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EXHIBIT 10.69
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of December 19, 1996 (the "Agreement"),
among Tongeren Manufacturing Company, a company organized under the laws of
Belgium (the "Company" or "TMC"), C.P. Clare Corporation, a Massachusetts
corporation ("Seller"), Xxxxxxx, GmbH, a corporation organized under the laws of
Switzerland ("Buyer") and X. Xxxxxxx, GmbH, a corporation organized under the
laws of Germany ("Xxxxxxx").
WITNESSETH:
WHEREAS, Seller owns or will own prior to the Closing all of the shares of
stock of TMC (the "TMC Shares");
WHEREAS, the Seller desires to sell to the Buyer and the Buyer desires to
purchase from the Seller all of the Seller's shares of TMC in accordance with
the terms and conditions hereof.
NOW, THEREFORE, in order to consummate the purchase and sale and in
consideration of the mutual agreements set forth herein, the parties hereto
agree as follows.
Section 1. SALE OF THE SELLER'S SHARES
1.1 TRANSFER OF COMPANY SHARES. At the Closing, the Seller and Buyer
shall enter the transfer of the TMC Shares in the shareholder's register of TMC
by signing appropriate transfer declarations thereon. Seller will execute such
other documents as may be reasonably required by Buyer to effect a valid
transfer of such TMC Shares by the Seller. Buyer may require the transfer of one
share to a third party purchaser to be named by Buyer.
1.2 PURCHASE PRICE AND PAYMENT. In consideration of the sale by
Seller to Buyer of the TMC Shares, Buyer agrees that at the Closing it will
deliver to the Seller a total purchase price of $10.00 (Ten U.S. Dollars).
1.3 TIME AND PLACE OF CLOSING. The closing of the purchase and sale
provided for in this Agreement (herein called "Closing) shall be held at the
offices of Seller at 00 Xxxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxxx on January 15,
1997 or at such other place or an earlier or later date or time as may be
mutually agreed upon by the parties.
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Section 2. CERTAIN REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES BY THE SELLER. The Seller
represents and warrants to Buyer that:
(a) ORGANIZATION. The Company is a corporation duly organized,
and validly existing under the laws of Belgium.
(b) POWER AND AUTHORIZATION. The Seller has full legal right,
power and authority to enter into and perform its obligations under this
Agreement and the other agreements and documents (collectively, the
"Agreements") required to be delivered by it hereunder. The execution, delivery
and performance by the Seller of this Agreement and such other Agreements and
documents have been duly authorized by all necessary corporate action. This
Agreement has been duly and validly executed and delivered by the Seller and
constitutes its legal, valid and binding obligation, enforceable in accordance
with its terms. When executed and delivered by the Seller as contemplated
herein, each of such other Agreements to be executed in connection with this
Agreement and the transactions contemplated hereby shall constitute the legal,
valid and binding obligation of the Seller, enforceable in accordance with its
terms.
(c) OWNERSHIP OF SELLER SHARES. Upon transfer of the TMC Shares
owned by Seller, Buyer shall acquire good and marketable title to such TMC
Shares, free and clear of all claims, liens, charges, proxies, encumbrances and
security interests of any kind or nature whatsoever.
(d) DISCLAIMER. No representation or warranty of any kind or
nature (express or implied) is being made by the Seller or the Company with
respect to the business, the results of operations, or future operations or
prospects of the Company or the nature, condition, or value of any assets or
liabilities (contingent or otherwise) of the Company or to any other matter with
respect to the Company or the merchantability, fitness for a particular purpose,
condition, use, quantity, workmanship or existence of any assets. Buyer and
Xxxxxxx acknowledge that the transfer of the TMC Shares from the Seller is being
made "AS IS WHERE IS" on a non-recourse basis with respect to the Seller, except
to the extent that the representations and warranties in Section 2.1 are not
accurate and provided, however, that Seller represents that the written
information made available to Buyer as set forth in Schedule 1 herein is
accurate to the best of its knowledge and belief at the time such information
was provided.
2.2 CERTAIN REPRESENTATIONS AND WARRANTIES BY THE BUYER AND XXXXXXX.
Each of Buyer and Xxxxxxx represents and warrants to the Seller that:
(a) ORGANIZATION. Each of Buyer and Xxxxxxx is a corporation duly
organized and validly existing under the laws of its jurisdiction of
incorporation. Xxxxxxx owns all the outstanding capital stock or other equity
interests of Buyer.
