SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made as of the o day of December, 1999.
BETWEEN:
XXX XXXXXXXXXX, of ________________________
(hereinafter referred to as "X. Xxxxxxxxxx")
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XXXXX DE LAET, of ______________________
(hereinafter referred to as "H. De Laet")
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__________ SCHELFHOUT-DE LAET, of __________________
(hereinafter referred to as "Schelfhout- De Laet")
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AGRICOMP N.V., a corporation incorporation pursuant
to the laws of _______________
(hereinafter referred to as "Agricomp")
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E-AUCTION BELGIUM N.V., a corporation incorporated under the
laws of Belgium
(hereinafter referred to as the "Purchaser")
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E-AUCTION GLOBAL TRADING INC., a corporation incorporated
under the laws of the State of Nevada
(hereinafter referred to as "e-Auction")
WHEREAS X. Xxxxxxxxxx, H. De Laet, Schelfhout-De Laet and Agricomp
(collectively referred to as the "Vendors") are the registered and beneficial
owners of all the issued and
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outstanding share capital of Schelfhout Computer
Systemen N.V. ("Schelfhout") in the following proportions:
NAME OF SHAREHOLDER NUMBER OF SHARES % OF OWNERSHIP
------------------- ---------------- --------------
X. Xxxxxxxxxx 5 0.78125
X. Xx Xxxx 0 0.00000
Xxxxxxxxxx-Xx Xxxx 160 25
Agricomp 470 73.4375
--- -------
TOTAL 640 100%
AND WHEREAS the Purchaser is willing to purchase and the Vendors are
willing to sell all of the issued and outstanding share capital of Schelfhout on
the terms and conditions contained in this Agreement;
NOW THEREFORE this Agreement witnesses that, in consideration of the
mutual covenants and agreements contained herein, the parties covenant and agree
as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS. In this Agreement or in any amendment hereto, the following
terms shall have the meanings set out below unless the context requires
otherwise:
(a) "AFFILIATE" means, with respect to any Person, any other
Person who directly or indirectly controls, is controlled by,
or is under direct or indirect common control with, such
Person, and includes any Person in like relation to an
Affiliate. A Person shall be deemed to control a Person if
such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies
of such Person, whether through the ownership of voting
securities, by contract or otherwise; and the term
"controlled" shall have a similar meaning.
(b) "AGREEMENT" means this Agreement, including the Schedules to
this Agreement, as it or they may be amended or supplemented
from time to time, and the expressions "HEREOF", "HEREIN",
"HERETO", "HEREUNDER", "HEREBY" and similar expressions refer
to this Agreement and not to any particular Section or other
portion of this Agreement.
(c) "APPLICABLE LAW" means, with respect to any Person, property,
transaction, event or other matter, any law, rule, statute,
regulation, order, judgement, decree, treaty or other
requirement having the force of law (collectively, the "LAW")
relating or applicable to such Person, property, transaction,
event or other matter. Applicable Law also includes, where
appropriate, any interpretation of the Law (or any part
thereof) by any Person having jurisdiction over it, or charged
with its administration or interpretation.
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(d) "ASSETS" means all of the property, assets, interests and
rights of Schelfhout of every kind and description and
wherever situated including, without limiting the generality
of the foregoing, the following:
(i) the Real Property;
(ii) the Personal Property;
(iii) the Inventories;
(iv) the Receivables;
(v) all rights and interests under or pursuant to all
warranties, representations and guarantees, express,
implied or otherwise, of or made by suppliers or
others in connection with the Assets or otherwise
Related to the Business;
(vi) the Intellectual Property;
(vii) the Material Contracts;
(viii) the Licences and Permits;
(ix) the Books and Records;
(x) all goodwill Related to the Business, the present
telephone numbers, internet domain addresses and
other communications numbers and addresses of
Schelfhout; and
(xi) all proceeds of any or all of the foregoing received
or receivable after the Closing Time.
(e) "BOOKS AND RECORDS" means all books, records, files and papers
of Schelfhout, Related to the Business including without
limitation, financial, operating, inventory, legal and payroll
information, drawings, engineering information, computer
programs (including source code), software programs, manuals
and data, sales and advertising materials, sales and purchases
correspondence, trade association files, research and
development records, lists of present and former customers and
suppliers, personnel, employment and other records, and the
minute and share certificate books of Schelfhout, and all
copies and recordings of the foregoing.
(f) "BUSINESS" means the business carried on by Schelfhout which
primarily involves the facilitating of electronic auctions of
perishable commodities (fish, flowers, fruits and vegetables).
(g) "BUSINESS DAY" means any day except Saturday, Sunday, a
statutory holiday in the Province of Ontario or any other day
on which banks are generally not open for business in the City
of Xxxxxxx, Xxxxxxx.
(h) "CLAIM" has the meaning ascribed thereto in Section 6.1.
(i) "CLOSING" means the completion of the purchase and sale of the
Shares in accordance with the provisions of this Agreement.
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(j) "CLOSING DATE" means ________________ or such earlier or later
date as may be agreed upon in writing by the parties to this
Agreement.
(k) "CLOSING TIME" means the time of closing on the Closing Date
provided for in Section 3.1.
(l) "CONDITION OF THE BUSINESS" means the condition (financial or
otherwise) of the Business taken as a whole, having regard to
its earnings, Assets, Liabilities, properties, operations and
prospects.
(m) "CONSENTS AND APPROVALS" means all consents and approvals
required to be obtained in connection with the execution and
delivery of this Agreement and the completion of the
transactions contemplated by this Agreement including any and
all third party consents required under any of the Contracts
in connection with or as a result of the transfer of the
Assets and Shares to the Purchaser.
(n) "DEPOSIT" has the meaning ascribed thereto in Section 2.3.
(o) "DIRECT CLAIM" shall have the meaning ascribed thereto in
Section 6.4.
(p) "e-AUCTION SHARES" means 3,636,364 common shares in the
capital of e-Auction Global Trading Inc. to be delivered to
the Vendors pursuant to section 2.4(c) hereof.
(q) "EMPLOYEES" means an individual who is employed by Schelfhout
in the Business, and "EMPLOYEES" means every Employee.
(r) "INDEMNIFIED PARTY" means a Person whom Schelfhout, the
Purchaser or e-Auction, as the case may be, has agreed to
indemnify under Article 6.
(s) "INDEMNIFYING PARTY" means, in relation to an Indemnified
Party, the party to this Agreement which has agreed to
indemnify that Indemnified Party under Article 6.
(s1) "INITIAL SHARE VALUE" shall have the meaning ascribed thereto
in section 2.4 hereof.
(t) "INTELLECTUAL PROPERTY" means all rights to and interests in:
(i) all business and trade names, corporate names, brand
names and slogans Related to the Business;
(ii) all inventions, patents, patent rights, patent
applications (including all reissues, divisions,
continuations, continuations-in-part and extensions
of any patent or patent application), industrial
designs and applications for
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registration of industrial designs Related to the
Business and developed by Schelfhout;
(iii) all copyrights and trade-marks (whether used with
wares or services and including the goodwill
attaching to such trade-marks), registrations and
applications for trade-marks and copyrights (and all
future income from such trade-marks and copyrights)
Related to the Business and developed by Schelfhout;
(iv) all rights and interests in and to processes, lab
journals, notebooks, data, trade secrets, designs,
know-how, product formulae and information,
manufacturing, engineering and other drawings and
manuals, technology, blue prints, research and
development reports, agency agreements, technical
information, technical assistance, engineering data,
design and engineering specifications, and similar
materials recording or evidencing expertise or
information Related to the Business and developed by
Schelfhout;
(v) all of the intellectual property listed in Schedule
5.1(q)(i);
(vi) all other intellectual and industrial property rights
throughout the world Related to the Business and
developed by Schelfhout;
(vii) all licences of the intellectual property listed in
items (i) to (vi) above;
(viii) all future income and proceeds from any of the
intellectual property listed in items (i) to (vi)
above and the licences listed in item (vii) above;
and
(ix) all rights to damages and profits by reason of the
infringement of any of the intellectual property
listed in items (i) to (vii) above.
(u) "INTERIM PERIOD" means the period commencing on June 30, 1999
and ending at the Closing Time;
(v) "LIABILITIES" means all costs, expenses, charges, debts,
liabilities, claims, demands and obligations, whether primary
or secondary, direct or indirect, fixed, contingent, absolute
or otherwise, under or in respect of any contract, agreement,
arrangement, lease, commitment, undertaking, Applicable Law or
Taxes.
