UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest reported): April 2, 2004
WPCS INTERNATIONAL INCORPORATED
(Exact name of registrant as specified in charter)
Delaware 0-26277 98-0204758
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
140 South Village Avenue, Suite 20, Exton, Pennsylvania 19341
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 903-0400
ITEM 1. ACQUISITION OR DISPOSITION OF ASSETS
Acquisition of Heinz Corporation
On April 2, 2004, WPCS International Incorporated, a Delaware corporation (the
"Company"), entered into and completed an Agreement and Plan of Merger with
Heinz Acquisition Corp., a Missouri corporation wholly-owned by the Company (the
"Subsidiary"), Heinz Corporation, a Missouri corporation ("Heinz") and James
Heinz ( "J. Heinz"). Pursuant to the terms of the Agreement and Plan of Merger
(the "Acquisition"), the Company acquired all of the issued and outstanding
shares of capital stock of Heinz from J. Heinz for $1,000,000 in cash and
Company common stock, as follows: (1) $700,000 of the Company's common stock,
based on the closing price of the Company's common stock on March 30, 2004, for
an aggregate of 714,286 newly issued shares of the Company's common stock (the
"Shares"); and (2) $300,000 total cash consideration, of which $100,000 was paid
at closing and $200,000 was given in a promissory note. As part of the
Acquisition, the Company's Board of Directors entered into employment contracts
with J. Heinz, Richard Fann, and Michael Caponi to serve as President, Vice
President and Chief Technology Officer, and Senior RF Engineer, respectively, of
Heinz.
Heinz Corporation is a St. Louis, Missouri based provider of in-building
wireless infrastructure services for both cellular and WiFi applications
including consulting, integration and installation services for wireless
infrastructure. In addition, Heinz has performed fixed wireless services,
structured cabling, and cellular base station equipment installation and
testing. The acquisition of Heinz gives the Company additional project
engineering expertise for wireless infrastructure services, broadens its
customer base, and expands its geographical presence in the Midwest.
The 714,286 Shares of common stock issued in the merger were not registered
under the Securities Act of 1933, as amended (the "Act") and were issued in the
reliance upon the exemption from registration provided by section 4(2) of the
Act, on the basis that the Acquisition is a transaction not involving a public
offering. All certificates evidencing the Shares bear a customary form of
investment legend and may not be sold, pledged, hypothecated or otherwise
transferred unless first registered under the Act or pursuant to an available
exemption from such registration requirements.
As part of the Acquisition, the Company caused the Subsidiary and Heinz to be
merged pursuant to Articles of Merger filed with the Missouri Secretary of State
on April 7, 2004. Heinz survived the merger and the Company intends to continue
to hold the surviving company as a wholly-owned subsidiary and to continue its
operations.
The amount of consideration paid to J. Heinz for Heinz was determined through
arm's-length negotiations between these parties and the Company. Other than as
disclosed herein, there are no material relationships between J. Heinz and the
Company or any of its affiliates, any directors or officers of the Company, or
any associate of such directors or officers.
Following the closing of the merger, the Company had 20,849,976 shares of its
common stock issued and outstanding.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of businesses acquired.
1. Audited Financial Statements of Heinz for the years ended
December 31, 2003 and December 31, 2002 (to be filed by
amendment).
2. Unaudited Financial Statements of Heinz for the one month period
ended January 31, 2004 (to be filed by amendment).
(b) Proforma Financial Information
Proforma Financial Information will be filed by amendment.
(c) Exhibits.
3. Agreement and Plan of Merger by and among WPCS International
Incorporated, Heinz Acquisition Corp., Heinz Corporation and
James Heinz made as of the 2nd day of April, 2004.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WPCS INTERNATIONAL INCORPORATED
Date: April 9, 2004 /s/ ANDREW HIDALGO
-------------------- ---------------------------
Andrew Hidalgo, President
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Exhibit 3
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of the 1st day of April, 2004
AMONG:
WPCS INTERNATIONAL INCORPORATED, a corporation formed
pursuant to the laws of the State of Delaware and having an
office for business located at 140 South Village Avenue,
Suite 20, Exton, Pennsylvania 19341
("WPCS")
AND:
HEINZ ACQUISITION CORP., a body corporate formed pursuant to
the laws of the State of Missouri and a wholly owned
subsidiary of WPCS
(the "Acquirer")
AND:
HEINZ CORPORATION, a body corporate formed pursuant to the
laws of the State of Missouri and having an office for
business located at 804 Lebanon Drive, St. Louis, Missouri
63104
("Heinz")
AND:
JAMES HEINZ, an individual having an address at 804 Lebanon
Drive, St. Louis, Missouri 63104
(the "Heinz Shareholder")
WHEREAS:
A. Heinz is a Missouri corporation engaged in the business of providing
wireless and structured cabling systems;
B. The Heinz Shareholder owns 1,000 Heinz Shares, being 100% of the
presently issued and outstanding Heinz Shares;
C. WPCS is a reporting company whose common stock is quoted on the OTC
Bulletin Board and which is engaged in the business of providing fixed wireless
telecommunications services; and
D. The respective Boards of Directors of WPCS, Heinz and the Acquirer deem
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it advisable and in the best interests of WPCS, Heinz and the Acquirer that the
Acquirer merge with and into Heinz (the "Merger") pursuant to this Agreement and
the Articles of Merger, and the applicable provisions of the laws of the State
of Missouri.
NOW THEREFORE, WITNESSETH THAT in consideration of the premises and the mutual
covenants, agreements, representations and warranties contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Definitions
1.1 In this Agreement the following terms will have the following meanings:
(a) "Acquisition Shares" means such number of WPCS Common Shares as equals
$700,000, divided by the closing price of the WPCS Common Shares as
reported by the OTC Bulletin Board on the second day prior to the
Closing Date, to be issued to the Heinz Shareholder at Closing
pursuant to the terms of the Merger;
(b) "Agreement" means this agreement and plan of merger among WPCS, the
Acquirer, Heinz, and the Heinz Shareholders;
(c) "Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 9 hereof;
(d) "Closing Date" means the day on which all conditions precedent to the
completion of the transaction as contemplated hereby have been
satisfied or waived;
(e) "Commission" means the Securities and Exchange Commission;
(f) "DGCL" means the General Corporation Law of the State of Delaware;
(g) "Effective Time" means the date of the filing of an appropriate
Articles of Merger in the form required by the State of Missouri
provide that the Merger shall become effective upon such filing;
(h) "Employment Agreements" means the employment agreements to be entered
into on the Closing Date between Heinz and James Heinz, Richard Fann
and Michael Caponi in the forms attached hereto as Schedule "O";
(i) "Exchange Act" means the Securities Exchange Act of 1934, as amended;
(j) "Merger" means the merger, at the Effective Time, of Heinz and the
Acquirer pursuant to this Agreement and Plan of Merger;
(k) "Place of Closing" means the offices of Sichenzia Ross Friedman
Ference LLP, 1065 Avenue of the Americas, New York, New York 10018, or
such other place as WPCS and Heinz may mutually agree upon;
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(l) "Registration Rights Agreement" means the registration rights
agreement to be entered into on the Closing Date between WPCS and the
Heinz Shareholders in respect of the Acquisition Shares in the form
attached hereto as Schedule "M";
(m) "SEC Reports" means all forms, reports and documents filed and
required to be filed by WPCS with the Commission under the Exchange
Act from June 7, 2002 through the date hereof;
(n) "Securities Act" means the Securities Act of 1933, as amended;
(o) "Surviving Company" means Heinz following the merger with the
Acquirer;
(p) "Heinz Accounts Payable and Liabilities" means all accounts payable
and liabilities of Heinz and HTS, due and owing or otherwise
constituting a binding obligation of Heinz or HTS (other than a Heinz
Material Contract) as of December 31, 2003 as set forth in Schedule
"A" hereto;
(q) "Heinz Accounts Receivable" means all accounts receivable and other
debts owing to Heinz or HTS, as of December 31, 2003 as set forth in
Schedule "B" hereto;
(r) "Heinz Assets" means the undertaking and all the property and assets
of the Heinz Business of every kind and description wheresoever
situated including, without limitation, Heinz Equipment, Heinz
Inventory, Heinz Material Contracts, Heinz Accounts Receivable, Heinz
Cash, Heinz Intangible Assets and Heinz Goodwill, and all credit
cards, charge cards and banking cards issued to Heinz;
(s) "Heinz Bank Accounts" means all of the bank accounts, lock boxes and
safety deposit boxes of Heinz or relating to the Heinz Business as set
forth in Schedule "C" hereto;
(t) "Heinz Business" means all aspects of the business conducted by Heinz,
including HTS;
(u) "Heinz Cash" means all cash on hand or on deposit to the credit of
Heinz or HTS on the Closing Date;
(v) "Heinz Debt to Related Parties" means the debts owed by Heinz and HTS
to the Heinz Shareholder or to any family member thereof, or to any
affiliate, director or officer of Heinz, HTS or the Heinz Shareholder
as described in Schedule "D";
(w) "Heinz Equipment" means all machinery, equipment, furniture, and
furnishings used in the Heinz Business, including, without limitation,
the items more particularly described in Schedule "E" hereto;
(x) "Heinz Financial Statements" means collectively, the financial
statements of Heinz for the years ended December 31, 2002 and 2003,
all of which are to be prepared in accordance with United States
generally accepted accounting principles, true copies of which are
attached as Schedule "F" hereto;
(y) "Heinz Goodwill" means the goodwill of the Heinz Business together
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with the exclusive right of WPCS to represent itself as carrying on
the Heinz Business in succession of Heinz subject to the terms hereof,
and the right to use any words indicating that the Heinz Business is
so carried on including the right to use the name "Heinz" or "Heinz
International" or any variation thereof as part of the name of or in
connection with the Heinz Business or any part thereof carried on or
to be carried on by Heinz, the right to all corporate, operating and
trade names associated with the Heinz Business, or any variations of
such names as part of or in connection with the Heinz Business, all
telephone listings and telephone advertising contracts, all lists of
customers, books and records and other information relating to the
Heinz Business, all necessary licenses and authorizations and any
other rights used in connection with the Heinz Business;
(z) "Heinz Insurance Policies" means the public liability insurance and
insurance against loss or damage to Heinz Assets and the Heinz
Business as described in Schedule "G" hereto;
(aa) "Heinz Intangible Assets" means all of the intangible assets of Heinz
and HTS, including, without limitation, Heinz Goodwill, all
trademarks, logos, copyrights, designs, and other intellectual and
industrial property of Heinz and its subsidiaries;
(bb) "Heinz Inventory" means all inventory and supplies of the Heinz
Business as of December 31, 2003 as set forth in Schedule "H" hereto;
(cc) "Heinz Material Contracts" means the burden and benefit of and the
right, title and interest of Heinz or HTS in, to and under all trade
and non-trade contracts, engagements or commitments, whether written
or oral, to which Heinz or HTS is entitled in connection with the
Heinz Business whereunder Heinz or HTS is obligated to pay or entitled
to receive the sum of $10,000 or more including, without limitation,
any pension plans, profit sharing plans, bonus plans, loan agreements,
security agreements, indemnities and guarantees, any agreements with
employees, lessees, licensees, managers, accountants, suppliers,
agents, distributors, officers, directors, attorneys or others which
cannot be terminated without liability on not more than one month's
notice, and those contracts listed in Schedule "I" hereto; and
(dd) "Heinz Shares" means all of the issued and outstanding shares of
Heinz's equity stock;
(ee) "HTS" means Heinz Tower Services, Inc., a Missouri corporation.
