Execution copy
SHARE PURCHASE AGREEMENT
relating to the shares in:
COMPX EUROPE B.V.
made on 24 January 2005 between:
COMPX INTERNATIONAL INC.
(as Seller)
and
ANCHOR HOLDING B.V.
(as Purchaser)
CONTENTS
Clauses
1. Interpretation
2. Sale/purchase and transfer of the Shares
3. Purchase Price and payment
4. Completion
5. Seller's Representations and Warranties
6. Due Diligence investigation
7. Limitation on Seller's liability
8. Handling of Warranty Claims
9. Off-settable losses
10. Severance payment
11. Purchaser's Warranties
12. Post-closing covenants
13. Intercompany trading balances
14. Trade names
15. Confidentiality
16. Non-competition
17. Public announcements
18. Assignment
19. Expenses
20. Miscellaneous
21. Notices
22. Governing law and competent court
Schedules and Annexes
Schedule 1 Representations and Warranties
(Annex 8.1 - Intellectual Property)
(Annex 4.1 - Audited Accounts 2003)
(Annex 5.1 - Interim Accounts)
Schedule 2 Disclosure Letter
(Annex I - Index of Data Room Documents)
Schedule 3 Purchaser's Warranties
Schedule 4 Transfer Deed
Schedule 5 Shareholders' resolutions in respect of the conversion of
outstanding debts (including accrued interest) and relocation
provision into equity
Schedule 6 Shareholders' resolutions in respect of (i) distribution of
reserves and (ii) appointment and dismissal of statutory
directors and dismissal of members of supervisory board
Schedule 7 Principal Terms and Conditions (regarding distribution and
agency)
Schedule 8 Patent License Agreement
Schedule 9 Subordinated Loan
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (the "Agreement") is made this 24 day of January
2005 between:
1. COMPX INTERNATIONAL INC, a company incorporated under the laws of Delaware,
having its place of business located at Three Lincoln Centre, Suite 1700,
0000 XXX Xxxxxxx, Xxxxxx, Xxxxx, XXX 00000, hereinafter referred to as: the
"Seller";
and
2. ANCHOR HOLDING B.V. a private company incorporated under the laws of the
Netherlands, having its statutory seat in Maastricht, and address at
Industrieweg 40 (6219 NR) Maastricht, the Netherlands, hereinafter referred
to as: the "Purchaser";
Party 1 and 2 are hereinafter jointly referred to as the "Parties" and each of
them a "Party";
WHEREAS:
A. Seller holds all issued shares in the capital of CompX Europe B.V., a
private company with limited liability, (besloten vennootschap met beperkte
aansprakelijkheid), incorporated under the laws of the Netherlands, having
its statutory seat in Maastricht, and address at Industrieweg 40 (6219 NR)
Maastricht, the Netherlands (the "Company");
B. In turn, the Company holds - directly and/or indirectly - the entire share
capital of Xxxxxx Xxxxxx Holding B.V. ("TRH"), Xxxxxx Xxxxxx Nederland B.V.
("TRN"). Xxxxxx Xxxxxx B.V. ("TR") and Xxxxxx Xxxxxx International B.V.
("TRI") (the Company, TRH, TRN, TR and TRI hereinafter jointly referred to
as the "Companies");
X. Xxxxx van Luyken in his capacity as member of the management board of each
of the Companies has expressed its interest to purchase from the Seller
(through the Purchaser) 100% of the issued and outstanding shares in the
Company being 200 ordinary shares with a nominal value of (euro) 100 (the
"Shares");
D. the Purchaser and the Seller have complied with their obligations pursuant
to the Works Council Act (Wet op de ondernemingsraden) and the SER Merger
Code 2000 (SER-Fusiegedragsregels 2000) and no objections have been
expressed by the relevant Works Council(s) to the (contemplated)
Transaction;
E. to the extent applicable, the Purchaser and the Seller have complied with
the obligations pursuant to Chapter 5 of the Dutch Competition Act
(Mededingingswet);
F. the Seller and the Purchaser have obtained the necessary internal approvals
to enter into the Transaction;
G. Parties shall procure that the outstanding long term debts in the amounts
of (euro) 20,218,257 (excluding accrued interest) and (euro) 3,477,053
(excluding accrued interest) payable by TR and the Company, respectively,
to the Seller prior to the Completion Date including the accrued interest
thereon shall be converted into equity of the respective Companies no later
than on the Completion Date;
H. this Agreement sets forth the terms and conditions pursuant to which the
Seller has accepted to sell and the Purchaser has agreed to purchase the
Shares (the "Transaction").
NOW IT IS HEREBY AGREED AS FOLLOWS:
Clause 1. Interpretation
In this Agreement:
Audited
Accounts means the audited statutory financial statements of the Companies for
the period ending 31 December 2003, consisting of a balance sheet
reflecting the financial position of the Companies as at 31 December
2003, the profit and loss accounts for the period 1 May, 2003 up to
and including 31 December 2003 and the explanatory notes thereto which
financial statements are drawn up by the Seller in accordance with
Dutch GAAP;
Agreement means this share purchase agreement including all Annexes and
Schedules thereto;
Annex any annex to any of the Schedules;
Awarded Amount
means the awarded amount as defined in Clause 5.4;
Business Day
means a day, other than a Saturday or Sunday, on which banks are
generally open for business in Amsterdam, and collectively referred to
as "Business Days";
Breach of
Warranties
means any Warranty, individually or together with other Warranties,
being wholly or partially untrue, inaccurate or misleading on the
Completion Date;
Cash Purchase
Price
means the cash purchase price as defined in Clause 3 of this
Agreement;
CITA means Corporate Income Tax Act (Wet op de vennootschapsbelasting
1969);
CIT means Corporate Income Tax, being taxation based on application of the
CITA;
Communication
means the communication as defined in Clause 21.1 of this Agreement;
Company means CompX Europe B.V.;
Companies mean the companies as defined under B of the preamble;
Completion
means the completion of the sale and purchase of the Shares in
accordance with this Agreement;
Completion
Date means 24 January 2005, or such other date as the Parties may agree;
Damages means damages as referred to in section 6:96 Dutch Civil Code,
excluding consequential damages and loss of profit to the extent these
are not to be taken into account pursuant to section 6:98 Dutch Civil
Code;
Data Room means the data room containing documents and information relating to
the Companies made available to the Purchaser and their
representatives and advisers at the offices of the Company. An index
of the documents and information provided to the Purchaser in the data
room is attached as Annex I to Schedule 2;
Disclosure
Letter means the disclosure letter referred to in Clause 5.1 and attached as
Schedule 2;
Due Diligence
Investigation
means the financial, tax and legal due diligence investigation that
Purchaser and its advisors conducted into the affairs of the
Companies;
Interim
Accounts mean the unaudited balance sheet of the Company as at September 24,
2004 and the unaudited income statement of the Company for the period
from January 1, 2004 to September 24, 2004, attached as Annex 5.1 to
Schedule 1;
Notary means X.X. Xxxxxxxx or another civil law notary of Stibbe, or his
substitute;
Notary's Account
Number means the notary's account with account number 696.462.672 held with
ING;
Off-Settable Losses
means the off-settable losses as defined in Clause 9.1 of this
Agreement;
Off-Settable Losses Indemnification
means the off-settable losses indemnification as defined in Clause 9.1
of this Agreement;
Party means a party to this Agreement and collectively the "Parties";
Patent License
Agreement means the patent license agreement defined in Clause 4 (xv) of this
Agreement and attached as Schedule 8;
Principal terms and
Conditions
means the principal terms and conditions (regarding distribution and
agency) defined in Clause 4 (xiv) of this Agreement and attached as
Schedule 7;
Purchaser means the Party referred to under 2 in the preamble to this Agreement;
Purchase
Price means the purchase price as defined in Clause 3 of this Agreement;
Purchaser's
Warranties
mean the warranties by the Purchaser referred to in Clause 11 of this
Agreement and set out in Schedule 3;
Relevant Party
means the relevant party as defined in Clause 8.3 of this Agreement;
Representations
and Warranties
mean the statements set out in Schedule 1;
Schedules any schedule to this agreement;
Seller means the Party referred to under 1 in the preamble to this Agreement;
Seller's
Knowledge means the knowledge of the Seller in its capacity as shareholder of
the Company and in its capacity as statutory director and, whereby the
knowledge of the Seller in its capacity as statutory director is
limited to its actual knowledge;
Shares mean 100% of the issued and outstanding shares of the Company as
defined under C of the preamble;
Signing Date
means the date of signing this Agreement, being the Completion Date;
Subordinated Loan
Agreement means the subordinated loan agreement defined in Clause 4 (xvi) of
this Agreement and attached as Schedule 9;
Taxes mean value added tax, wage and personal income taxes, social security
premiums, corporate income tax and capital tax;
Third Party
Claim means a liability vis-a-vis or a dispute with a third party;
Transaction
means the transaction as defined under H in the preamble of this
Agreement;
TR
means the company as defined under B in the preamble of this
Agreement;
Transfer
Deed
means the notarial deed of transfer by which the Shares will be
transferred by the Seller to the Purchaser;
TRH means the company as defined under B in the preamble of this Agreement;
TRI means the company as defined under B in the preamble of this Agreement;
TRN means the company as defined under B in the preamble of this Agreement;
VAT means Value Added Tax, being taxation based on the Value Added Tax Act
(Wet op de omzetbelasting 1968);
Warranty
Claim means any individual claim by the Purchaser in respect of any of the
Representations and Warranties.
