1
EXHIBIT 10.04
SHARE PURCHASE AGREEMENT
by and among
CHORE-TIME XXXXX HOLDING B.V.
as "Buyer"
and
XXXXXX INVESTMENTS III B.V.
XXXXXX INVESTMENTS III C.V.
STICHTING FONDSBEHEER FINCON
BELDOR B.V.
V. XXXXXX
X. XXXXX
J. PAQUES
J.H.M. XXXXXXX
X.X. GOOTZEN
as "Selling Shareholders"
and
FANCOM HOLDING B.V.
(The "Company")
Dated as of May 1, 1997
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This SHARE PURCHASE AGREEMENT (this "Agreement") dated as of May 1,
1997 is made and entered into by and among Chore-Time Xxxxx Holding B.V., a
Netherlands corporation and each of the Selling Shareholders identified on the
first page hereof (individually, a "Selling Shareholder" and collectively, the
"Selling Shareholders") and Fancom Holding B.V., a Netherlands corporation (the
"Company") with respect to the issued shares of the Company.
W I T N E S S E T H :
WHEREAS, the Selling Shareholders own all of the issued shares (the
"Shares" in the share capital of the Company; and
WHEREAS, the Selling Shareholders desire to transfer the ownership of
the shares to the Buyer for the consideration specified herein;
NOW THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants, agreements, terms and conditions
contained herein, and in order to set forth the terms and conditions of the
purchase and sale of the Shares, the parties hereto do hereby agree as follows:
ARTICLE I
CLOSING
1.1 The Closing. The closing (the "Closing") of the transactions
provided for in this Agreement shall be held at the offices of Xxxxxxx Xxx
Xxxxxx, 000 Xx Xxxxxxxxxxxxxx, 0000 XX Amsterdam on the Closing Date. The
"Closing Date" shall mean May 1, 1997 or such other date as mutually agreed upon
by the Buyer and Selling Shareholders.
1.2. Transfer of Shares. On the Closing Date and subject to the terms
and conditions set forth in this Agreement, the Selling Shareholders will
transfer to Buyer, and Buyer will accept transfer of the Shares, free and clear
of all options, pledges, security interests, liens or other encumbrances or
restrictions of any kind through the execution by the parties of a Dutch
notarial deed of share transfer in the form attached hereto as Exhibit B, which
deed will be executed before M.D. van Waateringe, a civil law notary, in
Amsterdam or his deputy or successor, at the offices of Xxxxxxx Xxx Xxxxxx, 000
Xx Xxxxxxxxxxxxxx, 0000 XX Amsterdam.
1.3 Consideration. On the Closing Date and subject to the terms and
conditions set forth in this Agreement, in reliance on the representations,
warranties, covenants and agreements of the parties contained herein and in
consideration of the sale and transfer of the Shares, the Buyer agrees to
purchase from the Selling Shareholders the Shares for the considerations
specified below in this Article 1.
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1.4 Purchase Price. The Selling Shareholders shall cause the Company
to prepare and deliver to Buyer five business days prior to the Closing Date an
audited balance sheet of the Company and its subsidiaries as of February 28,
1997 (the "February Balance Sheet"), which shall be prepared as if February 28,
1997 was the Company's normal year end, in accordance with Dutch generally
accepted accounting practices ("Netherlands GAAP") applied on a basis consistent
with the audited Financial Statements (as defined in Section 2.2 (h). Reserves,
liabilities, allowances and similar items shall be made on the February Balance
Sheet for all liabilities (whether contingent or otherwise) and to appropriately
value the assets of the Company and its subsidiaries. On the Closing Date, the
Buyer shall pay the Selling Shareholders an aggregate amount equal to (i) NLG
34,500,000 plus (ii) the amount of Cash (as defined in Section 1.5) on the
February Balance Sheet minus (iii) the amount of the Debt (as defined in Section
1.5) on the February Balance Sheet plus (iv) an amount, not to exceed NLG
330,000, equivalent to the cash received by the Company prior to Closing in
consideration for the exercise of all stock options held by Mr. J.H.M. Xxxxxxx
minus (v) 1% of the said consideration to account for capital tax due by the
Company over such consideration minus (vi) an amount of NLG 247,887 representing
a tax refund which the Company must return to the tax receiver. An amount equal
to NLG 3,450,000 is to be delivered to ABN AMRO Bank N.V., as escrow agent (the
"Escrow Agent") at Closing to be held pursuant to an Escrow Agreement
substantially in the form attached as Exhibit C hereto, and the balance is to be
paid to the Selling Shareholders at Closing by bank transfer to one account
designated by the Selling Shareholders; amounts so held by the Escrow Agent are
to be referred to therein as the "Escrow Fund").
1.5 Purchase Price Adjustment.(a) As soon as practicable, but in no
event later than 45 days following the last days of March 1997 and April 1997
respectively, the Company shall prepare and deliver to Buyer and the Selling
Shareholders financial statements of the Company and its subsidiaries as of
March 31, 1997 and as of April 30, 1997 (the "March Financial Statements" and
the "April Financial Statements"), together also the "Post February Financial
Statements", together with the workpapers used in the preparation thereof. The
Post February Financial Statements shall present the amounts of Net Income of
the Company and its subsidiaries as of the closing of business on March 31, 1997
and April 30, 1997 respectively. The Post February Financial Statements shall be
prepared as if the Closing Date was the Company's normal year end, in accordance
with Netherlands GAAP applied on a basis consistent with the audited Financial
Statements (as defined in Section 2.2(h)). Reserves, liabilities, allowances and
similar items shall be made on the Post February Financial Statements for all
liabilities (whether contingent or otherwise) and to appropriately value the
assets of the Company and its subsidiaries. As used herein and throughout this
Agreement, the following terms shall have the following meanings:
"Cash" means cash and cash equivalents (without duplication, net of
outstanding checks) of the Company and of its subsidiaries.
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"Debt" means, without duplication, "long term debt" including the
current portion of any long term debt, as well as any other funded
indebtedness including, without limitation, any bank revolving line of
credit or overdraft mechanism, and any capitalized leases, including any of
the foregoing reflected as current liabilities, of the Company and its
subsidiaries. Debt does not include trade accounts payable, accrued
liabilities, deferred income taxes, provisions or reserves under
Netherlands GAAP and other liabilities not defined as debt herein.
"Net Income", means results of operations after consideration for
interest expense, interest income, taxes and minority interest of the
Company and its subsidiaries.
(b) Buyer and the Selling Shareholders shall have 30 days to review
the Post February Financial Statements after receipt thereof or each of them. If
either party so notifies the other party of its objection to the Post February
Financial Statements, Buyer and the Selling Shareholders shall, within 30 days
following such notice (the "Resolution Period"), attempt to resolve their
differences and any resolution in writing by them as to any disputed amounts
shall be final, binding and conclusive. If, at the conclusion of the Resolution
Period, any amounts remain in dispute, then all amounts remaining in dispute
shall be submitted to arbitration pursuant to Section 8.7 hereof.
(c) Within 5 days after the lapse of the term for review under the
preceding paragraph or within 5 days after the date when the respective Post
February Financial Statements shall have been agreed or established as outcome
of arbitration, the Buyer shall pay to the Selling Shareholders the Net Income
shown on each Post February Financial Statements as earned during the month of
March 1997 or April 1997 respectively, provided that the initial payment of such
Net Income earned for March 1997 shall not exceed NLG 300,000, with the balance
thereof in excess of NLG 300,000, if any, to be paid along with the payment of
Net Income earned for April 1997, and provided further that the aggregate
adjustment under this section will not exceed NLG 600,000.
