Exhibit 2.1
Xxxxxx Xxxxxx, November 8, 1997
Mackie Designs Inc.
00000 Xxxx-Xxx Xxxx XX
Xxxxxxxxxxx, XX 00000
XXX
Dear Sirs,
Please find enclosed our proposal for:
"STOCK PURCHASE AND SALE AGREEMENT
This Agreement is made this _____ day of __________, 1998, by and among Mackie
Designs Inc., a Washington corporation, Radio Cine Forniture (R.C.F.) S.p.A., an
Italian corporation, Novac SRL, an Italian corporation, Pierres SA, a Luxembourg
corporation, Xxxx Xxxxxxx, Xxxxx Xxxxx, Xxxxxxx Xxxxxxx, Xxxxxxxxx Xxxxxxx,
Giorgio Xxxxxx, Xxxxxx Xxxxxx, Xxxxx Pisi, Xxxxx Xxxxx, Xxxxxxxx Xxxxx,
Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxx Xxxxxx Catellani, Xxxxxxxxx Xxxxxxxx,
Xxxxxx Xxxxxx and Xxxxxxxxx Xxxxxxxx.
RECITALS
A. The RCF Shareholders own all of the issued and outstanding shares of RCF,
which is engaged in the business of manufacturing and selling speakers,
loudspeakers and other audio products (all capitalized terms are hereafter
defined in Section 1.1 of this Agreement).
X. Xxxxxx manufactures and sells audio mixers, studio monitors, amplifiers and
other products, and wishes to acquire the technical and manufacturing expertise
of RCF.
C. The RCF Shareholders and the Novac Shareholders wish to sell, and Mackie
wishes to buy, the RCF Shares and/or the Novac Shares upon the terms and
conditions set forth in this Agreement.
D. The RCF Shareholders and the Novac Shareholders enter into this Agreement
jointly and severally and shall together be deemed one party hereto, including,
without limitation, in the event of arbitration or litigation in accordance
herewith, except in respect of individual behavior on the part of the RCF
Shareholders or the Novac Shareholders following the Base Price and Earn Out
Closing Date in violation of the provisions of Section 12 below.
E. RCF enters into this Agreement for the purpose of assuring implementation
and execution of the same.
STOCK PURCHASE AGREEMENT PAGE - 1
BASED UPON THE ABOVE RECITALS, the parties promise, warrant and agree as
follows:
1. DEFINITIONS AND PRINCIPALS OF CONSTRUCTION:
1.1 DEFINITIONS: The following terms shall have the following
meanings when used in this Agreement:
1.1.1 "Approved RCF Financials" shall have the meaning set forth
in Section 5.1 of this Agreement.
1.1.2 "Assets" shall have the meaning set forth in Section 6.8 of
this Agreement.
1.1.3 "Base Price" shall have the meaning set forth in Section 4.1
of this Agreement.
1.1.4 "Base Price and Earn Out Closing Date" shall mean June 29,
1998.
1.1.5 "Benefit Plans" shall have the meaning set forth in Section
6.11 of this Agreement.
1.1.6 "Caroli" shall mean Xxxxxxx Xxxxxx, one of the RCF
Shareholders, born in Xxxxxx Xxxxxx on October 27, 1939, having his
place of residence at Xxxxxx Xxxxxx, Via 9 Martiri n. 8, tax
identification number CRL GRG 39R 27H 223G.
1.1.7 "December 31 Financials" shall have the meaning set forth in
Section 5.1 of this Agreement.
1.1.8 "Doglioni" means Giorgio Doglioni, the present managing
director of RCF, born in __________ on ___________, having his place
of residence at __________, tax identification number __________.
1.1.9 "Doglioni Consulting Agreement" shall mean the agreement
between RCF and Giorgio Doglioni attached as Exhibit A.
1.1.10 [The text of this section has been deleted and filed
separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.]
1.1.11 "First Demand Bank Guaranty" shall mean the stand-by letter
of credit attached as Exhibit B and incorporated into this Agreement
by this reference.
1.1.12 "Leases" shall mean those leases of the Assets between RCF
or any RCF Subsidiary and various lessors, all as more fully described
in Schedule 1.1.12 to this Agreement.
STOCK PURCHASE AGREEMENT PAGE - 2
1.1.13 "Mackie" shall mean Mackie Designs Inc., a company
incorporated under the laws of the State of Washington, USA and having
its principal office at 00000 Xxxx-Xxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxxx,
X.X.X. 00000.
1.1.14 "Major Contracts" shall mean all written or unwritten
agreements between RCF and/or any RCF Subsidiary and third parties
where the cumulative value of the goods or services involved is more
than $100,000 in any one year, all as more fully described in Schedule
1.1.14 to this Agreement.
1.1.15 "Materials and Substances" shall have the meaning set forth
in Section 6.23 of this Agreement.
1.1.16 "Morlini" shall mean Xxxx Xxxxxxx, one of the RCF
Shareholders, born in Xxxxxx Xxxxxx on May 24, 1939, having his place
of residence at Xxxxxx Xxxxxx, Via Xxxxx Xxxxxxx n. 13, tax
identification number MRL RME 39E 24H 223F.
1.1.17 "Novac" shall mean Novac S.R.L., a company incorporated
under the laws of the Republic of Italy having its registered office
at Xxx Xxxxx Xxxxx 00, Xxxxx, Xxxxx, VAT number 11925450154, and one
of the RCF Shareholders.
1.1.18 "Novac Shareholders" shall mean the "quotisti" of Novac,
namely, Xxxxxx Xxxxxx, born in Bologna on May 16, 1941, having his
place of residence at Bologna, Via del Pratello n. 13, tax
identification number VCR XXX 00X 00X 000X, Xxxxxxxxx Xxxxxxxx, born
in Pola, Croatia on September 27, 1950, having her place of residence
at Xxx xxx Xxxxxxxx 00, Xxxxxxx, Xxxxx, tax identification number PLD
NMR 50P67 Z118X, Xxxxx Xxxxx, born in Xxxxxx Xxxxxx on April 17, 1950,
having his place of residence at Xxxxxx Xxxxxx, Via Xxxx Ferrari n. 7,
tax identification number RSS RNZ 50D 17H 223D, Xxxxxxx Xxxxx, born in
Xxxxxx Xxxxxx on August 9, 1951, having her place of residence at
Xxxxxx Xxxxxx, Via Wolf Ferrari n. 7, tax identification number RSS
LNZ 51M 49H 000X, Xxxxxxxxx Xxxxx, born in Xxxxxx Xxxxxx on August 9,
1951, to, having her place of residence at Xxxxxx Xxxxxx, Via Xxxx
Ferrari n. 7, tax identification number RSS GZL 51M 49H 223A,
Xxxxxxxx Xxxxx, born in Xxxxxx Xxxxxx on October 22, 1973, having her
place of residence at Albinea, Via Xxxxxxx n. 38/2, tax identification
number RSS FRC 73R 62H 223J, Xxxxx Pisi, born in Xxxxxx Xxxxxx on
May 8, 1953, having her place of residence at Xxxxxx Xxxxxx, Via Xxxx
Ferrari n. 7, tax identification number PSI LRA 53E 48H 223Y, Xxxx
Xxxxxx Catellani, born in Quattro Castella (RE) on December 13, 1940,
having his place of residence at Xxxxxx Xxxxxx, Via Xxxxxxx n. 17, tax
identification number CTL PML 40T 13H 122N, Xxxxxx Xxxxxx, born in
Bagnolo in Piano (RE) on July 31, 1947, having his place of residence
at Xxxxxx Xxxxxx, Via Belojannis n. 4, tax identification number DVL
FST 47L 31A 573O, and Xxxxxxxxx Xxxxxxxx, born in Xxxxxx Xxxxxx on
July 29, 1940, having his place of residence at Xxxxxx Xxxxxx, Via
Cocconi Xxxxx n. 9, tax identification number GND GCR 40L 29H 223Q.
STOCK PURCHASE AGREEMENT PAGE - 3
1.1.19 "Novac Shares" shall mean all of the issued and outstanding
shares ("quote"), debentures, options or other rights to an ownership
interest in Novac or rights which are capable of being converted into
an ownership interest in Novac.
1.1.20 "Permits" shall mean all of the necessary operating permits,
licenses and other authorizations necessary for the conduct of all or
any business operated by RCF or any RCF Subsidiary, all as more fully
set forth in Schedule 1.1.20 to this Agreement.
1.1.21 "Permitted Encumbrances" shall mean all of the encumbrances
upon the Assets of RCF or any RCF Subsidiary which shall be allowed to
survive the closing of the transaction contemplated by this Agreement,
all as more fully set forth in Schedule 1.1.21 to this Agreement.
1.1.22 "Pierres" shall mean Pierres SA, a company incorporated
under the laws of Luxembourg, having its Siege Social at 00, xxx X.
Xxxxx - X - 0000 Xxxxxxxxxx, one of the RCF Shareholders.
1.1.23 "RCF" shall mean Radio Cine Forniture (R.C.F.) S.p.A., a
company incorporated under the laws of the Republic of Italy, having
its registered office at Xxx Xxxxxxxxx 00, Xxxxxxxxx, Xxxxxx Xxxxxx,
Xxxxx, VAT number 00148760358.
1.1.24 [The text of this section has been deleted and filed
separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.]
1.1.25 "RCF Financials" shall mean the statements of income and
balance sheets attached to this Agreement as Exhibit C, all made in
compliance with mandatory requirements of Italian law and with
generally accepted accounting principles.
1.1.26 "RCF Shareholders" shall mean Novac, Pierres, Morlini,
Caroli, Xxxxx Xxxxx, born in Xxxxxx Xxxxxx on December 23, 1939,
having her place of residence at Xxxxxx Xxxxxx, Via Xxxxx Xxxxxxx n.
13, tax identification number RSS CRL 39T 63H 223T, Xxxxxxx Xxxxxxx,
born in Xxxxxx Xxxxxx on January 12, 1969, having his place of
residence at Xxxxxx Xxxxxx, Via Xxxxx Xxxxxxx n. 13, tax
identification number MRL SFN 69A 12H 223F and Xxxxxxxxx Xxxxxxx,
born in Xxxxxx Xxxxxx on December 03, 1970, having his place of
residence at Xxxxxx Xxxxxx, Via Xxxxx Xxxxxxx n. 13, tax
identification number MRL FNC 70T 03H 223V.
1.1.27 "RCF Shares" shall mean all of the issued and outstanding
shares, warrants, debentures, stock options or other rights to an
ownership interest in RCF or rights which are capable of being
converted into an ownership interest in RCF.
1.1.28 "RCF Subsidiary" shall mean any company in which RCF is
able to cast the majority of votes in ordinary shareholders'
meetings and/or in which RCF is able to cast sufficient votes to
exercise a dominant influence in ordinary shareholders' meetings
and/or
STOCK PURCHASE AGREEMENT PAGE - 4
over which RCF has a dominant influence by virtue of the particular
contractual relationship between RCF and said company.
1.1.29 "Real Property" shall mean all of the real property owned,
occupied or leased by RCF or any RCF Subsidiary, all as more fully set
forth in Schedule 1.1.29 to this Agreement.
1.1.30 "Xxxxxx" means Xxxxxx Xxxxxx, a shareholder of AEB Srl, an
Italian company having its registered office at Calderara di Reno
(Bologna), Via Roma 116/118, and one of the Novac Shareholders.
1.1.31 "Xxxxxx Consulting Agreement" shall mean the consulting
agreement between RCF and Xxxxxx Xxxxxx attached as Exhibit D.
1.2 ACCOUNTING PRINCIPLES: Any reference in this Agreement to generally
accepted accounting principles refers to generally accepted accounting
principles which have been established by law in the Republic of Italy,
and, where not established by law, established from time to time by the
Italian Commissione Nazionale dei Dottori Commercialisti e dei Ragionieri,
or any successor body thereto.
1.3 CURRENCY: Unless otherwise expressly indicated, all currency amounts
set forth in this Agreement are expressed in United States Dollars.
2. SALE OF RCF SHARES: At closing and subject to the terms and conditions
of this Agreement, Mackie shall purchase, and the RCF Shareholders shall
sell, the RCF Shares. The RCF Shares shall be delivered to Mackie on the
Base Price and Earn Out Closing Date, duly endorsed for transfer to Mackie
upon the books and records of RCF. Upon Mackie's request in writing any
number of the RCF Shares shall be duly endorsed for transfer upon the books
and records of RCF by the RCF Shareholders to any other company (which may be
a non-U.S. company and a non-Italian company) provided the same agrees in
writing to be jointly and severally bound with Mackie by this Agreement, it
being understood that Mackie will remain jointly and severally bound by this
Agreement with said other company.
