▇▇▇▇▇▇▇ ▇▇▇▇▇. Any such notice or document shall be deemed to
have been served:
18.1.1 if served personally, at the time of service; or
18.1.2 if posted, by midday on the second working day after the same
shall have been posted.
18.2 In proving such service it shall be sufficient to prove that delivery was
made or that the envelope containing such notice or document was properly
addressed and posted as a pre-paid first class recorded delivery letter
and despatched as the case may be.
19 ENTIRE AGREEMENT
19.1 This Agreement shall constitute the entire agreement and understanding
between the parties in respect of all matters which are referred to.
20 INVALIDITY
20.1 If any term or provision in this Agreement shall in whole or in part be
held to any extent to be illegal or unenforceable under any enactment or
rule of law that term or provision or part shall to that extent be deemed
not to form part of this Agreement and the enforceability of the remainder
of this Agreement shall not be affected.
21 WAIVER
21.1 No failure or delay by either party in exercising any right, power or
privilege shall operate as a waiver thereof nor shall any single or
partial exercise of any right, power or privilege prevent any further
exercise thereof or the exercise of any other right, power or privilege.
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22 ANNOUNCEMENTS
22.1 The Seller shall make no announcement of the terms of this Agreement or
the sale and purchase hereby agreed or of any matters ancillary thereto
without the prior written approval of the Buyer. Nothing in this Clause 22
shall prevent or be deemed to prevent the Seller from notifying or
consulting with the employee representatives and/or trade union
representatives of the Employees in accordance with the Seller's
obligations so to do under the Regulations.
23 SET OFF
23.1 Provided that the Buyer has complied with and/or otherwise had regard to
the provisions of clauses 14.3 to 14.11 inclusive and Tyco Electronics
Corp. has complied with and/or had regard to sections 11.3 to 11.5
(inclusive) and 11.8 of the North American Agreement (as the case may be),
the Buyer shall be entitled to set-off the amount of any Claim pursuant to
the terms of this Agreement or any North American Warranty Claim against
any sum due from (a) the Buyer to the Seller under or pursuant to either
this Agreement and/or any other agreement to which the Seller and the
Buyer are parties and / or (b) Tyco Electronics Corp. to Quad Systems
Corporation under or pursuant to the terms of the North American
Agreement.
24. CONDUCT OF BUSINESS IN THE INTERIM PERIOD
24.1 The Seller agrees that, during the Interim Period, the Seller shall
conduct the Business in a manner materially consistent with past practices
of the Seller, and the Seller shall not engage in any transactions out of
the ordinary course of business. Furthermore, except as may otherwise be
required under this Agreement and insofar as the Business is concerned,
the Seller will not do any of the following without the prior consent of
the Buyer:
24.1.1 incur or permit to be incurred any obligation or other liabilities
(exclusive of health and property insurance premiums), which would
arise after Completion or for which the Buyer would be ultimately
responsible, in excess of $5,000 except for Inventory purchases in
the normal and ordinary course of business consistent with past
practice;
24.1.2 increase the rate of compensation for any of the employees of the
Business, except for increases in the ordinary course and
consistent with past practices, or otherwise enter into or alter
any employment, consulting, or service agreement respecting the
Business;
24.1.3 commence, enter into, or alter any profit sharing, deferred
compensation, bonus, stock option, stock purchase, pension,
retirement, or incentive plan or any fringe benefit plan for the
Employees;
24.1.4 sever or terminate any of the Employees except for cause in the
ordinary course of the Business it being acknowledged by the Buyer
that, in the foregoing case, the Buyer's consent shall not be
unreasonably withheld or delayed;
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24.1.5 make or commit to any capital expenditure in excess of $10,000 or
make or commit to such expenditures which would, in the aggregate,
exceed $25,000;
24.1.6 merge or consolidate with any other person or (except in the
ordinary course of business) acquire a material amount of assets
of any other person;
24.1.7 lease, license, or otherwise surrender, relinquish, encumber, or
dispose of any Assets other than the disposition of obsolete or
damaged assets in the ordinary course of business or the sale of
Inventory in the ordinary course of business;
24.1.8 change in any method of accounting or accounting practice used by
it, except for any change required or permitted by GAAP
regulation, the rules of the Securities Exchange Commission or any
legislative requirements in the United Kingdom; or
24.1.9 agree or commit to do any of the foregoing.
24.2 The Seller shall grant to the Buyer and to the Buyer's Accountants,
financial advisers, legal counsel, consultants, financing sources, and
other authorized representatives, reasonable access during normal business
hours for the period from the date hereof to Completion, to all its books,
records, business properties and personnel, and, during such period, shall
furnish as promptly as practicable to the Buyer (a) a copy of each
material report, schedule, and other document filed or received by them
pursuant to the requirements of laws and (b) all other information as the
Buyer reasonably may request in furtherance of the transactions
contemplated hereby, provided that the Buyer shall not disclose any
competitively sensitive information (unless the Buyer is legally compelled
to do so in which case the Buyer shall provide the Seller with prompt
written notice of the legal requirement to disclose so that the Seller may
seek a protective order or other appropriate remedy) and provided further,
that no investigation pursuant to this Clause 24.2 or otherwise shall
affect any representations or warranties made herein or the conditions to
the obligations of the respective parties to consummate the transactions
contemplated by this Agreement.