(ff) "MGBCL" means the Missouri General and Business Corporation Law.
(gg) "WPCS Business" means all aspects of any business conducted by WPCS
and its subsidiaries;
(hh) "WPCS Common Shares" means the shares of common stock in the capital
of WPCS; and
(ii) "WPCS Financial Statements" means, collectively, the audited
consolidated financial statements of WPCS for the fiscal years ended
April 30, 2002 and 2003, and the unaudited consolidated financial
statements for the nine months ended January 31, 2004, true copies of
which are attached as Schedule "M" hereto.
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Any other terms defined within the text of this Agreement will have the meanings
so ascribed to them.
Captions and Section Numbers
1.2 The headings and section references in this Agreement are for convenience of
reference only and do not form a part of this Agreement and are not intended to
interpret, define or limit the scope, extent or intent of this Agreement or any
provision thereof.
Section References and Schedules
1.3 Any reference to a particular "Article", "section", "paragraph", "clause" or
other subdivision is to the particular Article, section, clause or other
subdivision of this Agreement and any reference to a Schedule by letter will
mean the appropriate Schedule attached to this Agreement and by such reference
the appropriate Schedule is incorporated into and made part of this Agreement.
The Schedules to this Agreement are as follows:
Information concerning Heinz
Schedule "A" Heinz Accounts Payable and Liabilities
Schedule "B" Heinz Accounts Receivable
Schedule "C" Heinz Bank Accounts
Schedule "D" Heinz Debts to Related Parties (including accounts
payableaging ledger)
Schedule "E" Heinz Equipment
Schedule "F" Heinz Financial Statements
Schedule "G" Heinz Insurance Policies
Schedule "H" Heinz Inventory
Schedule "I" Heinz Material Contracts
Schedule "J" Heinz Business Qualifications
Schedule "K" Heinz Pension Plans
Schedule "L" Heinz Collective Bargaining Agreements
Information concerning WPCS
Schedule "M" WPCS Financial Statements
Schedule "N" WPCS Options, Warrants and Agreements
Exhibits
Schedule "O" Form of Employment Agreements
Schedule "P" Form of Registration Rights Agreement
Schedule "Q" Form of Promissory Note
Severability of Clauses
1.4 If any part of this Agreement is declared or held to be invalid for any
reason, such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion, and it is hereby declared the intention of
the parties that this Agreement would have been executed
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without reference to any portion which may, for any reason, be hereafter
declared or held to be invalid.
ARTICLE 2
THE MERGER
The Merger
2.1 At Closing, the Acquirer shall be merged with and into Heinz pursuant to
this Agreement and Plan of Merger and the separate corporate existence of the
Acquirer shall cease and Heinz, as it exists from and after the Closing, shall
be the Surviving Company.
Effect of the Merger
2.2 The Merger shall have the effect provided therefore by the MGBCL. Without
limiting the generality of the foregoing, and subject thereto, at Closing (i)
all the rights, privileges, immunities, powers and franchises, of a public as
well as of a private nature, and all property, real, personal and mixed, and all
debts due on whatever account, including without limitation subscriptions to
shares, and all other choses in action, and all and every other interest of or
belonging to or due to Heinz or the Acquirer, as a group, subject to the terms
hereof, shall be taken and deemed to be transferred to, and vested in, the
Surviving Company without further act or deed; and all property, rights and
privileges, immunities, powers and franchises and all and every other interest
shall be thereafter as effectually the property of the Surviving Company, as
they were of Heinz and the Acquirer, as a group, and (ii) all debts,
liabilities, duties and obligations of Heinz and the Acquirer, as a group,
subject to the terms hereof, shall become the debts, liabilities and duties of
the Surviving Company and the Surviving Company shall thenceforth be responsible
and liable for all debts, liabilities, duties and obligations of Heinz and the
Acquirer, as a group, and neither the rights of creditors nor any liens upon the
property of Heinz or the Acquirer, as a group, shall be impaired by the Merger,
and may be enforced against the Surviving Company.
Certificate of Incorporation; Bylaws; Directors and Officers
2.3 The Certificate of Incorporation of the Surviving Company from and after the
Closing shall be the Certificate of Incorporation of Heinz until thereafter
amended in accordance with the provisions therein and as provided by the
applicable provisions of the MGBCL. The Bylaws of the Surviving Company from and
after the Closing shall be the Bylaws of Heinz as in effect immediately prior to
the Closing, continuing until thereafter amended in accordance with their terms,
the Certificate of Incorporation of the Surviving Company and as provided by the
MGBCL. The Board of Directors of the Surviving Company shall consist of James
Heinz, Andrew Hidalgo and Joseph Heater.
Conversion of Securities
2.4 At the Effective Time, by virtue of the Merger and without any action on the
part of the Acquirer, Heinz or the Heinz Shareholders, the shares of capital
stock of each of Heinz and the Acquirer shall be converted as follows:
(a) Capital Stock of the Acquirer. Each issued and outstanding share of
the Acquirer's capital stock shall continue to be issued and
outstanding and shall be converted into one share of validly issued,
fully paid, and non-assessable common stock of the Surviving Company.
Each stock certificate of the Acquirer evidencing ownership of any
such shares shall continue to evidence ownership of such shares of
capital stock of the Surviving Company.
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(b) Conversion of Heinz Shares. Each Heinz Share that is issued and
outstanding at the Effective Time shall automatically be cancelled
aextinguished and converted, without any action on the part of the
holder thereof, into the right to receive at the time and in the
amounts described in this Agreement an amount of Acquisition Shares
equal to the number of Acquisition Shares divided by the number of the
Heinz Shares outstanding immediately prior to Closing. All such Heinz
Shares, when so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and
each holder of a certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive
the Acquisition Shares paid in consideration therefor upon the
surrender of such certificate in accordance with this Agreement.
Additional Consideration
2.5 In addition to the Acquisition Shares, WPCS shall pay the Heinz Shareholder
additional consideration in the amount of $300,000 ("Cash Consideration"). The
Cash Consideration shall be paid as follows:
(a) On the Closing Date, WPCS shall pay the Heinz Shareholder $100,000 by
certified check, bank check or wire transfer; and
(b) The balance of $200,000 shall be evidenced by a promissory note in the
form attached hereto as Schedule "Q". Of such $200,000, $75,000 shall
be payable on the first and second anniversaries of the Closing Date
and $50,000 shall be payable on the third anniversary of the Closing
Date.