3. SALE OF NOVAC SHARES: At Mackie's sole option and in lieu of purchase
from Novac of the RCF Shares held in Novac's name, Mackie may elect to purchase
from the Novac Shareholders the Novac Shares, and the Novac Shareholders shall
sell the Novac Shares to Mackie if Mackie so elects. In the event that Mackie
elects to purchase the Novac Shares, the Novac Shareholders warrant jointly and
severally that the representations and warranties contained in Exhibit E
attached to this Agreement are true and correct as to Novac as of the Base Price
and Earn Out Closing Date, and that the truth thereof shall survive the Base
Price and Earn Out Closing Date. If Mackie elects to purchase the Novac Shares,
it shall pay to the Novac Shareholders that percentage of the Base Price and
Earn Out Price as the RCF Shares held by Novac bear to the total RCF Shares, and
of that sum each Novac Shareholder shall receive such percentage as the Xxxxx
Shares held in his name bear to the total issued and outstanding Novac Shares
and the Novac Shares shall be duly transferred to Mackie on the Base Price and
Earn Out Closing Date in such a way that said transfer may subsequently be
recorded upon the books and records of Novac.
STOCK PURCHASE AGREEMENT PAGE - 5
4. PURCHASE PRICE: On the Base Price and Earn Out Closing Date, Mackie shall
pay the following sums to the RCF Shareholders (or to the RCF Shareholders and
the Novac Shareholders, as the case may be) in the indicated manner:
4.1 [The text of this section has been deleted and filed separately with
the Securities and Exchange Commission pursuant to a request for
confidential treatment.]
4.2 [The text of this section has been deleted and filed separately with
the Securities and Exchange Commission pursuant to a request for
confidential treatment.]
4.3 [The text of this section has been deleted and filed separately with
the Securities and Exchange Commission pursuant to a request for
confidential treatment.]
4.4 ALLOCATION OF PURCHASE PRICE AMONG SELLERS: Unless otherwise
instructed in writing by all RCF Shareholders, Mackie will pay the Base
Price and the Earn Out Price, if any, to each of the RCF Shareholders in
such percentage as the RCF Shares held by each bears to the total issued
and outstanding RCF Shares; provided, that if Mackie elects to purchase the
Novac Shares, the amount to be paid therefore and the persons to be paid in
which amounts shall be determined in accordance with Section 3 of this
Agreement. With respect to the purchase price paid to each of the RCF
Shareholders (or the RCF Shareholders and the Novac Shareholders, as the
case may be) ten percent (10%) of the amount paid to each shall be
allocated to the covenant not to compete to which they are agreeing in
Section 12 of this Agreement.
4.5 METHOD OF PAYMENT: Unless otherwise instructed in writing prior to
the appropriate date of payment, Mackie will make payment to each
appropriate recipient by non-transferable banker's draft at the time of
delivery to Mackie of the duly endorsed certificates representing the RCF
Shares and of the transfer to Mackie of the Novac Shares on the Base Price
and Earn Out Closing Date, receipt of which payment shall be acknowledged
in writing by each recipient.
5. AUDIT AND REVIEW OF RCF FINANCIALS; DUE DILIGENCE
5.1 AUDIT AND REVIEW: Following the close of its December 31, 1997,
fiscal year, RCF will promptly cause the preparation and completion of
audited, consolidated financial statements, in compliance with the law,
which will include cash flow statements and balance sheets of RCF and the
RCF Subsidiaries as of December 31, 1997 ("December 31 Financials"), all to
be prepared in accordance with generally accepted accounting principles in
a manner consistent with RCF's past practice as previously employed in the
RCF Financials and with applicable law. The December 31 Financials will be
prepared on an audited basis by Xxxxx Xxxxxxxx, RCF's certified public
accountants, and will be subject to the review and approval of Ernst &
Young, Mackie's certified public accountants. Ernst & Young will have full
access to Xxxxx Xxxxxxxx'x work papers and other material used in preparing
the December 31 Financials, and
STOCK PURCHASE AGREEMENT PAGE - 6
will be entitled to be present at critical times during the audit
process if it so elects. Ernst & Young will have a period of thirty
(30) days to review and approve the accuracy of the December 31
Financials following their completion by Xxxxx Xxxxxxxx. If Xxxxx &
Young, with reason, does not approve the accuracy of the December 31
Financials within the stated review period, Mackie and any other company
bound jointly and severally with Mackie under this Agreement may refuse
to consummate the proposed transaction and they shall have no liability
to RCF, the RCF Shareholders or the Novac Shareholders for its/their
refusal. If Ernst & Young approves the accuracy of the December 31
Financials ("Approved RCF Financials"), the Approved RCF Financials
shall become the basis for determining the amount of the Earn Out Price.
To the extent necessary, any adjustments to the December 31 Financials
agreed upon by both parties' auditors will be made against the Earn Out
Price only, and not the Base Price. RCF shall be responsible for the
compensation of Xxxxx Xxxxxxxx and Xxxxxx shall be responsible for the
compensation of Ernst & Young. Each party shall bear the costs of the
consultants appointed by said party.
5.2 DUE DILIGENCE: From the date hereof through the Base Price and
Earn Out Closing Date, the RCF Shareholders and the Novac Shareholders
shall supply Mackie with all information and data not already in Mackie's
possession, including confidential information, necessary to enable Mackie
to conduct thorough due diligence for the purpose of verifying the accuracy
of the representations and warranties of the RCF Shareholders and the Novac
Shareholders as set forth in this Agreement and shall cooperate fully with
Mackie and Mackie's appointed representatives and consultants in the
carrying out of said due diligence. Said due diligence shall include,
without limitation, an examination of the intellectual property rights of
RCF and the RCF Subsidiaries, all books and records of Novac, RCF and the
RCF Subsidiaries, all contracts currently in force to which Novac, RCF or
any RCF Subisidiary is a party and all litigation and arbitration matters,
whether in course or threatened, affecting Novac, RCF or any RCF
Subisidiary. RCF shall bear the costs of the consultants appointed by RCF
in carrying out said due diligence, with the exception of those costs
indicated in Schedule 5.2 hereto, which will be borne by Mackie ; Mackie
shall bear the costs of the consultants appointed by Mackie in carrying out
said due diligence.
6. REPRESENTATIONS AND WARRANTIES OF THE RCF SHAREHOLDERS: The RCF
Shareholders jointly and severally and unconditionally represent and warrant
that the following statements are true as of the date hereof, will be true as of
the Base Price and Earn Out Closing Date, and that such representations and
warranties shall survive and remain in effect following the Base Price and Earn
Out Closing Date, notwithstanding any independent investigation or review by
Mackie or its employees, agents, or independent contractors:
6.1 CORPORATE ORGANIZATION: RCF is a corporation duly organized, validly
existing, and in good standing under the laws of the Republic of Italy,
with full corporate power and corporate authority to carry on its business
as presently conducted. The Articles of Incorporation (atto costitutivo)
and by-laws (statuto) attached as Schedule 6.1 are the current, outstanding
versions of RCF's and each RCF Subsidiary's Articles of Incorporation (atto
costitutivo) and by-laws (statuto) and any amendments thereto, and there
are no other amendments thereto not reflected in Schedule
STOCK PURCHASE AGREEMENT PAGE - 7
6.1. RCF and the RCF Subsidiaries are qualified to do business in each
jurisdiction in which the nature of the business and their ownership of
properties would make such qualification necessary and where failure to
be so qualified might have a material adverse effect on its assets,
business, or financial condition;
6.2 AUTHORIZATION: The RCF Shareholders have obtained all necessary
authorizations and approvals, and RCF and the RCF Subsidiaries have
obtained all necessary corporate authorizations and approvals, required for
the execution and delivery by RCF and the RCF Shareholders of this
Agreement and all other documents or agreements contemplated by this
Agreement;
6.3 VALID AGREEMENT: This Agreement constitutes the legal, valid, and
binding agreement of RCF and the RCF Shareholders, enforceable against RCF
and the RCF Shareholders in accordance with its terms. There are no
agreements by which the RCF Shareholders or RCF are bound or provisions of
the Articles of Incorporation (atto costitutivo) or by-laws (statuto) or
other governing corporate instruments of RCF which prohibit the transfer of
the RCF Shares to Mackie, or require the consent of any third party to such
transfer, except such consents as shall have been obtained at or prior to
the Base Price and Earn Out Closing Date and except such agreements as
shall terminate on or prior to the Base Price and Earn Out Closing Date.
No RCF Subsidiary is subject to any agreement, understanding or provision
of its Articles of Incorporation (atto costitutivo) or by-laws (statuto)
which would require it to seek third party consent due to a change in
control of RCF or would allow a third party to exercise, with respect to
its shares, a right of purchase or other right with respect to any of the
rights of ownership thereof upon a change in control of RCF;
6.4 NO ACTIONS: No action or proceeding has been instituted or, to the
best of the RCF Shareholders' knowledge, threatened before any court or
governmental body which challenges (i) the execution, delivery, or
performance by RCF or the RCF Shareholders of this Agreement, (ii) the
consummation by RCF or the RCF Shareholders of the transactions
contemplated hereby, or (iii) the transfer of control of the RCF
Subsidiaries from the RCF Shareholders to Mackie. To the best of the RCF
Shareholders' knowledge, there is no basis for any such action or
proceeding;
6.5 NO CONFLICT: Neither the execution and delivery by the RCF
Shareholders or RCF of this Agreement nor the consummation by the RCF
Shareholders of the transactions contemplated by this Agreement will
conflict with or result in a violation or breach of any provision of, or
constitute a default under, RCF's or any RCF Subsidiary's Articles of
Incorporation (atto costitutivo) or by-laws (statuto), or any statute,
order, judgment, decree, license, permit, rule, or regulation of any court
or governmental body by which the RCF Shareholders, RCF or any RCF
Subsidiary is bound, or any contract, agreement, or other instrument to
which the RCF Shareholders, RCF or any RCF Subsidiary is a party;
6.6 FINANCIAL MATTERS:
STOCK PURCHASE AGREEMENT PAGE - 8
6.6.1 RCF FINANCIALS: The RCF Financials as defined in Section
1.1.25 are true, correct, and complete in all material respects. The
RCF Financials are and have been prepared and maintained in accordance
with applicable law and generally accepted accounting principles
consistently applied throughout the years.
6.6.2 APPROVED RCF FINANCIALS : The Approved RCF Financials which
will be prepared for the purpose of this transaction will be true,
correct and complete in all material respects. The Approved RCF
Financials will be prepared and maintained in accordance with
applicable law and generally accepted accounting principles
consistently applied throughout the preparation of said Approved RCF
Financials. They are attached to this Agreement as Exhibit C-1.
6.6.3 LIABILITIES: Neither RCF nor any RCF Subsidiary has any
liabilities or obligations, whether absolute, accrued or contingent,
which are not specifically reserved against or reflected as a
liability in the RCF Financials (or will not be specifically reserved
against or reflected as a liability in the Approved RCF Financials),
whether or not such liabilities or obligations were required to be so
reflected or reserved in accordance with the law and generally
accepted accounting principles, except for those liabilities and
obligations set forth in Schedule 6.6.3 hereto;
6.6.4 ACCOUNTS AND NOTES RECEIVABLE: The accounts and notes
receivable reflected in the RCF Financials, or which will be reflected
in the Approved RCF Financials, arose from bona fide transactions in
the ordinary course of business, and the allowance for doubtful
accounts that appears thereon was based on RCF's or any applicable RCF
Subsidiary's experience in accordance with the law and generally
accepted accounting principles consistently applied;
6.7 CERTAIN ACTIONS: Except as set forth in Schedule 6.7 attached, since
November 8, 1997, through the Base Price and Earn Out Closing Date, there
have been (i) no changes in the business, operations, assets or financial
condition of RCF which have been materially adverse to RCF or any RCF
Subsidiary, (ii) no changes in the capital structure of RCF or any RCF
Subsidiary, (iii) no increases or decreases in the number of authorized
shares of RCF or any RCF Subsidiary, (iv) no changes in the charter
documents of RCF or any RCF Subsidiary, (v) no damage, destruction or loss,
whether or not covered by insurance, materially adverse to RCF or any RCF
Subsidiary, (vi) no direct or indirect redemption, purchase or other
acquisition of any shares of RCF's capital stock or that of any RCF
Subsidiary, (vii) no increase in compensation payable to, or to become
payable by RCF or any RCF Subsidiary to, any of its officers or employees,
or any bonus payment or arrangement to be made with any of them, and (viii)
no dividend, distribution or other payment to the shareholders of RCF,
whether in cash, stock or other;
6.8 TITLE TO ASSETS: Except for the Permitted Encumbrances and the
Leases, RCF and the RCF Subsidiaries have good and marketable title to all
of the Real Property and all equipment, assets and other personal property
used by RCF or the RCF Subsidiaries in the operation of their respective
business as presently conducted (collectively, all such Real Property,
equipment, assets
STOCK PURCHASE AGREEMENT PAGE - 9
and other personal property, whether owned or leased by RCF or any RCF
Subsidiary, is hereafter known as the "Assets"), including, but not
limited to, the assets reflected in Schedule 6.8 attached. The Assets
represented in the RCF Financials, and which will be represented in the
Approved RCF Financials, represent all of the assets customarily used by
RCF or the RCF Subsidiaries in the conduct of their respective business.