ARTICLE II
2.1 Representations and Warranties by Buyer. Buyer represents and
warrants to, and agrees with, the Selling Shareholders as follows:
a. Organization, etc. Buyer is a corporation duly organized and
validly existing under the laws of the jurisdiction of its incorporation, with
full corporate power and authority to own all of its property and assets and to
carry an its business as it is now being conducted. Buyer is duly qualified or
licensed to do business and is in good standing or validly existing in each
jurisdiction in which the nature of its business or the character of its
property makes such qualification necessary. The copies of the
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Certificate of Incorporation and By-laws of Buyer, which have been delivered to
the Selling Shareholders are complete and correct, and such instruments, as so
amended, are in full force and effect.
b. Authority Relative to Agreement. Buyer has the power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery by Buyer of this Agreement and
the consummation by Buyer of the transactions contemplated hereby have been duly
authorized by all necessary corporate action or proceedings. This Agreement has
been duly executed and delivered by Buyer and is a valid and binding agreement
of Buyer, enforceable in accordance with its terms.
c. Non-Contravention. The execution and delivery of this Agreement by
Buyer does not, and the consummation by Buyer of the transactions contemplated
hereby will not, conflict with, violate any provision of the Certificate of
Incorporation or By-Laws of Buyer, or conflict with, violate, or result with the
giving of notice or the lapse of time or both in a violation of, any provision
of any mortgage, lien, lease, agreement, license, instrument, law, ordinance,
regulation, order, arbitration award, judgment or decree to which Buyer or any
of its properties or assets (real, personal or mixed, tangible or intangible)
are bound.
d. Consents, etc. As of the Closing Date, Buyer shall have obtained
all licenses, permits, consents, authorizations, orders or approvals of any
governmental commission, board or regulatory body necessary for their execution
and delivery of this Agreement and its concummation of the transactions
contemplated hereby.
e. Brokers. Except for American Securities Capital Partners L.P.,
whose fees, commissions and expenses are the sole responsibility of the Buyer,
and Broadview Associates, whose fees, commissions and expenses are the sole
responsibility of the Selling Shareholders, no financial advisor, broker or
finder is entitled to any financial advisory, brokerage or finder's fee or other
similar payment from the Buyer, the Selling Shareholders, the Company or any of
their subsidiaries or affiliates.
2.2 Representations and Warranties by the Selling Shareholders. Except
as set forth in the Disclosure Schedule dated as of the date of this Agreement
prepared by the Selling Shareholders and accepted by the Buyer and made a part
of this Agreement (the "Disclosure Schedule" attached as Annex D), the Selling
Shareholders represent and warrant to, and agree with, Buyer as follows:
a. Organization. The Company is a corporation duly incorporated and a
validly existing limited liability company ("besloten vennootschap met beperkte
aansprakelijkheid") under the laws of The Netherlands, With full corporate power
and authority to own all of its properties and assets and to carry on its
business as it is now
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being conducted. The copies of the certificate of incorporation and articles of
association, as amended, of the Company, which have been delivered to Buyer, are
complete and correct, and such instruments are in full force and effect. The
Company is registered at the Commercial Register of the Chamber of Commerce in
Roermond, the Netherlands, under number 34658 in accordance with law and the
information contained in the extract of said registration attached hereto as
Exhibit E is complete and correct. All documents required to be filed with the
Commercial Register with respect to the Company have been properly and timely
filed.
b. Share Capital and Securities. The authorized share capital of the
Company consists of 2,000,000 shares with a par value of NLG 10.-. As of the
Closing Date, 1,257,000 shares will be issued and outstanding, numbered 1
through 1,257,000, all of which will be owned, beneficially and of record, by
the Selling Shareholders in the amounts and numbers set forth in Exhibit F
attached hereto. Each share in the share capital of the Company is owned by the
Selling Shareholders free and clear of any and all liens, charges, pledges,
security interests or other encumbrances of any kind. Each issued share in the
share capital of the Company is and shall be duly authorized, validly issued and
fully paid up. As Xx Xxxxxxx has exercised an option held by him to purchase an
aggregate of 33,000 shares in the authorized share capital of the Company
("Maatschappelijk kapitaal") before signature of this Agreement the Company
does not have any outstanding commitments to issue or sell any shares in its
share capital, or any securities or obligations convertible into or exchangeable
for, or giving any person any right to subscribe for or acquire from the Company
any shares in its share capital, and no securities or obligations evidencing any
such right are outstanding. The Company does not have outstanding any other debt
or equity securities other than its issued shares and existing indebtedness,
which, including the terms thereof, are fully described in the Disclosure
Schedule.
c. Subsidiaries. Set forth on the Disclosure Schedule is a correct and
complete list of the Company's subsidiaries, showing as to each, its name, its
corporate, partnership or joint venture form, the jurisdiction of its
incorporation or formation, the number of shares of stock of each class of each
subsidiary which is outstanding and the number of such outstanding shares owned
by each of the Company and its subsidiaries. For the purpose of this Agreement
the term subsidiaries includes the subsidiaries and the sub-subsidiaries of the
Company. Each subsidiary is a corporation duly organized, validly existing under
the laws of its jurisdiction of incorporation. Each subsidiary has the corporate
or other power and authority to carry on its business as now being conducted and
to own and lease its properties and is duly qualified to do business as a
foreign corporation in each jurisdiction in which the nature of its business or
properties makes such qualification necessary. All of the outstanding shares of
capital stock of each subsidiary have been validly issued, are fully paid and
non-assessable with no personal liability attaching to the ownership thereof and
are free and clear of all liens. Except for Wolters WX B.V., in which the
Company indirectly owns 160 common shares out of
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400 common shares and owns all priority shares which are fully paid and are free
and clear of all liens. The Company is the legal and sole beneficial owner of
all the outstanding shares of each subsidiary which is a corporation and there
are no other securities of any subsidiary which is a corporation other than such
outstanding shares. There are no outstanding rights, warrants, options or
agreements with respect to any such outstanding shares. There are no outstanding
rights, warrants, options or agreements with respect to any such outstanding
shares of the Company's subsidiaries including, without limitation, agreements
granting to any person rights to acquire any capital stock or agreements with
respect to the voting thereof. Neither the Company nor any of its subsidiaries
has any investment (whether equity, debt or other) in any other person. The
copies of the Certificate of Incorporation and By-laws, as amended, of each
subsidiary, which have been delivered to Buyer, are complete and correct, and
such instruments are in full force and effect.
d. Status. Neither the Company nor any subsidiary is or has been
involved in proceedings for its winding-up, liquidation, bankruptcy, moratorium
or debt relief or for the appointment of a receiver, administrator or liquidator
and no shareholders' decision to such effect has been made with respect to the
Company or any subsidiary.
e. Authority Relative to Agreement. Each Selling Shareholder has the
power and authority to execute this Agreement and the Escrow Agreement and to
consummate the transactions contemplated hereby and thereby. The execution by
each Selling Shareholder of this Agreement and the Escrow Agreement and the
consummation by such parties of the transactions contemplated hereby and thereby
have been duly authorized by each such party. No other proceedings on the part
of the Company or any Selling Shareholder are necessary to authorize the
execution of this Agreement and the Escrow Agreement and the consummation of the
transactions contemplated hereby and thereby. This Agreement has been and the
Escrow Agreement will be duly executed by each Selling Shareholder and this
Agreement is and the Escrow Agreement will be a valid and binding agreement of
each such party, enforceable in accordance with its terms.
f. Non-Contravention. The consummation of the transactions
contemplated hereby and by the Escrow Agreement will not violate any provision
of the Articles of Association of the Company or any of its subsidiaries, or
violate, or result with the giving of notice or the lapse of time or both in a
violation of, any provision of any mortgage, lien, lease agreement, license,
instrument, law, ordinance, regulation, order, arbitration award, judgment or
decree to which the Company, any of its subsidiaries or any of their properties
or assets (real, personal or mixed, tangible or intangible) are bound.
g. Consents, etc. No consent, approval or action of, filing with or
notice to any governmental or regulatory authority is required in connection
with the execution and
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delivery of this Agreement and the Escrow Agreement and the consummation of the
transactions contemplated hereby and thereby.