Adherence with Applicable Securities Laws
2.6 The Heinz Shareholder agrees that he is acquiring the Acquisition Shares for
investment purposes and will not offer, sell or otherwise transfer, pledge or
hypothecate any of the Acquisition Shares issued to them (other than pursuant to
an effective registration statement under the Securities Act) directly or
indirectly unless:
(a) the sale is to WPCS;
(b) the sale is made pursuant to the exemption from registration under the
Securities Act, provided by Rule 144 thereunder; or
(c) the Acquisition Shares are sold in a transaction that does not require
registration under the Securities Act, or any applicable United States
state laws and regulations governing the offer and sale of securities,
and the seller has furnished to WPCS an opinion of counsel to that
effect or such other written opinion as may be reasonably required by
WPCS.
The Heinz Shareholder acknowledges that the certificates representing the
Acquisition Shares shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT. THEY MAY NOT BE MORTGAGED, PLEDGED, HYPOTHECATED, OR
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OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR
SUCH SHARES UNDER THE SECURITIES ACT OF 1933 AND OTHER APPLICABLE
SECURITIES LAWS OR AN OPINION OF COUNSEL FOR THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND OTHER APPLICABLE
SECURITIES LAWS. THE HOLDER MAY BE REQUIRED TO PROVIDE AN OPINION AT
THE HOLDER'S COST TO THE COMPANY THAT SUCH TRANSFER IS PERMITTED
WITHOUT REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS, WHICH
OPINION MUST BE ACCEPTABLE TO THE COMPANY'S COUNSEL.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF WPCS
Representations and Warranties
3.1 WPCS represents and warrants in all material respects to the Heinz
Shareholder, with the intent that the Heinz Shareholder will rely thereon in
entering into this Agreement and in approving and completing the transactions
contemplated hereby, that:
WPCS - Corporate Status and Capacity
(a) Incorporation. WPCS is a corporation duly incorporated and validly
subsisting under the laws of the State of Delaware, and is in good
standing with the office of the Secretary of State for the State of
Delaware;
(b) Carrying on Business. WPCS carries on business primarily in the
Commonwealth of Pennsylvania and the state of Missouri and does not
carry on any material business activity in any other jurisdiction. The
nature of the WPCS Business does not require WPCS to register or
otherwise be qualified to carry on business in any other jurisdiction;
(c) Corporate Capacity. WPCS has the corporate power, capacity and
authority to own its assets and to enter into and complete this
Agreement;
(d) Reporting Status; Listing. WPCS's common stock is registered under
Section 12(b) or 12(g) of the Exchange Act and WPCS is required to
file current reports with the Commission pursuant to section 13(a) of
the Exchange Act. The WPCS Common Shares are quoted on the OTC
Bulletin Board under the symbol "WPCS";
(e) SEC Reports. WPCS has timely filed all SEC Reports with the Commission
under the Exchange Act. The SEC Reports, at the time filed, complied
as to form in all material respects with the requirements of the
Exchange Act. None of the SEC Reports, including without limitation
any financial statements or schedules included therein, contains any
untrue statements of a material fact or omits to stare a material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading;
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Acquirer - Corporate Status and Capacity
(f) Incorporation. The Acquirer is a corporation duly incorporated and
validly subsisting under the laws of the State of Missouri, and is in
good standing with the office of the Secretary of State for the State
of Missouri;
(g) Carrying on Business. Other than corporate formation and organization,
the Acquirer has not carried on business activities to date.
(h) Corporate Capacity. The Acquirer has the corporate power, capacity and
authority to enter into and complete this Agreement;
WPCS - Capitalization
(i) Authorized Capital. The authorized capital of WPCS consists of
30,000,000 WPCS Common Shares, $0.0001 par value and 5,000,000 shares
of preferred stock. $0.0001 par value, of which 20,135,690 WPCS Common
Shares are presently issued and outstanding;
(j) Options, Warrants and other Agreements. No person, firm or corporation
has any agreement or option or any right capable of becoming an
agreement or option for the acquisition of WPCS Common Shares or for
the purchase, subscription or issuance of any of the unissued shares
in the capital of WPCS, except as set forth on Schedule "N";
Acquirer - Capitalization
(k) Authorized Capital. The authorized capital of the Acquirer consists of
100 shares of common stock, $0.001 par value, of which one share of
common stock is presently issued and outstanding;
(l) No Option. No person, firm or corporation has any agreement or option
or any right capable of becoming an agreement or option for the
acquisition of any common or preferred shares in Acquirer or for the
purchase, subscription or issuance of any of the unissued shares in
the capital of Acquirer;
WPCS - Records and Financial Statements
(m) Charter Documents. The charter documents of WPCS and the Acquirer have
not been altered since the incorporation of each, respectively, except
as filed in the record books of WPCS or the Acquirer, as the case may
be;
(n) Corporate Minute Books. The corporate minute books of WPCS and its
subsidiaries are complete and each of the minutes contained therein
accurately reflect the actions that were taken at a duly called and
held meeting or by consent without a meeting. All actions by WPCS and
its subsidiaries which required director or shareholder approval are
reflected on the corporate minute books of WPCS and its subsidiaries.
WPCS and its subsidiaries are not in violation or breach of, or in
default with respect to, any term of their respective Certificates of
Incorporation (or other charter documents) or by-laws;
(o) WPCS Financial Statements. The WPCS Financial Statements present
fairly, in all material respects, the assets and liabilities (whether
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accrued, absolute, contingent or otherwise) of WPCS, on a consolidated
basis, as of the respective dates thereof, and the results of
operations and changes in financial position of WPCS during the
periods covered thereby, in all material respects and have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods indicated;
(p) WPCS Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of WPCS or its subsidiaries
which are not reflected in the WPCS Financial Statements except those
incurred in the ordinary course of business since the date of the said
schedule and the WPCS Financial Statements, and neither WPCS nor its
subsidiaries have guaranteed or agreed to guarantee any debt,
liability or other obligation of any person, firm or corporation;
(q) WPCS Accounts Receivable. All the accounts receivable of WPCS result
from bona fide business transactions and services actually rendered
without, to the knowledge and belief of WPCS, any claim by the obligor
for set-off or counterclaim;
(r) No Debt to Related Parties. Neither WPCS nor its subsidiaries are, and
on Closing will not be, materially indebted to any affiliate, director
or officer of WPCS except accounts payable on account of bona fide
business transactions of WPCS incurred in normal course of the WPCS
Business, including employment agreements, none of which are more than
30 days in arrears;
(s) No Related Party Debt to WPCS. No director or officer or affiliate of
WPCS is now indebted to or under any financial obligation to WPCS or
its subsidiaries on any account whatsoever, except for advances on
account of travel and other expenses not exceeding $5,000 in total;
(t) No Dividends. No dividends or other distributions on any shares in the
capital of WPCS have been made, declared or authorized since the date
of WPCS Financial Statements;
(u) No Payments. No payments of any kind have been made or authorized
since the date of the WPCS Financial Statements to or on behalf of
officers, directors, shareholders or employees of WPCS or its
subsidiaries or under any management agreements with WPCS or its
subsidiaries, except payments made in the ordinary course of business
and at the regular rates of salary or other remuneration payable to
them;
(v) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting WPCS or its subsidiaries;
(w) No Adverse Events. Since January 31, 2004,
(i) there has not been any material adverse change in the properties,
results of operations, financial position or condition (financial
or otherwise) of WPCS, its subsidiaries, its assets or
liabilities or any damage, loss or other change in circumstances
materially affecting WPCS, the WPCS Business or WPCS' right to
carry on the WPCS Business, other than changes in the ordinary
course of business,
(ii) there has not been any damage, destruction, loss or other event
(whether or not covered by insurance) materially and adversely
affecting WPCS, its subsidiaries, or the WPCS Business,
(iii)there has not been any material increase in the compensation
payable or to become payable by WPCS to any of WPCS'
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officers, employees or agents or any bonus, payment or
arrangement made to or with any of them,
(iv) the WPCS Business has been and continues to be carried on in the
ordinary course,
(v) WPCS has not waived or surrendered any right of material value,
(vi) Neither WPCS nor its subsidiaries have discharged or satisfied or
paid any lien or encumbrance or obligation or liability other
than current liabilities in the ordinary course of business, and
(vii)no capital expenditures in excess of $10,000 individually or
$30,000 in total have been authorized or made.