Clause 2. Sale/purchase and transfer of the Shares
2.1 On the terms and conditions set out in this Agreement the Seller hereby
sells the Shares to the Purchaser, and the Purchaser hereby purchases the
Shares from the Seller.
2.2 Subject to Completion, the Purchaser shall be entitled to exercise all
rights attached or accruing to the Shares as of the Completion Date.
2.3 The sale, purchase and transfer of the Shares shall take place on the
Completion Date by means of signing this agreement and the Transfer Deed,
which will be executed before the Notary. A copy of the Transfer Deed has
been attached hereto as Schedule 4. The Company shall be a party to the
Transfer Deed, thereby acknowledging the transfer of the Shares.
Clause 3. Purchase Price and payment
3.1 The purchase price (the "Purchase Price") for the Shares shall amount to
(i) a cash payment in the amount of (euro) 14,800,000 (in words: fourteen
million eight hundred thousand Euro(s)) (the "Cash Purchase Price") and
(ii) debt of the Purchaser in the amount of (euro) 3,200,000 (in words:
three million two hundred thousand Euro(s)) (to be denominated in US
dollars on the Completion Date) pursuant to and evidenced by the
Subordinated Loan Agreement as described in Clause 4 (xvi). It is assumed
that:
(i) any increase of the consolidated amount of shareholders equity as per
24 September 2004 until the Completion Date shall be for the benefit
of the Purchaser; and
(ii) no payments on existing long term debts and/or interest payment
relating thereto have been made in the period prior to the Closing
Date.
3.2 The Purchaser shall pay the Cash Purchase Price to the Notary's Account
Number by telephonic transfer order on the Completion Date. Upon receipt by
the Notary of the Cash Purchase Price and upon satisfaction of all payment
obligations of the Company pursuant to the Subordinated Loan Agreement as
referred to in Clause 4 (xvi), the Purchaser shall be deemed to have been
granted discharge by the Seller concerning its obligation to pay the
Purchase Price.
Clause 4. Completion
On the Completion Date the following actions and settlement shall take place in
the following order:
(i) the Company has reimbursed the Seller for the payments it has made in
relation to the insurance coverage in the amount of (euro) 256,078;
(ii) the Seller is hereby discharged by the Company from its (alleged) payment
obligation in the amount of (euro) 485,292 regarding the royalty
agreement;
(iii) the outstanding long term debts including accrued interest (as referred
to in recital G) shall be converted into equity by means of the execution
of the resolutions attached hereto as Schedule 5. The Seller shall
reimburse the respective Companies for any capital tax
(kapitaalsbelasting) associated with these conversions. For the avoidance
of doubt, capital tax (kapitaalsbelasting) due as a result of a
conversion into share capital of the Companies which takes place after
the Completion Date shall be borne and paid by the Purchaser;
(iv) the Purchaser shall procure that a part of the Cash Purchase Price in the
amount of (euro) 3,300,000 (in words: three million three hundred
thousand Euro(s)) has been paid to the Notary's Account Number by
telephonic transfer order;
(v) a right of pledge on the Shares shall be established by the Purchaser in
favor of the Rabobank Overname Financiering B.V. subject to the condition
precedent that the Shares have been transferred in accordance with the
terms and conditions of this Agreement;
(vi) the Seller shall transfer to the Purchaser title to and ownership of the
Shares in accordance with Clause 2.3 of this Agreement;
(vii) within the statutory limits and the limits set by Dutch law distribution
out of the freely distributable reserves of the Companies shall take
place by means of the execution of the resolutions attached hereto as
Schedule 6;
(viii) the Purchaser shall pay a part of the Cash Purchase Price in the amount
of (euro) 11,500,000 (in words: eleven million five hundred thousand
Euro(s)) to the Notary's Account Number by telephonic transfer order;
(ix) the Purchaser shall pay to the Seller the Cash Purchase Price by
instructing the Notary to transfer the Cash Purchase Price credited by
the Purchaser to the Notary's Account Number by telephonic transfer order
to an account number designated by the Seller in accordance with Clause 3
of this Agreement;
(x) the Seller shall make available to the Purchaser the shareholders'
registers of the Companies. In the shareholders register of the Company
the transfer of the Shares shall be properly recorded and signed by the
management board of the Company;
(xi) Purchaser, the Company, TRH, TRN and TR shall, in their capacity as sole
shareholder of respectively the Company TRH, TRN, TR and TRI, dismiss all
present statutory directors of TRH, TRN, TR and TRI, grant them full
discharge for their management until the Completion Date and appoint
Purchaser as statutory director of the Company, TRH, TRN and TR and
Familie Van Luyken B.V. as statutory director of TRI by means of the
execution of the resolutions attached hereto as Schedule 6;
(xii) the Company, in its capacity as sole shareholder of TRH, shall xxxxx X.X.
Xxxxxx and X.X. Xxxxxxx as members of the supervisory board of TRH full
discharge for their supervision until the Completion Date by means of the
execution of the resolution attached hereto as Schedule 6;
(xiii) the Purchaser shall provide the Seller with the resignation letters
signed by (i) CompX International Inc and J.M.B.J. van Luyken in which
the relevant managing director resigns as managing director of the
Company, TRH, TRN, TR and TRI immediately after the transfer of the
Shares, and (ii) X.X. Xxxxxx and X.X. Xxxxxxx in which the relevant
supervisory director resigns as supervisory director of TRH immediately
after the transfer of the Shares;
(xiv) the Purchaser and the Seller (or any of its group companies) shall enter
into principal terms and conditions (regarding distribution and agency)
in the draft form attached hereto as Schedule 7 (the "Principal Terms and
Conditions");
(xv) the Purchaser and the Seller (or any of its group companies) shall enter
into a license agreement in the draft form attached hereto as Schedule 8
(the "Patent License Agreement");
(xvi) the Purchaser and the Seller shall enter into a subordinated loan
agreement in the draft form attached hereto as Schedule 9 pursuant to
which a loan is granted by the Seller to the Purchaser for the remainder
of the Purchase Price, amounting to Euro 3,200,000 (to be denominated in
US dollars on the Completion Date) (the "Subordinated Loan Agreement").
Clause 5. Seller's Representations and Warranties
5.1 Subject to the limitations set forth in this Clause 5 and Clause 6, 7 and
8 the Seller hereby represents and warrants to the Purchaser that each of
the matters set forth in Schedule 1 hereto is and will be true correct
and not misleading at the Completion Date, except for any matters and/or
circumstances that have been disclosed to the Purchaser in the Disclosure
Letter attached as Schedule 2.