24.3 The Buyer shall have the right to have its designated representatives, as
identified to the Seller in writing from time to time (the "Designated
Buyer Representatives"), present at the principal offices of the Seller
during reasonable business hours from the date hereof until Completion.
Such Designated Buyer Representatives shall have the right to review and
become familiar with the conduct of the Business and shall be available to
be consulted and shall have authority on behalf of the Buyer in regard to
consultation in regard to Material Decisions (as defined below in this
Clause 24.3). The Buyer shall take all reasonable actions necessary to
ensure that its Designated Buyer Representatives will be readily available
during normal business hours. Without notice to and consultation with the
Designated Buyer Representatives (but not subject to their consent), the
Buyer shall not take any action involving any Material Decision. "Material
Decision" shall mean, for purposes of this Agreement, entering into,
terminating, or materially amending or waiving any of the Seller's rights
in respect of any of the following to the extent the same may materially
affect the Assets or operations of the Business following the Completion:
(i) any Contract, lease relating to the Property; (ii) any purchase order
for products or supplies involving in excess of $5,000 in any instance to
be delivered, or the payment for which shall become due, after Completion;
(iii) the acceptance of any material customer order that deviates in any
material respect from the terms and conditions of current pricing
policies; (iv) any action to respond to any material customer or
regulatory complaint outside of the normal course of business; (v) any
general communication with customers related to the Business or the
transactions contemplated hereby; or (vi) a material change in pricing,
promotional, marketing or any other decision that would affect in any
material respect any of the Seller's customary profit margins.
22
24.4 If for any reason this Agreement is terminated prior to Completion, the
provisions of section 12.9 of the North American Agreement shall be deemed
to apply to the parties hereunder mutatis mutandis as if the Seller
mentioned in the North American Agreement were the Seller and the
Purchaser mentioned therein were the Buyer.
24.5 For the purpose of converting any Dollar amount mentioned in this clause
24 into Sterling, the provisions of clause 14.12 shall apply mutatis
mutandis save that the date by reference to which the conversion shall be
made shall be the date upon which the items in relation to which a Dollar
amount is referred to in this clause 24 is incurred.
25. CONDITION PRECEDENT
25.1 This Agreement is conditional on the North American Agreement becoming
unconditional in all respects except only as to any condition directly
relating to the Completion of this Agreement, namely the condition
referred to in section 9.2.15 of the North American Agreement.
25.2 The parties shall use their reasonable endeavours to procure the
satisfaction of the condition set out in Clause 25.1 on or before 10.00
a.m. eastern time on 10 July 2001 or such other date and time as may be
mutually agreeable to the parties. The Buyer may waive that condition in
whole or in part.
25.3 This Agreement may be terminated at any time prior to Completion without
any liability to the other party:
25.3.1 by the mutual agreement of the parties;
25.3.2 at the Buyer's option if the condition referred to in this clause
25 has not been satisfied;
25.3.3 at the Buyer's option if the Seller has breached any Warranty or
covenant or other term of this Agreement which cannot be or is not
cured prior to the scheduled Completion Date and which breach
individually or when aggregated with any other such breaches could
have a material adverse effect on the Assets or the results of the
operation of the Business;
25.3.4 at any time following the date hereof if the North American
Agreement is ended pursuant to Clause 9.4 thereof; or
25.3.5 at the Buyer's option if Completion does not occur within thirty
days of the date of this Agreement.
23
25.4 If this Agreement terminates pursuant to clause 25.3 and the transactions
contemplated hereby are not consummated, this Agreement shall become null
and void and be of no further force or effect and neither party shall be
liable to the other save in respect of any breach of its obligations under
clause 25.1. For avoidance of doubt, nothing in this agreement shall be
deemed to affect the rights of the parties to the North American Agreement
as set out in sections 9.5 (b) (c) and (d) thereof.
26. GOVERNING LAW
26.1 This Agreement shall be governed by and construed in accordance with the
laws of England and each of the parties hereto agrees to submit to the
non-exclusive jurisdiction of the English Courts as regards any claim or
matter arising under this Agreement.
26.2 If a dispute arises under the North American Agreement and such dispute in
any way touches or concerns any provision of this Agreement, the parties
agree that notwithstanding the provisions of clause 26.1, to the extent
that such dispute concerns this Agreement, the provisions in this
Agreement so concerned shall be amenable to the governing law set out in
section 12.8 of the North American Agreement.