WPCS - Income Tax Matters
(x) Tax Returns. All tax returns and reports of WPCS and its subsidiaries
required by law to be filed have been filed and are true, complete and
correct, and any taxes payable in accordance with any return filed by
WPCS and its subsidiaries or in accordance with any notice of
assessment or reassessment issued by any taxing authority have been so
paid;
(y) Current Taxes. Adequate provisions have been made for taxes payable
for the current period for which tax returns are not yet required to
be filed and there are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing of any
tax return by, or payment of, any tax, governmental charge or
deficiency by WPCS or its subsidiaries. WPCS is not aware of any
contingent tax liabilities or any grounds which would prompt a
reassessment including aggressive treatment of income and expenses in
filing earlier tax returns;
WPCS - Applicable Laws and Legal Matters
(z) Licenses. WPCS and its subsidiaries hold all licenses and permits as
may be requisite for carrying on the WPCS Business in the manner in
which it has heretofore been carried on, which licenses and permits
have been maintained and continue to be in good standing except where
the failure to obtain or maintain such licenses or permits would not
have a material adverse effect on the WPCS Business;
(aa) Applicable Laws. Neither WPCS nor its subsidiaries have been charged
with or received notice of breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which they are subject or
which apply to them the violation of which would have a material
adverse effect on the WPCS Business, and to WPCS' knowledge, neither
WPCS nor its subsidiaries are in breach of any laws, ordinances,
statutes, regulations, bylaws, orders or decrees the contravention of
which would result in a material adverse impact on the WPCS Business;
(bb) Pending or Threatened Litigation. There is no material litigation or
administrative
14
or governmental proceeding pending or threatened against or relating
to WPCS, its subsidiaries, or the WPCS Business nor does WPCS have any
knowledge of any deliberate act or omission of WPCS or its
subsidiaries that would form any material basis for any such action or
proceeding;
(cc) No Bankruptcy. Neither WPCS nor its subsidiaries have made any
voluntary assignment or proposal under applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been filed or
presented against WPCS or its subsidiaries and no order has been made
or a resolution passed for the winding-up, dissolution or liquidation
of WPCS or its subsidiaries;
(dd) Labor Matters. Neither WPCS nor its subsidiaries are party to any
collective agreement relating to the WPCS Business with any labor
union or other association of employees and no part of the WPCS
Business has been certified as a unit appropriate for collective
bargaining or, to the knowledge of WPCS, has made any attempt in that
regard;
(ee) Finder's Fees. Neither WPCS nor its subsidiaries are party to any
agreement which provides for the payment of finder's fees, brokerage
fees, commissions or other fees or amounts which are or may become
payable to any third party in connection with the execution and
delivery of this Agreement and the transactions contemplated herein;
Execution and Performance of Agreement
(ff) Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated hereby,
have been duly and validly authorized by all necessary corporate
action on the part of WPCS and the Acquirer;
(gg) No Violation or Breach. The execution and performance of this
Agreement will not:
(i) violate the charter documents of WPCS or the Acquirer or result
in any breach of, or default under, any loan agreement, mortgage,
deed of trust, or any other agreement to which WPCS or its
subsidiaries are party,
(ii) give any person any right to terminate or cancel any agreement or
any right or rights enjoyed by WPCS or its subsidiaries,
(iii)result in any alteration of WPCS' or its subsidiaries'
obligations under any agreement to which WPCS or its subsidiaries
are party,
(iv) result in the creation or imposition of any lien, encumbrance or
restriction of any nature whatsoever in favor of a third party
upon or against the assets of WPCS,
(v) result in the imposition of any tax liability to WPCS or its
subsidiaries relating to the assets of WPCS, or
15
(vi) violate any court order or decree to which either WPCS or its
subsidiaries are subject;
The WPCS Business
(hh) Maintenance of Business. Since the date of the WPCS Financial
Statements, WPCS and its subsidiaries have not entered into any
material agreement or commitment except in the ordinary course and
except as disclosed herein or in the WPCS SEC Reports;
(ii) Subsidiaries. Except for the Acquirer or as disclosed in the WPCS SEC
Reports, WPCS does not own any subsidiaries and does not otherwise
own, directly or indirectly, any shares or interest in any other
corporation, partnership, joint venture or firm;
WPCS - Acquisition Shares
(jj) Acquisition Shares. The Acquisition Shares when delivered to the
holder of Heinz Shares pursuant to the Merger shall be validly issued
and outstanding as fully paid and non-assessable shares and the
Acquisition Shares shall be transferable upon the books of WPCS, in
all cases subject to the provisions and restrictions of all applicable
securities laws; and
(kk) Securities Law Compliance. Neither WPCS nor any person acting on its
behalf has taken or will take any action (including, without
limitation, any offering of any securities of WPCS under circumstances
which would require the integration of such offering with the offering
of the Acquisition Shares issued to the Heinz Shareholders) which
subject the issuance or sale of such shares to the Heinz Shareholders
to the registration requirements of Section 5 of the Securities Act.
Non-Merger and Survival
3.2 The representations and warranties of WPCS contained herein will be true at
and as of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by the Heinz Shareholder, the
representations and warranties of WPCS shall survive the Closing for a period of
two (2) years.
Indemnity
3.3 WPCS agrees to indemnify and save harmless the Heinz Shareholder from and
against any and all claims, demands, actions, suits, proceedings, assessments,
judgments, damages, costs, losses and expenses, including any payment made in
good faith in settlement of any claim (subject to the right of WPCS to defend
any such claim), resulting from (i) the breach by it of any representation or
warranty made under this Agreement or from any misrepresentation in or omission
from any certificate or other instrument furnished or to be furnished by WPCS to
the Heinz Shareholder hereunder provided that each individual claim or series of
related claims exceeds $10,000, or (ii) any personal liability of the Heinz
Shareholder arising from the agreement between Heinz and First National Bank of
St. Louis.
16
ARTICLE 4
COVENANTS OF WPCS
Covenants
4.1 WPCS covenants and agrees with Heinz that it will:
(a) Conduct of Business. Until the Closing, conduct its business
diligently and in the ordinary course consistent with the manner in
which it generally has been operated up to the date of execution of
this Agreement;
(b) Access. Until the Closing, give the Heinz Shareholder and his
representatives full access to all of the properties, books,
contracts, commitments and records of WPCS, and furnish to the Heinz
Shareholder and his representatives all such information as he may
reasonably request;
(c) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party consents
required to permit the Merger;
(d) Public Information. Make and keep public information available, as
those terms are understood and defined in Rule 144; and
(e) SEC Filings. File with the Commission in a timely manner, all reports
and other documents required of WPCS under the Securities Act and the
Exchange Act.
(f) Employment Agreements. On the Closing Date, WPCS will cause Heinz to
enter into the Employment Agreements.
(g) Delivery of Registration Rights Agreement and Promissory Note. On the
Closing Date, WPCS will deliver the executed Registration Rights
Agreement and Promissory Note to the Heinz Shareholder.
(h) Renewal and Indemnification of Bank line. Following the Closing, WPCS
shall use its best efforts to assist Heinz in renewing its existing
line of credit with First National Bank of St. Louis (the "Bank"), and
shall execute such documents as the Bank may reasonably request in
connection therewith. WPCS agrees that following the Closing that it
shall indemnify and hold harmless the Heinz Shareholder from and
against any claims and expenses relating thereto with respect to such
line of credit arising out of the Heinz Shareholder's guaranty of the
line of credit.
Authorization
WPCS hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting WPCS and its subsidiaries to release any and all
information in their possession respecting WPCS and its subsidiaries to Heinz.
WPCS shall promptly execute and deliver to Heinz any and all consents to the
release of information and specific authorizations which Heinz reasonably
requires to gain access to any and all such information.
Reports Under Exchange Act
16
With a view to making available to the Heinz Shareholder the benefits of
Rule 144 promulgated under the Securities Act or any other similar rule or
regulation of the Commission that may at any time permit the Heinz Shareholder
to sell securities of WPCS to the public without registration and without
imposing restrictions arising under the federal securities laws on the purchases
thereof ("Rule 144"), and provided that the one year holding period imposed by
paragraph d of Rule 144 has been met, WPCS agrees to furnish to each Heinz
Shareholder, so long as such Heinz Shareholder owns WPCS Common Shares, promptly
upon request, (i) a written statement by WPCS that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of WPCS and such other
reports and documents so filed by WPCS, and (iii) such other information as may
be reasonably requested to permit the Heinz Shareholders to sell such securities
pursuant to Rule 144 without registration.