h. Financial Statements. The Selling Shareholders have heretofore
delivered to Buyer the audited consolidated financial statements of the Company
and its subsidiaries for the fiscal years ended December 31, 1994, 1995 and 1996
including their consolidated balance sheets as of each such date and the related
consolidated statements of income, and shareholders' equity for each of the
respective periods then ended (the "Financial Statements"). The Selling
Shareholders have also delivered to Buyer the audited consolidated balance sheet
of the Company and its subsidiaries as of February 28, 1997 (the "February
Balance Sheet"). Such Financial Statements and February Balance Sheet are
attached hereto as Exhibit G, (i) and have been prepared from the books and
records of the Company and its subsidiaries, (ii) are in accordance with
Netherlands GAAP consistently applied and fairly present the financial condition
and results of operations of the Company and its subsidiaries as of the
respective dates and for the respective periods thereof.
i. Governmental Authorizations and Compliance with Laws. The
Disclosure Schedule contains a complete and accurate list of all permits held by
the Company or any of its subsidiaries or for which the Company or any
subsidiary has applied, which are the only material permits necessary for or
used by the Company and its subsidiaries to carry on their business as presently
conducted. To the Selling Shareholders' knowledge after due inquiry the business
of the Company and its subsidiaries has been operated in material compliance
with all laws, ordinances, regulations and orders, of all governmental entities,
domestic or foreign. To the Selling Shareholders' knowledge after due inquiry
the Company and its subsidiaries have all material permits, certificates,
licenses, approvals and other authorization required in connection with the
operation of their business. There are no orders outstanding against the Company
or any of its subsidiaries. No notice has been received by the Company or any of
its subsidiaries and, to the Selling Shareholders' knowledge after due inquiry,
no investigation or review is pending or threatened by any governmental entity
with respect to (i) any alleged violation by the Company or any of its
subsidiaries of any law, ordinance, regulation, order, policy or guideline of
any governmental entity, or (ii) any alleged failure to have all permits,
certificates, licenses, approvals and other authorizations required in
connection with the operation of the business of the Company and its
subsidiaries. As used in this Agreement, "Selling Shareholders' knowledge after
due inquiry" shall refer to matters within the knowledge of the Selling
Shareholders and matters which should have been known by such persons, in each
case after reasonable inquiry by them of the Company's management.
j. Tax matters and Social Security Charges. (i) All taxes, whether
direct or indirect, and all social security charges including all municipal
taxes, water board charges (waterschapsheffingen), penalties and further
assessments with respect thereto for which
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the Company or any subsidiary has been or may be assessed have been withheld as
legally required, and either paid in full or adequate provision therefor has
been made in the Financial Statements.
(ii) There are no notices of tax or social security charge
deficiencies and no litigation or dispute with the relevant authorities with
respect thereto.
(iii) All reports required to be filed by the Company or any
subsidiary in respect to taxes or social security charges have been timely and
properly filed and all information supplied to the relevant authorities is
correct and complete.
(iv) The execution and performance by the Selling Shareholders of
their obligations under this Agreement will not give rise to any adverse tax
consequences for the Company or any subsidiary.
k. Title to Properties; Absence of Liens and Encumbrances, etc. To the
Selling Shareholders' knowledge after due inquiry the Company and its
subsidiaries have full and legal title to all of the properties and other assets
(real, personal and mixed, tangible and intangible) reflected in the Balance
Sheet or acquired after the date thereof (except for properties and assets sold
or otherwise disposed of since December 31, 1996 In the ordinary and usual
course of business) free and clear of any and all liens, charges, pledges,
mortgages, retention of title, security interest or other encumbrances of any
kind ("Lien"). Except for those properties or assets acquired since December 31,
1996, all properties and assets (real, personal and mixed, tangible and
intangible) used in the business of the Company and its subsidiaries are
reflected in the Balance Sheet in the manner and to the extent required by
Netherlands GAAP.
1. Real Estate. (i) The Disclosure Schedule specifies all the land and
buildings owned, used or occupied by the Company and each of the subsidiaries
(the "Properties"), the rights vested of each company in each of the Properties,
and the respective durations of such rights.
(ii) Insofar as freehold property ("eigendom") identified in the
Disclosure Schedule ("Freehold Properties") is concerned, the relevant company
has good and marketable title to its listed Freehold Properties free from all
mortgages, any leases, tenancies, or options, or any license, agreement, claims
of right or easement of any kind in respect thereto.
(iii) With respect to any Properties leased by the Company or any
subsidiary ("Leased Properties") as identified in the Disclosure Schedule, there
are no circumstances which would entitle a lessor or any other person to
exercise my power of entry upon or take possession of any of the Leased
Properties or which would otherwise restrict the continued possession of any of
such Properties or which could prevent the development
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of any of the Properties for which planning permission has been or is expected
to be obtained. No notice of breach of any terms of any lease has been received
by the company or any subsidiary.
(iv) To the Selling Shareholders' knowledge after due inquiry the use
to which each of the Properties is put is not subject to any restriction or
condition and conforms to all laws and regulations, permits, licences and orders
of the relevant authorities and in the case of Leased Properties the use to
which each of the Properties is put complies with the terms of the lease and all
necessary consents to such existing use have been obtained. No notice or warning
of violation of any law or regulation, permit or licences has been received by
the Company or any subsidiary.
(v) All requisite permits, licences and approvals have been obtained
for all development or alteration of the Properties and all conditions imposed
therein have been complied with.
(vi) The market value of each of the Properties is not materially
below the value at which the same is included in the Balance Sheet.
m. Material Agreements. The Disclosure Schedule lists every material
agreement to which the Company or any of its subsidiaries is a party or by which
it or any of their properties or assets (real, personal or mixed, tangible or
intangible) is bound which is to be performed in whole or in part after the
Closing Date. Solely for the purpose of this Section 2.2(m), the term "material
agreement" shall mean any single agreement or lease (in each case, whether oral
or written), including agreements with respect to notes receivable, pursuant to
which any party thereto is obligated after the date hereof to make payments
aggregating more than USD 75,000 except for agreements which the Company or its
Subsidiaries can terminate at will without a penalty; agreements (in each case,
whether oral or written) relating to the declaration or payment of dividends or
distributions, the incurrence of indebtedness or the sale or purchase of assets
out of the ordinary course of business; employment contracts or severance
agreements with annual salary payments of USD 75,000 gross per year or more;
agreements (in each case, whether oral or written) restricting the Company's or
any of its subsidiaries' ability to compete or engage in any type of business or
otherwise containing restrictive covenants; and agreements (in each case,
whether oral or written) with "change in control" provisions. There is no
default, nor will any default occur hereafter, as a result of the consummation
of the transactions contemplated hereby, by the Escrow Agreement or otherwise,
in any obligation to be performed by any party to any material agreement to
which the Company or any of its subsidiaries is a party or by which it or any
of its properties or assets (real, personal or mixed, tangible or intangible) is
bound. Each agreement listed in the Disclosure Schedule is valid and binding in
accordance with its terms. Other than this Agreement, there are no agreements or
options to sell or lease any of the properties or assets (real, personal or
mixed, tangible
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or intangible) of the Company or any of its subsidiaries except in the ordinary
and usual course of its business. The Company has delivered or made available to
Buyer true and complete copies of all agreements listed in the Disclosure
Schedule including supporting documentation.
n. Litigation. (i) There is no claim, action, suit or proceeding
pending or, to the Selling Shareholders' knowledge after due inquiry, threatened
against the Selling Shareholders, the Company, any of its subsidiaries or any of
their properties or assets (real, personal or mixed, tangible or intangible) or
which seeks to prohibit, restrict or delay consummation of the transactions
contemplated by this Agreement or the Escrow Agreement or any of the conditions
to consummation of the transactions contemplated by this Agreement, nor is there
any judgement, decree, injunction, ruling, award or order of any, court,
governmental department, commission, agency or instrumentality or arbitrator
outstanding or, to the Selling Shareholders' knowledge after due inquiry,
threatened against the Company, any of its subsidiaries or any of their
properties or assets (real, personal or mixed, tangible or intangible); or (ii)
to the Selling Shareholders' knowledge after due inquiry neither the Company,
any of its subsidiaries nor any of their officers or employees is currently
charged with, or is currently under investigation with respect to, any
violation of any provision of any federal, state, foreign or other applicable
law or administrative regulation in respect of the business of the Company and
its subsidiaries.
o. Employees. (i) To the Selling Shareholders' knowledge after due inquiry
the Disclosure Schedule sets forth a list of all of the current employees
of the Company and its subsidiaries, their dates of birth and their dates
of hire, their base salary and any bonuses and premiums to which they are
entitled. The employees of the Company and its subsidiaries are not
entitled to receive any indemnities (such as termination indemnities,
retirement indemnities or end of work indemnities) which exceed the
indemnities required by the laws which apply to the Company and its
subsidiaries, and no employees are entitled to participate in the
Company's or its subsidiaries' profits or any other results which apply to
the Company and its subsidiaries.