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(b) POWER AND AUTHORIZATION. Buyer has the legal right, power and
authority to enter into and perform its obligations under this Agreement and the
other Agreements required to be delivered by it hereunder. The execution,
delivery and performance by Buyer of this Agreement and such other agreements
and documents have been duly authorized by all necessary corporate action. This
Agreement has been duly and validly executed and delivered by Buyer and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms. When executed and delivered by Buyer as contemplated
herein, each of such other Agreements to be executed in connection with this
Agreement and the transactions contemplated hereby shall constitute the legal,
valid and binding obligation of Buyer, enforceable in accordance with its terms.
(c) POWER AND AUTHORIZATION. Xxxxxxx has the legal right, power
and authority to enter into and perform its obligations under this Agreement and
the other Agreements required to be delivered by it hereunder. The execution,
delivery and performance by Xxxxxxx of this Agreement and such other agreements
and documents have been duly authorized by all necessary corporate action. This
Agreement has been duly and validly executed and delivered by Xxxxxxx and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms. When executed and delivered by Xxxxxxx as
contemplated herein, each of such other Agreements to be executed in connection
with this Agreement and the transactions contemplated hereby shall constitute
the legal, valid and binding obligation of Xxxxxxx, enforceable in accordance
with its terms.
(d) DUE DILIGENCE AND ANALYSIS: Buyer and Xxxxxxx understand and
agree that they and not any Seller or the Company have been responsible for
having conducted due diligence investigations of the Company. Buyer and Xxxxxxx
acknowledge and agree that in entering into this Agreement, each has relied upon
its own valuation of the Company and the TMC Shares and not upon any valuation
provided by the Company or the Seller. In this regard, Buyer and Xxxxxxx also
acknowledge that they or their representatives have had complete opportunity to
ask such questions and make such detailed inquiries, and receive such
information and material, regarding the business, personnel, assets, condition,
capital structure, agreements and prospects of and applicable to the Company.
Buyer and Xxxxxxx acknowledge and verify that neither the Seller nor the Company
has made any representation or warranty or has any duty or obligation to it
whether express or implied, of any kind or character, except as expressly set
forth herein or as may be set forth in a definitive Supply Agreement executed by
the parties. Buyer and Xxxxxxx acknowledge that they have completed their due
diligence investigation of the Company to their full satisfaction prior to
signing this Agreement, including with respect to environmental and labor
related matters, and that Buyer's and Xxxxxxx'x obligation to close the
transactions contemplated by this Agreement are not conditioned upon the absence
of a material, adverse change in the financial condition or prospects of the
Company's operations. Neither Xxxxxxx or Buyer is relying on any forecasted
operating results, budgets or valuations (including, without limitation, any
information
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contained in any confidential offering memorandum supplied in connection with
this transaction) prepared by the Seller or the Company but is rather relying on
its own plan of operation and financial forecasts for the Company or such other
information that it deems appropriate.
Section 3. COVENANTS
3.1 COVENANTS OF THE COMPANY. The Company hereby makes the covenants
and agreements set forth in this Section 3.1.
3.1.1 CONDUCT OF BUSINESS. Between the date of this Agreement and the
Closing Date, TMC will conduct and Seller will cause TMC to conduct its business
in the ordinary course, except with respect to the following:
(a) the continued negotiations and proceedings with respect to
the collective dismissal of approximately 160 employees of TMC in accordance
with the collective dismissal papers filed with the Belgian authorities on
December 3, 1996 and any social actions taken by the workers of the Company with
respect to such collective dismissal, including, without limitation, a strike,
plant occupation or other such action;
(b) the sale by TMC of a group of up to six engineers, and
certain related assets, associated with such group all as set forth on Exhibit
B, to a company to be designated by Seller for consideration [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION], which amount shall be paid in cash upon the receipt by such company
of all the equipment set forth on Exhibit B;
(c) the transfer for no consideration of up to three employees
specified by the Company in its sole discretion to C.P. Clare, N.V.;
(d) the filing by the Company of an environmental report with
respect to certain investigations undertaken at the Tongeren, Belgium site of
the Company with the appropriate Flemish environmental authorities; and
(e) balance sheet adjustments necessary following a review by the
Company of current grants outstanding from the Flemish government.
3.1.2 AUTHORIZATION FROM OTHERS. Prior to the Closing Date, the Company
will use its best efforts to obtain all authorizations, consents and permits of
others required to permit the consummation by the Seller and the Company of the
transactions contemplated by this Agreement.