5.2 The Seller acknowledges that the accuracy of the Representations and
Warranties is essential for the Purchaser's decision to enter into this
Agreement on the terms contained herein. The Seller has no knowledge of
facts and circumstances which have not been disclosed to the Purchaser
prior to the date of this Agreement, which facts and circumstances can
reasonably be considered as having any material relevance for the
Purchaser entering into this Agreement.
5.3 The Purchaser acknowledges that the Representations and Warranties by the
Seller are limited to the ones contained in Schedule 1. The Parties
exclude the applicability of the provisions of title 1 of Book 7 of the
Dutch Civil Code.
5.4 The Seller hereby covenants and agrees with the Purchaser that it shall
compensate the Purchaser on a euro for euro basis for all Damages,
subject to the limitations, if any, of Clause 8, which may be incurred or
sustained by the Purchaser directly and exclusively resulting from a
Breach of Warranties, provided that such Damages have been awarded in an
amount which is immediately enforceable (uitvoerbaar bij voorraad) by the
relevant courts (the "Awarded Amount") or such claims have been settled
in accordance with Clause 8. If and to the extent the Awarded Amount has
been paid by the Seller and is rejected by the relevant court of appeal
in appeal proceedings and therefore the Purchaser has incurred no Damages
(partially or wholly), the rejected amount shall immediately be paid by
the Purchaser to the Seller.
5.5 The Purchaser hereby covenants and agrees with the Seller that it shall
not set off, nor has a right to set off (verrekenen) any amount owed to
the Purchaser resulting from a Breach of Warranties with any amount owed
to the Seller under the Subordinated Loan Agreement and/or the Principal
Terms and Conditions.
5.6 The Seller cannot invoke force majeure against a claim based on Breach of
Warranties.
Clause 6. Due Diligence Investigation
6.1 The Purchaser has conducted the Due Diligence Investigation, which Due
Diligence Investigation has been completed before the Completion Date. As
part of the Due Diligence Investigation, the Seller has provided the
Purchaser with information and documentation listed in the Disclosure
Letter that is attached as Annex I to Schedule 2.
6.2 The Purchaser declares that it is not aware of any Breach of Warranties
or any claim or matter which could give rise to such breach.
Clause 7. Limitation on Seller's liability
7.1 The Seller shall not be liable for any Warranty Claim unless (a) the
amount of any single Warranty Claim exceeds (euro) 10,000 (in words: ten
thousand Euro(s)), whereby claims arising from the same Representation
and Warranty or in respect of the same subject matter or from the same
cause, set of facts or relating to the same type of asset or liability on
the balance sheet, shall be considered one single claim, and (b) the
aggregate amount of liability in respect of all Warranty Claims exceeds
(euro) 75,000 (in words: seventy five thousand Euro(s)), in which case
the Seller shall be liable for the aggregate amount.
7.2 The total aggregate liability of Seller for claims arising out of or
related to this Agreement (including Warranty Claims) shall not exceed
fifty per cent (50%) of the Purchase Price, being (euro) 9,000,000 (in
words: nine million Euro(s)).
7.3 The Seller shall have no liability in respect of any Warranty Claim:
(i) to the extent that such claims would not have arisen but for (a)
any change in the applicable law or taxes or interpretation
thereof after the Completion Date (whether or not such change
purports to have retroactive effect), (b) any change in the
accounting policies and methods applied in respect of the
Companies after the Completion Date; or
(ii) to the extent that any provision or reserve has been made in the
Audited Accounts and/or the Interim Accounts for matters giving
rise to a Warranty Claim; or
(iii) to the extent it relates to any loss or Damages which is recovered
by the Purchaser and/or the Companies from its insurers.
7.4 The liability of the Seller in respect of any Warranty Claim shall be
reduced by any Tax or other saving directly in connection with the
circumstances that give rise to a Warranty Claim.
7.5 Any payment made by the Seller in respect of any Warranty Claims shall be
deemed to be a reduction of the amount of the Cash Purchase Price.
Clause 8. Handling of Warranty Claims
8.1 The Purchaser shall inform the Seller in writing of any Warranty Claim as
soon as reasonably possible and in any event within 30 Business Days
after the Purchaser has become aware of such Warranty Claim stating the
nature of the breach and - to the extent reasonably possible - the damage
sustained or expected, failing which no claim can be brought by the
Purchaser against the Seller on the basis of such Warranty Claim.
8.2 The Seller shall not be liable for any Warranty Claim unless it has
received written notice from the Purchaser:
(i) in case of a Warranty Claim in respect of the Representations and
Warranties in paragraph 6 of Schedule 1 (`Taxes') within three
months after the date of expiry of the period of time prescribed
by the applicable statute of limitations,
(ii) in case of a Warranty Claim in respect of the Warranties in
paragraph 2 (Corporate Standing), 3 (Capital and Shares), 7.2 and
7.3 of Schedule 1 within ten (10) years from the Completion Date;
and
(iii) in case of a Warranty Claim in respect of any of the other
Warranties within eighteen (18) months as of the Completion Date;
8.3 If a Breach of Warranty is the result of or connected with a Third Party
Claim, the Purchaser shall ensure that:
(i) the party against whom the Third Party Claim is made ("Relevant
Party") shall, after mutual consultation of the Seller and the
Purchaser, do everything (or as the case may be refrain from doing
anything) to conduct a defence against, or negotiate about the
Third Party Claim concerned, and to minimize the Damages that may
arise from the Third Party Claim;
(ii) in connection with the defence referred to above in this
paragraph, the Relevant Party shall only engage advisors after
consultation with the Seller and the Purchaser, or, at the joint
request of the Seller and the Purchaser give the Seller a power of
attorney to act in and out of court as agent of the Relevant Party
in respect of the defence or negotiations relating to the Third
Party Claim.
8.4 To the extent Seller acts in and out of court as agent of the Relevant
Party in respect of the defence or negotiations relating to the Third
Party Claim as referred to above, the Seller shall have the right to
settle or defend, at its own expense and with its own professional
advisors, any Third Party Claim. The Purchaser shall co-operate with the
Seller in defence and/or negotiations relating to a Third Party Claim,
including but not limited to providing without charge access to all
relevant information, which may be requested by the Seller in this
respect. The Purchaser shall not unreasonably withhold its consent to a
settlement by the Seller of a Third Party Claim. If the Seller wishes to
settle a Third Party Claim, and the Purchaser refuses to consent such
settlement on unreasonable grounds, the liability of the Seller in
respect of such Third Party Claim shall be limited to the amount offered
for the settlement. The Purchaser shall not induce third parties to make
a Third Party Claim. The Seller shall not be liable for Third Party
Claims that are so induced.
8.5 In their manner of conduct in respect of a Third Party Claim, the parties
shall take into account the reasonable interest of the other party and
the Seller shall thereby give reasonable consideration to the Purchaser's
interest in maintaining a commercial relationship between the Purchaser
and the third party. However, if any conflict arises between the Seller's
interest in minimizing any compensation to be paid to the third party and
the Purchaser's interest in maintaining a commercial relationship with
the third party, the Seller's interest in minimizing any compensation to
be paid to the third part shall in any event prevail.
Clause 9. Off-settable losses
9.1 The off-settable losses (compensabel verlies) (the "Off-Settable Losses")
of the Company amounts to at least (euro) 1,400,000 on the Completion
Date. If and to the extent the Off-Settable Losses are less than (euro)
1,400,000 the Seller shall reimburse the Company for the taxes related to
the shortfall. For the avoidance of doubt, the liability of the Seller
shall not exceed the amount of (euro) 1,400,000 times the corporate tax
rate in effect at the time a shortfall is determined (the "Off-Settable
Losses Indemnification").
9.2 If and to the extent that (i) the conversions set forth under G in the
preamble of this Agreement result in corporate income tax or (ii) a
current and/or deferred interest deduction related to the long term debts
of the Companies to the Seller is disallowed, Seller shall reimburse the
Purchaser for the amount of the tax claim in addition to the Off-Settable
Losses Indemnification set forth in Clause 9.1.