(w) "LICENCES AND PERMITS" means all licences, permits, filings,
authorizations, approvals or indicia of authority Related to
the Business or required for the ownership and/or operation of
the Business and/or the Assets.
(x) "LIEN" means any lien, mortgage, charge, hypothec, pledge,
security interest, prior assignment, option, warrant, lease,
sublease, right to possession,
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encumbrance, claim, right or restriction which affects, by way
of a conflicting ownership interest or otherwise, the right,
title or interest in or to any particular property.
(y) "MATERIAL ADVERSE CHANGE" means a change in the business,
operations or capital of Schelfhout or e-Auction which has had
or could reasonably be expected to have a significant adverse
effect on the value of the Business or the Shares.
(z) "MATERIAL CONTRACT" means an agreement (whether oral or
written) Related to the Business to which Schelfhout is a
party or by which Schelfhout or any of the Assets or the
Business is bound or affected except an agreement which
involves or may reasonably be expected to involve the payment
to or by Schelfhout of less than US$25,000 over the term of
the agreement and is not otherwise material to the Condition
of the Business.
(aa) "PARTY" means a party to this Agreement and any reference to a
party includes its successors and permitted assigns; and
"PARTIES" means every party.
(bb) "PERSON" is to be broadly interpreted and includes an
individual, a corporation, a partnership, a trust, an
unincorporated organization, and the successors, assigns,
executors, heirs, administrators or other legal
representatives of an individual in such capacity.
(cc) "PERSONAL PROPERTY" means, without limitation, all machinery,
equipment, furniture, fixtures, fittings, motor vehicles and
other chattels Related to the Business (including those in
possession of third parties).
(dd) "PERSONAL PROPERTY LEASES" means all chattel leases, equipment
leases, rental agreements, conditional sales contracts and
other similar agreements.
(ee) "PRO-RATA BASIS" means, with respect to each Vendor, the
proportion of his holdings of shares in the capital of
Schelfhout, as set out in the recitals to this Agreement, to
the total number of shares in the capital of Schelflout
outstanding as at the Closing Time.
(ff) "PURCHASE PRICE" has the meaning ascribed thereto in Section
2.4.
(gg) "PURCHASER" means e-Auction Belgium N.V., a corporation
incorporated under the laws of Belgium.
(hh) "REAL PROPERTY" means all real property owned or used by
Schelfhout Related to the Business including, without
limitation, the Improvements.
(ii) "RECEIVABLES" means all accounts receivable, bills receivable,
trade accounts, book debts and insurance claims Related to the
Business together with any unpaid
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interest accrued on such items and any security or collateral
for such items, including recoverable deposits.
(jj) "RELATED TO THE BUSINESS" means, directly or indirectly, used
in, arising from or relating in any manner to the Business.
(kk) "SCHELFHOUT" means Schelfhout Computer Systemen N.V., a
corporation incorporated under the laws of Belgium.
(ll) "SHARES" means all of the issued and outstanding share capital
of Schelfhout more specifically set out in the recitals to
this Agreement.
(mm) "TAXES" means all taxes, charges, fees, levies, imposts and
other assessments, including all income, sales, use, goods and
services, value added, capital, capital gains, alternative,
net worth, transfer, profits, withholding, payroll, employer
health, excise, franchise, real property and personal property
taxes, and any other taxes, customs duties, fees, assessments
or similar charges in the nature of a tax including pension
plan contributions, unemployment insurance payments and
workers' compensation premiums, together with any installments
with respect thereto, and any interest, fines and penalties
imposed by any governmental authority (including federal,
state, provincial, municipal and foreign governmental
authorities), and whether disputed or not.
(nn) "THIRD PARTY" has the meaning given in Section 6.6.
(oo) "THIRD PARTY CLAIM" has the meaning given in Section 6.4.
(pp) "VENDORS" means collectively X. Xxxxxxxxxx, H. De Laet,
Schelfhout-De Laet and Agricomp.
1.2 HEADINGS. The division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement.
1.3 NUMBER AND GENDER. Unless the context requires otherwise, words importing
the singular include the plural and vice versa and words importing gender
include all genders.
1.4 BUSINESS DAYS. If any payment is required to be made or other action is
required to be taken pursuant to this Agreement on a day which is not a Business
Day, then such payment or action shall be made or taken on the next Business
Day.
1.5 CURRENCY AND PAYMENT OBLIGATIONS. All dollar amounts referred to in this
Agreement are stated in United States Dollars and any payment required to be
made hereunder shall be made by electronic transfer or any other method as
agreed to from time to time by the parties hereto that provides immediately
available funds. In the case of the Vendors, payment by certified
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cheque, bank draft or electronic transfer shall be made payable to the order of
or to the account of each Vendor, on a Pro-Rata Basis, or as they may otherwise
direct in writing.
1.6 STATUTE REFERENCES. Any reference in this Agreement to any statute or any
section thereof shall, unless otherwise expressly stated, be deemed to be a
reference to such statute or section as amended, restated or re-enacted from
time to time.
1.7 SECTION AND SCHEDULE REFERENCES. Unless the context requires otherwise,
references in this Agreement to Sections or Schedules are to Sections or
Schedules of this Agreement. The Schedules to this Agreement are as follows:
SCHEDULES
Schedule 5.1(i) - Financial Statements of Schelfhout
Schedule 5.1(l) - Real Property
Schedule 5.1(n) - Insurance
Schedule 5.1(o) - Material Contracts
Schedule 5.1(p) - List of Receivables
Schedule 5.1(q) - Intellectual Property
Schedule 5.1(y)(i) - Employees
Schedule 5.1(y)(vii) - Benefit Plan
ARTICLE 2
PURCHASE OF SHARES
2.1 AGREEMENT TO PURCHASE AND SELL. At the Closing Time, subject to the terms
and conditions hereof, the Vendors shall sell to the Purchaser and the Purchaser
shall purchase from the Vendors, the Shares.
2.2 AMOUNT OF PURCHASE PRICE. The purchase price (the "Purchase Price") payable
by the Purchaser to the Vendors for the Shares shall be the sum of ten million
dollars (US$10,000,000) in United States funds.
2.3 DEPOSIT. The Vendors acknowledge and agree that the Purchaser has already
deposited the sum of one million dollars (US$1,000,000) in United States funds
in trust with X. Xxxxxxxxxx and H. De Laet (the "Deposit"), which Deposit shall
be applied towards the payment of the Purchase Price.
2.4 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid and satisfied by
the Purchaser to the Vendors as follows:
(a) at the Closing Time, the Deposit shall be paid to the Vendors,
on a Pro-Rata Basis, by X. Xxxxxxxxxx and H. De Laet and
credited against the Purchase Price;
(b) at the Closing Time, by delivery to the Vendors, on a Pro-Rata
basis, of an aggregate of three million dollars (US$3,000,000)
in United States funds; and
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(c) at the Closing Time, by delivery to the Vendors, on a Pro-Rata
Basis, of an aggregate of 3,636,364 common shares in the
capital of e-Auction, which shares shall at the Closing Time
have an aggregate value of six million dollars (US$6,000,000)
in United States funds, and a per share value equal to US$1.65
("Initial Share Value"), subject to the terms and conditions
contained in Section 2.5 below.
2.5 E-AUCTION SHARES. The Vendors agree not to sell, transfer, convey or dispose
("Sell") of any of the e-Auction Shares delivered to the Vendors pursuant to
Section 2.4(c) above except on the following basis:
(a) the Vendors shall not Sell any of the e-Auction Shares until
the date which is six (6) months after the Closing Date, and
following such date the Vendors shall only be entitled to sell
their Pro-rata Share of such number of e-Auction Shares having
an aggregate value, calculated on the basis of a per share
value equal to the Initial Share Value, of seven hundred and
fifty thousand dollars (US$750,000) in United States funds
(454,545 common shares in the aggregate), on each of the six
(6) month, twelve (12) month, eighteen (18) month and twenty
four (24) month anniversary of the Closing Date; and
(b) the Vendors shall be entitled to Sell their Pro-rata Share of
such number of e-Auction Shares having an aggregate value,
calculated on the basis of a per share value equal to the
Initial Share Value, of one million dollars (US$1,000,000) in
United States funds (606,061 common shares in the aggregate),
on each of the thirty six (36) month, forty-eight (48) month
and sixty (60) month anniversary of the Closing Date.