24
SCHEDULE 1
EMPLOYEES
Start
Initial Surname Job Title Qualifications DOB date Salary
-------------------------------------------------------------------------------------------------------------------------------
▇▇ ▇▇▇▇▇▇▇ Customer Support Engineer 6 CSE's & YTS Basic Electronics Cert 07/02/69 10/01/00 22,500
J ▇▇▇▇▇▇ Principal Customer Service 3 'O' levels & 2 CSE's & BTEC Mechanical 17/05/67 09/02/98 30,000
Engineer Engineering
M Ashton Credit Controller Pitmans Book-Keeping Levels 1&2 21/03/52 15/02/00 17,000
I ▇▇▇▇▇ Sales Manager 4 'O' Levels & 3 CSE's 23/11/63 01/07/99 32,000
Z Austin-York Customer Support Controller & 7 'O' Levels & Pitmans Advanced 03/06/68 13/05/96 25,000
Account Manager Typing/Shorthand/ISP Diploma
▇▇ ▇▇▇▇▇▇ Senior Engineer Applications HNC Industrial Measurment&Control & Programmable 23/03/59 01/06/98 27,500
Logic Controllers
City & Guilds Advanced Eng Craft & 200 Eng Craft
Studies & ONC Engineering
A ▇▇▇▇▇▇▇ Senior Customer Service 5 'O' Levels & 4 Highers & HNC 15/10/73 09/02/98 27,500
Engineer Mechatronics&Advanced Printed Circuit Assy
N Best Sales Manager 7 'O' Levels 16/12/70 08/12/97 30,000
▇▇ ▇▇▇▇▇ Sales & Marketing Manager 4 'O' Levels 22/07/69 04/05/99 22,000
D Davies Service & Training Manager 6 CSE's & City & Guilds Parts 1&2 Electrical 14/05/66 30/09/96 34,000
Installations
N Earthrowl Customer Support Engineer 8 GCSE's & 1 'O' Level & BTEC First&National 18/07/70 25/04/94 24,500
Certificate Engineering
BTEC Higher National Certificate Production
Engineering
S ▇▇▇▇▇▇▇▇▇ General Manager & Director 9 'O' Levels & 3 'A' Levels & HND Electronic 09/07/57 01/09/00 55,000
Engineering & Business Studies
E Fraser Customer Support Engineer ONC Mechanical Engineering & HNC Mechatronics 11/11/71 04/01/00 25,000
N ▇▇▇▇▇▇▇ Spares Co-ordinator NVQ Levels 1&2 Secretarial/Admin & 2'A' Levels 09/11/72 03/07/00 17,000
A ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ Purchase Ledger Controller Pitmans Secretarial & Advanced Book-Keeping 06/10/48 16/02/98 17,000
R Green Sales & Marketing Co-ordinator 6 CSE's 01/03/70 03/07/00 15,000
N ▇▇▇▇▇▇▇ DVT Engineer S/W & IT Manager 8 GCSE's & EnTra Cert General Eng 02/11/73 22/02/93 22,500
Appreciation&Electronic Eng Applications
BTEC National Certificate Engineering & Diploma
Personal Computer Repair
▇▇ ▇▇▇▇▇▇ Electical/Electronics 9 GCSE's 02/03/83 01/05/00 8,000
Apprentice
IM ▇▇▇▇▇▇-▇▇▇▇▇▇ Materials Controller 4 'O' Levels & 5 'O' Levels & RSA Stage II 21/04/62 04/10/99 24,000
English Language
R ▇▇▇▇▇ Operations Manager 3 CSE's & 4 GCE's & NVQ Level 2 13/02/59 29/09/97 25,000
Wholesaling,Wharehousing&Stores
S Manroy Senior Customer Service 6 CSE's & BTEC National Diploma Computer Studies 22/01/68 07/10/96 27,500
Engineer & METEL (Wiring Regs)
I ▇▇▇▇▇ Senior Storeman Fork lift licence 21/10/66 08/06/98 14,420
J ▇▇▇▇▇▇ Principal Engineer 5 'O' Levels & ONC Electrical/Electronic 01/06/62 04/05/99 30,000
Applications Engineering
I ▇▇▇▇▇▇▇▇▇ Financial Director BSC Metallurgy & Material Science & Association 28/07/63 05/10/98 40,000
of Chartered Accountancy
N ▇▇▇▇▇▇▇▇▇ Stock Controller Fork lift licence 19/07/46 03/06/96 17,500
R ▇▇▇▇▇▇▇▇ Northern European Service 01/08/67 02/01/01 34,000
Engineer
NM ▇▇▇▇▇ Mechanical Assembler City & Guilds Electronic Servicing & YTS 10/05/68 22/10/97 15,750
Electronic&Mechanical Fitting
▇▇ ▇▇▇▇▇▇ Mechanical Assembler City & Guilds Mechanical/Electrical Motor Industry 05/04/63 20/10/97 15,000
G ▇▇▇▇ Financial Accountant RSA Stage II Accounting,Cost 07/05/51 06/11/95 27,000
Accounting,Arithmetic,Communications
R ▇▇▇▇▇▇ Mechanical Assembler City & Guilds Electrical Installation & NVQ Level 24/04/74 06/09/95 15,750
3
AD ▇▇▇▇▇ Mechanical Assembler 9 'O' Level equivalent & Diploma in Electronics 06/03/70 02/10/00 13,750
S ▇▇▇▇ Service Engineer 7 GCSE's & City & Guilds Engineering Technology, 20/03/72 06/11/00 21,000
General Eng, Communication
Mechanical Prod Technology&Practical, Toolmaking
& NVQ ▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ Reflow Development Manager 5 'O' Levels & ONC Electronic Engineering 14/11/582 8/02/94 37,000
City & Guilds Electronic Servicing/Telecom
Engineering
▇▇ ▇▇▇▇▇▇ Business Manager - Reflow 8 GCSE's & BTEC National Business/Leisure Studies 26/09/712 3/08/93 30,000
& CIMA Level 2
▇▇ ▇▇▇▇▇ Mechanical Assembler 7 GCSE's & City & Guilds Electronic Systems 09/02/733 1/01/00 14,000
