Exhibit 2.1
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STOCK PURCHASE AGREEMENT BETWEEN
STEELCASE INC.
AND
STRAFOR FACOM S.A.
Effective as of March 31, 1999
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (THIS "AGREEMENT") IS MADE AND ENTERED INTO
AS OF THIS 21ST DAY OF APRIL, 1999, BY AND BETWEEN STRAFOR FACOM S.A., A FRENCH
societe anonyme ("SELLER") AND STEELCASE INC., A MICHIGAN CORPORATION
("PURCHASER").
RECITALS:
A. Seller is the record and beneficial owner (or if not the record owner,
the beneficial owner) of certain Steelcase Strafor Shares (as defined below)
equaling approximately fifty percent (50%) of the outstanding capital stock of
Steelcase Strafor S.A., a French societe anonyme (the "Company").
B. This Agreement contemplates a transaction in which Purchaser will, or
will cause its designee to, purchase from Seller, and Seller will sell to
Purchaser or its designee, the Steelcase Strafor Shares and certain shares of
other affiliated companies, upon the terms and conditions set forth herein.
NOW, THEREFORE,
1. DEFINITIONS AND TERMS
1.1 Definitions. As used in this Agreement, the following terms shall
have the meaning set forth or as referenced below:
"Accounts Receivable" shall mean (i) all trade accounts receivable and
other rights to payment from customers and the full benefit of all security for
such accounts or debts, including all trade accounts receivable representing
amounts receivable in respect of goods shipped, products sold or services
rendered to customers, and (ii) all other accounts or notes receivable relating
to Company and the full benefit of all security for such accounts or notes, and
(iii) any claims, remedies and other rights related to any of the foregoing.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person at any time during the period for which the determination of
affiliation is being made. The term "control" (including, with correlative
meaning, the terms "controlled by" and "under common control with"), as used
with respect to any Person, means the possession, directly or indirectly, of the
power to elect a majority of the board of directors (or other governing body) or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"Affiliate Lessees" shall have the meaning set forth in 5.10(a).
"Aggregate Non-Tax Indemnification Limit" shall mean Two Hundred and Fifty
Million French francs (FRF 250,000,000).
"Agreement Regarding Leases" shall have the meaning set forth in Section
8.1(d).
"Assignment Agreement" shall have the meaning set forth in Section 8.1(e).
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banks in Grand Rapids, Michigan, U.S.A. or Strasbourg, France are
authorized or obligated by Law to close.
"Claim" shall have the meaning set forth in Section 7.5.
"Closing" shall have the meaning set forth in Section 2.2.
"Closing Date" shall have the meaning set forth in Section 2.2.
"Company" shall have the meaning set forth in the Recitals.
"Company Business" shall have the meaning set forth in Section 5.8(b).
"Company Employees" shall have the meaning set forth in Section 3.10(j)(i).
"Competition Laws" shall mean Laws (as defined herein) that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization, lessening of competition or restraint of trade.
"Confidentiality Agreement" shall mean the Confidentiality Agreement by and
between Seller and Purchaser, dated December 15, 1998.
"Consolidated Subsidiaries" shall mean those Subsidiaries whose assets,
liabilities, financial position, results of operations and cash flows are
reflected in the consolidated financial statements of Company as indicated in
Schedule 3.1(d).
"Contract" shall mean any agreement, commitment, contract or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
"De Minimis Amount" shall have the meaning set forth in Section 7.2(d).
"De Minimis Threshold" shall have the meaning set forth in Section 7.2(d).
"Details Joint Venture Agreement" shall mean that certain Joint Venture
Agreement between Office Details Inc., a corporation organized under the laws of
the State of Michigan, United States of America, and Seller, dated January 26,
1998.
"Details Purchase Price" shall have the meaning set forth in Section
2.1(b).
"Details Shares" shall have the meaning set forth in Section 3.3(a).
"Disclosure Schedule" shall have the meaning set forth in Section 10.1.
"Effective Date" shall mean 23:59 hours on March 31, 1999.
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"Employee Plans/Agreements" shall have the meaning set forth in Section
3.10(j)(i).
"Encumbrance" shall mean any charge, lien, option, pledge, right of
usufruct, security interest, mortgage, hypothecation, assignment, attachment,
title retention arrangement, right of first refusal or limitation of any kind,
including any restriction on use, voting, transfer, receipt of income or
exercise of any other attribute of ownership.
"Environmental Laws" shall have the meaning set forth in Section 7.6.
"Financial Statements" shall have the meaning set forth in Section 3.6.
"GAAP" shall mean generally accepted accounting principles and practices in
effect in France.
"Governmental Authorizations" shall mean all licenses, permits, consents,
exemptions and other authorizations and approvals required to carry on the
business of the Company and each Subsidiary as conducted as of the date of this
Agreement under applicable Laws.
"Governmental Entity" shall mean any supranational, regional, national,
federal, state, provincial or local legislative, administrative, judicial or
executive authority of any nature, including any agency, branch, bureau,
department, entity, court or other tribunal.
"Indemnification Threshold" shall have the meaning set forth in Section
7.2(d).
"Indemnitee" shall mean a party entitled to indemnification pursuant to
Article 7.
"Indemnitor" shall mean a party liable for indemnification pursuant to
Article 7.
"Intellectual Property" shall have the meaning set forth in Section 3.10(l)
"Inventories" shall mean all inventory, including raw materials, packaging
supplies, work-in-process and finished goods.
"Joint Venture Agreement" shall mean that certain (Joint Venture) Agreement
by and between Steelcase Inc. and Forges de Strasbourg S.A. (now known as
Strafor Facom S.A.), dated June 27, 1974, as amended.
"Knowledge", a Person shall be deemed to have "Knowledge" of a particular
fact or other matter if:
(a) A Person who is an individual will be considered to have
"Knowledge" of a fact or other matter (i) if such Person is actually aware of
such fact or other matter, or (ii) if such Person could reasonably be expected
to become aware of such fact or other matter in the course of the conduct of
his/her duties within the Company or any Subsidiary.
(b) A Person other than an individual will be considered to have
"Knowledge" of a fact or other matter if any individual who is serving, or who
has at any time served, as a director, manager or senior executive, officer,
partner or trustee of such Person (or in
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any similar capacity) has, or at any time had, Knowledge of such fact or other
matter (as defined in (a)).
(c) Seller also shall be considered to have "Knowledge" of any fact
or matter of which any individual nominated or appointed by Seller or Company
who is serving, or who has at any time served, as a director, manager or senior
executive, officer, partner or trustee of Company or any Subsidiary has
Knowledge (as defined in (a)).
"Law" shall include any supranational, regional, national, federal, state,
provincial or local legislative or administrative treaty, law, statute, code,
ordinance or regulation of any nature, including directives and regulations of
the competent regulatory bodies of the European Union and the European Economic
Area.
"Liabilities" shall mean any and all debts, liabilities and obligations,
whether accrued or fixed, known or unknown, absolute or contingent, matured or
unmatured, primary or secondary, secured or unsecured, determined or
determinable, whenever arising, and whether or not required to be reflected on a
balance sheet prepared in accordance with GAAP.
"Litigation" shall have the meaning set forth in Section 3.10(d).
"Losses" shall have the meaning set forth in Section 7.1.
"Material Adverse Effect" shall mean an effect that is materially adverse
to the business, results, operations, condition (financial or otherwise),
affairs, assets or Liabilities of the referenced Person. "Material Adverse
Effect" does not mean an adverse change resulting from industry consolidations,
an adverse change in capital or foreign exchange markets or in the availability
of capital generally, or in general economic conditions generally affecting the
businesses in which Seller, Purchaser, the Company or their respective
Affiliates are engaged.
"Material Contracts" shall have the meaning set forth in Section
3.10(h)(xii).
"Order" shall mean any order, writ, judgment, injunction, decree, ruling,
assessment, stipulation, determination or award entered by or with any
Governmental Entity or arbitrator.
"Ordinary Course of Business" shall mean, with respect to any Person, an
action taken by such Person if such action is consistent in nature, scope and
magnitude with the past practices of such Person and is taken in the ordinary
course of the normal day-to-day operations of such Person.
"Permitted Encumbrances" shall mean (i) Encumbrances approved in writing by
Purchaser, or arising or resulting from any action taken by Purchaser or any of
its Affiliates other than Company and the Subsidiaries, (ii) statutory
Encumbrances arising out of operation of Law with respect to a Liability
incurred in the Ordinary Course of Business and which is not delinquent, (iii)
such Encumbrances and other imperfections of title as do not materially detract
from the value or impair the use of the property subject thereto, (iv) liens for
Taxes not yet subject to penalties for nonpayment or which are being actively
contested in good faith by appropriate Litigation, (v) mechanics',
materialmens', carriers', workmens', warehousemens',
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repairmens', landlords' or other like liens and security obligations that are
not delinquent or (vi) restrictions on the transfer of securities arising under
any securities Law.
"Person" shall mean an individual, a corporation, a general or limited
partnership, a limited liability company, an association, a trust or other
entity or organization or Governmental Entity.
"Pohlschroder Purchase Price" shall have the meaning set forth in Section
2.1(d).
"Pohlschroder Shares" shall have the meaning set forth in Section 3.3(c).
"Premises" shall have the meaning set forth in Section 5.10(a).
"Products" shall have the meaning set forth in Section 3.10(m).
"Purchase Prices" shall mean, collectively, the Steelcase Strafor Purchase
Price, the Details Purchase Price, the Werndl Purchase Price and the
Pohlschroder Purchase Price.
"Purchaser" shall have the meaning set forth in the Recitals.
"Recent Balance Sheet" shall have the meaning set forth in Section 3.6.
"Seller" shall have the meaning set forth in the Recitals.
"Shares" shall mean, collectively, the Steelcase Strafor Shares, the
Details Shares, the Pohlschroder Shares and the Werndl Shares.
"Steelcase SAS" shall mean Steelcase SAS, a societe par actions simplifiee,
organized under the laws of France.
"Steelcase Strafor Shares" shall have the meaning set forth in Section
3.1(f).
"Subsidiaries" shall have the meaning set forth in Section 3.1(d).
"Tax" or "Taxes" shall mean all taxes, charges, duties, fees, levies or
other assessments, including but not limited to, income, corporation, excise,
property, sales, value added, gross receipts, profits, gains, license,
withholding (with respect to compensation or otherwise), payroll, employment,
unemployment, disability, wealth, welfare, net worth, capital gains, purchase,
transfer, stamp, registration, social security, environmental, occupation,
franchise, alternative minimum, estimated or other similar taxes, imposed by any
Tax Authority, and including any interest, penalties and additions attributable
thereto.
"Tax Authority" shall mean, with respect to any Tax, the Governmental
Entity that imposes such Tax and the agency (if any) charged with the collection
of such Tax for such entity or subdivision.
"Tax Law" shall mean any Law relating to any Tax.
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"Tax Return" or "Tax Returns" shall mean any return, report, declaration,
information return, statement or other document filed or required to be filed
with any Tax Authority, in connection with the determination, assessment or
collection of any Tax or the administration of any Laws relating to any Tax
Laws.
"Waste" shall have the meaning set forth in Section 7.6.
"Werndl Purchase Price" shall have the meaning set forth in Section 2.1(c).
"Werndl Shares" shall have the meaning set forth in Section 3.3(b).