3.1.3 CONSUMMATION OF AGREEMENT. The Company and the Seller shall use
their best efforts to perform and fulfill all conditions and obligations on
their parts to be
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performed and fulfilled under this Agreement. The Company will obtain prior to
the Closing all necessary authorization of its Board of Directors.
3.2 COVENANTS OF BUYER. Buyer hereby makes the covenants and
agreements set forth in this Section 3.2.
3.2.1 CONSUMMATION OF AGREEMENT. Buyer shall use its best efforts to
perform and fulfill all conditions and obligations on its part to be performed
and fulfilled under this Agreement. To this end, Buyer will obtain prior to the
Closing all necessary authorizations or approvals of its stockholders and Board
of Directors.
3.2.2 MANAGING DIRECTOR. Buyer shall insure that Xx. Xxxxx Xxxxxx is
appointed as the Managing Director of TMC on the day of the Closing and remains
so during the term of the Supply Agreement, for so long as he shall be employed
by Xxxxxxx or any of its subsidiaries or affiliates. In the event that TMC
wishes to replace Xx. Xxxxxx as Managing Director, the operating committee
established under the Supply Agreement will have the right and authority to
consent to such replacement Managing Director.
3.2.3 LEGAL COUNSEL. Buyer covenants and agrees following the Closing
to cause TMC to continue to retain Stibbe Simont Xxxxxxx Duhot as designated
legal counsel to assist in the social restructuring begun prior to the Closing
and that Stibbe Simont Xxxxxxx Duhot shall participate in the negotiations
regarding such social restructuring. The operating committee to be formed
pursuant to the Supply Agreement shall have the right to oversee and review all
decisions made regarding such social restructuring and Seller shall continue to
have the right to engage Stibbe Simont Xxxxxxx Duhot on any matter and consult
directly with them with respect to such social restructuring. Any legal fees
incurred following the Closing relating directly or indirectly to the social
restructuring shall be the responsibility of TMC and Buyer; provided, however
that Seller shall pay legal fees it incurs.
3.2.4 TAX RETURNS; ACCESS TO RECORDS. Following the Closing, Buyer
shall cause the Company to cooperate with Seller to permit the Seller, in
accordance with applicable law, to promptly prepare and file on or before the
due date or any extension thereof, all federal, state and local tax returns
required to be filed by the Seller with respect to taxable periods ending on or
before the Closing. The Company will afford the Seller and its attorneys and
accountants access to all records, files and other historic materials of the
Company required by Seller to complete such tax and other filings. In the event
that the Company is audited with respect to any period prior to the Closing,
Buyer will notify the Seller immediately and the Seller shall have the right to
control such audit procedure and, at its own expense, hire accountants to assist
in such audit.
Section 4. CONDITIONS
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4.1 CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligation of Buyer
to consummate this Agreement and the transactions contemplated hereby are
subject to the fulfillment, prior to or at the Closing, of the following
conditions precedent:
(a) REPRESENTATIONS; WARRANTIES. Each of the representations and
warranties of the Company and the Seller contained in Section 2 shall be true
and correct in all material respects as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing; and the Company and
the Seller shall, on or before the Closing, have performed all of their
obligations hereunder which by the terms hereof are to be performed on or before
the Closing.
(b) SUPPLY AGREEMENT. Each of the Seller, Buyer and TMC, and
insofar as is applicable Xxxxxxx, shall have executed and delivered a Supply
Agreement in form and substance reasonably satisfactory to both parties with the
terms and conditions outlined in Exhibit A hereof.
(c) ESCROW AGREEMENT. Each of the Company, the Seller and the
Escrow Agent shall have executed and delivered the Escrow Agreement in form and
substance reasonably satisfactory to both parties.
(d) CONSENTS. The Company and the Seller, as the case may be,
shall have made all filings with and notifications of governmental authorities,
regulatory agencies and other entities required to be made by the Company or the
Seller in connection with the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby and the Company and Buyer
shall have received all authorizations, waivers, consents and permits, in form
and substance reasonably satisfactory to Buyer, from all third parties,
including without limitation, applicable governmental authorities, regulatory
agencies, lessors, lenders and contract parties, required to permit the
continuation of the business of the Company and the consummation of the
transactions contemplated by this Agreement.