G ▇▇▇▇▇▇▇ Design & Verification Engineer City & Guilds Mechanical Engineering 06/12/441 2/05/97 18,500
M ▇▇▇▇▇ Customer Support Engineer 10 GCSE's ONC Electronics&Mechanical & NVQ IV 26/11/761 0/07/00 20,600
Support to Manufacture
N ▇▇▇▇ Production Manager City & Guilds Mechanical Engineering 22/11/700 5/02/96 20,000
R ▇▇▇▇ Principal Customer Service 5 'O' Levels & ONC Control Engineering & HNC 13/06/701 5/06/98 30,000
Engineer Electronics
IT White Technical Sales & 4 'O' Levels & 3 CSE's 13/06/611 2/07/93 37,000
Applications Manager
25
Start
Initial Surname Job Title Qualifications DOB date Salary
-------------------------------------------------------------------------------------------------------------------------------
▇▇ ▇▇▇▇▇▇▇ Customer Support Engineer 6 CSE's & YTS Basic Electronics Cert 07/02/691 0/01/00 22,500
J ▇▇▇▇▇▇ Principal Customer Service 3 'O' levels & 2 CSE's & BTEC Mechanical 17/05/670 9/02/98 30,000
Engineer Engineering
M Ashton Credit Controller Pitmans Book-Keeping Levels 1&2 21/03/521 5/02/00 17,000
I ▇▇▇▇▇ Sales Manager 4 'O' Levels & 3 CSE's 23/11/630 1/07/99 32,000
Z Austin-York Customer Support Controller & 7 'O' Levels & Pitmans Advanced 03/06/681 3/05/96 25,000
Account Manager Typing/Shorthand/ISP Diploma
▇▇ ▇▇▇▇▇▇ Senior Engineer Applications HNC Industrial Measurment&Control & Programmable 23/03/590 1/06/98 27,500
Logic Controllers
City & Guilds Advanced Eng Craft & 200 Eng Craft
Studies & ONC Engineering
A ▇▇▇▇▇▇▇ Senior Customer Service 5 'O' Levels & 4 Highers & HNC 15/10/73 09/02/98 27,500
Engineer Mechatronics&Advanced Printed Circuit Assy
N Best Sales Manager 7 'O' Levels 16/12/70 08/12/97 30,000
▇▇ ▇▇▇▇▇ Sales & Marketing Manager 4 'O' Levels 22/07/69 04/05/99 22,000
D Davies Service & Training Manager 6 CSE's & City & Guilds Parts 1&2 Electrical 14/05/66 30/09/96 34,000
Installations
N Earthrowl Customer Support Engineer 8 GCSE's & 1 'O' Level & BTEC First&National 18/07/70 25/04/94 24,500
Certificate Engineering
BTEC Higher National Certificate Production
Engineering
S ▇▇▇▇▇▇▇▇▇ General Manager & Director 9 'O' Levels & 3 'A' Levels & HND Electronic 09/07/57 01/09/00 55,000
Engineering & Business Studies
E Fraser Customer Support Engineer ONC Mechanical Engineering & HNC Mechatronics 11/11/71 04/01/00 25,000
N ▇▇▇▇▇▇▇ Spares Co-ordinator NVQ Levels 1&2 Secretarial/Admin & 2'A' Levels 09/11/72 03/07/00 17,000
A ▇▇▇▇▇▇-
▇▇▇▇▇▇▇ Purchase Ledger Controller Pitmans Secretarial & Advanced Book-Keeping 06/10/48 16/02/98 17,000
R Green Sales & Marketing Co-ordinator 6 CSE's 01/03/70 03/07/00 15,000
N ▇▇▇▇▇▇▇ DVT Engineer S/W & IT Manager 8 GCSE's & EnTra Cert General Eng 02/11/73 22/02/93 22,500
Appreciation&Electronic Eng Applications
BTEC National Certificate Engineering & Diploma
Personal Computer Repair
▇▇ ▇▇▇▇▇▇ Electical/Electronics 9 GCSE's 02/03/83 01/05/00 8,000
Apprentice
IM ▇▇▇▇▇▇-▇▇▇▇▇▇ Materials Controller 4 'O' Levels & 5 'O' Levels & RSA Stage II 21/04/62 04/10/99 24,000
English Language
R ▇▇▇▇▇ Operations Manager 3 CSE's & 4 GCE's & NVQ Level 2 13/02/59 29/09/97 25,000
Wholesaling, Wharehousing & Stores
S Manroy Senior Customer Service 6 CSE's & BTEC NAtional Diploma Computer Studies 22/01/68 07/10/96 27,500
Engineer & METEL (Wiring Regs)
I ▇▇▇▇▇ Senior Storeman Fork lift licence 21/10/66 08/06/98 14,420
J ▇▇▇▇▇▇ Principal Engineer 5 'O' Levels & ONC Electrical/Electronic 01/06/62 04/05/99 30,000
Applications Engineering
I ▇▇▇▇▇▇▇▇▇ Financial Director BSC Metallurgy & Material Science & Association 28/07/63 05/10/98 40,000
of Chartered Accountancy
N ▇▇▇▇▇▇▇▇▇ Stock Controller Fork lift licence 19/07/46 03/06/96 17,500
R ▇▇▇▇▇▇▇▇ Northern European Service 01/08/67 02/01/01 34,000
Engineer
NM ▇▇▇▇▇ Mechanical Assembler City & Guilds Electronic Servicing & YTS 10/05/68 22/10/97 15,750
Electronic&Mechanical Fitting
▇▇ ▇▇▇▇▇▇ Mechanical Assembler City & Guilds Mechanical/Electrical Motor Industry 05/04/63 20/10/97 15,000
G ▇▇▇▇ Financial Accountant RSA Stage II Accounting,Cost 07/05/51 06/11/95 27,000
Accounting,Arithmetic,Communications
R ▇▇▇▇▇▇ Mechanical Assembler City & Guilds Electrical Installation & 24/04/74 06/09/95 15,750
NVQ Level 3
AD ▇▇▇▇▇ Mechanical Assembler 9 'O' Level equivalent & Diploma in Electronics 06/03/70 02/10/00 13,750