Except for the Permitted Encumbrances, the Assets are free and clear of
all mortgages, liens, security interests, charges, encumbrances and
restrictions. Each Asset listed in Schedule 6.8 which is also listed in
Schedule 6.8.1 hereto has been regularly serviced or maintained, is in
good operating condition and repair, normal wear and tear excepted,
taking into account its age and level of usage and in compliance with
all applicable laws and regulations. All of the Leases are in full
force and effect, and neither the lessor thereunder nor RCF or the
applicable RCF Subsidiary is in material default of the terms thereof;
6.9 GUARANTEES AND INDEBTEDNESS OF OTHERS: Except as set forth in
Schedule 6.9, neither RCF nor any RCF Subsidiary is a guarantor or
otherwise liable for any indebtedness of any person or entity other than
RCF or an RCF Subsidiary;
6.10 EMPLOYEE MATTERS: Schedule 6.10 attached contains a complete list of
all salaried employees, consultants, commercial intermediaries and agents
employed by RCF or any RCF Subsidiary as of the Base Price and Earn Out
Closing Date, together with their current rates of compensation. To the
best of the RCF Shareholders' knowledge, no such employee, consultant,
commercial intermediary or agent is in violation of any non-disclosure
agreement or agreement relating to proprietary information by which RCF or
any RCF Subsidiary is bound. Except as set forth in Schedule 6.10
attached, neither RCF nor any RCF Subsidiary has any contract with any
employee, consultant, commercial intermediary or agent or is bound by any
collective bargaining agreement or collective labor agreement with any
employees. Since November 8, 1997, there has been no resignation of any
employee, agent, commercial intermediary or consultant of RCF or any RCF
Subsidiary which would have a material adverse effect upon the operations
and business of RCF or the applicable RCF Subsidiary. There is no pending
termination of any RCF or any RCF Subsidiary employee, consultant,
commercial intermediary or agent which would have a material adverse effect
upon the operations and business of RCF or the applicable Subsidiary.
Neither RCF nor any RCF Subsidiary is engaged in any unfair, illegal or
improper labor practice, nor is there any strike, slowdown, dispute,
representation campaign or work stoppage of any kind actually pending or,
to the best of the RCF Shareholders' knowledge, threatened against RCF or
any RCF Subsidiary. RCF and all RCF Subsidiaries have set aside funds
sufficient fully to cover all financial obligations imposed on them in
respect of their employees, consultants, commercial intermediaries and
agents.
6.11 ADDITIONAL EMPLOYEE MATTERS: Schedule 6.11 attached contains a true
and complete list of all bonus, deferred compensation, severance, profit,
pension, retirement, health, medical or life insurance plans or programs or
other employee benefit plans or programs, if any, maintained or contributed
to by RCF or any RCF Subsidiary (collectively, the "Benefit Plans"). The
RCF Shareholders have delivered to Mackie, or made available to Mackie for
inspection, true and complete copies of all documents comprising or
relating to the Benefit Plans. Except as identified on Schedule 6.11,
neither RCF nor any RCF Subsidiary maintains or contributes to, and never
has
STOCK PURCHASE AGREEMENT PAGE - 10
maintained or contributed to, an employee benefit plan or program. Each
Benefit Plan is in material compliance with all applicable laws and
regulations. All liabilities with respect to any Benefit Plan are
accurately reflected in the RCF Financials, or will be accurately
reflected in the Approved RCF Financials. To the best of the RCF
Shareholders' knowledge, there are no unfunded liabilities with respect
to any such Benefit Plan;
6.12 INTELLECTUAL PROPERTY RIGHTS: In connection with its operations as
presently conducted, each of RCF and the RCF Subsidiaries has full right to
use (i) its name, (ii) all logos, identifying marks, and styles used by it
in connection with the operation of its business, (iii) all trademarks,
service marks, copyrights, and trade names, and (iv) trade secrets in each
jurisdiction in which it conducts business and there exist no third party
rights and/or claims relating thereto. Schedule 6.12 attached contains a
complete listing of all patents, copyrights and trademarks owned or held
under license by RCF or any RCF Subsidiary. Except as set forth in Schedule
6.12, neither RCF nor any RCF Subsidiary has granted any license in respect
of any patent, copyright, trademark or other intellectual property right
of RCF or any RCF Subsidiary. None of RCF's or any RCF Subsidiary's
operations, Assets or products infringes in any way upon any trademark,
service xxxx, trade name, patent, copyright, logo, identifying xxxx or
other intellectual property held or owned by any third party. Neither RCF
nor any RCF Subsidiary is wrongfully using any trade secret of any third
party;
6.13 TAX PAYMENTS: RCF and each RCF Subsidiary has caused to be properly
prepared and has filed returns for all national, local and foreign taxes,
assessments, and penalties to the extent such filings and payments are
required prior to the Base Price and Earn Out Closing Date, and all such
returns are materially correct. There is no known or pending asserted
deficiency by any national, local, or foreign government with respect to
any tax period. The amounts paid as estimated taxes or set up as reserves
for taxes on the RCF Financials or the Approved RCF Financials are
sufficient for the payment of all accrued and unpaid national and local
taxes, real property, personal property, sales, use, withholding and all
other taxes imposed on RCF or any RCF Subsidiary in accordance with
applicable law as of December 31, 1997, including interest and penalties,
if any, with respect to the income, value or other basis for determination
of such taxes to which such estimated taxes or reserves relate;
6.14 MAJOR CONTRACTS: Schedule 1.1.14 attached contains a true and
complete list of all currently outstanding agreements, leases or other
obligations or commitments, whether written or oral, if any, which are
deemed to be Major Contracts and to which RCF or any RCF Subsidiary is a
party and by which they are bound and which in any way relate to the
ownership or operation or prospects of their respective business
operations, including, but not limited to, a complete and accurate list,
including all relevant particulars, of all existing such contracts with any
of RCF's and the RCF Subsidiary's customers and suppliers, and each of RCF
and the RCF Subsidiaries has performed all material obligations required to
be performed under such Major Contracts and is not in material default
under any of such Major Contracts;
6.15 LITIGATION: Except as otherwise completely and accurately set forth
in Schedule 6.15 to this Agreement, there are no investigations, suits,
actions, or legal, administrative, arbitrations, or
STOCK PURCHASE AGREEMENT PAGE - 11
other proceedings pending or threatened by, against, or affecting RCF,
the RCF Subsidiaries or the Assets, or any investigations, suits,
actions, or legal, administrative, arbitrations or other proceedings
relating to the business of RCF and/or any RCF Subsidiary pending or
threatened by, against, or affecting the RCF Shareholders and/or any
employees, consultants, commercial intermediaries or agents of RCF
and/or the RCF Subsidiaries. To the best of the RCF Shareholders'
knowledge, there are no events or circumstances which could form the
basis of any such suit, action, proceeding, or investigation;
6.16 COMPLIANCE WITH LAWS: The business and operations of RCF and the RCF
Subsidiaries have been conducted through the Base Price and Earn Out
Closing Date in accordance with all applicable laws, ordinances, rules, and
regulations, violation of which, individually or in the aggregate, might
materially and adversely affect the assets, business or prospects of RCF or
the RCF Subsidiaries. Neither RCF nor the RCF Subsidiaries is in violation
of, or in default under, any term or provision of any instrument relating
to its formation and the governance of its business and affairs, or of any
lien, indenture, mortgage, lease, agreement, instrument, commitment, or
other arrangement;
6.17 LICENSES: Each of the Permits is in full force and effect, no
limitation, suspension or cancellation thereof of any kind is threatened,
and no other such licenses, authorizations or permits are required for the
operation of RCF's or the RCF Subsidiaries' business as presently
conducted;
6.18 INSURANCE MATTERS: Schedule 6.18 attached sets forth a complete and
accurate list of all insurance policies covering RCF and any RCF Subsidiary
(including their respective expiration dates) which are presently in effect
or which were in effect for the three (3) years prior to the Base Price
and Earn Out Closing Date. All said policies are adequate to cover the
risks they are intended to cover and all premiums due for such policies
have been paid and no notice of termination has been received, and each
such policy is in full force and effect for the stated period of coverage;
6.19 COMPETITIVE INTERESTS: Neither any RCF Shareholder, Novac
Shareholder nor any officer, director, consultant or principal employee of
RCF or any of the RCF Subsidiaries owns, directly or indirectly, an
interest in any partnership, association, entity or corporation (other than
as the holder of less than 1% of the issued and outstanding stock of a
publicly held corporation) which presently is conducting a business similar
to that conducted by RCF or any RCF Subsidiary as a competitor of RCF or
any RCF Subsidiary. To the best of the RCF Shareholders' knowledge,
neither any RCF Shareholder, Novac Shareholder nor any officer, director,
consultant or principal employee of RCF or any of the RCF Subsidiaries is
presently engaged, directly or indirectly, in any activity which would
compete with the present business of RCF or any RCF Subsidiary (except for
Xxxxxx'x involvement with AEB SRL, an Italian corporation as described in
Section 12.1 and except as otherwise completely and accurately set forth in
Schedule 6.19 to this Agreement);
6.20 NO BROKERS: Neither the RCF Shareholders, the Novac Shareholders nor
RCF or any RCF Subsidiary has incurred any liability to any broker, finder,
or agent for any brokerage fees,
STOCK PURCHASE AGREEMENT PAGE - 12
finders' fees, or commissions with respect to the transactions
contemplated by this Agreement, except that the RCF Shareholders and the
Novac Shareholders have incurred liability for brokerage fees to the
broker Madison Capital Group USA, LLC, New York, which fees shall be
paid for entirely by the RCF Shareholders and the Novac Shareholders
from the proceeds of the sale of shares contemplated by this Agreement.
