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EXHIBIT 2.1
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Execution Copy #204307 v6
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STOCK PURCHASE AGREEMENT
AMONG
XXXXXXX & XXXXX HOLDINGS, INC.
(AS BUYER)
AND
XXXXXXX & XXXXX, INC.
(AS SOLE STOCKHOLDER OF BUYER)
AND
XXXXX XXXXXXX-XXXXX
(AS SELLER)
MADE AS OF
AUGUST 10, 2001
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TABLE OF CONTENTS
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PAGE
Section 1. Definitions; Certain Interpretative Provisions..................................................1
1.01 Definitions.....................................................................................1
1.02 Other Interpretative Provisions.................................................................8
Section 2. Purchase and Sale of Stock......................................................................8
2.01 Purchase........................................................................................8
2.02 Purchase Price..................................................................................8
2.03 Earnout Consideration...........................................................................8
2.04 Sale of Stock Consideration....................................................................10
2.05 Establishment of Escrow Fund...................................................................10
2.06 Right of First Refusal with Respect to Sale of Stock Consideration.............................11
Section 3. Closing........................................................................................12
Section 4. Representations and Warranties of Seller with Respect to Seller................................15
4.01 Title to, and Transfer of, Romaco Stock........................................................15
4.02 Authority of Seller...........................................................................15
4.03 No Violation by Seller.........................................................................15
4.04 No Brokerage Fees..............................................................................15
4.05 Litigation.....................................................................................15
4.06 Investment Representations.....................................................................16
4.07 Consents.......................................................................................16
4.08 Disclosure of Transaction......................................................................16
Section 5. Representations and Warranties of Seller Regarding the Companies...............................16
5.01 Title to Capital Stock of Consolidated Subsidiaries............................................16
5.02 Organization, Good Standing and Qualification..................................................16
5.03 Capital Stock..................................................................................17
5.04 Corporate Information Exhibit..................................................................17
5.05 No Conflict; Required Filings; and Consents....................................................17
5.06 Title to Properties; Absence of Liens, Etc.....................................................17
5.07 Financial Information..........................................................................18
5.08 Customers and Suppliers........................................................................18
5.09 Claims.........................................................................................18
5.10 Product Warranty...............................................................................18
5.11 Product Liability..............................................................................19
5.12 Contracts......................................................................................19
5.13 Compliance with Applicable Laws; Permits.......................................................20
5.14 Environmental Compliance.......................................................................21
5.15 Loans of the Companies.........................................................................22
5.16 Employee Plans.................................................................................22
5.17 Labor Matters..................................................................................23
5.18 Insurance......................................................................................23
5.19 Intellectual Property..........................................................................23
5.20 Absence of Certain Changes, Events or Conditions...............................................23
5.21 Affiliates.....................................................................................24
5.22 Companies in Liquidation.......................................................................24
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5.23 Brokers and Finders............................................................................24
5.24 Predecessor Affiliates.........................................................................24
5.25 Accuracy of Representations....................................................................24
Section 6. Representations and Warranties of Buyer and R&M Parent.........................................25
6.01 Organization and Standing......................................................................25
6.02 Corporate Authority............................................................................25
6.03 No Violation...................................................................................25
6.04 Litigation.....................................................................................25
6.05 Consents.......................................................................................26
6.06 Investment Only................................................................................26
6.07 Brokers and Finders............................................................................26
6.08 Funds for the Purchase.........................................................................26
6.09 R&M Parent Reports.............................................................................26
6.10 Future Dealings with Non-Consolidated Subsidiaries.............................................27
6.11 Continuity for Purposes of Calculation of the Earnout Consideration............................27
Section 7. Certain Covenants of Seller....................................................................27
7.01 Interim Operations of the Companies............................................................27
7.02 Access, Information and Confidentiality........................................................29
7.03 Confidentiality................................................................................29
Section 8. Certain Covenants of Buyer.....................................................................29
8.01 Confidentiality................................................................................29
Section 9. Certain Additional Agreements and Covenants of Buyer and Seller................................29
9.01 Regulatory Filings.............................................................................29
9.02 Consummation of Transactions...................................................................30
9.03 Public Announcements...........................................................................30
9.04 Access to Records..............................................................................30
9.05 Further Assurances.............................................................................30
9.06 Expenses.......................................................................................31
9.07 Consents.......................................................................................31
9.08 Environmental..................................................................................31
9.09 Guarantees of Obligations of Non-consolidated Subsidiaries.....................................32
Section 10. Conditions to Buyer's Obligations..............................................................32
10.01 Accuracy of Representations and Warranties.....................................................32
10.02 Litigation.....................................................................................32
10.03 Consents and Approvals.........................................................................32
10.04 Employment Agreements .........................................................................32
Section 11. Conditions to Seller's Obligations.............................................................33
11.01 Accuracy of Representations and Warranties.....................................................33
11.02 Litigation.....................................................................................33
11.03 Consents and Approvals.........................................................................33
Section 12. Survival of Representations and Warranties.....................................................33
Section 13. Indemnity......................................................................................34
Section 14. Termination....................................................................................38
14.01 Termination of Agreement.......................................................................38
14.02 Effect of Termination..........................................................................39
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Section 15. Taxes..........................................................................................39
Section 16. Miscellaneous..................................................................................42
16.01 Assignment; No Third-Party Rights..............................................................42
16.02 Entire Agreement...............................................................................42
16.03 Section and Other Headings; Number.............................................................42
16.04 Notices........................................................................................42
16.05 Governing Law..................................................................................44
16.06 Consent to Jurisdiction........................................................................44
16.07 Counterparts...................................................................................44
16.08 Severability...................................................................................44
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TABLE OF EXHIBITS AND SCHEDULES
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EXHIBITS
A - Procedures for Calculating Earnout Consideration
B - Corporate Information Exhibit
C - Noncompetition Agreement of BFS
D - Escrow Agreement
E - R&M Parent Note Term Sheet
SCHEDULES
1.01 - Financial Statements
1.01(b) BFS Stock Purchase Agreement
5.06(a) - Real Property Schedule
5.06(b) - Title to Real Property and Tangible Assets
5.07 - Financial Information
5.08 - Customers and Suppliers
5.09 - Claims
5.10 - Product Warranty Claims
5.11 - Product Liability
5.12 - Contracts
5.13 - Compliance with Applicable Laws; Permits
5.14 - Environmental Compliance
5.15 - Loans of the Companies
5.16 - Employee Plans
5.17 - Labor Matters
5.19 - Intellectual Property
5.20 - Absence of Certain Changes, Events or Conditions
6.05 - Consents
15 - Deficiencies
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STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT is entered into as of the 10th day of
August, 2001, between XXXXXXX & XXXXX HOLDINGS, INC., a Delaware corporation
("BUYER"), XXXXXXX & XXXXX, INC., an Ohio corporation ("R&M PARENT"), and XXXXX
XXXXXXX-XXXXX ("SELLER"), under the following circumstances:
A. Seller owns all of the issued and outstanding capital stock
of Romaco N.V., a Netherlands Antilles corporation ("ROMACO"); and
B. Upon the terms and conditions of this Agreement, Seller
desires to sell to Buyer, and Buyer desires to purchase from Seller,
all of the issued and outstanding capital stock of the Romaco;
NOW, THEREFORE, SELLER, BUYER, R&M PARENT AGREE AS FOLLOWS:
SECTION 1. DEFINITIONS; CERTAIN INTERPRETATIVE PROVISIONS.
1.01 DEFINITIONS. For purposes of this Agreement, any amendment,
Exhibit or Schedule, the following terms shall have the following meanings:
"ACCOUNTANTS" means PricewaterhouseCoopers LLP, New York, New York
office, or if such firm is unable or unwilling to serve as an arbitrator of
disputes arising pursuant Section 2.03, then a firm of independent accountants
of internationally recognized standing (other than Ernst & Young LLP) reasonably
satisfactory to Buyer and Seller which shall not have any material relationship
with Buyer, Seller or any of the Companies.
"AFFILIATE" means, with respect to any Person, any other Person who is
directly or indirectly controlling, controlled by or under the common control
with such Person. For the purposes of this definition, the term "control," when
used with respect to any Person, means the possession, directly or indirectly,
of 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.
"AGREEMENT" means this Stock Purchase Agreement, together with the
Exhibits and Schedules.
"BUYER GROUP" has the meaning set forth at Section 13(a).
"BFS STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement among
certain BFS Family Members and Romaco Finance B.V. included at SCHEDULE 1.01(b).
"BFS TRANSACTION" means the sale of all of the stock of Randomat
International B.V. to be effected pursuant to the BFS Stock Purchase Agreement
immediately following the purchase of the Romaco Stock by Buyer pursuant to this
Agreement.
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"BUSINESS" means the design, engineering, manufacture, marketing,
distribution or sale of processing equipment, packaging equipment, printing or
security equipment for use in the healthcare, nutraceutical, or cosmetic
industries and includes the design, engineering, manufacture, marketing,
distribution or sale of the products, parts, accessories or services offered for
sale by any of the Companies during 2000 (the "CURRENT PRODUCTS AND SERVICES")
and any products or services which now or hereafter are developed for the
similar applications as those for which the Current Products and Services are
used.
"BUSINESS DAY" means any day other than a Saturday, Sunday, or a day on
which the New York Stock Exchange is closed for regular trading.
"BUYER" means Xxxxxxx & Xxxxx Holdings, Inc., a Delaware corporation
and a wholly owned subsidiary of R&M Parent.
"CLOSING," means the closing for which provision is made at Section 3.
"CLOSING DATE," means the date of the Closing.
"CONTRACT DATE" means the date set forth on the cover page of this
Agreement as the date as of which this Agreement was executed.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANIES" means and includes Romaco and each of the Consolidated
Subsidiaries and Non-Consolidated Subsidiaries.
"CONSOLIDATED SUBSIDIARY(IES)" means, individually, a company which was
accounted for on a consolidated basis (and not under the equity method) in the
Year-end Financial Statements and, collectively, all of the companies that were
accounted for on a consolidated basis in the Year-end Financial Statements; and
all of the Consolidated Subsidiaries are identified and listed in the Corporate
Information Exhibit.
"CORPORATE INFORMATION EXHIBIT" means EXHIBIT B to this Agreement.
"CONFIDENTIALITY AGREEMENT" means the Confidentiality Agreement dated
December 12, 2000 between Romaco and Buyer.
"DECEMBER BALANCE SHEET" means the audited consolidated balance sheet
of Romaco at December 31, 2000, which is included with the Financial Statements.
"EARNOUT CALCULATION SCHEDULE" has the meaning set forth at Section
2.03(a).
"EARNOUT CONSIDERATION" has the meaning set forth at Section 2.03(a).
"EFFECTIVE TIME" means 11:59 p.m. on the Closing Date.
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"EMPLOYEE PLAN" mean any employment, bonus, deferred compensation,
pension, retirement, profit sharing, stock option, stock purchase, employee
stock ownership, stock appreciation rights, savings, severance, termination,
collective bargaining, group insurance, fringe benefit and other employee
benefit, incentive and welfare plans, policies, contracts and arrangements,
formal or informal, written or oral, and all trust agreements related thereto,
relating to any present or former directors, officers or employees of any of the
Companies; "DOMESTIC EMPLOYEE PLAN" means any Employee Plan maintained by any
one of the Companies which is incorporated in the United States; and "FOREIGN
EMPLOYEE PLANS" means any Employee Plan maintained by a Company which is
incorporated outside of the United States.
"ENVIRONMENTAL LAWS" means any and all Laws existing on the Closing
Date relating to discharge or release of Hazardous Materials into the
environment including ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, use, treatment, storage, disposal, or
handling of Hazardous Materials or the clean-up or other remediation thereof.
"ESCROW AGENT," "ESCROW AGREEMENT," and "ESCROW FUND" have the
respective meanings set forth in Section 2.05.
"EXHIBIT" means any of the exhibits attached to this Agreement.
"FINANCIAL STATEMENTS" means (i) the audited consolidated balance
sheets of the Romaco as of December 31, 2000, 1999, 1998 and 1997 and the
related consolidated statements of income and cash flows for the years ended
December 31, 2000, 1999, 1998, and 1997 and (ii) the Interim Financial
Statements, all of which are included at SCHEDULE 1.01.
"GAAP" means International generally accepted accounting principles.
"GUARANTEE PLEDGE" means the arrangement under which R&M Parent will
hold R&M Parent Note A in its possession until the guarantee given by a
Consolidated Subsidiary to secure obligations of Modulatus
Grundstucks-Vermietungsgesellschaft GmbH & Co Objeckt Worms KG related to real
property located in Worms, Germany is released.
"GOVERNMENTAL ENTITY" means any court, governmental authority or other
regulatory or administrative agency or commission, domestic or foreign.
"HAZARDOUS MATERIAL" means any substance defined as toxic, radioactive
or otherwise hazardous under any Laws, and petroleum and any constituent
thereof.
"INITIAL CASH PORTION OF THE PURCHASE PRICE" has the meaning set forth
at Section 2.01.
"INTELLECTUAL PROPERTY" means all rights of any of the Companies in,
to, or under any patent, trademark, service xxxx, trade name (including the
corporate names of each of the
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Companies) or copyright (or registrations or applications therefor) used in the
Business or listed in SCHEDULE 5.19; all intellectual property rights, patent
disclosures, inventions, know-how, confidential business information, computer
software, web sites, domain names, data and documents, trade secrets or
intellectual property, processes and formulae of any of the Companies; and
licenses or other agreements to or from third parties regarding the foregoing.
"INTERIM BALANCE SHEET" means the unaudited consolidated balance sheet
of Romaco as of June 30, 2001, which was included with the Interim Financial
Statements.
"INTERIM FINANCIAL STATEMENTS" means the unaudited consolidated
balance sheet of Romaco as of June 30, 2001 and the related consolidated
statement of income for the six-month period then ended.
"KNOWN TO SELLER" or "TO SELLER'S KNOWLEDGE" means any information,
fact or matter known to any of the following persons: Seller, Xxxxxx
Xxxxxxx-Xxxxx; Xxxxxxx Xxxxx; Xxxx Xxxxxxxxx; Xxxxx Xxxxx; Reindent Dooves; and
Cor de Vos.
"LAWS" means all applicable laws, regulations, rules, judgments, orders
and decrees of Governmental Entities.
"LEASED REAL PROPERTY" means the land, building, structures, or other
real property listed at SCHEDULE 5.06(a) as currently being leased by any of the
Companies.
"LIEN" means a lien, encumbrance, security interest, mortgage, pledge,
assessment, option, right of first refusal, restriction on voting or transfer,
or other encumbrance, excluding any restriction on transfer of capital stock
that may be imposed by federal or state securities laws.
"MATERIAL" when used herein to limit a representation or warranty of a
Person shall be interpreted as follows: whenever any representation or warranty
of a Person contains an exception or limitation relating to "materiality,"
"material adverse" events or omissions, "material adverse effects" or similar
concepts (other than "Material Adverse Closing Condition Effect") (collectively,
"Materiality Tests"), such Materiality Tests shall be deemed to have been met
(i.e., such events or omissions shall be deemed to be "material," "materially
adverse," have a "material adverse effect" or otherwise meet a similar test),
and such representation or warranty shall be deemed to have been breached, if
such breach results in, or would be reasonably expected to result in, damages
with respect to the matter being represented or warranted of (Euro)100,000 or
more.
"MATERIAL ADVERSE CLOSING CONDITION EFFECT" means a material adverse
effect on the business, operations or financial condition of a Person and its
Affiliates, if any, taken as a whole or a material adverse effect on the
Person's ability to consummate the transactions contemplated hereby; provided,
however, that a "Material Adverse Closing Condition Effect" shall not include
any change or effect solely resulting from or attributable to (i) general
national, international or regional economic or financial conditions, (ii) other
developments which are not unique to such
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Person and its Affiliates, but also affect other Persons who engage in the lines
of business in which such party or its Affiliates, if any, are engaged, or (iii)
the announcement or pendency of this Agreement or the transactions contemplated
hereby.
"NONCOMPETITION AGREEMENT OF SELLER" means the Noncompetition Agreement
to be entered into between the Company and Seller in the form attached hereto as
EXHIBIT C.
"NON-CONSOLIDATED SUBSIDIARIES" means and includes the following
companies: Randomat International B.V., a Netherlands company; Robannic
Immobilien Verwaltungs GmbH, a German company; Roscherwerke GmbH, a German
company; Geba Verwaltungs GmbH, a German company; GEBA GmbH + Co KG, a German
company; Modulatus Grundstucks-Vermietungsgesellschaft GmbH & Co Objeckt Worms
KG, a German company; Modulatus Grundstucks-Vermietungsgesellschaft GmbH, a
German company
"OBJECTION NOTICE" has the meaning set forth at Section 2.03(a).
"OBJECTION PERIOD" has the meaning set forth at Section 2.03(a).
"OWNED REAL PROPERTY" means the land, buildings, structures, fixtures,
and other improvements located at the premises listed at SCHEDULE 5.06(a) as
currently being owned by any of the Companies.
"PER SHARE PRICE" has the meaning set forth at Section 2.02.
"PERMITS" means any license, permit, approval, and authorization of a
Governmental Entity which is necessary to conduct the Business.