9.3 The disclosures set forth in paragraph 6.3 and 6.4 of the Disclosure
Letter do not limit Purchaser's right to claim under Clause 9.2 of this
Agreement.
9.4 The Off-Settable Losses Indemnification and any obligation of the Seller
to reimburse the Purchaser pursuant to Clause 9.2 shall not be subject to
the threshold set forth in Clause 7.1 of this Agreement.
Clause 10. Severance payment
The obligation assumed by the Seller to reimburse the Purchaser for a maximum
amount of (euro) 100,000, which reimbursement relates to the exit of Xx. X.X.
Xxxxxxx, has been reimbursed by the Seller by way of set off against the amount
payable by the Company to the Seller pursuant to Clause 4 (i) of this Agreement.
Clause 11. Purchaser's Warranties
11.1 The Purchaser represents and warrants to the Seller that each of the
matters set forth in Schedule 3 hereto is and will be true and accurate
at the Completion Date, unless explicitly stated otherwise. The Seller
acknowledges that the Purchaser Warranties are limited to the ones
contained in Schedule 3.
11.2 The Purchaser hereby covenants and agrees with the Seller that, subject
to the other provisions of this Clause 11, it shall compensate the Seller
and indemnify it against any and all liabilities and damages which may be
incurred or sustained by the Seller resulting from or relating to any
misrepresentation or breach of warranty under the Purchaser Warranties.
11.3 If the Seller becomes aware of a breach pursuant to the Purchaser
Warranties, it shall inform the Purchaser thereof (thereby stating the
nature if the fact circumstance or event concerned, as well as the amount
of the liabilities and damages expected) as soon as reasonably possible
and in any event within 30 Business Days after the Seller has become
aware of such breach, failing which no claim can be brought by the Seller
against the Purchaser on the basis of such breach under the Purchaser
Warranties.
Clause 12. Post-closing covenants
12.1 The Seller hereby covenants and agrees with the Purchaser that as of the
Completion Date until 1 July 2005 the Companies can continue the use of
the license as granted to the Seller and its group companies pursuant to
the contract that the Seller has entered into with Mc Afee on behalf of
its group companies.
12.2 The Seller hereby covenants and agrees with the Purchaser that as of the
Completion Date the Companies can continue the use of the license as
granted to the Seller and its group companies pursuant to the contract
that the Seller has entered into with Microsoft on behalf of its group
companies, whereby (the use of) such license is limited to the software
released by Microsoft prior to the expiration of the contract on 1 July
2005. The Companies may install any updates or improvements thereto
without incurring additional licensing fees.
12.3 In case at any time after Completion any further action is necessary from
either the Companies and/or the Seller (or its group companies) to
complete each other's tax filings and/or audit filings, Parties shall
furnish to each other (and to their respective tax advisors and auditors)
and provide access to, all relevant information as reasonably requested
by the other party. The Purchaser shall ensure that the Companies shall
designate PricewaterhouseCoopers Accountants N.V. as to perform an annual
audit of their financial statements for the year 2004. The Seller and the
Purchaser shall procure that each of their group companies, employees and
advisors shall co-operate with the covenant described in this Clause 12.
12.4 The Seller hereby covenants and agrees with the Purchaser that within one
(1) month as of the Completion Date the domain names "xxxxxxxxxxxx.xxx",
"xxxxxxxxxxxx.xxx" and "xxxxxxxxxxxx.xxxx" are transferred to TRI for no
consideration.
12.5 The Seller hereby covenants and agrees with the Purchaser that within six
(6) month as of the Completion Date the trademark registered in the
United States Patent and Trademark Office in the name of Xxxxxx Xxxxxx
USA Inc under registration number 2,341,342 is transferred to TRI for no
consideration.
Clause 13. Intercompany trading balances
For the avoidance of doubt, the balance of payables and receivables between the
Companies on the one hand and Seller and/or any of its group companies on the
other hand, other than the ones listed in Clause 4, relating to their trading
activities, shall remain in place beyond the Completion Date and be dealt with
in the ordinary course of business.
Clause 14. Trade names
14.1 Without prejudice to the rights and obligations of the Parties pursuant
to the Principal Terms and Conditions, Parties hereby agree and
acknowledge that during a period of three (3) months as of the Completion
Date the Seller and/or its group companies and the Purchaser and/or the
Companies are entitled to use the trade names "CompX Regout" and "Xxxxxx
Xxxxxx".
14.2 The Seller and the Purchaser shall ensure that within six (6) months as
of the Completion Date, the formal names of Xxxxxx Xxxxxx USA Inc and the
Company, respectively, shall be amended, provided that the new name of
Xxxxxx Xxxxxx USA Inc, or any part thereof, shall not include the name
"Xxxxxx Xxxxxx" and the new name of the Company, or any part thereof,
shall not include the name "CompX".
14.3 The Parties to this Agreement hereby agree and acknowledge that the
formal names of the Seller and each and any of its group companies and
the Purchaser and each and any of the Companies, respectively, shall not
(be amended as to) include the name "Xxxxxx Xxxxxx", or any part thereof,
respectively, the name "CompX", or any part thereof.
Clause 15. Confidentiality
15.1 The Parties to this Agreement shall treat as strictly confidential all
information regarding the contents of and/or the negotiations relating to
this Agreement. Each party may, however, disclose information which would
otherwise be confidential, if and to the extent (i) required by law, or
(ii) required by contractual obligations existing at the time of entering
into this Agreement, or (iii) required by any securities exchange or
regulatory or governmental body to which the relevant party is subject,
or (iv) the information has come into the public domain through no fault
of that party, or (v) the other Parties have given prior approval to the
disclosure, which approval shall not be unreasonably withheld. Each of
the Parties hereby covenants that in the event of disclosure of
information, which would otherwise be confidential, it will consult with
the other Party as to the contents and form of the disclosure to be made.
15.2 Each of the Parties shall procure that its subsidiaries, employees, and
advisors shall act in accordance with the provisions of this Clause.
15.3 In the event that a Party breaches any of its obligations under this
Clause, the Party who is in breach shall, after having been given notice
of default by the other Party and if within twenty (20) days after having
received such notice the breach has not been remedied, become liable to
the other Party for a penalty in the amount of Euro 250,000 (in words:
two hundred and fifty thousand Euro) for each such breach and without
prejudice to the right of the other Party to claim Damages.
Clause 16. Non-competition
16.1. The Seller hereby agrees and undertakes that, notwithstanding the
arrangements made in the Principal Terms and Conditions, it will not:
o in Europe, without the prior written consent of Purchaser, for a
period of 3 (three) years from the Completion Date, either
directly or indirectly through any of its affiliated companies, as
principal, consultant, sales representative, agent, distributor,
shareholder or partner, either directly or indirectly, solicit,
endeavor to solicit, be engaged in activities which directly
compete with the business of the Companies as carried out on the
Completion Date;
o either directly or indirectly through any of its affiliated
companies, persuade, cause or attempt to persuade any employee,
distributor, commercial agent or any customer or supplier doing
business with the Companies on the Completion Date to terminate
his, her or its relationship with the Companies, or take any
action that may result in the impairment of such relationship.
16.2. In the event that Seller breaches any of its obligations under this
Clause, Seller shall, after having been given notice of default by the
Purchaser and if within twenty (20) days after having received such
notice the breach has not been remedied, become liable to the Purchaser
for a penalty in the amount of Euro 250,000 (in words: two hundred and
fifty thousand Euro) for each such breach and for a penalty payment of
Euro 10,000 (in words: ten thousand Euro) for each day such breach
continues and without prejudice to the right of the Purchaser to claim
Damages.
Clause 17. Public announcements
All public announcements in respect of (the subject matter and provisions of)
this Agreement shall be agreed upon between the Parties, not only as to their
contents but also with respect to their form and timing, with the exception of
those public announcements the Seller is required (i) by law or (ii) required by
any securities exchange or regulatory or governmental body to which the Seller
is subject. A copy of such public announcement shall be submitted to the
Purchaser after it has been released.