6.21 CUSTOMER MATTERS: Except as set forth in Schedule 6.21 attached, no
single supplier or customer who accounted for more than 10% of RCF's or any
RCF Subsidiary's purchases or sales during its most recent complete fiscal
year, or the fiscal year to date, nor any supplier who is a material source
of supply of any goods essential to the business of RCF or any RCF
Subsidiary, has cancelled or otherwise terminated, or made any threat to
cancel or otherwise terminate, its relationship with RCF or the applicable
RCF Subsidiary;
6.22 CONDITION OF REAL PROPERTY: All of the Real Property is zoned in such
a manner by the appropriate governing jurisdiction as to permit the present
operation of RCF's or the RCF's Subsidiary's business conducted thereon,
and does not encroach upon any contiguous property. The Real Property and
all structures located thereon are in compliance with all applicable laws
and all structures located upon such Real Property are in compliance with
all applicable building codes and building regulations and have received
all appropriate certificates of occupancy;
6.23 MATERIALS AND SUBSTANCES; WORKPLACE: Except as otherwise provided in
Schedule 6.23 hereto, any handling, disposition, transportation, storage,
treatment and/or usage of Materials and Substances as hereinafter defined
by RCF or any RCF Subsidiary has been in compliance with all applicable
national (including European Union) and local (including regional,
provincial and municipal) laws, regulations and ordinances; and no leak,
spill, release, discharge, emission or disposal of Materials and Substances
has occurred during RCF's or any RCF Subsidiary's business operations in
violation of applicable national (including European Union) and local
(including regional, provincial and municipal) laws, regulations and/or
ordinances. The Real Property and the soil, groundwater, and soil vapor on
or under any of the Real Property is free of all Materials and
Substances, the presence of which would constitute a violation of
applicable national (including European Union) and/or local (including
regional, provincial and municipal) laws, regulations and/or ordinances. As
used herein, the term "Materials and Substances" means waste of any sort
and any toxic or otherwise hazardous substance or material in accordance
with applicable law, including but not limited to those to which Decreto
Legislativo no. 22 of February 5, 1997 and/or Decreto Legislativo no. 52 of
February 3, 1997 apply, petroleum products, or such other substances,
materials, and wastes that are regulated under any applicable local
(including regional, provincial and municipal) or national (including
European Union) law or regulation, including radioactive substances and
asbestos. Any electroplating which has been carried out by RCF and/or any
RCF Subsidiary or has otherwise been carried out on the Real Property has
not given rise to any violation of applicable national (including European
Union) and/or local (including regional, provincial and municipal) laws,
regulations and/or ordinances. In addition, RCF and all RCF Subsidiaries
are and at all times in the past have been, in compliance with all
applicable national (including European Union) and local (including
regional, provincial and municipal) laws and regulations governing (a)
environmental protection, including without
STOCK PURCHASE AGREEMENT PAGE - 13
limitation Law no. 319 of May 10, 1976 as amended, Decreti Legislativi
nos. 132 and 133 of January 27, 1992 and D.P.R. no. 203 of May 24, 1988
and (b) hygiene and safety in the workplace, including without
limitation Decreto Legislativo no. 626 of September 19, 1994 as amended
by Decreto Legislativo no. 242 of March 19, 1996;
6.24 BOOKS AND RECORDS: All books and records of RCF or any RCF
Subsidiary required to be maintained by applicable law or reasonably
necessary in the operation of RCF's or the RCF Subsidiary's business,
including but not limited to the charter documents (including amendments
thereto), all minutes of the proceedings of the Board of Directors and
shareholders, all accounting records, all tax returns, all current
insurance policies and all permits, orders and authorizations issued by any
regulatory authority are in the possession of RCF or the RCF Subsidiary,
are complete and correct and have been regularly kept in accordance with
applicable law;
6.25 PAYMENTS TO RCF SHAREHOLDERS: Except for salary, bonuses, director
or consulting fees, rent, benefits, expense reimbursements and similar
amounts payable by RCF or any RCF Subsidiary to the RCF Shareholders in the
ordinary course of business, all outstanding amounts due RCF or any RCF
Subsidiary from the RCF Shareholders and vice versa on or prior to the Base
Price and Earn Out Closing Date have been paid in full or otherwise settled
or compromised and the RCF Shareholders shall receive no additional
payments in any form on or before the Base Price and Earn Out Closing Date
from the earnings of RCF or any RCF Subsidiary or otherwise, except as
otherwise expressly provided in section 4.2 above in respect of the Earn
Out Price. Except as described in the preceding sentence and/or in Schedule
6.25 hereto, none of the RCF Shareholders or the Novac Shareholders has any
expectation of any sums due him as a result of being an officer, director
or consultant (and not in his capacity as an employee) of RCF or any of the
RCF Subsidiaries for periods prior to the Base Price and Earn Out Closing
Date;
6.26 CAPITALIZATION OF RCF: The authorized capital stock, and the total
issued and outstanding shares, of RCF and the RCF Subsidiaries consists
entirely of the shares set forth in Schedule 6.26 attached. The RCF Shares
and the issued and outstanding shares of each RCF subsidiary have been duly
authorized, validly issued, are fully paid, and are non-assessable. Other
than the RCF Shares, RCF does not have outstanding any other stock or
securities convertible into or exchangeable for any shares of its capital
stock, any preemptive rights or other rights to subscribe for or to
purchase, or any options for the purchase of, or any agreements providing
for the issuance (contingent or otherwise) of, or any calls, commitments or
claims of any character relating to the issuance of, any of its capital
stock or any securities convertible into or exchangeable for any of its
capital stock. RCF is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock. All of the RCF Subsidiaries are wholly owned by RCF except
as specifically set forth in Schedule 6.26;
6.27 RCF SHARES AND RCF SUBSIDIARY STOCK: The RCF Shares and the issued
and outstanding shares of each RCF Subsidiary are free and clear of any
liens, encumbrances, pledges, security interests, restrictions on transfer,
voting trusts or voting agreements which would continue to exist following
the Base Price and Earn Out Closing Date. This Agreement, upon compliance
STOCK PURCHASE AGREEMENT PAGE - 14
with the terms and satisfaction of the conditions contained therein, is
sufficient to transfer good and marketable title to the RCF Shares to
Mackie;
6.28 PRODUCT LIABILITY: The products manufactured and/or sold by RCF prior
to the Base Price and Earn Out Closing Date are in compliance with safety
requirements and with all applicable laws and regulations concerning
product liability and to the extent that any claim relating to said
products is not covered by insurance, the RCF Shareholders shall be solely
responsible for said claim with the understanding that, should the
uncovered amount of such claim, together with any other claim under Section
13.1 hereof, exceed the sum of the stand-by letter of credit in favor of
Mackie referred to in Section 13.6 of this Agreement, then the RCF
Shareholders shall be liable for said excess sum only in cases of
fraudulent warranties and/or misrepresentations made with fraudulent
intent.
6.29 DISCLOSURE: All relevant information concerning RCF and/or any RCF
Subsidiary has been disclosed to Mackie.
6.30 REPRESENTATIONS AND WARRANTIES: No representations or warranties by
the RCF Shareholders set forth in this Agreement contain any untrue
statement of a material fact, or omit to state a material fact necessary to
make the statement and facts contained herein not misleading, it being
understood that no breach of a representation in this Agreement will
automatically and in and of itself constitute proof that the representation
was made with fraudulent intent.
7. MACKIE'S REPRESENTATIONS AND WARRANTIES: Mackie represents and warrants
that the following statements are true, will be true as of the Base Price and
Earn Out Closing Date, and that such representations and warranties shall
survive and remain in effect following the Base Price and Earn Out Closing Date
notwithstanding any independent investigation or review by the RCF Shareholders
(or the Novac Shareholders, as the case may be) or their employees, agents, or
independent contractors:
7.1 CORPORATE ORGANIZATION: Mackie is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Washington, USA, with full power and authority to carry on its business as
now conducted and to enter into and carry out the terms of this Agreement;
7.2 CORPORATE AUTHORIZATION: Mackie has obtained all necessary corporate
and other authorizations and approvals required for its execution and
delivery of the documents or agreements contemplated by this Agreement,
except the approval (if required) of the Italian Antitrust Authority or the
European Union competition authority which is the subject of Mackie's
obligation set forth in Section 11.4 below;
7.3 VALID AGREEMENT: This Agreement constitutes the legal, valid, and
binding agreement of Mackie, enforceable against Mackie in accordance with
its terms. There are no agreements by which Mackie is bound or provisions
of its Articles of Incorporation, bylaws or other governing corporate
instruments which prohibit the contemplated transaction or require the
consent of any third party to such transaction, except such consents as
shall have been obtained at or prior to the Base Price and Earn Out Closing
Date;
STOCK PURCHASE AGREEMENT PAGE - 15
7.4 NO ACTIONS: No action or proceeding has been instituted or, to the
best knowledge of Mackie, threatened before any court or governmental body
which challenges (i) the execution, delivery or performance by Mackie of
this Agreement, or (ii) the consummation by Mackie of the transactions
contemplated thereby. To the best of Mackie's knowledge there is no basis
for any such action or proceeding;
7.5 NO CONFLICT: Neither the execution and delivery by Mackie of this
Agreement nor the consummation by Mackie of the transactions contemplated
by this Agreement will conflict with or result in a violation or breach of
any provision of, or constitute a default under, Mackie's Articles of
Incorporation or bylaws, or any statute, order, judgment, decree, license,
permit, rule, or regulation of any court or any governmental body by which
Mackie is bound, or any contract, agreement, or other instrument to which
Mackie is a party;
7.6 NO BROKERS: Mackie has not incurred any liability to any broker,
finder or agent for any brokerage fees, finders' fees or commissions with
respect to the transactions contemplated by this Agreement;
7.7 REPRESENTATIONS AND WARRANTIES: No representations or warranties by
Mackie set forth in this Agreement contain any untrue statement of a
material fact, or omit to state a material fact necessary to make the
statement and facts contained herein not misleading.
8. CERTAIN AGREEMENTS:
8.1 NOTIFICATION OF BREACH: Mackie, the Novac Shareholders and the RCF
Shareholders shall promptly notify the other parties of any action or
inaction by any of them or any other person and any information which they
shall discover, which shall render inaccurate in any material respect any
of the respective representations and warranties contained in this
Agreement.
8.2 UPDATE OF EXHIBITS AND SCHEDULES: On the Base Price and Earn Out
Closing Date, the RCF Shareholders (and the Novac Shareholders, as the case
may be) shall provide a certificate to Mackie which identifies any
modifications or changes to the Exhibits and Schedules arising from events
out of RCF's, any RCF Subsidiary's and/or the RCF Shareholders' (or Novac's
and/or the Novac Shareholders', as the case may be) reasonable control
which have occurred between the date of the Exhibit or Schedule in question
and the Base Price and Earn Out Closing Date, if any. To the extent any
such changes have been disclosed on the certificate, the RCF Shareholders
(or the Novac Shareholders, as the case may be) shall not be deemed to be
in default of their representations or warranties under this Agreement as a
result of any such event, but Mackie and any other company bound jointly
and severally with Mackie under this Agreement may elect not to proceed
with the contemplated transaction.
8.3 THIRD PARTY CONSENTS: Mackie, the Novac Shareholders and the RCF
Shareholders shall use their respective best efforts to obtain the consent
or approval of each third party whose consent or approval is required for
the consummation of the transactions contemplated by this Agreement.
STOCK PURCHASE AGREEMENT PAGE - 16
8.4 CORPORATE ACTIONS PROHIBITED: Without Mackie's express prior written
consent, which consent shall not be unreasonably withheld or delayed,
between the date of this Agreement and the Base Price and Earn Out Closing
Date neither Novac, RCF nor any RCF Subsidiary shall:
8.4.1 declare and/or pay any dividend, whether in cash, stock or
kind;
8.4.2 dissolve or merge or consolidate with any other person or
entity;
8.4.3 change any method of accounting from that previously used in
their respective financials or their respective books of account,
including, but not limited to the RCF Financials;
8.4.4 amend their respective Articles of Incorporation (atto
costitutivo) or by-laws (statuto);
8.4.5 issue, sell, pledge or dispose of, or agree to issue, sell,
pledge or dispose of, any shares of its capital stock, or grant or
issue, or agree to grant or issue, any options, warrants or other
rights calling for the issue thereof;
8.4.6 suffer or cause to be suffered any material increase or
decrease to their respective accounting reserves;
8.4.7 cause or suffer any material damage to the Assets;
8.4.8 fail to pay, in full as they come due, all of the wages,
salaries, overtime and deferred compensation, bonuses, vacation pay,
benefits, pension, tax, unemployment, termination indemnities,
industrial insurance obligations and other economic obligations with
respect to its employees , agents, consultants and commercial
intermediaries;
8.4.9 sell, encumber or dispose of any of the Assets;
8.4.10 enter into any Major Contract, make or permit, or agree to
make or permit, any material alteration in any existing Major Contract
to which it is a party;
8.4.11 surrender or forfeit any Permit;
8.4.12 grant, adopt or amend any employment agreement, profit
sharing, compensation, bonus, deferred compensation, pension,
retirement or other employee benefit plan, agreement, fund trust or
arrangement for the benefit or welfare of any employee or agree to do
the same;
8.4.13 settle any material litigation, legal, administrative,
arbitration or other proceeding, claim or tax audit; or,
STOCK PURCHASE AGREEMENT PAGE - 17
8.4.14 cause or suffer any material default in any Lease or Major
Contract.
9. CLOSING: The Base Price and Earn Out Closing shall occur on the
specified date and commence at the hour of 7:30 p.m., at the offices of Notaio
Xxxxxx Errani, located at Xxx Xxxxx 0, Xxxxxxx, Xxxxx, or at such other time and
place as the parties may mutually agree in writing. Delivery of the RCF Shares
(and the Novac Shares, as the case may be) shall occur at the Base Price and
Earn Out Closing before an Italian notary of Mackie's choice, as notified by
Mackie to the other parties hereto; the notary shall attest to the authenticity
of the signatures and carry out all necessary formalities with the full
cooperation of the parties and the expenses in respect of said formalities shall
be borne by Mackie and/or any company bound jointly and severally with Mackie
under this Agreement; nothing which shall thereafter occur shall affect Mackie's
title thereto, and, as between the parties, Mackie shall thereafter be the sole
owner of, and have the sole custody of, RCF and the RCF Subsidiaries (and Novac,
as the case may be). At the Base Price and Earn Out Closing, all deliveries,
including without limitation, delivery by Mackie of the purchase price for the
RCF Shares (and the Novac Shares, as the case may be) pursuant to Section 4
above, shall be considered to have taken place simultaneously as a single
transaction, and no delivery shall be considered to have been made until all
deliveries are completed. At the Base Price and Earn Out Closing the RCF
Shareholders (and the Novac Shareholders, as the case may be) shall deliver to
Mackie the letters of resignation of all the directors and, possibly, of all
statutory auditors ("sindaci") of RCF and the RCF Subsidiaries (and Novac, as
the case may be) and, all parties shall be prepared to deliver all executed
documents necessary to consummate the transactions contemplated by this
Agreement.