"PERMITTED LIENS" means (i) Liens for Taxes not yet due and payable or
being contested in good faith, (ii) mechanic's and materialman's Liens and other
Liens arising as a matter of Law, (iii) purchase money security interests, (iv)
Liens the sole purpose of which is to secure payment of any loan listed in
SCHEDULE 5.15, and (v) Liens and imperfections of title that do not individually
or in the aggregate materially detract from the value, or impair the use, of the
assets as presently used.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a Governmental Entity.
"PRIVATE TRANSACTION" means any sale of the shares included in the
Stock Consideration that is not effected on the New York Stock Exchange, another
stock exchange, or another public trading market.
"PURCHASE PRICE" has the meaning set forth at Section 2.02.
"R&M PARENT NOTE AGREEMENT" means the agreement pursuant to which the
R&M Parent Note A and R&M Parent Note B are to be issued.
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"R&M PARENT NOTE A" means a note substantially upon the terms set out
in the R&M Parent Note Term Sheet, executed by R&M Parent and having the
following additional details: (i) the principal amount shall be (euro) 2,452,000
and (ii) the issue date shall be the Closing Date.
"R&M PARENT NOTE B" means a note substantially upon the terms set out
in the R&M Parent Note Term Sheet, executed by R&M Parent and having the
following additional details: (i) the principal amount shall be an amount in
Euros equal to 50% of the Earnout Consideration and (ii) the issue date shall be
deemed to be the earlier of (i) February 28, 2002 and (ii) 10 days after Buyer
has received the necessary financial information to calculate the Earnout
Payment
"R&M PARENT" means Xxxxxxx & Xxxxx, Inc., an Ohio corporation, which
owns all of the issued and outstanding capital stock of Buyer.
"R&M PARENT REPORTS" means all reports, registrations, and statements,
together with any amendments thereto, filed by R&M Parent with the SEC since
September 1, 1999, including but not limited to, Forms 10-K, Forms 10-Q, Forms
8-K, and proxy statements.
"R&M PARENT STOCK" means the common shares, without par value, of R&M
Parent which are traded on the New York Stock Exchange under the symbol "RBN."
"R&M PARENT STOCK VALUE" means (Euro) 17,448,000.
"READILY MARKETABLE" means with respect to the shares of R&M Parent
Stock included in the Stock Consideration that 200,000 of such shares may be
sold without registration under the Securities Act or any state securities laws
beginning on the six-month anniversary date of the Closing Date, that an
additional 200,000 of such shares included in the Stock Consideration may be
sold without registration under the Securities Act or any state securities laws
beginning on the 12-month anniversary date of the Closing Date, and that the
remaining 200,000 of such shares included in the Stock Consideration may be sold
without registration under the Securities Act or any state securities laws
beginning on the 18-month anniversary date of the Closing Date.
"REAL PROPERTY LEASES" means the agreements or documents pursuant to
which any of the Companies leases, subleases, or otherwise occupies any of the
Leased Real Property.
"RECORDS" means, in the case of each of the Companies, all books and
records of the Company including its tax returns, minute books, stock records,
general ledger, all property and equipment records, production records,
engineering records, purchasing and sales records, personnel and payroll
records, accounting records, magnetic copies of computer files and
documentation, customer and vendor lists, and other records and files of the
each Company kept in the ordinary course of its business and in the possession
of the Companies, Seller, or any Affiliate of Seller.
"RETURNED PRODUCTS" has the meaning set forth at Section 2.03(c).
"ROMACO" means Romaco N.V., a Netherlands Antilles corporation.
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"ROMACO STOCK" means all of the issued and outstanding capital stock of
Romaco.
"SCHEDULE" means any of the Schedules listed in the Table of Exhibits
and Schedules to this Agreement.
"SEC" means the United States Securities and Exchange Commission.
"SELLER" means Xxxxx Xxxxxxx-Xxxxx.
"SELLER GROUP" has the meaning set forth at Section 13(b).
"STATUTORY PLANS" means a plan maintained or sponsored by a
Governmental Entity which provides pension, health, life insurance or other
benefits to employees or former employees of a Company and to which the Company
may or may not make contributions and with respect to which the Company has no
unfunded future obligations.
"SUBSEQUENT EARNOUT REVIEWS" has the meaning set forth at Section
2.03(e).
"TAX" or "TAXES" means any foreign, federal, state or local income,
gross receipts, license, severance, occupation, premium, environmental
(including taxes under Section 59A of the Code), customs, duties, profits,
disability, registration, alternative or add-on minimum, estimated, withholding,
payroll, employment, unemployment insurance, social security (or similar),
excise, sales, use, value-added, tariff, occupancy, franchise, real property,
personal property, business and occupation, mercantile, windfall profits,
capital stock, stamp, transfer, xxxxxxx'x compensation or other tax, fee or
imposition of any kind whatsoever, including any interest, penalties, additions,
assessments or deferred liability with respect thereto, whether disputed or not.
"TAX RETURNS" means any return, report, information return, or other
document (including any related or supporting information) filed or required to
be filed with any Governmental Entity or required to be prepared in connection
with the determination, assessment or collection of any Taxes or the
administration of any laws, regulations or administrative requirements relating
to any Taxes, including, without limitation, declarations of estimated tax and
tax reports required to be filed with respect to any of the Companies or any of
their income, properties or operations.
"YEAR END FINANCIAL STATEMENTS" means the audited consolidated balance
sheet of the Romaco as of December 31, 2000 and the related consolidated
statement of income and cash flows for the year ended December 31, 2000.
"WARRANTY AND LITIGATION RESERVE" means a total of (Euro) 1,800,000,
which represents the sum of the product warranty reserve of (Euro) 1,700,000 and
the litigation reserve of (Euro) 100,000 of the Companies included in the
Interim Balance Sheet.
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1.02 OTHER INTERPRETATIVE PROVISIONS.
(a) The words "hereof," "herein," and "hereunder and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement.
(b) Terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa.
(c) The term "capital stock" means the equity capital of a Person by
whatever name called including common stock, preferred stock, ordinary shares,
extraordinary shares, or quotas.
(d) The term "certificate of incorporation" means the basic document
under which a person is organized, for example, in the case of a Delaware
corporation, it would be the Certificate of Incorporation; in the case of an
Ohio corporation, it would be the Articles of Incorporation; and in the case of
an Ohio limited liability company, it would be the Operating Agreement.
(e) The terms "Euros" and "_" shall mean the monetary currency of the
European Union; all references in this Agreement to monetary amounts are
references to amounts in Euros unless it is clear from the context that a
different currency is being specified.
(f) The term "including" shall be deemed to be immediately followed by
the term "but not limited to."
SECTION 2. PURCHASE AND SALE OF STOCK
2.01 PURCHASE. At the Closing, Buyer will purchase the Romaco Stock
from Seller, and Seller will sell the Romaco Stock to Buyer, free and clear of
Liens.
2.02 PURCHASE PRICE. The purchase price to be paid by Buyer to Seller
shall be comprised of the following consideration: (a) a cash payment of (Euro)
45,100,000 (the "INITIAL CASH PORTION OF THE PURCHASE PRICE"); (b) 600,000
shares of R&M Parent Stock (the "STOCK CONSIDERATION"); (c) the R&M Parent Note
A; and (d) the Earnout Consideration, if any (the "PURCHASE PRICE").
2.03 EARNOUT CONSIDERATION.
(a) EARNOUT CALCULATION. The earnout consideration ("EARNOUT
CONSIDERATION") shall be calculated in accordance with, and subject to the
limitations set forth in, EXHIBIT A. As soon as practicable after December 31,
2001, but not later than March 15, 2002, Buyer shall furnish to Seller a
schedule setting forth Buyer's calculation of the Earnout Consideration in
accordance with EXHIBIT A (the "EARNOUT CALCULATION SCHEDULE"). Buyer shall
allow Seller and its representatives timely and full access to all books,
records, and work papers of the Companies that Seller may reasonably request to
review the Earnout Calculation Schedule. If Seller objects
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to Buyer's calculation of Earnout Payment as shown on the Earnout Calculation
Schedule, then within 30 days after Seller's receipt of such schedule (the
"OBJECTION PERIOD"), Seller may object to such calculation by giving a written
notice of objection to Buyer specifying in reasonable detail its objections (the
"OBJECTION NOTICE") to the Earnout Calculation Schedule. Within 30 days after
Buyer's receipt of the Objection Notice, Buyer and Seller shall meet on a date
specified by Seller at the offices of Ernst & Young LLP, Amsterdam, Netherlands
and attempt in good faith to reasonably resolve any disputes as to the
calculation of Earnout Consideration. If Buyer and Seller are unable to resolve
any such disputes, Seller may refer the matter to the Accountants for final
determination as set forth in Section 2.03(b) provided such referral is made
prior to June 30, 2002. If Seller does not deliver the Objection Notice to Buyer
within the Objection Period, Seller shall be deemed to agree in all respects
with Buyer's calculation of the Earnout Consideration.
(b) ACCOUNTANTS' REVIEW OF EARNOUT CALCULATION SCHEDULE. If a matter
set forth in the Objection Notice is timely referred to the Accountants by
Seller sending to the Accountants (with a copy to Buyer) a copy of its Objection
Notice and requesting the Accountants to resolve the disputes set forth in the
Objection Notice in accordance with this Agreement, Buyer and Seller shall cause
the Accountants to promptly review the Objection Notice, this Agreement, the
Earnout Calculation Schedule, and the Earnout Consideration and the disputed
items or amounts for the purpose of calculating the Earnout Consideration. In
making such calculation, the Accountants shall independently determine the
Earnout Consideration in accordance with this Agreement and shall deliver to
Buyer and Seller, as promptly as practicable, a written report setting forth
their calculation of the Earnout Consideration. Buyer and Seller shall provide
such information to the Accountants as the Accountants may request in connection
with their review of the Earnout Calculation Schedule and Earnout Consideration.
The costs and expenses for the services of the Accountants shall be borne by
Seller and Buyer in proportion to the extent to which the Accountants accept the
respective positions of Seller and Buyer. For example, if Seller asserts that
the Earnout Consideration should be increased by (Euro) 10,000 and Buyer asserts
that no adjustment in the Earnout Consideration is warranted, and the
Accountants determine that the Earnout Consideration should be increased by
(Euro) 4,000, Seller is responsible for 60% and Buyer is responsible for 40% of
the costs of the Accountants.
(c) PAYMENT OF EARNOUT CONSIDERATION. The Earnout Consideration shall
be due and payable on the third Business Day after the Earnout Consideration is
finally determined in accordance with this Section 2.03. The Earnout
Consideration shall be paid 50% in cash and 50% by Buyer delivering the R&M
Parent Note B to Seller. The 50% of the Earnout Consideration payable in cash
shall bear interest at a rate of 6.0% per annum until paid, with such interest
beginning to accrue on the earlier of February 28, 2002 and 10 days after Buyer
has received the necessary financial information to calculate the Earnout
Payment Any amount not timely paid shall bear interest at a rate per annum equal
to the Default Rate set forth in the R&M Parent Note Agreement until the same is
paid.
(d) PRELIMINARY EARNOUT RELATED INFORMATION. During the period from the
Closing Date through December 31, 2001, Buyer hereby agrees to furnish to
Seller, upon his request,
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such financial information concerning the Companies for the then most recently
completed fiscal month of the Companies that would be relevant to the
calculation of the Earnout Consideration in accordance with EXHIBIT A. Seller
understands and acknowledges that such information is being furnished in
preliminary form and without formal review and is subject to additional review
and normal year-end adjustments consistent with the procedures applicable to
Buyer's preparation of the Earnout Calculation Schedule.
(e) SUBSEQUENT EARNOUT REVIEW. Notwithstanding anything included in
this Agreement to the contrary, Buyer shall be entitled to initiate a subsequent
Earnout Consideration review (the "SUBSEQUENT EARNOUT REVIEW") if Buyer notifies
Seller at any time prior to December 31, 2002 that (i) the Earnout Calculation
Schedule, when previously finalized in accordance with this Agreement, included
sales of products of the Companies which products were returned to one of the
Companies prior to March 31, 2003 ("RETURNED PRODUCTS") provided, however,
Returned Products shall not include any products tendered as a trade-in on
another product of one of the Companies or as an exchange or swap for another
product of one of the Companies, (ii) the calculation of the Earnout
Consideration after eliminating the sales and EBITDA attributable to the
Returned Products would result in the Earnout Consideration being at least
(Euro) 250,000 less than previously determined in accordance with this
Agreement, and (iii) Buyer includes with such notice a revised Earnout
Calculation Schedule showing the Earnout Consideration after eliminating the
Returned Products. Upon Seller's receipt of the revised Earnout Calculation
Schedule, the procedures under this Section 2.03 that were applicable to the
previously furnished Earnout Calculation Schedule, including a new Objection
Period, Objection Notice, and Accountants' review shall be followed in
connection with the Subsequent Earnout Review. Any adjustment in the Earnout
Consideration resulting from the Subsequent Earnout Review shall be made first
to the R&M Parent Note B and then, to the extent necessary, be settled by
payment of cash.
2.04 SALE OF STOCK CONSIDERATION. Without the consent of R&M Parent,
Seller may not sell any of the shares included in the Stock Consideration until
six months after the Closing Date. After the sixth month anniversary date of the
Closing Date, Seller may sell up to 200,000 of such shares; after the 12-month
anniversary date of the Closing Date, Seller may sell an additional 200,000 of
such shares; and after the 18-month anniversary date of the Closing Date, Seller
may sell any of the shares included in the Stock Consideration that remain
unsold.
2.05 ESTABLISHMENT OF ESCROW FUND. At the Closing, Buyer shall deposit
into escrow with Semanchin & Wetter LLP, Williamsville, New York (the "ESCROW
AGENT"), 600,000 of the shares of R&M Parent Stock included in the Stock
Consideration (the "ESCROW FUND"), which shall serve on a non-exclusive basis as
collateral for the indemnification obligations of Seller pursuant to this
Agreement. The deposit, maintenance and ultimate disposition of the Escrow Fund
shall be governed by the terms of an escrow agreement, the form of which is
attached hereto as EXHIBIT D (the "ESCROW AGREEMENT").
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2.06 RIGHT OF FIRST REFUSAL WITH RESPECT TO SALE OF STOCK
CONSIDERATION. If prior to August 31, 2004, Seller desires to sell 100,000 or
more of the shares included in the Stock Consideration in a Private Transaction,
the following provisions shall apply:
(a) In the event that Seller receives a bona fide offer from a third
party to buy 100,000 or more of the shares included in the Stock Consideration
in Private Transaction (an "OFFER"), Seller shall transmit to R&M Parent a
written notice (the "SELLER NOTICE") setting forth: (i) the name, address and
principal business activity of the proposed purchaser; (ii) the number of shares
proposed to be sold to such person; (iii) the manner in which the sale is
proposed to be made; and (iv) the price at which or other consideration for
which, and the material terms upon which, such sale is proposed to be made, and
stating that such person's Offer is, to the best knowledge of Seller, bona fide.
(b) Upon receipt of the documents required to be furnished to it under
subsection (a) proposing a sale, R&M Parent shall have an option to purchase
all, but not less than all, of the shares proposed to be disposed of on the
following terms and conditions:
(i) The purchase price and terms for the purchase of the
shares purchasable upon exercise of the option shall be the price and
terms specified in the Seller Notice; provided, however, that: (A) if
the Offer is a tender offer, the price shall be the highest price paid
by the successful tender offeror pursuant to the tender offer to any of
the shareholders of R&M Parent (it being understood that if the price
offered in any tender offer is increased, either by the original tender
offeror or a third party, after R&M Parent has elected to exercise its
option at a lower price, then R&M Parent shall have the right to
re-examine its decision and to elect not to exercise such option so
long as notice of its election not to exercise is received by the
Seller at least 24 hours prior to the expiration of the tender offer
and (B) if the price so specified is payable in whole or in part in
property (which term shall include the securities of any other issuer),
the price allocable to such property shall be cash equal to the fair
market value of such property on the date R&M Parent receives the
Seller Notice, as agreed upon within seven days after receipt thereof
by the parties hereto or, if such parties are unable to agree, as
determined by such investment banking firm as is mutually agreeable to
both parties. In the event that the parties are unable to agree on an
investment banking firm for the purposes of this subsection (i), each
party shall name its own investment banking firm and such firms shall
select a third investment banking firm to determine the value pursuant
to this subsection (i). The costs and expenses of such third
investment-banking firm shall be borne equally by Seller and R&M
Parent.
(ii) If R&M Parent desires to exercise the aforesaid option to
purchase the shares proposed to be disposed of, R&M Parent shall send a
written notice (the "R&M NOTICE") informing Seller of such fact in time
so that Seller receives such notice within two business days after the
Seller Notice is received by R&M Parent but, in the case of a tender
offer, in no event later than 24 hours prior to the expiration date of
the tender offer.
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(iii) At the time the R&M Parent Notice is transmitted, there
shall be deemed to be a binding agreement between Seller and R&M Parent
concerning the sale on the price and the terms as provided for herein.