The Vendors agree to allow a legend to be placed upon the e-Auction
Shares referencing the above restrictions which legend shall remain
until the date which is sixty (60) months following the Closing Date.
2.6 FREELY TRADABLE E-AUCTION SHARES.
(a) Subject to (c) below, in the event that the e-Auction Shares
referred to in Section 2.5(a) above are not freely tradable on any one of the
six (6), twelve (12), eighteen (18) or twenty four (24) month anniversary of the
Closing Date, the Purchaser agrees to pay to the Vendors, by way of electronic
transfer, within ten (10) Business Days after the date of the applicable
anniversary, an amount equal to seven hundred and fifty thousand dollars
(US$750,000) in United States funds.
(b) Subject to (c) below, in the event that the e-Auction Shares
referred to in Section 2.5(b) above are not freely tradable on any one of the
thirty six (36), forty eight (48) or sixty (60) month anniversary of the Closing
Date, the Purchaser agrees to pay to the Vendors, by way of electronic transfer,
within ten (10) Business Days after the date of the applicable anniversary, an
amount equal to one million dollars (US$1,000,000) in United States funds.
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(c) Upon any payment by the Purchaser pursuant to Section 2.6 (a) or
Section 2.6(b), the Vendors agree to transfer ownership to the Purchaser, within
ten (10) Business Days after receipt of any payment, such number of e-Auction
Shares equal to the amount paid by the Purchaser to the Vendors, with each share
having a value equal to the Initial Share Value.
2.7 GUARANTEE. e-Auction unconditionally and irrevocably guarantees the prompt
payment to the Vendors of all the indebtedness, liabilities and obligations of
any kind whatsoever which the Purchaser is under an obligation to pay to the
Vendors pursuant to Sections 2.4 and 2.6 above.
ARTICLE 3
CLOSING ARRANGEMENTS
3.1 CLOSING. The Closing shall take place at 2:00 p.m. (the "Closing Time") on
the Closing Date at the offices of the auditor of Schelfhout, Gislenus Bats &
Co. b.v.b.a., located at Xxxxxxxx-Xxxx 0, X-0000 Xxxx-Xxxxxxx, Xxxxxxx, or at
such other time or place as may be agreed upon orally or in writing by the
parties to this Agreement.
3.2 VENDORS' CLOSING DELIVERIES. At the Closing Time, the Vendors shall deliver
or cause to be delivered to the Purchaser the following:
(a) the certificate of registration of the Purchaser in the
register of shareholders of Schelfhout as owner of the Shares;
(b) a certified copy of a resolution of the board of directors of
Schelfhout authorizing the transfer of the Shares from the
Vendors to the Purchaser;
(c) a certificate executed by each of the Vendors certifying that
the representations, warranties and covenants in Section 5.1
are true and correct as at the Closing;
(d) a release of all claims against Schelfhout in favour of the
Purchaser and Schelfhout in the form attached hereto as
Schedule 3.2(e), duly executed by each of the Vendors; and
(e) all such other assurances, consents, agreements, documents and
instruments as may be reasonably required by the Purchaser to
complete the transactions provided for in this Agreement.
3.3 PURCHASER'S CLOSING DELIVERIES. At the Closing, the Purchaser shall deliver
or cause to be delivered to the Vendors the following:
(a) the payments referred to in Sections 2.4 above;
(b) the certificate or certificates representing the e-Auction
Shares, duly registered in the names of each Vendor, on a
Pro-rata Basis;
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(c) a certificate executed by the Purchaser certifying that the
representations, warranties and covenants in Section 5.2 are
true and correct as at the Closing;
(d) evidence in a form satisfactory to the Vendors, acting
reasonably, that the Purchaser was incorporated and acquired
legal status and that the person signing on the Purchaser's
behalf has the power to represent the Purchaser; and
(e) all such other assurances, consents, agreements, documents and
instruments as may be reasonably required by the Vendors to
complete the transactions provided for in this Agreement.
3.4 POST CLOSING DELIVERIES. Within fifteen (15) Business Days following the
Closing Date, the Vendors shall deliver or cause to be delivered to the
Purchaser the following:
(a) copies of any applicable schedule referenced in this Agreement
which the Vendors are unable to deliver to the Purchaser on
the Closing Date; and
(b) legal opinion of the Vendors' solicitors (lawyers) addressed
to the Purchaser and the Purchaser's solicitors (lawyers) in a
form satisfactory to the Purchaser acting reasonably.
ARTICLE 4
CONDITIONS OF CLOSING
4.1 PURCHASER'S CONDITIONS. The Purchaser shall not be obliged to complete the
purchase and sale of the Shares pursuant to this Agreement unless, at or before
the Closing Time, each of the following conditions have been satisfied, it being
understood that the following conditions are included for the exclusive benefit
of the Purchaser and may be waived, in whole or in part, in writing by the
Purchaser at any time; and each of the Vendors hereby, jointly and severally,
covenant and agree with the Purchaser to take all such actions, steps and
proceedings as are reasonably within their control as may be necessary to ensure
that the following conditions are fulfilled at or before the Closing Time:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations,
warranties and covenants of the Vendors in Section 5.1 shall be true and correct
at the Closing Time.
(b) VENDORS' COMPLIANCE. The Vendors shall have performed and complied
with, or caused to be performed or complied with, all of the terms and
conditions in this Agreement on their part to be performed or complied with at
or before Closing Time and shall have executed and delivered or caused to have
been executed and delivered to the Purchaser at the Closing Time all the
documents contemplated in Section 3.2 or elsewhere in this Agreement.
(c) GOOD TITLE. The Vendors shall have good and marketable title to the
Shares, free and clear of any and all Liens of any kind and nature whatsoever.
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(d) MATERIAL ADVERSE CHANGE. During the Interim Period, there shall
have been no Material Adverse Change.
(e) CONSENTS AND APPROVALS. All the Consents and Approvals have been
obtained.
(f) NO LITIGATION. Except as set out below, there shall be no
litigation or proceedings:
(i) pending or threatened against any of the Vendors or
against Schelfhout or any of its directors or
officers, for the purpose of enjoining, preventing or
restraining the completion of the transactions
contemplated by this Agreement; and
(ii) pending or threatened against any of the Vendors or
against Schelfhout or any of its directors or
officers which:
(1) if decided adversely, could adversely affect
the right of the Purchaser to acquire or
retain the Shares; or
(2) in the judgement of the Purchaser, acting
reasonably, would make the completion of the
transactions contemplated by this Agreement
inadvisable;
except for (i) Xxxxxxx x. Xxxxxxxxxx which is presently under
appeal, in which the French Court ordered Schelfhout and the
Chamber of Commerce of Cherbourg on January 1, 1999 to pay
damages to Xxxxxxx in the amount of FRF200.000; and (ii)
[DESCRIBE SECOND LITIGATION].
4.2 CONDITION NOT FULFILLED. If any condition in Section 4.1 has not been
fulfilled at or before the Closing Time, then the Purchaser in its sole
discretion may, without limiting any rights or remedies available to the
Purchaser at law or in equity, either:
(a) terminate this Agreement by notice to the Vendors, in which
event the Purchaser shall be released from its obligations
under this Agreement to complete the purchase of the Shares;
or
(b) waive compliance with any such condition in whole or in part
without prejudice to its right of termination in the event of
non-fulfilment of any other condition in whole or in part.
4.3 VENDORS' CONDITIONS. The Vendors shall not be obliged to complete the
purchase and sale of the shares pursuant to this Agreement and to complete the
transactions contemplated by this Agreement unless, at or before the Closing
Time each of the following conditions have been satisfied, it being understood
that the following conditions are included for the exclusive benefit of the
Vendors, and may be waived, in whole or in part, in writing by the Vendors at
any time;
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and the Purchaser hereby covenants and agrees with the Vendors to take
all such actions, steps and proceedings as are reasonably within the Purchaser's
control as may be necessary to ensure that the following conditions are
fulfilled at or before the Closing Time:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations,
warranties and covenants of the Purchaser in Section 5.2 shall be true and
correct at the Closing Time.
(b) PURCHASER'S COMPLIANCE. The Purchaser shall have performed and
complied with all of the terms and conditions in this Agreement on its part to
be performed or complied with at or before the Closing Time and shall have
executed and delivered or caused to have been executed and delivered to the
Vendors at the Closing Time all the documents contemplated in Section 3.3 or
elsewhere in this Agreement.
(c) GOOD TITLE. The Purchaser shall have good and marketable title to
the e-Auction Shares, free and clear of any and all Liens of any kind and nature
whatsoever.
(d) MATERIAL ADVERSE CHANGE. During the Interim Period, there shall
have been no Material Adverse Change in the business and assets of e-Auction.
(e) NO LITIGATION. There shall be no litigation or proceedings pending
or threatened against e-Auction or the Purchaser or any of its directors and
officers which, in the judgement of the Vendors, acting reasonably, would make
the completing of the transactions contemplated by this Agreement inadvisable.
(f) INCORPORATION OF THE PURCHASER. The Purchaser shall have been
incorporated and shall have acquired legal status.
(g) CONTRIBUTION IN KIND AND CAPITAL DECREASE. Schelfhout shall have
contributed the buildings in a new Belgium company to be set up and shall have
decreased its capital for the same amount (e.g., the bookkeeping value of the
buildings, decreased by the amount of the mortgages.
(h) PLEDGE AGREEMENT. The Purchaser shall have completed a pledge
agreement with the Vendors, by which the Shares are pledged to the Vendors, and
shall have been registered the pledge in the shareholders register.
4.4 CONDITION NOT FULFILLED. If any condition in Section 4.3 shall not have been
fulfilled at or before the Closing Time, then the Vendors, in their sole
discretion may, without limiting any rights or remedies available to the Vendors
at law or in equity, either:
(a) terminate this Agreement by notice to the Purchaser in which
event the Vendors shall be released from all obligations under
this Agreement to complete the sale of the Shares; or
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(b) waive compliance with any such condition in whole or in part
without prejudice to its right of termination in the event of
non-fulfilment of any other condition in whole or in part.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE VENDORS. As a material
inducement to the Purchaser entering into this Agreement and completing the
transactions contemplated by this Agreement and acknowledging that the Purchaser
is entering into this Agreement in reliance upon the representations, warranties
and covenants of the Vendors, the Vendors hereby, jointly and severally,
represent, warrant and covenant to and with the Purchaser as follows:
(a) OWNERSHIP OF SHARES. The Vendors are, and at the Closing Time will
be, the registered and beneficial owners of the Shares, with good and marketable
title thereto, free and clear of all Liens of any kind and nature whatsoever. No
Person, other than the Purchaser, has any agreement, option, right or privilege
of any kind capable of becoming an agreement for the purchase from the Vendors
of any of the Shares.
(b) ENFORCEABILITY OF OBLIGATIONS. This Agreement constitutes a valid
and binding obligation of each of the Vendors enforceable against each of them
in accordance with its terms, subject however, to limitations with respect to
enforcement imposed by law in connection with bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally and to the
extent that equitable remedies such as specific performance and injunction are
only available in the discretion of the court from which they are sought.
(c) AUTHORIZATION BY THE VENDORS. Each of the Vendors has the legal
capacity to enter into this Agreement and all other agreements and instruments
to be executed by any of them as contemplated by this Agreement and to carry out
their respective obligations under this Agreement and such other agreements and
instruments and the Vendors have the exclusive right, power and authority to
sell the Shares in accordance with the terms of this Agreement.
(d) BANKRUPTCY. Neither Schelfhout nor any Vendor has committed an act
of bankruptcy (within the meaning of the BANKRUPTCY AND INSOLVENCY ACT (Canada)
or similar laws of any other jurisdiction) nor made an assignment in favour of
its creditors nor made a proposal in bankruptcy to its creditors or any class
thereof nor had any petition for a receiving order presented in respect of it.
Neither Schelfhout nor any Vendor has initiated proceedings with respect to a
compromise or arrangement with its creditors nor initiated any proceedings for
its winding up, liquidation or dissolution. No receiver has been appointed in
respect of Schelfhout or any Vendor or any of the Assets or Shares and no
execution or distress has been levied upon any of the Assets or Shares.
(e) INCORPORATION AND POWER. Schelfhout is a corporation duly
incorporated, organized, validly subsisting and in good standing under the laws
of Belgium. Schelfhout is duly
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licensed, registered and qualified to do business and is in good standing under
the laws of Belgium. Schelfhout has the full corporate power and authority to
carry on the Business and to own, lease and operate the Assets and the Business
as now carried on and owned, leased and operated by it.
(f) SHARE CAPITAL. The authorized capital of Schelfhout consists of 640
shares and there are 640 shares issued and outstanding. Schelfhout does not have
a stock option plan and there are no outstanding securities convertible into or
exchangeable for any shares of capital stock or any rights (either pre-emptive
or other) to subscribe for or to purchase, or any options, rights or warrants
for the purchase of, or any agreements providing for the issuance of, or any
calls, commitments, agreements or claims of any character relating to the
issuance of, any securities in the capital of Schelfhout, except for the usual
preferential rights for the existing shareholders of Schelfhout in the case of
capital increases as provided for in Article 7 of the articles of incorporation
of Schelfhout.
(g) TITLE TO ASSETS. Schelfhout has good and marketable title to all
the Assets, free and clear of any and all Liens. All machines, machinery,
equipment, tools or other moveable or mechanical property forming part of the
Assets are in good operating condition and are in a state of good repair and
maintenance, reasonable wear and tear excepted. The Assets are sufficient to
permit the continued operation of the Business in substantially the same manner
as now being conducted. There is no agreement, option or other right or
privilege outstanding in favour of any Person for the purchase from Schelfhout
of the Business or of any of the Assets out of the ordinary course of Business.
(h) NO SUBSIDIARY. Schelfhout has no subsidiaries or agreements of any
nature to acquire any subsidiary or to acquire or lease any other business
operations, except for the shares in the company into which the buildings were
contributed.
(i) FINANCIAL STATEMENTS. The Purchaser has been furnished with the
financial statements of Schelfhout for the 1996, 1997 and 1998 fiscal years
ending December 31, (the "Financial Statements") prepared in accordance with
Belgium generally accepted accounting principles (GAAP), copies of which are
attached hereto as Schedule 5.1(i). The balance sheets contained in such
Financial Statements fairly present in all material respects the financial
position of Schelfhout as of its date and the statements of earnings and
retained earnings contained in the Financial Statements fairly present in all
material respects the results of operations for the period indicated. Since
December 31, 1998, Schelfhout has carried on its business in the ordinary course
and there has been no Material Adverse Change in the Business, financial
condition, Assets, results of operations or prospects of Schelfhout, except for
the contribution in kind of the building.
(j) CORPORATE RECORDS. The minute books of Schelfhout contain true,
correct and complete copies of its articles, its by-laws, the minutes of every
meeting of its board of directors and every committee thereof and of its
shareholders and every written resolution of its directors and shareholders. The
register of shareholders of Schelfhout is complete and accurate in all material
respects.
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(k) PERSONAL PROPERTY. All Personal Property is in good operating
condition, and repair, ordinary wear and tear excepted.
(l) REAL PROPERTY. Schedule 5.1(l) lists the municipal address for and
a general description of each parcel of land owned, leased or used in the
Business. The Real Property and the current use thereof comply with Applicable
Law. No notice of violation of any Applicable Law or of any covenant,
restriction or easement affecting the Real Property or with respect to the use
or occupancy of the Real Property, has been given by any governmental authority
having jurisdiction over the Real Property or by any other Person entitled to
enforce the same.
(m) PERSONAL PROPERTY LEASES. Each Personal Property Lease is in full
force and effect and has not been amended, and Schelfhout is entitled to the
full benefit and advantage of each Personal Property Lease in accordance with
its terms. Each Personal Property Lease used in the Business is in good standing
and there has not been any default by any party under any Personal Property
Lease nor any dispute between Schelfhout and any other party under any Personal
Property Lease.
(n) INSURANCE. The Business, properties and Assets of Schelfhout are
insured for the benefit of Schelfhout in amounts deemed adequate by Schelfhout's
management against risk usually insured against by Persons operating a business
similar to the Business of Schelfhout in the localities where such properties
are located. Particulars of the policies of insurance maintained by Schelfhout
as at the Closing Date are set out in Schedule 5.1(n) hereto. All policies are
in full force and effect and Schelfhout is not in default, whether as to payment
of premiums or otherwise, under the terms of such policies.
(o) MATERIAL CONTRACTS. Schedule 5.1(o) lists all the Material
Contracts. Schelfhout is not in default under any Material Contract and neither
Schelfhout nor the Vendors have received notice of a default and there has not
occurred any event which, with the lapse of time or giving of notice or both,
would constitute a default under any Material Contract by Schelfhout or any
other party to the Material Contract. Each Material Contract is in full force
and effect, unamended by written or oral agreement, and Schelfhout is entitled
to the full benefit and advantage of each Material Contract in accordance with
its terms. Each Material Contract is in good standing and there has not been any
default by any party under any Material Contract nor any dispute between
Schelfhout and any other party under any Material Contract.
(p) RECEIVABLES. Schedule 5.1(p) lists all of the Receivables as at the
Closing Date. The Receivables are valid obligations which arose in the ordinary
course of business and are enforceable and fully collectable accounts not
subject to any setoff or counterclaim. None of the Receivables are due from a
Person with whom Schelfhout does not deal at arm's length.
(q) INTELLECTUAL PROPERTY.
(i) Schedule 5.1(q)(i) lists the Intellectual Property
for products developed by Schelfhout. The
Intellectual Property, and all registrations of the
Intellectual Property, are valid and subsisting. All
of the registrations and
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applications for registration of the Intellectual
Property are in good standing and are recorded in
the name of Schelfhout. No application for
registration of any of the Intellectual Property has
been rejected.
(ii) Schelfhout is the first and only owner of the
Intellectual Property and is entitled to the
uninterrupted use of the Intellectual Property
without payment of any royalty or other fees. No
Person has any right, title or interest in any of the
Intellectual Property and all such persons have
waived their moral rights in any copyright works
within the Intellectual Property. Schelfhout has
diligently protected its legal rights to the
exclusive use of the Intellectual Property.
(iii) There is no current litigation pending or threatened
against or relating to the Intellectual Property.
(iv) Schelfhout has not permitted or licensed any Person
to use any of the Intellectual Property.
(v) No Person has challenged the validity of any
registrations for the Intellectual Property or the
rights of Schelfhout to any of the Intellectual
Property.
(vi) To the best of the knowledge of the Vendors, neither
the use of the Intellectual Property (which includes
products, processes, methods, substances, parts and
other materials presently sold by or used by
Schelfhout in connection with the Business) nor the
conduct of the Business has infringed or currently
infringes upon the industrial or intellectual
property rights of any other Person.
(vii) To the best of the knowledge of the Vendors, no other
Person has infringed the Schelfhout rights to the
Intellectual Property.
(viii) There is no governmental prohibition or restriction
on the use of the Intellectual Property.
(r) LICENCES AND PERMITS. Schelfhout is registered with the Ministry of
Finance of Belgium by decision dated January 1, 1990 as a building contractor
under the number 429.285.178.06.26.12. Schelfhout holds this registration free
and clear of any and all Liens. This registration is in good standing and in
full force and effect, Schelfhout is not in violation of any term or provision
or requirement of such registration, and no Person has threatened to revoke,
amend or impose any condition in respect of, or commenced proceedings to revoke,
amend or impose conditions in respect of this registration. Schelfhout does not
hold any Licenses or Permits other than described in this Section 5.1(r).
- 18 -
(s) UNDISCLOSED LIABILITIES. Schelfhout does not have any other
liabilities, obligations, indebtedness or commitments, whether accrued,
absolute, contingent or otherwise, other than the liabilities which have been
previously disclosed in writing to the Purchaser and which do not exceed in the
aggregate twenty thousand dollars (US$20,000) in United States funds.
(t) CONSENTS AND APPROVALS. All the Consents and Approvals are listed
in Schedule 5.1(t). Except for the Consents and Approvals, no consent or
approval of any Person is required in connection with the execution and delivery
of this Agreement and the completion of the transactions contemplated by this
Agreement or to permit Schelfhout to carry on the Business after the Closing as
the Business is currently carried on by it.
(u) NOTICES. no Notices are required to be delivered to any Person in
connection with the execution and delivery of this Agreement and the completion
of the transactions contemplated by this Agreement or to permit Schelfhout to
carry on the Business after the Closing as the Business is currently carried on
by Schelfhout.
(v) ABSENCE OF CONFLICTING AGREEMENTS. The execution, delivery and
performance of this Agreement by the Vendors and the completion (with any
required Consents and Approvals) of the transactions contemplated by this
Agreement do not and will not result in or constitute any of the following:
(i) a default, breach or violation or an event that, with
notice or lapse of time or both, would be a default,
breach or violation of any of the terms, conditions
or provisions of the articles or by-laws of
Schelfhout;
(ii) an event which, pursuant to the terms of any Material
Contract or Licence and Permit, causes any right or
interest of Schelfhout to come to an end or be
amended in any way that is detrimental to the
Business or entitles any other Person to terminate or
amend any such right or interest;
(iii) the creation or imposition of any Lien on any Asset;
or
(iv) the violation of any Applicable Law by the Vendors or
Schelfhout.
(w) LITIGATION. There is no action, suit, proceeding, claim,
application, complaint or investigation in any court or before any arbitrator or
before or by any regulatory body or governmental or non-governmental body
pending or threatened by or against the Vendors or Schelfhout, or Related to the
Business or affecting the Business or the operations or capital of Schelfhout or
the transactions contemplated by this Agreement, and there is no factual or
legal basis which could give rise to any such action, suit, proceeding, claim,
application, complaint or investigation except for (i) Xxxxxxx x. Xxxxxxxxxx
which is presently under appeal, in which the French Court ordered Schelfhout
and the Chamber of Commerce of Cherbourg on January 1, 1999 to pay damages to
Xxxxxxx in the amount of FRF200.000; and (ii) [DESCRIBE SECOND LITIGATION].
- 19 -
(x) NO CONFLICT. No current director or officer of Schelfhout (nor
anyone who was a director or officer of Schelfhout in the last fiscal year) and,
to the knowledge of each Vendor, no current shareholder of Schelfhout, nor any
associate of any such Person, is presently, directly or indirectly through his
or her affiliation with any other Person, a party to any transaction with
Schelfhout providing for the furnishing of services by or to (except services
related to such person acting as a director or officer of Schelfhout), or rental
of real or personal property from or to, or otherwise requiring cash payments to
or by any such Person except for (i) an agreement dated June 10, 1992 between
Agricomp and Schelfhout providing for the furnishing of management, consulting
and related services by Agricomp to Schelfhout in the amount of 327.514 BEF per
month; and (ii) the Lease Agreement referred to in Section 5.1(hh), and (iii)
the option to acquire the shares in the company into which the buildings were
contributed.
(y) EMPLOYEES.
(i) Schedule 5.1(y)(i), which will be provided to the
Purchaser on the Closing Date, lists all the
Employees and the age, position, status, length of
service, compensation and all other benefits of each
of them, respectively. The Purchaser has been
provided with the opportunity to review all
contracts or arrangements with or relating to any
Employee and will be provided with copies of such
contracts or arrangements on the Closing Date. All
Employees have written employment agreements.
(ii) There is no labour strike, dispute, slowdown or
stoppage actually pending or involving or, to the
best of the knowledge of each Vendor, threatened
against Schelfhout with respect to the Business;
(iii) No union representation question exists respecting
the Employees in connection with the Business and no
collective bargaining agreement is in place or
currently being negotiated by Schelfhout;
(iv) Other than as set out in their written contracts of
employment with Schelfhout, no Employee has any
agreement as to length of notice required to
terminate his or her employment;
(v) All required withholding of amounts from the
employees have been paid to the appropriate authority
in compliance with Applicable Law.
(vi) No notice has been received by Schelfhout or any
Vendor of any complaint which has not been resolved,
filed by any of its employees claiming that
Schelfhout has violated any applicable employee or
human rights or similar legislation in any
jurisdictions in which Schelfhout operates), or of
any complaints or proceedings which have not been
resolved of any kind involving Schelfhout or, to the
Vendors' knowledge, after due inquiry, any of the
Employees before any labour relations board.
- 20 -
There are no outstanding orders or charges against
Schelfhout under any applicable health and safety
legislation in any jurisdictions in which Schelfhout
carries on business). All levies, assessments and
penalties made against Schelfhout pursuant to the
workers' compensation legislation in the
jurisdictions in which Schelfhout carries on business
have been paid by Schelfhout and Schelfhout has not
been reassessed under any such legislation except
such as have been resolved.
(vii) The only benefit plans of Schelfhout (the "Benefit
Plans") are listed in Schedule 5.1(y)(vii) hereto.
All contributions or premiums required to be made by
Schelfhout under the terms of the Benefit Plans have
been made. Schelfhout may terminate, without penalty,
the Benefit Plans. Schelfhout has furnished to the
Purchaser all related documentation and plan
summaries, booklets and personal manuals related to
the Benefit Plans. No material changes have occurred
to the Benefit Plans or are expected to occur which
would affect the actuarial reports or financial
statements provided to the Purchaser, except for the
hospitalisation and group insurance which will be
introduced by Schelfhout on or about January 1, 1999
as far as the group insurance is concerned for two of
the employees and January 1, 2000 as far as
hospitalisation is concerned.
(z) Intentionally omitted.
(aa) CUSTOMERS. None of the Vendors is aware of, nor has any of them
received notice of, any intention on the part of any such customer to cease
doing business with Schelfhout or to modify or change in any material manner any
existing arrangement with Schelfhout for the purchase of any products or
services. The relationships of Schelfhout with each of their respective
principal customers are satisfactory, and there are no unresolved disputes with
any such customer.
(bb) AFFILIATED TRANSACTIONS. Schelfhout is not liable in respect of
advances, loans, guarantees to or on behalf of any shareholder, officer,
director, employee or any other Person with whom Schelfhout does not deal at
arm's length.
(cc) TAXES. Schelfhout has filed with appropriate taxing authorities on
a timely basis all returns, reports and estimates relating to Taxes which are
required to be filed by or on behalf of Schelfhout to the date hereof, and each
such return, report and estimate is complete and accurate in all material
respects. Schelfhout has paid, or made adequate provision in accordance with
generally accepted accounting principles for the payment of, all Taxes which are
shown to be due on such returns, reports or estimates. There are no current
assessments, liens or claims issued by any taxing authority regarding any Taxes
of Schelfhout. All assessments of Taxes with respect to Schelfhout have either
been paid or provided for or are being contested in good faith by appropriate
proceedings as to which adequate reserves have been provided. No action,
proceeding or investigation has been threatened by any governmental authority
for the assessment or collection of any Taxes for which Schelfhout would be
liable.
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(dd) ACTION DURING INTERIM PERIOD. During the Interim Period,
Schelfhout has not:
(i) made or agreed to make any change in the compensation
of any director, officer or Employee, except for the
normal increases which are necessary in the Business
to retain Employees, and has not paid or agreed to
pay or set aside any bonus, profit sharing,
retirement, insurance, death, severance, fringe
benefit, or other extraordinary or indirect
compensation to, for, or on behalf of any director,
officer or Employee, except for the hospitalisation
and group insurance for Employees which will be
introduced by Schelfhout on or about January 1, 1999
as far as the group insurance is concerned for two of
the employees and January 1, 2000 as far as
hospitalisation is concerned;
(ii) suffered any Material Adverse Change;
(iii) declared or made any payment of any dividend or other
distribution in respect of its shares and has not
redeemed, purchased or otherwise acquired any shares;
(iv) issued or sold any shares or other securities or
issued, sold or granted any option, warranty or right
to purchase any shares or other securities of
Schelfhout or its Affiliates;
(v) sold, assigned, transferred, mortgaged, pledged,
granted a security interest in or otherwise
encumbered any of the Assets except sales of
Inventories in the normal course of business which,
individually and in the aggregate are not material to
the financial condition of the operation of the
Business, except for the contribution by Schelfhout
of the building according to Section 5.1(hh) and
except for the granting of an irrevocable option on
the shares in the company into which the buildings
were contributed;
(vi) changed any accounting or costing systems or methods
in any material respect;
(vii) suffered any extraordinary loss or cancelled or
waived any debt, claim or other right;
(viii) incurred or assumed any liabilities, obligations or
indebtedness (whether accrued, absolute, contingent
or otherwise), except unsecured current liabilities,
obligations and indebtedness incurred in the normal
course of business;
(ix) entered into any Material Contract or any other
transaction that was not in the normal course of
business; or
- 22 -
(x) terminated, cancelled or modified in any material
respect or received notice or a request for
termination, cancellation or modification in any
material respect of any Material Contract, including
any policy of insurance which related to Schelfhout
or any of the Assets, except for the maintenance
contract with Socave-Vergt which was terminated on
August 17, 1999.
(ee) DIRECTORS AND OFFICERS. At the request of the Purchaser any time
on or following the Closing Date, the Vendors shall cause their nominees on the
board of directors of Schelfhout to tender resignations.
(ff) e-AUCTION SHARES. The Vendors acknowledge that:
(i) the e-Auction Shares were issued in accordance with
Rule 144 pursuant to the UNITED STATES SECURITIES ACT
of 1933 (the "1933 Act") and are known as restricted
shares;
(ii) the Vendors may only make offers or sales of the
e-Auction Shares to non-U.S. Persons outside the
United States pursuant to Rule 904 of Regulation S of
the 1933 Act. The Vendors may offer or sell the
e-Auction Shares only: outside the United States in
accordance with the provisions of Rule 904 of
Regulation S; pursuant to registration of the
e-Auction Shares under the 1933 Act; or in the United
States pursuant to an available exemption from the
registration requirements of the 1933 Act. Such an
exemption would be available for persons who are not
Underwriters, Distributors or Affiliates of
e-Auction. The foregoing is only a summary of the
applicable United States securities laws and
regulations governing the resale of the e-Auction
Shares within the United States. The determination of
the status of the Vendors for such purpose and the
availability of any exemption from registration will
depend on the prevailing facts and circumstances.
Accordingly, the Vendors should consult appropriate
United States counsel prior to any resale of the
e-Auction Shares within the United States;
(iii) the e-Auction Shares acquired pursuant to this
Agreement may be resold in other jurisdictions not
listed above only in accordance with applicable
securities laws in effect in that jurisdiction;
(iv) upon the original issuance thereof, and until such
time as the same is no longer required under
applicable requirements of the 1933 Act or applicable
state laws, the certificates representing the
e-Auction Shares sold in the United States, and all
certificates issued in exchange therefor or in
substitution thereof, shall bear the following
legend:
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"No sale, offer to sale, or transfer of the
shares represented by this certificate shall
be made unless a registration statement
under the FEDERAL SECURITIES ACT of 1993, as
amended, with respect to such shares is then
in effect or an exemption from the
registration requirements of said Act is
then in fact applicable to said shares."
(v) pursuant to applicable securities legislation it may
be necessary to place a legend, different or in
addition to the one listed in paragraph 5.1(ff)(vi)
above, relating to resale restrictions on the
certificates representing the e-Auction Shares
purchased hereunder and to the extent that such is
required by applicable securities legislation, and
the Vendors consent to the same.
(gg) FULL DISCLOSURE. None of the foregoing representations and
warranties and no document furnished by or on behalf of Schelfhout and the
Vendors to the Purchaser in connection with the negotiation of the transactions
contemplated by this Agreement contain any untrue statement of a material fact
or omit to state any material fact necessary to make any such statement or
representation not misleading to a prospective purchaser of the Shares seeking
full information as to Schelfhout and its respective properties, businesses and
affairs. Except for those matters disclosed in this Agreement, there are no
facts not disclosed in this Agreement which, if learned by the Purchaser, might
reasonably be expected to materially diminish its evaluation of the value of the
Shares and the Business or to deter the Purchaser from completing the
transactions contemplated by this Agreement on the terms of this Agreement.
(hh) LEASE. The Vendors acknowledge and agree that Schelfhout shall be
entitled to remain on the premises where Schelfhout currently operates and
carries on business for a period of twelve (12) months following the Closing
Date on a rent free basis and that following such twelve (12) month period, the
Vendors shall lease the building to Schelfhout at a rate of 2,400 BEF per square
metre for office space, 1,800 BEF per square metre for the work room and 1,200
per square metre for the warehouse, for a term of 10 years (the "Lease
Agreement"), which terms of the lease shall be no less favourable than the lease
terms currently enjoyed by Schelfhout prior to the Closing.
5.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND e-AUCTION. As a material
inducement to the Vendors entering into this Agreement and completing the
transactions contemplated by this Agreement and acknowledging that the Vendors
are entering into this Agreement in reliance upon the representations,
warranties and covenants of the Purchaser and e-Auction, the Purchaser and
e-Auction hereby represents, warrants and covenants to the Vendors as follows:
(a) INCORPORATION. The Purchaser is a corporation duly incorporated and
validly subsisting and in good standing under the laws of Belgium.
(b) DUE AUTHORIZATION. The Purchaser has all necessary corporate power,
authority and capacity to enter into, execute and deliver this Agreement and all
other agreements and
- 24 -
instruments required to be delivered hereunder and to perform its obligations
hereunder and under such other agreements and instruments. The execution and
delivery by the Purchaser of this Agreement and such other agreements and
instruments to be delivered hereunder, and the completion of the transactions
contemplated by this Agreement and under such other agreements and instruments
have been duly authorized and approved by all necessary corporate action on the
part of the Purchaser.
(c) ENFORCEABILITY OF OBLIGATIONS. This Agreement constitutes a valid
and binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms subject, however, to limitations on enforcement
imposed by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally and to the extent that equitable remedies such as
specific performance and injunctions are only available in the discretion of the
court from which they are sought.
(d) OWNERSHIP OF SHARES. The Purchasers at the Closing Time will be the
registered and beneficial owners of the e-Auction Shares, with good and
marketable title thereto, free and clear of all Liens of any kind and nature
whatsoever. No Person, other than the Purchaser, has any agreement, option,
right or privilege of any kind capable of becoming an agreement for the purchase
from the Purchaser of any of the e-Auction Shares.
(e) BANKRUPTCY. The Purchaser has not committed an act of bankruptcy
(within the meaning of the BANKRUPTCY AND INSOLVENCY ACT (Canada) or similar
laws of any other jurisdiction) nor made an assignment in favour of its
creditors nor made a proposal in bankruptcy to its creditors or any class
thereof nor had any petition for a receiving order presented in respect of it.
The Purchaser has not initiated proceedings with respect to a compromise or
arrangement with its creditors nor initiated any proceedings for its winding up,
liquidation or dissolution. No receiver has been appointed in respect of the
Purchaser or any of the assets or shares of the Purchaser and no execution or
distress has been levied upon any of the assets or shares.
(f) LITIGATION. There is no action, suit, proceeding, claim,
application, complaint or investigation in any court or before any arbitrator or
before or by any regulatory body or governmental or non-governmental body
pending or threatened by or against the Purchaser, related to its business or
affecting the business or the operations or capital of the Purchaser or the
transactions contemplated by this Agreement, and there is no factual or legal
basis which could give rise to any such action, suit, proceeding, claim,
application, complaint or investigation.
(g) CORPORATE RECORDS. The minute books of the Purchaser contain true,
correct and complete copies of its articles, its by-laws, the minutes of every
meeting of its board of directors and every committee thereof and of its
shareholders and every written resolution of its directors and shareholders. The
share certificate book, register of shareholders, register of transfers and
register of directors and officers of the Purchaser are complete and accurate in
all material respects.
(h) FULL DISCLOSURE. None of the foregoing representations and
warranties and no document furnished by or on behalf of the Purchaser and
e-Auction in connection with the
- 25 -
negotiation of the transactions contemplated by this Agreement contain any
untrue statement of a material fact or omit to state any material fact necessary
to make any such statement or representation not misleading to the Vendors
seeking full information as to e-Auction and its respective properties,
businesses and affairs. Except for those matters disclosed in this Agreement,
there are no facts not disclosed in this Agreement which, if learned by the
Vendors, might reasonably be expected to deter the Vendors from completing the
transactions contemplated by this Agreement on the terms of this Agreement.
(i) NO TRANSFER OF SHARES. The Purchaser shall not, during a period of
thirteen (13) months following the Closing Date, transfer any or all of the
Shares in any way whatsoever which would make article 90, 9e and 94 of the
Belgium Income Tax Code applicable. The Purchaser shall be accountable for any
breach of this covenant, whether by the Purchaser itself, one of its assigns,
successors or creditors.
5.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) The representations and warranties of the Vendors contained in this
Agreement or contained in any agreement, certificate or other document delivered
or given pursuant to or in connection with this Agreement or the transactions
provided for herein shall survive the Closing, and regardless of any
investigation by or on behalf of the Purchaser with respect thereto, shall
continue in full force and effect for the benefit of the Purchaser for a period
of two (2) years from the Closing Date.
(b) The representations and warranties of the Purchaser and e-Auction
contained in this Agreement or contained in any agreement, certificate or
document delivered or given pursuant to or in connection with this Agreement or
the transactions provided for herein shall survive the Closing, and regardless
of any investigation by or on behalf of the Vendors with respect thereto, shall
continue in full force and effect for the benefit of the Vendors for a period of
two (2) years from the Closing Date.
ARTICLE 6
INDEMNIFICATION
6.1 INDEMNITY BY THE VENDORS. The Vendors shall, jointly and severally,
indemnify and hold the Purchaser and e-Auction, its directors, officers,
employees, agents, representatives, assigns and the Purchaser's Affiliates, and
their respective directors, officers and employees harmless in respect of any
claim, demand, action, cause of action, damage, loss, cost, liability or expense
(hereinafter referred to as "Claim") which may be made or brought against an
Indemnified Party or which it may suffer or incur directly or indirectly as a
result of, in respect of or arising out of:
(a) any incorrectness in or breach of any representation or
warranty of the Vendors contained in this Agreement or in any
other agreement, certificate or instrument executed and
delivered pursuant to this Agreement; or
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(b) any breach of or any non-fulfillment of any covenant or
agreement on the part of the Vendors under this Agreement or
under any other agreement, certificate or instrument executed
and delivered pursuant to this Agreement;
6.2 INDEMNITY BY THE PURCHASER AND E-AUCTION. The Purchaser and e-Auction shall
indemnify and hold the Vendors and their respective heirs and legal
representatives harmless in respect of any Claim which may be made or brought
against an Indemnified Party or which it may suffer or incur directly or
indirectly as a result of in respect of or arising out of:
(a) any incorrectness in or breach of any representation or
warranty of the Purchaser or e-Auction, contained in this
Agreement or in any other agreement, certificate or instrument
executed and delivered pursuant to this Agreement;
(b) any breach of or any non-fulfillment of any covenant or
agreement on the part of the Purchaser or e-Auction under this
Agreement or under any other agreement, certificate or
instrument executed and delivered pursuant to this Agreement;
or
(c) in the event of a breach of Section 5.2(i) above, the
Purchaser and e-Auction, their assigns and creditors, agree to
pay to the Vendors ispo jure, an indemnity equal to the taxes
to be paid by the Vendors, including any and all fines,
interest and increases thereof. The Purchaser and e-Auction
agree to pay this indemnity to the Vendors within fourteen
(14) days of the receipt of the copy of the notice of
assessment provided by the Vendors.
6.3 LIMITATIONS. No party shall have any Liability for indemnification pursuant
to Sections 6.1 or 6.2 unless and until the accumulated aggregate amount of
Claims of the Indemnified Party exceeds twenty thousand dollars (US$20,000) in
United States funds, following which all such accumulated Claims and all further
Claims of the Indemnified Party shall be recoverable as provided in this
Agreement.
6.4 NOTICE OF CLAIM. If an Indemnified Party becomes aware of a Claim in respect
of which indemnification is provided for pursuant to either of Section 6.1 or
6.2, as the case may be, the Indemnified Party shall promptly give written
notice of the Claim to the Indemnifying Party. Such notice shall specify whether
the Claim arises as a result of a claim by a Person against the Indemnified
Party (a "Third Party Claim") or whether the Claim does not so arise (a "Direct
Claim"), and shall also specify with reasonable particularity (to the extent
that the information is available):
(a) the factual basis for the Claim; and
(b) the amount of the Claim, if known.
If, through the fault of the Indemnified Party, the Indemnifying Party does not
receive notice of any Claim in time effectively to contest the determination of
any liability susceptible of being contested, then the Liability of the
Indemnifying Party to the Indemnified Party under this
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Article shall be reduced by the amount of any losses incurred by the
Indemnifying Party resulting from the Indemnified Party's failure to give such
notice on a timely basis.
6.5 DIRECT CLAIMS. In the case of a Direct Claim, the Indemnifying Party shall
have sixty (60) days from receipt of notice of the Claim within which to make
such investigation of the Claim as the Indemnifying Party considers necessary or
desirable. For the purpose of such investigation, the Indemnified Party shall
make available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or before the expiration of such sixty (60) day period (or any mutually
agreed upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim, failing which the matter shall be referred to
binding arbitration in such manner as the parties may agree or shall be
determined by a court of competent jurisdiction.
6.6 THIRD PARTY CLAIMS. In the case of a Third Party Claim, the Indemnifying
Party shall have the right, at its expense, to participate in or assume control
of the negotiation, settlement or defence of the Claim and, in such event, the
Indemnifying Party shall reimburse the Indemnified Party for all of the
Indemnified Party's out-of-pocket expenses as a result of such participation or
assumption. If the Indemnifying Party elects to assume such control, the
Indemnified Party shall have the right to participate in the negotiation,
settlement or defence of such Third Party Claim and to retain counsel to act on
its behalf, provided that the fees and disbursements of such counsel shall be
paid by the Indemnified Party unless the Indemnifying Party consents to the
retention of such counsel at its expense or unless the named parties to any
action or proceeding include both the Indemnifying Party and the Indemnified
Party and a representation of both the Indemnifying Party and the Indemnified
Party by the same counsel would be inappropriate due to the actual or potential
differing interests between them (such as the availability of different
defences). If the Indemnifying Party, having elected to assume such control,
thereafter fails to defend the Third Party Claim within a reasonable time, the
Indemnified Party shall be entitled to assume such control and the Indemnifying
Party shall be bound by the results obtained by the Indemnified Party with
respect to such Third Party Claim. If any Third Party Claim is of a nature such
that (i) the Indemnified Party is required by Applicable Law or the order of any
court, tribunal or regulatory body having jurisdiction, or (ii) it is necessary
in the reasonable view of the Indemnified Party acting in good faith and in a
manner consistent with reasonable commercial practices, in respect of (A) a
Third Party Claim by a customer relating to products or services supplied by the
Business or (B) a Third Party Claim relating to any Contract which is necessary
to the ongoing operations of the Business or any material part thereof in order
to avoid material damage to the relationship between the Indemnified Party and
any of its major customers or to preserve the rights of the Indemnified Party
under such an essential Contract, to make a payment to any Person (a "Third
Party") with respect to the Third Party Claim before the completion of
settlement negotiations or related legal proceedings, as the case may be, the
Indemnified Party may make such payment and the Indemnifying Party shall,
promptly after demand by the Indemnified Party, reimburse the Indemnified Party
for such payment. If the amount of any liability of the Indemnified Party under
the Third Party Claim in respect of which such a payment was made, as finally
determined, is less than the amount which was paid by the
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Indemnifying Party to the Indemnified Party, the Indemnified Party shall,
promptly after receipt of the difference from the Third Party, pay the amount of
such difference to the Indemnifying Party. If such a payment, by resulting in
settlement of the Third Party Claim, precludes a final determination of the
merits of the Third Party Claim and the Indemnified Party and the Indemnifying
Party are unable to agree whether such payment was unreasonable in the
circumstances having regard to the amount and merits of the Third Party Claim,
then such dispute shall be referred to and finally settled by binding
arbitration from which there shall be no appeal.
6.7 SETTLEMENT OF THIRD PARTY CLAIMS. If the Indemnifying Party fails to assume
control of the defence of any Third Party Claim, the Indemnified Party shall
have the exclusive right to contest, settle or pay the amount claimed. Whether
or not the Indemnifying Party assumes control of the negotiation, settlement or
defence of any Third Party Claim, the Indemnifying Party shall not settle any
Third Party Claim without the written consent of the Indemnified Party, which
consent shall not be unreasonably withheld or delayed; provided, however, that
the liability of the Indemnifying Party shall be limited to the proposed
settlement amount if any such consent is not obtained for any reason within a
reasonable time after the request therefor.
6.8 SET-OFF. The Purchaser shall be entitled to set-off the amount of any Claim
submitted under Section 6.1 as damages or by way of indemnification against any
other amounts payable by the Purchaser to the Vendors whether under this
Agreement or otherwise.
ARTICLE 7
DISPUTE RESOLUTION
7.1 ARBITRATION. Any dispute concerning the validity, the interpretation or the
execution of this Agreement or any agreement or document entered into pursuant
to this Agreement, shall be definitively settled in accordance with the Rules of
the Cepani, by one or several arbitrators appointed in accordance these Rules.
The Arbitration Tribunal shall be composed of three arbitrators. The place of
the arbitration shall be Sint-Niklaas, Belgium.
ARTICLE 8
GENERAL
8.1 FURTHER ASSURANCES. Each of the parties hereto from time to time at the
request and expense of any other party hereto and without further consideration,
shall execute and deliver such other instruments of transfer, conveyance and
assignment and take such further action as the other party may require to more
effectively complete any matter provided for herein.
8.2 EXPENSES. Unless otherwise provided in this Agreement, each of the parties
hereto shall bear its or his own expenses (including those of legal counsel and
advisors) incurred in connection with this Agreement and the transactions
contemplated by this Agreement.
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8.3 ENTIRE AGREEMENT. This Agreement and the Schedules hereto together with any
agreements referenced herein constitute the entire agreement between the parties
pertaining to the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties respecting the subject matter hereof and there are no implied
representations, warranties or conditions, statutory or otherwise, except as
expressly set forth herein. There are no oral representations or warranties
among the parties hereto of any kind. This Agreement may not be amended or
modified in any respect except by written instrument signed by all the parties
hereto.
8.4 TIME OF THE ESSENCE. Time shall be of the essence of this Agreement.
8.5 NOTICES. Any notice required or permitted to be given hereunder shall be in
writing and shall be effectively given if (i) delivered personally or (ii) sent
by fax or other similar means of electronic communication, in each case to the
applicable address set out on the execution page of this Agreement. Any notice
so given shall be deemed conclusively to have been given and received when so
personally delivered or on the day of faxing or sending by other means of
recorded electronic communication, provided that such day in either event is a
Business Day. Otherwise, such communication shall be deemed to have been given
and made and to have been received on the next following Business Day. Any party
hereto or others mentioned above may change any particulars of its address for
notice by notice to the others in the manner aforesaid.
8.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of Belgium.
8.7 SEVERABILITY. Any covenant or provision hereof determined to be void or
unenforceable in whole or in part shall not be deemed to affect or impair the
validity of any other covenant or provision hereof and the covenants and
provisions hereof are declared to be separate and distinct.
8.8 WAIVER. A waiver of any default, breach or non-compliance under this
Agreement is not effective unless in writing and signed by the party to be bound
by the waiver. No waiver shall be inferred from or implied by any failure to act
or delay in acting by a party in respect of any default, breach or
non-observance or by anything done or omitted to be done by the other party. The
waiver by a party of any default, breach or non-compliance under this Agreement
shall not operate as a waiver of that party's rights under this Agreement in
respect of any continuing or subsequent default, breach or non-observance
(whether of the same or any other nature).
8.9 SUCCESSORS AND ASSIGNS. This Agreement shall not be assignable by any of the
parties hereto without the prior written consent of the other parties hereto and
the Agreement shall enure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties hereto.
8.10 NON-MERGER. Each party hereby agrees that all provisions of this Agreement,
other than the representations and warranties contained in Article 5, and the
indemnities in Sections 6.1 and 6.2 hereof (which shall be subject to the
special arrangements provided in such Articles or Sections), shall survive the
execution, delivery and performance of this Agreement, the Closing
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Date and the execution, delivery and performance of any and all documents
delivered in connection with this Agreement.
8.11 COUNTERPARTS AND FACSIMILE. This Agreement may be executed by the parties
in any number of separate counterparts each of which, when so executed and
delivered, shall be an original, but all such counterparts shall together
constitute one and the same instrument. Counterparts may be executed either in
original or faxed form and the parties adopt any signatures received by a
receiving fax machine as original signatures of the parties, provided, however
that any party providing its signature in such manner shall promptly forward to
the other party an original of the signed copy of this Agreement which was so
faxed.
[THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto.
------------------------------- --------------------------------------
Witness XXX XXXXXXXXXX
Address:
--------------------------
--------------------------
Facsimile:
--------------------------
------------------------------- --------------------------------------
Witness XXXXX DE LAET
Address:
--------------------------
--------------------------
Facsimile:
--------------------------
------------------------------- --------------------------------------
Witness SCHELFHOUT-DE LAET
---------------
Address:
--------------------------
--------------------------
Facsimile:
--------------------------
AGRICOMP N.V.
Per:
--------------------------
Address:
--------------------------
--------------------------
Facsimile:
--------------------------
E-AUCTION BELGIUM N.V.
Per:
--------------------------
Name:
--------------------------
Address:
--------------------------
--------------------------
Facsimile:
--------------------------
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E-AUCTION GLOBAL TRADING INC.
Per:
--------------------------
Name:
--------------------------
Address:
--------------------------
--------------------------
Facsimile:
--------------------------