1.2 Other Definitional Provisions.
1.2(a) The words "hereof", "herein", "hereto" and "hereunder" and
words of similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
1.2(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
1.2(c) The word "including", and words of similar import, when used
in this Agreement, shall mean "including, but not limited to" and "including,
without limitation".
1.2(d) The terms "dollars" and "US$" shall mean United States
dollars, the lawful currency of the United States of America.
1.2(e) The terms "French Francs" and "FRF" shall mean French Francs,
the lawful currency of France.
1.2(f) References to "Articles", "Sections", "Schedules" or
"Exhibits" shall mean the Articles or Sections of, or the Schedules or Exhibits
to, this Agreement, as the case may be, except as may be otherwise specified.
1.2(g) The term "non-assessable" shall mean that the owners of record
of the relevant shares are not liable, solely by reason of such shareholding,
for the payment of any taxes, duties, wages, or other amounts for which the
corporate Person which issued such shares is liable.
2. PURCHASE AND SALE OF STOCK
2.1 Sale and Transfer of Common Stock. Subject to the terms and
conditions of this Agreement, Purchaser agrees to purchase, or to cause its
designees to purchase, at the Closing, and Seller agrees to sell and transfer,
and to cause its nominees to sell and transfer, to Purchaser and/or its
designees at the Closing:
2.1(a) the Steelcase Strafor Shares, free and clear of all
Encumbrances (except Permitted Encumbrances), for an aggregate price of Two
Hundred Twenty Million United States dollars (US$220,000,000) (the "Steelcase
Strafor Purchase Price");
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2.1(b) the Details Shares, free and clear of all Encumbrances (except
Permitted Encumbrances), for an aggregate price of FRF 1 (the "Details Purchase
Price"), and thereby to terminate the Details Joint Venture Agreement and all
ancillary agreements pertaining thereto in accordance with Section 13.02 of such
Details Joint Venture Agreement;
2.1(c) the Werndl Shares, free and clear of all Encumbrances (except
Permitted Encumbrances), for an aggregate price of DM 9,600,000 (the "Werndl
Purchase Price"); and
2.1(d) the Pohlschroder Shares, free and clear of all Encumbrances
(except Permitted Encumbrances), for an aggregate price of FRF 1 (the
"Pohlschroder Purchase Price").
2.2 Closing. The purchase and sale of the Shares (the "Closing") shall
take place at the Paris offices of Xxxxx & XxXxxxxx (32 Xxxxxx Xxxxxx, 00000
Xxxxx, Xxxxxx), at 10:00 a.m. local time, on the later of (i) April 22, 1999, or
(ii) the fifth (5th) Business Day following the satisfaction or waiver of the
conditions precedent specified in Article 6 (other than the conditions to be
satisfied on the Closing Date, but subject to waiver or satisfaction of such
conditions), or at such other date and time as the parties mutually agree upon
orally or in writing (which date and time are designated as the "Closing Date").
At the Closing, Seller shall deliver to Purchaser, among other things as
provided in Section 8.1, ordres de mouvement and/or such other transfer
documents necessary to effect the transfer of the Shares to Purchaser (or its
designees) and the registration of the Shares in the name of Purchaser (or its
designees) against, among other things as provided in Section 8.2, payment of
the Purchase Prices therefor by wire transfer(s) in accordance with written
instructions given by Seller to Purchaser not less than five (5) Business Days
prior to the Closing.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller makes the following representations and warranties to Purchaser,
each of which is true and correct on the date hereof and will be true and
correct on the Closing Date (as though made then and as though the Closing Date
were substituted for the date of this Agreement throughout this Article 3),
shall be unaffected by any investigation heretofore or hereafter made by
Purchaser or any agent or representative of Purchaser, other than as
specifically disclosed in the Disclosure Schedule delivered to Purchaser at the
time of execution of this Agreement, and shall survive the Closing of the
transactions as provided for herein.
3.1 Company.
3.1(a) Organization. Company is a societe anonyme duly organized,
validly existing and in good standing under the Laws of France.
3.1(b) Power. Company has all requisite legal power and authority to
own, operate and lease its properties and to carry on its business.
3.1(c) Qualification. Company is duly licensed or qualified to do
business as a foreign corporation, and is in good standing, in each jurisdiction
wherein such licensing or qualification is necessary except where the lack of
such qualification would not have a Material Adverse Effect on the Company. The
jurisdictions in which Company is licensed or qualified to do business are
listed in Schedule 3.1(c).
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3.1(d) Subsidiaries. Schedule 3.1(d) contains a complete and
accurate listing of all corporations, partnerships and other entities in which
Company owns any interest (the "Subsidiaries"), including, for each such
Subsidiary, its name, its legal form of organization, its jurisdiction of
organization, the other jurisdictions in which it has a branch, representative
office or other registered presence or is otherwise authorized to do business,
and whether its assets, liabilities, financial position, results of operations
and cash flows are reflected in the consolidated financial statements of
Company. Each Subsidiary is duly organized, validly existing and in good
standing, as applicable, under the Laws of its jurisdiction of organization.
Each Subsidiary is duly licensed or qualified to do business as a foreign
business entity, and is in good standing, in each jurisdiction wherein such
licensing or qualification is necessary except where the lack of such
qualification would not have a Material Adverse Effect on such Subsidiary.
3.1(e) Corporate Documents, Etc. Seller has delivered to Purchaser
true, correct and complete copies of the articles or certificate of
incorporation or association, company registrations, statuts and other
organizational documents of Company and each Subsidiary as are presently in
effect. The corporate minute book and stock records reflecting the stock or
other share capital of or other participation interest in Company and each
Subsidiary which have been furnished to Purchaser for inspection are true,
correct and complete and accurately reflect all material corporate action taken
by Company and each Subsidiary. On the Closing Date, all such books and records
will be in the possession of Company and the Subsidiaries.
3.1(f) Capitalization. The stated capital stock of Company consists
of FRF1,103,760,000, divided into 2,207,520 ordinary shares of FRF500 each, all
of which shares are validly issued and outstanding, fully paid and
nonassessable. Seller is the record and beneficial owner (or if not the record
owner, the beneficial owner) of 1,103,759 of such issued and outstanding shares
of stock (the "Steelcase Strafor Shares"). The names and jurisdictions of
organization, as applicable, of all of the record owners of the Steelcase
Strafor Shares are set forth on Schedule 3.1(f). All of the outstanding shares
of capital stock of each Subsidiary are validly issued, fully paid and
nonassessable, and, except as set forth in Schedule 3.1(f), Company is the
record and beneficial owner (or if not the record owner, the beneficial owner)
of all such outstanding shares of each Subsidiary free and clear of all
Encumbrances except, in the case of the shares of any individual Subsidiary, the
statuts of such Subsidiary, and Permitted Encumbrances. The names and
jurisdictions of organization, as applicable, of all of the record owners of
shares of capital stock of each Subsidiary are set forth on Schedule 3.1(f).
3.2 Seller.
3.2(a) Organization. Seller is a societe anonyme duly organized,
validly existing and in good standing under the Laws of France.
3.2(b) Power. Seller has full power, legal right and authority to
enter into, execute and deliver this Agreement and the other agreements,
instruments and documents contemplated hereby to be executed and delivered by
Seller, and to carry out the transactions contemplated hereby and thereby.
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3.2(c) Authority. The execution and delivery of this Agreement and
the other documents and instruments to be executed and delivered by Seller
pursuant hereto and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate action on the part
of Seller. No other corporate act or proceeding on the part of Seller or its
shareholders is necessary to authorize this Agreement or the other documents and
instruments to be executed and delivered by Seller pursuant hereto or the
consummation of the transactions contemplated hereby and thereby. This
Agreement constitutes, and when executed and delivered, the other documents and
instruments to be executed and delivered by Seller pursuant hereto, will
constitute, valid and binding agreements of Seller, enforceable in accordance
with their respective terms, except as such may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights generally,
by general equitable principles and by the power of a court to deny enforcement
of remedies generally based on public policy.
3.3 Shares; Title.
3.3(a) Details Shares. Seller is the record and beneficial owner (or
if not the record owner, the beneficial owner) of 13,749 issued and outstanding
shares of the capital stock (Series B) and 13,750 bons de souscription d'actions
(Series B) of Details S.A., a French societe anonyme (the "Details Shares").
3.3(b) Werndl Shares. Seller is the record and beneficial owner (or
if not the record owner, the beneficial owner) of 200,000 issued and outstanding
shares of the capital stock (representing approximately 5% of the capital stock)
of Werndl BuroMobel AG, a German stock corporation (the "Werndl Shares").
3.3(c) Pohlschroder Shares. Seller is the record and beneficial
owner (or if not the record owner, the beneficial owner) of two (2) quotas in
the nominal amounts of DM 269,000 and DM 31,000, respectively, in the capital
stock of Pohlschroder GmbH, a German limited liability company (the
"Pohlschroder Shares").
3.3(d) Title. Seller has good, valid and marketable title to the
Shares, free and clear of all Encumbrances, except for Permitted Encumbrances
and, with respect to the Steelcase Strafor Shares, Purchaser's rights under the
Joint Venture Agreement and the statuts of Company.
3.4 Issuance and Redemption of Share Capital. Except as provided in the
Joint Venture Agreement and the statuts of Company, there are no outstanding
warrants, options, agreements, subscriptions, convertible or exchangeable
securities, preemptive rights or other commitments pursuant to which Company or
any Subsidiary is or may become obligated to issue, sell, purchase, return or
redeem any shares of capital or other securities of Company or such Subsidiary
and no equity securities of Company or any Subsidiary are reserved for issuance
for any purpose.
3.5 No Violation; Government Consents. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
(with or without notice or lapse of time, or both): (a) will violate any Law or
any Order to which Seller, Company
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or any Subsidiary is subject, (b) except as set forth on Schedule 3.5 or as
required under Competition Laws, will require any approval, consent, exemption
or other action by any Governmental Entity, or (c) subject to obtaining the
consents referred to in Schedule 3.5 and any consents required under Competition
Laws, will violate or conflict with, or constitute a default under, or will
result in the termination of, or accelerate the performance required by, or
result in the creation of any Encumbrance upon any of the assets of Company or
any Subsidiary (or any portion of the Shares), under any term or provision of
the articles or certificate of incorporation, statuts or other organizational
documents of Seller, Company or any Subsidiary, of any Contract to which Seller
is a party or by which Seller or any of its respective assets or properties are
bound or affected or, to Seller's Knowledge, of any material Contract to which
Company or any Subsidiary is a party or by which Company or any Subsidiary or
any of their respective assets or properties are bound or affected.
3.6 Financial Statements. Seller has delivered to Purchaser true and
complete copies of the audited consolidated balance sheets of Company as of
December 31, 1996, 1997 and 1998, and the related statements of income and cash
flows for the years then ended (including the notes contained therein or annexed
thereto), which balance sheets, statements of income and cash flows have been
reported on, and are accompanied by, the signed, unqualified opinions of Xxxxxx
Xxxxxxxx LLP, independent auditors for Company for such years (referred to
collectively herein as the "Financial Statements"). The audited consolidated
balance sheet of Company as of December 31, 1998, shall be referred to herein as
the "Recent Balance Sheet". All of the Financial Statements are true, complete
and accurate, have been prepared in accordance with GAAP applied on a consistent
basis, have been prepared in accordance with the books and records of Company
and the Consolidated Subsidiaries, and fairly present, in accordance with GAAP,
the assets, liabilities and financial position, the results of operations and
cash flows of Company and the Consolidated Subsidiaries as of the dates and for
the years and periods indicated.