10. MACKIE'S CONDITIONS PRECEDENT TO CLOSING: The obligation of Mackie to
consummate the transactions contemplated by this Agreement is expressly subject
to the satisfaction, on or prior to the Base Price and Earn Out Closing Date, of
all of the following conditions (compliance with which or the occurrence of
which may be waived in whole or in part by Mackie in writing):
10.1 REPRESENTATIONS AND WARRANTIES: All representations and warranties
of the RCF Shareholders and/or of the Novac Shareholders contained in this
Agreement shall be true and correct in all material respects as of the Base
Price and Earn Out Closing Date as if made at and as of such date. The RCF
Shareholders (and the Novac Shareholders, as the case may be) shall have
delivered a certificate to Mackie to that effect in form and substance
reasonably satisfactory to Mackie (such as the draft certificate contained
in Exhibit F hereto) dated as of the Base Price and Earn Out Closing Date;
10.2 CONDUCT OF OPERATIONS: RCF's, Novac's and the RCF Subsidiaries'
business and operations shall have been conducted in accordance with the
provisions of Section 8 of this Agreement;
10.3 COVENANTS AND AGREEMENTS: The RCF Shareholders and the Novac
Shareholders shall have performed and satisfied all covenants and
conditions required by this Agreement to be performed or satisfied by them
on or prior to the Base Price and Earn Out Closing Date;
STOCK PURCHASE AGREEMENT PAGE - 18
10.4 NO ACTIONS: No action or proceeding shall have been instituted or
threatened and no administrative or court order shall be in effect (i)
seeking to prevent or make illegal the contemplated sale by the RCF
Shareholders (or the Novac Shareholders, as the case may be) or the
contemplated purchase by Mackie, or the consummation by RCF, the RCF
Shareholders, the Novac Shareholders or Mackie of the transactions
contemplated hereby, or (ii) which would materially and adversely affect
the operation of the business of RCF or any RCF Subsidiary;
10.5 CONSENTS: Either RCF or the RCF Shareholders shall have obtained, if
required, the consent of (i) the owner of any leased Asset to an assignment
of the lease or tenancy, or (ii) the maker of any Major Contract by which
RCF or any RCF Subsidiary is bound;
10.6 DELIVERY OF CERTIFICATES: The RCF Shareholders (and the Novac
Shareholders, if applicable) shall deliver or have delivered to Mackie all
certificates representing the RCF Shares duly and properly endorsed for
transfer to Mackie and shall cause the Novac Shares to be transferred to
Mackie on Novac's book of shareholders ("quotisti");
10.7 APPROVALS: RCF and the RCF Shareholders shall have secured all
authorizations and approvals, if any, of national and European Union and
local authorities (or exemptions therefrom) which are required for the
execution and delivery of this Agreement or the consummation of the
proposed transaction;
10.8 [The text of this section has been deleted and filed separately with
the Securities and Exchange Commission pursuant to a request for
confidential treatment.]
10.9 DOGLIONI CONSULTING AGREEMENT: Doglioni shall have executed and
delivered the Doglioni Consulting Agreement;
10.10 XXXXXX CONSULTING AGREEMENT: Xxxxxx shall have executed and
delivered the Xxxxxx Consulting Agreement;
10.11 MACKIE BOARD APPROVAL: The approval of the Board of Directors of
Mackie shall have been obtained to this Agreement and the consummation of
the transaction contemplated by this Agreement on or before June 29, 1998;
10.12 ASSETS: Title to all of the Assets shall be good and marketable,
free and clear of all encumbrances, security interests and liens except the
Permitted Exceptions and the Leases;
10.13 ERNST & YOUNG APPROVAL: Ernst & Young shall have approved the
December 31 Financials;
10.14 FIRST DEMAND BANK GUARANTY: The RCF Shareholders and the Novac
Shareholders shall deliver or have delivered the First Demand Bank
Guaranty; and,
STOCK PURCHASE AGREEMENT PAGE - 19
10.15 ENVIRONMENTAL AUDIT: Mackie shall have received the results of
an environmental audit performed by an environmental auditor chosen by
Mackie and acceptable to the RCF Shareholders, on the properties owned,
leased or occupied by RCF or the RCF Subsidiaries, the cost of which audit
shall be borne equally by Mackie on the one part and by RCF on the other
part, and the audit shall have disclosed no breaches of applicable law and
regulations and no hidden or potential liability for failure to comply with
future legal requirements which are known as of the date of this Agreement.
The report of said environmental auditor and the written observations of
RCF in response thereto, if any, will be attached to this Agreement as
Schedule 10.15.
10.16 DUE DILIGENCE: The RCF Shareholders and the Novac Shareholders
shall have fully cooperated with and enabled Mackie to complete the due
diligence described in Section 5.2 above and said due diligence shall not
have revealed any material inaccuracy in the representations and warranties
of the RCF Shareholders set forth in this Agreement.
11. THE RCF SHAREHOLDERS' CONDITIONS PRECEDENT TO CLOSING: The obligation of
the RCF Shareholders (or the RCF Shareholders and the Novac Shareholders, as the
case may be) to consummate the transactions contemplated by this Agreement is
expressly subject to the satisfaction, on or prior to the Base Price and Earn
Out Closing Date, of all of the following conditions (compliance with which or
the occurrence of which may be waived in whole or in part by the RCF
Shareholders (or the RCF Shareholders and the Novac Shareholders, as the case
may be) in writing):
11.1 REPRESENTATIONS AND WARRANTIES: All representations and warranties
of Mackie contained in this Agreement shall be true and correct in all
material respects as of the Base Price and Earn Out Closing Date as if made
at and as of such date. The RCF Shareholders shall be unaware of any
action or inaction by Mackie or any other person or any information
discovered which renders inaccurate any of Mackie's representations and
warranties contained in this Agreement. Mackie shall have delivered
certificates to the RCF Shareholders to that effect in form and substance
reasonably satisfactory to the RCF Shareholders dated as of the Base Price
and Earn Out Closing Date;
11.2 COVENANTS AND AGREEMENTS: Mackie shall have performed and satisfied
all covenants and conditions required by this Agreement to be performed or
satisfied by it on or prior to the Base Price and Earn Out Closing Date;
11.3 NO ACTIONS: No action or proceeding shall have been instituted or
threatened, and no administrative or court order shall be in effect,
seeking to prevent or make illegal the delivery by the RCF Shareholders (or
the Novac Shareholders, if applicable) or the acquisition by Mackie of the
RCF Shares (or the Novac Shares, if applicable), or the consummation by the
RCF Shareholders, the Novac Shareholders or Mackie of the transactions
contemplated hereby;
11.4 APPROVALS: Mackie shall have secured all authorizations and
approvals, if any, from all United States and foreign federal, state or
local authorities and from all European Union authorities and all
authorities of the single member states of the European Union (or
exemptions therefrom) which are required for their execution and delivery
of this Agreement;
STOCK PURCHASE AGREEMENT PAGE - 20
11.5 [The text of this section has been deleted and filed separately with
the Securities and Exchange Commission pursuant to a request for
confidential treatment.]
11.6 [The text of this section has been deleted and filed separately with
the Securities and Exchange Commission pursuant to a request for
confidential treatment.]
11.7 NOVAC SHARES: Mackie shall have opted to purchase the Novac Shares in
accordance with Section 3 above, it being understood that should Mackie
have opted not to purchase the Novac Shares, then the RCF Shareholders
shall have no obligation to consummate the transactions contemplated by
this Agreement.
12. COVENANT NOT TO COMPETE: The parties hereby acknowledge and agree that
the provisions of this Section 12 are necessary to ensure that Mackie will
receive the full value of the business assets and goodwill of RCF upon the
consummation of the transactions contemplated by this Agreement and that, but
for the provisions of this Section 12, the acquisition contemplated by this
Agreement would not be implemented. Accordingly:
12.1 NONCOMPETITION:
12.1.1 GENERAL PROVISION: Except as provided in Sections 12.1.2,
12.1.3 and 12.1.4 below, for a period of three (3) years from and after the
Base Price and Earn Out Closing Date, neither the RCF Shareholders nor the
Novac Shareholders shall, directly or indirectly, singly or in partnership
or in conjunction with any other person or persons, firm, association,
syndicate, company or corporation, as officer, director, consultant,
employee, independent contractor, principal, or agent, or as shareholder,
partner, or owner exercising a direct or indirect management function in or
a material influence on any of the following businesses or otherwise, carry
on and/or be engaged in and/or finance, guarantee the indebtedness of, or
permit his or its name or credit to be used while exercising a direct or
indirect management function in or material influence on any of the
following businesses, anywhere in the world where the products of RCF or
any RCF Subsidiary are sold as of the Base Price and Earn Out Closing Date
in any way in conjunction with:
12.1.1(a) any company manufacturing speakers used in installed sound
application, including without limitation, those used in
commercial buildings, and known in the trade as "70 Volt Business";
12.1.1(b) any manufacturer of video projection and/or audio
equipment, including, in particular, compression drivers and woofers,
consumer HiFi, auto audio equipment and installed sound (such as that
used in movie theaters); or,
12.1.1(c) any business which is competitive with the business of RCF
or any RCF Subsidiary as presently conducted.
Provided, that nothing in this covenant not to compete shall prevent
Xxxxxx from engaging in
STOCK PURCHASE AGREEMENT PAGE - 21
the above described activities in connection with the business
known as AEB SRL ("AEB"), as such business is conducted as of the
date of this Agreement. AEB principally is engaged in the business
of manufacturing various items of audio equipment, including mixers.
12.1.2 In the event that the employment by RCF of Caroli and/or Mr. Xxxx
Xxxxxx Catellani ("Catellani") and/or Xx. Xxxxxx Xxxxxx ("Xxxxxx") is
terminated without a good cause ("giusta causa"), Mackie and RCF shall
ensure that, in said termination, RCF respects the collective labor
agreement in effect by paying the number of months' notice pay
contractually due to him/them by virtue of his/their age(s) and number of
years of service, as well as a supplemental severance pay equal to the
average of the minimum and maximum number of months' pay provided for by
contract, with reference to his/their legal and de facto employment and
compensation situations as of November 8, 1997. In consideration of this
undertaking by Mackie and RCF and conditional upon its full performance,
Caroli, Catellani and Davoli hereby agree to be bound by the provisions of
this Section 12 and agree that this Section 12 shall be valid and effective
in its entirety and shall continue to bind Caroli, Catellani and Davoli in
the event that they voluntarily resign their positions with RCF. Should
the employment by RCF of Caroli, Catellani and/or Davoli be terminated by
RCF for any cause and/or reason, the provisions of Sections 12.2, 12.3,
12.4, 12.5, 12.6 and 12.7 below shall continue to apply and to bind the
terminated individual(s) and the provisions of Section 12.1.1 above shall
cease to apply to the terminated individual(s) except that, for three (3)
years following the Base Price and Earn Out Closing Date, the terminated
individual(s) shall not, directly or indirectly, create and/or form or
cause to be created and/or formed and/or acquire an ownership interest in
any business described in Section 12.1.1(a), 12.1.1(b) and/or 12.1.1(c ),
anywhere in the world where the products of RCF or any RCF Subsidiary are
sold as of the Base Price and Earn Out Closing Date ; subject to the
foregoing limitations, it is understood that the terminated individual(s)
may work as employees and/or consultants for such competing businesses, and
that Davoli alone may call on and/or interfere with and/or accept business
from any person or firm who was a customer at any time of RCF and/or an RCF
Subsidiary only if Davoli's employment by RCF is terminated by RCF, Davoli
is not subsequently hired by RCF as a consultant, and Davoli is
subsequently employed by a competing business as described in Section
12.1.1(a), 12.1.1(b) and/or 12.1.1(c).
12.1.3 The provisions of Sections 12.2, 12.3, 12.4, 12.5, 12.6 and 12.7
below shall apply to and bind Xx. Xxxxxxxxx Xxxxxxxx ("Xxxxxxxx") and the
provisions of Section 12.1.1 above shall not apply to Xxxxxxxx except that,
for (3) years following the Base Price and Earn Out Closing Date, Xxxxxxxx
shall not, directly or indirectly, create and/or form or cause to be
created and/or formed and/or acquire an ownership interest in any business
described in Section 12.1.1(a), 12.1.1(b) and/or 12.1.1(c ), anywhere in
the world where the products of RCF or any RCF Subsidiary are sold as of
the Base Price and Earn Out Closing Date ; subject to the foregoing
limitations, it is understood that Xxxxxxxx may work as an employee and/or
consultant for such competing businesses and may call on and/or interfere
with and/or accept any business from the following firms which are/were
customers at any time of RCF and/or an RCF Subsidiary: Phonocar S.p.A. and
Sound Corporation di Xxxxxx Xxxxxx & C. s.a.s.