Clause 18. Assignment
None of the Parties may assign its rights and/or transfer its obligations under
this Agreement, either in whole or in part, to any other party without the prior
written consent of the other Party.
Clause 19. Expenses
Each of the Parties to this Agreement shall bear its own costs and expenses
incurred in connection with the preparation and consummation of this Agreement
and the transaction contemplated thereby, provided that the costs of the
transfer of the Shares shall be borne by the Purchaser. The success fee of Boer
& Croon, less any credit for hourly fees previously paid by the Company, shall
be paid by the Seller whereas the hourly fees and cost paid and/or due to Boer &
Croon relating to the sale of the Company shall be borne by the Company.
Clause 20. Miscellaneous
20.1 This Agreement constitutes the entire agreement between the Parties
thereto with respect to the sale and purchase of the Shares, and this
Agreement supersedes any and all earlier agreements, either verbally or
in writing, between the Parties. The Schedules and Annexes to this
Agreement form an integral part thereof. Any reference to this Agreement
includes a reference to said Schedules and Annexes and vice versa.
20.2 The headings in this Agreement are for convenience only and do not affect
the interpretation of this Agreement. References in this Agreement to
Clauses, Annexes and Schedules are references to Clauses, Annexes and
Schedules of this Agreement.
20.3 In case of conflict between or inconsistency of the provisions of this
actual agreement and the contents of the Schedules or Annexes, the
provisions of this actual agreement shall prevail.
20.4 In case of conflict between Dutch legal concepts mentioned between
brackets and/or in italics in this Agreement and the English translation
thereof as used in this Agreement, the Dutch text, and its meaning
thereof under Dutch law, will prevail.
20.5 If any provision of this Agreement should be invalid or in any other way
unenforceable, such provision shall be ineffective only to the extent of
such unenforceability or invalidity and shall in no way affect the
enforceability or validity of the remainder of such provision nor of the
other provisions of this Agreement. In that event the Parties shall after
mutual consultation amend such provision, taking into account the spirit
of the Agreement, and replace the provision that is invalid or
unenforceable by a provision that resembles the invalid or unenforceable
provision as closely as possible.
20.6 No failure on the part of any party to this Agreement to exercise, and no
delay in exercising, any right under this Agreement, in the event of
breach of contract by any party hereto, will operate as a waiver of such
right under this Agreement.
20.7 The Parties waive their right to rescind (ontbinden) this Agreement under
section 6:265 et seq. Dutch Civil Code.
Clause 21. Notices
21.1 Any communication or document, including process in any legal action or
proceedings, which either party may desire to give or deliver in
connection with this Agreement (a "Communication") shall be:
(a) in writing;
(b) delivered by hand or sent by registered mail (in the case of
communications within the same country) or by airmail post (in the
case of communications being sent from one country to another) or
by fax to the addressee at its address or fax number set out in
Clause 21.3.
21.2 A Communication shall be deemed to have been given, if delivered by hand,
at the time of delivery, if sent by post, on the second Business Day
after the envelope or package containing the same shall have been put
into the post or, if sent by fax, on the Business Day following the day
on which the same shall have been transmitted (provided that a copy of
the Communication is delivered by another means permitted by this Clause
as soon as is practicable).
21.3 The current addresses and fax numbers of, and exterior markings required
by, the Parties for the purposes of Communications are as follows:
Seller
Compx International Inc.
Attn. Xx. X.X. Xxxxxx
Address: X.X. Xxx 000 Xxx Xxxx Xxxx, Xxxxxxx, XXX 00000
Fax number: + 1 864 297 12 02
E-mail: xxxxxxx@xxxxxxxx.xxx
With a copy to:
Stibbe
Attn. Xx. X.X. Xxxxxxxx
Address: Strawinskylaan 2001
1077 ZZ Amsterdam
Fax number: + 00 00 000 00 00
E-mail: xxxxxx.xxxxxxxx@xxxxxx.xxx
Purchaser
Anchor Holding B.V.
Attn. Mr. J. M.B.J. van Luyken
Address: Xxxxxxxxxxxx 00
0000 XX Xxxxxxxxxx
Fax number. + 31 43 351 66 99
E-mail: x.xxxxxxxxx@xxxxxxx.xx
With a copy to:
Dijkstra Voermans Advocaten
Attn. Mr. R.H.C. Larsson
Address: Xxxxxxxxxxxx 0
0000 XX Xxxxxxx
Fax number: + 31 30 285 03 01
E-mail: xxxxx.xxxxxxx@xxxx.xx
Clause 22. Governing law and competent court
22.1 This Agreement shall be construed in accordance with and be governed by
the laws of the Netherlands.
22.2 In the event of a dispute arising out of or in connection with this
Agreement or further agreements resulting thereof, the Parties will use
their best efforts to resolve the matter amicably before referring the
matter to court as meant in Clause 22.3
22.3 All disputes that should arise in connection with the Agreement, or of
agreements relating thereto, shall be submitted to the competent court in
Amsterdam.
Thus agreed and signed in twofold on 24 January 2005.
CompX International Inc:
-----------------------------
Name:
Title:
-----------------------------
Name:
Title:
Anchor Holding B.V.:
-----------------------------
Name: Familie van Luyken B.V.
Title: Director
Execution Copy
USD 4,179,200
Loan Facility
SUBORDINATED LOAN AGREEMENT
made on 24 January 2005 between:
COMPX INTERNATIONAL INC.
(as Lender)
and
ANCHOR HOLDING B.V.
(as Borrower)
and
COMPX EUROPE B.V.
XXXXXX XXXXXX HOLDING B.V.
XXXXXX XXXXXX NEDERLAND B.V.
XXXXXX XXXXXX B.V.
XXXXXX XXXXXX INTERNATIONAL B.V.
(as Subsidiaries)
And
RABOBANK OVERNAME FINANCIERINGEN B.V. co6PERATIEVE RABOBANK MAASTRICHT E.O. U.
SUBORDINATED LOAN AGREEMENT
This Subordinated Loan Agreement (the "Agreement") is made this 24 January 2005
between:
1. COMPX INTERNATIONAL INC., a company incorporated under the laws of
Delaware, having its place of business located at Three Lincoln Centre,
Suite 1700, 0000 XXX Xxxxxxx. Xxxxxx, Xxxxx, XXX, 00000, hereinafter
referred to as: the "Lender" and/or "CompX Inc";
2. ANCHOR HOLDING B.V., a private company incorporated under the laws of the
Netherlands, having its statutory seat in Maastricht, and address at
Industrieweg 40 (6219 NR) Maastricht, the Netherlands, hereinafter
referred to as: the "Borrower" and/or "Anchor";
3. COMPX EUROPE B.V., a private company incorporated under the laws of the
Netherlands, having its statutory seat in Maastricht, and address at
Xxxxxxxxxxxx 00 (0000 XX) Xxxxxxxxxx, the Netherlands;
4. XXXXXX XXXXXX HOLDING B.V., a private company incorporated under the laws
of the Netherlands, having its statutory seat in Maastricht, and address
at Xxxxxxxxxxxx 00 (0000 XX) Xxxxxxxxxx, the Netherlands;
5. XXXXXX XXXXXX NEDERLAND B.V., a private company incorporated under the
laws of the Netherlands, having its statutory seat in Maastricht, and
address at Xxxxxxxxxxxx 00 (0000 XX) Xxxxxxxxxx, the Netherlands;
6. XXXXXX XXXXXX B.V., a private company incorporated under the laws of the
Netherlands, having its statutory seat in Maastricht, and address at
Xxxxxxxxxxxx 00 (0000 XX) Xxxxxxxxxx, the Netherlands;
7. XXXXXX XXXXXX INTERNATIONAL B.V., a private company incorporated under
the laws of the Nethedands, having its statutory seat in Maastricht, and
address at Xxxxxxxxxxxx 00 (0000 XX) Xxxxxxxxxx, the Netherlands;
8. RABOBANK OVERNAME FINANCIERINGEN B.V., a private company incorporated
under the laws of the Netherlands, having its statutory seat in Utrecht
and address at Xxxxxxxxx 00 (0000 XX) Xxxxxxx, xxx Xxxxxxxxxxx ("ROF");
9. COOPERATIEVE RABOBANK MAASTRICHT e.o. U.A., a company incorporated under
the laws of the Netherlands, having its statutory seat in Maastricht and
address at Van Hasseltkade 20 (6211 CD) Maastricht ("Rabobank
Maastricht");
Party 2 up to and including 7 are hereinafter jointly referred to as the
"Companies";
Party 3 up to and including 7 are hereinafter jointly referred to as the
"Subsidiaries";
Party 1 up to and including 9 are hereinafter jointly referred to as the
"Parties" and each of them a "Party".