(ii) To the Selling Shareholders' knowledge after due inquiry the
Company and its subsidiaries have not contracted any obligation nor are bound by
any obligation towards any former managing director, officer or employee or the
heirs of any former managing director, officer or employee, in particular
pursuant to a pension or complementary retirement scheme.
(iii) To the Selling Shareholders' knowledge after due inquiry no
present or former managing director, officer or employee has any claim against
the Company or any subsidiary arising out of notice of termination of employment
or office prior to the Closing Date.
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(iv) To the Selling Shareholders' knowledge after due inquiry licenses
have been obtained from the Director of the appropriate District Labour Office
("Regional Bureau der Arbeidsvoorzieningen" or "Inspection du Travail") in
respect of every employee whose employment has been terminated by the Company
where such license is required. There are not outstanding applications before
any District Labour Office.
(v) To the Selling Shareholders' knowledge after due inquiry the
Disclosure Schedule contains a true and correct list of all employee benefit
plans. Each compulsory or voluntary employee benefit plan is in good standing
under all applicable legislation and all required employer contributions under
any such plans have been made or reserved in the books and records maintained by
the Company and the applicable funds have been funded in accordance with the
terms of the plans. No liabilities exist thereunder which have not been paid
when due.
p. Labor Matters. There are no controversies pending between the
Company and its subsidiaries and any of their employees or officers.
q. Absence of Certain Changes on Events. Since February 28, 1997 there
has not been (i) any change, or any development involving a prospective change,
which, individually or in the aggregate, has had or could have a material
adverse effect ("Material Adverse Effect") on the financial condition, business,
operations, or prospects of the Company and its subsidiaries taken as a whole;
(ii) any damage, destruction or other loss with respect to property owned by the
Company or any of its subsidiaries, whether or not covered by insurance, or any
strike, work stoppage or slowdown or other labor trouble involving the Company
or any of its subsidiaries; (iii) any direct or indirect redemption, purchase or
other acquisition by the Company or any of its subsidiaries of any shares of the
capital stock of the Company or any of its subsidiaries; (iv) any declaration,
setting aside or payment of any dividend or distribution (whether in cash,
capital stock or property); (v) any investment made in the debt or equity of
another entity; (vi) the entry by the Company or any of its subsidiaries into
any commitment or transaction which is not in the ordinary course of business;
(vii) any material (x) change in any investment, accounting, tax accounting,
financial reporting, inventory, credit, allowance or tax practice, election or
policy of the Company or any subsidiary; (y) change in any method of calculating
any bad debt, contingency or other reserve of the Company or any subsidiary for
accounting, financial reporting or tax purposes, or any change in the fiscal
year of the Company or any subsidiary or (z) decrease in selling prices or
increase of purchase prices; (viii) to the Selling Shareholders' knowledge after
due inquiry any hiring of any new employees (other than in the ordinary course
of business consistent with past practice); or (ix) any increase in any manner
of the compensation, remuneration or fringe benefits of any of the managing
directors or employees of the Company or its subsidiaries or payment or
agreement to pay any pension retirement allowance, or other benefit not required
by any existing employee benefit plan with or for the benefit of any officers or
employees of the
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Company or its subsidiaries or any other person, or alteration, amendment,
termination in whole or in part, or curtailment or permanent discontinuance of
distributions to, any pension plan or any other employee benefit plan.
r. Intellectual Property Rights. (i) The Disclosure Schedule sets
forth a complete and accurate list of: (a) all patents, trademarks,
service-marks, tradenames, copyrights, registered designs and other intellectual
property rights (the "Intel1ectual Property Rights") used or planned to be
used by the Company or any subsidiary in connection with its business; (b) all
written agreements relating to the Intellectual Property Rights which the
Company or any subsidiary has licensed from or to a third party.
(ii) The Intellectual Property Rights are registered in the name of,
are legally and beneficially vested in and are the property of the stated
Company or subsidiary except as disclosed in the Disclosure Schedule, the
Intellectual Property Rights are valid and continuing, have been properly
maintained and (where necessary) renewed, are not being infringed, and will not
be altered or impaired by the consummation of the transactions contemplated by
this Agreement.
(iii) All pending applications for Intellectual Property Rights
initiated with respect by the Company or any subsidiary have been properly
pursued.
(iv) To the Selling Shareholders' knowledge after due inquiry no
tradename, trademark and/or service-xxxx registered or applied for in the name
of the Company or any subsidiary is being used by any person in the same or
similar business as that of the Company or any subsidiary except as disclosed in
the Disclosure Schedule.
(v) To the Selling Shareholders' knowledge after due inquiry no
further Intellectual Property Rights or licenses are required by the Company or
any subsidiary to conduct its business as now conducted or as currently planned
in order to avoid conflicts with or infringements upon the rights of others and
no such conflict or infringement currently exists.
(vi) No claim has been asserted and to the Selling Shareholders
knowledge after due inquiry, none is anticipated, challenging either the
ownership or the use by the Company or any subsidiary of any Intellectual
Property Rights, technology, know-how or process, or the validity of any licence
therefor.
s. Absence of Undisclosed Liabilities and Agreements. Except as
specifically provided for in the Financial Statements and February Balance
Sheet, the Company and its subsidiaries (i) did not have, as of December 31,
1996 or February 28, 1997 any debts, liabilities or obligations, whether accrued
absolute, contingent or otherwise and whether due or to become due (including,
without limitation, any liabilities resulting from the failure to comply with
any law applicable to the Company, any of its subsidiaries or to
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the conduct of their business) except as disclosed the Financial Statements and
February Balance Sheet, (ii) have not incurred, since December 31, 1996 any such
debts, liabilities or obligations other than in the ordinary and usual course of
their business consistent with past practice and which would be reflected on a
balance Sheet prepared in the ordinary course of business.
t. Insurance. To the Selling Shareholders' knowledge after due inquiry
the Company and its subsidiaries have adequate insurance policies in full force
and effect which provide for coverages which are customary in both amount and
scope for the business conducted by the Company and its subsidiaries. The
current insurance coverage of the Company and its subsidiaries is as described
in the Disclosure Schedule. All material claims have been filed in timely
fashion and are mentioned in the Disclosure Schedule under 2.2(n). There are no
present circumstances giving rise to a claim under any policy of insurance.
u. Payments. To the Selling Shareholders' knowledge after due inquiry
the Company and its subsidiaries have not, directly or indirectly, paid or
delivered any fees, commissions or other sums of money or items of property
however characterized to any finders, agents, customers, government officials or
other parties, in the United States or in any other country, which in any manner
are related to the business or operations of the Company and its subsidiaries,
and which have been illegal under any federal, state or local laws of the United
States or any other country or territory having jurisdiction over the Company or
any of its subsidiaries. The Company and its subsidiaries have not participated,
directly or indirectly, in any illegal boycotts or similar practices.
v. Subsidies and Governmental Assistance. To the Selling Shareholders'
knowledge after due inquiry the Disclosure Schedule enumerates the governmental
subsidies and assistance, as well as the licenses, contracts and preferential
conditions consented to by a Governmental or Regulatory Authority, which have
been transmitted to the Company or to which any of the subsidiaries is a party
or beneficiary. The Company and the subsidiaries will in no event be required to
reimburse for any reason whatsoever the subsidies already received. Neither the
Company nor any subsidiary is liable or will in the future be liable to repay
any material investment premiums as a result of the transfer contemplated in
this Agreement or any event occurring prior thereto. Solely for the purpose of
this section 2.2.v the term "material investment premiums" shall mean any
repayment of an investment premium of more than USD 25,000.