STOCK PURCHASE AGREEMENT PAGE - 22
12.1.4 Except as otherwise agreed in writing by Mackie, RCF and/or any RCF
Subsidiary and Xx. Xxxxx Xxxxx ("Xxxxx"), pursuant to which agreement Rossi
is hired or retained in some professional capacity for which he is
compensated, the non-competition provisions of Section 12.1.1 shall not
apply to Rossi but the provisions of Sections 12.2, 12.3, 12.4, 12.5, 12.6
and 12.7 shall apply to and bind Rossi, except that Rossi may call on
and/or interfere with and/or accept any business from any person or firm
who was a customer at any time of RCF and/or an RCF Subsidiary. Should the
working relationship between RCF Artesuono S.r.l. and Ms. Xxxxx Pisi
("Pisi") cease for any cause and/or reason, the non-competition provisions
of Section 12.1.1 shall automatically cease to apply to Pisi but Pisi
shall remain bound by the provisions of Sections 12.2, 12.3, 12.4, 12.5,
12.6 and 12.7, except that Pisi may call on and/or interfere with and/or
accept any business from any person or firm who was a customer at any time
of RCF and/or an RCF Subsidiary.
12.2 NONDISCLOSURE: Neither the RCF Shareholders nor the Novac
Shareholders shall disclose or use in any way any of RCF's and/or any RCF
Subsidiary's proprietary technical know-how including, but not limited to,
manufacturing processes, (materials, supply sources, formulations), product
development and applications. Moreover, during the three (3) year period
commencing with the Base Price and Earn Out Closing Date neither the RCF
Shareholder nor the Novac Shareholders shall disclose or use in any way any
of RCF's and/or any RCF Subsidiary's proprietary business information
relating to products, operations, customer lists, pricing policies, or
marketing plans;
12.3 NONSOLICITATION OF CUSTOMERS: Except as otherwise expressly provided
in Section 12.1 above, during the three (3) year period commencing with the
Base Price and Earn Out Closing Date neither the RCF Shareholders nor the
Novac Shareholders shall, directly or indirectly, either for their own
benefit or for the benefit of others, solicit, call on, interfere with,
accept any business from, or attempt to divert away from RCF and/or any RCF
Subsidiary any person or firm who was a customer at any time of RCF and/or
an RCF Subsidiary;
12.4 NONSOLICITATION OF EMPLOYEES; CONSULTANTS AND INTERMEDIARIES: During
the three (3) year period commencing with the Base Price and Earn Out
Closing Date, neither the RCF Shareholders nor the Novac Shareholders
shall, directly or indirectly, employ, utilize the services of, offer to
employ or to utilize the services of, solicit or enlist any employee,
agent, commercial intermediary or consultant of RCF and/or any RCF
Subsidiary to leave such entity's employ for any reason;
12.5 INJUNCTIVE RELIEF: In addition to damages suffered by Mackie, RCF or
any RCF Subsidiary as a result of the RCF Shareholders' or the Novac
Shareholders' breach of this paragraph, these latter agree that Mackie, RCF
or the RCF Subsidiary, as the case may be, shall be entitled to the
granting of an injunction to prohibit violations of this paragraph upon
reasonable proof of the occurrence of any event which contravenes its
terms;
12.6 TERMS: The RCF Shareholders and the Novac Shareholders acknowledge
that the provisions of this Section have been considered by them, and are
reasonable as to time, area, and extent, having regard to all circumstances
of this transaction; and,
STOCK PURCHASE AGREEMENT PAGE - 23
12.7 SEVERABILITY: If any provision of this Section shall be
unenforceable, illegal, or contrary to the public policy of the
jurisdiction in which it is sought to be enforced, such provision shall be
deemed to be deleted from this Agreement and the remaining provisions of
this Section shall be and remain valid and binding upon and enforceable by
the parties hereto; the parties hereto shall, in good faith, substitute the
invalid provision with a valid provision having, to the extent legally
possible, similar content. In addition, the duration and coverage of each
separate covenant may be limited by a court in which enforcement of such
covenant is sought to the extent necessary to permit the enforcement of
such separate covenant.
13. INDEMNIFICATION:
13.1 BY THE RCF SHAREHOLDERS: The RCF Shareholders and the Novac
Shareholders shall hold Mackie, RCF and the RCF Subsidiaries harmless from,
and defend them against, any and all claims, losses, expenses, obligations,
and liabilities, including court costs and attorneys' fees, which arise or
result from, or are incident to (i) the inaccuracy or breach of any
representation or warranty of the RCF Shareholders or the Novac
Shareholders, (ii) any default or failure of the RCF Shareholders or the
Novac Shareholders to perform commitments or obligations under this
Agreement, (iii) any act or omission of the RCF Shareholders or the Novac
Shareholders which constitutes a breach or default under this Agreement, or
(iv) the operation of RCF's business prior to December 31, 1997, which are
not disclosed or fully reserved against in the RCF Financials or the
Approved RCF Financials. The RCF Shareholders and the Novac Shareholders
shall reimburse Mackie, RCF and the RCF Subsidiaries following the
procedure indicated hereinbelow for any payment made or loss suffered by
them at any time after the Base Price and Earn Out Closing Date in respect
of any damages to which the foregoing indemnity relates. Consummation of
the transaction contemplated under this Agreement shall not be deemed or
construed to be a waiver of any right or remedy of Mackie, RCF or the RCF
Subsidiaries. In addition to its other remedies, Mackie, RCF or the RCF
Subsidiaries may offset any amounts which may become owing hereunder
against any sums due the RCF Shareholders or the Novac Shareholders under
this Agreement or any agreement contemplated by this Agreement. The RCF
Shareholders and the Novac Shareholders may offset any unforeseen gains or
credits of RCF relating to the period prior to the Base Price and Earn Out
Closing Date against any unforeseen losses of RCF for which the RCF
Shareholders and the Novac Shareholders are liable hereunder which have
already accrued. The parties hereby acknowledge and agree that the
aggregate liability of the RCF Shareholders and the Novac Shareholders to
Mackie, RCF and/or the RCF Subsidiaries pursuant to this Section 13.1 shall
be limited to $1,000,000, except for liability in respect of
misrepresentations made with fraudulent intent and/or fraudulent
warranties, which shall be unlimited. Should they fail to maintain in
existence the third party liability insurance policies of RCF existing as
of the Base Price and Earn Out Closing Date and listed in Schedule 6.18
hereto or similar insurance policies, in either case, with maximum limits
of insurance or liability on the part of the insurer not less than those
contained in the third party liability insurance policies of RCF existing
as of the Base Price and Earn Out Closing Date and listed in Schedule 6.18,
then Mackie, RCF and the RCF Subsidiaries shall lose all indemnification
rights hereunder vis a vis the RCF Shareholders and the Novac Shareholders
in respect of those claims which would have been covered by said third
party liability insurance policies.
STOCK PURCHASE AGREEMENT PAGE - 24
13.2 BY MACKIE AND RCF: Mackie and RCF shall hold the RCF Shareholders
and the Novac Shareholders harmless from, and defend them against, any and
all damages, claims, losses, expenses, costs, obligations, and liabilities,
including court costs and attorneys' fees, which arise, result from, or are
incident to (i) the inaccuracy or breach of any representation or warranty
of Mackie contained in this Agreement, (ii) any default of Mackie's
commitments or obligations under this Agreement, (iii) any act or omission
of Mackie which constitutes a breach or default under this Agreement, or
(iv) the operation of RCF's business subsequent to the Base Price and Earn
Out Closing Date. Mackie and RCF shall reimburse the RCF Shareholders or
the Novac Shareholders following the procedure indicated in Section 13.3
hereinbelow for any payment made or loss suffered by them at any time after
the Base Price and Earn Out Closing Date in respect of any damages to which
the foregoing indemnity relates. Consummations of the transactions
contemplated by this Agreement shall not be deemed or construed to be a
waiver of any right or remedy of the RCF Shareholders and the Novac
Shareholders, as the case may be.
13.3 INDEMNIFICATION PROCEDURE : MATTERS INVOLVING CLAIMS OF THIRD PARTIES:
The party indemnified hereunder (the "Indemnitee") shall promptly notify
the indemnifying party (the "Indemnitor") of the existence of any claim or
demand, whether in court or out of court, involving liabilities to third
parties to which the Indemnitor's indemnification obligations would apply,
and shall give the Indemnitor twenty (20) days from the date of receipt of
said notice in which to elect to defend the same at its own expense and
with counsel of its own selection (who shall be approved by the Indemnitee,
which approval shall not be unreasonably withheld, and who, should said
approval be given and should the Indemnitor elect to defend, shall be
granted by the Indemnitee the power of attorney necessary to conduct said
defense); provided that the Indemnitee shall at all times also have the
right to fully participate in the defense at its own expense. If the
Indemnitor shall, within such twenty (20) day period, fail to defend, the
Indemnitee shall have the right, but not the obligation, to undertake the
defense of and to compromise or settle (exercising reasonable business
judgment) the claim or other matter on behalf, for the account, and at the
risk and expense of the Indemnitor. Except as otherwise provided above,
the Indemnitee shall not compromise or settle the claim or other matter
without the written consent of the Indemnitor, such consent not to be
unreasonably withheld. If the claim is one that cannot by its nature be
defended solely by the Indemnitor, the Indemnitee shall make available all
information and assistance (including access to the books and records of
RCF and the RCF Subsidiaries) that the Indemnitor may reasonably request;
provided that any actual out of pocket expenses shall be paid by the
Indemnitor.
13.4 INDEMNIFICATION PROCEDURE : CLAIMS OF MACKIE, RCF AND/OR RCF
SUBSIDIARIES NOT DEPENDENT ON CLAIMS BY THIRD PARTIES: In the event that
Mackie, RCF and/or any RCF Subsidiary become aware of any matter not
dependent upon claims by third parties, out of which an obligation on the
part of the RCF Shareholders and the Novac Shareholders to indemnify it or
them may arise, directly or indirectly, Mackie, RCF and/or the RCF
Subsidary(ies) concerned shall inform the RCF Shareholders and the Novac
Shareholders in writing of the reasons for the claim and the amount
requested and shall send them copies of the relevant documents. In such
case, Mackie guaranties that the RCF Shareholders and the Novac
Shareholders shall be given access to the books and records of RCF and/or
the RCF Subsidiary(ies) concerned to enable the RCF Shareholder and the
Novac Shareholders to mount the defense. No later than sixty (60) days
STOCK PURCHASE AGREEMENT PAGE - 25
following receipt of the above-mentioned claim, the RCF Shareholders and
the Novac Shareholders shall advise Mackie, RCF and any RCF Subsidiary(ies)
concerned in writing of any reasonable objection relating to such claim
and/or the sum requested. In the absence of such notice within said time
period, the RCF Shareholders and the Novac Shareholders shall be liable for
all consequences resulting from said event, shall be obligated to indemnify
Mackie, RCF and the RCF Subsidiaries in respect of all debts, losses,
damages and expenses incurred by them and shall be deemed to have waived
all rights to contest or otherwise raise any objection in respect of their
liability and/or the amount due, which amount shall be due and payable by
the RCF Shareholders and the Novac Shareholders in full thirty (30) days
following the last day of the calendar quarter in which the claim was made.
However, Mackie, RCF and the RCF Subsidiaries shall remain entitled to make
a further claim in the event that the loss, damages and costs incurred by
Mackie, RCF and the RCF Subsidiary exceed those indicated in the earlier
claim. Should the RCF Shareholders and the Novac Shareholders notify
Mackie, RCF and the RCF Subsidiary(ies) concerned of any such reasonable
objection within said sixty-day period and should the parties be unable to
reach an agreement resolving the dispute within sixty (60) days following
the date of receipt by all said parties of said notice of objection, the
dispute may be submitted to arbitration pursuant to Section 18.1 below and,
until the earlier of (a) such time as the parties have reached a written
agreement resolving such dispute or (b) thirty (30) days following the end
of the calendar quarter after that in which the claim was made, if no
arbitration proceeding in respect of said claim has been commenced by the
RCF Shareholders and the Novac Shareholders by said date or (c) thirty (30)
days following the end of the calendar quarter in which an arbitration
award in respect of the claim has been entered pursuant to Section 18.1
below in favor of Mackie, RCF and/or the RCF Subsidiary(ies) concerned,
Mackie shall not be entitled to demand or receive payment of the sum
claimed under the stand-by letter of credit in favor of Mackie referred to
in Section 13.6 below or otherwise.