WHEREAS:
A. On the date hereof the Lender and the Borrower have entered nto a share
purchase agreement pursuant to which the Lender has accepted to sell and
the Borrower has agreed to purchase all of the issued and outstanding
shares of CompX Europe B.V. (the "SPA");
B. It is a condition under the SPA that the Borrower and the Lender enter
into this Agreement on the Completion Date (as defined in the SPA),
pursuant to which the Borrower confirms to the Lender that the principal
amount owed to the Lender amounts to USD 4,179,200 (the "Principal
Facility");
C. For the purposes of acknowledgment (and evidencing) an agreement between
on the one hand ROF and Rabobank Maastricht and on the other hand the
parties listed under 1 up to and including 7 of the preamble of this
Agreement, this Agreement is also signed by ROF and Rabobank Maastricht;
D. The Borrower promises and undertakes towards the Lender to pay the
Principal Facility in accordance with the terms and conditions of this
Agreement.
NOW IT IS HEREBY AGREED AS FOLLOWS:
Clause 1. The facility
Subject to the terms and conditions of this Agreement, the Borrower promises and
undertakes towards the Lender to repay the Principal Facility.
Clause 2. Interest rate
2.1 The interest rate applicable to the Principal Facility is 7,0 per cent
(%) per annum. Interest shall be calculated on the basis of the
outstanding balance of the Principal Facility and shall accrue from day
to day, and be calculated on the basis of a year of 360 days and the
actual number of days elapsed.
2.2 Accrued interest on the Principal Facility is payable by the Borrower on
31 December 2008 ("Interest Payment Date"). For the avoidance of doubt,
the claim for payment of accrued interest on the Principal Facility is
subordinated in accordance with Clause 8 of this Agreement.
Clause 3. Repayment
3.1 The Borrower undertakes to repay and shall repay the Principal Facility
in installments on the dates and amounts set forth in this Clause 3, to
the Lender.
----------------------------------------------------------------------
Repayment Date Installment
----------------------------------------------------------------------
----------------------------------------------------------------------
31 December 2005 USD 1,306,000
----------------------------------------------------------------------
31 December 2006 USD 1,306,000
----------------------------------------------------------------------
31 December 2007 USD 1,306,000
----------------------------------------------------------------------
31 December 2008 USD 261,200
----------------------------------------------------------------------
For the avoidance of doubt, these installments may only be paid by the Borrower
and the claim for repayment of the Principal Facility is subordinated in
accordance with Clause 8 of this Agreement.
3.2 The Borrower may upon giving the Lender at least 10 Business Days (a
Business Day means a day on which banks are open in Amsterdam) prior
written notice prepay the Lender the whole of the Principal Facility
together with interest accrued thereon. Any notice of such prepayment
shall be irrevocable and shall oblige the Borrower to make such
prepayment on the thirtieth Business Day following such notice. The
Borrower shall not be entitled to reborrow any amount so prepaid. Any
amount prepaid under this Clause 3.2 shall be applied against the
outstanding balance of the Principal Facility. For the avoidance of
doubt, the Borrower may only prepay the Principal Facility or any
interest accrued thereon in accordance with Clause 8 of this Agreement.
3.3 If a day on which any amount under this Agreement is due and payable is
not a Business Day, the day for payment of such amount shall be the
previous Business Day.
3.4 All sums payable to the Lender hereunder shall be paid in full without
set-off or counterclaim and free and clear of and without any deduction
on account of any present or future taxes, levies, duties, charges or
withholdings of any nature.
Clause 4. Representations and warranties
Each of the Companies makes the representations and warranties set out in is
Clause 4 for the benefit of the Lender on the date of this Agreement.
(i) each of the Companies is a private company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid) duly incorporated
under the laws of the Netherlands and validly existing under the laws of
Netherlands;
(ii) each of the Companies has the power to own its assets and to carry on its
business as it is being conducted;
(iii) each of the Companies has the power to enter into and perform, and has
taken all necessary corporate action to authorize the entry o performance
and delivery of this Agreement;
(iv) the entry into and performance by each of the Companies of this Agreement
do not and will not: (i) conflict with any applicable law or regulation
or judicial or official order, (ii) conflict with each of their articles
of association, or (iii) conflict with any agreement or other instrument
which is binding upon the Companies or any asset of the Companies.
(v) no (potential) event of default (within the meaning of Clause 6 of this
Agreement) is continuing or would result from the Companies entering into
this Agreement;
(vi) except for any security rights given for the benefit of ROF and Rabobank
Maastricht under the Finance Documents (as defined in Clause 8), no
security rights are in existence with respect to the assets over which
security has been granted to the Lender pursuant to this Agreement;
(vii) all authorizations required in connection with the entry into,
performance, validity and enforceability of this Agreement have been
obtained or effected (as appropriate) and are in full force and effect;
(viii) the Companies are not aware of any facts or circumstances, which, if
known to the Lender, would cause the Lender not to enter into this
Agreement;
(ix) no facts and/or circumstances have arisen which have a material adverse
effect on the business and the financial condition of the Companies
("Material Adverse Effect");
(x) the Companies have not taken any corporate action nor have any other
steps been taken or legal proceedings been started or threatened against
each of the Companies for its winding-up, dissolution or for the
appointment of a receiver, administrator, administrative receiver,
trustee or similar officer of the Companies or of any or all of the
Companies' assets or revenues.
Clause 5. Covenants
5.1 The Borrower shall notify the Lender of the occurrence of any event which
results in or may reasonably be expected to result in any of the
representations contained in Clause 4 being misleading or untrue when
made.
5.2 The Borrower shall notify the Lender of any potential event of default
and/or any actual event of default (within the meaning of Clause 6 of
this Agreement) promptly upon its occurrence.
5.3 Each of the Companies shall at all times comply with its obligations
under this Agreement and shall promptly notify the Lender of any failure
by it to comply and of the occurrence of any event which would or might
render it unable so to comply.
5.4 Each of the Companies shall not, without the prior written consent of the
Lender, create or permit to subsist any mortgage, pledge, lien, charge,
assignment or security interest on any of its assets or revenues, other
than such mortgage, pledge, lien, charge, assignment or security interest
created or permitted to subsist for the benefit of ROF and Rabobank
Maastricht.
5.5 The Companies shall not merge or legally merge (juridisch fuseren), other
than a merger between the Subsidiaries, consolidate with any company or
enter into a legal division (juridische splitsing), without the prior
written consent of the Lender.
5.6 The Borrower shall ensure that at all times the claims pursuant to this
Agreement ranks at least pan passu with all its other subordinated
creditors save for the preferred claims of the ROF and the Rabobank
Maastricht and those whose claims are preferred by law.
5.7 The Companies will take out and maintain adequate insurances against
risk, which are customarily covered in the areas of business in which
each of the Companies is or may become active.
5.8 The Companies shall not without prior written consent of the Lender enter
into any loan agreement, not as borrower or as lender, or provider in any
other manner of debt to a third party, other than the subordinated loan
agreements entered into by on the one hand, the Borrower and on the other
hand, respectively, Familie Van Luyken B.V., Mr. W.A.P. Soudant, L.J.M.