w. Inventories. All inventories carried by the Company and its
subsidiaries as of December 31, 1996 and February 28, 1997 and reflected in the
Financial Statements and the February Balance Sheet, are valued consistent with
Netherlands GAAP. The Company has adequate obsolescence reserves to cover
inventory items which have a market value lower than cost. Except to the extent
of inventory reserves reflected in the
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Balance Sheet, the items included in said inventories are normal items of
inventory carried by the Company and its subsidiaries, and are current, suitable
and merchantable at customary prices of the filling of orders in the normal
course of business, and are not obsolete damaged, defective or slow moving.
x. Products Liability. Except as disclosed in the Disclosure Schedule
2.2(n), to the Selling Shareholders' knowledge after due inquiry, there are no
facts or events which have occurred forming the basis for any claim against the
Company or any of its subsidiaries for products liability, whether in tort or
strict liability or on account of any express or implied warranty, and all
reserves thereon for on the Balance Sheet are adequate.
y. Notes and Accounts Receivable and Liabilities. Each of the
material liabilities of the Company and its subsidiaries as of December 31,
1996 and February 28, 1997 is reflected or reserved for in the Financial
Statements and February Balance Sheet and the amounts so reflected or reserved
are true and correct according to Netherlands GAAP. Notes and accounts
receivable will be fully collectible, except to the extent of reserves for
doubtful accounts reflected in the Balance Sheet.
z. Proprietary Rights. The proprietary rights listed in the Disclosure
Schedule are all those used in the business of the Company and its subsidiaries.
The Company's and its subsidiaries' use of such proprietary rights is not
infringing upon or otherwise violating the rights of any third party in or to
such proprietary rights, and no proceedings have been instituted against or
notices received by the Company or any of its subsidiaries that are presently
outstanding alleging that the Company's or any subsidiary's use of such
proprietary rights infringes upon or otherwise violates any rights of a third
party in or to such proprietary rights.
aa. Books of Account. The books of account of the Company and its
subsidiaries have been fully, properly and accurately kept, and have and will
adequately reflect all of their respective items of income and expense and all
of their assets, liabilities and accruals, in accordance with Netherlands GAAP.
ab. Purchase Commitments and Outstanding Bids. As of the Closing Date
there are no claims against the Company or any of its subsidiaries to return in
excess of an aggregate of USD 50,000 by reason of alleged over-shipments,
defective merchandise or otherwise, or of merchandise in the hands of customers
under an understanding that such merchandise would be returnable. The Disclosure
Schedule lists all capital expenditures committed for but not paid for by the
Company. No outstanding purchase or outstanding lease commitment of the Company
or any of its subsidiaries presently is in excess of the normal, ordinary and
usual requirements of its business or contains terms and conditions more onerous
than those usual and customary in the business of the Company and its
subsidiaries.
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ac. Customers and Suppliers. To the Selling Shareholders' knowledge
after due inquiry the Disclosure Schedule contains a complete and accurate list
of (i) the 10 largest customers of the Company and its subsidiaries in terms of
revenues during each of the Company's and its subsidiaries last two fiscal
years, showing the approximate total sales to each such customer during such
period; and (ii) the 10 largest suppliers of the Company and its subsidiaries in
terms of purchases during each of the Company's last two fiscal years, showing
the approximate total purchases from each such supplier during such period.
Since December 31, 1996, to the Selling Shareholders' knowledge after due
inquiry, there has been no material adverse change in the business relationship
of the Company and its subsidiaries with any customer or supplier named in the
Disclosure Schedule.
ad. Intentionally deleted.
ae. Environmental Matters. (1) The Company and each of its subsidiaries
are in compliance in all material respects with all applicable Environmental
Laws (as defined below), and for the past five years have been in such
compliance; without prejudice to and without limiting their obligations
hereunder, the Selling Shareholders state that they have reviewed: (1) the
report made by Oranjewoud (the "Oranjewoud Report") dated March 20, 1997, of
which a copy in the English language has been provided to by the Buyer, (2) the
report dated December 21, 1995 referring to the Masterfan location in Wierden
(the "Masterfan Report"), of which a copy has been disclosed to the Buyer; (3)
two reports that are being made with respect to the Company's Properties in
France, copies of which will be provided to the Buyer as soon as they have
become available (the "French Reports"); to the Selling Shareholders' knowledge
there is no reason to believe that circumstances exist which could prevent or
interfere with continued compliance in all material respects by the Company and
each of its subsidiaries with all applicable Environmental Laws that are
reasonably likely to become applicable to the Company or any of its subsidiaries
after the Closing Date and that could individually or in the aggregate, have a
Material Adverse Effect after the Closing Date if adopted.
(2) The Company and Its subsidiaries hold all material Environmental
Permits (as defined below) necessary to conduct their operations as they are
currently conducted; the Disclosure Schedule includes a true and complete list
of all such Environmental Permits and their expiration dates, and the Company
has no reason to believe that such permits will not be renewed.
(3) There are not Materials of Environmental Concern (as defined below)
present at, and no Materials of Environmental Concern are or have been in any
way released or threatened to be released from, any Fancom Property (as defined
below), or to the best of the Selling Shareholders knowledge after due inquiry,
former Fancom Property, or as a result of present or former operations of the
Company or any of its subsidiaries or any predecessor entity (including without
limitation the disposal of
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Materials of Environmental Concern at any location other than a Fancom Property
or former Fancom Property), that could reasonably be expected to be in material
violation of or otherwise to give rise to material liability of the Company or
any of its subsidiaries under any Environmental Law.
(4) No reports of any kind have been made to or required by any
governmental authority pursuant to any Environmental Law concerning spills or
any other releases of any kind at, or in any way from, any Fancom Property,
former Fancom Property (as defined below), or as a result of present or former
operations of the Company or any of its subsidiaries or any predecessor entity,
for which spills, releases, or reports thereof the Company or any of its
subsidiaries may be liable under any Environmental Law; true and complete copies
of all written reports concerning such spills and other releases have been
provided or made available to Buyer.
(5) None of the following are or have been on, under, in or at any
Fancom Property, or to the Selling Shareholders' knowledge after due inquiry,
any former Fancom Property: (A) underground or aboveground storage tanks
containing Materials of Environmental Concern; (B) polychlorinated biphenyls;
(C) asbestos or asbestos-containing materials; (D) septic tanks, septic fields,
drywalls, or similar Structures; (E) lagoons or impoundments; or other bodies of
water to which Materials of Environmental Concern may have been discharged; (F)
landfills or dumping areas; or similar locations where Materials of
Environmental Concern may have been placed.
(6) Neither the Company nor any of its subsidiaries has received any
Environmental Claim (as defined below), and to the Selling Shareholders'
knowledge after due inquiry, no Environmental Claim has been threatened against
the Company or any of its subsidiaries by any person.
(7) Neither the Company nor any of its subsidiaries has entered into,
agreed to, nor is the Company or any of its subsidiaries otherwise subject to
any judgment, decree, order or similar requirement under any Environmental Law,
nor to the Selling Shareholders' knowledge is any such judgment, decree, order
or requirement being negotiated that may obligate or affect the Company or any
of its subsidiaries.
(8) Neither the Company nor any of its subsidiaries has assumed or
retained, contractually or by operation of law, any liabilities or obligations
of other persons, contingent or otherwise, in connection with any Environmental
Law.
(9) There are no past or present actions, activities, events,
conditions or circumstances, including without limitation the release,
threatened release, emission, discharge, generation, treatment, storage or
disposal of Materials of Environmental Concern, that could reasonably be
expected to give rise to any material liability or obligation of the Company or
any of its subsidiaries under any Environmental Laws.
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None of the matters set forth on the Disclosure Schedule, or any aggregation
thereof, could reasonably be expected to have a Material Adverse Effect.
(10) True and complete copies of all reports, studies, assessments,
audits, and similar documents in the possession or control of the Company, any
of its subsidiaries or any Selling Shareholder that address any issues of actual
or potential noncompliance in any material respect with, or actual or potential
material liability under, any Environmental Laws that may affect the Company or
any of its subsidiaries have been provided to Buyer prior to the signing hereof.