13.5 ARBITRATION OF INDEMNIFICATION DISPUTES: All disputes relating to
claims or requests for indemnification hereunder made by Mackie, RCF and/or
any RCF Subsidiary vis a vis the RCF Shareholders and the Novac
Shareholders and all disputes relating to claims or requests for
indemnification hereunder made by the RCF Shareholders and the Novac
Shareholders vis a vis Mackie and/or RCF including any dispute relating to
the payment of the stand-by letter of credit in favor of Mackie referred
to in Section 13.6 below which has not been resolved amicably by the
parties by written agreement after having exhausted the procedure provided
for in this Section 13, may be submitted to arbitration in accordance with
the provisions of Section 18.1 below. Except as otherwise provided in this
Section 13, the failure of the RCF Shareholders and the Novac Shareholders
to react to the payment of the stand-by letter of credit in favor of Mackie
referred to in Section 13.6 below shall not prevent them from contesting
their payment obligation in the arbitration proceeding. The RCF
Shareholders and the Novac Shareholders shall have access to all the
documents of RCF and/or of the RCF Subsidiaries reasonably necessary for
their defense in the arbitration proceeding. Should the arbitration
proceeding result in an award in favor of the RCF Shareholders and the
Novac Shareholders on the ground that Mackie should not have received
payment under the stand-by letter of credit referred to in Section 13.6
below, Mackie shall be obligated to pay interest, from the date of payment
under said stand by-letter of credit through the date of repayment of the
sum declared by the arbitrators not to have been due,
STOCK PURCHASE AGREEMENT PAGE - 26
at the Associazione Bancaria Italiana (ABI) prime rate in effect during
that period, increased by two (2) points.
13.6 GUARANTIES: The RCF Shareholders and the Novac Shareholders shall
provide Mackie with a stand-by letter of credit in compliance with Brochure
500 of the International Chamber of Commerce ("ICC") in the amount of US$
1,000,000, issued by a primary bank in the United States of America, or
issued by a primary Italian bank and confirmed by a primary bank in the
United States of America, and substantially in the form of Exhibit B
hereto, in respect of the RCF Shareholders' and the Novac Shareholders'
indemnity obligations to Mackie, RCF and the RCF Subsidiaries pursuant to
this Agreement. Said stand-by letter of credit shall be valid until the
fifth anniversary of the Base Price and Earn Out Closing Date.
13.7 PAYMENT UNDER FIRST DEMAND BANK GUARANTY : Except as otherwise
expressly provided in Section 13.8 below, the stand-by letter of
credit in favor of Mackie as referred to in Section 13.6 above shall
be payable upon presentation by Mackie of
(a) a letter in which Mackie declares :
(i) that the claim in respect of which the payment is made is covered by
the indemnification obligation undertaken by the RCF Shareholders and
the Novac Shareholders pursuant to Section 13.1 of this Agreement and
indicates the nature of the claim , and
(ii) that the procedures contemplated by Section 13.3 or Section 13.4 of
this Agreement have been followed ; and
(b) only in those cases in which the claim of Mackie, RCF and/or the
RCF Subsidiary(ies) is based on a deficiency assessed by the competent
tax authorities, the receipt of said tax authorities attesting that
said assessment has been paid; it being understood that, in the cases
referred to in this Section 13.7(b), payment to Mackie under the
stand-by letter of credit referred to in Section 13.6 above shall
be made together with interest at the relevant LIBOR rate as from
the date set forth on the tax authorities' receipt.
13.8 PAYMENT UNDER FIRST DEMAND BANK GUARANTY WHERE CLAIM HAS BEEN MADE
PURSUANT TO SECTION 13.4 AND TIMELY CONTESTED BY THE RCF SHAREHOLDERS AND
THE NOVAC SHAREHOLDERS :
Only in those cases in which a claim has been made by Mackie, RCF and/or
an RCF Subsidiary(ies) pursuant to Section 13.4 above and the RCF
Shareholders and the Novac Shareholders have notified in writing Mackie,
RCF and the RCF Subsidiary(ies) concerned of their reasonable objection
thereto within the sixty-day period referred to said Section 13.4, the
stand-by letter of credit in favor of Mackie as referred to in Section
13.6 above shall be payable upon presentation by Mackie of (a) the letter
described in Section 13.7(a) above and (b) one of the following :
(i)a written agreement with the RCF Shareholders and the Novac Shareholders
pursuant to said Section 13.4 ; or
(ii)a certificate from the Secretariat of the International Court of
Arbitration of the International Chamber of Commerce dated at least
thirty (30) days following the end of the calendar quarter after that
in which the claim was made and stating that as of the date of the
certificate, no arbitration proceeding between the parties to the
Agreement has been lodged with the Secretariat ; or
STOCK PURCHASE AGREEMENT PAGE - 27
(iii)an arbitration award in favor of Mackie, RCF and/or the RCF
Subsidiary(ies), even if appealed against or subject to appeal.
14. TERMINATION: This Agreement shall terminate automatically and with
immediate effect, without liability to any party hereto, should Mackie fail to
obtain any approval or authorization (or any exemption therefrom) of the
competition authorities of the European Union or of any European Union member
state, which approval or authorization (or exemption therefrom) is required for
the closing and/or carrying out of the transactions contemplated by this
Agreement. In addition, this Agreement may be terminated prior to closing
without liability on the part of any party exercising the right of termination
as follows:
14.1 MUTUAL: By the mutual written consent of the parties;
14.2 FOR BREACH: By any party hereto if, as of the Base Price and Earn
Out Closing Date, there has been a material misrepresentation or a material
breach on the part of the other party of the warranties of such other party
as set forth in this Agreement or made pursuant hereto, or if, as of the
Base Price and Earn Out Closing Date, there has been any failure on the
part of the other party to perform its obligations or comply with the
covenants under this Agreement;
14.3 DAMAGE TO ASSETS: By Mackie, if the Assets or the business of RCF or
any RCF Subsidiary have been damaged in any material way prior to the
closing of the contemplated transaction; or,
14.4 FAILURE OF CONDITION: By either Mackie or the RCF Shareholders if
the conditions precedent to its performance have not been satisfied or
waived as of the Base Price and Earn Out Closing Date.
Each party to this Agreement shall use its best efforts to cause the
satisfaction of all conditions to the consummation of this Agreement which are
in the control of such party and to cooperate as necessary in the satisfaction
of all other conditions to the consummation of this Agreement. In the event of
termination and abandonment by any party as described above, written notice
shall be given to the other parties, and this Agreement shall terminate and be
abandoned without further action by any of the parties hereto. If this
Agreement is terminated as described above, each party shall redeliver all
documents, work papers, and other materials of any other party relating to the
transaction contemplated by this Agreement, whether obtained before or after the
execution of this Agreement, to the parties furnishing the same. If such
termination occurs because a condition to a party's obligation to consummate the
transaction contemplated by this Agreement has not been satisfied by the Base
Price and Earn Out Closing Date and the other party is not in default, or if
such termination arises pursuant to the provisions of Section 14.1, no party
thereto shall have any liability or further obligation to any other party to
this Agreement. If this Agreement shall fail to close for any reason, any and
all information acquired by Mackie prior to closing in Mackie's review of the
books and records of RCF or in its contact with RCF's accountants, lenders,
employees, customers and suppliers is and shall remain confidential, and shall
not be used or disclosed by Mackie in any manner without the prior written
consent of the RCF Shareholders.
STOCK PURCHASE AGREEMENT PAGE - 28
15. APPROVAL OF FINANCIAL STATEMENTS AND TAX RETURNS: The RCF Shareholders
and the Novac Shareholders shall act diligently so as to ensure that prior to
the transfer of the RCF Shares and the Novac Shares the official annual
financial statements, INTER ALIA for tax purposes within the meaning of Section
6.6.1 of RCF and Novac for the year ending on December 31, 1997 are approved by
the RCF Shareholders and the Novac Shareholders at the shareholders' meeting and
that all tax returns of RCF and Novac for the year ending December 31, 1997 are
approved and signed.
16. FURTHER DOCUMENTATION AND COOPERATION OF THE PARTIES:
16.1 FURTHER DOCUMENTATION: From time to time at the request of the other
parties, whether at or after the Base Price and Earn Out Closing Date and
without further consideration, each party shall take such action as the
requesting party may reasonably require to carry out more effectively the
transactions contemplated by this Agreement.
16.2 COOPERATION OF THE PARTIES: Subject to the obligations of the
parties pursuant to Section 13 above, Mackie, RCF and/or the RCF
Subsidiaries shall advise the RCF Shareholders and the Novac Shareholders
in writing of any notice of assessment, tax inspection or audit, deed,
request, claim or other matter which is relevant for tax purposes and which
may result in liability of RCF or any RCF Subsidiary in relation to the
period prior to the Base Price and Earn Out Closing Date. Further, the
parties hereto shall cooperate fully with and assist, to the greatest
extent possible considering their respective spheres of competence, the
professional advisors engaged by RCF and/or the RCF Subsidiaries in
connection with the carrying out of matters relating to the period prior to
the Base Price and Earn Out Closing Date. In the event that the competent
tax authorities assess a deficiency against RCF and/or any RCF Subsidiary
in relation to the period prior to the Base Price and Earn Out Closing
Date, Mackie shall ensure, in good faith, that all reasonable, legitimate
steps are taken to contest said assessment, subject to the provisions of
Section 13 above.
17. ANNOUNCEMENTS: No announcement of this Agreement will be issued
regarding the transactions described herein without the written consent of all
parties.
18. MISCELLANEOUS:
18.1 DISPUTE RESOLUTION: Any controversy or claim arising out of or
relating to this Agreement shall be finally settled under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce by
three (3) arbitrators appointed in accordance with said Rules. The place of
arbitration shall be Amsterdam, the Netherlands. The language of the
arbitration shall be English. As a partial exception to the foregoing, all
disputes regarding the violation of Section 12 of this Agreement shall be
resolved exclusively by the courts of Xxxxxx Xxxxxx, Italy.
18.2 ASSIGNMENT: The parties may not assign their rights and obligations
hereunder without the prior written consent of the other party or parties,
as the case may be. Notwithstanding the above, this Agreement shall inure
to the benefit of, and be binding upon, the parties hereto and their
respective personal representatives, heirs, successors and/or assigns.
STOCK PURCHASE AGREEMENT PAGE - 29
18.3 RULES OF CONSTRUCTION: All parties have been actively represented by
counsel throughout the negotiations leading to the execution and delivery
of this Agreement. Consequently, the usual rules of construction of
documents against the interest of the party drafting the same are hereby
waived, and the parties stipulate that this Agreement and the documents
contemplated thereby be construed in accordance with the intent of the
parties as expressed herein or therein.
18.4 NOTICES: Any notice or other communication required or permitted
hereunder shall be in writing, and shall be deemed to have been given when
delivered, addressed as follows:
If to The RCF Shareholders: Xx. Xxxxxx Xxxxxx
Radio Cine Forniture (RCF) SpA
Xxx Xxxxxxxxx 0
00000 Xxxxxxxxx
(Xxxxxx Xxxxxx) Xxxxx
With a copy to: Avv. Piero Puppini
Xxx Xxxxx Xxxx 0
00000 Xxxxxxx, Xxxxx
If to the Novac Shareholders: Mr. Xxxx Xxxxxx Catellani
Xxx Xxxxxxx 00
00000 Xxxxxx Xxxxxx, Xxxxx
With a copy to: Avv. Xxxxx Xxxxxxxx
Xxx Xxxxxxxx 00
00000 Xxxxxxx, Xxxxx
If to Mackie : Mackie Designs Inc.
00000 Xxxx-Xxx Xxxx XX
Xxxxxxxxxxx, XX 00000
Attn: Chief Operating Officer
With a copy to: Weiss, Jensen, Xxxxx & Xxxxxx
000 Xxxx Xxxxx, Xxxxx 0000
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Each of the parties shall be entitled to specify a different address by
giving notice as aforesaid.
18.5 EXHIBITS AND SCHEDULES: This Agreement including the recitals
hereto, the exhibits and schedules to this Agreement which are incorporated
by reference, and the agreements and other instruments referred to in this
Agreement constitute the entire agreement between the parties pertaining to
the subject matter and supersede all prior agreements, understandings,
negotiations,
STOCK PURCHASE AGREEMENT PAGE - 30
and discussions, whether oral or written. No supplement, modification
or waiver of this Agreement shall be binding unless executed in writing
by the party to be bound. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other
provisions (whether or not similar), nor shall such waiver constitute a
continuing waiver or estoppel with respect to subsequent defaults unless
otherwise expressly provided.