3.7 Tax Matters.
3.7(a) Provision For Taxes. The provision made for Taxes on the
Recent Balance Sheet is sufficient for the payment of all Taxes of Company and
the Consolidated Subsidiaries accrued as of the date of the Recent Balance
Sheet. Since the date of the Recent Balance Sheet, Company and the Consolidated
Subsidiaries have not incurred any Taxes other than Taxes incurred in the
Ordinary Course of Business consistent in type and amount with past practices of
Company and the Consolidated Subsidiaries.
3.7(b) Tax Returns Filed. Except as set forth on Schedule 3.7(b),
all Tax Returns required to be filed by or on behalf of Company and any
Consolidated Subsidiary have been timely filed and when filed were true and
correct in all material respects, and the Taxes shown as due thereon were paid
or adequately accrued. Company and each Consolidated Subsidiary has duly
withheld and paid all Taxes which it is required to withhold and pay relating to
salaries and other compensation heretofore paid by Company or such Consolidated
Subsidiary.
3.7(c) Tax Notices. Neither Company nor any Consolidated Subsidiary
has received from any Tax Authority any notice of underpayment of Taxes or other
deficiency which has not been paid or any objection to any Tax Return filed by
Company or any Consolidated
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Subsidiary. There are no outstanding agreements or waivers extending the
statutory period of limitations applicable to any Tax Return.
3.7(d) Consolidated Group. Schedule 3.7(d) lists every year Company
or any Consolidated Subsidiary was a member of an affiliated group of Persons
that filed a consolidated Tax Return on which the statute of limitations does
not bar a tax assessment, and each corporation that has been part of such group.
No affiliated group of Persons of which Company or any Subsidiary has been a
member has discontinued filing consolidated returns during the past five years.
3.7(e) Other. Since December 31, 1997 Company has not (i) applied
for any tax ruling, (ii) entered into a closing or settlement agreement with any
Taxing Authority, or (iii) become a party to any tax indemnity, tax allocation
or tax sharing agreement.
3.8 [Reserved]
3.9 No Brokers or Finders. Neither Seller nor any of its respective
directors, employees, shareholders or agents has retained, employed or used any
broker or finder in connection with the transaction contemplated herein or in
connection with the negotiation hereof.
3.10 Other Representations and Warranties. To Seller's Knowledge:
3.10(a) Inventory. All Inventory of Company and the Consolidated
Subsidiaries accounted for in the Recent Balance Sheet is valued in accordance
with GAAP in a manner consistent with past practice.
3.10(b) Absence of Certain Changes. Since the date of the Recent
Balance Sheet, Company and the Consolidated Subsidiaries have conducted their
businesses in the Ordinary Course of Business and there has not been:
(i) No Adverse Change. Any change in the financial
condition, assets, Liabilities, business, or operations of Company or any
Consolidated Subsidiary, which constitutes a Material Adverse Effect on
Company and the Subsidiaries taken as a whole;
(ii) No Damage. Any material loss, damage, destruction or
condemnation not covered by insurance, affecting Company's or a
Consolidated Subsidiary's business or properties;
(iii) No Increase in Compensation. Any increase in the
compensation, salaries or wages payable or to become payable to any Company
Employee, or any grant, increase, payment or accrual of any bonus or other
employee benefit to any Company Employee, or any entry into any employment,
severance or similar Contract with any Company Employee, except in the
Ordinary Course of Business consistent with past practice;
(iv) No Labor Disputes. Any labor dispute or disturbance of
the Company or any Subsidiary, other than routine individual grievances
which are not
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material to the business, financial condition or results of
operations of Company or such Subsidiary;
(v) Contracts. Entry into any amendment to, termination
of, receipt of notice of termination of, or waiver of any material rights
under, any material Contract or transaction by Company or any Consolidated
Subsidiary, except in the Ordinary Course of Business consistent with past
practice;
(vi) No Disposition of Property. Any sale, lease or other
transfer or disposition of any material properties or assets of Company or
any Consolidated Subsidiary, except for the sale of inventory items in the
Ordinary Course of Business;
(vii) No Indebtedness. Any indebtedness for borrowed money
incurred, assumed or guaranteed by Company or any Consolidated Subsidiary,
except in the Ordinary Course of Business consistent with past practice;
(viii) No Encumbrance. Any Encumbrance made on any of the
material properties or assets of Company or any Consolidated Subsidiary,
except for Permitted Encumbrances incurred in the Ordinary Course of
Business consistent with past practice;
(ix) Loans and Advances. Any material loan or advance
(other than advances to Company Employees in the Ordinary Course of
Business for travel and entertainment in accordance with past practice)
made by Company or any Consolidated Subsidiary to any Person, including,
but not limited to, any Affiliate;
(x) Credit. Any grant of material credit to any customer
or distributor of Company or any Consolidated Subsidiary on terms or in
amounts more favorable than those which have been extended to such customer
or distributor in the past, any other material change in the terms of any
credit heretofore extended by Company or any Consolidated Subsidiary, or
any other material change of Company's or any Consolidated Subsidiary's
policies or practices with respect to the granting of credit;
(xi) Accounting Methods. Any change in the accounting
methods used by Company or any Consolidated Subsidiary; or
(xii) General. Any entry into a Contract by Company or any
Consolidated Subsidiary to do any of the foregoing.
3.10(c) Absence of Undisclosed Liabilities. Except as and to the
extent specifically disclosed in Schedule 3.10(c), Company and the Consolidated
Subsidiaries do not have any Liabilities as of the date of this representation
and warranty other than (a) Liabilities reflected or reserved against on the
Recent Balance Sheet or in the notes thereto; (b) Liabilities incurred in the
Ordinary Course of Business since the date of the Recent Balance Sheet; and (c)
Liabilities which, individually or in the aggregate, have not had and will not
have a Material Adverse Effect on Company and the Subsidiaries taken as a whole.
3.10(d) No Litigation. Except as set forth in Schedule 3.10(d),
there is no action, suit, arbitration, proceeding, audit or investigation,
whether civil, criminal or administrative, by
12
or before any Governmental Entity or arbitrator, ("Litigation") pending or
threatened against Company or any Consolidated Subsidiary, or any of their
respective directors (in such capacity), which relates to their respective
businesses or any of their assets or which challenges or may have the effect of
delaying, making illegal or otherwise interfering with the transaction
contemplated by this Agreement. Except as set forth in Schedule 3.10(d), neither
Company nor any Consolidated Subsidiary nor any of their respective businesses
or assets is subject to any Order that is not generally applicable.
3.10(e) Compliance With Laws and Orders.
(i) Compliance. Company and each Consolidated Subsidiary
is in material compliance with all Laws and Orders applicable to its
ownership and operation of its assets and its business as presently
conducted and with the Governmental Authorizations of Company and each
Consolidated Subsidiary described in Section 3.10(e)(ii) (other than those
set forth in Schedule 3.10(e)(ii)). Neither Company nor any Consolidated
Subsidiary has received notice of any violation or alleged violation of any
such Law, Order or Governmental Authorization.
(ii) Licenses and Permits. Company and each Consolidated
Subsidiary has each Governmental Authorization required for the conduct of
its business (as presently conducted) and operation of the Real Property,
the absence of which Governmental Authorization would have a Material
Adverse Effect on the Company or such Consolidated Subsidiary, and each
such Governmental Authorization is in full force and effect, all except as
set forth in Schedule 3.10(e)(ii).
3.10(f) Title to and Condition of Properties.
(i) Marketable Title. Company and each Consolidated
Subsidiary has good and marketable title to (or, in the case of leased
assets, valid leasehold interest in) all of its respective assets and
properties (whether real, personal or mixed and whether tangible or
intangible), free and clear of all Encumbrances except for Permitted
Encumbrances, including, without limitation, Real Property, Intellectual
Property and all assets and properties reflected in the Recent Balance
Sheet, except for Inventory disposed of in the Ordinary Course of Business
since the date of such Recent Balance Sheet.
(ii) Condition. All material property and assets owned or
utilized by Company or any Consolidated Subsidiary are in good operating
condition and repair, free from any defects (except such minor defects as
do not interfere with the use thereof in the conduct of the normal
operations of Company or the respective Consolidated Subsidiary) and have
been maintained consistent with the standards generally followed in the
industry.
(iii) Real Property. Schedule 3.10(f)(iii) sets forth all
real property owned, used or occupied by Company or any Consolidated
Subsidiary (the "Real Property"), including a description of all land, and
all Encumbrances, easements or rights of way of record granted on or
appurtenant to or otherwise affecting such Real Property, the zoning
classification thereof, and all plants, buildings or other structures
located
13
thereon. Schedule 3.10(f)(iii) also sets forth, with respect to
each parcel of Real Property which is leased, the material terms of such
lease. There is not (i) any structure located on any Real Property which
encroaches on or over the boundaries of neighboring or adjacent properties
or (ii) any structure of any other party which encroaches on or over the
boundaries of any of such Real Property. None of the Real Property is
located in a flood plain, flood hazard area, wetland or lakeshore erosion
area within the meaning of any applicable Law. No public improvements have
been commenced and, none are planned, which in either case may result in
special assessments against or otherwise materially adversely affect any
Real Property. No portion of any of the Real Property has been used as a
landfill or for storage or landfill of Waste. Seller has no notice of any
(i) planned or proposed material increase in assessed valuations of any
Real Property, (ii) Order requiring material repair, alteration, or
correction of any existing condition affecting any Real Property or the
systems or improvements thereat, (iii) material condition or defect which
could give rise to an Order of the sort referred to in (ii) above, (iv)
underground storage tanks, or any structural, mechanical, or other defects
of material significance affecting any Real Property or the systems or
improvements thereat (including, but not limited to, inadequacy for normal
use of mechanical systems or disposal or water systems at serving the Real
Property), or (v) work that has been done or labor or materials that has or
have been furnished to any Real Property during the period of six (6)
months immediately preceding the date of this Agreement for which a
material Encumbrance could be filed against any of the Real Property.
(iv) No Condemnation or Expropriation. Neither the whole nor
any portion of the Real Property nor any other assets of Company or any
Consolidated Subsidiary is subject to any Order to be sold or is being
condemned, expropriated or otherwise taken by any Governmental Entity with
or without payment of compensation therefor, nor has any such condemnation,
expropriation or taking been proposed.
3.10(g) Insurance. Set forth in Schedule 3.10(g) is a complete and
accurate list and brief description of all policies of fire, liability, product
liability, workers compensation, health and other forms of insurance presently
in effect with respect to the business, properties and assets of Company and
each Consolidated Subsidiary, and true and correct copies of such policies have
been delivered to Purchaser. Schedule 3.10(g) includes, without limitation, the
carrier, the description of coverage, the limits of coverage, retention or
deductible amounts, amount of annual premiums, date of expiration and the date
through which premiums have been paid with respect to each such policy, and any
pending claims. All such policies are in full force and effect.
3.10(h) Contracts and Commitments.
(i) Real Property Leases. Except as set forth in Schedule
3.10(h)(i), neither Company nor any Consolidated Subsidiary is a party to
or bound by any lease of Real Property involving consideration or other
expenditure in excess of FRF 300,000 annually.
(ii) Personal Property Leases. Except as set forth in
Schedule 3.10(h)(ii), neither Company nor any Consolidated Subsidiary is a
party to or bound by
14
any lease of personal property involving consideration or other
expenditure in excess of FRF 300,000 annually or involving performance over
a period of more than one year.