(11) As used in this Section 2.2(ae):
"Environmental Claim" means any written or oral notice, claim, demand,
action, suit, complaint, proceeding or other communication by any person
alleging liability or potential liability (including without limitation
liability or potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resource damages, property damage, personal
injury, fines or penalties) arising out of, relating to, based on or resulting
from (i) the presence, discharge, emission, release or threatened release of any
Materials of Environmental Concern at any location, (ii) circumstances forming
the basis of any violation or alleged violation of any Environmental Law or
Environmental Permit, or (iii) otherwise relating to obligations or liabilities
under any Environmental Law.
"Environmental Laws" means all federal, state, provincial and local
statutes, rules, regulation, ordinances, orders, judgments, decrees and common
law relating in any manner to contaminated, polluting, or protection of human
health or the environment.
"Environmental Permits" means all permits, licenses, registrations
and other governmental authorizations or exemptions required under
Environmental Laws.
"Fancom Property" means all real property in which the Company or any
of its subsidiaries have any legal interest, including without limitation a
leasehold interest, and any equipment or other property owned or leased by the
Company or any of its subsidiaries.
"Materials of Environmental Concern" refers to any waste, pollutant,
contaminant or other substance of any kind (including without limitation orders,
radioactivity, and electromagnetic fields) regulated by or under, or which may
otherwise give rise to liability under, any Environmental Law.
af. Transactions with Certain Persons. No officer, director,
shareholder or employee of the Company and its subsidiaries nor any member of
any such person's
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immediate family is presently a party to any material transaction with the
Company or any of its subsidiaries relating to the business of the Company and
its subsidiaries, including without limitation, any contract, agreement or other
arrangement (i) providing for the furnishing of material services by (other than
for services as officers, directors or employees of the Company and its
subsidiaries), (ii) providing for the rental of material real or personal
property from, or (iii) otherwise requiring material payments to (other than for
services as officers, directors or employees of the Company and its
subsidiaries) any such person or corporation, partnership, trust or other entity
in which any such person has a substantial interest as a shareholder, officer,
director, trustee or partner.
ag. Bank Accounts, Signing Authority, Power of Attorney. The Disclosure
Schedule lists all accounts with and safety deposit boxes held by or in the name
of the Company or any subsidiary in any bank or other financial institution as
well as the names of all persons who have any power, whether individually or
jointly, to sign an order on behalf of the Company or any subsidiary to withdraw
money or other property from any bank or other account, or who are authorized to
borrow money or sign notes on behalf of the Company or any subsidiary.
ah. Brokers. Except for American Securities Capital Partners L.P.,
whose fees, commissions and expenses are the sole responsibility of the Buyer,
and Broadview Associates, whose fees, commissions and expenses are the sole
responsibility of the Selling Shareholders, no financial advisor, broker or
finder is entitled to any financial advisory, brokerage or finder's fee or other
similar payment from the Buyer, the Selling Shareholders, the Company or any of
their subsidiaries or affiliates.
ai. Investment Assets. The Disclosure Schedule contains a true and
complete list of all investments in debt or equity of other entities outstanding
as of the date hereof made by the Company or any of its subsidiaries.
aj. Information. To the Selling Shareholders' knowledge after due
inquiry the Company has furnished and will continue up and until the Closing to
furnish to Buyer all information with respect to the assets, earnings, and
business of the Company and its subsidiaries, material for disclosure to an
intending purchaser of the Company and acknowledge that Buyer has relied and
will rely thereon in entering into this Agreement and consummating the
transactions contemplated by this Agreement and the Escrow Agreement. To the
Selling Shareholders' knowledge after due inquiry no such information contains
an untrue statement of material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made not misleading.
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ARTICLE III
ACTIONS PRIOR TO THE CLOSING
3.1 Consents, Authorizations, etc. Each party hereto will use its
commercially reasonable efforts to obtain all consents, authorizations, orders
and approvals of, and make all filings and registrations with, any governmental
commission, board or other regulatory body or any other person required for or
in connection with the consummation on of the transactions contemplated hereby
and will cooperate fully with the other parties in assisting them to obtain such
approvals and to make such filings and registrations. No party hereto will take
or omit to take any action for the purpose of delaying, impairing or impeding
the receipt of any required consent, authorization, order or approval or the
making of any required filing or registration.
3.2 Expenses. Intentionally deleted.
3.3 Conduct of the Company.
a. Operations in the Ordinary Course of Business. The Selling
Shareholders warrant and represent that during the period as from March 1, 1997
inclusive to the Closing Date the Company and its subsidiaries have conducted
their business operations according to the ordinary and usual course of business
and have used their reasonable best efforts (i) to preserve intact their
business organization; (ii) to maintain their books and records in accordance
with past practices; (iii) to keep available the services of their managing
directors (directeuren) and employees; and (iv) to maintain satisfactory
relationships with licensors, suppliers, distributors, customers and others
having business relationships with them.
b. Except as contemplated by this Agreement, the Company and its
subsidiaries have not during the period from March 1, 1997 inclusive to the
Closing Date:
(1) incurred any new debt, liability or obligation, direct or indirect,
whether accrued, absolute, contingent or otherwise (other than short-term
indebtedness in the ordinary course of business consistent with past
practice in an amount not exceeding USD 50,000;
(2) assumed, guaranteed, endorsed or otherwise become responsible for
the obligations of, or made any loans or advances to, any other individual,
firm or corporation (other than the Company or any Of its subsidiaries);
(3) made any direct or indirect redemption, purchase or other
acquisition of any shares of its capital stock or declare, set aside or pay
any dividend or distribution
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(whether in cash, capital stock or property), other than any dividends to the
Company from any of its subsidiaries;
(4) mortgaged, pledged or otherwise encumbered any of its properties or
assets other than in the ordinary course of business consistent with past
practice;
(5) sold, leased, transferred or disposed of any of its properties or
assets, waived or released any rights of material value, or cancelled,
compromised, released or assigned any indebtedness owed to it or any claims held
by it except for sales of inventory in the ordinary and usual course of business
and consistent with past practice;
(6) except for capital expenditures not exceeding USD 10,000
individually, made any investment or expenditure of a capital nature either by
purchase of stock or securities, contributions to capital, property transfers or
otherwise, or by the purchase of any property or assets of any other individual,
firm or corporation;
(7) entered into any transaction other than in the ordinary and usual
course of its business and consistent with past practice;
(8) entered into or terminated any agreement, plan or lease, or made
any change in any of its agreements, plans or leases other than in the ordinary
course of business consistent with past practice;
(9) permitted any insurance policy naming it as a beneficiary or a loss
may be payee to be cancelled or terminated or any of the coverage thereunder to
lapse;
(10) entered into any collective bargaining agreements;
(11) hired any new employees (other than in the ordinary course of
business consistent with past practice) or increased in any manner the
compensation, remuneration or fringe benefits of any of its officers or
employees or pay or agree to of pay any pension, retirement allowance, or other
benefit not required by any existing employee benefit plan to any such officers
or employees, commit itself to any employment agreement or employee benefit plan
with or for the benefit of any of its officers or employees or any other person,
or altered, amended, terminated in whole or in part or curtailed or permanently
discontinued distributions to, any pension plan or any other employee benefit
plan;
(12) except for an issue in the month April 1997 of 33.000 shares with
a nominal value of NLG 10 each issued to J.H.M. Xxxxxxx and for which a
consideration of NLG 330,000 was received, issued any shares of capital stock or
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issued any warrants, options, calls, subscriptions, or other agreements or
commitments obligating it to issue shares of capital stock;
(13) entered into an agreement to do any of the things described in
clause (1) through (12) of this Section 3.3: or
(14) taken any action which would render inaccurate any representation
and warranty made herein.