If R&M Parent delivers an R&M Parent's Notice to Seller, then on the
third business day following R&M Parent's receipt of the Seller Notice,
Seller will deliver to R&M Parent certificates for the shares of the
Stock Consideration to be sold, duly endorsed for transfer or
accompanied by a duly executed stock power, and R&M Parent will deliver
to Seller the purchase price to be paid in accordance with the terms
and conditions set forth in the Seller Notice. All payments shall be
made in immediately available funds in Euros at the Exchange Rate in
effect on the date the Seller's Notice was received by R&M Parent.
If the conditions prescribed in subsection (a) have been met in
connection with a proposed sale of shares of the Stock Consideration,
and R&M Parent has not elected to exercise the option arising under
subsection (b) hereof, then Seller shall be free to effect such sale
for a period of 90 days, but only to the person specified in the Seller
Notice at the price (or for the consideration) and on the terms
specified in said notice, and if such sale does not occur within such
90 days, the shares of the Stock Consideration so proposed to be sold
will continue to be subject to this Agreement to the same extent as if
such sale pursuant to an Offer had not been proposed; and
(iv) Notwithstanding anything set forth in this Agreement to
the contrary, the right of first refusal granted to R&M Parent in this
Section 2.06 shall not apply to (A) sales of less than 100,000 shares
or (B) to any sales effected on the New York Stock Exchange, any other
stock exchange, or any other public trading market.
SECTION 3. CLOSING.
(a) The Closing under this Agreement shall take place at the offices of
Xxxxxxxx Xxxx LLP, 0000 Xxxxxxxxxx Xxxxx, XX, 00 Xxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxx 00000, at 10:00 a.m., local time, on August 31, 2001 or at such other time,
date, and place as may be mutually agreed upon by Seller and Buyer, but in no
event may either of them be required to agree to a date later than September 15,
2001. At the Closing, the actions provided for in this Section 3 shall be taken
and shall be deemed to occur simultaneously.
(b) At the Closing, Seller shall, subject to the fulfillment to
Seller's reasonable satisfaction of the conditions set forth in Section 11 or
its waiver thereof, deliver to Buyer:
(i) The certificates representing all of the Romaco Stock,
duly endorsed for transfer to Buyer by Seller and with any requisite
tax transfer stamps or other documents attached, with each certificate
being free and clear of any Lien;
(ii) the Noncompetition Agreement of Seller, dated the Closing
Date and duly executed by Seller;
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(iii) the Escrow Agreement, dated the Closing Date and duly
executed by Seller;
(iv) the R&M Parent Note Agreement, dated the Closing Date and
duly executed by Seller;
(v) a certificate, dated the Closing Date and duly executed by
Seller, certifying that the conditions set forth in Section 10 have
been satisfied;
(vi) an opinion, dated the Closing Date, of Duke, Holzman,
Xxxxxx & Photiadis, LLP, in a form reasonably acceptable to counsel for
Buyer;
(vii) stock certificates representing all of the outstanding
capital stock of each of the Companies which has issued stock
certificates, registered in the name of the respective owner of such
certificates as set forth in the Corporate Information Exhibit, with
each certificate being free and clear of any Lien;
(viii) a list of the directors and officers of each of the
Companies shall be made available to Buyer at the office of Romaco in
Monaco;
(ix) a certificate of the Secretary or Assistant Secretary of
Romaco certifying as to Romaco (i) a true copy of the Certificate of
Incorporation of Romaco and all amendments thereto, with original
certification by the Secretary of State or other appropriate agencies
in the state or jurisdiction of incorporation of Romaco and (ii) a true
copy of the By Laws (or similar document) of Romaco as in effect on the
Closing Date;
(x) certificates of good standing for each of the Companies
organized under one of the states of the United States, dated no
earlier than 30 days prior to the Closing Date;
(xi) all minute books and stock transfer records of each of
the Companies will be delivered to Buyer by Seller certifying to Buyer
that such items are at the office of Romaco in Monaco;
(xii) evidence of cancellation of (A) all obligations of the
Companies to the Non-Consolidated Subsidiaries or Seller except for the
rights of Seller or any of the Non-Consolidated Subsidiaries under this
Agreement and (B) any guarantee of a Company of any obligation or
liability of a Non-Consolidated Subsidiary or Seller except for the
guarantee secured by the Guarantee Pledge;
(xiii) the BFS Stock Purchase Agreement, duly executed by
Seller; and
(xiv) such other documents and instruments as are required to
be delivered to Buyer by Seller pursuant to this Agreement at or prior
to the Closing.
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(c) At the Closing, Buyer shall, subject to the fulfillment to its
reasonable satisfaction of the conditions set forth in Section 10 or its waiver
thereof, deliver to Seller the following:
(i) (A) evidence of the wire transfer in immediately available
funds of (Euro) 39,706,000 to such bank accounts which Seller specified
in writing to Buyer not less than 48 hours prior to the Closing Date
and (B) evidence of the wire transfer in immediately available funds of
(Euro) 5,394,000 to such bank account as Romaco Finance b.v. shall
specify for the purpose of receiving Seller's payment of the amount due
it from Seller as provided in the BFS Stock Purchase Agreement;
(ii) R&M Parent Note A, duly executed by R&M Parent;
(iii) Certificates representing the 600,000 shares of R&M
Stock comprising the Stock Consideration, duly registered in the name
of Seller, with any requisite tax transfer stamps or other documents
attached, with each certificate being free and clear of any Lien;
(iv) the Noncompetition Agreement of Seller, dated the Closing
Date and duly executed by R&M Parent and Buyer;
(v) the Escrow Agreement, dated the Closing Date and duly
executed by Buyer;
(vi) the R&M Parent Note Agreement, dated the Closing Date and
duly executed by R&M Parent;
(vii) a certificate, dated the Closing Date and executed by a
duly authorized officer of Buyer, certifying that the conditions set
forth in Section 11 have been satisfied;
(viii) an opinion, dated the Closing Date, of Xxxxxxxx Xxxx
LLP, counsel for Buyer, in a form reasonably acceptable to counsel for
Seller;
(ix) copies of all resolutions of Buyer's and R&M Parent's
Board of Directors authorizing the transactions contemplated hereby or
otherwise relating to this Agreement and the transactions contemplated
hereby, certified by the Secretary (or an Assistant Secretary) of Buyer
or R&M Parent, as the case may be, as being in full force and effect on
the Closing Date;
(x) the BFS Stock Purchase Agreement, duly executed by Buyer;
and
(xi) certificate of the appropriate state official, dated no
earlier than 30 days prior to the Closing Date, that Buyer is duly
incorporated in the State of Delaware and that R&M Parent is in good
standing in the State of Ohio; and
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(xii) such other documents and instruments as are required to
be delivered to Seller by Buyer pursuant to this Agreement at or prior
to the Closing.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER WITH RESPECT TO
SELLER. Seller represents and warrants to Buyer and R&M Parent, as follows:
4.01 TITLE TO, AND TRANSFER OF, ROMACO STOCK. Seller has good and valid
title to the Romaco Stock, free and clear of any and all Liens. Seller has the
full legal right, power and authority to transfer, convey, and sell to Buyer at
the Closing the Romaco Stock, and upon delivery of a certificate or certificates
representing the Romaco Stock at the Closing as contemplated herein, Seller will
transfer to Buyer good and valid title to the Romaco Stock, free and clear of
any and all Liens.
4.02 AUTHORITY OF SELLER. Seller has all power and authority necessary
to enable him to enter into this Agreement and carry out the transactions
contemplated by this Agreement. This Agreement has been duly executed by Seller,
is a valid and binding agreement of Seller, enforceable against Seller in
accordance with its terms except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or from time to time affecting the enforcement of creditors' rights
generally and except that the enforceability of Seller's obligations is subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
4.03 NO VIOLATION BY SELLER. Neither the execution and delivery of this
Agreement or the other documents and instruments to be executed and delivered by
Seller pursuant hereto, nor the consummation by Seller of the transactions
contemplated hereby or thereby (i) will violate or be in conflict with any
applicable law or any applicable judgment, decree, injunction or order of any
Governmental Entity, or (ii) except for matters arising in connection with
agreements, arrangements or mortgages relating to the loans listed in SCHEDULE
5.15, will, in any material respect, violate or conflict with or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under or will result in the termination of, or accelerate
the performance required by, or result in the creation of any Lien, upon any of
the assets of Seller under, any term or provision of any contract, commitment,
understanding, arrangement, agreement, order, arbitration award, judgment,
decree or restriction of any kind or character to which Seller is a party or by
which Seller or any of his assets or properties may be bound or affected.
4.04 NO BROKERAGE FEES. No broker or finder has acted for Seller or any
of the Companies in connection with this Agreement or the transactions
contemplated hereby and no broker or finder is entitled to any brokerage or
finders fee or other commissions in respect of such transactions based in any
way on agreements, arrangements or understandings made by or on behalf of Seller
or any of the Companies.
4.05 LITIGATION. There is no order, judgment or decree of any
Governmental Entity, by which Seller is bound and no action, suit or other
legal, administrative or arbitration proceedings or investigations before any
Governmental Entity is pending or, to the Seller's Knowledge,
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threatened, which, in each case, would prohibit the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby.
4.06 INVESTMENT REPRESENTATIONS. Seller is an "accredited investor" as
defined in Rule 501 adopted under the Securities Act. Seller is acquiring the
Stock Consideration, the R&M Parent Note A, and the R&M Parent Note B (the
"SECURITIES") for his own account and not with a view to any distribution
thereof. Seller acknowledges that the issuance of any of the Securities pursuant
to this Agreement has not been registered under the Securities Act or any
applicable state securities laws, in reliance upon an exemption from the
registration requirements of the Securities Act and such state laws and none of
the Securities so issued may be resold or transferred unless they are registered
under the Securities Act and such state laws or unless an applicable exemption
from registration is available (and the certificates evidencing the Stock
Consideration, the R&M Parent Note A, and the R&M Parent Note B will bear
legends setting forth such restrictions and the other restrictions imposed under
this Agreement and the R&M Parent Note Agreement). Seller acknowledges receiving
copies of the R&M Parent Reports and that he has had the opportunity to ask
questions and receive answers concerning the terms and conditions of this
Agreement and the issuance of the Securities and to obtain any additional
information which R&M Parent possesses or can acquire with reasonable effort or
expense that is necessary to verify the accuracy of any information provided by
R&M Parent to Seller.
4.07 CONSENTS. No authorization, consent, approval, order of or filing
with or notice to any Governmental Entity or other entity or person is necessary
for the execution and delivery of this Agreement or any other agreement or
document to be delivered by Seller or the consummation by Seller of the
transactions contemplated hereby.
4.08 DISCLOSURE OF TRANSACTION. Any Person who transferred or sold his
shareholdings of Romaco since May 15, 2001 was aware of the terms of that
certain letter of intent between Seller, as Stockholders' Representative, and
R&M Parent, dated May 15, 2001.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER REGARDING THE
COMPANIES. Seller represents and warrants to Buyer and R&M Parent, as follows:
5.01 TITLE TO CAPITAL STOCK OF CONSOLIDATED SUBSIDIARIES. Romaco,
directly or indirectly, owns of record and beneficially all of the issued and
outstanding capital stock of the Companies to the extent set forth on EXHIBIT B,
free and clear of any and all Liens.
5.02 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the
Companies is a corporation or partnership, duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, has
all requisite corporate power and authority to carry on its business as it
currently is conducted and to own, lease or operate the properties and assets it
now owns, leases or operates. Each of the Companies is duly qualified or
licensed to do business in each of the jurisdictions in which the conduct of its
business or the character and location of any property or personnel of the
Company requires such qualification or good standing, except where the failure
to be so licensed or qualified would not have a material adverse effect.
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5.03 CAPITAL STOCK. All of the issued and outstanding shares of capital
stock of each of the Companies has been validly authorized and duly issued and
is validly outstanding, fully paid and nonassessable. There are no outstanding
(i) options, subscriptions, calls, puts, warrants or other rights with respect
to the purchase or sale of capital stock of any of the Companies, (ii)
securities convertible into or exchangeable for shares of any capital stock of
any of the Companies, (iii) other commitments or agreements of any kind for the
issuance of additional shares of capital stock of any of the Companies or
options, warrants or other securities any of the Companies or (iv) commitments
or agreements relating to the voting of any capital stock of any of the
Companies.
5.04 CORPORATE INFORMATION EXHIBIT. The information set forth in the
Corporate Information Exhibit is true and accurate.
5.05 NO CONFLICT; REQUIRED FILINGS; AND CONSENTS. Neither the execution
and delivery of this Agreement or the other documents and instruments to be
executed and delivered by Seller pursuant hereto, nor the consummation by Seller
of the transactions contemplated hereby or thereby (i) will violate any
provision of the Certificate of Incorporation or By Laws of any of the
Companies, (ii) will violate or be in conflict with any Laws, or (iii) except
for matters arising in connection with agreements, arrangements or mortgages
relating to the loans listed in SCHEDULE 5.15, will violate or conflict with or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under or will result in the termination of, or
accelerate the performance required by, or result in the creation of any Lien,
upon any of the assets of any of the Companies under, any term or provision of
the Certificate of Incorporation or By Laws of any of the Companies or of any
contract, commitment, understanding, arrangement, agreement, order, arbitration
award, judgment, decree or restriction of any kind or character to which any of
the Companies is a party or by which any of the Companies or any of their assets
or properties may be bound or affected, other than violations or conflicts which
would not have a material adverse effect.
5.06 TITLE TO PROPERTIES; ABSENCE OF LIENS, ETC.
(a) REAL PROPERTY SCHEDULE. Set forth on SCHEDULE 5.06(a) is a complete
list of all Owned Real Property and Leased Real Property identified by street
address. Listed on SCHEDULE 5.06(a) is any lease, sublease or other agreement
under which any of the Companies has rights with respect to the Leased Real
Property. Except as listed on SCHEDULE 5.06(a), none of the Owned Real Property
or Leased Real Property is leased or subleased by any of the Companies to
another person.
(b) TITLE TO REAL PROPERTY AND TANGIBLE ASSETS. Except as set forth in
SCHEDULE 5.06(b), each of the Companies has good and marketable title to all of
its Owned Real Property and all of its other tangible properties and assets,
including without limitation, those assets and properties reflected in the
December Balance Sheet, free and clear of all Liens except (i) properties and
assets disposed of since the date of the December Balance Sheet in the ordinary
course of business; (ii) Permitted Liens; (iii) assets which any one of the
Companies leases under
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a capitalized lease; and (iv) as to Leased Real Property, Liens arising as a
result of actions or inactions of the landlord or owner of such properties
unrelated to any default by any of the Companies under the terms of occupancy of
such property. Each of the Companies owns, or has valid and enforceable rights
as lessees to possess and use, all properties and assets used in the conduct of
their respective businesses since January 1, 2001, other than any properties or
assets disposed of since such date in the ordinary course of business.
(c) CONDITION OF PROPERTIES. To Seller's Knowledge, none of the
property, plant and equipment of the Companies is in need of repairs or
replacement, except for ordinary and routine repairs and scheduled maintenance,
items provided for in Romaco's budget for calendar year 2001, and items that
would not, individually, be material in amount.
5.07 FINANCIAL INFORMATION. The Financial Statements are in accordance
with, and accurately reflect, the respective books and records of the Companies,
and except as noted in SCHEDULE 5.07 or in such Financial Statements, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods covered by such statements and fairly
present in all material respects the financial condition, assets and
liabilities, net worth, profit and loss accounts and retained earnings of the
Companies as of their respective dates and the results of operations for the
periods then ended.
5.08 CUSTOMERS AND SUPPLIERS. SCHEDULE 5.08 is a list of the ten
largest customers of the Companies for the years ended December 31, 2000 and ten
largest suppliers (measured by Euro volume in each case) of the Companies for
the year ended December 31, 2000. None of the foregoing customers or suppliers
has advised any of the Companies that it intends to cease dealing with any of
the Companies or that it intends to reduce by 20% or more, when compared to the
year ended December 31, 2000, its purchases from, or sales to, any of the
Companies.
5.09 CLAIMS. SCHEDULE 5.09 sets forth every action, suit or other legal
proceeding, which involves any of the Companies and which is presently pending
(except such actions, suits or proceedings as have not been served on any of the
Companies and which are not Known to Seller), or, to Seller's Knowledge, is
threatened against any of the Companies. To Seller's Knowledge, there are not
any circumstances with regard to which there is a reasonable likelihood that a
suit or proceeding will be brought against one of the Companies which would
result in a payment by one of the Companies to the other party, not covered by
insurance, of more than (Euro) 250,000. None of the Companies is in violation of
any judgment, decree, injunction or order outstanding against it or applicable
to any of its assets. No claim for a breach of any representation or warranty
contained in this Section 5.09 shall be made against Seller until the aggregate
cumulative costs of warranty work on the products of the Business shipped prior
to June 30, 2001 incurred by Buyer or the Companies exceeds the Warranty and
Litigation Reserve (after such reserve has been reduced for any costs charged
against such reserve after the Closing Date).