Survival
The covenants set forth in this Article shall survive the Closing for the
benefit of the Heinz Shareholder.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF
THE HEINZ SHAREHOLDER
Representations and Warranties
5.1 The Heinz Shareholder represents and warrants in all material respects to
WPCS, with the intent that it will rely thereon in entering into this Agreement
and in approving and completing the transactions contemplated hereby, that:
Heinz - Corporate Status and Capacity
(a) Incorporation. Heinz is a corporation duly incorporated and validly
subsisting under the laws of the State of Missouri, and is in good
standing with the office of the Secretary of State for the State of
Missouri;
(b) Carrying on Business. Heinz carries on business primarily in the State
of Missouri and does not carry on any material business activity in
any other jurisdiction, except as set forth on Schedule "J". Heinz has
an office in St. Louis, Missouri and in no other locations. The nature
of the Heinz Business does not require Heinz to register or otherwise
be qualified to carry on business in any other jurisdiction;
(c) Corporate Capacity. Heinz has the corporate power, capacity and
authority to own Heinz Assets and to carry on the Business of Heinz
and Heinz has the corporate power, capacity and authority to enter
into and complete this Agreement;
HTS- Corporate Status and Capacity
(d) Incorporation. HTS is a corporation duly incorporated and validly
subsisting under the laws of the State of Missouri, and is in good
standing with the office of the Secretary of State for the State of
Missouri;
(e) Carrying on Business. HTS carries on business primarily in the State
of Missouri and does not carry on any material business activity in
any other jurisdiction,
18
except as set forth on Schedule "J". The nature of the business of HTS
does not require HTS to register or otherwise be qualified to carry on
business in any other jurisdiction;
(f) Corporate Capacity. HTS has the corporate power, capacity and
authority to own its assets and to carry on its business;
Heinz - Capitalization
(g) Authorized Capital. The authorized capital of Heinz consists of 30,000
shares of common stock, $1.00 par value per share;
(h) Ownership of Heinz Shares. The issued and outstanding share capital of
Heinz will on Closing consist of 1,000 common shares (being the Heinz
Shares), which shares on Closing shall be validly issued and
outstanding as fully paid and non-assessable shares. The Heinz
Shareholder will be at Closing the registered and beneficial owner of
the Heinz Shares. The Heinz Shares owned by the Heinz Shareholder will
on Closing be free and clear of any and all liens, charges, pledges,
encumbrances, restrictions on transfer and adverse claims whatsoever;
(i) No Option. No person, firm or corporation has any agreement, option,
warrant, preemptive right or any other right capable of becoming an
agreement or option for the acquisition of Heinz Shares held by the
Heinz Shareholder or for the purchase, subscription or issuance of any
of the unissued shares in the capital of Heinz;
(j) No Restrictions. There are no restrictions on the transfer, sale or
other disposition of Heinz Shares contained in the charter documents
of Heinz or under any agreement;
Heinz - Records and Financial Statements
(k) Charter Documents. The charter documents of Heinz and HTS have not
been altered since the incorporation date, except as filed in the
record books of Heinz or HTS, respectively;
(l) Corporate Minute Books. The corporate minute books of Heinz and HTS
are complete and each of the minutes contained therein accurately
reflect the actions that were taken at a duly called and held meeting
or by consent without a meeting. All actions by Heinz or HTS which
required director or shareholder approval are reflected on the
corporate minute books of Heinz or HTS. Heinz and HTS are not in
violation or breach of, or in default with respect to, any term of
their Certificates of Incorporation (or other charter documents) or
by-laws;
(m) Heinz Financial Statements. The Heinz Financial Statements present
fairly, in all material respects, the assets and liabilities (whether
accrued, absolute, contingent or otherwise) of Heinz as of the
respective dates thereof, and the results of operations and changes in
financial position of Heinz during the periods covered thereby, in all
material respects, and will be prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods indicated;
19
(n) Heinz Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of Heinz which are not disclosed
in Schedule "A" hereto or reflected in the Heinz Financial Statements
except those incurred in the ordinary course of business since the
date of the said schedule and the Heinz Financial Statements, and
Heinz has not guaranteed or agreed to guarantee any debt, liability or
other obligation of any person, firm or corporation. Without limiting
the generality of the foregoing, all accounts payable and liabilities
of Heinz as of December 31, 2003 are described in Schedule "A" hereto;
(o) Heinz Accounts Receivable. All Heinz Accounts Receivable result from
bona fide business transactions and services actually rendered
without, to the knowledge and belief of Heinz, any claim by the
obligor for set-off or counterclaim;
(p) Heinz Bank Accounts. All of the Heinz Bank Accounts, their location,
numbers and the authorized signatories thereto are as set forth in
Schedule "C" hereto;
(q) No Debt to Related Parties. Except as disclosed in Schedule "D"
hereto, Heinz is not, and on Closing will not be, materially indebted
to the Heinz Shareholders nor to any family member thereof, nor to any
affiliate, director or officer of Heinz or the Heinz Shareholders
except accounts payable on account of bona fide business transactions
of Heinz incurred in normal course of Heinz Business, including
employment agreements with the Heinz Shareholders and attached to
Schedule "D" hereto is an accounts payable aging ledger;
(r) No Related Party Debt to Heinz. Neither the Heinz Shareholder nor any
director, officer or affiliate of Heinz are now indebted to or under
any financial obligation to Heinz on any account whatsoever, except
for advances on account of travel and other expenses not exceeding
$5,000 in total;
(s) No Dividends. No dividends or other distributions on any shares in the
capital of Heinz have been made, declared or authorized since the date
of the Heinz Financial Statements;
(t) No Payments. No payments of any kind have been made or authorized
since the date of the Heinz Financial Statements to or on behalf of
the Heinz Shareholder or to or on behalf of officers, directors,
shareholders or employees of Heinz, except payments made in the
ordinary course of business and at the regular rates of salary or
other remuneration payable to them;
(u) No Pension Plans. Except as set forth on Schedule "K", there are no
pension, profit sharing, group insurance or similar plans or other
deferred compensation plans ("Employee Benefit Plans") affecting
Heinz. All contributions and premiums required by law or by the terms
of any Employee Benefit Plan which are defined benefit plans or money
purchase plans or any agreement relating thereto have been timely made
(without regard to any waivers granted with respect thereto) to any
funds or trusts established thereunder or in connection therewith, and
no accumulated funding deficiencies exist in any of such plans. The
benefit liabilities of each of the Employee Benefit Plans in the event
it terminated each such plan do not exceed the fair market value of
the assets of each such plan. The liabilities of each Employee Benefit
Plan that has been terminated or otherwise wound up, have been fully
discharged in full compliance with applicable law. There has been no
"reportable event" as that term is defined in Section 4043 of ERISA
and the regulations thereunder with respect to any of the Employee
Benefit Plans subject to Title IV of ERISA
20
which would require the giving of notice, or any event requiring
notice to be provided under Section 4041(c)(3)(C) or 4063(a) of ERISA.
Each of the Employee Benefit Plans has been maintained, in all
material respects, in accordance with its terms and all provisions of
applicable law. All amendments and actions required to bring each of
the Employee Benefit Plans into conformity in all material respects
with all of the applicable provisions of ERISA and other applicable
Laws have been made or taken except to the extent that such amendments
or actions are not required by law to be made or taken until a date
after the Closing Date. Neither Heinz nor any "party in interest" or
"disqualified person" with respect to the Employee Benefit Plans has
engaged in a "prohibited transaction" within the meaning of Section
4975 of the Code or Section 406 of ERISA. Neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) result in any payment becoming due to any
employee of Heinz or HTS; (ii) increase any benefits otherwise payable
under any Employee Benefit Plan; or (iii) result in the acceleration
of the time of payment or vesting of any such benefits;
(v) No Adverse Events. Since the date of the Heinz Financial Statements,
except as described in Schedule "A" hereto:
(i) there has not been any material adverse change in the properties,
results of operations, financial position or condition of Heinz,
its liabilities or the Heinz Assets or any damage, loss or other
change in circumstances materially affecting Heinz, the Heinz
Business or the Heinz Assets or Heinz's right to carry on the
Heinz Business, other than changes in the ordinary course of
business,
(ii) there has not been any damage, destruction, loss or other event
(whether or not covered by insurance) materially and adversely
affecting Heinz, the Heinz Business or the Heinz Assets,
(iii)there has not been any material increase in the compensation
payable or to become payable by Heinz to the Heinz Shareholders
or to any of Heinz's officers, employees or agents or any bonus,
payment or arrangement made to or with any of them,
(iv) the Heinz Business has been and continues to be carried on in the
ordinary course,
(v) Heinz has not waived or surrendered any right of material value,
(vi) Heinz has not discharged or satisfied or paid any lien or
encumbrance or obligation or liability other than current
liabilities in the ordinary course of business, and
(vii)no capital expenditures in excess of $10,000 individually or
$30,000 in total have been authorized or made;
21
Heinz - Income Tax Matters
(w) Tax Returns. All tax returns and reports of Heinz required by law to
be filed have been filed and are true, complete and correct, and any
taxes payable in accordance with any return filed by Heinz or in
accordance with any notice of assessment or reassessment issued by any
taxing authority have been so paid;
(x) Current Taxes. Adequate provisions have been made for taxes payable
for the current period for which tax returns are not yet required to
be filed and there are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing of any
tax return by, or payment of, any tax, governmental charge or
deficiency by Heinz. Heinz is not aware of any contingent tax
liabilities or any grounds which would prompt a reassessment including
aggressive treatment of income and expenses in filing earlier tax
returns;
Heinz - Applicable Laws and Legal Matters
(y) Licenses. Heinz holds all licenses and permits as may be requisite for
carrying on the Heinz Business in the manner in which it has
heretofore been carried on, which licenses and permits have been
maintained and continue to be in good standing except where the
failure to obtain or maintain such licenses or permits would not have
a material adverse effect on the Heinz Business;
(z) Applicable Laws. Heinz has not been charged with or received notice of
breach of any laws, ordinances, statutes, regulations, by-laws, orders
or decrees to which it is subject or which applies to it the violation
of which would have a material adverse effect on the Heinz Business,
and, to Heinz's knowledge, Heinz is not in breach of any laws,
ordinances, statutes, regulations, by-laws, orders or decrees the
contravention of which would result in a material adverse impact on
the Heinz Business;
(aa) Pending or Threatened Litigation. Except as described in Schedule "A"
attached hereto, there is no material litigation or administrative or
governmental proceeding pending or threatened against or relating to
Heinz, the Heinz Business, or any of the Heinz Assets, nor does Heinz
have any knowledge of any deliberate act or omission of Heinz that
would form any material basis for any such action or proceeding;
(bb) No Bankruptcy. Heinz has not made any voluntary assignment or proposal
under applicable laws relating to insolvency and bankruptcy and no
bankruptcy petition has been filed or presented against Heinz and no
order has been made or a resolution passed for the winding-up,
dissolution or liquidation of Heinz;
(cc) Labor Matters. Except as set forth on Schedule "L", Heinz is not a
party to any collective agreement relating to the Heinz Business with
any labor union or other association of employees and no part of the
Heinz Business has been certified as a unit appropriate for collective
bargaining or, to the knowledge of Heinz, has made any attempt in that
regard and Heinz has no reason to believe that any current employees
will leave Heinz's employ as a result of this Merger. Heinz has
delivered or otherwise made available to WPCS true,
22
correct and complete copies of the labor or collective bargaining
agreements listed on Schedule "L", together with all amendments,
modifications or supplements thereto. No labor organization or group
of employees of Heinz or HTS has made a pending demand for
recognition, and there are no representation proceedings or petitions
seeking a representation proceeding presently pending or, to the best
knowledge of Heinz, threatened to be brought or filed, with the
National Labor Relations Board or other labor relations tribunal.