ARTICLE IV
CONDITIONS TO THE CLOSING
4.1 Conditions to the Closing Relating to Buyer. Consummation of the
transactions contemplated hereby is subject to the fulfilment to the reasonable
satisfaction of Buyer, prior to or at the Closing Date, of each of the following
conditions:
a. Escrow Agreement. The Escrow Agreement, attached hereto, shall be
executed and delivered substantially in the form of Exhibit C.
b. Legal Opinion. Buyer shall have received a legal opinion, dated as
of the Closing Date, from Xxxxx & Xxxxxxx/Xxxxx & XxXxxxxx, special counsel to
the Company, substantially in the form of Exhibit H hereto.
c. Resignations of Supervisory Directors. All members of the boards of
supervisory directors of the Company and its subsidiaries shall have tendered,
effective at the Closing, their resignations as supervisory directors and
General Meeting of Shareholders of the Company or the Subsidiaries, as the case
may be, shall have accepted such resignations thereby limiting any releases to
the conduct of the Supervisory Directors as appearing from the Financial
Statements, and the Buyer shall have received releases, in form and substance
satisfactory to the Buyer, by each of them of any claims they may have against
the Company and its subsidiaries.
4.2 Conditions to the Closing Related to the Company and the Selling
Shareholders. Consummation of the transaction contemplated hereby is subject to
the fulfilment to the reasonable satisfaction of the Company and the Selling
Shareholders, prior to or at the Closing Date, of the following condition:
a. Escrow Agreement. The Escrow Agreement attached hereto, shall be
executed and delivered substantially in the form of Exhibit C.
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ARTICLE V
TERMINATION
5.1 Termination. This Agreement may be terminated by:
(1) By mutual action of the Selling Shareholders Representative and
Buyer,
(2) By the Selling Shareholders Representative, if any of the
conditions set forth in Section 4.2(a) noncompliance or nonperformance
shall have not been cured or eliminated (or by its nature cannot be cured
or eliminated by Buyer on or before the Closing Date: or
(3) By Buyer, if any of the conditions set forth in Section 4.1 shall
not have been complied with or performed and such noncompliance or
nonperformance shall not have been cured or eliminated (or by its nature
cannot be cured or eliminated) by the Company and the Selling Shareholders
on or before the Closing Date or (Y) waived by the Buyer; or
(4) At any time after 30 days, by either Buyer or the Selling
Shareholders Representative if the Closing shall not have occurred on or
before such date and such failure is not caused by a breach of this
Agreement by the terminating party.
5.2 Termination Fee. In the event of the termination of this
Agreement, the Selling Shareholders agree to reimburse the Buyer for fifty
percent (50%) of the Buyer's out-of-pocket costs related to the transaction
which are incurred within the first 30-day period after complete execution
and delivery of the Letter of Intent, up to a maximum reimbursement of USD
50,000.--.
5.3 Effects of Termination. In the event of the termination of
this Agreement, this Agreement shall thereafter become void and have no
effect, and no party hereto shall have any liability to the other parties
hereto or their respective stockholders or directors or officers in respect
thereof, except for the obligations of the parties hereto in Section 5.2
and except that nothing herein will relieve any party from liability for
any breach of this Agreement prior to such termination.
5.4 After the Closing of this Agreement neither party shall be
entitled to rescind this Agreement on account of breach of performance by
the other party.
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ARTICLE VI
INDEMNITY
6.1 Survival of Representations and Warranties. The representations and
warranties by the Selling Shareholders inclusive those made in section 3.3
hereof shall survive until and including June 30, 1998, except that the
representations and warranties of the Selling Shareholders contained in Sections
2.2(j) shall survive three months after the date when the assessments for
corporate income tax (vennootschapsbelasting) for the fiscal years up to and
including 1997 have become final and in respect of those years
"navorderingsaanslagen" can no longer be imposed and such representations and
warranties as are contained in section 2.2(b) shall survive until the end of the
statutory limitation period for obligations under such representations and
warranties. Such representations and warranties as contained in section 2.2(ae)
shall survive until and including April 30, 2002.
6.2 Indemnity. The Selling Shareholders agree to indemnify Buyer and
the Company for any and all claims, losses, costs, charges, expenses,
obligations, liabilities, actions, suits, damages, judgments, and
deficiencies, including interest and penalties, reasonable counsels' fees and
all amounts paid in settlement of any claim, action, or suit (collectively
referred to as "Claims") which may be sustained, suffered or incurred by any of
them and arising out of or relating to any breaches of the representations,
warranties, covenants and agreements of the Company or the Selling Shareholders
contained herein; provided, that with respect to any breach of a representation
or warranty the Selling Shareholder Representative receives notice of such
breach prior to the expiration of the relevant representation or warranty
pursuant to Section 6.1; provided, further, that the obligations of the Selling
Shareholders under this Section 6.2 (other than obligations relating to Sections
2.2(b), 2.2j) and 2.2(ae)) shall be limited to the aggregate of (i) the amounts
initially in the Escrow Fund (ii) a percentage equivalent to the statutory
interest over the amounts which from time to time are in the Escrow Fund.
Notwithstanding anything herein to the contrary, regardless of whether or not
the Escrow Agreement is then in effect or the amount of Escrowed Funds are then
sufficient, the parties hereto agree that there shall be no limit as to the
Selling Shareholders' obligations with respect to claims relating to Sections
2.2(b), 2.2(j) and 2.2(ae). The Escrow Agreement shall in all respects be
subject to this Section 6.2.
6.3 Cooperation. In the event a Claim is asserted by any third party
against Buyer and/or the Company for which indemnification may be sought, it
shall notify the Selling Shareholders Representative of such Claim by giving to
the Selling Shareholders Representative written notice, and shall give
Shareholders and their counsel access to any and all such files, records and
other documents as may be necessary to enable the Selling Shareholders to
investigate or participate in the defence against such Claim (but at the cost
and expense of such Selling Shareholders) and Buyer shall otherwise
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cooperate in connection therewith and shall nor unreasonably assume a position
contrary to that of Shareholders with respect to all such third party Claims.
6.4 Severalty. If and when any indemnification would become due under
this Article VI, the Selling Shareholders will be liable on a basis in
proportion to their respective shareholdings in the Company, to be calculated on
the basis of the aggregate nominal value of the shares held by each of them.
6.5 Threshold. The Buyer is not entitled to receive an indemnification
for breach of the representations and warranties of the Selling Shareholders
contained in section 2.2 paragraphs (a) to (i) inclusive, (l), (n) to (p)
inclusive, (r) to (ad) inclusive and (af) to (aj) inclusive unless the aggregate
of any claims in respect of breach of these warranties and representation is an
amount in excess of NLG 100,000.
ARTICLE VII
CERTAIN POST-CLOSING AGREEMENTS
7.1 Noncompete. Each of the Selling Shareholders agrees on behalf of
itself and its affiliates that he, she or it will not at any time for five years
after the date hereof, except with the express prior written consent of the
Buyer; (a) directly or indirectly, engage in any Competitive Business (meaning,
any current business engaged in the businesses of the Company and its
subsidiaries, or any natural extensions of such business), whether such
engagement shall be as an owner, partner, agent, employee, consultant or
shareholder (except as the holder of not more than five percent (5%) of the
outstanding shares of a corporation whose stock is publicly traded); (b)
directly or indirectly solicit, divert or accept business from or otherwise take
away or interfere with any customer of the Buyer, the Company or their
Affiliates engaged in any Competitive Business, including without limitation any
person who was a customer or whose business was being pursued by the Buyer, the
Company of their Affiliates prior to the date hereof; or (c) directly or
indirectly, accept employment with, be employed or be a principal of any
business or enterprise which then employs or has as a principal or holder of any
interest therein (except as the holder of not more than one percent (1%) of the
outstanding shares of a corporation whose shares are publicly traded) any
individual who was previously employed in a managerial or consultant position
with Buyer, the Company or any of their Affiliates.