(e) BALANCE SHEET ITEMS. At the Closing, the balance sheet of
the Company shall contain the following items, (i) a cash balance of at least
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION], which amount may be increased up to [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] in the
event that the debt outstanding as set forth in item (ii) hereof exceeds
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION], in which case the cash balance will increase on a
proportional basis; (ii) debt payable to Kredietbank in a total principal amount
equal to a minimum of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] and a maximum of [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; (iii)
a book amount of intercompany
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accounts receivable of approximately [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION; and (iv) the write off
of goodwill in an amount approximately equal to 37,837,000 BEF and certain other
balance sheet adjustments to be subsequently defined.
4.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE SELLER. The
obligation of the Company and the Seller to consummate this Agreement and the
transactions contemplated hereby is subject to the fulfillment, prior to or at
the Closing, of the following conditions precedent:
(a) REPRESENTATIONS; WARRANTIES; COVENANTS. Each of the
representations and warranties of the Buyer and Xxxxxxx contained in Section 2
shall be true and correct in all material respects as of the date of this
Agreement and as of the
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Closing Date as though made on and as of the Closing; and Buyer and Xxxxxxx
shall, on or before the Closing, have performed all of their obligations
hereunder which by the terms hereof are to be performed on or before the
Closing.
(b) SUPPLY AGREEMENT. Each of the Seller, the Buyer and TMC, and
insofar as applicable Xxxxxxx shall have executed and delivered a Supply
Agreement in form and substance reasonably satisfactory to both parties with the
terms and conditions outline in Exhibit A hereof.
(c) ESCROW AGREEMENt. Each of the Company, Buyer, Seller and the
Escrow Agent shall have executed and delivered the Escrow Agreement in form and
substance reasonably satisfactory to both parties.
(d) CONSENTS. The Buyer and Xxxxxxx shall have made all filings
with and notifications of governmental authorities, regulatory agencies and
other entities required to be made by the Buyer of Xxxxxxx in connection with
the execution and delivery of this Agreement and the performance of the
transactions contemplated hereby and the Company, and Buyer shall have received
all authorizations, waivers, consents and permits, in form and substance
reasonably satisfactory to the Company and Seller, from all third parties,
including without limitation, applicable governmental authorities, regulatory
agencies, lessors, lenders and contract parties, required to permit the
continuation of the business of the Company and the consummation of the
transactions contemplated by this Agreement.
(e) BALANCE SHEET ITEMS. At the Closing, the balance sheet of
the Company shall contain the following items, (i) a cash balance of at least
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION], which amount may be increased up to [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] in the
event that the debt outstanding as set forth in item (ii) hereof exceeds
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION], in which case the cash balance will increase on a
proportional basis; (ii) debt payable to Kredietbank in a total principal amount
equal to a minimum of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] BEF and a maximum of [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]; (iii) a book amount of intercompany accounts receivable of
approximately [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]; and (iv) the write off of goodwill in an
amount approximately equal to 37,837,000 BEF and certain other balance sheet
adjustments to be subsequently defined.
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(f) SERVICE AGREEMENT. The Company and Seller, or its designated
affiliates shall enter into a Service Agreement with respect to services to be
provided for up to one year by the Company to Seller and its affiliates by up to
6 engineers and certain designated administrative personnel. The Service
Agreement will also provide that Seller or such affiliates shall have the right
to require the transfer to Seller or such affiliate, of such personnel during
the term of such Service Agreement, with the consent of such person. Such
Service Agreement may also provide that CP Clare or its affiliates will provide
certain services to the Company for a limited term. Prior to or at the Closing,
the existing Service Agreement dated as of July 10, 1996 by and between the
Company and CP Clare, N.V. shall have been terminated and be of no further force
and effect, and all intercompany transfers required thereunder shall have been
made or settled.
(g) Guaranty Release. The Seller shall have received a full and
unconditional release of its parental guaranty of the Company's debt outstanding
to Kredietbank, in form and substance satisfactory to the Seller.
Section 5. OTHER COVENANTS AND INDEMNITIES
5.1 RELEASE. Unless as otherwise set forth in Section 5.2, each of
TMC, Xxxxxxx and Buyer and their affiliated persons hereby irrevocably waive the
assertion of any claims against the Seller and its affiliates and affiliated
persons as concerns any and all claims and liabilities arising in respect of the
acquisition of the TMC Shares and agrees not to bring any lawsuit or other
action or proceeding or claim in respect thereto, including with respect to any
amounts of severance or other amounts required to be paid due to the social
restructuring of the Company; provided, however, that nothing in this Section
5.1 shall limit the right of Buyer or Xxxxxxx to seek indemnification as set
forth in Section 5.2 hereof. Each of Xxxxxxx and Buyer hereby acknowledge that
the Company has given notice of a collective dismissal of 160 Company employees.