(iii) Purchase Commitments. Neither Company nor any
Consolidated Subsidiary is a party to or bound by any Contract for the
purchase of Inventory or supplies involving consideration or other
expenditure in excess of FRF 300,000 annually or involving the purchase of
an amount which, together with the amount on hand, constitutes in excess of
twelve (12) months normal usage.
(iv) Sales Commitments. Neither Company nor any
Consolidated Subsidiary is a party to or bound by any Contract for the sale
of Inventory or other assets involving consideration in excess of FRF
300,000 annually, except those made in the Ordinary Course of Business, at
arm's length, and no such Contracts are for a sales price which would
result in an anticipated material loss to the Company or the respective
Consolidated Subsidiary.
(v) Contracts With Affiliates and Certain Others. Neither
Company nor any Consolidated Subsidiary is a party to or bound by any
Contract with any Affiliate or any Company Employee, agent, consultant,
distributor, dealer, sales representative or franchisee entered into
outside the Ordinary Course of Business.
(vi) Powers of Attorney. Neither the Company nor any
Consolidated Subsidiary has given a power of attorney, which is currently
in effect, to any Person for any purpose whatsoever outside the Ordinary
Course of Business.
(vii) Collective Bargaining. Except as set forth in
Schedule 3.10(h)(vii), neither Company nor any Consolidated Subsidiary is a
party to or bound by any collective bargaining Contract with any union,
guild, shop committee or other collective bargaining group. Copies of all
such Contracts have been delivered to Purchaser.
(viii) Loan Agreements. Except as set forth in Schedule
3.10(h)(viii), neither Company nor any Consolidated Subsidiary is a party
to or bound by any loan Contract, promissory note, letter of credit, or
other evidence of indebtedness as a signatory, guarantor or otherwise,
other than indebtedness of less than FRF 300,000.
(ix) Guarantees. Except as set forth in Schedule 3.10(c),
neither Company nor any Consolidated Subsidiary has guaranteed the payment
or performance of any Person, agreed to indemnify any Person, or agreed to
be contingently or secondarily liable for the obligation of any Person,
other than guarantees of indebtedness of less than FRF 300,000.
(x) Restrictive Agreements. Except as set forth in
Schedule 3.10(h)(x), neither Company nor any Consolidated Subsidiary is a
party to or bound by any Contract requiring Company or any Consolidated
Subsidiary to assign any interest in any Intellectual Property, including
any trade secret or proprietary information, or prohibiting or restricting
Company or any Consolidated Subsidiary from competing in any business or
geographical area or soliciting customers or otherwise restricting it from
carrying on its business anywhere in the world in any material respect.
15
(xi) Other Material Contracts. Neither Company nor any
Consolidated Subsidiary is a party to or bound by any Contract involving
consideration or other expenditure in excess of FRF 2,000,000 annually, or
involving performance over a period of more than twelve (12) months, or
which is otherwise individually material to the operations of Company or
any Consolidated Subsidiary or was entered into outside the Ordinary Course
of Business, except as explicitly described in Schedule 3.10(h)(xi) or in
any other Schedule.
(xii) Material Contracts; No Breach or Default. The
Contracts listed in Schedules 3.10(h)(i)-(xi) are referred to herein
collectively as the "Material Contracts", and each individually as a
"Material Contract." Except as disclosed in Schedule 3.10(h)(xii), neither
Company nor any Consolidated Subsidiary is in material breach of or default
under any Material Contract, nor has any event or omission occurred which
with the passage of time or the giving of notice, or both, would constitute
a material breach of or default thereunder or cause the acceleration of any
of Company's or any Consolidated Subsidiary's obligations thereunder or
result in the creation of any Encumbrance on any of the material assets
owned, used or occupied by Company or any Consolidated Subsidiary.
3.10(i) Labor Matters. Within the last three (3) years neither
Company nor any Consolidated Subsidiary experienced any material labor disputes
or any work stoppage, slowdown or picketing due to labor disagreements in
connection with its business. Company and each Consolidated Subsidiary is in
substantial compliance with all applicable Laws respecting employment and
employment practices, terms and conditions of employment and wages and hours,
and is not engaged in any unfair labor practice. The Company and each
Consolidated Subsidiary maintains all works councils, employee representatives
or similar bodies representing Company Employees of the Company or any
Consolidated Subsidiary that are required by Law.
3.10(j) Employee Benefit Plans.
(i) Disclosure. For purposes of this Agreement, "Employee
Plans/Agreements" shall mean all employee benefit plans, funds, programs,
Contracts, policies and arrangements covering or benefiting employees of
the Company or any Subsidiary ("Company Employees"), all employee manuals,
and all written or binding oral statements of policies, practices or
understandings relating to employment, which are provided to, for the
benefit of, or relate to, any Company Employees. All Employee
Plans/Agreements are maintained in accordance with applicable Laws.
(ii) Full Funding. Except as set forth in Schedule
3.10(j)(ii), the funds available under each Employee Plan/Agreement which
is intended to be a funded plan exceed the amounts required to be paid, or
which would be required to be paid if such Employee Plan/Agreement were
terminated, on account of rights vested or accrued as of the Closing Date
(using the actuarial methods and assumptions then used by Company's or the
relevant Consolidated Subsidiary's actuaries in connection with the funding
of such Employee Plan/Agreement).
16
(iii) Payments and Compliance. With respect to each Employee
Plan/Agreement (i) all payments due from Company or any Consolidated
Subsidiary have been made and all amounts have been properly recorded on
the books of Company and the Consolidated Subsidiaries and are reflected in
the Recent Balance Sheet in accordance with GAAP or other generally
accepted accounting principles applicable outside France; (ii) Company and
the Consolidated Subsidiaries have complied with, and each Employee
Plan/Agreement conforms in form and operation to, all applicable Laws in
all respects, and all reports and information relating to each Employee
Plan/Agreement required to be filed with any Governmental Entity have been
timely filed; (iii) all reports and information relating to each Employee
Plan/Agreement required to be disclosed and provided to participants or
their beneficiaries have been timely disclosed or provided; (iv) there are
no Litigation or claims pending (other than routine claims for benefits) or
threatened with respect to any Employee Plan/Agreement or against the
assets of any Employee Plan/Agreement; and (v) all employer and employee
contributions to any Employee Plan/Agreement required by applicable Law
have been made in accordance with applicable Law and past practice.
(iv) Post-Retirement Benefits. No Employee Plan/Agreement
provides benefits, with respect to current or former Company Employees,
beyond their retirement or other termination of service other than (i)
coverage mandated by applicable Law, (ii) death or retirement benefits
under any Employee Plan/Agreement that is an employee pension benefit plan,
(iii) deferred compensation benefits accrued as Liabilities on the books of
Company and the Consolidated Subsidiaries (including the Recent Balance
Sheet), (iv) disability benefits under any Employee Plan/Agreement that is
an employee welfare benefit plan and which have been fully provided for by
insurance or otherwise, or (v) benefits in the nature of severance pay.
(v) No Triggering of Obligations. The consummation of the
transactions contemplated by this Agreement will not (a) entitle any
current or former Company Employee to severance pay, unemployment
compensation or any other payment, or (b) accelerate the time of payment or
vesting, or increase the amount of compensation due to any such current or
former Company Employee.
(vi) Delivery of Documents. There has been delivered to
Purchaser, with respect to each Employee Plan/Agreement:
(a) a copy of the annual report, if any,
for the last two (2) years;
(b) a copy of the summary plan
description, if any, together with each summary of material
modifications, all material employee communications relating to such
Employee Plan/Agreement, and, unless the Employee Plan/Agreement is
embodied entirely in an insurance policy to which Company is a party,
a true and complete copy of such Employee Plan/Agreement, including
all amendments thereto; and
17
(c) if the Employee Plan/Agreement is funded through a
trust or any third party funding vehicle (other than an insurance
policy), a copy of the trust or other funding agreement and the latest
financial statements thereof.
With respect to each Employee Plan/Agreement for which an annual
report has been filed and delivered to Purchaser pursuant to clause (a) of
this Section 3.10(j)(vi), no material adverse change has occurred with
respect to the matters covered by the latest such annual report since the
date thereof.
(vii) Future Commitments. Neither Company nor any
Consolidated Subsidiary has announced any plan or entered into any Contract
to create any additional Employee Plans/Agreement or to amend or modify any
existing Employee Plan/Agreement.
3.10(k) Employees.
(i) Terms of Employment. Schedule 3.10(k)(i) contains a
complete and accurate list of the number of Company Employees grouped by
department and location.
(ii) Relationships With Other Persons. No Company Employee
or director of Company or any Consolidated Subsidiary is a party to, or is
otherwise bound by, any Contract, including any confidentiality,
noncompetition, or proprietary rights Contract, between such employee or
director and any other Person that in any material way adversely affects or
will affect (a) the performance of his duties as an employee or director as
currently defined, or (b) the ability of Company of any Consolidated
Subsidiary to conduct its business as it is currently conducted, including
any such agreements with Seller. Except as contemplated by this Agreement,
no director, Company Employee, or group of Company Employees intends to
terminate his or its employment with Company or any Consolidated
Subsidiary.
3.10(l) Intellectual Property. Schedule 3.10(l) lists all
Intellectual Property (as defined below) in which Company or any Consolidated
Subsidiary now has any interest, specifying whether such Intellectual Property
is owned, controlled, used or held (under license or otherwise) by Company or
any Consolidated Subsidiary, and also indicating whether such Intellectual
Property is registered. All Intellectual Property shown as registered in
Schedule 3.10(l) has been properly registered, all pending registrations and
applications have been properly made and filed and all annuity, maintenance,
renewal and other fees relating to registrations or applications are current. In
order to conduct the respective businesses of Company and the Consolidated
Subsidiaries, as such is currently being conducted, neither Company nor any
Consolidated Subsidiary requires any Intellectual Property that it does not
already have. Neither Company nor any Consolidated Subsidiary is infringing or
has infringed any Intellectual Property of another Person in the operation of
the respective businesses of Company and the Consolidated Subsidiaries, nor is
any other Person infringing the Intellectual Property of Company or any
Consolidated Subsidiary. Except as set forth in Schedule 3.10(l), neither
Company nor any Consolidated Subsidiary has granted any license or made any
assignment of any Intellectual Property listed on Schedule 3.10(l), nor does
Company or any
18
Consolidated Subsidiary pay any royalties or other consideration for the right
to use any Intellectual Property of others. The consummation of the transactions
contemplated hereby will not alter or impair any Intellectual Property owned or
used by Company or any Consolidated Subsidiary. As used herein, the term
"Intellectual Property" shall mean and include: (i) all trademark rights,
business identifiers, service marks, trade names and brand names, all
registrations thereof and applications therefor and all goodwill associated with
the foregoing; (ii) all copyrights, copyright registrations and copyright
applications, and all other rights associated with the foregoing and the
underlying works of authorship; (iii) all patents and patent applications, and
all international proprietary rights associated therewith; (iv) all Contracts
granting any right, title, license or privilege under the intellectual property
rights of any third Person; (v) all inventions, know-how, discoveries,
improvements, processes, designs, trade secrets, shop and royalty rights,
employee covenants and agreements respecting intellectual property and non-
competition and all other types of intellectual property; and (vi) all claims
for infringement or breach of any of the foregoing.