7.2 Nondisclosure. Each of the Selling Shareholders, agrees that, at
all times from and after the date hereof, except as required by law or by the
order of any court or government agency, it shall keep secret and retain in
strictest confidence and shall not, except with the express prior written
consent of Buyer, directly or indirectly disclose, communicate or divulge to any
person, or use for the benefit of any person, any Proprietary Information
(meaning, all information or data with respect to the conduct
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or details of the business of the Company including, without limitation, methods
of operation, customers and customer lists, details of contracts with customers,
consultants, suppliers or employees, products, proposed products, former
products, proposed, pending or completed acquisitions of any company, division,
product line or other business unit, prices and pricing policies, fees, costs,
plans, designs, technology, inventions, trade secrets, know-how, software,
marketing methods, policies, plans, personnel, suppliers, competitors, markets
or other specialized information or proprietary matters of the business of the
Company). The restriction contained in the preceding sentence shall not apply to
any Proprietary Information that (i) is a matter of public knowledge on the date
of this Agreement or (ii) becomes a matter of public knowledge after the date of
this Agreement from another source which is under no known obligation of
confidentiality to Buyer or its affiliates.
ARTICLE VIII
MISCELLANEOUS
8.1 Notices. Except as otherwise required by law, all announcements,
notices, summons and other communications pursuant to this Agreement shall be
delivered to the addresses stated hereunder (or to such address as a party or
Company has communicated to the other party or parties in accordance with this
Article) by registered mail with return receipt, by courier or by telegram,
telex or telefax:
if to Buyer or the Company:
Chore-Time Xxxxx Holding X.X.
Xx Xxxxxxxxx 0
0000 XX Xxxxxxxxx
X.X. Xxx 00000
0000 XX Xxxxxxxxx
Attn: Equity Trust Co. N.V.
Telephone: 00 (0)00 00 00 000
Telecopy: 31 (0)20 64 27 675
with copies to:
CTB, Inc.
Xxxxx Xxxx 00 Xxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: J. Xxxxxxxxxxx Xxxxxxx, President
Telephone: 0 (000) 000 0000
Telecopy: 0 (000) 000 0000
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Trenite Van Xxxxxx
Xx Xxxxxxxxxxxxxx 000
0000 XX Xxxxxxxxx
Attn: X. Xxxxxxxx
Telephone: 00 (0)00 0000 000
Telecopy: 00 (0)00 0000 000
if to the Selling Shareholders:
Xxxxxx Investments III B.V.
9 Xxxxx Voorhout
2514 EA 's-Gravenhage
Telephone: 00 (0)00 000 0000
Telecopy: 00 (0)00 000 0000
with a copy to:
Xxxxx & Xxxxxxx/Xxxxx & XxXxxxxx
Attn. M. van Xxxxxx
00 Xxxxxxxxxxx
0000 XX Xxxxxxxxx
Telephone: 00 (0)00 000 0000
Telecopy: 00 (0)00 000 0000
Notices sent as follows shall be deemed to have been received at the following
times:
(a) if sent by courier: at the moment of delivery by the courier to
the addressee;
(b) if sent by registered letter: on the date noted on the return
receipt;
(c) if sent by telegram, telex or telefax: on the date on which the
notice is sent.
8.2 Counterparts. This Agreement shall be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.3 Exhibits, Schedules and Disclosure Schedule. The Exhibits,
Schedules and Disclosure Schedule are integral parts of this Agreement.
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8.4 Headings and Table of Definitions. The headings herein are for
convenience only, do not constitute a part of this Agreement, and shall not be
deemed to limit or affect any of the provisions hereof.
8.5 Power of Attorney. Each of the undersigned Selling Shareholders
hereby irrevocably makes, constitutes and appoints Xxxxxx Investments III B.V. ,
as his, her or its attorney-in-fact (the "Selling Shareholders Representative")
with full power to act in his, her or its place and stead to compromise any
claim or take any other action, including without limitation pursuant to Section
6.3, with respect to this Agreement.
8.6 Miscellaneous. This Agreement (including the Schedule and Exhibits
hereto and the Disclosure Schedule) (a) constitutes the entire Agreement and
understanding and supersedes all prior agreements and understandings, both
written and oral, among the parties hereto with respect to the subject matter
hereof, including the Letter of Intent dated February 25, 1997 between the
Company and the Buyer and (b) shall not be assigned, by operation of law or
otherwise.
8.7 Arbitration. Any disputes arising that relate to the calculations
made pursuant to Section 1.5 of this Agreement shall be settled by arbitration.
The parties hereto shall submit such dispute to neutral binding arbitration in
the City of Amsterdam, by a partner of a "Big 6" Accounting Firm, other than
Deloitte & Touche and Coopers & Xxxxxxx to be appointed to this end by the
president of the NIVRA. In the event of such arbitration, the matter shall be
heard by such partner as a single arbitrator. Any party requesting arbitration
shall give notice to the other party stating the issue to be resolved. The
decision of the arbitrator shall be final and binding on both parties. Any
arbitration shall be conducted in the English language. The arbitrator shall set
the order of the proceedings. All fees and expenses relating to the work, if
any, to be performed by the arbitrator shall be borne entirely by the
non-prevailing party (i.e. the party whose claim is furthest from the
arbitrator's award), who shall be determined by the arbitrator. Each party
hereby consents to the entry of a judgment in any court of competent
jurisdiction enforcing any arbitration decision made in accordance herewith.
8.8 Injunctive Relief. Notwithstanding anything to the contrary herein
and without prejudice to any remedies given to the parties by law, each of the
Selling Shareholders agrees only for the purpose of Buyer obtaining an
injunction hereunder that any breach of the covenants contained in Article VII
would irreparably injure the Company and the Buyer. Accordingly, each of the
Selling Shareholders agrees that the Company or the Buyer may, in addition to
pursuing any other remedies it may have in law, obtain an injunction against
each Selling Shareholder from any court having jurisdiction over the matter
restraining any further violation of this Agreement by the Selling Shareholder.
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8.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the law of The Netherlands.
8.10 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article VI.
8.11 U.S. Internal Revenue Service
The Buyer has entered into this Agreement in contemplation of its U.S. parent
company filing an Internal Revenue Code Section 338 election (the "Election")
with the Internal Revenue Service with respect to the transaction. The Selling
Shareholders hereby agree to cooperate with the Buyer with respect to the
preparation of the Election and agrees to give its consent to the filing as may
be reasonably requested.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
duly executed in Amsterdam as of the date first above written:
CHORE-TIME XXXXX HOLDING B.V.
By: CTB, Inc.
By /s/ J. Xxxxxxxxxxx Xxxxxxx
--------------------------------------
Name: J. Xxxxxxxxxxx Xxxxxxx
Title: President & CEO
XXXXXX INVESTMENTS III B.V.
By /s/ Xxxxxxx Van Bremen
--------------------------------------
Name: Xxxxxxx Van Bremen
Title: Attorney in Fact
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XXXXXX INVESTMENTS III C.V.
By /s/ Xxxxxxx Van Bremen
--------------------------------------
Name: Xxxxxxx Van Bremen
Title: Attorney in fact
STICHTING FONDSBEHEER FINCON
By /s/ Xxxxxxx Van Bremen
--------------------------------------
Name: Xxxxxxx Van Bremen
Title: Attorney in fact
BELDOR B.V.
By /s/ Xxxxxxx Van Bremen
--------------------------------------
Name: Xxxxxxx Van Bremen
Title: Attorney in fact
/s/ Xxxxxxx Van Bremen
-----------------------------------------
X. XXXXXX
/s/ Xxxxxxx Van Bremen
-----------------------------------------
X. XXXXX
/s/ Xxxxxxx Van Bremen
-----------------------------------------
J. PAQUES
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/s/ Xxxxxxx Van Bremen
-----------------------------------------
J.H.M. XXXXXXX
/s/ Xxxxxxx Van Bremen
-----------------------------------------
H.W. GOOTZEN
/s/ Xxxxxxx Van Bremen
-----------------------------------------
FANCOM HOLDING B.V.
By /s/ Xxxxxxx Van Bremen
--------------------------------------
Name:
Title:
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CTB, Inc. An Indiana corporation, hereby guarantees to the Selling Shareholders
the prompt fulfillment by the Buyer of all and any obligations assumed by it
under this Agreement.
Amsterdam, May 1, 1997.
CTB, Inc.
By: /s/ J. Xxxxxxxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------ ------------------------------
Name: J. Xxxxxxxxxxx Xxxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: President & CEO Title: V.P. & Secretary