5.2 INDEMNIFICATION.
(a) After the Closing the Company shall save, defend, indemnify
and hold harmless the Seller and its affiliated persons from, and shall promptly
reimburse each of them for, any losses, damages, costs and expenses, including
reasonable legal fees, incurred by or assessed against any of them and arising
out of or resulting directly or indirectly from: (A) any act or omission of the
Company following the Closing Date with respect to the operation and conduct of
the business; (B) the payment or fulfillment or failure to pay or fulfill when
due and liability or obligation of the Company, whether arising prior to or
after the date hereof, including, without limitation, liabilities associated
with severance or social restructuring; and (C) the performance or failure to
perform under any contract or other agreement applicable to the Company.
(b) Buyer and Xxxxxxx shall jointly and severally save, defend,
indemnify and hold harmless the Seller and its affiliated persons from, and
shall promptly reimburse each of them for, any losses, damages, costs and
expenses (including
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reasonable legal fees) incurred by or assessed against any of them and arising
out of or resulting directly or indirectly from: (A) the inaccuracy of any
representation or warranty made by Xxxxxxx or Buyer in this Agreement; or (B)
the failure by Xxxxxxx or Buyer to perform or observe any term or provision of
this Stock Purchase Agreement.
(c) Following the Closing, the Seller shall save, defend,
indemnify and hold harmless the Buyer and Xxxxxxx and their affiliated persons
from and shall promptly reimburse each of them for, any losses, damages, costs
and expenses (including reasonable legal fees) incurred by or assessed against
any of them arising out of or resulting from, (A) the inaccuracy of any
representation or warranty made by the Seller in this Agreement; (B) the failure
by the Seller to perform or observe any term or provision of this Agreement, (C)
legal action taken against the Company by Elfein Elektrogerate GmbH with respect
to claims for allegedly defective switches sold by the Company prior to the
Closing (D) the indebtedness of the Company to Xxxxxx, Inc. which has been
repaid and ATT, all of which indebtedness has been transferred out of the
Company prior to the Closing and (E) taxes payable by the Company for periods
ending prior to the Closing Date in the event that such tax liability exceeds
the net operating losses attributable to the Company on the date of Closing or
penalties associated with any late payment of taxes.
(d) When a party seeking indemnification under Sections 5.2(a),
(b), or (c) (the "Indemnified Party") receives notice of any claim made by third
party (a "Third Party Claim") which is to be the basis for a claim for
indemnification hereunder, the Indemnified Party shall give prompt written
notice thereof to the party from which indemnification is sought (the
"Indemnifying Party") reasonably indicating (to the extent known) the nature of
such claim and the basis thereof, but the failure so to notify the Indemnifying
Party (i) will not relieve it from liability under paragraphs (a), (b) or (c)
above unless and to the extent such failure results in the forfeiture by the
Indemnifying Party of any right and defense and (ii) will not, in any event,
relieve the Indemnifying Party from any other obligations to any Indemnified
Party. Upon notice from the Indemnified Party, the Indemnifying Party may, but
shall not be required to, assume the defense of any such Third Party Claim,
including its compromise or settlement, and the Indemnifying Party shall pay all
reasonable costs and expenses thereof and shall be fully responsible for the
outcome thereof; provided, however, that in such case the Indemnifying Party
shall have no obligation to pay any further costs or expenses of legal counsel
of the Indemnified Party in connection with such defense. Notwithstanding the
Indemnifying Party's election to appoint counsel to represent the Indemnified
Party in an action, the Indemnified Party shall have the right to employ
separate counsel (including local counsel), and the Indemnifying Party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) use
of counsel chosen by the Indemnifying Party to represent the Indemnified Party
would present such counsel with a material conflict of interest, (ii) the
defendants in, or targets of, any such action include both the Indemnified
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Party and the Indemnifying Party and the Indemnified Party shall have reasonably
concluded that there are legal defense available to it which conflict with those
available to the Indemnifying Party, (iii) the Indemnifying Party shall not have
employed counsel reasonably satisfactory to the Indemnified Party to represent
the Indemnified Party within 30 days after notice of the institution of such
action or (iv) the Indemnifying Party shall authorize the Indemnified Party to
employ separate counsel at the expense of the Indemnifying Party. No compromise
or settlement in respect of any Third Party Claim may be effected by the
Indemnifying Party without the Indemnified Party's prior written consent (which
consent shall not be unreasonably withheld), unless the sole relief is monetary
damages that are paid in full by the Indemnifying Party. The Indemnifying Party
shall give notice to the Indemnified Party as to its intention to assume the
defense of any such Third Party Claim within thirty business days after the date
of receipt of the Indemnified Party's notice in respect of such Third Party
Claim. If an Indemnifying Party does not, within thirty business days after the
Indemnified Party's notice is given, give notice to the Indemnified Party of its
assumption of the defense of the Third Party Claim, the Indemnifying Party shall
be deemed to have waived its rights to control the defense thereof. If the
Indemnified Party assumes the defense of any Third Party Claim because of the
failure of the Indemnifying Party to do so in accordance with this Section the
Indemnifying Party shall pay all reasonable costs and expenses of such defense.