Moonen Beheer B.V. and Stichting Werknemersparticipatie Xxxxxx Xxxxxx
International on the Completion Date (as defined in the SPA) for the
aggregate amount of EUR 200,000 and the (subordinated) loan agreements
entered into between the Borrower and the ROF and/or the Rabobank
Maastricht nor shall the Companies grant any guarantee or security for
any indebtedness of any of the other Companies on any of their assets
other than those granted pursuant to this Agreement.
5.9 The Borrower shall submit to the Lender, as soon as available and in any
event not later than six months after the end of its financial year,
copies of the audited (consolidated) financial statements for such
financial year of each of the Companies.
5.10 The Borrower shall submit to the Lender, as soon as available and in any
event not later than 15 Business Days after each month of the
consolidated financial statements, consisting of the balance sheet, the
profit and loss statement for the current month and the year-to-date
period and a cash flow statement for the year-to-date period of each of
the Companies.
5.11 The Borrower shall from time to time at the request of the Lender, submit
to the Lender within a reasonable period of time, with such information
about the business and financial condition of each of the Companies as
the Lender may require in order to adequately determine its position
under this Agreement.
5.12 None of the Companies shall without the prior written consent of the
Lender alter, amend or modify or cause to be altered, amended or modified
any of its agreements material to its business, whereby any amendment or
modification which is not related to the material provisions of the
agreements falls outside the scope of this clause.
5.13 None of the Companies shall dispose of any material assets during the
term of this Agreement without the prior written consent of the Lender.
5.14 The Companies shall not materially change their business as presently
conducted during the term of this Agreement without prior written consent
of the Lender.
5.15 The Borrower shall forthwith notify the Lender if and to the extent the
Borrower has received a notification (in writing or orally) from the ROF
and/or the Rabobank Maastricht with respect to the financial covenants as
stipulated in the debt financing.
Clause 6 Event of default
6.1 Each of the following events constitutes an event of default:
(i) the Borrower does not pay any amount payable by it under this
Agreement in the manner and at the place at which it is expressed
to be payable;
(ii) any representation or warranty made in this Agreement shall prove
to have been untrue or misleading;
(iii) any (other) loan or indebtedness, guarantee or other obligation
for borrowed moneys of the Borrower becomes prematurely repayable
or due following a default or if the Borrower fails to pay on the
due date (after allowing for 15 Business Days of grace) any loan
indebtedness, guarantee or other obligation for borrowed moneys
and the result of the foregoing would be materially and adversely
affect the ability of the Borrower to perform its obligations
hereunder;
(iv) the Borrower ceases, or threatens to cease to carry on its
business or substantially the whole of its business;
(v) the Borrower merges or legally merges (juridisch fuseren) or
consolidates with any company other than the Subsidiaries or
enters into a legal division (juridische splitsing), without the
prior written consent of the Lender;
(vi) any event or series of events occurs which, in the reasonable
opinion of the Lender, might have a Material Adverse Effect;
(vii) the Borrower: () is unable to pay its debts as they fall due in
all events of insolvency and bankruptcy, however, defined, or
admits inability to pay its debts as they fall due, (ii) suspends
making payments on all or any class of its debts or announces an
intention to do so, or files for or is granted a moratorium of
payments (surseance van betaling), (iii) makes a proposal to one
or more of its creditors with a view to the readjustment or
rescheduling of any of its indebtedness, (iv) is involved in legal
proceedings (or formal steps have been taken to that extent) for
the liquidation or dissolution of the Borrower, or (v) ceases to
conduct its business as presently conducted;
(viii) a shareholders' meeting is convened of the Borrower for the
purpose of considering any resolution for (or to petition for)
filing bankruptcy (faillissement);
(ix) anyone requests the competent court to declare the Borrower
bankrupt (in staat van faillissement to verkiaren), which request
has not been dismissed within thirty days;
(x) the Borrower is declared bankrupt (failliet verklaard);
(xi) any material asset of any of the Borrower is attached, which
attachment is not discharged within thirty days;
(xii) if the Borrower violates any covenant made in this Agreement and
such violation has not been remedied by the Borrower within 15
Business Days after giving notice by the Lender;
(xiii) if a change of control of the Borrower or the Subsidiaries occurs.
A change of control means a change in the shareholding of the
Borrower and/or the Subsidiaries in excess of 10% and such change
involves a party which is not a shareholder of the Borrower and/or
each and any of the Subsidiaries on the Completion Date (as
defined in the SPA);
(xiv) no repayment has taken place by the Borrower to the Lender in
accordance with Clause 3 of this Agreement on two successive dates
on which an installment is due as described in Clause 3.1 while in
the same period any repayments have taken place on two successive
dates by the Borrower (and/or any of the Subsidiaries) to ROF
and/or Rabobank Maastricht under the Finance Documents (as defined
in Clause 8).
6.2 Upon the occurrence of an event of default within the meaning of Clause
6.1 and at any time thereafter for so long as such event of default is
continuing, the Lender may, by notice to the Borrower, demand that the
Principal Facility, together with accrued interest and all other amounts
accrued under this Agreement be immediately due and payable, whereupon
they shall become immediately due and payable. For the avoidance of
doubt, the Borrower may only pay any amount as a result of an event of
default (as mentioned in Clause 6.1) and the Lender may only demand
and/or receive such payment in accordance with Clause 8 of this
Agreement.
6.3 The events described in Clause 6.1 shall apply accordingly to any and
each of the Subsidiaries.
Clause 7. Security
The Borrower shall in order to secure its obligations under this Agreement
provide second ranking right of pledge on the shares in CompX Europe B.V. to the
Lender. The Lender shall not commence, initiate or carry out any action directed
at an execution, recovery and/or redress at the expense of the Borrower or take
any other form of recourse against the Borrower without the prior written
consent of ROF.
Clause 8. Subordination
8.1 Lender herewith subordinates all its present and future claims on the
Borrower (for the purpose of this clause defined as Anchor Holding B.V.
and/or any of its subsidiaries or any other company in which Anchor
Holding B.V. has a direct or indirect control) under or in connection
with this Agreement (the "Claims") to the present and future claims of
ROF and Cooperatieve Rabobank Maastricht e.o. U.A., established at and
having its place of business in Maastricht, the Netherlands (hereafter
jointly and severally referred to as the "Bank") on the Borrower pursuant
to one or more Loan Agreements and/or Facility Agreements the Bank and
the Borrower have entered into or will enter into (the "Finance
Documents") provided any repayments are made in accordance with Clause
8.2.
8.2 The claims of the Lender under this Agreement may be repaid if (i) such
repayment consists of the annual repayment in accordance with the
stipulations of this Agreement and (ii) ROF has given his previous
written consent to such a repayment. If Lender request for ROF's consent,
ROF will decide on such request within four weeks after having received
the unqualified annual report of the Borrower regarding the year to which
the annual repayments relates (for the time to the year 2005). ROF can
only withhold his written consent if in relation to the Borrower (one of)
the agreed limits of the Cash Cover Ratio, the Total Net Debt / EBITDA
Ratio and the ratio between the consolidated solvency and the total of
the balance as defined below (the "Agreed Limits") are/is or would be
broken by the annual repayment. If the latter is the case and the Bank
considers the Borrower in default under the Finance Documents then the
annual payment due to the Lender shall be deferred until such time as the
Borrower is in compliance with the Agreed Limits. Any annual payment that
has been deferred will continue to accrue interest in accordance with
Clause 2.1 except that such deferred payment will accrue interest at 10,0
per cent (%) per annum from the due date of the next annual payment if
such payment has not been made by the due date of the next annual
payment. The ratio's as mentioned in the above are defined as follows.
Cash Cover Ratio: The consolidated (Anchor Holding BV) result before
corporation tax, amortisation of intangible fixed assets,
depreciation, extraordinary profit / loss, total finance
costs (EBITDA) minus investments in (in)tangible fixed
assets less disposal at net bookvalue, and minus
corporation tax divided by the consolidated total net cash
interest charges of Anchor Holding BV plus contractual
standard repayments on interest bearing debt (= excl.
additional repayments caused by the Cash Sweep). This ratio
will be determined annually based on the unqualified annual
report.