S ▇▇▇▇ Service Engineer 7 GCSE's & City & Guilds Engineering Technology, 20/03/72 06/11/00 21,000
General Eng, Communication
Mechanical Prod Technology&Practical, Toolmaking
& NVQ ▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ Reflow Development Manager 5 'O' Levels & ONC Electronic Engineering 14/11/58 28/02/94 37,000
City & Guilds Electronic Servicing/Telecom
Engineering
▇▇ ▇▇▇▇▇▇ Business Manager - Reflow 8 GCSE's & BTEC National Business/Leisure Studies 26/09/71 23/08/93 30,000
& CIMA Level 2
▇▇ ▇▇▇▇▇ Mechanical Assembler 7 GCSE's & City & Guilds Electronic Systems 09/02/73 31/01/00 14,000
G ▇▇▇▇▇▇▇ Design & Verification Engineer City & Guilds Mechanical Engineering 06/12/44 12/05/97 18,500
M ▇▇▇▇▇ Customer Support Engineer 10 GCSE's ONC Electronics&Mechanical & NVQ IV 26/11/76 10/07/00 20,600
Support to Manufacture
N ▇▇▇▇ Production Manager City & Guilds Mechanical Engineering 22/11/70 05/02/96 20,000
R ▇▇▇▇ Principal Customer Service 5 'O' Levels & ONC Control Engineering & HNC 13/06/70 15/06/98 30,000
Engineer Electronics
IT White Technical Sales & 4 'O' Levels & 3 CSE's 13/06/61 12/07/93 37,000
Applications Manager
26
SCHEDULE 2
WARRANTIES
1 CAPACITY
1.1 The Seller has the requisite power and authority to enter into and perform
this Agreement.
1.2 The operation of the Business does not as far as the Seller is aware,
infringe the rights of any third party or give rise to the payment of any
royalty or similar payment.
1.3 The Seller has not given any person any power of attorney or any other
authority (express, implied or ostensible) in connection with the Business
which remains effective to enter into any commitment on its behalf (other
than to Employees to enter into routine trading contracts in the usual
course of their duties) in connection with or in relation to the Business.
2 Arrangements between the Business and the SELLER'S associates
There are in existence no contracts, arrangements, engagements, orders or
liabilities outstanding or remaining in whole or in part to be performed
affecting the Business between the Seller and any Associate of the Seller.
3 OTHER INTERESTS OF THE SELLER'S ASSOCIATES
3.1 No Associate of the Seller has or intends to acquire any interest, direct
or indirect, in any business which has a close trading relationship with
or which competes or is likely to compete with the Business.
4 ACCURACY AND ADEQUACY OF INFORMATION
4.1 The information contained in Schedules 1, 3 and 4 to this Agreement is
accurate and complete.
4.2 So far as the Seller is aware, all information contained in the Disclosure
Letter was when given and remains true and accurate and is not misleading
because of any omission and where the information is expressed as an
opinion, it is truly and honestly held and not given casually, recklessly
or without due regard for its accuracy.
5 INSOLVENCY
5.1 No distress, execution or other process has been levied against the Seller
in relation to the Business or the Assets nor action taken to repossess
any goods of the Business in the Seller' possession.
5.2 No receiver (including an administrative receiver), trustee or
administrator has been appointed of the whole or any part of the Assets or
undertaking of the Seller which relates to or would or might affect the
Business or the Assets and the Seller is not aware of any circumstances
likely to give rise to the appointment of any such receiver, trustee or
administrator.
28
5.3 The Seller has not been a party to any transaction with any third party or
parties which relates to or would or might affect the Business or any of
the Assets and which would, if any such third party went into liquidation
or had a bankruptcy or administration order made in relation to it,
constitute (in whole or in part) a transaction at an undervalue,
preference or invalid floating charge or otherwise would or might
constitute any other transaction or transfer at an undervalue or involving
an unauthorised reduction of capital.
6 MANAGEMENT ACCOUNTS
6.1 The Accounts fairly reflect the trading position of the Seller in relation
to the Business as at the date and for the period to which they relate and
are not affected by any extraordinary exceptional, unusual or
non-recurring income, capital gain or expenditure or by any other factor
known by the Seller rendering profits or losses for the period covered
exceptionally high or low.