The Indemnifying Party shall have no liability with respect to any compromise or
settlement thereof effected without its prior written consent (which consent
shall not be unreasonably withheld). An Indemnifying Party will not, without the
prior written consent of the Indemnified Parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Party from all liability arising out of such claim, action, suit or proceeding.
5.3 ENVIRONMENTAL INDEMNITY. Following the Closing, Seller agrees to
indemnify the Company for fifty percent (50%) of the reasonable and conclusively
documented costs incurred by the Company on instruction of OVAM or other
appropriate Flemish governmental authority to remediate any groundwater
contamination that is found at the Tongeren, Belgium site of the Company and
described in the Dames and Xxxxx report dated December 5, 1996 (the "Report");
and which was caused by the operation of the Company prior to the date of such
Report. Such Report was provided to the Buyer prior to the execution of this
Agreement. The indemnification by the Seller with respect to this Section 5.3
shall in no event exceed $500,000; and any amounts owing or paid by Seller to
Company shall be reduced by fifty percent (50%) of any amount received by the
Company as a contribution towards the clean up costs, including, without
limitation, governmental funding or contribution by other parties, whenever such
set off amount is received. The right of indemnification arising under this
Section 5.3 shall only arise if (a) Seller has been advised in writing and in
advance of any amounts to be expended in connection with any such clean-up and
has the opportunity to review and approve any clean-up proposal, which approval
will not be unreasonably withheld,
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and (b) the Company proves to the satisfaction of the Seller that the Company,
with the assistance of the Buyer, as needed, has used its best efforts to
obtain any such government or third party contribution towards the clean up
costs as may be available and has exercised all other recourse as may be
available, provided, however, that this item (b) shall not require the Company
to commence litigation to obtain such contribution. The right to
indemnification by the Company under this Section 5.3 shall terminate and be of
no further force and effect on January 31, 2002 and shall terminate earlier in
the event that any groundwater remediation is completed by the Company or it is
determined that no such remediation obligation exists.
5.4 CONFIDENTIALITY. If this Agreement and the transactions
contemplated hereby are not consummated, each party hereto shall treat all
information obtained in connection with this Agreement and the transactions
contemplated hereby, not otherwise in the public domain, as confidential in
accordance with the provisions of the Confidentiality Agreement previously
signed by the parties on August 19, 1996.
5.5 LIABILITY. Nothing in this Agreement shall be deemed to impose
any liability on Comus International, Xxxxx Xxxxxx or Xxxxxx Xxxxxx.
Section 6. CLOSING DELIVERIES
6.1 SELLER'S DELIVERIES. At the Closing, Seller shall deliver, shall
have previously delivered, or shall cause to be delivered, as applicable, the
following:
(a) an executed copy of the Supply Agreement
(b) an executed copy of the Escrow Agreement
(c) an executed copy of the Service Agreement
(d) a legal opinion issued by counsel to the Seller reasonably
satisfactory to the Buyer opining upon (i) the legal existence and good standing
of the Seller in its jurisdiction of organization; (ii) the enforceability of
the Agreements executed at the closing; and (iii) the authority of the Seller to
enter into and fully perform the Agreements to be executed at the Closing
(e) such other documents and instruments as Buyer may reasonably
request to effectuate or evidence the transactions contemplated by this
Agreement.