5.10 PRODUCT WARRANTY. Except as disclosed in SCHEDULE 5.10, there were
no outstanding product warranty claims relating to products sold, or services
provided, by the
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Companies in excess of (Euro) 100,000. The Warranty and Litigation Reserve is
sufficient to cover all obligations and liabilities of the Companies for repair
or replacement of products of the Business under express warranties of the
Companies for products shipped prior to June 30, 2001. No claim for a breach of
any representation or warranty contained in this Section 5.10 shall be made
against Seller until the aggregate cumulative costs of warranty work on the
products of the Business shipped prior to June 30, 2001 incurred by Buyer or the
Companies exceeds the Warranty and Litigation Reserve (after such reserve has
been reduced for any costs charged against such reserve after the Closing Date).
5.11 PRODUCT LIABILITY.
(a) SCHEDULE 5.11 is a true and complete list of all product liability
suits or actions which relate to products sold by any of the Companies which
have been commenced since January 1, 1998 (except such suits or actions as have
not been served on any of the Companies and which are not Known to Seller) or
which, to Seller's Knowledge, have been threatened since January 1, 2000 to be
asserted against Seller or any of the Companies.
(b) Since January 1, 1998, there has not been any product recall by any
of the Companies relating to any product which was manufactured, shipped or sold
by any of the Companies.
(c) To Seller's Knowledge, there are no design defects resulting in
hazardous conditions, including without limitation, any failure to warn of any
design defects, which involve any product manufactured, shipped, or sold by any
of the Companies.
5.12 CONTRACTS. SCHEDULE 5.12 is a true and complete list of each of
the following contracts or agreements which any of the Companies is a party to,
is bound by, or by which any property or assets of any of them may be bound:
(a) any lease of tangible personal property having rentals in excess of
(Euro) 500,000 over the remaining term of the lease and which provides for
rental payments and other charges that, in the aggregate, are in excess of
current market rates or the tangible personal property covered by such lease is
being used at less than 50% of such property's rated capacity;
(b) all franchise, dealer, or other distribution agreements pursuant to
which any of the Companies sells or otherwise distributes its products or
services;
(c) any agreement involving the licensing of Intellectual Property
which is material to the business of any of the Companies;
(d) any non-competition agreement, arrangement, or commitment which
materially restricts the conduct of any line of business of any of the
Companies;
(e) any agreement with, or benefiting, any director or officer of any
of the Companies and which provides for aggregate payments in any calendar year
in excess of (Euro) 60,000, exclusive of salary and payments under Employee
Plans;
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(f) any agreement, mortgage, indenture or other instrument relating to
the borrowing of money by any of the Companies except for any of such
instruments which relates to any of loans listed in SCHEDULE 5.15;
(g) any agreement pursuant to which any of the Companies is obligated
to lend money or make advances to any person (other than routine advances to any
employee not to exceed (Euro) 10,000, deposits or advances in respect of
products purchased in the ordinary course of business, and advances made to an
employee in connection with the relocation of such employee by any of the
Companies);
(h) any agreement, arrangement or commitment to guarantee the
obligations of, or to indemnify or exonerate from liability, any person,
including any Non-Consolidated Subsidiary or any director or officer of any of
the Companies (other than pursuant to applicable law or the Certificate of
Incorporation or By Laws of any of the Companies), but (A) excluding any
agreements relating to companies or real properties disposed of by one or more
of the Companies prior to the Closing Date and (B) excluding any guarantees
given to unrelated parties for customer advance deposits and contractual
performance provided the aggregate amount of all such guarantees did not at June
30, 2001, and will not on the Closing Date, exceed (Euro) 15,500,000;
(i) any agreement or arrangement relating to the voting or disposition
of any securities of any of the Companies; and
(j) any partnership, joint venture, or other agreement pursuant to
which any of the Companies holds an equity interest in any person or entity.
Seller has delivered to Buyer true and complete copies of each contract listed
on SCHEDULE 5.12 and each Real Estate Lease listed on SCHEDULE 5.06(a) . Except
as set forth on SCHEDULE 5.12, none of the Companies is in default in any
material respect under any contract and no condition or state of facts exists
which, with notice or the passage of time, or both, would constitute such a
default, except for such instances of default which would not have, individually
or in the aggregate, a material adverse effect on the Companies.
5.13 COMPLIANCE WITH APPLICABLE LAWS; PERMITS.
(a) LAWS. Except as listed in SCHEDULE 5.13, (i) Each of the Companies
is in compliance with all Laws applicable to it, except where the failure to be
in compliance would not have, individually or in the aggregate, a material
adverse effect and (ii) the Companies have not received any written notice of
any administrative, civil or criminal investigation or audit by any Governmental
Entity relating to the Companies which if decided adversely to a Company would
have, individually or in the aggregate, a material adverse effect on the
Companies; provided, however, that this Section 5.13 shall not apply to
environmental matters which shall be governed by Section 5.14 only.
(b) PERMITS. Except as set forth in SCHEDULE 5.13 OR SCHEDULE 5.14,
each of the Companies has all permits, licenses, orders and approvals of all
Governmental Entities required
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for it to carry on its business as presently conducted, except for such Permits,
the absence of which will not have a material adverse effect on the Companies.
All of such Permits are in full force and effect, and to Seller's Knowledge, no
suspension or cancellation of any of them is being threatened, nor will any of
the Permits be affected by the consummation of the transactions contemplated by
this Agreement.
5.14 ENVIRONMENTAL COMPLIANCE.
(a) COMPLIANCE WITH LAW; PERMITS. Except as set forth in SCHEDULE 5.14,
each of the Companies (i) is carrying on its business in compliance with all
applicable Environmental Laws and (ii) has obtained all Permits which are
required with respect to the operation of its business under applicable
Environmental Laws, except for such instances of noncompliance or failure to
obtain a Permit which do not, either alone or in the aggregate, materially and
adversely affect the financial condition or operations of the Companies. Except
as set forth in SCHEDULE 5.14, each of the Companies is in compliance with all
terms and conditions of the required Permits and with any order, decree, or
judgment of any Governmental Entity affecting any of the Companies or the Owned
Real Property or the Leased Real Property, except for such instances of
noncompliance which do not, either alone or in the aggregate, materially and
adversely affect the Company.
(b) LEGAL PROCEEDINGS. There are no actions, suits, demands, notices,
claims, investigations or proceedings under any Environmental Laws pending or,
to Seller's Knowledge, threatened against the any of the Companies or relating
to any real property currently or previously owned, leased, occupied or used by
any of them or requests for information from any Governmental Entity making
inquiries relating to any Environmental Laws or any notice that the any of the
Companies is or may be a potentially responsible party under any Environmental
Laws.
(c) RELEASES OF HAZARDOUS MATERIALS. There has not been any release of
any Hazardous Materials on or from any real property currently or previously
owned, leased, or operated by any of the Companies during the time any such
property was owned, leased, or operated by any of them except for such releases
which do not, either alone or in the aggregate, materially adversely affect the
financial condition or operations of the Companies. The term "release" shall
have the meaning given to such term in Section 101(22) of Comprehensive
Environmental Response, Compensation and Liability Act.
(d) OFF-SITE DISPOSAL OF HAZARDOUS MATERIALS. All Hazardous Materials
removed from any property currently or previously owned, leased, or operated by
any of the Companies during the time the property was owned, leased, or operated
by any of the Companies was removed, transported off-site, treated, stored or
disposed of in compliance with applicable Environmental Laws, except for such
instances of noncompliance which do not, either alone or in the aggregate,
materially and adversely affect the financial condition or operations of the
Companies.
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(e) ENVIRONMENTAL CONDITIONS. To Seller's Knowledge there is no
existing condition or contamination at any of the Owned Real Property or Leased
Real Property that is required under applicable Environmental Laws to be
remediated.
5.15 LOANS OF THE COMPANIES. SCHEDULE 5.15 sets forth the following
information with respect to all outstanding loans to any of the Companies as of
the close of business on June 30, 2001: (a) lender; (b) borrower; (c) amount
outstanding; (d) amount available; and (e) security for loan, if any; including
any guarantee.
5.16 EMPLOYEE PLANS.
(a) REPRESENTATIONS APPLICABLE TO ALL EMPLOYEE PLANS.
(i) To Seller's Knowledge, each Employee Plan has been
maintained, operated and administered in compliance with its terms and
each Employee Plan currently complies, and has at all relevant times
complied, in all material respects with applicable Laws.
(ii) Other than Statutory Plans, none of the Companies
maintains, or has any liability with respect to any Employee Plan which
provides actuarially determined benefits after termination of
employment.
(iii) Except as set forth on SCHEDULE 5.16, no Employee Plan
provides benefits, including without limitation, death or medical
benefits (whether or not insured), with respect to current or former
employees beyond their retirement or other termination of service,
other than (A) temporary coverage mandated by applicable Laws, (B)
Statutory Plans, (C) deferred compensation benefits fully accrued as
liabilities on the books of the Company providing the same, or (D)
benefits the full cost of which are borne by the current or former
employee (or his or her beneficiary).
(iv) No Employee Plan is involved in or is the subject of any
litigation or any claims other than routine benefit claims, and to
Seller's Knowledge, no facts exists which are reasonably expected to
result in the filing of any such litigation or claim that may have a
material adverse effect on the Companies.
(b) OTHER MATTERS.
(i) Each Employee Plan that is intended to meet the
requirements of Code Section 401(a) and, where applicable, Code Section
401(k), and the trust forming the part thereof, has received a
favorable determination letter from the Internal Revenue Service as to
its qualification under the Code and to the effect that such trust is
exempt from taxation under Code Section 501(a), and such determination
letter has not been revoked; and to Seller's Knowledge, no event has
occurred that will or could give rise to disqualification or loss of
tax-exempt status of any such plan or trust under such Sections.
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(ii) With respect to each Employee Plan (other than a
Statutory Plan) which is funded by any of the Companies (A) all
required contributions which are due for all periods ending prior to or
as of the Closing Date will have been made by the Closing Date, and (B)
all such contributions which are not due as of the Closing Date have
been properly accrued to the extent required by GAAP.
(iii) Except as set forth on SCHEDULE 5.16, no employee or
former employee of any of the Companies will become entitled to any
bonus, retirement, severance, job security, or similar benefit or
enhanced benefit, including accelerated vesting rights under the
Employee Plans, or accelerated time for payments under the Employee
Plans as a result of the transactions contemplated in this Agreement
that, following the consummation of the transaction contemplated
hereby, will be an obligation of any of the Companies or Buyer.
5.17 LABOR MATTERS. Except as set forth on SCHEDULE 5.17, there are no
controversies pending between any of the Companies and any of their respective
employees, other than routine individual grievances which will not have a
material adverse affect on the Companies.
5.18 INSURANCE. A list and description of the insurance policies
currently maintained by any of the Companies has been provided to Buyer. No
notice of suspension or cancellation of any such policies has been received by
any of the Companies or, to Seller's Knowledge, is threatened in writing.
5.19 INTELLECTUAL PROPERTY. There are no pending and, to the best of
Seller's Knowledge, threatened interference, opposition or infringement actions,
or any other proceedings with respect to the Intellectual Property. SCHEDULE
5.19 lists all of the patents and registered trademarks, service marks, trade
names and registered copyrights and all applications for any of the foregoing
which are owned by any of the Companies. Subject to being challenged during any
unexpired opposition period provided under applicable Laws or to being contested
as improperly issued under applicable Laws, one of the Companies will be at the
Effective Time the registered owner and have good and marketable title to the
registered patents and trademarks in the listed jurisdictions and, to Seller's
Knowledge, good title to all of the other Intellectual Property. Except as set
forth in SCHEDULE 5.19, to Seller's Knowledge, each of the Companies has valid,
binding, enforceable and rights to use all of the other Intellectual Property it
uses. Buyer acknowledges that Seller does not make any representation or
warranty hereunder that third parties cannot and do not lawfully possess and use
in their business trade secrets, know-how, patents, trademarks, service marks,
trade names, copyrights, applications for any of the foregoing and other similar
proprietary or intellectual property rights or interests which are similar to
the Intellectual Property. To Seller's Knowledge, there has been no infringement
or misappropriation of the Intellectual Property.
5.20 ABSENCE OF CERTAIN CHANGES, EVENTS OR CONDITIONS. Since December
31, 2000 and except as set forth in SCHEDULE 5.20, (i) each of the Companies
have operated their businesses in the ordinary course on a basis consistent with
past practice, (ii) each of the
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Companies have paid each of their respective creditors in the ordinary course of
business unless the existence or amount of indebtedness is being contested in
good faith, (iii) except as reflected in the Interim Financial Statements, there
has not been any material adverse change in the financial position, results of
operations, or net worth of the Companies, (iv) none of the Companies has
declared, set aside, or paid any dividend or other distribution (whether in
cash, stock or property) in respect of its capital stock except to another of
the Companies, or, directly or indirectly, redeemed or otherwise acquired any of
its capital stock.; (v) none of the Companies has leased, sold or disposed of,
or contracted to lease, sell or dispose of, in any single transaction or group
of related transactions, any asset or group of assets having a value, or selling
price, or aggregate rental, in excess of (Euro) 250,000 other than transactions
involving the sale or lease of products of the Companies in the ordinary course
of business, or (vi) none of the Companies has leased, purchased or otherwise
acquired, in any single transaction or group of related transactions, any asset
or group of assets having a purchase price or lease payments in excess of (Euro)
250,000, except in connection with the capital expenditure projects listed on
SCHEDULE 5.20.
5.21 AFFILIATES. No part of the Business is conducted through any
Affiliate of Seller other than the Companies.
5.22 COMPANIES IN LIQUIDATION. In connection with the completion of the
liquidation and dissolution of those Companies that are listed in the Corporate
Information Exhibit as being in the process of liquidation or dissolution, the
Companies will not, in the aggregate, incur more than (Euro) 100,000 in total
additional costs or liabilities that are not accrued on the balance sheet which
is included with the Interim Financial Statements.
5.23 BROKERS AND FINDERS. None of Seller, the Companies or any of the
Companies' directors, officers or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders fees in
connection with the transactions contemplated hereby.
5.24 PREDECESSOR AFFILIATES. For purposes of the representations,
warranties, or covenants of Seller under this Agreement with respect to any
Company, "Company" includes any predecessor company to a Company if the
predecessor company was owned by any person who was or is an Affiliate of any
person who is now an Affiliate of Seller.
5.25 ACCURACY OF REPRESENTATIONS. No representation or warranty by or
with respect to Seller or the Companies made by Seller and contained herein or
in any Exhibit, Schedule, certificate or other document furnished by Seller
pursuant hereto contains or will contain any untrue statement of a material fact
or omits to state a material fact necessary to make such representation or
warranty not misleading in light of the circumstances under which it was made.
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SECTION 6. REPRESENTATIONS AND WARRANTIES OF BUYER AND R&M PARENT.
Buyer and R&M Parent hereby represent and warrant the following to Seller as of
the date of this Agreement:
6.01 ORGANIZATION AND STANDING. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with the corporate power and authority to conduct its business and to own and
lease its properties and assets. R&M Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of Ohio, with
the corporate power and authority to conduct its business and to own and lease
its properties and assets.
6.02 CORPORATE AUTHORITY. Each of Buyer and R&M Parent has the
corporate power and authority to execute, deliver and carry out the terms of
this Agreement and the other agreements and instruments to be executed and
delivered by either of them in connection with the transactions contemplated
hereby and thereby and has taken all necessary corporate action, including
approval by their respective Board of Directors, to authorize the execution and
delivery of this Agreement and such other agreements and instruments and the
consummation of the transactions contemplated hereby and thereby. This Agreement
is, and the other agreements and instruments to be executed and delivered by
Buyer and R&M Parent in connection with the transactions contemplated hereby and
thereby will be, the legal, valid and binding obligations of Buyer and R&M
Parent, enforceable in accordance with their respective terms except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or from time to time
affecting the enforcement of creditors' rights generally and except that the
enforceability of each Seller's and R&M Parent's obligations is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
6.03 NO VIOLATION. Neither the execution or delivery of this Agreement
or the other documents or instruments to be executed and delivered by Buyer and
R&M Parent pursuant hereto, nor the consummation by Buyer and R&M Parent of the
transactions contemplated hereby or thereby (i) will violate any provision of
the Certificate of Incorporation or By-Laws of Buyer or R&M Parent, (ii) will
violate or be in conflict with any applicable law or any judgment, decree,
injunction or order of any court or governmental agency or authority or (iii)
will on the Closing Date violate or be in conflict with or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under or will result in the termination of, accelerate the performance
required by, or result in the creation of any Lien upon any of the assets or
properties of Buyer or R&M Parent under, any term or provision of the
Certificate of Incorporation or By-Laws of Buyer or R&M Parent or of any
contract, commitment, understanding, arrangement or agreement of any kind or
character to which Buyer or R&M Parent is a party or by which Buyer or R&M
Parent or any of their properties or assets may be bound or affected.
6.04 LITIGATION. There is no action, suit, proceeding or investigation
at law or in equity or by or before any Governmental Entity now pending or, to
the knowledge of Buyer or
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R&M Parent, threatened against Buyer or R&M Parent which would materially and
adversely affect the financial condition of R&M Parent and its subsidiaries,
taken as a whole, or the ability of Buyer or R&M parent to consummate the
transactions contemplated hereby. For purposes of this Section 6.04, the
definition of "material" at Section 1.01 shall not apply.