3.10(m) Product Warranty and Product Liability. Schedule 3.10(m)
contains a true, correct and complete copy of Company's and each Consolidated
Subsidiary's standard warranty or warranties for sales of Products (as defined
below) and, except as stated therein, there are no warranties, commitments or
obligations with respect to the return, repair or replacement of Products.
There are no material product liability claims or similar Litigation relating to
products manufactured or sold, or services rendered, which are presently pending
or threatened, or which have been asserted or commenced against Company or any
Consolidated Subsidiary within the last five (5) years (whether or not covered
by insurance). None of the Products has been the subject of any modification or
recall campaign by Company or any Consolidated Subsidiary. As used in this
Section 3.10(m), the term "Products" means any and all products currently or at
any time previously manufactured, distributed or sold by Company or any
Consolidated Subsidiary.
3.10(n) Bank Accounts. Schedule 3.10(n) sets forth the names and
locations of all banks, trust companies, savings and loan associations and other
financial institutions at which the Company or any Consolidated Subsidiary
maintains a safe deposit box, lock box or checking, savings, custodial or other
account of any nature, the type and number of each such account and the
signatories therefor, a description of any compensating balance arrangements,
and the names of all persons authorized to draw thereon, make withdrawals
therefrom or have access thereto.
3.10(o) Accounts Receivable. Except as set forth in Schedule
3.10(o), all material Accounts Receivable of Company and the Consolidated
Subsidiaries reflected on the Recent Balance Sheet, and as incurred in the
Ordinary Course of Business since the date thereof: (i) represent arm's length
sales actually made in the Ordinary Course of Business; and (ii) are not subject
to counterclaim or setoff, and are not in dispute.
3.10(p) Certain Payments. None of Seller, Company or any
Consolidated Subsidiary and no director, officer, manager, employee, agent or
representative of, or other Person acting for or on behalf of, Seller, Company
or any Consolidated Subsidiary, has directly or indirectly, offered, paid, or
promised to pay, or authorized the payment of any money or other thing of value
(including any fee, gift, sample, service, travel expenses, contribution, or
entertainment with a value in excess of FRF1000 or the equivalent thereof in any
currency in the
19
aggregate to any one individual in any year) to any Person who is an official,
officer, agent, employee, or representative of any Governmental Entity or of any
government-owned entity or of any non-government owned supplier or customer, to
any political party or official thereof, to any candidate for political or
political party office, or to any other person while knowing or having reason to
believe that all or any portion of such money or thing of value would be
offered, given, or promised, directly or indirectly, to any such official,
officer, agent, employee, representative, political party, political party
official or candidate, (i) to obtain favorable treatment in securing business
for the Company or any Consolidated Subsidiary, (ii) to pay for favorable
treatment for business secured for the Company or any Consolidated Subsidiary,
(iii) to obtain special concessions or pay for special concessions already
obtained, for or in respect of the business of Company or any Consolidated
Subsidiary, or (iv) in violation of any Law.
3.10(q) Disclosure. No representation or warranty by Seller in this
Agreement, nor any statement, certificate, schedule, document or exhibit hereto
furnished or to be furnished by or on behalf of Company, any Subsidiary, or
Seller pursuant to this Agreement or in connection with the transactions
contemplated hereby, contains or shall contain any untrue statement of material
fact or omits or shall omit a material fact necessary to make the statements
contained therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser makes the following representations and warranties to Seller,
each of which is true and correct on the date hereof, and will be true and
correct on the Closing Date (as though made then and as though the Closing Date
were substituted for the date of this Agreement throughout this Article 4),
shall be unaffected by any investigation heretofore or hereafter made by Seller
or any notice to Seller, and shall survive the Closing of the transactions as
provided for herein.
4.1 Corporate.
4.1(a) Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Michigan.
4.1(b) Power. Purchaser has full power, legal right and authority to
enter into, execute and deliver this Agreement and the other documents and
instruments to be executed and delivered by Purchaser, and to carry out the
transactions contemplated hereby and thereby.
4.1(c) Authority. The execution and delivery of this Agreement and
the other documents and instruments to be executed and delivered by Purchaser
pursuant hereto and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate action on the part
of Purchaser. No other corporate act or proceeding on the part of Purchaser or
its shareholders is necessary to authorize this Agreement or the other documents
and instruments to be executed and delivered by Purchaser pursuant hereto or the
consummation of the transactions contemplated hereby and thereby. This
Agreement constitutes, and when executed and delivered, the other documents and
instruments to be executed and delivered by Purchaser pursuant hereto will
constitute, valid and binding agreements of Purchaser, enforceable in accordance
with their respective terms, except as such
20
may be limited by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, by general equitable principles and by the power of
a court to deny enforcement generally based on public policy.
4.2 No Violation; Government Consents. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
(a) will violate any Law or Order, to which Purchaser is subject, or (b) except
as set forth on Schedule 4.2 or as required under Competition Laws, will require
any approval, consent, exemption or other action by any Governmental Entity.
4.3 No Brokers or Finders. Neither Purchaser nor any of its directors,
officers, employees or agents have retained, employed or used any broker or
finder in connection with the transaction provided for herein or in connection
with the negotiation hereof.
4.4 Disclosure. To Purchaser's Knowledge, no representation or warranty
by Purchaser in this Agreement, nor any statement, certificate, schedule,
document or exhibit hereto furnished or to be furnished by or on behalf of
Purchaser pursuant to this Agreement or in connection with transactions
contemplated hereby, contains or shall contain any untrue statement of material
fact or omits or shall omit a material fact necessary to make the statements
contained therein not misleading.
4.5 Investment Intent. The Shares are being acquired by Purchaser for
investment only and not with a view to their resale or other distribution within
the meaning of the Securities Act of 1933, as amended.
5. COVENANTS
5.1 Consents; Filings. Each of Seller and Purchaser will use its
reasonable best efforts prior to Closing to obtain, and Seller and Purchaser
will cause Company to obtain, all consents necessary for the consummation of the
transactions contemplated hereby, including, without limitation, (i) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity; and (ii) any consent necessary or advisable from any
private Person, including Company's lenders. Each of Seller and Purchaser will
further use its reasonable best efforts prior to Closing to effect all necessary
filings and registrations with Governmental Entities. Subject to the terms of
the Confidentiality Agreement, each of the parties will furnish to the other
party such necessary information and reasonable assistance as such other party
may reasonably request in connection with the foregoing and will provide the
other party with copies of all filings made by such party with any Governmental
Entity in connection with this Agreement and the transactions contemplated
hereby.
5.2 Other Action. Each of Seller and Purchaser agrees to use its
reasonable best efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary for it to do under applicable Laws to
consummate and make effective the transactions contemplated by this Agreement,
including (i) to cause the fulfillment at the earliest practicable date of all
of the conditions to the parties' respective obligations to consummate the
transactions contemplated in this Agreement; and (ii) to take any action
reasonably necessary to defend, lift,
21
mitigate or rescind the effect of any Litigation adversely affecting the
purchase of the Shares or this Agreement, including promptly appealing any
adverse Order.
5.3 Information and Documents. From and after the date hereof and pending
Closing, Seller will, and will use its reasonable best efforts to cause Company
and the Subsidiaries to, permit Purchaser and its representatives to have
reasonable access to the assets, employees, facilities, books and records of
Seller, Company and the Subsidiaries relating to the businesses of Company and
the Subsidiaries, and shall furnish, or cause to be furnished, to Purchaser,
such financial, tax and operating data and other available information with
respect to the businesses of Company and the Subsidiaries as Purchaser shall
from time to time reasonably request; provided that no Person shall be required
to take any action or provide any information which is prohibited by applicable
Laws; and provided, further that any information obtained pursuant to this
Section 5.3 shall be kept confidential in accordance with the terms of the
Confidentiality Agreement.
5.4 Conduct of Business. From and after the date hereof and to Closing,
except as otherwise contemplated by this Agreement or as Purchaser shall
otherwise consent in writing, Seller will use its reasonable best efforts to
cause Company and the Subsidiaries to conduct their respective businesses in the
Ordinary Course of Business, and to use their reasonable best efforts to
preserve the businesses and related relationships with customers, suppliers and
other third parties and keep available the services of all present employees of
Company and the Subsidiaries.
5.5 Notification and Supplements to Disclosure Schedule.
5.5(a) Between the date hereof and the Closing Date, Seller shall
promptly notify Purchaser in writing if Seller becomes aware of (i) any fact or
condition that causes or constitutes a breach of any of Seller's representations
and warranties made as of the date of this Agreement, or (ii) the occurrence
after the date of this Agreement of any fact or condition that would cause or
constitute a breach of any such representation or warranty, had such
representation or warranty been made as of the time of the occurrence or
discovery of such fact or condition. Should any such fact or condition require
any change to the Disclosure Schedule were such Disclosure Schedule dated the
date of the occurrence or discovery of such fact or condition, Seller shall
promptly notify Purchaser and deliver to Purchaser a supplement to the
Disclosure Schedule specifying such change. During the same period, Seller will
promptly notify Purchaser of the occurrence of any breach of any covenant of
Seller in this Article 5 or of the occurrence of any event that may make the
satisfaction of the conditions in Article 6 impossible or unlikely.
5.5(b) Between the date hereof and the Closing Date, Purchaser shall
promptly notify Seller in writing if Purchaser becomes aware of (i) any fact or
condition that causes or constitutes a breach of any of Purchaser's
representations and warranties made as of the date of this Agreement, or (ii)
the occurrence after the date of this Agreement of any fact or condition that
would cause or constitute a breach of any such representation or warranty, had
such representation or warranty been made as of the time of the occurrence or
discovery of such fact or condition. During the same period, Purchaser will
promptly notify Seller of the occurrence of any breach of any covenant of
Purchaser in this Article 5 or of the occurrence of any event that may make the
satisfaction of the conditions in Article 6 impossible or unlikely.
22
5.6 No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Article 9, Seller will not solicit, initiate, or
encourage any inquiries, offers or proposals from, engage in any discussions or
negotiations with, provide any non-public information to, or consider the merits
of any unsolicited inquiries, offers or proposals from, any Person (other than
Purchaser) relating to any transaction involving the sale of the Shares or any
portion thereof, or any merger, consolidation, business combination or similar
transaction involving Company or any Subsidiary. Seller shall immediately cease
and cause to be terminated any existing activities, discussion or negotiations
with any Person (other than Purchaser) with respect to any of the foregoing.
Seller further agrees to notify Purchaser promptly if any inquiry, offer or
proposal with respect to the foregoing is received by Seller or any Affiliate of
Seller and to provide to Purchaser the details of any such inquiry, offer or
proposal, including information as to the identity of the party making the
inquiry, offer and/or proposal and the specific terms of the offer or proposal.
5.7 Use of "Strafor". Seller shall have the right to use the word
"Strafor" in its corporate name, and to use the trade name "Strafor" (but only
in combination with the word "Facom"), in each case until December 31, 1999.
Seller agrees to eliminate the word "Strafor" from its corporate name on or
before, and otherwise not to use the "Strafor" trade name in any way after,
December 31, 1999.
5.8 Non-Competition.
5.8(a) Neither Seller nor any of its Affiliates shall, directly or
indirectly, for a period of twenty-four (24) months from the Closing Date,
encourage to resign or solicit to hire any Person who as of the Closing Date is
an employee of Company or any Subsidiary.