6.2 THE BUYER'S DELIVERIES. At the Closing, the Buyer shall deliver,
or shall cause to be delivered, to Seller the items described below:
(a) the cash Purchase Price
(b) an executed copy of the Supply Agreement
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(c) an executed copy of the Escrow Agreement
(d) an executed copy of the Service Agreement
(e) a legal opinion issued by counsel to the Buyer and Xxxxxxx
reasonably satisfactory to the Seller opining upon (i) the legal existence and
good standing of each of the Company and Xxxxxxx in their respective
jurisdictions of organization; (ii) the enforceability of the Agreements
executed at the closing; and (iii) the authority of each such Company to enter
into and fully perform the Agreements to be executed at the Closing.
(f) such other documents and instruments as the Seller may
reasonably request to effectuate or evidence the transactions contemplated by
this Agreement.
Section 7. MISCELLANEOUS
7.1 ASSIGNMENT. None of the parties to this Agreement may assign any
of its rights or obligations under this Agreement without the prior written
consent of the other parties hereto. Subject to the foregoing, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns.
7.2 ENTIRE AGREEMENT; AMENDMENTS; WAIVER. This Agreement contains the
entire understanding between the parties hereto with respect to its specific
subject matter. This Agreement may be amended only by written instrument duly
executed by the parties hereto. No party may waive any term, provisions,
covenant or restriction of this Agreement except by duly signed writing
referring to the specific provision to be waived.
7.3 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered personally
or transmitted by telex, fax of telegram, to the respective parties as follows:
(a) If to the Seller:
C.P. Clare Corporation
00 Xxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxxxx X. Xxxxxx
with a copy to:
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C.P. Clare Corporation
00 Xxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxx
(b) If to the Buyer:
Xxxxxxx XxxX
Xx. Xxxxxx - Xxxxxxx 0
0000 Xxxxx, Xxxxxxxxxxx
Attn: Dr. Beat Xxxxxxxxxxx
with a copy to:
X. Xxxxxxx GmbH
Virnsberger Xxxxxxx 00
Xxxxxxxxx X. 00000
Xxxxxxx
Attn: Xxxxx Xxxxxx
or to such other address as any party may have furnished to the others in
writing.
7.4 GOVERNING LAW. This Agreement will be governed by and construed
in accordance with the internal laws of the Commonwealth of Massachusetts, USA,
without regard to its conflict of laws provisions.
7.5 SURVIVAL. All representations, warranties, covenants and
agreements of the parties hereto shall survive indefinitely the Closing.
7.6 FEES AND EXPENSES. Each of the parties will bear its own expenses
in connection with the negotiation and the consummation of the transactions
contemplated by this Agreement.
7.7 PUBLICITY AND DISCLOSURES. No press releases or public
disclosure, either written or oral, of the transactions contemplated by this
Agreement, shall be made by a party to this Agreement without the prior
knowledge and written consent of Buyer and the Company.
7.8 CONSENT TO JURISDICTION. The parties hereby consent to personal
jurisdiction, service of process and venue in the federal or state courts of
Massachusetts USA or Belgium for any claim, suit or proceeding arising under
this Agreement, or in the case of a third party claim subject to indemnification
hereunder, in the court where such claim is brought.
7.9 COUNTERPARTS; HEADINGS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together
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shall constitute one and the same document. The article and section headings
contained herein are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
7.10 REPRESENTATION. Each party hereto acknowledges that it has had
the benefit of advice of competent legal counsel with respect to its decision to
enter into this Agreement. This Agreement shall not be construed against the
drafter thereof.
7.11 ARBITRATION. Except with respect to an action seeking specific
performance, any dispute arising relating to this Agreement, or a breach of this
Agreement, arising among the parties shall be settled by arbitration in
accordance with the commercial arbitration rules of the American Arbitration
Association ("AAA"). The arbitration proceeding, including the rendering of an
award, shall take place in Boston, Massachusetts and be administered by the AAA.
The decision of the arbitrators shall be final and binding on the parties hereto
and any judgment rendered by such arbitrators may be enforced by any court of
competent jurisdiction. Each party shall bear its own expenses in connection
with such arbitration unless otherwise ordered by such arbitrator.
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7.12 LANGUAGE. The official language of this document and all
documents produced in connection with the transactions contemplated by this
Agreement shall be English. Any translation into any other language shall be for
the convenience of the parties only and shall be of no force and effect
whatsoever.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written.