There are no (i) strikes, work stoppages, slowdowns, lockouts or
arbitrations or (ii) material grievances or other labor disputes
pending or, to the best knowledge of Heinz or the Heinz Shareholder,
threatened against or involving Heinz or HTS. There are no unfair
labor practice charges, grievances or complaints pending or, to the
best knowledge of Heinz or the Heinz Shareholder, threatened by or on
behalf of any employee or group of employees of Heinz or HTS.
(dd) Finder's Fees. Heinz is not a party to any agreement which provides
for the payment of finder's fees, brokerage fees, commissions or other
fees or amounts which are or may become payable to any third party in
connection with the execution and delivery of this Agreement and the
transactions contemplated herein;
Execution and Performance of Agreement
(ee) Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated hereby,
have been duly and validly authorized by all necessary corporate
action on the part of Heinz and the Heinz Shareholders;
(ff) No Violation or Breach. The execution and performance of this
Agreement will not
(i) violate the charter documents of Heinz or result in any breach
of, or default under, any loan agreement, mortgage, deed of
trust, or any other agreement to which Heinz is a party,
(ii) give any person any right to terminate or cancel any agreement
including, without limitation, Heinz Material Contracts, or any
right or rights enjoyed by Heinz,
(iii)result in any alteration of Heinz's obligations under any
agreement to which Heinz is a party including, without
limitation, the Heinz Material Contracts,
(iv) result in the creation or imposition of any lien, encumbrance or
restriction of any nature whatsoever in favor of a third party
upon or against the Heinz Assets,
(v) result in the imposition of any tax liability to Heinz relating
to Heinz Assets or the Heinz Shares, or
(vi) violate any court order or decree to which either Heinz is
subject;
23
Heinz Assets - Ownership and Condition
(gg) Business Assets. The Heinz Assets comprise all of the property and
assets of the Heinz Business, and neither the Heinz Shareholders nor
any other person, firm or corporation owns any assets used by Heinz in
operating the Heinz Business, whether under a lease, rental agreement
or other arrangement, other than as disclosed in Schedules "E" or "I"
hereto;
(hh) Title. Heinz is the legal and beneficial owner of the Heinz Assets,
free and clear of all mortgages, liens, charges, pledges, security
interests, encumbrances or other claims whatsoever, save and except as
disclosed in Schedules "E" or "I" hereto;
(ii) No Option. No person, firm or corporation has any agreement or option
or a right capable of becoming an agreement for the purchase of any of
the Heinz Assets;
(jj) Heinz Insurance Policies. Heinz maintains the public liability
insurance and insurance against loss or damage to the Heinz Assets and
the Heinz Business as described in Schedule "G" hereto;
(kk) Heinz Material Contracts. The Heinz Material Contracts listed in
Schedule "I" constitute all of the material contracts of Heinz;
(ll) No Default. There has not been any default in any material obligation
of Heinz or any other party to be performed under any of Heinz
Material Contracts, each of which is in good standing and in full
force and effect and unamended (except as specifically disclosed in
Schedule "I"), and Heinz is not aware of any default in the
obligations of any other party to any of the Heinz Material Contracts;
(mm) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances
on termination of employment of any employee of Heinz. Heinz is not
obliged to pay benefits or share profits with any employee after
termination of employment except as required by law;
Heinz Assets - Heinz Equipment
(nn) Heinz Equipment. The Heinz Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner and such equipment
is in good working condition;
Heinz Assets - Heinz Goodwill and Other Assets
(oo) Heinz Goodwill. Heinz carries on the Heinz Business only under the
name "Heinz Corporation" and variations thereof and under no other
business or trade names. Heinz does not have any knowledge of any
infringement by Heinz of any patent, trademark, copyright or trade
secret;
The Business of Heinz
(pp) Maintenance of Business. Since the date of the Heinz Financial
Statements, the Heinz Business has been carried on in the ordinary
course and Heinz has not entered into any material agreement or
commitment except in the ordinary
24
course; and
(qq) Subsidiaries. Other than HTS, Heinz does not own any subsidiaries and does
not otherwise own, directly or indirectly, any shares or interest in any
other corporation, partnership, joint venture or firm and Heinz does not
own any subsidiary and does not otherwise own, directly or indirectly, any
shares or interest in any other corporation, partnership, joint venture or
firm.
Non-Merger and Survival
5.2 The representations and warranties of the Heinz Shareholders contained
herein will be true at and as of Closing in all material respects as though such
representations and warranties were made as of such time. Notwithstanding the
completion of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by WPCS, the
representations and warranties of the Heinz Shareholders shall survive the
Closing for a period of two (2) years.
Indemnity
5.3 The Heinz Shareholder agrees to indemnify and save harmless WPCS from and
against any and all claims, demands, actions, suits, proceedings, assessments,
judgments, damages, costs, losses and expenses, including any payment made in
good faith in settlement of any claim (subject to the right of the Heinz
Shareholder to defend any such claim), resulting from the breach by any of them
of any representation or warranty of such party made under this Agreement or
from any misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished by Heinz or the Heinz Shareholder to
WPCS hereunder provided that each individual claim or series of related claims
exceeds $10,000 and that in no event shall the Heinz Shareholder be required to
pay more than $1,000,000 hereunder.
ARTICLE 6
COVENANTS OF HEINZ AND
THE HEINZ SHAREHOLDER
Covenants
6.1 Heinz and the Heinz Shareholder covenant and agree with WPCS that they will:
(a) Conduct of Business. Until the Closing, conduct the Heinz Business
diligently and in the ordinary course consistent with the manner in
which the Heinz Business generally has been operated up to the date of
execution of this Agreement;
(b) Preservation of Business. Until the Closing, use their best efforts to
preserve the Heinz Business and the Heinz Assets and, without
limitation, preserve for WPCS Heinz's relationships with their
suppliers, customers and others having business relations with them;
(c) Access. Until the Closing, give WPCS and its representatives full
access to all of the properties, books, contracts, commitments and
records of Heinz relating to Heinz, the Heinz Business and the Heinz
Assets, and furnish to WPCS and its representatives all such
information as they may reasonably request;
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(d) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party consents
required to permit the Merger and to preserve and maintain the Heinz
Assets, including the Heinz Material Contracts, notwithstanding the
change in control of Heinz arising from the Merger; and
(e) Reporting and Internal Controls. From and after the Effective Time,
forthwith take all required actions to implement internal controls on
the business of the Surviving Company to ensure that the Surviving
Company complies with Section 13(b)(2) of the Exchange Act.
(f) Delivery of Registration Rights Agreement. On the Closing Date, the
Heinz Shareholder will deliver the executed Registration Rights
Agreement to WPCS.
(g) Employment Agreements. On the Closing Date, Heinz will deliver the
executed Employment Agreements to WPCS.
Authorization
6.2 Heinz hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting Heinz to release any and all information in their
possession respecting Heinz to WPCS. Heinz shall promptly execute and deliver to
WPCS any and all consents to the release of information and specific
authorizations which WPCS reasonably require to gain access to any and all such
information.
Survival
6.3 The covenants set forth in this Article shall survive the Closing for the
benefit of WPCS.