5.8(b) Neither Seller nor any of its Affiliates shall, directly or
indirectly, for a period of three (3) years from the Closing Date, compete with
the business conducted by Company and the Subsidiaries as of the date of this
Agreement (the "Company Business"). The competitive activities prohibited by
this Section 5.8(b) include the following: (i) the manufacture or sale of any
of the Products, or categories of Products, manufactured or sold in the Ordinary
Course of Business of the Company Business, or (ii) the acquisition by Seller
and/or any of its Affiliates of ten percent (10%) or more of the outstanding
equity interests in any company the principal business of which is substantially
similar to the Company Business. In the event that Seller and/or any of its
Affiliates shall, directly or indirectly, within 3 (three) years of the Closing
Date, acquire ten percent (10%) or more of the outstanding equity interests in a
company that conducts ancillary operations substantially similar to the Company
Business, Seller shall (i) inform Purchaser of such acquisition promptly after
completion thereof and (ii) if Purchaser so requests, negotiate in good faith
with Purchaser the sale of such line of business to Purchaser at fair market
value and subject to such reasonable terms and conditions as the parties may
then agree; provided, however, that nothing in this Section 5.8(b) shall
prohibit Seller from owning its present direct and indirect equity interests in
Cassina Spa, Clestra or any of their subsidiaries or prohibit any of them from
conducting their respective businesses as they are presently conducted.
5.8(c) Seller and Purchaser acknowledge that this Section 5.8
constitutes an independent covenant and shall not be affected by performance or
nonperformance of any other
23
provisions of this Agreement. It is the desire and intent of the parties that
the provisions of this Section 5.8 shall be enforced to the fullest extent
permissible under applicable Law. If all or part of this Section 5.8 is held
invalid, illegal or incapable of being enforced, all other terms and provisions
of this Agreement shall nevertheless remain in full force and effect. If any
part of this Section 5.8 is held to be excessively broad as to duration, scope,
activity or subject, such part will be construed by limiting and reducing it so
as to be enforceable to the maximum extent under applicable Law.
5.9 Termination of Agreements. As of the Closing Date, the following
agreements shall terminate and shall be void and without further effect:
(i) the Joint Venture Agreement, as amended;
(ii) the License Agreement, dated August 5, 1974, as amended, by
and between Company and Purchaser, covering the 451 Series Chair;
(iii) the License Agreement, dated August 5, 1974, as amended,
by and between Company and Purchaser, covering chairs other than the 451
Series Chair;
(iv) the Trademark License Agreement, dated August 5, 1974, as
amended, by and between Company and Forges de Strasbourg S.A. (now known as
Strafor Facom S.A.); and
(v) that certain Distributorship Agreement, dated August 5, 1974,
as amended, by and between the Company and Forges de Strasbourg S.A. (now
known as Strafor Facom S.A.).
6. CONDITIONS TO CLOSING
6.1 Conditions to the Obligations of Purchaser and Seller. The respective
obligations of each of the parties to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction of the following
conditions precedent:
6.1(a) Prohibition. There shall not (i) be in effect any Law or
Order which makes illegal or enjoins, prevents or delays in any respect the
consummation of the transactions contemplated by this Agreement, or (ii) have
been threatened or commenced any Litigation which seeks to prevent, enjoin or
delay in any respect the transactions contemplated by this Agreement or which
may have a Material Adverse Effect on Company and the Subsidiaries taken as a
whole;
6.1(b) Waiting Period. No waiting period (including any extensions
thereof) under Competition Laws or investigation by a Governmental Entity
relating to the transactions contemplated hereby shall be unexpired or pending
which, in the reasonable opinion of counsel, is likely to result in an action or
proceeding seeking to enjoin in any respect the transaction contemplated herein;
6.1(c) Governmental Consents and Filing. Any consent, authorization,
order, approval or action of, and any filing or registration with, any
Governmental Entity having
24
jurisdiction which is necessary to consummate lawfully the transactions
contemplated hereby shall have been obtained, made or effected; provided, that
no such consent, authorization, order, approval or action shall have imposed a
condition thereto which is unduly burdensome to the business or operations of
Purchaser, Company or any Subsidiary; and
6.1(d) Works Councils. Any consultations of the Comite d'entreprise
(works council) required by Law shall have been undertaken.
6.2 Conditions to the Obligations of Purchaser. The obligation of
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions precedent:
6.2(a) Covenants; Representations and Warranties. Seller shall have
performed in all material respects its covenants, agreements and obligations
contained in this Agreement required to be performed by it at or before the
Closing, and each of Seller's representations and warranties contained herein
shall have been true and correct in all respects when made and shall be true and
correct in all respects as of the Closing, as if made as of the Closing Date
(except for representations and warranties that expressly address matters as of
a particular date), without giving effect to any supplement to the Disclosure
Letter; and
6.2(b) Closing Deliveries. Seller shall have made or caused to be
made delivery to Purchaser of the items required by Section 8.1.
6.3 Conditions to the Obligations of Seller. The obligation of Seller to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction of the following conditions precedent:
6.3(a) Covenants; Representations and Warranties. Purchaser shall
have performed in all material respects its covenants, agreements and
obligations contained in this Agreement required to be performed by it at or
before the Closing, and each of the representations and warranties of Purchaser
contained herein shall have been true and correct in all respects when made and
shall be true and correct in all respects as of the Closing, as if made as of
the Closing Date (except for representations and warranties that expressly
address matters as of a particular date); and
6.3(b) Closing Deliveries. Purchaser shall have made or caused to be
made delivery to Seller of the items required by Section 8.2.
7. INDEMNIFICATION
7.1 Indemnification of Purchaser. Subject to Sections 7.2, 7.7 and 7.8,
Seller shall indemnify Purchaser and its Affiliates (including Company and the
Subsidiaries) against and hold Purchaser and its Affiliates (including Company
and the Subsidiaries) harmless from any claim, action, cause of action,
judgment, award, settlement, liability, loss, damage, cost and expense,
including, without limitation, reasonable attorneys' fees (collectively,
"Losses") actually and directly suffered by Purchaser or any Affiliate
(including Company and the Subsidiaries), resulting from or arising out of (a)
any inaccuracy in or breach of any representation or warranty made by Seller in
this Agreement (without giving effect to any
25
supplement to the Disclosure Schedule added after the date hereof); (b) any
breach or nonperformance of any covenant or obligation made or incurred by
Seller herein or in any agreement, document or instrument delivered by Seller
pursuant to this Agreement; or (c) any Liability (including any Liability in
respect of Taxes and, in particular, any Liabilities resulting from or arising
out of the matters disclosed in Schedules 3.7(b) and 3.7(d), and including any
Liabilities resulting from or arising out of the matters disclosed in Schedule
3.10(c)) of any nature, existing at, resulting from, relating to or arising out
of the business, operations or assets of Company or any Subsidiary on or prior
to the Closing Date to the extent not fully reflected or provided for in the
Recent Balance Sheet or the notes thereto or, in the case of such Liabilities
arising after the date of the Recent Balance Sheet, to the extent such
Liabilities did not arise out of the Ordinary Course of Business (it being
understood that Seller shall have no obligation with respect to environmental
matters pursuant to this Section 7.1(c), claims with respect to which are
separately addressed in Section 7.6). Seller does not make and shall not be
deemed to have made, nor is Purchaser relying upon, any representation or
warranty other than those representations and warranties which are expressly set
forth in this Agreement. Purchaser's sole and exclusive remedy for any breach of
any representation or warranty of Seller herein shall be to receive
indemnification in accordance with this Article 7.
7.2 Limitations on Indemnification of Purchaser. Notwithstanding any
other provisions of this Agreement, the indemnification of Purchaser provided
for in this Agreement shall be subject to the limitations and conditions set
forth in Sections 7.2, 7.7 and 7.8:
7.2(a) Survival. Claims for indemnification resulting from or
arising out of inaccuracies in or breaches of representations and warranties
contained in Sections 3.2 (Seller), 3.3 (Title) and 3.4 (Issuance and Redemption
of Share Capital) shall be made by delivering written notice to Seller at any
time after the Closing. Claims for indemnification arising under Section 7.6
(Indemnification for Environmental Matters) shall be required to be made by
delivering written notice to Seller no later than the expiration of thirty-six
(36) months after the Closing. Claims for indemnification resulting from or
arising out of inaccuracies in or breaches of representations and warranties
contained in Section 3.7 (Tax Matters) or arising under Section 7.1(c) (but only
as such Section relates to Tax Liabilities) shall be required to be made by
delivering written notice to Seller no later than three months after the
expiration of all applicable statute of limitations periods with respect
thereto. Claims for indemnification resulting from or arising out of the breach
or nonperformance of the covenants contained in Section 5.8 (Non-Competition)
shall be required to be made by delivering written notice to Seller no later
than three months after the expiration of Seller's obligations pursuant thereto.
Any other claim by Purchaser for indemnification pursuant to this Agreement
shall be required to be made by delivering written notice to Seller no later
than the expiration of eighteen (18) months after the Closing.
7.2(b) [Reserved].
7.2(c) Indemnifiable Amount of Claims. Subject to Section 7.2(d),
with respect to any claim for indemnification arising under (i) Section 7.1(a),
and resulting from or arising out of any inaccuracy in or breach of any
representation or warranty made by Seller in Section 3.2, 3.3 or 3.9; or (ii)
Section 7.1(b), Purchaser shall be entitled to indemnification for one hundred
percent (100%) of the Losses resulting therefrom. Subject to Section 7.2(d),
with respect to any
26
other claim for indemnification arising under this Agreement, Purchaser's right
of indemnification shall be limited to fifty percent (50%) of the Losses
resulting therefrom.
7.2(d) De Minimis; Threshold; Aggregate Non-Tax Indemnification
Limit. Purchaser shall be entitled to indemnification only if the aggregate
amount of all of Purchaser's claims exceeds FRF 20,000,000 (the "Indemnification
Threshold"), and then only to the extent such aggregate amount exceeds the
Indemnification Threshold. For purposes of calculating whether the
Indemnification Threshold has been met, (i) each of Purchaser's indemnification
claims less than FRF 10,000 (the "De Minimis Amount") shall not be included
until the aggregate amount of all of Purchaser's indemnification claims
individually greater than the De Minimis Amount is equal to or exceeds FRF
2,000,000 (the "De Minimis Threshold"); and (ii) from and after the date that
the De Minimis Threshold is met, all claims for indemnification (including
individual claims less than the De Minimis Amount) shall be included. For all
claims, other than claims resulting from or arising out of: (i) inaccuracies in
or breaches of representations and warranties contained in Section 3.7 (Tax
Matters); or (ii) Section 7.1(c) (but only as such Section relates to Tax
Liabilities), the maximum indemnification amount to which Purchaser may be
entitled shall be an amount equal to the Aggregate Non-Tax Indemnification
Limit. For all claims resulting from or arising out of: (i) inaccuracies in or
breaches of representations and warranties contained in Section 3.7 (Tax
Matters); or (ii) Section 7.1(c) (as such Section relates to Tax Liabilities),
the indemnification amount to which Purchaser may be entitled is unlimited.
7.2(e) [Reserved.]
7.2(f) [Reserved.]
7.2(g) Procedure. Any claim for indemnification by Purchaser shall
be made by delivering to Seller, no later than the last date (if any) set forth
in Section 7.2(a) for making such claim (or, in the case of third-party Claims
subject to Section 7.5, such shorter period as is required (if any) not to
prejudice the interests of Indemnitor), a written notice setting forth in
reasonable detail the alleged factual basis for such claim, the provision or
provisions of this Agreement on which such claim is based, and the amount or
estimated amount thereof to the extent then feasible to determine (which
estimate shall not be conclusive of the final amount of such claim).