C.P. CLARE CORPORATION
By: ________________________
Xxxxxxxxxx X. Xxxxxx
Vice President and Chief
Financial Officer
TONGEREN MANUFACTURING
COMPANY
By: ________________________
Xxxxxx Xxxxxxxx
Director
By: ________________________
Xxxxxxxxxx X. Xxxxxx
Director
XXXXXXX, GmbH
By: ________________________
Xxxxx Xxxxxx
Managing Director
X. XXXXXXX, GmbH
With respect to Sections 2.2,
5.1, 5.2 (b), 5.2 (c), 5.2 (d),
5.4 and 7.1 - 7.12.
By: ________________________
Xxxxx Xxxxxx
Managing Director
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EXHIBIT A
SUMMARY OF SUPPLY AGREEMENT
(a) Simultaneously with the closing of the Acquisition, TMC and CP Clare or
its designated affiliate will enter into a Supply Agreement for three years
which shall provide that TMC shall provide a supply of mercury switches and/or
relays to CP Clare on a sole source basis. CP Clare or its designees shall agree
to purchase a total minimum annual revenue amount in the first calendar year
equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION] (U.S.), in consideration for TMC not selling the
following products in any configuration to any third party during the term of
the Supply Agreement: [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION]. The minimum annual revenue commitments
for the second and third calendar years shall be established by December 15 the
of preceding calendar year. The parties may agree to extend the Supply Agreement
beyond the three year term on a year to year basis. TMC shall be entitled to
manufacture and sell directly [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of mercury wetted
switches per week if such production is transferred from another Xxxxxxx
facility. Any newly developed mercury wetted switches manufactured by TMC will
be distributed and sold solely through CP Clare. Any dry xxxx switches
manufactured by TMC will be subject to a royalty payment to CP Clare, which
shall be negotiated on a case by case basis The parties will agree in the
definitive supply agreement on the methods by which annual revenue targets shall
be achieved, which shall include but not be limited to purchases of products by
CP Clare or its affiliates, purchases of other products produced by TMC, and
purchases by buyers referred to TMC by CP Clare or its affiliates.
(b) The Supply Agreement will contain the following additional terms and
conditions:
(i) TMC shall maintain or obtain, as the case may be, ISO 9000 status
at the Tongeren plant.
(ii) An operating committee consisting of two representatives of each
of CP Clare and of TMC shall be created and maintained during the term of the
Supply Agreement. The powers and obligations of the operating committee shall be
set forth in the Supply Agreement but shall include general review of the
operations of TMC in connection with switch and relay sales.
(iii) CP Clare shall have the obligation prior to the expiration of
the Supply Agreement to purchase the identified dry xxxx relay and TAP
automation tooling, fixtures and equipment for a total purchase price of
[CONFIDENTIAL MATERIAL OMITTED
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* Confidential Treatment Requested *
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] (U.S.).
(iv) The parties will have reciprocal rights of first refusal
regarding (i) on the part of CP Clare, the sale by [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] during
the period of the Supply Agreement of a majority or controlling interest of the
parent corporation of Xxxxxxx and the right of first refusal in the event of the
sale, liquidation or bankruptcy of the Company or the transfer by the Company of
any mercury switch or relay equipment, whether voluntarily or in connection with
a liquidation, forced sale or bankruptcy; and (ii) on the part of the Company,
the sale by CP Clare of any equipment related to the manufacture of mercury
switches or relays.
(v) In the event that TMC breaches its obligations under the Supply
Agreement CP Clare shall be entitled to produce mercury switches and relays
directly and / or to find an alternative source.
(vi) Xxxxxxx Xxxxx and Xxxxxxx will make affirmative covenants that
TMC will not be voluntarily liquidated or sold within the period of the Supply
Agreement.
(vii) [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] will retain majority ownership and control
of the ultimate parent company of Xxxxxxx during the term of the Supply
Agreement, unless otherwise agreed.
(viii) In order to assure performance under the Supply Agreement, at
the Closing TMC will place $1.25 million into escrow which amount shall be
payable to CP Clare in the event of default under the Supply Agreement, on such
terms as the parties may agree. The escrow will be released over the first three
years of the Supply Agreement based on successful performance under the Supply
Agreement.
Nothing in the Supply Agreement shall be deemed to impose liability on Comus
International, Xxxxx Xxxxxx or Xxxxxx Xxxxxx.
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EXHIBIT B
Equipment
---------
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION].
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