7 EVENTS SINCE THE ACCOUNTS DATE
7.1 Since the Accounts Date there has been no material adverse change
in:
7.1.1 the financial or trading position or prospects of the Business;
7.1.2 the value or state of assets; or
7.1.3 in the turnover, direct or indirect expenses or the margin of
profitability of the Business as compared with the position
disclosed for the equivalent period of the last financial year.
7.2 The Seller has since the Accounts Date carried on the Business in the
ordinary course and without interruption, so as to maintain it as a going
concern.
8 CONTRACTS AND COMMITMENTS
8.1 A true and complete copy of the Seller's standard terms and conditions has
been given to the Buyer.
8.2 None of the Contracts:
8.2.1 is expected to have material adverse consequences in terms of
expenditure or revenue;
8.2.2 relate to matters outside the ordinary course of the Business or
were entered into other than on arms length terms;
8.2.3 can be terminated in the event of any change in the underlying
ownership or control of it or would be materially affected by such
change; or
29
8.2.4 cannot readily be fulfilled or performed by the Seller on time on
the basis of the Seller's current lead times and profit margins.
8.3 In relation to the Business there are no outstanding bids, tenders, sales
or service proposals which are material or which, if accepted, would be
likely to result in a loss.
8.4 The Seller is unaware of any actual, potential or alleged breach,
invalidity, grounds for termination, grounds for rescission, grounds for
avoidance or grounds for repudiation of any Contract.
8.5 Since the Accounts Date:
8.5.1 The Seller has carried on the Business in its ordinary and usual
course without any interruption or alteration in its nature, scope
or manner as regards its nature and manner so as to maintain the
same as a going concern.
8.5.2 No substantial customer of the Business (that is a customer whose
business represents five per cent or more of the turnover of the
Business in the period of 12 months to the Accounts Date) has ceased
or materially reduced its relationship with the Business and the
Seller has no actual knowledge that any such customer will terminate
or materially reduce such relationship.
8.5.3 The Seller has not been required to offer to customers any discounts
or rebates in relation to Stock and the Seller has not entered into
any commitments or arrangements with any of their customers in
relation to price, discount or credit terms which commitment or
arrangement extend beyond 3 months from the Completion Date.
8.5.4 The Seller has not entered into any capital transaction in excess of
(pound)10,000 individually or (pound)75,000 in aggregate with regard
to the Business as vendor, buyer, lessor, lessee or otherwise
undertaken any material commitment in relation to the Business.
8.5.5 In connection with the Business there has been no change in the
manner or time of payment of creditors or the issue of invoices or
collection of debts, or in the quantities of stock bought or agreed
to be bought, or manufactured, stored, sold or agreed to be sold by
the Seller, or in the level of borrowing or working capital
requirements of the Business.
9 PRODUCT LIABILITY
In relation to the Business, the Seller has not sold or provided any
product or service which does not in every respect comply with all
applicable laws, regulations or standards in the United Kingdom and, so
far as the Seller is aware, elsewhere or which is defective in any
material respect or dangerous or not in accordance with any representation
or warranty, express or implied, given in respect of it to the extent that
any liability to third parties arising as a result thereof is not covered
by the Maintenance Contracts and exceeds US$ 165,000.
30
10 LICENCES AND CONSENTS
10.1 The Seller has not been required to hold or obtain any licences, consents,
permissions, authorisations and approvals required for the carrying on of
the Business other than have been disclosed to the Buyer and all of them
that have been obtained by it are in full force and effect.
10.2 During the last three years and as far as the Seller is aware, all
reports, returns and information required by law or as a condition of any
licence, consent, permission, authorisation or approval required to be
made or given to any person or authority in connection with the Business
have been made or given to the appropriate person or authority and there
are no circumstances which indicate that any licence, consent, permission,
authorisation or approval might not be renewed in whole or in part or is
likely to be revoked, suspended or cancelled or which may confer a right
of revocation, suspension or cancellation.
11 COMPETITION AND TRADE REGULATION LAW
11.1 In relation to the Business, the Seller is not nor has it, so far as the
Seller is aware, been party to, or is or have been concerned in any
agreement or arrangement, or is conducting or has conducted itself,
whether by omission or otherwise, in a manner which:
11.1.1 contravenes, is invalidated in whole or in part or has been, or
should have been, registered under the Restrictive Trade
Practices Acts 1976 and 1977;
11.1.2 contravenes the provisions of the Resale Prices ▇▇▇ ▇▇▇▇, the
Trade Description Acts 1968 and 1972, the Fair Trading Act 1973
or any secondary legislation made under either of those Acts; or
11.1.3 infringes Articles 81 or 82 of the Treaty of Rome (formerly
Articles 85 and 86 respectively) or any regulation or directive
made under them or any other anti-trust or similar legislation
in any jurisdiction in which the Business is carried on or where
its activities may have any effect.
11.2 In relation to the Business, the Seller has not:
11.2.1 given an undertaking to, or is subject to, any order of or
investigation by, or has received any request for information
from;
11.2.2 received any process, notice or communication, formal or
informal by or on behalf of; or
11.2.3 been or is a party to, or is or has been concerned in, any
agreement or arrangement in respect of which an application for
negative clearance and/or exemption has been made to;
the Office of Fair Trading, the Monopolies and Mergers Commission, the
Secretary of State, the European Commission or any other governmental or
other authority, department, board, body or agency of any country having
jurisdiction in anti-trust or similar matters in relation to the Business.