6.05 CONSENTS. Except for the authorizations or consents set forth on
SCHEDULE 6.05, no authorization, consent, approval, order of or filing with or
notice to any Governmental Entity or other entity or person is necessary for the
execution and delivery of this Agreement or any other agreement or document to
be delivered by Buyer or R&M Parent or the consummation by Buyer or R&M Parent
of the transactions contemplated hereby.
6.06 INVESTMENT ONLY. Buyer is acquiring the Romaco Stock solely for
the purpose of investment and not with a view to, or for sale or other
disposition in connection with, any distribution thereof. Buyer acknowledges
that the Romaco Stock is not registered under the Securities Act of 1933, as
amended (the "ACT"), or any applicable state securities laws and that the Romaco
Stock may not be transferred, pledged or sold except pursuant to the
registration provisions of the Act and such laws or pursuant to applicable
exemptions therefrom. Buyer has such knowledge, experience and skill in
evaluating and investing in common stocks and other securities, based on actual
participation in financial investment and business matters, so that it is
capable of evaluating the merits and risks of an investment in the Romaco Stock
and has such knowledge, experience and skill in financial and business matters
that it is capable of evaluating the merits and risks of the investment in the
Companies.
6.07 BROKERS AND FINDERS. None of Buyer, R&M Parent or any of their
directors, officers or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders fees in connection
with the transactions contemplated hereby except to The Nassau Group, Inc. Buyer
shall be responsible for paying the fee of The Nassau Group, Inc.
6.08 FUNDS FOR THE PURCHASE. Buyer and R&M Parent have available to
them funds sufficient to pay the Initial Cash Portion of the Purchase Price, the
cash portion of the Earnout Payment, and all of their fees and expenses relating
to this Agreement and the transactions contemplated hereby.
6.09 R&M PARENT REPORTS. As of their respective dates, the R&M Parent
Reports did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited consolidated financial statements and unaudited
consolidated interim financial statements of R&M Parent included in the R&M
Parent Reports were prepared in accordance with United States generally accepted
accounting principles (except as may be indicated therein or in the notes or
schedules thereto or in the case of the unaudited consolidated interim financial
statements, as permitted by Form 10-Q of the SEC) and present fairly, in all
material respects, the consolidated financial position of the Company as of the
dates thereof and its consolidated results of operations and changes in
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financial position for the periods then ended (subject, in the case of unaudited
consolidated interim financial statements to normal year-end adjustments).
Notwithstanding Section 1.01 of this Agreement to the contrary, "Material," when
used in this Section 6.09, shall have the meaning associated in the case law of
the United States when interpreting provisions of Section 10 of the Securities
Exchange Act of 1934, as amended.
6.10 FUTURE DEALINGS WITH NON-CONSOLIDATED SUBSIDIARIES. For at least a
two-year period following the Closing Date, the Companies will afford any
Non-Consolidated Subsidiary, which, prior to the Closing Date, was a supplier of
manufacturing services or parts to a Company, the status of preferred supplier
of such services and parts to the Companies that it provided such services and
parts to prior to the Closing Date. Assuming that such products and services of
the Non-Consolidated Subsidiary are competitive in price, quality and delivery,
then any orders for such products and services that are placed by any of the
Companies during such period will be first offered to the Non-Consolidated
Subsidiary with which the Company placing the order had previously done
business.
6.11 CONTINUITY FOR PURPOSES OF CALCULATION OF THE EARNOUT
CONSIDERATION. For the period from the Closing Date through December 31, 2001,
R&M Parent will not permit any of the Companies to effect any changes in the
operations of their respective businesses, including changes in pricing,
management, personnel, or their respective budgets that would adversely impact
the amount of the Earnout Consideration payable to Seller or the ability of
Seller to verify the calculation of the Earnout Consideration.
SECTION 7. CERTAIN COVENANTS OF SELLER.
7.01 INTERIM OPERATIONS OF THE COMPANIES. During the period from the
date of this Agreement to the Effective Time, except as specifically
contemplated by this Agreement, as required by applicable Laws, or as otherwise
consented to by R&M Parent in writing (and R&M Parent shall designate one or
more persons to be available, which persons shall have the authority to provide
such consent):
(a) CONDUCT OF BUSINESS. Seller shall cause each of the Companies to
conduct its business in, and only in, the regular course in substantially the
same manner as heretofore conducted.
(b) GOVERNING INSTRUMENTS. Seller shall not permit any of the Companies
to make any change or amendment to or repeal their respective Certificate of
Incorporation or By Laws.
(c) CAPITAL STOCK. Except for entering into the BFS Stock Purchase
Agreement, Seller shall not permit any of the Companies to issue or sell shares
of capital stock or any other securities of any of them or issue any securities
convertible into or exchangeable for, or rights to purchase relating to, or
enter into any contract, commitment or arrangement with respect to the issuance
of, any shares of capital stock or any other securities of any of them, or
adjust, split, combine or reclassify any of their capital stock or other
securities, or amend, permit acceleration of, or otherwise make any other
changes in their capital structures.
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(d) DIVIDENDS. Except for dividends or distributions payable to a
Company, Seller shall not permit any of the Companies to declare, set aside, pay
or make any dividend or other distribution or payment (whether in cash, stock or
property) with respect to, or purchase or redeem, any shares of its capital
stock.
(e) EMPLOYEE PLANS, COMPENSATION, ETC. Seller shall not permit any of
the Companies to adopt or amend any Employee Plan. Seller shall not permit any
of the Companies to increase the compensation or fringe benefits of any present
or former director, officer or employee (except that, in the case of employees
who are not officers, individual merit increases and promotional increases, not
to exceed 5% of salary, in accordance with past practices may be granted, but no
across-the-board or generally applicable increases may be granted), or pay any
bonus, compensation or benefit not required by any existing Employee Plan, or
hire any employee at an annual rate of compensation (including anticipated
incentive compensation, if any) in excess of (Euro) 80,000, or enter into any
contract, agreement, commitment or arrangement to do any of the foregoing.
(f) SALE OF ASSETS. Other than in the ordinary course of business,
Seller shall not permit any of the Companies to lease, sell or dispose of, or
contract to lease, sell or dispose of, in any single transaction or series of
related transactions, any asset or group of assets having a value, or selling
price, or aggregate rental, in excess of (Euro) 250,000.
(g) PURCHASE OF ASSETS. Other than in the ordinary course of business,
Seller shall not permit any of the Companies to lease, purchase or otherwise
acquire, in any single transaction or series of related transactions, any asset
or group of assets having a value or purchase price, or lease payments, in
excess of (Euro) 250,000, except that each of the Companies shall be permitted
to, and shall, continue any existing capital expenditure projects or programs
listed in SCHEDULE 5.20 in a manner consistent with the performance of such
projects or programs prior to the date of this Agreement.
(h) INVESTMENTS, LOANS AND GUARANTEES. Seller shall not permit any of
the Companies to make any investment (whether by acquisition of stock, capital
contribution or otherwise) in, or make any loan or advance to, or enter into or
renew any guarantee on behalf of, any person which continues after the Effective
Time, except for investments in cash equivalent instruments and investments by
one Company in another Company.
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7.02 ACCESS, INFORMATION AND CONFIDENTIALITY.
(a) During the period from the date of this Agreement to the Effective
Time, Seller shall cause each of the Companies to provide to Buyer and Buyer's
authorized representatives reasonable access during normal business hours to the
facilities and to the books and records of each of the Companies and shall cause
the officers of each of the Companies to promptly furnish Buyer with such
information with respect to the business and properties of each of the Companies
as Buyer or its authorized representatives from time to time may reasonably
request.
(b) Buyer and R&M Parent shall indemnify and hold Seller and the
Companies and their respective employees and agents, and each of them, harmless
from and against any and all losses, claims, damages and liabilities (including,
without limitation, reasonable attorneys' fees incurred in connection therewith)
arising out of or resulting from Buyer's or R&M Parent's exercise of its rights
under this Section 7.02.
7.03 CONFIDENTIALITY. After the Effective Time, Seller shall not use
and keep confidential, except as to directors and officers of Buyer, R&M Parent
and its Affiliates, all information concerning the Companies and the Business
which was considered confidential by Seller or any of the Companies prior to the
Closing Date, unless such information is required to be disclosed by law or is
readily ascertainable from public or published information or trade sources.
SECTION 8. CERTAIN COVENANTS OF BUYER.
8.01 CONFIDENTIALITY. Buyer and R&M Parent agree that any information
contained in any Schedule or Exhibit to this Agreement or otherwise provided to
Buyer pursuant to this Agreement shall be held by Buyer as confidential
information in accordance with, and shall be subject to the terms of the
Confidentiality Agreement. The terms of the Confidentiality Agreement are hereby
incorporated by reference herein and shall continue in full force and effect,
and if this Agreement is terminated or if the Closing shall not have occurred
for any reason whatsoever, the Confidentiality Agreement shall thereafter remain
in full force and effect in accordance with its terms.
SECTION 9. CERTAIN ADDITIONAL AGREEMENTS AND COVENANTS OF BUYER AND
SELLER.
9.01 REGULATORY FILINGS.
(a) GENERAL. Seller and Buyer acknowledge that the transactions
contemplated by this Agreement (i) require written notification to the
Department of Enterprise, Trade and Employment of the Country of Ireland and the
filing of a merger report with the competition regulatory authorities of the
Country of Brazil and (ii) do not require filings with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
under the HSR Act.
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(b) FILINGS. Seller and R&M Parent shall each promptly file such
notifications and reports with the Countries of Ireland and Brazil as may be
required and shall undertake in good faith to file promptly any supplemental
information which may be requested in connection therewith, which notifications
and reports comply, and filing of supplemental information will comply, in all
material respects with the requirements of the Laws of the respective countries.
Seller and R&M Parent shall each furnish the other with such information as
either may reasonably request to make such filings.
9.02 CONSUMMATION OF TRANSACTIONS. Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto agrees to use its best
efforts (i) to take, or cause to be taken, all such actions and to do, or cause
to be done, all other things necessary to carry out its obligations hereunder;
(ii) to cause the conditions to the obligations of the other party hereto to be
satisfied prior to or at the Closing; and (iii) to consummate and make
effective, as soon as reasonably practicable, the transactions contemplated by
this Agreement, including obtaining all waivers, permits, consents and approvals
and effecting all registrations, filings and notices with or to third parties or
Governmental Entities which are necessary in connection with the transactions
contemplated by this Agreement; provided, however, that this Section 9.02 shall
not require either party to waive any condition for its benefit or any
performance hereunder by the other party; and provided, further, that this
Section 9.02 shall not require such party to take any action the result of
which, in its reasonable judgment, would be to impose material limitations on
its ability to consummate and retain the full benefits of the transactions
contemplated hereby.
9.03 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, Buyer and Seller
will mutually agree on any announcement or correspondence with or to the public
or customers, suppliers, manufacturer's representatives, or employees of the
Companies about the terms and conditions of this Agreement or the transactions
contemplated hereby unless such announcement merely reiterates information that
was contained in the original press release announcing the execution of this
Agreement or is required by law in the good faith opinion of counsel and in such
a case, the announcing or corresponding party will notify the other party and
provide it in advance with a copy of the public disclosure and an opportunity to
comment on such proposed disclosure.
9.04 ACCESS TO RECORDS. Buyer agrees that on and after the Effective
Time it will permit Seller and its agents during normal business hours to have
access to and examine and make copies of the Records which are delivered to
Buyer pursuant hereto provided that Seller certifies that Seller requires such
information in connection with the preparation of Tax Returns or the preparation
accounting or regulatory reports or filings. Seller agrees that each of them
will use its best efforts to prevent the disclosure to any person or use by any
person other than Seller of any confidential information which is delivered to
Seller pursuant to this Section 9.04 other than pursuant to a court order or
subpoena or with respect to Tax Returns and other reports required by law.
9.05 FURTHER ASSURANCES. Each party shall at the request of the other
party do and perform or cause to be done and performed all such further acts and
furnish, execute and deliver
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such other documents, instruments, certificates, notices or other further
assurances as counsel for the requesting party may reasonably request, from time
to time, to consummate more effectively the transactions contemplated by this
Agreement or to vest in Buyer all of Seller's right, title and interest in the
Companies.
9.06 EXPENSES. Except as otherwise provided in this Agreement, each
party will pay all fees and expenses incurred by it in connection with this
Agreement and the transactions contemplated hereby.
9.07 CONSENTS. Prior to or at the Closing, Seller shall use
commercially reasonable efforts to obtain all consents or waivers from third
parties necessary to assure that the sale of the Romaco Stock to Buyer does not
result in termination of any of the Contracts.
9.08 ENVIRONMENTAL. Buyer represents that it has provided Seller with
copies of all of the Phase I environmental reports which Buyer obtained with
respect to the Owned Real Property and Leased Real Property. Buyer understands
that such reports recommend that certain additional Phase II environmental
testing be performed at three sites (the "Properties"), namely: the Owned Real
Property in Rheinfelden, Switzerland and in Neuenburg, Germany and the Leased
Real Property in Remschingen, Germany (the "Phase II Testing"). Prior to
December 31, 2001, Buyer, at its expense, shall complete the Phase II Testing as
outlined in the Phase I reports and provide copies of reports with respect to
such Phase II testing to Seller. If the Phase II Testing reports indicate
environmental conditions at the Properties that, under applicable Laws, are
required to be remediated, then Buyer, in consultation with Seller and its
representatives, shall obtain cost estimates for the remediation that is
required. If Seller disputes that remediation is required or the nature of the
remediation or that the cost estimates for the proposed remediation activities
are reasonable, Seller shall be afforded an opportunity to meet with
representatives of Buyer and its environmental consultants in Monaco and to
present information with respect to the same to Buyer and its environmental
consultants. After Seller has been afforded the opportunity to meet with Buyer
and its representatives as set forth in the preceding sentence, then Buyer and
the Companies shall proceed to take reasonable steps to remediate the
environmental conditions at the Properties to the extent required to bring the
Properties in compliance with applicable Laws. All costs incurred by Buyer or
any of the Companies pursuant to the preceding sentence shall be billed to
Seller and paid by Seller within 10 days after a xxxx for the same is received
by Seller either (i) if the Earnout Payment has not yet been paid, then by
deducting such amount from the Earnout Payment as provided in the Earnout
Calculation Schedule, with any balance to be paid in accordance with following
clause and (ii) if the Earnout Payment has been paid, then by Seller wire
transferring funds to the account designated by Buyer in the xxxx or by advising
Buyer in writing that the amount of the xxxx should be deducted from the
outstanding principal amount of R&M Parent Note A or R&M Parent Note B, or any
combination of the foregoing methods of payment. Nothing herein shall have the
effect of waiving Seller's rights to challenge any such xxxx on the basis that
the remediation was not required under applicable Laws or the remediation costs
were not reasonable. Seller shall also be responsible for complying with the
State of New Jersey's property transfer law, known as
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the "Industrial Site Recovery Act," to the extent compliance with the same is
required in connection with the transactions contemplated herein.
9.09 GUARANTEES OF OBLIGATIONS OF NON-CONSOLIDATED SUBSIDIARIES. At the
Closing, Seller shall deliver R&M Parent Note A to R&M Parent in order to give
effect to the Guarantee Pledge. When the guarantee secured by the Guarantee
Pledge is fully released, then R&M Parent shall deliver the R&M Parent Note A to
Seller. In the event R&M Parent or any of its Affiliates incur any loss as a
result of the guarantee secured by the Guarantee Pledge, then the principal
amount of the R&M Parent Note A may be reduced to the extent necessary to cover
such loss.
SECTION 10. CONDITIONS TO BUYER'S OBLIGATIONS. The obligations of Buyer
are subject to satisfaction, prior to or at the Closing, of each of the
following conditions (all or any of which may be waived in whole or in part by
Buyer):
10.01 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Seller contained in this Agreement shall be true and correct
in all respects (but without regard to any materiality qualification) as of the
Closing Date with the same effect as though made as of the Closing Date, except
(i) for changes specifically permitted by the terms of this Agreement; (ii) that
the accuracy of representations and warranties that by their terms speak as of
the date of this Agreement or some other date will be determined as of such
date; (iii) where the failure of the representations and warranties in the
aggregate to be true and accurate in all respects would not have a Material
Adverse Closing Condition Effect; and (iv) Seller shall have performed and
complied with, in all material respects, all agreements, obligations and
conditions required by this Agreement to be performed or complied with by them
prior to or at the Closing.
10.02 LITIGATION. No action, suit, or proceeding relating to the
transactions contemplated hereby shall be instituted by any party and remain
pending in which there is, or is likely to be, sought a temporary, preliminary
or permanent judgment, order or decree restraining or enjoining consummation of
the transactions contemplated hereby or requiring any holding separate or
divestiture of any substantial portion of the assets of any of the Companies by
Buyer.
10.03 CONSENTS AND APPROVALS. All approvals, agreements and consents of
any party necessary to consummation by Seller of the transactions contemplated
by this Agreement shall have been obtained and delivered to Buyer.
10.04 EMPLOYMENT AGREEMENTS. Each of the following persons shall have
entered into an Employment Agreement with R&M Parent: Xxxxxx Xxxxxxx-Xxxxx;
Xxxxxxx Xxxxx; Xxxx Xxxxxxxxx; Xxxxx Xxxxx; Reindent Dooves; and Cor de Vos.