ARTICLE 7
CONDITIONS PRECEDENT
Conditions Precedent in favor of WPCS
7.1 WPCS' obligations to carry out the transactions contemplated hereby are
subject to the fulfillment of each of the following conditions precedent on or
before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to WPCS hereunder will have been so executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by Heinz or the Heinz Shareholder at or
prior to the Closing will have been complied with or performed;
(c) title to the Heinz Shares held by the Heinz Shareholder and to the
Heinz Assets will be free and clear of all mortgages, liens, charges,
pledges, security interests, encumbrances or other claims whatsoever;
(d) the Certificates of Merger shall be executed by Heinz in form
acceptable for filing with the Missouri Secretary of State;
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(e) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position or
condition of Heinz, its liabilities or the Heinz Assets or any
damage, loss or other change in circumstances materially and
adversely affecting the Heinz Business or the Heinz Assets or
Heinz's right to carry on the Heinz Business, other than (i)
changes described in the Schedule "A" hereto and (ii) changes in
the ordinary course of business, none of which has been
materially adverse, or
(ii) any damage, destruction, loss or other event, including changes
to any laws or statutes applicable to Heinz or the Heinz Business
(whether or not covered by insurance) materially and adversely
affecting Heinz, the Heinz Business or the Heinz Assets.
(f) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject
matter hereof, if any.
(g) existing Heinz debt lines will be converted to WPCS obligations, with
repayment terms acceptable to WPCS.
(h) the backlog and forecasts of Heinz previously provided to WPCS shall
be have been confirmed to the satisfaction of WPCS.
(i) WPCS shall have received satisfactory confirmation that the
consummation of the transactions contemplated by this Agreement will
not have an adverse impact on Heinz's agreements with Nextel, Super
Conductor and Verizon.
Waiver by WPCS
7.2 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of WPCS and any such condition may be waived in whole or
in part by WPCS at or prior to Closing by delivering to Heinz and the Heinz
Shareholders a written waiver to that effect signed by WPCS. In the event that
the conditions precedent set out in the preceding section are not satisfied on
or before the Closing, WPCS shall be released from all obligations under this
Agreement.
Conditions Precedent in Favor of Heinz and the Heinz Shareholder
7.3 The obligations of Heinz and the Heinz Shareholder to carry out the
transactions contemplated hereby is subject to the fulfillment of each of the
following conditions precedent on or before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to Heinz hereunder will have been so executed and delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by WPCS at or prior to the Closing will
have been complied with or performed;
(c) WPCS will have delivered the Acquisition Shares to be issued pursuant
to the
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terms of the Merger to the Heinz Shareholders at the Closing and the
Acquisition Shares will be registered on the books of WPCS in the name
of the Heinz Shareholders at the Effective Time;
(d) title to the Acquisition Shares will be free and clear of all
mortgages, liens, charges, pledges, security interests, encumbrances
or other claims whatsoever;
(e) payment of the Cash Consideration required to be paid as of the
Closing Date shall have been made;
(f) the Articles of Merger shall be executed by the Acquirer in form
acceptable for filing with the Missouri Secretary of State;
(g) WPCS shall have provided written confirmation to Heinz that WPCS has
engaged an investment bank to raise additional working capital;
(h) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position or
condition of WPCS, its subsidiaries, their assets of liabilities
or any damage, loss or other change in circumstances materially
and adversely affecting WPCS or the WPCS Business or WPCS' right
to carry on the WPCS Business, other than changes in the ordinary
course of business, none of which has been materially adverse, or
(ii) any damage, destruction, loss or other event, including changes
to any laws or statutes applicable to WPCS or the WPCS Business
(whether or not covered by insurance) materially and adversely
affecting WPCS, its subsidiaries or its assets; and
(j) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject
matter hereof, if any.
Waiver by Heinz and the Heinz Shareholder
7.4 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of Heinz and the Heinz Shareholder and any such condition
may be waived in whole or in part by Heinz or the Heinz Shareholder at or prior
to the Closing by delivering to WPCS a written waiver to that effect signed by
Heinz and the Heinz Shareholder. In the event that the conditions precedent set
out in the preceding section are not satisfied on or before the Closing Heinz
and the Heinz Shareholder shall be released from all obligations under this
Agreement.
Nature of Conditions Precedent
7.5 The conditions precedent set forth in this Article are conditions of
completion of the transactions contemplated by this Agreement and are not
conditions precedent to the existence of a binding agreement. Each party
acknowledges receipt of the sum of $1.00 and other good and valuable
consideration as separate and distinct consideration for agreeing to the
conditions of precedent in favor of the other party or parties set forth in this
Article.
Termination
7.6 Notwithstanding any provision herein to the contrary, if the Closing does
not occur on or before April 2, 2004, this Agreement will be at an end and will
have no further force or effect,
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unless otherwise agreed upon by the parties in writing.
Confidentiality
7.7 Notwithstanding any provision herein to the contrary, the parties hereto
agree that the existence and terms of this Agreement are confidential and that
if this Agreement is terminated pursuant to the preceding section the parties
agree to return to one another any and all financial, technical and business
documents delivered to the other party or parties in connection with the
negotiation and execution of this Agreement and shall keep the terms of this
Agreement and all information and documents received from Heinz and WPCS and the
contents thereof confidential and not utilize nor reveal or release same,
provided, however, that WPCS may be required to issue news releases regarding
the execution and consummation of this Agreement and file a Current Report on
Form 8-K with the Securities and Exchange Commission respecting the proposed
Merger contemplated hereby together with such other documents as are required to
maintain the currency of WPCS' filings with the Securities and Exchange
Commission.
No-Shop Provision
7.8 From the date hereof until the close of business on April 2, 2004, the
parties hereto agree that they shall not, nor will they cause their directors,
officers, employees, agents and representatives to, directly or indirectly,
solicit or entertain offers from, hold meetings or discussions with, or in any
manner encourage, accept or consider any proposal of, any other person relating
to the acquisition of Heinz, shares of Heinz's capital stock, securities
convertible into or exchangeable for shares of Heinz's capital stock, or Heinz's
assets or business, in whole or in part, whether directly or indirectly, through
purchase, merger, consolidation, original issuance, or otherwise. Heinz and the
Heinz Shareholder will immediately notify WPCS in writing regarding any such
contact from the date hereof until the close of business on April 2, 2004.
ARTICLE 8
RISK
Material Change in the Business of Heinz
8.1 If any material loss or damage to the Heinz Business occurs prior to Closing
and such loss or damage, in WPCS' reasonable opinion, cannot be substantially
repaired or replaced within sixty (60) days, WPCS shall, within two (2) days
following any such loss or damage, by notice in writing to Heinz, at its option,
either:
(a) terminate this Agreement, in which case no party will be under any
further obligation to any other party; or
(b) elect to complete the Merger and the other transactions contemplated
hereby, in which case the proceeds and the rights to receive the
proceeds of all insurance covering such loss or damage will, as a
condition precedent to WPCS' obligations to carry out the transactions
contemplated hereby, be vested in Heinz or otherwise adequately
secured to the satisfaction of WPCS on or before the Closing Date.
Material Change in the WPCS Business
8.2 If any material loss or damage to the WPCS Business occurs prior to Closing
and such loss or damage, in Heinz's reasonable opinion, cannot be substantially
repaired or replaced
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within sixty (60) days, Heinz shall, within two (2) days following any such loss
or damage, by notice in writing to WPCS, at its option, either:
(a) terminate this Agreement, in which case no party will be under any
further obligation to any other party; or
(b) elect to complete the Merger and the other transactions contemplated
hereby, in which case the proceeds and the rights to receive the
proceeds of all insurance covering such loss or damage will, as a
condition precedent to Heinz's obligations to carry out the
transactions contemplated hereby, be vested in WPCS or otherwise
adequately secured to the satisfaction of Heinz on or before the
Closing Date.
ARTICLE 9
CLOSING
Closing
9.1 The Merger and the other transactions contemplated by this Agreement will be
closed at the Place of Closing in accordance with the closing procedure set out
in this Article.
Documents to be Delivered by Heinz
9.2 On or before the Closing, Heinz and the Heinz Shareholder will deliver or
cause to be delivered to WPCS:
(a) the original or certified copies of the charter documents of Heinz and
all corporate records documents and instruments of Heinz, the
corporate seal of Heinz and all books and accounts of Heinz;
(b) all reasonable consents or approvals required to be obtained by Heinz
for the purposes of completing the Merger and preserving and
maintaining the interests of Heinz under any and all Heinz Material
Contracts and in relation to Heinz Assets;
(c) certified copies of such resolutions of the shareholders and directors
of Heinz as are required to be passed to authorize the execution,
delivery and implementation of this Agreement;
(d) an acknowledgement from Heinz and the Heinz Shareholder of the
satisfaction of the conditions precedent set forth in section 7.3
hereof;
(e) the Employment Agreements;
(f) the Certificates of Merger, duly executed by Heinz;
(g) the Registration Rights Agreement, duly executed by the Heinz
Shareholder; and
(h) such other documents as WPCS may reasonably require to give effect to
the terms and intention of this Agreement.
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Documents to be Delivered by WPCS
9.3 On or before the Closing, WPCS shall deliver or cause to be delivered to
Heinz and the Heinz Shareholder:
(a) share certificates representing the Acquisition Shares duly registered
in the name of the Heinz Shareholder;
(b) the Cash Consideration due to be paid on the Closing Date;
(c) certified copies of such resolutions of the directors of WPCS as are
required to be passed to authorize the execution, delivery and
implementation of this Agreement;
(d) a certified copy of a resolution of the directors of Heinz dated as of
the Closing Date, approving the Employment Agreements;
(e) an acknowledgement from WPCS of the satisfaction of the conditions
precedent set forth in section 7.1 hereof;
(f) the Employment Agreements, duly executed by Heinz:
(g) the Registration Rights Agreement, duly executed by WPCS;
(h) the Promissory Note, duly executed by WPCS
(i) the Certificates of Merger, duly executed by the Acquirer; and
(j) such other documents as Heinz and the Heinz Shareholder may reasonably
require to give effect to the terms and intention of this Agreement.
ARTICLE 10
POST-CLOSING MATTERS
Forthwith after the Closing, WPCS, Heinz and the Heinz Shareholder agree to
use all their best efforts to:
(a) file the Certificates of Merger with Secretary of State of Missouri;
(b) remove the present directors of Heinz from office and appoint James
Heinz, Andrew Hidalgo and Joseph Heater as the directors of Heinz;
(c) issue a news release reporting the Closing;
(d) file a Form 8-K with the Securities and Exchange Commission disclosing
the terms of this Agreement and, not more than 60 days following the
filing of such Form 8-K, to file and amended Form 8-K which includes
audited financial statements of Heinz as well as pro forma financial
information of Heinz and WPCS as required by Regulation SB as
promulgated by the Securities and Exchange Commission; and
(e) file reports on Form 3 (and Form 13D, if applicable) with the
Securities and Exchange Commission disclosing the acquisition of the
Acquisition Shares by
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the Heinz Shareholder.
ARTICLE 11
GENERAL PROVISIONS
Arbitration
11.1 The parties hereto shall attempt to resolve any dispute, controversy,
difference or claim arising out of or relating to this Agreement by negotiation
in good faith. If such good negotiation fails to resolve such dispute,
controversy, difference or claim within thirty (30) days after any party
delivers to any other party a notice of its intent to submit such matter to
arbitration, then any party to such dispute, controversy, difference or claim
may submit such matter to arbitration.
Any action or proceeding seeking to enforce any provision of, or based upon
any right arising out of, this Agreement shall be settled by binding arbitration
by a panel of three (3) arbitrators in accordance with the Commercial
Arbitration Rules of the American Arbitration Association and governed by the
laws of the State of Delaware (without regard to the choice-of-law rules or
principles of that jurisdiction). Judgment upon the award may be entered in any
court located in the State of Delaware, and all the parties hereto hereby
consent to submit to the jurisdiction of such courts and expressly waive any
objections or defense based upon lack of personal jurisdiction or venue.
Each of the plaintiff and defendant party to the arbitration shall select
one (1) arbitrator (or where multiple plaintiffs and/or defendants exist, one
(1) arbitrator shall be chosen collectively by such parties comprising the
plaintiffs and one (1) arbitrator shall be chosen collectively by those parties
comprising the defendants) and then the two (2) arbitrators shall mutually agree
upon the third arbitrator. Where no agreement can be reached on the selection of
either a third arbitrator or an arbitrator to be named by either a group of
plaintiffs or a group of defendants, any implicated party may apply to a judge
of the courts of the State of Delaware, to name an arbitrator. The location of
any arbitration shall be in the State of Delaware. Process in any such action or
proceeding may be served on any party anywhere in the world.
Indemnification Provisions
11.2 Notice to Indemnifying Party. If any party (the "Indemnitee") receives
notice of any claim or the commencement of any action or proceeding with respect
to which the other party (or parties) is obligated to provide indemnification
(the "Indemnifying Party") pursuant to Sections 3.3 or 5.3 hereof, the
Indemnitee shall give the Indemnifying Party written notice thereof within a
reasonable period of time following the Indemnitee's receipt of such notice.
Such notice shall describe the claim in reasonable detail and shall indicate the
amount (estimated if necessary) of the losses that have been or may be sustained
by the Indemnitee. The Indemnifying Party may, subject to the other provisions
of this Section 11.2, compromise or defend, at such Indemnifying Party's own
expense and by such Indemnifying Party's own counsel, any such matter involving
the asserted liability of the Indemnitee in respect of a third-party claim. If
the Indemnifying Party elects to compromise or defend such asserted liability,
it shall within thirty (30) days (or sooner, if the nature of the asserted
liability so requires) notify the Indemnitee of its intent to do so, and the
Indemnitee, shall reasonably cooperate, at the request and reasonable expense of
the Indemnifying Party, in the compromise of, or defense against, such asserted
liability. The Indemnifying Party will not be released from any obligation to
indemnify the Indemnitee hereunder with respect to a claim without the prior
written consent of the Indemnitee, unless the Indemnifying Party delivers to the
Indemnitee a duly executed agreement settling or compromising such claim with no
monetary liability to or injunctive relief against the Indemnitee and a complete
release of the Indemnitee with respect thereto. The Indemnifying
32
Party shall have the right to conduct and control the defense of any third-party
claim made for which it has been provided notice hereunder. All costs and fees
incurred with respect to any such claim will be borne by the Indemnifying Party.
The Indemnitee will have the right to participate, but not control, at its own
expense, the defense or settlement of any such claim; provided, that if the
Indemnitee and the Indemnifying Party shall have conflicting claims or defenses,
the Indemnifying Party shall not have control of such conflicting claims or
defenses and the Indemnitee shall be entitled to appoint a separate counsel for
such claims and defenses at the cost and expense of the Indemnifying Party. If
the Indemnifying Party chooses to defend any claim, the Indemnitee shall make
available to the Indemnifying Party any books, records or other documents within
its control that are reasonably required for such defense.
Notice
11.3 Any notice required or permitted to be given by any party will be deemed to
be given when in writing and delivered to the address for notice of the intended
recipient by personal delivery, prepaid single certified or registered mail, or
Facsimile. Any notice delivered by mail shall be deemed to have been received on
the fourth business day after and excluding the date of mailing, except in the
event of a disruption in regular postal service in which event such notice shall
be deemed to be delivered on the actual date of receipt. Any notice delivered
personally or by Facsimile shall be deemed to have been received on the actual
date of delivery.
Addresses for Service
11.4 The address for service of notice of each of the parties hereto is as
follows:
(a) WPCS or the Acquirer:
WPCS International Incorporated
140 South Village Avenue, Suite 20
Exton, Pennsylvania 19341
Attn: Andrew Hidalgo, President
Phone: (610) 903-0400
Facsimile: (610) 903-0401
Copy to:
Marc J. Ross, Esq.
Thomas A. Rose, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Facsimile: (212) 930-9725
(b) Heinz or the Heinz Shareholder
Heinz Corporation
804 Lebanon Drive
St. Louis, MO 63104
Attn: James Heinz, President
Phone:
Facsimile:
33
Copy to:
James R. Dankenbring, Esq.
Spencer Fane Britt & Browne LLP
One North Brentwood, Suite 1000
St. Louis, MO 63105
Phone: (314) 863-7733
Facsimile: (314) 862-4656
Change of Address
11.5 Any party may, by notice to the other parties change its address for notice
to some other address in North America and will so change its address for notice
whenever the existing address or notice ceases to be adequate for delivery by
hand. A post office box may not be used as an address for service.
Further Assurances
11.6 Each of the parties will execute and deliver such further and other
documents and do and perform such further and other acts as any other party may
reasonably require to carry out and give effect to the terms and intention of
this Agreement.
Time of the Essence
11.7 Time is expressly declared to be the essence of this Agreement.
Entire Agreement
11.8 The provisions contained herein constitute the entire agreement among
Heinz, the Heinz Shareholders, the Acquirer and WPCS respecting the subject
matter hereof and supersede all previous communications, representations and
agreements, whether verbal or written, among Heinz, the Heinz Shareholder, the
Acquirer and WPCS with respect to the subject matter hereof.
Enurement
11.9 This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.
Assignment
11.10 This Agreement is not assignable without the prior written consent of the
parties hereto.
Expenses
11.11 Each party agrees to pay, without right of reimbursement from any other
party and regardless of whether or not the transaction is consummated, the costs
incurred by it in connection with this transaction, including legal fees and
other costs incidental to the negotiation of the terms of the transaction and
the preparation of related documentation. Notwithstanding the foregoing, the
costs associated with the audit of Heinz financial statements shall be paid by
WPCS.
Counterparts
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11.12 This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by Facsimile will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.
Applicable Law
11.13 This Agreement is subject to the laws of the State of Delaware.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.
WPCS INTERNATIONAL INCORPORATED
By: /s/ Andrew Hidalgo
------------------
Andrew Hidalgo, President
HEINZ ACQUISITION CORP.
By: /s/ Andrew Hidalgo
------------------
Andrew Hidalgo, President
HEINZ CORPORATION
By: /s/ James Heinz
---------------
James Heinz, President
/s/ James Heinz
---------------
James Heinz
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