31
12 LITIGATION AND DISPUTES
12.1 Except for actions to recover any debt incurred in the ordinary course of
the business owed to the Seller where each individual debt and its costs
outstanding amounts to less than (pound)10,000:
12.1.1 neither the Seller nor, as far as the Seller is aware, any
person for whose acts the Seller may be liable are in relation
to the Business engaged in any litigation, arbitration,
administrative or criminal proceedings, whether as plaintiff,
defendant or otherwise;
12.1.2 no litigation, arbitration, administrative or criminal
proceedings by or against the Seller or, as far as the Seller is
aware, any person for whose acts it may be liable relating to
the Business are threatened or expected and, as far as the
Seller is aware, none are pending; and
12.1.3 so far as the Seller is aware there are no facts or
circumstances likely to give rise to any litigation,
arbitration, administrative or criminal proceedings against the
Seller or any person for whose acts they may be liable in
relation to the Business.
12.2 The Seller is not in relation to the Business subject to any order or
judgement given by any court or governmental or other authority,
department, board, body or agency or has not been a party to any
undertaking or assurance given to any court or governmental or other
authority, department, board, body or agency which is still in force, nor
are there any facts or circumstances likely to give rise to it becoming
subject to such an order or judgement or to be a party to any such
undertaking or assurance.
13 CHARGES AND ENCUMBRANCES OVER THE ASSETS
13.1 No option, right to acquire, mortgage, charge, pledge, lien (other than a
lien arising by operation of law in the ordinary course of trading) or
other form of security or encumbrance or equity on, over or affecting the
Assets is outstanding and, apart from this Agreement, there is no
agreement or commitment to give or create any of them and no claim has
been made by any person to be entitled to any of them.
13.2 The Seller has not received notice from any person intimating that it will
enforce any security which it may hold over any of the Assets and so far
as the Seller is aware there are no circumstances likely to give rise to
such a notice.
14 INTELLECTUAL PROPERTY RIGHTS
14.1 There are no Intellectual Property Rights of which the Seller is or has
applied to be registered as proprietors in respect of the Business.
14.2 The Seller has not, as far as it is aware, infringed the Intellectual
Property Rights, of any person or entity.
14.3 No licences, registered user or other rights have been granted or agreed
to be granted by the Seller to any person in respect of any Intellectual
Property Right.
32
14.4 So far as the Seller is aware, none of the processes employed in the
Business, or products or services supplied by the Business infringes any
rights of any third party relating to Intellectual Property nor makes the
Seller liable to pay a fee or royalty and no claims have been made,
threatened or so far as the Seller is aware are pending, in relation to
such Intellectual Property Right against it.
14.5 So far as the Seller is aware and except in the ordinary course of
business and on a confidential basis, no disclosure has been made of any
of the confidential information, know-how, technical processes, financial
or trade secrets or customer or supplier lists of the Business.
14.6 Any names used by the Business are contained in the Disclosure Letter and
so far as the Seller is aware do not infringe the rights of any person.
15 EMPLOYEES
15.1 Complete and accurate details of the identities of all the Employees,
their dates of birth and commencement of employment, their remuneration
(including bonus, commission, profit sharing, permanent health insurance,
medical expenses insurance, life assurance and pension benefits if any),
notice periods and any agreements or arrangements for the payment of
compensation on termination of employment have been supplied to the Buyer.
15.2 The Seller has maintained up-to-date, records regarding the service and
terms and conditions of employment of each of the Employees.
15.3 The Seller has disclosed to the Buyer a true and complete copy of the
standard form contract on which all Employees are employed.
15.4 Since the Accounts Date there has been no material alteration in the terms
of employment or any material change in the number of the Employees.
15.5 So far as the Seller is aware, other than salary for the current month and
accrued holiday pay, no amount is owing to any Employee.
15.6 No Employee has given notice or is under notice of dismissal nor are there
any service contracts between the Seller and any of the Employees which
cannot be terminated by the Seller by 12 weeks notice or less without
giving rise to a claim for damages or compensation (other than a statutory
redundancy payment).
15.7 Apart from the Employees, so far as the Seller is aware, no other person
is employed in connection with the Business or was prior to Completion so
employed and whose employment was terminated in connection with the sale
contemplated by this Agreement.
16 INDUSTRIAL RELATIONS
16.1 In relation of the Business, the Seller is not a party to any contract,
agreement or arrangement with any trade union or other body or
organisation representing any of the Employees.
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16.2 So far as the Seller is aware, in relation to the Employees, the Seller
has complied with all conditions of service, where relevant, all
collective agreements and recognition agreements and material customs and
practices.
16.3 No dispute has arisen between the Seller and a material number or category
of the Employees nor are there any present circumstances known to the
Seller which are likely to give rise to any such dispute.
17 PENSIONS
17.1 The Seller has no plans, schemes or arrangements in relation to death,
disability or retirement of any of the Employees.
17.2 No death, disability or retirement gratuity is currently being paid or has
been promised nor will pending Completion be paid or promised by the
Seller to or in respect of any Employee.
18 TAX
18.1 None of the Assets are such that they are, have been or could be subject
to the capital goods scheme under the Value Added Tax ▇▇▇ ▇▇▇▇ ("VATA").