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SECTION 11. CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of
Seller under this Agreement are subject to satisfaction prior to or at the
Closing of each of the following conditions (all or any of which may be waived
in whole or in part by Seller):
11.01 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Buyer and R&M Parent contained in this Agreement shall be true
and correct in all respects (but without regard to any materiality
qualification) as of the Closing Date with the same effect as though made as of
the Closing Date, except (i) for changes specifically permitted by the terms of
this Agreement; (ii) that the accuracy of representations and warranties that by
their terms speak as of the date of this Agreement or some other date will be
determined as of such date; (iii) where the failure of the representations and
warranties in the aggregate to be true and accurate in all respects would not
have a Material Adverse Closing Condition Effect; and (iv) Buyer and R&M Parent
shall have performed and complied with, in all material respects, all
agreements, obligations and conditions required by this Agreement to be
performed or complied with by them prior to or at the Closing.
11.02 LITIGATION. No action, suit or proceeding relating to the
transactions contemplated hereby shall be instituted by any party and remain
pending in which there is, or is likely to be, sought a temporary, preliminary
or permanent judgment, order or decree restraining or enjoining consummation of
the transactions contemplated hereby.
11.03 CONSENTS AND APPROVALS. All approvals, agreements and consents of
any party necessary to Buyer's consummation of the transactions contemplated by
this Agreement shall have been obtained by Buyer and delivered to Seller.
SECTION 12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
(a) Except as provided in subsection (b) below, all representations and
warranties made by Seller to Buyer and by R&M Parent and Buyer to Seller in this
Agreement shall survive the Effective Time and continue until August 31, 2003 or
until the termination and abandonment of this Agreement pursuant to Section 14.
Any right of indemnification pursuant to Section 13 with respect to a claimed
breach of a representation or warranty shall expire at the date of termination
of the representation or warranty claimed to be breached (the "TERMINATION
Date"), unless on or prior to the Termination Date written notice asserting such
breach, which shall reasonably set forth, in light of the information then known
to the party giving such notice, a description of and estimate (if then
reasonable to make) of, the amount involved in such breach (the "ESTIMATED
CLAIM") has been given to the party from whom indemnification is sought.
Provided that an Estimated Claim is timely made, it may continue to be asserted
beyond the Termination Date of the representation and warranty to which such
Estimated Claim relates.
(b) Notwithstanding anything in this Section 12 to the contrary:
(i) the representations and warranties made in Sections 4.01
to 4.03, inclusive, 5.01, 5.03, 5.04, and 6.01 to 6.03, inclusive,
shall not expire;
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(ii) the representations and warranties made in Section 15
shall expire 90 days after the expiration of the period during which
any Tax deficiency may be asserted for any period prior to the
Effective Time; and
(iii) the representations and warranties made in Section 5.14
shall expire on August 31, 2006.
(c) The covenants and agreements of Seller or Buyer set forth in this
Agreement shall survive the Closing and shall continue until all obligations set
forth herein shall have been performed or satisfied or they shall have
terminated in accordance with their terms.
SECTION 13. INDEMNITY.
(a) INDEMNIFICATION OF BUYER GROUP. Subject to the terms and conditions
of this Section 13, Seller hereby agrees to indemnify, defend and hold harmless
Buyer, R&M Parent, each of the Companies, and each of their respective
Affiliates, directors, officers and employees and the successors and assigns of
any of them (the "BUYER GROUP") at any time after the Effective Time from and
against all demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses (including, without limitation,
reasonable fees and expenses of counsel), (collectively, "DAMAGES"), asserted
against, resulting to, imposed upon or incurred by any member of the Buyer
Group, directly or indirectly, by reason of or resulting from:
(i) a breach of any representation or warranty of Seller
contained in Section 4, 5, or 15;
(ii) a breach by Seller of any covenant, agreement or
obligation of Seller contained in or made pursuant to this Agreement;
(iii) any real property owned by Seller, any of the Companies,
or an Affiliate of Seller which was disposed of prior to the Effective
Time or any real property leased or otherwise used by Seller, any of
the Companies, or any Affiliate of Seller as to which the lease or the
right of use terminated prior to the Effective Time (the "FORMER
PROPERTIES");
(iv) any Hazardous Materials that were removed prior to the
Effective Time from (A) the Former Properties or (B) any real property
owned by Seller or an Affiliate of Seller, including the Companies;
(v) the sale by Seller or any Affiliate of Seller, including
the Companies, of the capital stock of any Person (other than the
Companies) or the assets of any Person where the assets sold or
divested constituted more than 50% of the assets of such Person at the
time of sale or divestiture;
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(vi) any matter disclosed or required to be disclosed in
SCHEDULE 5.09, except that no Damage payments are required pursuant to
this section until the Warranty and Litigation Reserve is exhausted and
the Minimum Amount at Section 13(c)(i) has been exceeded;
(vii) any obligation of the Companies, with respect to acts or
omissions occurring prior to the Effective Time, to indemnify any
person elected or appointed a director or officer of any of the
Companies at any time prior to the Effective Time, in his or her
capacity as a director or officer of any of the Companies or a former
director or officer of any of the Companies, arising under any of the
Companies' certificate of incorporation, bylaws, by contract or
otherwise, provided, however, this clause (vii) does not apply to any
Person who remains, or becomes, an employee or consultant to any of the
Companies after the Effective Time;
(viii) any actual bodily injury or physical damage to
properties (other than products manufactured or serviced by the
Companies) or persons which actually happened prior to the Effective
Time and is attributable to a product manufactured or service performed
or the omission of a service that should have been performed by any of
the Companies or by the Seller or an Affiliate of Seller;
(ix) the purchase of any capital stock of Romaco by Seller
from a former stockholder of Romaco or the failure of Seller to inform
any former stockholder of Romaco of any of the matters set forth in
this Agreement;
(x) any Taxes incurred by any of the Companies in connection
with the corporate restructuring by which Modulatus
Grundstucks-Vermietungsgesellschaft GmbH & Co Objeckt Worms KG and
Modulatus Grundstucks-Vermietungsgesellschaft GmbH became subsidiaries
of Randomat International B.V. or in connection with the sale of the
Non-Consolidated Subsidiaries pursuant to the BFS Stock Purchase
Agreement and; or
(xi) any guarantee of any obligation or liability of a
Non-Consolidated Subsidiary or Seller by Romaco or a Consolidated
Subsidiary.
(b) INDEMNIFICATION OF SELLER GROUP. Subject to the terms and
conditions of this Section 13, Buyer and R&M Parent hereby agree to indemnify,
defend and hold harmless Seller and the successors and assigns of Seller (the
"SELLER GROUP") at any time after the Effective Time, from and against all
Damages asserted against, resulting to, imposed upon or incurred by any member
of the Seller Group, directly or indirectly, by reason of or resulting from:
(i) a breach of any representation or warranty of Buyer or R&M
contained in or made pursuant to this Agreement; or
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(ii) the breach by Buyer or R&M of any covenant, agreement or
obligation of Buyer contained in or made pursuant to this Agreement
(collectively with the claims set forth in Section 13(a), "CLAIMS");
(c) INDEMNIFICATION THRESHOLD AND MAXIMUM LIABILITY FOR CERTAIN CLAIMS.
(i) MINIMUM AMOUNT FOR CERTAIN DAMAGES. Notwithstanding
anything contained in this Agreement to the contrary, Seller shall not,
except in instances of knowing, intentional fraud, be liable to
indemnify any member of the Buyer Group for Damages pursuant to Section
13(a)(i) resulting from a breach of a representation or warranty of
Seller contained in Sections 4, 5, or 15 of this Agreement or resulting
from a breach by Seller of any agreement or indemnification obligation
of Seller set forth in Section 15 of this Agreement or resulting from a
breach by Seller of any agreement or indemnification obligation of
Seller set forth in Section 13(a)(vi) of this Agreement until the
aggregate amount of all such Damages or indemnification obligations, in
the aggregate, exceeds (Euro) 1,500,000 (the "MINIMUM AMOUNT") and then
Seller shall be liable for all Damages in excess of the Minimum Amount,
except that the Minimum Amount shall not apply to reduce Damages
payable by Seller if the damages result from a breach of a
representation and warranty contained in Sections 4.01 to 4.04,
inclusive, 5.01, 5.03, or 5.04.
(ii) MAXIMUM LIABILITY FOR CERTAIN DAMAGES. Notwithstanding
anything contained in this Agreement to the contrary, Seller shall not,
except in instances of knowing, intentional fraud, be liable to
indemnify any member of the Buyer Group for Damages claimed pursuant to
Section 13(a)(i) in excess of (Euro) 25,000,000 except that such
limitation shall not apply to Damages relating to a breach of a
representation and warranty contained in Sections 4.01 to 4.04,
inclusive, 5.01, 5.03, or 5.04 or an indemnification obligation or
agreement made pursuant to Section 15.
(d) PROCEDURES APPLICABLE TO THIRD-PARTY CLAIMS. The obligations and
liabilities of a member of the Seller Group or of the Buyer Group to indemnify a
member of the other group under Section 13(a) or (b) with respect to Claims
asserted by a person other than a member of the Buyer Group or the Seller Group
shall be subject to the following terms and conditions:
(i) RIGHT OF INDEMNIFYING PARTY TO ASSUME DEFENSE OF CLAIM.
The party to be indemnified (the "INDEMNIFIED PARTY") shall give the
other party (the "INDEMNIFYING PARTY") prompt notice of any such Claim,
and, subject to the provisions of Section 13(d)(v), the Indemnifying
Party, at its sole cost and expense, shall have the right, upon written
notice to the Indemnified Party that it is assuming defense of the
Claim, to assume the defense of the Claim while reserving its right to
contest the issue of whether it is liable to the Indemnified Party for
any indemnity hereunder. If the Indemnifying Party assumes the defense
of the Claim, it shall select counsel reasonably acceptable to the
Indemnified Party to conduct the defense of the Claim and shall defend
or settle the
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same; provided, however, that if it shall later be determined that the
Indemnified Party is not entitled to indemnification with respect to
the matter as to which Indemnifying Party has undertaken the defense of
the Claim, the Indemnified Party shall reimburse the Indemnifying Party
for reasonable fees and disbursements of counsel and for any amounts
paid in judgment or settlement prior to such determination.
(ii) CONTROL OF THE DEFENSE. The contest of the Claim may be
conducted in the name and on behalf of the Indemnifying Party or the
Indemnified Party, as may be appropriate. Subject to compliance by the
Indemnifying Party with the other requirements of this Section
13(d)(ii), such contest shall be conducted diligently by reputable
counsel employed by the Indemnifying Party, but the Indemnifying Party
shall keep the Indemnified Party fully informed with respect to the
Claim and the contest thereof. Subject to compliance by the
Indemnifying Party with the other requirements of this Section
13(d)(ii), if the Indemnified Party joins in any such contest, the
Indemnifying Party shall have full authority, in consultation with the
Indemnified Party, to determine all action to be taken with respect
thereto; provided, however, the Indemnifying Party shall not consent to
a settlement of, or the entry of any monetary judgment arising from,
the Claim, without the prior written consent of the Indemnified Party
which shall not be unreasonably withheld or delayed; and further
provided that if the Indemnified Party shall fail or refuse to consent
to a settlement or judgment proposed by the Indemnifying Party and a
judgment thereafter shall be entered or a settlement shall be effected
in an amount in excess of the settlement or judgment proposed by the
Indemnifying Party, the Indemnifying Party shall have no liability
hereunder with respect to such excess or any expenses or other Damages
related thereto arising after the date such settlement or judgment is
so proposed. In no event shall the Indemnifying Party have authority to
agree to any relief other than the payment of money damages by the
Indemnifying Party unless agreed to by the Indemnified Party.
(iii) COOPERATION IN DEFENSE. If requested by the Indemnifying
Party, the Indemnified Party agrees to cooperate with the Indemnifying
Party and its counsel, including permitting reasonable access to books
and records, in contesting any Claim which the Indemnifying Party
elects to contest or, if appropriate, in making any counterclaim
against the person asserting the Claim, or any cross-complaint against
any person, but the Indemnifying Party will reimburse the Indemnified
Party for reasonable out-of-pocket costs (but not the cost of employee
time expended) incurred by the Indemnified Party in so cooperating. The
Indemnifying Party agrees to use its best efforts to afford the
Indemnified Party and its counsel the opportunity to be present at, and
to participate in, conferences with all persons, including governmental
authorities, asserting any Claim against the Indemnified Party or
conferences with representatives of or counsel for such persons.
(iv) FAILURE OF INDEMNIFYING PARTY TO ASSUME DEFENSE. If the
Indemnifying Party does not assume the defense of the Claim in
accordance with the terms hereof within 20 days after the receipt of
notice thereof, the Indemnified Party may, at the
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Indemnifying Party's expense, defend against the Claim in such
reasonable manner as it may deem appropriate; provided that the
Indemnified Party shall not agree to any settlement of the Claim
without the prior written consent of Indemnifying Party, which shall
not be unreasonably withheld or delayed.
(v) CLAIMS BELOW THE MINIMUM AMOUNT. The right to
indemnification pursuant to Section 13(a)(i), Section 13(a)(vi) and
Section 15(b) does not arise with respect to a Claim until the
aggregate amount of all Damages alleged in the Claim, together with all
prior Claims, exceeds the Minimum Amount, except that the party who
would be the Indemnifying Party if the Minimum Amount had been reached
shall have the right to participate in, but not control, the defense of
the Claim.
(vi) COMPLIANCE WITH PROCEDURES. Notwithstanding the terms of
this Section 13, the Indemnified Party shall not be entitled to
indemnification pursuant to this Section 13 unless the Indemnified
Party (x) delivers the notice required under Section 13(d)(i) (and in
the case of a representation and warranty, prior to the expiration of
the representation and warranty in issue) and (y) permits the
Indemnifying Party to exercise its rights under Section 13 with respect
to the defense of claims or legal proceedings; provided, however, that
the failure to comply with the foregoing requirements under (y) shall
constitute a defense to the indemnity obligations of the Indemnifying
Party hereunder only to the extent that the Indemnifying Party suffers
actual prejudice as the result of such failure to comply.
(vii) DAMAGES. When calculating Damages under this Section 13,
Damages shall be calculated net of any tax benefit or insurance
proceeds realized by the Indemnified Party as a result of the events
giving rise to its right to indemnification under this Section 13.
(viii) EXCLUSIVE NATURE OF INDEMNIFICATION PROVISIONS. From
and after the Effective Time, the Buyer Group's and the Seller's Group
right to indemnification under this Section 13 shall be their sole and
exclusive right and remedy for recovering from the other Damages
arising out of, or relating to, claims by third parties and they shall
not be entitled to pursue, and hereby expressly waive, any and all
rights that may otherwise be available either at law or in equity
against the other with respect to Damages arising out of claims by
third parties.
SECTION 14. TERMINATION.
14.01 TERMINATION OF AGREEMENT. This Agreement may be terminated at any
time prior to the Closing:
(a) by mutual agreement of Seller and Buyer;
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(b) by Buyer, if there has been a material violation or breach by
Seller of any of the agreements, representations or warranties contained in this
Agreement, unless Seller has informed Buyer that such violation or breach will
be cured on or before the Closing Date;
(c) by Seller, if there has been a material violation or breach by
Buyer or R&M Parent of any of the agreements, representations or warranties
contained in this Agreement, unless Buyer has informed Seller that it will be
cured on or before the Closing Date; or
(d) by either Seller or Buyer (provided the party causing termination
under this subsection (d) is not in material breach of its obligations under
this Agreement) if the Effective Time shall not have occurred on or prior to
September 15, 2001.
14.02 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either Buyer or Seller as provided in Section 14.01, this Agreement
shall forthwith be of no further force and effect (except that the provisions of
Sections 8, 9.03, 9.06 and 14.02 shall continue in full force and effect) and
there shall be no liability on the part of Buyer and R&M Parent or Seller,
except based upon: (i) a material and willful breach by a party of any of its
obligations under this Agreement or (ii) the obligations set forth in Sections
8, 9.03, 9.06, and 14.02.
SECTION 15. TAXES.
(a) DEFINITIONS. For purposes of this Section 15, the following terms
shall have the following meanings:
(i) "Seller's Tax Obligations" means (A) any and all Taxes
relating any of the following periods: (1) a taxable period which ended
on or before December 31, 2000 and (2) a tax period which began after
December 31, 2000 and ended on or before the Effective Time, but only
to the extent the liability for any Taxes for such period exceeded any
amount accrued on the Interim Balance Sheet for such Taxes for such
period plus any additional amount that would be accrued in the normal
course of business by Romaco in a manner consistent with its past
practice on its unaudited consolidated interim balance sheet as of the
Effective Time and (B) Seller's Proportionate Share of any Taxes
relating to a tax period which began after December 31, 2000 and ended
after the Effective Time (an "ALLOCABLE PERIOD"), but only to the
extent the liability for any Taxes for such Allocable Period is not for
income taxes or taxes measured by net income and exceeded any amount
accrued on the Interim Balance Sheet for such Taxes for such Allocable
Period plus any additional amount that would be accrued in the normal
course of business by Romaco in a manner consistent with its past
practice on its consolidated balance sheet for the last day of such Tax
period.