18.6 HEADINGS: Section headings are not to be considered part of this
Agreement and are included solely for convenience and reference and are not
intended to be full or accurate descriptions of the content thereof.
18.7 GOVERNING LAW: This Agreement and the validity, construction, and
interpretation of this Agreement shall be governed by the laws of Italy,
except for mandatory provisions of other applicable law. As a partial
exception to the foregoing, any controversies concerning the actions of the
bank making or obligated to make payment under the stand-by letter of
credit described in Section 13.6 above, as the case may be, and relating to
the payment by said bank of said stand-by letter of credit shall be
governed exclusively by the laws of the place in which said bank is
located.
18.8 COUNTERPARTS: This Agreement may be executed simultaneously in two
or more counterparts, each one of which shall be deemed an original, but
all of which shall constitute one and the same instrument.
18.9 NO THIRD PARTY RIGHTS: Except as specifically provided in this
Agreement and by documents contemplated by or attached as exhibits to this
Agreement, nothing in this Agreement is intended to imply or by implication
to confer upon any person other than the parties hereto any rights or
remedies under or by reason of this Agreement.
18.10 ATTORNEYS' FEES: In the event any party takes legal action,
including, without limitation, commencement of arbitration proceedings
pursuant to Section 18.1 above, to enforce any of its rights under this
Agreement, the prevailing party to such action shall be entitled to recover
its costs and expenses, including reasonable attorneys' fees, incurred in
any such action or any appeal thereof.
18.11 COSTS AND EXPENSES: All costs and expenses, including
attorneys' fees, incurred by either party in connection with the
negotiation and preparation of this Agreement and in closing and carrying
out the transactions contemplated hereby shall be paid by the party
incurring such expenses.
18.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES: The representations
and warranties of Mackie, the RCF Shareholders and the Novac Shareholders
contained in this Agreement and in any document delivered or to be
delivered pursuant to this Agreement shall survive the Base Price and Earn
Out Closing Date for a period of five (5) years.
Dated the day and year first above written.
STOCK PURCHASE AGREEMENT PAGE - 31
If you agree with the above, please return it to us duly signed for acceptance.
Very truly yours,
RADIO CINE FORNITURE (R.C.F.) S.p.A.
By:
------------------------------------
Title:
RCF SHAREHOLDERS:
NOVAC SRL
---------------------------------------
By: Xxxxxx Xxxxxx, Sole Director
PIERRES XX
Xxx Xxxxxx Xxxxx 00, X0000 Xxxxxxxxxx
---------------------------------------
By: Xxxxxxx Xxxxxxxxxxxx,
Title:
---------------------------------------
Xxxx Xxxxxxx
---------------------------------------
Xxxxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxx
---------------------------------------
Xxxxxxx Xxxxxxx
---------------------------------------
Xxxxxxxxx Xxxxxxx
STOCK PURCHASE AGREEMENT PAGE - 32
NOVAC SHAREHOLDERS:
---------------------------------------
Xxxxxxxx Xxxxx
---------------------------------------
Xxxxx Pisi
---------------------------------------
Xxxxxxxxx Xxxxx
---------------------------------------
Xxxxxxx Xxxxx
---------------------------------------
Xxxxx Xxxxx
---------------------------------------
Xxxx Xxxxxx Catellani
---------------------------------------
Xxxxxx Xxxxxx
---------------------------------------
Xxxxxxxxx Xxxxxxxx
---------------------------------------
Xxxxxx Xxxxxx
---------------------------------------
Xxxxxxxxx Xxxxxxxx
(SIGNED BY XXXXXX XXXXXX ON BEHALF OF THE ABOVE-MENTIONED RCF SHAREHOLDERS AND
NOVAC SHAREHOLDERS
)
-------------------------
Xxxxxx Xxxxxx
STOCK PURCHASE AGREEMENT PAGE - 33
LIST OF EXHIBITS AND SCHEDULES
Designation Section Reference Subject Matter
A. Exhibits:
A 1.1.9 Doglioni Consulting Agreement
B 1.1.11 First Demand Bank Guaranty
C 1.1.25 RCF Financials
C-1 6.6.2 Approved RCF Financials
D 1.1.31 Xxxxxx Consulting Agreement
E 3 Representations and Warranties of the Novac
Shareholders
F 10.1 Draft Certificate as to Representations and
Warranties of RCF Shareholders and Novac
Shareholders
G Exhibit E, Sec. 6.1 Novac Financials
B. Schedules:
1.1.12 1.1.12 Leases of Assets
1.1.14 1.1.14 Major Contracts
1.1.20 1.1.20 Permits
1.1.21 1.1.21 Permitted Encumbrances
1.1.29 1.1.29 Real Property
5.2 5.2 Certain Due Diligence Costs of RCF's
Consultants to be borne by Mackie
6.1 6.1 RCF and RCF Subsidiaries Articles of
Incorporation (atto costitutivo) and
by-laws (Statuto)
STOCK PURCHASE AGREEMENT PAGE - 34
6.6.3 6.6.3 Obligations and Liabilities Not Reserved
Against or Reflected as Liabilities in
RCF Financials or Approved RCF
Financials
6.7 6.7 Certain Actions
6.8 6.8 List of Assets
6.8.1 6.8 Assets which have been regularly
serviced or maintained and are in good
operating condition and repair
6.9 6.9 Guarantees and Indebtedness of Others
6.10 6.10 Salaried Employees, Consultants,
Commercial Intermediaries and Agents
6.11 6.11 Benefit Plans
6.12 6.12 Intellectual Property
6.15 6.15 Litigation Matters Concerning RCF and/or
RCF Subsidiaries
6.16 6.18 Insurance Policies
6.19 6.19 Competitive Interests
6.10 6.21 Supplier Matters
6.23 6.23 Environmental Permits Applied for and
yet to be obtained as of the Base Price
and Earn Out Closing Date
6.25 6.25 Sums Due to RCF Shareholders and Novac
Shareholders as Officers, Directors or
Consultants of RCF or RCF Subsidiaries
6.26 6.26 RCF and RCF Subsidiary Authorized
Capital and Issued and Outstanding
Shares
10.15 10.15 Environmental Auditor's Report and
Written Observations of RCF
STOCK PURCHASE AGREEMENT PAGE - 35
E.1 Exhibit E, Sec. 1 Novac and Novac Subsidiaries Articles of
Incorporation (atto costitutivo) and by-laws
(Statuto)
E.6.2 Exhibit E, Sec. 6.2 Obligations and Liabilities Not Reserved
Against or Reflected as Liabilities in Novac
Financials
E.7 Exhibit E, Sec. 7 Certain Actions Concerning Novac and/or the
Novac Subsidiaries
E.8 Exhibit E, Sec. 8 Novac Real Property ; Permitted Encumbrances
and Leases
E.8.1 Exhibit E, Sec. 8 List of Assets of Novac and the Novac
Subsidiaries
E.8.2 Exhibit E, Sec. 8 Novac Assets which have been regularly
serviced or maintained and are in good
operating condition and repair
E.9 Exhibit E, Sec. 9 Novac/Novac Subsidiaries' - Guarantees and
Indebtedness of Others
E.10 Exhibit E, Sec.10 Salaried Employees, Consultants, Commercial
Intermediaries and Agents of Novac and Novac
Subsidiaries
E.11 Exhibit E, Sec. 11 Novac Benefit Plans
E.12 Exhibit E, Sec. 12 Intellectual Property of Novac and Novac
Subsidiaries
E.14 Exhibit E, Sec. 14 Major Contracts of Novac and Novac
Subsidiaries
E.15 Exhibit E, Sec. 15 Litigation Matters Concerning Novac and/or
Novac Subsidiaries
E.17 Exhibit E, Sec. 17 Permits, Licenses and Authorizations of Novac
and Novac Subsidiaries
E.18 Exhibit E, Sec. 18 Insurance Policies Covering Novac and Novac
Subsidiaries
E.19 Exhibit E, Sec. 19 Novac/Novac Subsidiaries - Competitive
Interests
E.21 Exhibit E, Sec. 21 Novac/Novac Subsidiaries - Supplier Matters
E.25 Exhibit E, Sec. 25 Sums Due to Novac Shareholders as Officers,
Directors
STOCK PURCHASE AGREEMENT PAGE - 36
or Consultants of Novac or Novac
Subsidiaries
E.26 Exhibit E, Sec. 26 Novac and Novac Subsidiary Authorized Capital
and Issued and Outstanding Shares
[The above Exhibit and Schedules have been omitted pursuant to Item 601(b)(2)
of Regulation S-K.]
STOCK PURCHASE AGREEMENT PAGE - 37
TO: MACKIE
"Xxxxxx Xxxxxx, 8 november 1997
Dear Gentlemen :
Please find enclosed our offer for sale of our companies, RCF Spa and Novac
Srl, as of November 8, 1997, in the form of a share purchase and sale
agreement, without Exhibits.
Should you find our offer viable, please do reply to this letter at your
earliest convenience.
Best regards"
(Signed - RCF Shareholders and Novac Shareholders or Xxxxxx on their behalf)
STOCK PURCHASE AGREEMENT PAGE - 38
TO: RCF SHAREHOLDERS AND NOVAC SHAREHOLDERS
"Seattle, April 30th, 1998
Dear Gentlemen :
We have received your letter dated November 8, 1997, the content of which shall
be reproduced word for word at the end of this letter.
Our delay in replying to you in order to accept your proposal, with only those
changes which we set forth below, was caused by the need to verify the
strategic aspects of an acquisition of this kind.
We are happy to inform you that we are interested in your offer, which we could
accept provided that you agree to amend it as follows :
[The text of this section has been deleted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.]
We would also like to propose to you that we acquire RCF and Novac by means of
an Italian subsidiary incorporated for that purpose and, therefore, we would
like the same company to also sign the agreement along with Mackie Designs Inc.
and agree to be jointly and severally bound with it.
Finally, we would also like to propose to you to eliminate from the agreement
any reference to consulting agreements with Xx. Xxxxxx and/or Mr. Doglioni.
We believe our counter proposal should interest you and, in the affirmative, we
look forward to your positive reply within June 30th, 1998.
Best regards"
(Signed - Mackie Designs Inc.)
STOCK PURCHASE AGREEMENT PAGE - 39
TO: MACKIE
"Xxxxxx Xxxxxx, 25 June 1998
Dear Gentlemen :
We have received your letter dated April 30th, 1998, the content of which shall
be reproduced word for word at the end of this letter.
We reply to you in order to accept your proposal, with only those changes which
we set forth below. In the meantime, the audit and due diligence were carried
out in the terms proposed by us and accepted by you, and we have respected all
of the other terms of the agreement as if we were already bound thereby.
Without rewriting any of the other covenants contained in said agreement, we
propose the following:
Since from January 1st, 1998 to date RCF's Board of Directors and Novac's sole
Director have each managed the respective company without any interference by
you, we will also attach to the agreement special financial statements, for RCF
as of May 31st, 1998, and for Novac, as of June 24th, 1998.
Moreover, we propose that any claims which may be made relating to that portion
of the Approved RCF Financials dealing with inventories as represented on the
Approved RCF Financials as of December 31st, 1997 and as represented to Mackie
as existing thereafter, until the Base Price and Earn Out Closing Date, must be
made, in writing, by Mackie no later than February 15, 1999. No claim may be
made on this subject subsequent to such date; it being understood that Mackie
shall base any such claim on financial statements prepared in accordance with
GAAP, consistently applied.
We hope that you will agree to this proposal of ours, and for that purpose, we
have had our signatures on the present letter certified by a notary; in the
affirmative, please accept this proposal of ours in writing unconditionally and
with your signature certified by a notary as well on or before June 30th, 1998.
Best regards,"
STOCK PURCHASE AGREEMENT PAGE - 40
(Signed by each and any of the RCF Shareholders and the Novac Shareholders with
notarized signatures, on June 25, 1998)
STOCK PURCHASE AGREEMENT PAGE - 41
TO: RCF SHAREHOLDERS AND NOVAC SHAREHOLDERS
"Bologna, June 29th, 1998
Dear Gentlemen:
We have received your letter dated June 25, 1998, the content of which
shall be reproduced word for word at the end of this letter.
We are happy to inform you that the Board of Directors of Mackie has
unconditionally approved the agreement as amended by your said letter and the
consummation of the transaction contemplated thereby.
Consequently, Mackie Designs Inc. and Mackie Designs (Italy) S.r.l.
unconditionally accept your last offer by signing the present letter, also
reproducing the entire Stock Purchase and Sale Agreement, with respective
authorized and notarized signatures.
Best regards,
(Signed by Mackie Designs Inc. and Mackie Designs (Italy) S.r.l. with notarized
signature on June 29th, 1998)
STOCK PURCHASE AGREEMENT PAGE - 42