18.2 The Seller has not elected to waive exemption for VAT purposes, and is not
aware of any election to waive exemption made by any other person, in
respect of any land or buildings comprised in the Business.
18.3 None of the Assets agreed to be sold under this Agreement are the subject
of any security in favour of HM Customs & Excise under paragraph 4 of
Schedule 11 VATA or section 157 of the Customs and Excise Management ▇▇▇
▇▇▇▇.
18.4 All proper records have been kept and all proper returns and payments have
been made as required by law for the purposes of VAT in connection with
the Business.
18.5 None of the Assets agreed to be sold under this Agreement are the subject
of any distraint, charge, power of sale or mortgage in favour of the
Inland Revenue for the purposes of inheritance tax nor are there any
circumstances which may give rise to the same.
19 LEASEHOLD
The Lease is valid and in full force and there are no circumstances of
which the Seller is aware which would entitle any landlord or other person
to exercise any power of entry or take possession of the Property.
19.1 The Seller has paid the rent and has substantially observed and performed
the material covenants on the part of the tenant and the material
conditions contained in the Lease and the last demand (or receipt for rent
if issued) was unqualified.
19.2 All licences, consents and approvals required from the landlords and any
superior landlords for the grant of the Lease and during the continuance
of the Lease have been obtained and any covenants on the part of the
tenant contained in those licences, consents and approvals have been duly
performed and observed.
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19.3 The Seller has used and occupied the Property since 1994 without having
been made aware of any breach of planning legislation in relation to the
Property
20 TITLE
21.1 There is no lien, underlease, tenancy, licence, option, right of
pre-emption, affecting the Property;
21.2 All fixtures, fittings, plant and equipment (other than tenants' property
and meters and other equipment belonging to suppliers of telephone,
electricity, gas and water services) are the Seller's own absolute
property free from encumbrances.
21.3 Any replies given by or on behalf of the Seller to enquiries before
contract raised by or on behalf of the Buyer relating in any way to the
Property are true complete and accurate in all respects and contain all
information known or available to the Seller.
21 Contamination
22.1 So far as the Seller is aware, (not having made any examinations or
investigations as to the environmental state and condition of the
Property) the Seller has not done anything to contaminate the Property
during its period of occupation.
22 ENVIRONMENTAL MATTERS
23.1 So far as the Seller is aware, no Environmental Consents are
required in relation to its business
23.2 The Seller has never received any notification or informal indication that
any Environmental Consents will be required under Environmental Law in
order for it to continue its present business.
23.3 The Seller (and each of its officers, employees and agents in the course
of its business) has complied with all applicable Environmental Laws and
has never received any notification under Environmental Law requiring it
to take or omit to take any action
23.4 The Seller has not been threatened with any investigation or enquiry by
any organisation, or received any complaint, in connection with the
Environment.
24 CONDITION OF THE PROPERTY
24.1 The Seller has enjoyed unrestricted access over Halifax Road leading to
the industrial estate of which the Property forms part during its
occupation of the Property.
24.2 The Property enjoys the mains services of water, drainage, electricity and
gas.
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SCHEDULE 3
EXCLUDED ASSETS
1. All Contracts for the provision of goods or services to persons resident
in Germany.
2. Cash
3. Any interest the Seller has in any real property other than the Property
4. All Book Debts
5. Lease in relation to premises at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇.
6. Agreement with Rubroeder Factory Automation GmbH.
7. All contracts of insurance other than employers liability, car and travel
insurances.
8. The Creditors
9. All deposits for apartments and other real property
10. The duty deferment bond
11. All staff advances
12. All debit balances in accounts payable
13. All provision for warranty parts returns to the extent that they
represent inter company balances with QSC
14. Any proceeds resulting from the Zevatech litigation.
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SCHEDULE 4
THE CONTRACTS
Counterparty Approximate Value Comment
------------ ----------------- -------
1. Outstanding Customer Agreements
2. Maintenance Contracts
Siemens (pound)24,600 Invoiced and booked
until end September 2001
▇▇▇▇▇ ▇▇▇▇▇▇ (pound)1,065 Invoiced and booked
until end December ▇▇▇▇
▇▇▇▇▇▇▇ (pound)9,274 Invoiced and booked
until February 2002
Via Systems (pound)12,555 Invoiced and booked
until February 2002
Kenure (pound)5,550 Invoiced and booked
until February 2002
Control Equipment (pound)8,100 Invoiced and booked
until April 2002
Caradon Trend (pound)13,750 Invoiced and booked
until March 2002
BAe (pound)7,631 Invoiced and booked
until March 2002
3. Outstanding Supply Contracts
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In addition:-
o There is a spares backlog of about (pound)20,000 to (pound)40,000 in
total from suppliers other than Quad Systems Corporation and of
about US$39,612 from Quad Systems Corporation.
o Any supply relating to the Kanban agreements.
4. The Collaborative Research and Licence Agreement between the Seller and
Loughborough University
5. Axus / Lex Vehicle Leasing contracts
38
AS WITNESS the respective signatures of the parties or their duly authorised
signatories on behalf of the parties hereto the date first above written
EXECUTED and DELIVERED )
as a DEED by )
QUAD EUROPE LIMITED )
Acting by two directors )
EXECUTED and DELIVERED )
as a DEED by )
TYCO ELECTRONCS UK LIMITED )
Acting by two directors )
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