7.2(h) Disclaimer. In no event shall Seller be liable for incidental
or consequential damages arising out of or in connection with this Agreement,
including, without limitation, breach of any representation, warranty or
covenant made by or imposed on Seller hereunder or in connection herewith.
7.3 Indemnification of Seller. Subject to Sections 7.4, 7.7 and 7.8,
Purchaser shall indemnify Seller against and hold Seller harmless from any
Losses actually and directly suffered by Seller, resulting from or arising out
of (a) any inaccuracy in or breach of any of the representations and warranties
made by Purchaser in Article 4: or (b) any breach or nonperformance of any
covenant or obligation made or incurred by Purchaser herein. Purchaser does not
make and shall not be deemed to have made, nor is Seller of Seller relying upon,
any representation, warranty or covenant other than those representations,
warranties and covenants
27
which are expressly set forth in this Agreement. Seller's sole and exclusive
remedy for any breach of any representation or warranty of Purchaser herein
shall be to receive indemnification in accordance with this Article 7.
7.4 Limitations on Indemnification of Seller. Notwithstanding any other
provisions of this Agreement, the indemnification of Seller provided for in this
Agreement shall be subject to the limitations and conditions set forth in
Sections 7.4, 7.7 and 7.8:
7.4(a) Survival. Claims by Seller for indemnification pursuant to
this Agreement shall be required to be made by delivering written notice to
Purchaser no later than the expiration of eighteen (18) months after the
Closing.
7.4(b) [Reserved.]
7.4(c) Threshold. Seller shall be entitled to indemnification only
if the aggregate amount of all of Seller's claims for indemnification exceeds
the Indemnification Threshold, and then only to the extent such aggregate amount
exceeds the Indemnification Threshold.
7.4(d) Limit. The maximum indemnification amount to which Seller may
be entitled shall be an amount equal to the Aggregate Non-Tax Indemnification
Limit.
7.4(e) [Reserved.]
7.4(f) Procedure. Any Claim for indemnification by Seller shall be
made by delivering to Purchaser, no later than the last date (if any) set forth
in Section 7.4(a) for making such claim (or, in the case of third-party Claims
subject to Section 7.5, such shorter period as is required (if any) not to
prejudice the interests of Indemnitor), a written notice setting forth in
reasonable detail the alleged factual basis for such claim, the provision or
provisions of this Agreement on which such claim is based, and the amount or
estimated amount thereof to the extent then feasible to determine (which
estimate shall not be conclusive of the final amount of such claim).
7.4(g) Disclaimer. In no event shall Purchaser be liable for
incidental or consequential damages arising out of or in connection with this
Agreement, including, without limitation, breach of any representation, warranty
or covenant made by or imposed on Purchaser hereunder or in connection herewith.
7.5 Third Party Claims. If any legal proceeding is instituted or any
claim asserted by any third party (a "Claim") in respect of which Seller, on the
one hand, or Purchaser, on the other hand, may be entitled to indemnification
hereunder, the Indemnitee shall give the Indemnitor prompt written notice
thereof in accordance with Section 7.2(g) or Section 7.4(f), as the case may be.
A delay in giving such notice shall relieve the Indemnitor of liability for the
claim to the extent the Indemnitor suffers prejudice because of such delay. The
Indemnitor shall have the right, at its option and expense, to participate in
the defense of such Claim, but not to control the defense, negotiation or
settlement of such Claim, which control shall at all times rest with the
Indemnitee, unless the Indemnitor irrevocably acknowledges, in writing,
responsibility for such Claim and agrees to indemnify the Indemnitee against the
Claim (subject in cases where
28
Seller is an Indemnitor to the limitations set forth in Section 7.2 and in cases
where Purchaser is an Indemnitor to the limitations set forth in Section 7.4).
If the Indemnitor does not assume control of the defense of such Claim: (i)
the defense of the Claim by the Indemnitee and any judgment entered in the Claim
will be deemed to have been consented to by, and will be binding upon, the
Indemnitor as fully as though it alone had assumed the defense thereof and a
judgment had been entered in the Claim in the amount of judgment; and (ii) the
Indemnitor shall not be liable to the Indemnitee for any settlement of any Claim
without the consent of the Indemnitor, which consent shall not be unreasonably
withheld; provided, however, that in the case of clauses (i) and (ii) of this
paragraph the right of the Indemnitor to contest the right of the Indemnitee to
indemnification under this Agreement with respect to the Claim will not be
extinguished. If the Indemnitor does assume control of the defense of such
Claim, it shall not, without the prior written consent of the Indemnitee, settle
such Claim or consent to entry of any judgment relating thereto which does not
include as an unconditional term thereof the giving by the claimant to the
Indemnitee of a release from all liability in respect of the Claim. The parties
hereto agree to cooperate fully with each other in connection with the defense,
negotiation or settlement of any such Claim.
7.6 Indemnification for Environmental Matters. The applicable Laws
relating to pollution or protection of the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata), including Laws relating to emissions, discharges, generation, storage,
releases or threatened releases of pollutants, contaminants, chemicals or
industrial, toxic, hazardous or petroleum or petroleum-based substances or
wastes ("Waste" ) into the environment or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Waste, are herein collectively referred to as the "Environmental
Laws." Subject to the limitations and conditions set forth in Section 7.2, 7.7
and 7.8, without limiting the generality of the foregoing, Seller agrees to
indemnify, reimburse, hold harmless and defend Purchaser for, from and against
all Losses actually and directly suffered by Purchaser or any Affiliate
(including Company or any Subsidiary), in connection with any pollution, threat
to the environment, or exposure to, or manufacture, processing, distribution,
use, treatment, generation, transport or handling, disposal, emission,
discharge, storage or release of Waste that is related in any way to Company's,
or any Subsidiary's, or any previous owner's or operator's ownership, operation
or occupancy of the business, properties and assets owned or used by Company or
any Subsidiary on or before the Closing (including, but not limited to, Losses
resulting from or arising out of the matters identified in certain preliminary
environmental reports prepared by ARCADIS Xxxxxxxx & Xxxxxx and its affiliates
and provided by Purchaser to Seller prior to the Closing); provided, however,
that in the case of any environmental remediation or compliance measures
undertaken by Company or any Subsidiary that are not required by an Order, (i)
the Losses incurred in connection with such remediation or compliance measures
shall be indemnifiable only to the extent that an internationally recognized
environmental consulting firm (including, without limitation, ARCADIS Xxxxxxxx &
Xxxxxx, Inc. and its affiliates and correspondent offices) retained by Purchaser
or any Affiliate (including Company or any Subsidiary) advises that such
remediation or compliance measures are required to bring Company or such
Subsidiary into compliance with Environmental Laws or Governmental
Authorizations issued to Company or such Subsidiary with respect thereto, and
(ii) Purchaser and Seller shall consult in good faith regarding the scope and
budget of the proposed remediation and compliance measures.
29
7.7 Effective Nature of the Loss. For purposes of indemnification
pursuant to this Article 7:
7.7(a) A Loss shall be eligible for indemnification to the extent and
only to the extent that such Loss has been actually and directly suffered by the
Indemnitee (or, in the case Purchaser is the Indemnitee, Company or a
Subsidiary).
7.7(b) Any deficiency assessed by the tax authorities whose sole
effect is to shift tax liability from one fiscal year to another shall give
rise to indemnification only insofar as the Indemnitee (or, in the case
Purchaser is the Indemnitee, Company or a Subsidiary) is required to pay a
penalty or interest charge in relation thereto.
7.7(c) Any deficiency assessed with regard to a tax, such as a value-
added tax, which is recoverable shall give rise to indemnification only insofar
as the Indemnitee (or, in the case Purchaser is the Indemnitee, Company or a
Subsidiary) is required to pay a penalty or interest charge in relation thereto.
7.7(d) Any indemnification shall be calculated by taking into account
the effect of any tax savings and/or any tax cost realized by the Indemnitee
(and, in the case Purchaser is the Indemnitee, Company and the Subsidiaries) as
a result of the tax deductibility of the relevant Loss or, on the other hand,
the realization of income resulting from the receipt of the indemnification
payment.
7.7(e) Any amounts paid to the Indemnitee (and, in the case Purchaser
is the Indemnitee, Company and the Subsidiaries) under warranties, insurance
policies or any other amount (including subsidies) compensating a Loss for which
an indemnification claim is made shall be deducted from the amount of the Loss
for purposes of the calculation of the indemnifiable amount of the claim
pursuant to Section 7.2(c). If the Indemnitor pays an indemnity in respect of a
Loss and if any Indemnitee (or, in the case Purchaser is the Indemnitee, Company
or a Subsidiary) subsequently recovers (even after expiration of the relevant
time limit set forth in Sections 7.2(a) and 7.4(a)) all or part of the amount of
such indemnity from a third party (including insurance companies or tax
authorities), the Indemnitee shall, immediately upon recovery thereof, pay to
the Indemnitor the percentage of the amount thereby recovered which corresponds
to the percentage of the Loss paid to the Indemnitee pursuant to Section 7.2(c)
in connection with the indemnification claim (and in the event that such
recovery shall result in the total due in connection with the net amount of the
concerned Loss and other Losses, if any, which are eligible for indemnification
by Indemnitee, falling below the Indemnification Threshold; the Indemnitee shall
repay to Indemnitor the full amount paid in respect of all the relevant Loss
and/or Losses).
7.7(f) Any indemnification due by Indemnitor shall be based on the
amount of the Loss actually and directly suffered by Indemnitee (or, in the case
where Indemnitee is Purchaser, Company or a Subsidiary), and shall be computed
without regard to any multiple, price-earnings or equivalent ratio implicit in
negotiating and/or settling the Steelcase Strafor Purchase Price.
30
7.7(g) Any indemnification shall in all cases be limited to the
amount of the Loss, notwithstanding the fact that the event giving rise to the
indemnification obligation may originate from an inaccuracy of several of the
representations or covenants made in this Agreement.
7.7(h) In the event that an Indemnitor is required to make a payment
pursuant to Section 7.5, the Indemnitor shall not be required to make any
indemnification payment in connection thereto unless and until such payment has
actually been made by the Indemnitee to such third party.
7.8 Exonerating and Mitigating Factors. For purposes of indemnification
pursuant to this Article 7:
7.8(a) The Indemnitor shall not be held liable for indemnification to
the extent the Loss for which indemnification is sought may be solely attributed
to any change in accounting methods (including consolidation methods) or
policies of the Indemnitee (or, in the case Purchaser is the Indemnitee, Company
or a Subsidiary) after the Closing Date.
7.8(b) In the event that a situation giving rise to a Claim is
curable, in whole or in part, the Indemnitee (or, in the case Purchaser is the
Indemnitee, Company or a Subsidiary) shall give the Indemnitor a reasonable
opportunity to implement such a cure.