(ii) "Seller's Proportionate Share" means the percentage
obtained by dividing the number of days in an Allocable Period that
Romaco was owned by Seller by the total number of days in the Allocable
Period.
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(b) INDEMNIFICATION OF BUYER GROUP. Subject to the minimum threshhold
provisions at Section 13(c)(i), Seller shall be liable for, and shall hold the
Buyer Group harmless from and against, any and all Taxes which are part of, or
relate to, Seller's Tax Obligations. It is expressly agreed that Seller has no
obligation to indemnify the Buyer Group for any Tax which is an income tax or a
tax measured by net income and relates to an Allocable Period.
(c) INDEMNIFICATION OF SELLER. Except for Taxes which are Seller's
responsibility under Section 13(a)(x), Buyer, R&M Parent and the Companies shall
be liable for, and shall hold, the Seller Group harmless from and against, any
and all Taxes due or payable by a Company, R&M Parent or Buyer with respect to a
Company for any taxable year or tax period beginning after the Effective Time
and for any Tax period which is an Allocable Period to the extent that Taxes for
the Allocable Period are not included in Seller's Tax Obligations.
(d) FILING OF RETURNS. R&M Parent and Buyer shall cause each of the
Companies to file any Tax Return with respect to the business, activities or
assets of any of the Companies for any Allocable Period and R&M Parent and Buyer
shall pay or cause the relevant Company to pay (subject to Seller's Tax
Obligations to the Buyer Group in respect of such Taxes therefor) all Taxes
shown as due on any such Tax Return.
(e) REFUNDS. Any refunds or credits of Taxes attributable to a Company
other than a Non-Consolidated Subsidiary for any Tax period shall be for the
account of the Company entitled to the refund or credit. Any refunds or credits
of Taxes attributable to a Non-Consolidated Subsidiary for any Tax period shall
be for the account of the Non-Consolidated Subsidiary entitled to the refund or
credit.
(f) MAINTENANCE OF RECORDS AND ASSISTANCE. Seller and R&M Parent and
Buyer shall each maintain (or, in the case of R&M Parent, cause the Companies to
maintain) the books and records that relate to any Tax Return of a Company for a
period of not less than seven years following the filing date of such Tax
Return, shall thereafter give the other party at least 30 days notice of its
intention to destroy any such records and shall, at the other party's request
and expense, to the extent such records relate to a Company, turn over any such
records to the other party instead of destroying them. As soon as practicable
after a request by a member of the Seller Group or the Buyer Group ("Requesting
party"), R&M Parent or Seller, as the case may be (the "Delivering Party"),
shall deliver to the Requesting Party such information and data and make
available such knowledgeable persons employed at the time of the request by the
Delivering Party as the Requesting Party may reasonably request, in order to
enable the Requesting Party to complete and file all Tax Returns which it is
required to file with respect to the activities or assets of a Company or to
respond to audits by any taxing authorities with respect to such activities or
assets. The Delivering Party's obligation under this Section to permit the
Requesting Party access to and to review the foregoing materials is conditioned
upon the Requesting Party's execution of a reasonable confidentiality agreement
with respect thereto.
(g) NOTICE AND DEFENSE OF CLAIMS. If R&M Parent or a Company becomes
aware of any assessment, official inquiry, examination or proceeding that could
result in an official
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determination with respect to any Tax for which Seller could be liable pursuant
to this Agreement, R&M Parent shall promptly so notify Seller in writing and the
procedures set forth in Section 13(d) shall be applicable to the defense of the
potential Tax claim, with Seller having the rights of an indemnifying party
under Section 13(d) with respect to such Tax claim. If Seller becomes aware of
any official inquiry, examination or proceeding that could result in an official
determination with respect to any Tax for which R&M Parent or a Company could be
liable pursuant to this Agreement, Seller shall promptly so notify R&M Parent in
writing.
(h) REPRESENTATIONS AND WARRANTIES OF SELLER WITH RESPECT TO TAXES.
Seller represents and warrants to Buyer and R&M Parent as follows:
(i) TAX RETURN FILINGS. The Companies have duly filed or
caused to be filed, or shall duly file or cause to be filed, in a
timely manner (taking into account all extensions of due dates) with
the appropriate Governmental Entity all Tax Returns, which are required
to be filed on or before the Effective Time by or on behalf of the
Companies and such returns are (or will be, in the case of those filed
or caused to be filed between the date hereof and the Effective Time)
complete and correct in all material respects, and all Taxes shown to
be due on such Tax Returns have been or will have been paid in full on
or before the Effective Time.
(ii) DEFICIENCIES. There are no unassessed Tax deficiencies
proposed or threatened against any of the Companies, nor, except as set
forth on SCHEDULE 15, are there any agreements, waivers, or other
arrangements providing for extension of time with respect to the
assessment or collection of any Tax against any of the Companies or any
actions, suits, proceedings, investigations or claims now pending
against any of them with respect to any Tax, or any matter under
discussion with any federal, state, local or foreign authority relating
to any Taxes.
(iii) TAX SHARING AGREEMENT. None of the Companies is a party
to, is bound by, or has any obligation under any Tax sharing, Tax
indemnity, or similar agreement.
(iv) INTERNATIONAL BOYCOTT. None of the Companies has
participated in (and will not participate in) an international boycott
within the meaning of Section 999 of the Code.
(v) U.S. REAL PROPERTY HOLDING CORPORATION. None of the
Companies is, and none has been, a United States real property holding
corporation (as defined in Section 897(c)(2) of the Code) during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(vi) PERMANENT ESTABLISHMENT. Except as set forth on SCHEDULE
15, none of the Companies have, or has had, a permanent establishment
in any foreign country other than their respective country of
formation.
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(vii) PASSIVE FOREIGN INVESTMENT COMPANY. Except as set forth
on SCHEDULE 15, none of the Companies incorporated outside the United
States is, or have been, a Passive Foreign Investment Company or have
Qualifying Election Fund Status within the meaning of the Code.
(i) SECTION 338. Buyer shall have the right, in its sole discretion, to
make, or to cause any of the Companies to make, a Section 338 election under the
Code with respect to any of the Companies. Buyer and R&M Parent represent and
warrant that they will hold Seller Group harmless from, and indemnify Seller
Group against, any loss or tax to Seller Group, resulting, direct or indirectly,
from any such Section 338 election.
SECTION 16. MISCELLANEOUS
16.01 ASSIGNMENT; NO THIRD-PARTY RIGHTS. This Agreement shall be
binding upon and shall inure to the benefit of, and be enforceable by, the
parties hereto and their permitted successors and assigns. This Agreement may
not be assigned by either party without the prior written consent of the other,
except Buyer may, without the prior written consent of Seller, assign this
Agreement and the rights of Buyer hereunder to any Affiliate of Buyer. No
assignment of this Agreement shall relieve the assigning party of responsibility
for the performance of any of its obligations hereunder. Nothing herein is
intended to, nor shall it, create any rights in any person other than the
parties hereto and their respective successors and assigns.
16.02 ENTIRE AGREEMENT. This Agreement and the agreements to be
executed in connection herewith sets forth the entire agreement and
understanding of the parties in respect of the transactions contemplated hereby
and supersedes all prior agreements, arrangements and understandings relating to
the subject matter hereof. All Schedules and Exhibits and any documents and
instruments delivered pursuant to any provisions hereof are expressly made a
part of this Agreement as fully as though completely set forth herein.
16.03 SECTION AND OTHER HEADINGS; NUMBER. The section and other
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Words
used in this Agreement in the singular number shall be held to include the
plural, and vice versa, unless the context requires otherwise.
16.04 NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (i) on the date of service if served personally on the party to whom
notice is to be given, (ii) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, and telephonic confirmation of
receipt is obtained promptly after completion of transmission, (iii) on the
second business day after delivery to Federal Express or similar overnight
courier; or (iv) on the tenth day after mailing, if mailed to the party to whom
notice is to be given, by registered or certified mail, postage prepaid and
properly addressed, to the party as follows:
-42-
48
If to Buyer:
Xxxxxxx & Xxxxx Holdings, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
TEL: (000) 000-0000
FAX: (000) 000-0000
Attention: President
If to R&M Parent:
Xxxxxxx & Xxxxx Holdings, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
TEL: (000) 000-0000
FAX: (000) 000-0000
Attention: President
With a copy of any communication to either Buyer or R&M Parent
to:
Xxxxxxxx Xxxx LLP
0000 Xxxxxxxxxx Xxxxx X.X.
00 X. Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
TEL: 000-000-0000
FAX: 937/000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
If to Seller:
Xxxxx Xxxxxxx-Xxxxx
00, xxxxxxxxx xx Xxxxxx
XX 00000 Xxxxxx
TEL: x000 00 00 00 00
FAX: x000 00 00 00 00
-43-
49
With copies of any communication to Seller to:
Duke, Holzman,Xxxxxx & Photiadis, LLP
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
TEL: (000) 000-0000
FAX: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq. and Xxxx X. Xxxxxxx,
Esq.
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above.
16.05 GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the substantive law of the State of New York regardless of
the laws that might otherwise govern under principles of conflict of laws
applicable thereto.
16.06 CONSENT TO JURISDICTION. Any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought in the state courts of the County of Erie, State of New York, or the
Federal Courts, Western District, State of New York. The parties hereto consent
to the exclusive jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by Law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, the parties hereto agree that service of process on such party
may be made upon the designated person at the address provided in Section 16.04
hereof and shall be deemed to be effective service of process on such party.
16.07 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
16.08 SEVERABILITY. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable Laws but if any provision or portion of a
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable Laws in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or portion of
a provision in such jurisdiction, and this Agreement will be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of a provision had never been contained herein, so long as
the economic and legal substance of the transactions contemplated hereby are not
affected in a manner materially adverse to any party hereto.
-44-
50
IN WITNESS WHEREOF, Buyer, R&M Parent and Seller have each caused this
Agreement to be executed in a manner sufficient to legally bind them as of the
day set forth on the first page of this Agreement.
"Seller"
Xxxxx Xxxxxxx-Xxxxx
/s/ Xxxxx Xxxxxxx-Xxxxx
---------------------------------
"Buyer" "R&M Parent"
XXXXXXX & XXXXX HOLDINGS, INC. XXXXXXX & XXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
----------------------- ------------------------------
Title: President Title: President and CEO
------------------- --------------------------
-45-
51
EXHIBIT A
---------
PROCEDURES FOR CALCULATING EARNOUT CONSIDERATION
------------------------------------------------
The Earnout Consideration, if any, shall be calculated in accordance
with the following procedures and provisions:
1. The amount of the Earnout Consideration shall be an amount equal to
the sum of the Sales Portion and the EBITDA Portion less the following: (i)
(Euro) 170,000 and (ii) any environmental remediation costs due Buyer pursuant
to Section 9.08 to the extent known on the date the Earnout Consideration is
paid. Notwithstanding anything contained in this Agreement to the contrary, any
charges incurred by any of the Companies for which they are being reimbursed
pursuant to clauses (i) or (ii) of the preceding sentence shall not be an
expense for purposes of calculating the Earnout Consideration.
2. The Sales Portion of the Earnout Consideration shall be
calculated as follows:
A. Determine the excess of the Sales of the Companies
for the 12 months ended December 31, 2001 over (Euro)
150,000,000, which amount is referred to as the
"Performance Sales," provided, however, if
Performance Sales as so determined exceeds (Euro)
22,000,000, Performance Sales shall be reduced to
(Euro) 22,000,000.
B. The product obtained by multiplying the Performance
Sales by 0.75 is the "Sales Portion" of the Earnout
Consideration.
3. The EBITDA Portion of the Earnout Consideration shall be
calculated as follows:
A. Determine the excess of the EBITDA of the Companies
for the 12 months ended December 31, 2001 over (Euro)
12,000,000, which amount is referred to as the
"Performance EBITDA."
B. The product obtained by multiplying the Performance
EBITDA by 3.75 is the "EBITDA Portion" of the Earnout
Consideration.
4. For purposes of this EXHIBIT A:
A. "Sales" means total sales billed to customers which
are not Affiliates of any of the Companies after
deducting credits for returned goods, prepaid freight
or any other similar adjustment to sales and shall be
computed on a basis consistent with the determination
of sales in connection with Romaco's audited
consolidated statement of income for the year ended
December 31, 2000.
B. "EBITDA" means earnings of the Companies before
interest and taxes plus depreciation expense and
amortization expense. For purposes of illustrating
the calculation of EBITDA, if it were determined from
the
A-1
52
audited consolidated statement of income of Romaco
for the year ended December 31, 2000, it would be the
result of Sales minus Cost of Sales, minus Operating
Expenses (Research and Development, Selling Costs and
General and Administrative Expenses), plus
Depreciation Expense. In determining EBITDA, Sales,
Cost of Sales, Operating Expenses, and Depreciation
Expense shall be computed on a basis consistent with
the determination of such items in connection with
Romaco's audited consolidated statement of income for
the year ended December 31, 2000.
c. Buyer represents and warrants that it will maintain
the books and records of the Companies for the period
from the Effective Time to December 31, 2001 in a
manner that will readily allow for the calculation of
Sales and EBITDA in accordance with the provisions of
this EXHIBIT A.
d. Costs incurred after May 15, 2001 and included as
expenses of any of the Companies after May 15, 2001
that are payments to third-parties that were incurred
by any of the Companies primarily in connection with
due diligence activities requested by Buyer or R&M
Parent shall be excluded from expenses of the
Companies in calculating EBITDA for the period in
which such expenses were recorded. Such expenses
include (i) travel expenses of Company personnel,
lodging and meal costs, telephone and fax charges,
and similar items payable to third parties and (ii)
charges of Ernst & Young directly related to the such
due diligence activities, including the fees and
costs associated with any audit of the books and
records of the Companies performed by Ernst & Young
to prepare a Closing Date audit for R&M Parent.
----------------
A-2
53
EXHIBIT E
---------
R&M PARENT NOTE TERM SHEET
--------------------------
The terms and provisions of the R&M Parent Note Agreement and
the R&M Parent Note A ("Note A") and R&M Parent Note B ("Note B" and together
with Note A, the "Notes") issued pursuant to such agreement shall be consistent
with the following provisions:
NOTES Note A -10% subordinated notes due 2006
Note B -10% subordinated notes due 2007
COUPON: Payable quarterly in arrears on the principal
amount, commencing one year after Closing in the
case of Note A and on February 28, 2003 in the case
of Note B.
MATURITY: Assuming a Closing Date of August 31, 2001, Note A
will mature on August 31, 2006 and Note B on
February 28, 2007.
OPTIONAL REDEMPTION: The Notes may be prepaid, in whole or in part, at
anytime, with a prepayment penalty as follows:
-10% of the amount being repaid for any amount
prepaid in the first year the Note is
outstanding;
-8% of the amount being repaid for any amount
prepaid in the second year the Note is
outstanding;
-6% of the amount being repaid for any amount
prepaid in the third year the Note is
outstanding;
-0% of the amount being repaid for any amount
prepaid after the third year.
MANDATORY REDEMPTION: The Notes are redeemable, in whole or in part, at
the holder's option, at 100% of par PLUS accrued
interest upon a Change of Control of R&M Parent.
RANKING: The Notes will be pari passu with R&M Parent's U.S.
$65,000,000 Subordinated Convertible Notes Due 2003
(the "R&M
F-1
54
Convertibles") and will be subordinate to the same
senior debt as the R&M Convertibles.
COVENANTS: Same as R&M Convertibles.
EVENTS OF DEFAULT: Same as R&M Convertibles.
DEFAULT RATE: 12%
F-2
55
REVISED: AUGUST 9, 2001
EXHIBIT B
---------
CORPORATE INFORMATION EXHIBIT
-----------------------------
The following "Corporate Information Exhibit" sets forth with respect
to each of the Companies: (a) legal name of the Company; (b) the jurisdiction in
which, and date on which, the Company was incorporated; (c) the capitalization
of the Company, including the number of authorized shares of each class of its
capital stock, the number of issued and outstanding shares of each class of its
capital stock, the registered holders of any of the Company's outstanding shares
and the number of shares and class of its stock held by each such registered
owner as the same will be at the Effective Time; (d) jurisdictions in which the
Company is qualified to do business as a foreign corporation; (e) any Security
Interests existing with respect to any outstanding shares of capital stock of
the Company; and (f) the primary business activity of the Company.
(1) ROMACO N.V.
a. Legal Name: ROMACO N.V.
b. Jurisdiction and the date of incorporation: NETHERLANDS
ANTILLES (CURACAO)
SEPTEMBER 3, 1984
c. Capitalization of the Company:
Name of Registered
Class of Authorized Issued/Paid Owner/number of
Shares Capital Capital Shares Owned
------ ------- ------- ------------
COMMON (Euro)900,000/ (Euro)435,510/ [XXXXX XXXXXXX-XXXXX - 9,375]
SHARES 20,000 9,375
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: INVESTMENT/HOLDING COMPANY
F-3
56
PART A
------
CONSOLIDATED SUBSIDIARIES
-------------------------
(2) ROMACO X.X.X. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO X.X.X.
x. Jurisdiction and the date of incorporation: PRINCIPALITY OF
MONACO
DECEMBER 13, 1985
c. Capitalization of the Company:
Number of Name of Registered
Authorized Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
(Euro)150,000 500 500 [ROMACO N.V. - 470]
PAR VALUE - [30 QUALIFYING SHARES HELD BY:
(Euro)300 EACH XXXXX XXXXXXX-XXXXX
XXXXXX XXXXXXX-XXXXX
XXX. XXXXXX XXXXXXX-XXXXX]
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: MANAGEMENT AND CONSULTING FOR
THE COMPANIES IN THE ROMACO GROUP, AND, IN FURTHERANCE OF
THOSE PURPOSES, ANY OPERATIONS REGARDING ANY TYPE OF ASSETS
THAT ADVANCE THOSE PURPOSES.