Agreed Limit: < 1,1, on a consolidated basis.
Total Net Debt/EBITDA Ratio:
the total consolidated (Anchor Holding BV) long term
interest bearing debts of Anchor Holding BV (excluding
subordinated loans of seller and management team) plus
consolidated short term interest bearing debt minus free
liquid resources divided by the consolidated result of
Anchor Holding BV before corporation tax, amortisation of
intangibles, depreciation, extraordinary profit/loss,
interest income and cost. This ratio will be determined
annually based on the unqualified annual report.
Agreed Limit:
2005 > 2,6
2006/2007 > 2,2
2008 > 1,4
2009 > 1,0
Solvency Agency: the consolidated (Anchor Holding BV) risk bearing capital
of Anchor Holding (including subordinated loans of seller
and management team) divided by the total consolidated
assets of Anchor Holding. This ratio will be determined
annualy based on the unqualified annual report.
Agreed Limit: as from financial year 2005 < 20 % on a consolidated basis.
For the purpose of computing the compliance with the Agreed Limits, the
calculation shall be completed by the Bank utilizing the annual statutory
accounts of the Borrower, to be submitted to the Bank no later than on 1 March
of each respective year. If submission does not take place by the Borrower
before each of the above respective dates and consequently the annual payment is
delayed the accrued interest on the deferred annual payment will be continued at
10,0 per cent (%) per annum from 1 April of each respective year.
8.3 Parties acknowledge the subordination as mentioned under 8.1 and will act
accordingly. The Borrower shall make no payment whatsoever to the Lender
in relation to any Claim and the Lender will claim and/or receive none,
except as provided for in this Agreement.
8.4 The Lender undertakes towards the Bank, which accepts this, without the
prior written approval of the Bank, which approval will not unreasonably
be withheld, not to ask or accept repayment or prepayment of any of the
Claims in part or in whole (other than those provided for in this
Agreement, for which that article contains a provision), not to set off
nor encumber these claims and not to ask or accept security for these
claims, as long as the bank has or may have any claims under the Finance
Documents.
8.5 The Borrower and the Lender each warrant towards the Bank that the
information which each of them have provided to the Bank in respect of
this Subordinated Loan Agreement, correctly and completely reflects their
mutual (legal) relationship concerning this Agreement.
8.6 The subordination as mentioned in this Clause will terminate upon written
notification of release by the Bank to the Lender.
8.7 The Borrower shall pay any and all reasonable costs associated with the
conclusion, performance and execution of the subordination mentioned in
this Clause, including the costs of litigation and internal or external
costs of legal assistance, regardless whether these reasonable costs have
been made towards the Borrower or third parties.
8.8 Non compliance by the Borrower of their obligations under this Clause 8
constitutes an event of default under (at least one of) the Finance
Documents.
8.9 The subordination as mentioned in this Clause does not affect the power
of the Bank to extend existing loans or credit facilities to the
Borrower, to reduce or increase any Loan or Facility or to amend the
terms of (any of) the Finance Documents, to request for additional
security or release existing other security.
8.10 The Lender and the Borrower shall not alter, amend or change this
Subordinated Loan Agreement in any way without a previous written consent
by the Bank.
Clause 9. Miscellaneous
9.1 The headings in this Agreement are for convenience only and do not affect
the interpretation of this Agreement. References in this Agreement to
Clauses and Schedules are references to Clauses and Schedules of this
Agreement.
9.2 In case of conflict between Dutch legal concepts mentioned between
brackets and/or in italics in this Agreement and the English translation
thereof as used in this Agreement, the Dutch text, and its meaning
thereof under Dutch law, will prevail.
9.3 If any provision of this Agreement should be invalid or in any other way
unenforceable, such provision shall be ineffective only to the extent of
such unenforceability or invalidity and shall in no way affect the
enforceability or validity of the remainder of such provision nor of the
other provisions of this Agreement. In that event the parties shall after
mutual consultation amend such provision, taking into account the spirit
of the Agreement, and replace the provision that is invalid or
unenforceable by a provision that resembles the invalid or unenforceable
provision as closely as possible.
9.4 No failure on the part of any party to this Agreement to exercise, and no
delay in exercising, any right under this Agreement, in the event of
breach of contract by any party hereto, will operate as a waiver of such
right under this Agreement.
9.5 The parties to this Agreement waive their right to rescind (ontbinden)
this Agreement under section 6:265 et seq. Dutch Civil Code.
Clause 10. Assignment and transfer
10.1 The Companies may not assign or transfer any of their rights or
obligations under this Agreement.
10.2 The Lender may at any time:
(i) assign all or any part of its rights and benefits under this
Agreement to any of its group companies as defined in section
2:24b of the Dutch Civil Code; or
(ii) transfer by way of substitution of contract (contractsoverneming)
accordance with Clause 10.3 all of its rights and obligations
under this Agreement to any of its group companies as defined in
section 2:24b of the Dutch Civil Code.
10.3 Any transfer by the Lender of its rights and obligations under this
Agreement shall be effected in accordance with the applicable
requirements of Dutch law (including but not limited to section 6:159 of
the Dutch Civil Code) and any other applicable laws and the assignee
shall confirm in writing prior to the assignment to the Bank and the
Companies that it assumes the rights and obligations under this
Agreement. The Companies and the Bank hereby irrevocably grant in advance
their cooperation to transfer described in Clause 10.2.
10.4 If any of the previous Clauses allow of any assignment or transfer of
rights, the Lender shall not assign of transfer any of all of its rights,
claims, obligations and/or debts under the Subordinated Loan Agreement
without a previous written consent by the Bank. However, the Lender may
at any time assign his rights and/or obligations under the Subordinated
Loan Agreement to one of its group companies. The Companies and the Bank
hereby irrevocably grant in advance their cooperation to the transfer
described in this clause.
Clause 11. Notices
All notices or other communications under or in connection with this Agreement
shall be sent by registered mail or fax to the following addresses: With regard
to CompX International Inc:
Address: Three Lincoln Centre, Suite 1700
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx, XXX 00000
Attn. X.X. Xxxxxxx
Fax x0 000 000 0000
With regard to Anchor Holding B.V. (also on behalf of the Subsidiaries):
Address Xxxxxxxxxxxx 00
0000 XX Xxxxxxxxxx
Attn. Mr. J.M.B.J. van Luyken
Fax x0000000 00 00
With regard to Rabobank Overname Finacierinq B.V.:
Address X.X. Xxx 00000
0000 XX Xxxxxxx
Fax x00 00 000 00 00
With regard to Cooperatieve Rabobank Maastricht en omstreken U.A.:
Xxxxxxx Xxx Xxxxxxxxxxx 00
0000 XX Xxxxxxxxxx
Fax x0000 000 00 00
Clause 12. Governing law and competent court
12.1 This Agreement shall be construed in accordance with and be governed by
the laws of the Netherlands.
12.2 In the event of a dispute arising out of or in connection with this
Agreement or further agreements resulting thereof, the parties will use
their best efforts to resolve the matter amicably before referring the
matter to court as meant in
12.3 All disputes that should arise in connection with this Agreement, or of
agreements relating thereto, shall be submitted to the competent court in
Amsterdam.
CompX Europe B.V.
Name:
Title:
Xxxxxx Xxxxxx Holding B.V.
Name:
Title:
Xxxxxx Xxxxxx Nederland B.V.
Name:
Title:
Xxxxxx Xxxxxx B.V.
Name:
Title:
Xxxxxx Xxxxxx International B.V.
Name:
Title:
Rabobank Overname Financiering B.V.
Name:
Title:
Co6peratieve Rabobank Maastricht en omstreken U.A.
Name:
Title:
Thus agreed and signed in twofold on 24 January 2005. CompX International Inc.
CompX International Inc.
Name:
Title:
Name:
Title:
Anchor Holding B.V.
Name:
Title:
Name:
Title:
