1
EXHIBIT 10.4
STOCK PURCHASE AGREEMENT
BETWEEN
GENERAL BINDING CORPORATION
AND
XX. X. XXXXXXXXXXXXX
Table of Content
1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2 Sale and Purchase of Shares, Consideration . . . . . . . . . . . . 3
2.1 Sale and Purchase of Shares . . . . . . . . . . . . . . . . . . . 3
2.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Financial Statements; Audit of the Company's 1997
Financial Statements . . . . . . . . . . . ... . . . . . . . . . . 3
2.4 Payment of the Purchase Price; Escrow of the Holdback . . . . . . 4
2.5 Procedures for Final Determination of Net Working
Capital Amount and Funded Debt at Closing . . . . . . . . . . . . 5
2.6 Net Working Capital Amount and Funded Debt Amount
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.7 The EBITDA Adjustment . . . . . . . . . . . . . . . . . . . . . 7
3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Closing Date of Transaction . . . . . . . . . . . . . . . . . . 8
3.2 Conditions Precedent to Closing . . . . . . . . . . . . . . . . 8
3.3 Transfer of Shares and Payment of Purchase Price . . . . . . . . 9
3.4 Right to Rescind the Agreement . . . . . . . . . . . . . . . . . 9
4 Representations and Warranties of Seller . . . . . . . . . . . . 10
4.1 Seller's Power and Authority . . . . . . . . . . . . . . . . . . 10
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4.2 Organization and Qualification . . . . . . . . . . . . . . . . . 11
4.3 Capital Structure . . . . . . . . . . . . . . . . . . . . . . . 11
4.4 Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.5 Consolidated Financial Statement . . . . . . . . . . . . . . . . 11
4.6 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . 12
4.7 Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . 12
4.8 Condition of Buildings, Machinery and Equipment . . . . . . . . 12
4.9 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.10 Absence of Adverse Changes . . . . . . . . . . . . . . . . . . . 13
4.11 Permits and Authorities . . . . . . . . . . . . . . . . . . . . 14
4.12 Claims and Litigation . . . . . . . . . . . . . . . . . . . . . 14
4.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.14 Agreements with Third Parties . . . . . . . . . . . . . . . . . 14
4.15 Intellectual Property/Know-how . . . . . . . . . . . . . . . . . 14
4.16 Pensions/Employees . . . . . . . . . . . . . . . . . . . . . . . 15
4.17 Compliance with the Law . . . . . . . . . . . . . . . . . . . . 15
4.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . . 15
4.19 Product Liability/Warranty Claims . . . . . . . . . . . . . . . 15
4.20 Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.21 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.22 Brokers' Fees . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.23 Seller's Costs . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.24 No Further Warranties . . . . . . . . . . . . . . . . . . . . . 16
5 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 Term of Warranties and Representations . . . . . . . . . . . . . 16
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5.2 Notification and Arbitration . . . . . . . . . . . . . . . . . . 17
5.3 Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.4 Surety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.5 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.5.1 De Minimis . . . . . . . . . . . . . . . . . . . . . . . 17
5.5.2 Maximum Amount . . . . . . . . . . . . . . . . . . . . . 18
5.5.3 Exempt Representations and Warranties . . . . . . . . . 18
5.5.4 Exclusion of Liability . . . . . . . . . . . . . . . . . 18
5.6 Procedure with Third Parties and Authorities . . . . . . . . . . 19
6 Resignations of Directors and Auditors . . . . . . . . . . . . . 19
7 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.1 Covenant not to Compete . . . . . . . . . . . . . . . . . . . . 19
7.2 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . 20
7.3 Termination of Agreements between the Companies
and Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.4 Information of Employees . . . . . . . . . . . . . . . . . . . . 21
7.5 Employment of Seller . . . . . . . . . . . . . . . . . . . . . . 22
7.6 Seller's Cooperation . . . . . . . . . . . . . . . . . . . . . . 22
7.7 Transition Assistance . . . . . . . . . . . . . . . . . . . . . 22
7.8 Environmental Issues . . . . . . . . . . . . . . . . . . . . . . 22
8 Transfer of Management Responsibility . . . . . . . . . . . . . 23
9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.1 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.2 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.3 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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10.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . 25
10.5 Binding on Successors . . . . . . . . . . . . . . . . . . . . . 25
10.6 Announcements . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11 Governing Law and Arbitration . . . . . . . . . . . . . . . . . 25
11.1 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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STOCK PURCHASE AGREEMENT
between
Xx. Xxxx Xxxxxxxxxxxxx, Xxxxxxxxxx 00, XX-0000 Xxxxxxxxxx (Xxxxxxxxxxx)
"Seller"
and
General Binding Corporation, Xxx XXX Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (USA)
"Purchaser"
WHEREAS, IBICO, Xxxxxxxxxx 000, XX 0000 Xxxxxx (Xxxxxxxxxxx) (hereinafter
referred to as the "Company") has a share capital of CHF 2,000,000.--, divided
into 400 bearer shares with a nominal value of CHF 5,000.-- each;
WHEREAS, Seller owns all the shares of the Company and/or has the right to
transfer full ownership in such shares;
WHEREAS, Purchaser intends to purchase all the shares of the Company and
Seller intends to sell or cause to be sold to Purchaser all of the Shares of
the Company;
WHEREAS, Purchaser, in a due diligence review, has analyzed the Due Diligence
Material;
NOW, THEREFORE, the Parties have come to the following agreement.
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ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms have the following meaning
unless the context requires otherwise:
"AGREEMENT" shall mean this Agreement as amended from time to time pursuant to
art. 10.4 of this Agreement.
"CHF" shall mean Swiss Francs, being the lawful currency of Switzerland.
"CLOSING" shall mean the consummation of the transactions described in art. 2
of this Agreement in accordance with art. 3 of this Agreement.
"CLOSING DATE" shall mean the date defined in art. 3.1 of this Agreement.
"COMPANIES" shall mean the Company and the Subsidiaries.
"COMPANY" shall mean IBICO AG, Xxxxxxxxxx 000, 0000 Xxxxxx (Xxxxxxxxxxx).
"DUE DILIGENCE MATERIAL" shall mean the material set forth in Schedule 1.1
which has been submitted to Purchaser for the due diligence review.
"PARTY" OR "PARTIES" shall mean one or both parties to this Agreement.
"PURCHASE PRICE" shall mean the purchase price defined in art. 2.2 of this
Agreement.
"SELLER'S KNOWLEDGE" shall mean the knowledge of Seller after due and diligent
consultation with Xx. Xxxxxx, Xx. Xxxxxxxx, Xx. Xxxxx, Xx. Xxxxxxx, Xx.
Xxxxxxxx, Mr. van den Nieuwenhof, Xx. Xxxxx, Xx. Xxxxxx and Xx. X.
Xxxxxxxxxxxxx.
"SHARES" shall mean 400 bearer shares of the Company with a nominal value of
CHF 5,000.-- each.
"SUBSIDIARIES" shall mean the companies set forth in Schedule 1. 2.
"SURETY" shall mean the surety ("Solidarburgschaft") as defined in art. 5.4 of
this Agreement.
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"TAXES" shall mean all tax liabilities whether actual or deferred including but
not limited to those measured by or referred to as income taxes, sales taxes,
use taxes, VAT, gross receipts taxes, any turnover or cost-related taxes,
franchise taxes, profits taxes, license taxes, withholding taxes, stamp duties
and any other transfer duties, payroll taxes, social security taxes and
contributions, ad valorem taxes, employment taxes, excise taxes, severance
taxes, occupation taxes, premium taxes, windfall profit taxes, real estate
capital gain taxes, real estate transfer taxes and property taxes and all other
levies, customs, taxes and public duties, assessments or charges of any kind,
together with any interest and any penalties, additions to tax or additional
amounts imposed by any governmental authority.
"TAX RETURN" shall mean any return, report or statement required to be filed
with any governmental authority with respect to Taxes.
ARTICLE 2
SALE AND PURCHASE OF SHARES,
CONSIDERATION
2.1 SALE AND PURCHASE OF SHARES. Subject to the terms and conditions
defined herein, Seller hereby agrees to sell to Purchaser and
Purchaser agrees to buy from Seller the Shares, i.e. 400 bearer shares
of the Company with a nominal value of CHF 5,000.-- each.
2.2 PURCHASE PRICE. The aggregate purchase price for the Shares (the
"Purchase Price") paid by Purchaser to the Seller (which shall be
subject to adjustment pursuant to this art. 2) shall be equal to CHF
188,400,000.-- (Swiss Francs One Hundred Eighty eight Million four
hundred thousand) less the sum of (i) the amount of the Company's
Funded Debt Amount (as defined below) at Closing, and (ii) the amount
by which the Company's Net Working Capital Amount (as defined below)
at Closing, as determined in accordance with art. 2.5 and 2.6 below,
is less than CHF 59,000,000.-- and (iii) plus or minus the EBITDA
adjustment as defined in art. 2.7 of this Agreement.
2.3 FINANCIAL STATEMENTS; AUDIT OF THE COMPANY'S 1997 FINANCIAL
STATEMENTS. Seller shall cause the company's unaudited consolidated
financial statements for the nine (9) months ended September 30, 1997
to be prepared on a basis consistent with the accounting principles
employed in the preparation of the Company's consolidated financial
statements for its 1996 fiscal year and deliver such
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statements to Purchaser by November 20, 1997. Further, Seller shall
provide Purchaser by the 20th day of each month all monthly reports
and other information concerning the Companies and their operations
for the preceding month. Seller shall also cause the consolidated
financial statements of the Company to be audited by KPMG Peat Marwick
for the twelve (12) month period ended December 31, 1997 (the "1997
Audit"). Such audit shall be prepared using the accounting principles
employed in the audit of the 1996 consolidated financial statements of
the Company. The 1997 Audit shall be prepared at the Company's cost
and expense and shall be disclosed to Purchaser upon receipt by
Seller.
2.4 PAYMENT OF THE PURCHASE PRICE; ESCROW OF THE HOLDBACK
a) Four (4) business days prior to the Closing, the Seller shall
notify Purchaser in writing of its good faith estimate of (i)
the Net Working Capital Amount as of the Closing Date (the
"Estimated Net Working Capital Amount"), (ii) the Company's
estimated consolidated Funded Debt Amount at Closing (the
"Estimated Funded Debt Amount") and (iii) the EBITDA
Adjustment (the "Estimated EBITDA Adjustment") . The
Estimated Purchase Price shall be equal to CHF 188,400,000.--
less the sum of (i) the Estimated Funded Debt Amount and (ii)
the amount, if any, by which CHF 59,000,000.-- exceeds the
Estimated Net Working Capital Amount plus or minus, as the
case may be, (iii) the Estimated EBITDA Adjustment.
b) At the Closing, Purchaser shall pay the Estimated Purchase
Price, less a holdback (the "Escrow Holdback") of CHF
8,000,000.-- (such amount being paid at Closing is hereinafter
referred to as the "Closing Payment") by wire transfer to an
account or accounts designated by the Seller at least two (2)
business days prior to the Closing. At Closing, the Escrow
Holdback shall be deposited with Seller's law firm, Xxxxx &
XxXxxxxx (the "Escrow Agent") in escrow pending disposition
as provided in the Escrow Instructions attached hereto as
Schedule 2.4. Except as set forth in art. 2.4 c) , the
economic benefit of such Escrow Holdback shall be for the
account of the Seller with all earnings thereon accruing for
his benefit.
c) Upon the final determination of the Net Working Capital Amount
and the Funded Debt Amount at Closing pursuant to art. 2.5
below and the EBITDA Adjustment pursuant to art. 2.7 below,
the Purchaser and Seller shall
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recompute the Purchase Price based upon the actual net Working Capital
Amount and actual Funded Debt amount at Closing and the actual EBITDA
Adjustment, as finally determined. If the Purchase Price as so
determined is greater than the Closing Payment but lower than the
Estimated Purchase Price, within three (3) business days after such
final determination the Parties shall cause the Escrow Agent to pay to
Seller the amount by which the Purchase Price exceeds the Closing
Payment, together with a pro-rata share of the earnings on the Escrow
Holdback and to pay to Purchaser the amount by which the Estimated
Purchase Price exceeds the Purchase Price together with a pro-rata
share of the earnings on the Escrow Holdback. If the Purchase Price
as so determined is greater than the Estimated Purchase Price within
three (3) business days after such final determination the Parties
shall cause the Escrow Agent to pay to Seller the Escrow Holdback plus
earnings thereon and Purchaser shall pay to Seller the difference
between Purchase Price and Estimated Purchase Price plus 5% interest
(p.a.) on such additional payment (interest to be calculated from the
Closing Date until the final determination of the Purchase Price) . If
the Purchase Price as so determined is less than the Closing Payment
within three (3) business days after such final determination, the
Parties shall cause the Escrow Agent to pay to Purchaser the Escrow
Holdback plus earnings thereon and Seller shall pay to Purchaser the
amount by which the Closing Payment exceeds the Purchase Price
together with 5% interest (p.a.) on the sum repaid (interest to be
calculated from the Closing Date until the final determination of the
Purchase Price) . Final determination and payment of the Purchase
Price shall be made without regard to any claims or offsets that
either Party may have asserted against the other.
2.5 PROCEDURES FOR FINAL DETERMINATION OF NET WORKING CAPITAL AMOUNT AND
FUNDED DEBT AT CLOSING. Within forty-five (45) business days after
the Closing Date, Purchaser shall prepare and deliver to the Seller at
Purchaser's expense a consolidated balance sheet of the Company for
the Seller as of the opening of business on the Closing Date, audited
by Purchaser's independent certified public accountant, together with
a statement setting forth Purchaser's determination of the Net Working
Capital Amount and the Funded Debt Amount of the Company at Closing.
Within twenty-one (21) days after receipt of such items, the Seller
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shall deliver to Purchaser a detailed written statement describing its
objections, if any, to such balance sheet and determination of the Net
Working Capital Amount and the Funded - Debt Amount at Closing. If
the Seller does not raise any objections within the twenty-one (21)
day period, the audited balance sheet and Purchaser's determination of
the net Working Capital Amount and the Funded Debt Amount at Closing
shall become final and binding upon all parties. Upon request by the
Seller at any time after receipt of the aforementioned balance sheet
and statement, Purchaser shall make available to the Seller and its
accountants and other representatives the work papers used in
preparing the balance sheet and in determining Purchaser's calculation
of the Net Working Capital Amount and the Funded Debt Amount at
Closing and such other documents as the Seller may reasonably request
in connection with its review of the Net Working Capital Amount and
the Funded Debt Amount at Closing. If the Seller raises any
objections, Purchaser and Seller shall use reasonable efforts to
resolve any such disputes. If a final resolution is not obtained
within twenty-one (21) days after the Seller shall have submitted its
objections to Purchaser, any remaining disputes shall be resolved by
Deloitte Touche Tomahtsu, whose decision regarding the determination
of Net Working Capital Amount and Funded Debt at Closing shall be
final and binding upon the Parties as a "Schiedsgutachten". Each
Party bears 50% of the costs and fees of Deloitte Touche Tomahtsu.
2.6 NET WORKING CAPITAL AMOUNT AND FUNDED DEBT AMOUNT DEFINITIONS. "Net
Working Capital Amount" shall be determined as of opening of business
on the Closing Date and shall be equal to the combined current assets
of the Companies (excluding cash and cash equivalents) less the
combined current liabilities of the Companies (excluding from current
liabilities the current portion of any Funded Debt). The Company's
Closing Balance Sheet shall be prepared, and the Net Working Capital
Amount and Funded Debt Amount at Closing shall be determined in a
manner consistent with those used in preparing the Company's
consolidated balance sheet as of December 31, 1996 (the "1996 Balance
Sheet") which is attached hereto as Schedule 4.5 except that any
balance sheet item reflected on the Company's Closing Balance Sheet
which was not reflected on the 1996 Balance Sheet shall be determined
in accordance with generally accepted international accounting
standards. "Funded Debt Amount" shall be determined as of opening of
business on the Closing Date and shall be equal to all interest-
bearing debt obligations of the Companies, including interest bearing
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obligations for borrowed money and US purchase-money mortgages and
capitalized lease obligations (i.e. lease obligations which according
to the accounting principles set forth in Schedule 4.5.a have to be
capitalized) whether or not normally set forth on the Companies'
balance sheets (but exclusive of inter-Companies debt) less the amount
of cash and cash equivalents excluded in the determination of the Net
Working Capital Amount.
2.7 THE EBITDA ADJUSTMENT. If EBITDA in the year 1997 deviates from CHF
15,600,000.-- by greater than CHF 800,000.(plus or minus), the
Purchase Price will be adjusted in accordance with the following
formula:
Adjustment = 2 x (actual EBITDA - CHF 15,600,000.--).
EBITDA is equal to the Company's consolidated Operating Profit (before
interest and taxes) plus depreciation and amortization and the costs
identified in art. 10.1 herein in excess of CHF 594,000.-- and without
regard to (a) any losses which are covered by a warranty contained in
art. 4 of this Agreement and (b) any non- operational expenses
incurred through the restructuring of IBICO, Inc. ("Restructure
Expense"). EBITDA is calculated by the Seller on the basis of the
1997 audited Financial Statement prepared in accordance with art. 2.3
of this Agreement except that (i) foreign currencies (currencies other
than CHF) shall be expressed in CHF utilizing the exchange rates (the
"Forecast 2 Rates") used by the Company in the preparation of the
Management Profit and Loss Account and identified by IBICO Control /
Finance as PL51297, 15-09-97, 19:12 see schedule 2.7 attached) and
(ii) changes in IAS accounting standards effective after December 31,
1996 shall be disregarded and the financial results for the year 1997
and the calculation of the operating Profit (before interest and
taxes) shall be presented in a format consistent with the 1996 audited
IAS-consolidated financial statements. "Restructure Expense" shall be
limited to those expenses incurred by IBICO, Inc. in connection with
the termination of certain IBICO, Inc. management personnel, the
retention or relocation of successors to such personnel, the
termination of personnel employed in IBICO, Inc.'s Elk Grove office
and other incidental and consequential expense related to the
foregoing which totaled USD 1,146,000.-- as of August 31, 1997 and
which shall not exceed USD 1,200,000.-- for the year ended December
31, 1997. Seller shall cause KPMG Fides to issue a statement
describing the EBITDA and the EBITDA Adjustment and transmit such
Statement of KPMG Fides together with the 1997 audited statement
immediately after receipt to Purchaser. The dispute
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resolution mechanism described in art. 2.5 above shall also apply to
the determination of the EBITDA Adjustment.
ARTICLE 3
CLOSING
3.1 CLOSING DATE OF TRANSACTION. The transaction described in this
Agreement shall be consummated at the offices of Xxxxx & XxXxxxxx,
Xxxxxxxxxxxxxxx 000, 0000 Xxxxxx, on a date which is 10 days after the
conditions precedent set forth in art. 3.2 of this Agreement have been
met but not before January 9, 1998 unless extended pursuant to the
terms hereof.
3.2 CONDITIONS PRECEDENT TO CLOSING. The obligation of Purchaser to
consummate the transactions contemplated by this Agreement is subject
to the satisfaction of the following conditions on or before the
Closing Date.
a) All governmental filings, authorizations and approvals that
are required for the consummation of the transactions
contemplated hereby shall have been duly made and obtained on
terms and conditions reasonably satisfactory to Purchaser,
including all filings required by the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976 of the United States of
America or the EC Merger Regulation as amended or under the
law of any other jurisdiction in which Purchaser or Seller
does business having authority over the transactions
contemplated hereby, and the waiting period, if any, required
by such statutes or regulations shall have terminated or
expired.
b) No proceeding brought by any third party or governmental
entity shall be pending or threatened which seeks any
injunction, restraining order or other order which would
prohibit consummation of the transactions contemplated hereby
or materially impair the ability of Purchaser to own and
operate the business and the assets of the Company and its
Subsidiaries after the Closing Date.
The Parties shall use all reasonable efforts to take, or cause to be
taken, and to do, or cause to be done, all things necessary, proper or
advisable consistent with applicable law to cause the fulfillment on
or prior to the Closing Date of all of the above conditions,
including, in
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particular, making all necessary filings with any applicable
governmental entity and cooperating with each other in connection with
such filings and any other responses to governmental entities;
provided, however, that in no event shall Purchaser be obligated to
consider, or consummate, any sale, disposition, segregation or other
arrangement affecting any assets or properties owned by either
Purchaser or its affiliates, on the one hand, or by the Company and
its Subsidiaries, on the other hand, on account of the transaction
contemplated herein, or any other action which would limit the freedom
of Purchaser and its affiliates to own and operate their business,
assets and properties as they see fit. Seller shall assist Purchaser
free of charge in the pertinent procedures and, in particular, provide
the necessary information on the Companies for filings to be made by
Purchaser.
3.3 TRANSFER OF SHARES AND PAYMENT OF PURCHASE PRICE. On the Closing Date
Seller shall deliver to Purchaser:
- 400 bearer shares of the Company with a nominal value of CHF
5,000.-- each;
- the Surety;
- a certificate in form reasonably satisfactory to Purchaser
stating that (i) all representations and warranties made by
Seller contained in this Agreement are true and correct at and
as of the Closing Date, as though the Closing Date was
substituted for the date of this Agreement, and (ii) that
Seller has performed or complied with all covenants,
agreements and conditions required by this Agreement to be
performed and satisfied by him on or prior to Closing.
At the Closing, Purchaser shall pay the Closing Payment to
Seller and CHF 8,000,000.-- to Escrow Agent as provided in
art. 2.4(b) of this Agreement and the parties shall take the
additional actions called for by art. 2 above to be
accomplished on the Closing Date.
3.4 RIGHT TO RESCIND THE AGREEMENT.
a) Except in a situation where the Seller may rescind this
Agreement due to Purchaser's unwillingness or inability to
close the transactions contemplated by this Agreement as a
result of the failure to satisfy any condition expressed in
art. 3.2 a), or b), which gives
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rise to the rescission right of Seller set forth in art. 3.4
b) below, Seller may rescind this Agreement, if the Estimated
Purchase Price is not paid on the Closing Date to Seller or if
the other actions to be taken by Purchaser on or before the
Closing Date as provided for in art. 2.4 and art. 3.3 of this
Agreement do not occur, provided that all conditions to
Purchaser's obligation to perform have been satisfied. In
such case Purchaser shall pay to Seller CHF 4,000,000.--
(Swiss francs four million) and compensate Seller for any
further damage in excess of such amount caused by the fact
that the transaction described in this Agreement has not been
consummated: provided, however, such additional compensation
shall not exceed twenty percent (20%) of the Purchase Price.
b) Seller or Purchaser may rescind this Agreement in the event
the Closing does not occur by April 30, 1998, as a result of
the failure to satisfy any condition expressed in art. 3.2 a)
and b). In such case Purchaser shall pay to Seller CHF
7,250,000.-- (Swiss Francs seven millions two hundred fifty
thousand) in the form of liquidated damages and this Agreement
will forthwith become void and there will be no further
obligation or liability on the part of any party hereto or any
of their respective directors, officers, employees or
stockholders as a result of such rescission.
c) Purchaser may rescind this Agreement, if the Shares and the
Surety are not remitted to Purchaser on the Closing Date as
provided in art. 3.3 of this Agreement. In such case Seller
shall pay to Purchaser CHF 4,000,000.-- (Swiss francs four
million) and compensate Purchaser for any further damage in
excess of such amount caused by the fact that the transaction
described in this Agreement has not been consummated.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants on his own behalf and for the Companies
as of the date of this Agreement as follows:
4.1 SELLER'S POWER AND AUTHORITY. Seller has the legal right, and
full power, authority and capacity to enter into this
Agreement and to carry out his obligations hereunder without
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violating any agreement, legal provision, contract, property rights of
a third person or obligations under law.
4.2 ORGANIZATION AND QUALIFICATION. The Companies are duly organized and
validly existing under the laws under which they have been
incorporated and have full right and authority to own and to operate
their properties and to engage in the business in which they are now
engaged. Schedule 4.2 contains the memorandum or articles of
incorporation of the Companies as in force as of the date hereof.
4.3 CAPITAL STRUCTURE. As of the date hereof , the Companies have the
capital set forth in Schedule 4.3. No further capital, non-voting
stock, convertible securities warranties, options, subscription or
similar rights in the Companies have been or will by the Closing Date
be created or issued or agreed to be issued. All the Shares sold
pursuant to art. 2.1 of this Agreement and all shares of the
Subsidiaries have been validly issued and fully paid in and are
non-assessable.
4.4 OWNERSHIP. Seller has full right and capacity to transfer and sell
complete title to the Shares. Seller is not a party to any option,
warrant, purchase right, or other contract or commitment that could
require Seller to sell, transfer or otherwise dispose of any of the
Shares.
Upon the delivery of the Shares provided for in art. 3.3 of this
Agreement, Purchaser will receive good and valid title to the Shares,
free and clear of all liens, encumbrances or other rights of third
parties.
Seller warrants, furthermore, that the Company owns all of the shares
of the Subsidiaries as set forth in Schedule 4.4, free and clear of
all liens, encumbrances, options, charges, equities and claims arising
from any privilege, pledge or security arrangement.
4.5 CONSOLIDATED FINANCIAL STATEMENT. Schedule 4.5 contains the audited
consolidated balance sheet and the audited consolidated profit and
loss statement of the Company as of December 31, 1996 (the Financial
Statement) - This Financial Statements are in accordance with the
accounting and consolidation principles described in Schedule 4.5a and
in accordance with such principles show a true and fair view of the
consolidated financial position of the Company as of December 31, 1996
and for their respective periods then
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ended and do not understate any liabilities, which have to be reported
on the financial statements in accordance with the accounting and
consolidation principles described in Schedule 4.5 a).
Except as disclosed in the Notes to the Financial Statement set forth
in Schedule 4.5 and except for intercompany transactions the Companies
have not issued any guarantees, sureties or entered into similar
transactions for the benefit of any third parties (excluding
warranties for goods sold and services rendered as well as minimum
purchase or sale obligations).
4.6 ACCOUNTS RECEIVABLE. Except to the extent of the reserve for bad
debts shown in the Financial Statement and to the extent that accounts
receivables have been written-off or written-down, all of the accounts
receivable of the Companies constitute valid receivables, have been
incurred in the ordinary course of business, are fully collectible in
the stated amounts and are not subject to any set-off or counterclaim,
other than set-off for counterclaims which have been recorded as
liabilities in the Financial Statement set forth in Schedule 4.5 or
which have come into existence after the date of such Financial
Statement.
4.7 TITLE TO ASSETS. The Companies are the owners of all assets of any
kind reflected in the Financial statement or reflected in the books of
the Companies as being owned by them as of the respective account
date, free and clear of any liens, encumbrances, restrictions and
other rights of any kind, including any right of first refusal
(financial leases which are recorded as assets on the Financial
Statement are exempt from such warranty). The Companies have neither
executed nor authorized the execution of any contract or option for
the sale, leasing or other use of any kind, of any of its properties
or assets other than in the ordinary course of their business as
conducted at the date hereof.
4.8 CONDITION OF BUILDINGS, MACHINERY AND EQUIPMENT. The Company's and
each Subsidiary's buildings, machinery, equipment and other tangible
personal property are - their age properly taken into account - in
good condition and repair in all material respects, have been
maintained in accordance with normal industry standards and are usable
in the ordinary course of business. The Company or its Subsidiaries
own or lease under valid leases all buildings,
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machinery, equipment and other tangible assets necessary for the
conduct of their business.
4.9 INVENTORY. All inventories consist of a quality and quantity usable
and salable in the ordinary course of business or have been reserved
for in accordance with the principles described in Schedule 4.5.
Inventory is valued using the first-in, fist-out method of valuation.
Except to the extent it has been reserved for, no inventory is
obsolete or damaged or includes used, returned or previously leased or
sold goods. If the stock of a particular item of finished goods
(excluding replacement and repair parts) exceeds the projected sales
for the next 18 months such excess amount shall be considered as
obsolete. In such case Purchaser shall transfer such excess stock
(against payment of warranty claim) to Seller who may sell such stock
freely. For raw material and components the excess above 18 months of
projected sales shall not be treated as obsolete but shall be written
down to 50% of cost.
4.10 ABSENCE OF ADVERSE CHANGES. Seller represents and warrants that in
the period between December 31, 1996, and the date hereof there has
not been any material adverse change in the business, financial
condition, operations, or results of operations of the Companies.
Without limiting the generality of the foregoing, since that date, the
Companies:
- have conducted their business in the ordinary course and have
not entered into any material contracts, contract changes or
commitments and have not sold, assigned or transferred any
tangible or intangible assets other than in the ordinary
course of business, unless disclosed in Schedule 4.10;
- have not suffered any material damage, destruction or loss by
fire or other casualty whether or not covered by insurance
unless disclosed in Schedule 4.10;
- have not made any declaration or setting aside or payment of
any dividend or any other distribution of profit or any direct
or indirect redemption, purchase or other acquisition of any
quotas or shares of the Companies, other than the payment"of
dividends by the Subsidiaries to the Company;
- have not increased the total compensation payable to their
employees by more than 10% in local currencies (increases
based on the existing profit sharing plan
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are excluded from this limit) and have neither adopted any new
profit sharing plan, bonus plan, pension or benefit plan nor
changed any existing plans;
- the Companies have not committed to any of the foregoing.
4.11 PERMITS AND AUTHORIZATIONS. The Companies have all the permits and
authorizations which are necessary to carry on their business. No
governmental authority has threatened in writing to terminate any
permit or authorization.
4.12 CLAIMS AND LITIGATION. Except as set forth in Schedule 4.12 as of the
date hereof, there are no actions, suits or proceedings pending or
threatened in writing against the Companies either in court or before
any administrative board, agency or commission.
4.13 TAXES. All Taxes for periods and events before the date hereof and
before the Closing Date have been paid or have been sufficiently
provided for in the Financial Statement.
As of the date hereof, the Companies are in compliance with all
applicable laws, regulations or orders of any governmental entity with
respect to Taxes and have timely filed all Tax Returns for all Taxes
required by law to have been filed and all such Tax Returns are
complete and accurate. The documentary evidence necessary to support
such returns are at the disposition of the Companies or their tax
advisors. The necessary records have been maintained and the
necessary accounting methods have been adhered to.
4.14 AGREEMENTS WITH THIRD PARTIES. The Companies are not in, and the
consummation of the transactions contemplated by this Agreement will
not result in, any default under, or breach of, any agreement to which
any of the Companies is a party or which might result in termination
or liability or other loss which could materially affect its business,
assets or condition, financially or otherwise. All third parties to
these agreements are essentially in compliance therewith and not in
material default thereunder.
4.15 INTELLECTUAL PROPERTY/KNOW-HOW. The Companies own or have sufficient
right to use all the know-how and all the patents, trademarks, trade
names, trade secrets, copyrights and other intellectual property rights
(collectively the "Intellectual Property") which are necessary for the
conduct
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of their business as it is now conducted. Furthermore, Seller warrants
that the Intellectual Property and the Company's business practices to
the best of Seller's Knowledge, do not conflict with the rights of any
third party. The Companies have not granted any licenses to use any of
the Intellectual Property to any third parties.
4.16 PENSIONS/EMPLOYEES. The pension plans and/or pension funds and other
welfare plans of the Companies comply with all applicable legal
provisions and have been administered in conformity with all
applicable law. Seller warrants that all accrued pension claims and
accrued claims under other welfare plans of the Companies' employees
are covered by funds of special foundations, by insurance contracts or
provisions the Companies have specifically established for such
purpose.
The Companies have not entered into any agreement which oblige them to
make severance payments or grant other extraordinary privileges in
excess of any statutory or customary requirements. Exempt from such
warranty is the agreement with Xx. X. Xxxxx, which provides for 6
months severance payment (calculated on Xx. Xxxxx'x previous salary).
4.17 COMPLIANCE WITH THE LAW. To the best of Seller's Knowledge, the
Companies have not materially violated any applicable laws,
ordinances, regulations, decrees or orders of any government entity.
Seller, in particular, warrants that to the best of Seller's Knowledge
the Companies and their plants, real estate and equipment comply with
all applicable labor and occupational health and safety laws,
regulations, decrees and orders and that the competent authorities
have not informed the Companies in writing that they will issue any
orders with which the Companies do not yet comply.
4.18 ENVIRONMENTAL MATTERS. To the best of Seller's Knowledge, all
properties and facilities that are and have been operated by the
Companies and their businesses as presently conducted comply with all
applicable environmental laws, regulations, decrees and orders.
4.19 PRODUCT LIABILITY/WARRANTY CLAIMS. No third parties have any claims
against the Companies in connection with any products delivered or
services rendered by the Companies as of the date hereof which, or
before the Closing Date which
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(i) exceed one percent of the Companies' total turnover for the year
in which such products were delivered or services were rendered and
(ii) are neither covered by provisions in the Financial Statement nor
by insurance policies.
4.20 REAL ESTATE. The Companies have rightful title to the real estate
listed in Schedule 4.20 free and clear of any mortgages other than the
mortgages listed in Schedule 4.20. The Company identified on Schedule
4.20 has full legal and practical access to and good interest in such
real estate. None of the buildings constructed thereon encroaches
upon adjoining real estate.
4.21 LEASES. The real estate leases listed in Schedule 4.21 are in full
force and effect and constitute a valid and existing leasehold
interest under each of the leases for the term set forth on such
Schedule. With the exception of financial leases recorded on the
Company's Financial Statement set forth in Schedule 4.5 and any
contracts over payments of less than CHF 50,000.per year, all lease
agreements covering personal property the Companies have concluded are
listed in Schedule 4.21a.
4.22 BROKERS' FEES. Neither the Seller nor the Companies have any
liability or obligation to pay any fees or commissions to any Broker,
finder or agent with respect to the transactions contemplated by this
Agreement.
4.23 SELLER'S COSTS. The only costs of the Seller related to the
transactions contemplated by this Agreement that have been paid by the
Company or the Companies are those identified in art. 10.1 herein.
4.24 NO FURTHER WARRANTIES. Except as expressly provided in this Article
4, Seller makes no representation or warranty with respect to the
Shares or the Companies.
ARTICLE 5
REMEDIES
5.1 TERM OF WARRANTIES AND REPRESENTATIONS. The representations and
warranties set forth in art. 4 of this Agreement shall continue in
effect until the later of eighteen (18) months after the Closing Date
or July 7,1999. The representations and warranties set forth in art.
4.13 of this Agreement shall, however, continue in effect until three
months after the statute of limitation on the tax claims concerned has
expired.
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5.2 NOTIFICATION AND ARBITRATION. The Parties waive the notification and
examination requirements of art. 201 of the Swiss Code of Obligations.
However, Purchaser has to notify Seller within 30 days after Purchaser
has detected a breach of warranties, describing in reasonable details
such breach and any damage suffered by the Companies as a consequence
of such breach. If Purchaser has notified Seller of a breach of
representations and warranties, Purchaser has to commence arbitration
in accordance with art. 11.2 of this Agreement within months after
such notification has been made, unless the claim raised by Purchaser
is either. settled before the expiry of such deadline or the Parties
agree on an extension of such deadline. If Purchaser fails to meet
such deadline, the claim concerned shall be forgone and unenforceable.
5.3 DAMAGES. In case of a breach of a warranty, representation, covenant
or agreement of Seller, Seller shall within the limitations set forth
in art. 5.5 of this Agreement indemnify Purchaser for any direct
damage, e.g. pay as far as a particular state of a company is
warranted to Purchaser an amount equal to the amount by which the
actual state of the company concerned differs from the state described
in such warranty. The right of Purchaser to rescind this Agreement
("Wandelung") pursuant to art. 205 CO which is hereby expressly
excluded.
5.4 SURETY. In order to secure any claims which Purchaser may have
pursuant to art. 5.3 of this Agreement, Seller shall provide Purchaser
with a Surety ("Solidarburgschaft") issued by a first class Swiss bank
in an amount equal to 20% of the Purchase Price substantially in the
form attached hereto as Schedule 5.4. Two (2) years after the Closing
Date, the amount of the Surety shall be reduced to an amount equal to
(i) CHF 4,000,000.-- plus (ii) an amount equal to claims made until
such date but not yet settled under art. 5.3 of this Agreement. Such
reduced amount may, in any event, not be higher than the original
amount of the Surety minus all claims paid under such Surety. On the
5th anniversary of the Closing, the Surety shall expire, except as and
to the extent any claims in connection with breaches of warranties,
representations, covenants or agreements are pending before the court
of arbitration pursuant to art. 11.2.
5.5 LIMITATIONS.
5.5.1 DE MINIMIS. Seller shall have no obligation to pay any amounts under
art. 5.3 of this Agreement unless:
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(i) the amount to be paid as indemnification for each individual
breach exceeds CHF 100,000.-- (such amount not to be deducted
from Purchaser's total indemnity claim under this art. 5) and,
(ii) the aggregate amount of the amounts described in (i) above
equals or surpasses CHF 1,000,000.-(such amount to be deducted
from Purchaser's total indemnity claim under this art. 5).
5.5.2 MAXIMUM AMOUNT. Any payments of the Seller for breaches of
representations of warranties set forth in this Agreement shall be
limited to 20% of the Purchase Price in total.
Claims of Purchaser under art. 4.13 and art. 9 (first paragraph) of
this Agreement are not covered by the above limit; a separate limit of
CHF 4,000,000.-- applies to such claims. to such claims only the de
minimis of 5.1.1.(i) applies.
5.5.3 EXEMPT REPRESENTATIONS AND WARRANTIES. None of the limitations
described in art. 5.5.1 and 5.5.2 shall apply to the representations
and warranties set forth in art. 4.1, 4.2 and 4.3 and 4.4 of this
Agreement. Claims regarding Swiss and German pension claims are also
exempt from such limitations.
5.5.4 EXCLUSION OF LIABILITY. Seller shall not be liable in respect of a
claim of Purchaser for breach of warranties, representations,
covenants or agreements:
(i) if, but only to the extent that any provision, reserve or
expense for the matter giving rise to the claim was taken into
account in the Financial Statement set forth in Schedule 4.5;
(ii) if, but only to the extent that, the matter giving rise to a
claim was disclosed in all material respects in one of the
Schedules attached to this Agreement or in the Due Diligence
Material;
(iii) if, but only to the extent that, Purchaser or the Companies
receive compensation of the respective loss or damages
suffered by them under the terms of any insurance policy or
from any other third party;
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(iv) if, but only to the extent that, any Tax for which Purchaser
or the Companies are liable is reduced as a result of any
matter giving rise to a claim of Purchaser under the above
representations and warranties;
(v) if, but only to the extent that, any damage or loss was caused
by any act or omission of Purchaser occurring after the
Closing Date or by the fact that Purchaser has failed to take
reasonably necessary steps to mitigate the damage caused by a
breach of a representation or warranty.
5.6 PROCEDURE WITH THIRD PARTIES AND AUTHORITIES. If a breach of a
representation or warranty exists because any authorities or third
parties raise claims against the Companies or if the Companies in
connection with such a breach have to enforce any rights or claims
against authorities or other third parties, the Parties shall
cooperate in such negotiations and proceedings. The Companies in any
event may not settle any such claims without Seller's consent, which
consent shall not be unreasonably withheld.
ARTICLE 6
RESIGNATIONS OF DIRECTORS AND AUDITORS
At the Closing Date Seller shall remit to Purchaser resignations of
the directors and auditors of the Companies, as requested in writing
by Purchaser prior to December 1, 1997.
Purchaser agrees to hold an extraordinary shareholders' meeting for the
Company immediately after the Closing Date and to elect new directors
at such meeting. For the Subsidiaries Purchaser shall take such action
within 30 days after the Closing Date. Purchaser agrees to grant
complete discharge to the present directors at such meeting. The
consent of Purchaser to the Companies' financial statements and the
discharge of the directors does not operate as a waiver of Purchaser's
claims under art. 4 and 5 of this Agreement.
ARTICLE 7
COVENANTS
7.1 COVENANT NOT TO COMPETE. Seller agrees not to engage directly or
indirectly (including through partnerships or companies) in any
activities which compete with activities
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the Companies are engaged in at the Closing Date. Such covenant shall
be valid for a period of 3 years after the Closing Date. Any
participations of less than 5% in publicly traded companies are exempt
from this covenant. Furthermore, the interest of Seller in X.X.
Xxxxxxxx AG or other retail and wholesale operations which deal with
such products and a sale of inventory acquired pursuant to art. 4.9 of
this Agreement are also exempt from this covenant.
7.2 CONDUCT OF BUSINESS. Prior to the Closing, without the prior written
consent of Purchaser, Seller shall not, and shall cause the Companies
to take action, or refrain from action, so that they shall not:
- take any action that would require disclosure under this
Agreement;
- directly or indirectly (including through any agent, broker,
finder or other third part), offer to sell, merge, consolidate
or otherwise dispose of, negotiate for the sale, merger,
consolidation or other disposition of, initiate or continue
discussions concerning the sale, merger, consolidation or
other disposition of, the Companies as a whole, or the sale or
other disposition of any of its or their shares of capital
stock or any of their assets (other than in the ordinary
course of business);
- take or omit to take any action which would reasonably be
anticipated to have a material and adverse effect upon the
business of the Companies;
- redeem any stock, bonds or other securities or equity
interests, or declare or pay any dividend or other
distribution to its shareholders;
- make any change in its articles or certificate of
incorporation or bylaws that would interfere with or prevent
the consummation of the transactions contemplated herein;
- make any significant organizational or personnel changes;
- pay any bonus or grant any salary or wage increase not in the
ordinary course of business or consistent with past business
practices;
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- make any capital expenditures in excess of CHF 300,000.-- per
expenditure or CHF 1,000,000.-- in the aggregate;
- create any security interest in or any lien or encumbrance on
any property or interest of the Companies where the obligation
is more than CHF 50,000.-- or cancel or compromise any debt or
claims in excess of CHF 50,000.--; or
- make or grant any loan.
The conclusion and termination of the agreements described in art. 7.3
are exempt from this provision.
7.3 TERMINATION OF AGREEMENTS BETWEEN THE COMPANIES AND SELLER. With the
exception of the agreements listed in Schedule 7.3Seller shall
terminate on or before the Closing Date all agreements existing
between (i) the Companies on the one hand and (ii) Seller or any
persons, companies, partnerships or other legal or business entities
with which Seller or a member of Seller's family is affiliated on the
other hand. The termination of such agreements shall not oblige the
Companies to make any payments in compensation of the termination such
as for example severance payments or any payment for a notification
period extending beyond the Closing Date.
The parties intend to dissolve the lease agreement for the Del Rio
facility against payment of lease balance if such transaction does not
cause any excessive costs to one of the Parties (such as for example
payment of prepayment penalties or negative tax effects). The Parties
will after the execution hereof engage in negotiations on such
transaction.
Purchaser is entitle to terminate the lease agreements for the Zurich
and the Elk Grove facilities by serving six months' notice for Zurich
and 30 days notice for Elk Grove.
7.4 INFORMATION OF EMPLOYEES. Seller shall comply with the Closing Date
with all legal requirements regarding information of and consultation
with the Company's employees. Seller shall inform Purchaser on such
requirements and on the form and content of the information to be
disclosed to the employees and shall coordinate such. information with
the Purchaser.
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7.5 EMPLOYMENT OF SELLER. Seller shall conclude not later than at the
Closing Date a consultancy agreement with Purchaser. Seller and
Purchaser will negotiate such agreement after the execution hereof
taking into account the needs of the business.
7.6 SELLER'S COOPERATION. Prior to the Closing Date, Seller shall make
available to the Purchaser and its representatives during normal
business hours all of its books and records in addition to its
employees so that Purchaser may continue its investigation of the
business and affairs of the Company.
7.7 TRANSITION ASSISTANCE. From the date hereof and until three (3)
years after the closing Date, Seller shall not in any manner take any
action which is designed, intended or might be reasonably anticipated
to ave the effect of discouraging customers, suppliers, lessors and
other business associates from maintaining the same business
relationship with purchaser after the date of this Agreement as were
maintained with the Companies prior to the date hereof.
7.8 ENVIRONMENTAL ISSUES. Seller shall until March 31, 1998 remove or
remedy at his own cost:
- the oil spill at the tank in Lottstetten;
- the oil spill (out of barrels) in Del Rio.
Seller shall - as the owner of the facility in Lottstetten - remain
liable for the TCA contamination and hold the Companies and Purchaser
harmless from any claims relating to or in connection with such
contamination.
If the Purchaser or Ibico Portuguesa Ltda. are ordered by competent
authorities or directly compelled by statutory law to remove the roof
tiles containing asbestos fibres at the Xxxxx de Valdevez facility,
Seller shall pay to Purchaser the book value of such roof tiles
existing at such date on the basis of the depreciation rates currently
used by Ibico Portuguesa Ltda. Seller shall, furthermore, indemnify
Purchaser for costs incurred in the disposal of such tiles as far as
such costs are caused by the fact that the tiles contain asbestos
fibres.
The limitations set forth in art. 5.5 of this Agreement are not
applicable to Seller's obligations under this article.
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ARTICLE 8
TRANSFER OF MANAGEMENT RESPONSIBILITY
Immediately after the Closing, Purchaser takes over full responsibility for the
Company's management and operations.
ARTICLE 9
TAXES
Any Swiss taxes or other charges which become due in connection with the
transfer of the Shares by Seller to Purchaser under this agreement shall be at
the charge of Seller. If Swiss stamp taxes are levied on the purchase price
because Purchaser uses the services of a Swiss security dealer such stamp
taxes, however, shall be borne by Purchaser. Seller shall be liable for and
pay when due all Taxes to be paid by the Companies due to any reassessment of
Taxes for any periods and events before the Closing Date. Seller is, in
particular, liable for any Taxes to be paid on any constructive dividends paid
by the Companies to Seller or to third parties before the Closing Date and for
any Taxes to be paid due to any violation by any of the Companies prior to or
on the Closing Date of agreements they have concluded with tax authorities.
Seller, furthermore, shall be liable for any income taxes assessed on the
capital gain he realizes in the sale of the Shares. However, until the fifth
anniversary of the Closing Date, Purchaser shall not engage in any of the
following transactions, unless written consent is given by Seller:
- payment of any dividends by the Company on the basis of earnings
accrued before December 31, 1997;
- liquidation of the Company;
- merger of the Company into another company;
- payment of the Purchase Price, directly or indirectly, out of the
funds of the Company or its Subsidiaries.
Seller shall not withhold its consent to any of the above transactions if
Purchaser can prove with a private ruling of the cantonal tax authorities of
the canton in which Seller is domiciled (for income taxes) and of the Federal
Tax Authorities (for withholding taxes) that the planned transaction will not
result in a qualification of the gain realized by Seller in the
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sale of the Shares as being taxable income. Seller shall fully cooperate with
Purchaser in order to obtain such ruling.
ARTICLE 10
MISCELLANEOUS
10.1 COSTS. Each party bears the fees of its counsel and advisors.
Purchaser consents, however, to the fact that the Company in 1997 but
before the Closing Date has paid up to CHF 50,000.-- to Seller's
Counsel for the preparation of alternative sale transactions (going
public, participation of a financial investor, preparation due
diligence etc.) and up to CHF 200,000.-- to Master Consulting AG for
consultancy services rendered in connection with the evaluation of a
financial investor and up to CHF 150,000.-- to Revisuisse Price
Waterhouse and KPMG Fides for preparation of special audit statements
and CHF 40,000.-- to BMG for an environmental audit.
10.2 NOTICE. Any notice, request, instruction or other document deemed by
either Party to be necessary or desirable to be given to the other
Party, shall be in writing and shall be telefaxed or mailed by
registered mail addressed as follows:
If to Purchaser: Copy to:
General Binding Corp. Vedder, Price, Xxxxxxxx &
attn. President & CEO Kammholz
One GBC Plaza attn. Xxxxxx X. Xxxxxxx
Northbrook IL 60062 Xxxxxxx, XX 00000
XXX XXX
If to Seller: Copy:
Xx. X. Xxxxxxxxxxxxx Xx. X. Xxxxxxxx
Xxxxxxxxxx 00 Xxxxx & XxXxxxxx
8803 Ruschlikon Xxxxxxxxxxxxxxx 000
Xxxxxxxxxxx 0000 Xxxxxx
Xxxxxxxxxxx
Each Party may at any time change its address by giving notice to the
other party in the manner described above.
10.3 NO WAIVER. The failure of any of the Parties to enforce a provision
of this Agreement or any rights with respect thereto shall in no way
be considered as a waiver of such
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provisions or rights or in any way to affect the validity of this
Agreement. The waiver of any claim for breach of this Agreement by a
Party hereto shall not operate as a waiver of any claim pertaining to
another, prior or subsequent breach.
10.4 ENTIRE AGREEMENT. This instrument embodies the entire agreement
between the Parties hereto with respect to the transaction
contemplated herein and there have been and are no agreements or
warranties between the Parties other than those set forth or provided
for herein. This Agreement may be amended only in writing through a
document signed by all the parties hereto.
10.5 BINDING ON SUCCESSORS. All of the terms, provisions and conditions of
this Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective heirs, successors and assigns.
10.6 ANNOUNCEMENTS. Seller and Purchaser shall consult before issuing
press releases or otherwise making any public statements or any
statements to the Company's employees with respect to this Agreement
and shall not issue any such press release or statement without the
prior approval of the other Party.
10.7 ASSIGNMENT. Purchaser may assign this Agreement to a wholly owned
subsidiary of Purchaser. Purchaser, however, in such case remains
fully liable for all liabilities under this Agreement.
ARTICLE 11
GOVERNING LAW AND ARBITRATION
11.1 GOVERNING LAW. This Agreement shall be subject to and governed by
Swiss Law.
11.2 ARBITRATION. All disputes arising out of this Agreement or in
connection with this Agreement shall be solely and finally settled by
a court of arbitration consisting of three arbitrators in accordance
with the international arbitration rules of the Zurich Chamber of
Commerce. The place of arbitration shall be Zurich. The court of
arbitration shall conduct the proceedings and all awards shall be
rendered in the English language.
IN WITNESS WHEREOF, the parties thereto have executed this agreement as of the
date and year first above written.
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Seller: Purchaser:
General Binding
/s/ X. XXXXXXXXXXXXX /s/ XXXXXX X. XXXXXXXX
----------------------- -----------------------
Xx. X. Xxxxxxxxxxxxx
Annexes
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AMENDMENT TO STOCK PURCHASE AGREEMENT
BETWEEN
GENERAL BINDING CORPORATION
AND
XX. X. XXXXXXXXXXXXX
WHEREAS, Ibico, under a license contract with Xx. xxx Xxxxxxxxxxx (the
"License Agreement"), has had a license to use certain patents and know-how to
produce PolyCombs;
WHEREAS, on the day before the execution of the Stock Purchase Agreement, Ibico
has purchased the patents and the know-how on which the License Agreement was
based (the "Purchase Agreement");
NOW, THEREFORE, the Parties come to the following agreement:
1. CONSIDERATION PAID BY IBICO UNDER THE PURCHASE AGREEMENT
The Parties herewith agree that the net present value (applying a
discount rate of 6%) of the consideration to be paid by Ibico under
the Purchase Agreement shall be considered as Funded Debt under the
Stock Purchase Agreement.
2. PAYMENT TO SELLER
Purchaser shall pay to Seller as a recovery of the reduction of the
Purchase Price effected by the application of art. 1 of this Amendment
75% of the license fees Ibico would have had to pay under the License
Agreement for ten years after the Closing Date up to an amount equal
to the amount of Funded Debt taken into account in the purchase price
calculation under the Stock Purchase Agreement pursuant to art. 1 of
this Agreement (for the purpose of calculating these payments HK (alt)
as defined in the License Agreement shall be calculated on the basis
of actual production costs incurred by Purchaser). Seller shall,
however, not have any of the other rights Xx. xxx Xxxxxxxxxxx had
under the License Agreement than the right to such payments.
3. NO FURTHER CHANGES
This amendment does not lead to any changes or amendments other than
those described in art. 1 and 2 above in the Stock Purchase Agreement
between the Parties.
4. APPLICATION OF PROVISIONS OF THE STOCK PURCHASE AGREEMENT
32
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Art. 1, 10 and 11 of the Purchase Agreement are applicable
also to this amendment.
Zurich, October 17, 1997
General Binding Corporation
/s/ XXXXXX X. XXXXXXXX /s/ X. XXXXXXXXXXXXX
------------------------- ------------------------
Xx. X. Xxxxxxxxxxxxx