8. DOCUMENTS TO BE DELIVERED
8.1 Documents to be delivered by Seller. At the Closing, Seller shall
deliver, or cause to be delivered, to Purchaser the following documents, in each
case duly executed or otherwise in proper form:
8.1(a) Ordres de Mouvement; Other Transfer Documents. (i) Ordres de
Mouvement and/or such other transfer documents as may be necessary to effect the
transfer of the Steelcase Strafor Shares to Purchaser (or its designees) and
registration thereof in the name of Purchaser (or its designees); (ii) Ordres de
Mouvement and/or such other transfer documents as may be necessary to effect the
transfer of the Details Shares to Purchaser (or its designees) and registration
of thereof in the name of Purchaser (or its designees); (iii) duly endorsed, if
necessary, share certificates and/or such other transfer documents as may be
necessary to effect the transfer of the Werndl Shares to Purchaser (or its
designees) and registration thereof in the name of Purchaser (or its designees);
(iv) a transfer deed duly executed by a German law notary and/or such other
transfer documents as may be necessary to effect the transfer of the
Pohlschroder Shares to Purchaser (or its designees) and registration thereof in
the name of Purchaser (or its designees); and (v) such transfer documents as are
necessary to effect the transfer to Purchaser (or its designees) of all
outstanding equity interests in the Subsidiaries of which Seller or an Affiliate
of Seller (other than Company or any Subsidiary) is the record or beneficial
owner.
8.1(b) Certified Board Resolutions. Certified copies of the
resolutions of the board of directors of Seller authorizing and approving this
Agreement and the consummation of the transactions contemplated by this
Agreement.
31
8.1(c) Resignations. Resignations (effective on or prior to the
Closing Date) of those members of the Boards of Directors of Company and the
Subsidiaries nominated by Seller as are requested by Purchaser not less than
five (5) Business Days prior to the Closing Date.
8.1(d) Agreement Regarding Leases. An Agreement Regarding Leases, in
the form attached hereto as Exhibit A.
8.1(e) Assignment Agreement. An Assignment Agreement, in the form
attached hereto as Exhibit B, under which Seller assigns to Purchaser any and
all of Seller's rights under the Werndl BuroMobel AG Agreement for the Purchase
and Sale and Transfer of Shares, among Xx. Xxxxx Werndl, Xxx. Xxxxxxx Xxxxxx,
Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxx-Xxxxx Xxxxx, Steelcase Strafor Beteiligungs
GmbH, Seller and Purchaser, dated December 17, 1998 (the "Assignment
Agreement").
8.1(f) Other Documents. All other documents, instruments or writings
required to be delivered to Purchaser at or prior to the Closing pursuant to
this Agreement and such other certificates of authority and documents as
Purchaser may reasonably request.
8.2 Documents to be Delivered by Purchaser. At the Closing, Purchaser
shall deliver, or cause to be delivered, to Seller the following documents, in
each case duly executed or otherwise in proper form:
8.2(a) Cash Purchase Prices. One or more wire transfers in the
aggregate amount of the Purchase Prices.
8.2(b) Certified Resolutions. Certified copies of the resolutions of
the board of directors of Purchaser authorizing and approving this Agreement and
the consummation of the transactions contemplated by this Agreement.
8.2(c) Agreement Regarding Leases. The Agreement Regarding Leases.
8.2(d) Assignment Agreement. The Assignment Agreement.
8.2(e) Other Documents. All other documents, instruments or writings
required to be delivered to Seller at or prior to the Closing pursuant to this
Agreement and such other certificates of authority and documents as Seller may
reasonably request.
9. TERMINATION
9.1 Termination. This Agreement may be terminated at any time prior to
the Closing:
9.1(a) by written agreement of Purchaser and Seller;
9.1(b) by either Purchaser or Seller by giving written notice of such
termination to the other party, if the Closing shall not have occurred on or
prior to June 30, 1999 (unless the failure to consummate the Closing by such
date (i) shall be due to the failure of the party seeking to terminate this
Agreement to have fulfilled any of its obligations under this Agreement, or (ii)
32
is due to the continuance of a waiting period or lack of an approval required
under or an injunction or equivalent thereof entered based upon any Competition
Laws, in which event either party may not rely upon this Section 9.1(b) to
terminate this Agreement until the first anniversary of the date of this
Agreement);
9.1(c) by either Purchaser or Seller, if any court of competent
jurisdiction or other competent Governmental Entity shall have issued a final,
nonappealable Order or taken any other action permanently restraining, enjoining
or otherwise prohibiting the transactions contemplated by this Agreement;
9.1(d) by either Purchaser or Seller, if a breach of any provision of
this Agreement constituting or which could reasonably be expected to give rise
to a Material Adverse Effect on the Company and the Subsidiaries taken as a
whole has been committed by the other party and such breach has not been waived;
9.1(e) by Purchaser, if any condition in Section 6.1 or Section 6.2
has not been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of Purchaser
to comply with its obligations under this Agreement) and Purchaser has not
waived such condition on or before the Closing Date; or
9.1(f) by Seller, if any condition in Section 6.1 or Section 6.3 has
not been satisfied as of the Closing Date or if satisfaction of such a condition
is or becomes impossible (other than through the failure of Seller to comply
with its obligations under this Agreement) and Seller has not waived such
condition on or before the Closing Date.
9.2 Effect of Termination.
9.2(a) In the event of the termination of this Agreement in
accordance with Section 9.1, this Agreement shall thereafter become void and
have no effect, and no party hereto shall have any liability to the other party
hereto or their respective Affiliates, directors, officers or employees, except
for the obligations of the parties hereto contained in this Section 9.2 and in
Sections 10.3, 10.5, 10.6 and 10.8, and except that nothing herein will relieve
any party from liability for any breach of any covenant set forth in this
Agreement prior to such termination.
9.2(b) If this Agreement is terminated as permitted under Section
9.1, such termination shall be without liability to any party to this Agreement
or any Affiliate, shareholder, director, officer or representative of such
party, except for liability arising from a willful breach.
10. MISCELLANEOUS
10.1 Disclosure Schedule. Subject to Section 5.5, the Schedules hereto
have been compiled into one document (the "Disclosure Schedule"), executed by
Seller and dated and delivered to Purchaser on the date of this Agreement.
Information set forth in the Disclosure Schedule specifically refers to the
Article and Section of this Agreement to which such information is responsive.
10.2 Further Assurances. At any time after the Closing Date, at either
party's reasonable request and without further consideration, the other party
hereto will execute and
33
deliver to the requesting party such documents and take such other action as
such party may reasonably request in order to consummate more effectively the
transactions contemplated hereby.
10.3 Disclosures and Announcements. From the date hereof through and
including the Closing Date, announcements concerning the transactions provided
for in this Agreement by Purchaser, on the one hand, or by Company or Seller, on
the other hand, shall be subject to the prior written approval of the other
party in all essential respects, except that approval of the other party shall
not be required as to any statements and other information which any party may
submit to any stock exchange upon which its securities are listed or its
stockholders or be required to make pursuant to any rule or regulation of such a
stock exchange or otherwise required by any Law.
10.4 Assignment; Parties in Interest.
10.4(a) Assignment. Except as expressly provided herein, the rights
and obligations of a party hereunder may not be assigned, transferred or
encumbered, by operation of law or otherwise, without the prior written consent
of the other party. Notwithstanding the foregoing, Purchaser may, without
consent of any other party, assign any or all of its rights and/or delegate any
or all of its obligations hereunder to one or more Affiliates of Purchaser
(including Steelcase SAS, Company and the Subsidiaries); provided, that
Purchaser shall, nevertheless, remain liable for all of its obligations, and
those of any such Affiliate, to Seller hereunder.
10.4(b) Parties in Interest. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective permitted
successors and permitted assigns of the parties hereto. Nothing contained
herein shall be deemed to confer upon any other person any right or remedy under
or by reason of this Agreement.
10.5 Expenses; Transfer Taxes.
10.5(a) Expenses. Except as otherwise provided herein, each of
Purchaser and Seller shall be responsible for its own costs and expenses
incurred in connection with this Agreement and the consummation of the
transactions set forth in this Agreement.
10.5(b) Transfer Taxes. All transfer Taxes and duties incurred in
connection with this Agreement and the transactions contemplated hereby shall be
borne equally by Seller and Purchaser. Seller and Purchaser shall cooperate in
the filing of all necessary Tax Returns and other documentation with respect to
all such Taxes and duties and, if required by applicable Law, Seller and
Purchaser will each join in the execution of any such Tax Return or other
documentation.
10.6 Law Governing Agreement. This Agreement shall be construed and
interpreted according to the internal Laws of France, excluding any choice of
law rules that may direct the application of the Laws of another jurisdiction.
All disputes arising out of or in connection with this Agreement or the
transactions contemplated hereby shall be submitted for final resolution to an
international arbitration panel consisting of three (3) arbitrators, with each
of the parties appointing one (1); and the two (2) arbitrators so appointed
selecting a third arbitrator. The third
34
arbitrator shall be the presiding arbitrator and may not be a citizen or
resident of either the United States or France. In the event a party shall have
failed to select an arbitrator within fifteen (15) days after the other party
has selected its arbitrator or the two (2) arbitrators so selected shall fail to
agree on a third arbitrator, such arbitrator shall be selected by the
International Chamber of Commerce as appointing authority. The arbitration
proceedings shall take place in Geneva, Switzerland. All arbitrators shall be
fluent in the English and French languages, the proceedings shall be conducted
in the English language and their award shall be rendered in English; provided,
however, that evidence in the French language may be introduced without
translation. The arbitration shall be conducted in accordance with the UNCITRAL
Arbitration Rules then in effect, as modified herein. The award of the
arbitrators shall be final and binding on the parties and may be presented by
any of the parties for enforcement in any court of competent jurisdiction and
the parties hereby consent to the jurisdiction of such court solely for purposes
of enforcement of this arbitration agreement and any award rendered hereunder.
10.7 Amendment and Modification. Purchaser and Seller may amend, modify
and supplement this Agreement only as agreed upon in writing by Purchaser and
Seller.
10.8 Notice. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be deemed effectively given upon
personal delivery to the party to be notified, or upon delivery by an
internationally recognized overnight courier service, or upon receipt if sent by
facsimile and electronically confirmed. The respective addresses to be used for
all such notices, demands or requests are as follows:
If to Purchaser, to:
Steelcase Inc.
000 00xx Xxxxxx, X.X.
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
or to such other person or address as Purchaser shall furnish to
Seller in writing.
If to Seller, to:
Strafor Facom S.A.
00 xxx Xxxx Xxxxxxxxx
00000 Xxxxxxxxxx (Xxxxxx)
Attention: Xxxxxx Schmittheisler,
Directeur Financier
Facsimile: (00-0) 00 00 00 00
10.9 Entire Agreement. This Agreement and the documents referred to
herein embody the entire agreement between the parties hereto with respect to
the transactions contemplated herein and supersede all prior agreements and
undertakings, oral or written, with respect to such matters, except for the
Confidentiality Agreement which will remain in full force and effect for
35
the term thereof. The Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
10.10 Governing Language. This Agreement has been prepared and signed in
the English language. In the event of any conflict or inconsistency between the
English language version and any translation hereof made for any purpose, the
English language version shall govern the interpretation and construction hereof
and for any and all other purposes, except as may be required by applicable Law.
10.11 Effectiveness of Agreement. This Agreement shall be effective as of
March 31, 1999.
10.12 Counterparts. This Agreement may be executed in original or by
facsimile transmission in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
10.13 Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement in Paris,
France as of the date and year first above written.
SELLER:
STRAFOR FACOM S.A.
By: /s/ Xxxxxx Schmittheisler
-------------------------
Name: Xxxxxx Schmittheisler
Title:Attorney-in-Fact
PURCHASER:
STEELCASE INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Attorney-in-Fact
37