(3) ROMACO FINANCE B.V. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO FINANCE B.V.
b. Jurisdiction and the date of incorporation: THE NETHERLANDS
JUNE 19, 1985
c. Capitalization of the Company:
Name of Registered
Class of Authorized Issued/Paid Owner/Number of
Shares Capital Capital Shares Owned
------ ------- ------- ------------
NLG 175,000/ NLG 35,000/ ROMACO N.V. - 35
175 SHARES 35 SHARES
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
F-4
57
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
(4) DIOPTEC SCAN LIMITED - CONSOLIDATED SUBSIDIARY
a. Legal Name: DIOPTEC SCAN LIMITED
b. Jurisdiction and the date of incorporation: UNITED KINGDOM
JUNE 6, 1991
c. Capitalization of the Company:
Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
------ ------ ------ ------------
ORDINARY 300,000,000 2 ROMACO N.V.(FORMERLY ROBANNIC
PAR VALUE- N.V.)-2
(POUND)1.00 EACH
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: MANUFACTURING AND
DISTRIBUTION OF PRODUCTION AND PACKAGING MACHINERY FOR THE
PHARMACEUTICAL AND HEALTHCARE INDUSTRIES.
(5) ROMACO HOLDINGS UK LIMITED - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO HOLDINGS UK LIMITED
b. Jurisdiction and the date of incorporation: UNITED KINGDOM
OCTOBER 20, 1992
c. Capitalization of the Company:
Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
------ ------ ------ ------------
ORDINARY 4,000,000 3,900,000 DIOPTEC SCAN LIMITED -
PAR VALUE- 3,900,000
(POUND)1.00 EACH
F-5
58
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: INVESTMENT HOLDING COMPANY
(6) ROMACO INTERNATIONAL B.V. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO INTERNATIONAL B.V.
b. Jurisdiction and the date of incorporation: THE NETHERLANDS
JUNE 23, 1983
c. Capitalization of the Company:
Name of Registered
Class of Authorized Paid/Issued Owner/Number of
Shares Capital Capital Shares Owned
------ ------- ------- ------------
NLG 5,820,000/ NLG 1,164,000/ ROMACO HOLDINGS UK LTD
5,820 SHARES 1,164 SHARES . - 1,164
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
(7) ROBANNIC OVERSEAS FINANCE A.V.V. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROBANNIC OVERSEAS FINANCE A.V.V.
b. Jurisdiction and the date of incorporation: NETHERLANDS
ANTILLES (ARUBA)
APRIL 5, 1994
c. Capitalization of the Company:
Name of Registered
Class of Authorized Paid Owner/Number of
Shares Capital Capital Shares Owned
------ ------- ------- ------------
(Euro)45,000,000 (Euro)36,000,000 ROMACO NV - 81,000,000
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
F-6
59
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
(8) ROMACO ARGENTINA S.A. - CONSOLIDATED SUBSIDIARY - 50% OWNED
a. Legal Name: ROMACO ARGENTINA S.A.
b. Jurisdiction and the date of incorporation: ARGENTINA
FEBRUARY 18, 2000
c. Capitalization of the Company:
Number of Name of Initial Registered
Stock Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
--------- ------ ------ ------------
$200,000.00 20,000 20,000 ROMACO S.P.A. - 10,000
PAR VALUE - XXXXX XXXXXX XXXXXXXX XXXXX -
$10 EACH 10,000
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: THE PURCHASE, REPAIR,
TECHNICAL ASSISTANCE, IMPORTATION AND EXPORTATION OF MACHINES
DESIGNED FOR FRACTIONAL PROCESS, PACKING AND BOTTLING OF
PHARMACEUTICAL PRODUCTS AND COSMETICS, INCLUDING BIOLOGICAL
PRODUCTS AND THE PACKING OF PRODUCTS DERIVED FROM THE FOOD
INDUSTRY.
(9) ROMACO AUSTRALIA PTY LTD. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO AUSTRALIA PTY LTD.
b. Jurisdiction and the date of incorporation: QUEENSLAND
NOVEMBER 11, 1998
c. Capitalization of the Company:
Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
------ ------ ------ ------------
ORDINARY 1,000,000 1,000,000 ROMACO INTERNATIONAL B.V. -
PAR VALUE - 1 1,000,000
F-7
60
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: HOLDING
(10) ROMACO BOSSPAK - CONSOLIDATED SUBSIDIARY - 51% OWNED PARTNERSHIP
a. Legal Name: N/A
b. Jurisdiction and the date of incorporation: GENERAL
PARTNERSHIP
c. Capitalization of the Company:
NAME OF REGISTERED OWNER/PERCENTAGE OWNERSHIP
ROMACO AUSTRALIA PTY LTD. - 51%
BOSSPAK PTY. LTD. - 49%
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the ownership interests of
the Company: NONE.
f. Primary business of the Company: THE BUSINESS OF DESIGN,
MANUFACTURE, AND DISTRIBUTION OF PACKAGING MACHINERY FOR THE
PHARMACEUTICAL INDUSTRY.
(11) ROMACO S.A. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO S.A.
b. Jurisdiction and the date of incorporation: COLOMBIA
MAY 28, 1998
c. Capitalization of the Company:
Name of Registered
Authorized Subscribed Paid Owner/Number of
Capital Capital Capital Shares Owned
--------- ------- ------- ------------
COL $ 390,000,000 387,606,000 $387,606,000 [ROBANNIC INTERNATIONAL B.V. -
94% THE FOLLOWING COMPANIES
HOLD 6% OF THE SHARES:
ROBANNIC FINANCE B.V.
ROMACO S.P.A.
ZANCHETTA & C. S.R.L.
F-8
61
ROMANIC INTERNATIONAL B.V.]
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: IMPORT, COMMERCIALIZATION,
SALE AND DISTRIBUTION OF MACHINERY, EQUIPMENT, AND SPARE PARTS
USED IN THE PROCESSING AND PACKAGING OF PRODUCTS FOR THE
PHARMACEUTICAL, COSMETICS AND FOOD INDUSTRY. INSTALLATION AND
TECHNICAL SERVICES FOR REPAIRING AND MAINTENANCE OF THE
COMMERCIALIZED EQUIPMENT AND MACHINERY. EXPORT OF MACHINERY,
EQUIPMENT AND SPARE PARTS OF PRODUCTS FOR THE PHARMACEUTICAL,
COSMETICS AND FOOD INDUSTRY AND SERVICES FOR THE EXPORTED
ELEMENTS.
(12) INGENIERIE PHARMACEUTIQUE MODULAIRE (IPM) S.A - CONSOLIDATED SUBSIDIARY -
50% OWNED
a. Legal Name: INGENIERIE PHARMACEUTIQUE MODULAIRE S.A.
b. Jurisdiction and the date of incorporation: FRANCE
JULY 27, 1999
c. Capitalization of the Company:
Number of Name of Registered
Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
FRF 1,500,000 1,500 1500 ROMACO INTERNATIONAL B.V. 747
PAR VALUE - ROMACO S.A.R.L. - 1
FRF 1,000 EACH MICHEL DAUNES - 1
XXXXXXX XXXXXX - 1
XXXX SADARGUES - 747
XXXXXXX XXXXXX - 1
EMMANUELLE SADARGUES - 1
NELLY SADARGUES - 1
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f Primary business of the Company: THE DESIGN, STUDY,
PRODUCTION, MARKETING AND SALE OF INDUSTRIAL PRODUCTION UNITS
AND ALL RELATED SERVICES.
F-9
62
(13) PIEPENBROCK ENTERPRISES INC. - CONSOLIDATED SUBSIDIARY
a. Legal Name: PIEPENBROCK ENTERPRISES INC.
b. Jurisdiction and the date of incorporation: DELAWARE
DECEMBER 15, 1989
c. Capitalization of the Company:
Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
100% HELD BY ROMACO N.V. OR
CONSOLIDATED SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation:
e. Security Interests with respect to the capital stock of the
Company:
f. Primary business of the Company:
(14) ROMACO S.A.R.L.- CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO S.A.R.L.
b. Jurisdiction and the date of incorporation: FRANCE
OCTOBER 16, 1992
c. Capitalization of the Company:
Number of Name of Registered
Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
FRF 7,500,000 7,500 SHARES 7,500 ROMACO INTERNATIONAL B.V. -
PAR VALUE 7,499
FRF 1,000 EACH ROMACO HOLDINGS UK LTD. - 1
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: PURCHASE AND SALE OF
PACKAGING ARTICLES AND MACHINERY FOR INDUSTRIAL PURPOSES AND
FOR MARKETING PHARMACEUTICAL, COSMETICS, FOOD PRODUCTS ETC.
F-10
63
(15) FRYMA S.A.R.L. - CONSOLIDATED SUBSIDIARY
a. Legal Name: FRYMA S.A.R.L.
b. Jurisdiction and the date of incorporation: FRANCE
MARCH 22, 2000
c. Capitalization of the Company:
Number of Name of Registered
Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
FRF 100,000 100 100% HELD BY ROMACO SARL
PAR VALUE
FRF 1,000 EACH
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
(16) ROMACO PHARMATECHNIK GMBH - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO PHARMATECHNICK GMBH
b. Jurisdiction and the date of incorporation: GERMANY
SEPTEMBER 14, 1989
c. Capitalization of the Company:
Name of Registered
Stated Share Owner/Number of
Capital Shares
------- ------
DM 13,000,000 ROMACO INTERNATIONAL B.V. - DM 12,050,000
ROMACO HOLDING UK LTD. - DM 500,000
ROMACO FINANCE B.V. - DM 450,000
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: MANUFACTURER OF HORN, NOACK,
AND XXXXXXX MACHINERY, LAETUS EQUIPMENT SALES AND SERVICE.
F-11
64
(17) ROMACO ENGINEERING GMBH - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO ENGINEERING GMBH
b. Jurisdiction and the date of incorporation: GERMANY
MAY 31, 1994
c. Capitalization of the Company:
Name of Registered
Stated Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
DM 100,000 ROMACO INTERNATIONAL B.V. -
100,000
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: HOLDING
(18) LAETUS AM XXXXXXXX GERATEBAU GMBH -CONSOLIDATED SUBSIDIARY
a. Legal Name: LAETUS AM XXXXXXXX GERATEBAU GESELLSCHAFT
MITBESCHRANKTER HAFTUNG GMBH
b. Jurisdiction and the date of incorporation: GERMANY
JUNE 14, 1974
c. Capitalization of the Company:
Stated Number of Name of Registered
Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
DM 3,000,000.00 ROMACO PHARMATECHNIK GMBH -
3,000,000
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: REAL ESTATE
F-12
65
(19) TEC SYSTEMS - CONSOLIDATED SUBSIDIARY
a. Legal Name: TECHSYSTEMS HARD UND SOFTWARE FOR AUTOMATION GMBH
b. Jurisdiction and the date of incorporation: GERMANY
c. Capitalization of the Company:
Stated Number of Name of Registered
Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
100% HELD BY ROMACO N.V. OR
CONSOLIDATED SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
(20) FRYMAKORUMA GMBH - CONSOLIDATED SUBSIDIARY
a. Legal Name: FRYMAKORUMA GMBH
b. Jurisdiction and the date of incorporation: GERMANY
JULY 20, 1990
c. Capitalization of the Company:
Stated Number of Name of Registered
Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
(Euro)520,000 ROMACO HOLDINGS UK LIMITED -
(Euro)26,000
ROMACO PHARMATECHNIK GMBH -
(Euro)494,000
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: SHANGHAI (REG. CERT. 06544)
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: MANUFACTURER OF FRYMAKORUMA
MACHINERY
F-13
66
(21) FRYMA GMBH - CONSOLIDATED SUBSIDIARY
a. Legal Name: FRYMA GMBH
b. Jurisdiction and the date of incorporation: GERMANY
AUGUST 27, 1987
c. Capitalization of the Company:
Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
------ ------ ------ ------------
100% HELD BY ROMACO N.V. OR
CONSOLIDATED SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
(22) ROMACO LTD. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO LIMITED
b. Jurisdiction and the date of incorporation: HONG KONG
OCTOBER 20, 1999
c. Capitalization of the Company:
Number of Name of Registered
Authorized Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
--------- ------ ------ ------------
HK $3,000,000 3 MILLION 3 MILLION ROMACO S.P.A. - 2,970,000
PAR VALUE ROMACO FINANCE B.V. - 30,000
HK $1.00 EACH
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: SALES AND SERVICE
F-14
67
(23) ROMACO MACHINERY LTD. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO MACHINERY LIMITED
b. Jurisdiction and the date of incorporation: IRELAND
JULY 22, 1998
c. Capitalization of the Company:
PAR VALUE AUTHORIZED CAPITAL ISSUED SHARES REGISTERED OWNER
--------- ------------------ ------------- ----------------
(POUND)1.00 EACH (POUND) 1,000,000 1 ROMACO INTERNATIONAL
B.V. - 1
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: SELLING SUPPLY INSTALLATION
AND SERVICE OF PROCESSING, PACKAGING AND PRINTING MACHINES TO
THE PHARMACEUTICAL AND FOOD PROCESSING INDUSTRY.
(24) ROMACO S.P.A. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO S.P.A.
b. Jurisdiction and the date of incorporation: ITALY
AUGUST 10, 1972
c. Capitalization of the Company:
Number of Name of Registered
Stated Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
(Euro)2,520,000.00 500,000 ROMACO HOLDINGS UK LTD. -
.35% OR 1,750
ROMACO INTERNATIONAL B.V. -
99.65% OR 498,250
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: MANUFACTURING OF
ELECTRO-MECHANIC EQUIPMENT FOR USE IN BEVERAGE, FOOD,
CHEMICAL, COSMETIC AND PHARMACEUTICAL INDUSTRY.
F-15
68
(25) ZANCHETTA & C. S.R.L. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ZANCHETTA & C. S.R.L.
b. Jurisdiction and the date of incorporation: ITALY
MARCH 15, 1978
c. Capitalization of the Company:
Number of Name of Registered
Stated Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
(Euro)1,523,000.00 ROMACO S.P.A. - 1,173,000
ROMACO INTERNATIONAL B.V. -
350,000
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
(26) XXXXX X.X. DE C.V. - CONSOLIDATED SUBSIDIARY
a. Legal Name: XXXXX X.X. DE C.V.
b. Jurisdiction and the date of incorporation: MEXICO
APRIL 20, 1999
c. Capitalization of the Company:
Number of Name of Registered
Capital Authorized Outstanding Owner/Number of
Stock Shares Shares Shares Owned
----- ------ ------ ------------
1,000,000 PESOS TYPE A - 1000 ZANCHETTA & C. S.R.L. -
1000 PESOS 990 TYPE A
PER SHARE ROMACO INTERNATIONAL BV -
10 TYPE A
TYPE AA- 1,876 ROMACO INTERNATIONAL BV -
1,876,000 PESOS 1000 PESOS 19 AA
PER SHARE ZANCHETTA & C. S.R.L. -
1,857 AA
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
F-16
69
f. Primary business of the Company: SALE OF EQUIPMENT FOR THE
PHARMACEUTICAL AND CHEMICAL INDUSTRIES AND RENDERING OF
TECHNICAL SERVICES.
(27) ROMACO MACHINERY, S.A. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO MACHINERY, S.A.
b. Jurisdiction and the date of incorporation: SPAIN
MAY 17, 1993
c. Capitalization of the Company:
Current Name of Registered
Share Authorized Paid Owner/Number of
Capital Capital Capital Shares Owned
------- ------- ------- ------------
(Euro)598,295.50 9,955 SHARES (Euro)598,295.50 ROMACO A.G. - 20% OR 1,991
PAR (Euro)60.10 ROMACO S.P.A. - 80% OR 7,964
EACH
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: IMPORT, COMMERCIALIZATION,
AND INSTALLATION OF MACHINERY USED TO MANUFACTURE AND PACKAGE
FOOD, MEDICAL INSTRUMENTS, COSMETICS, PHARMACY, CHEMICAL AND
SANITARY PRODUCTS, AND OTHER CONSUMER GOODS.
(28) ROMACO A.G. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO A.G.
b. Jurisdiction and the date of incorporation: SWITZERLAND
MARCH 26, 1991 -
APRIL 23, 1991
c. Capitalization of the Company:
Number of Name of Registered
Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
--------- ------ ------ ------------
CHF 1,000,000 PAR VALUE 1,000 BEARER SHARES:
CFH 1,000 CERT 1 FOR 996 SHARES
PER SHARE CERT 2 FOR 1 SHARE (NR. 997)
CERT 3 FOR 1 SHARE (NR. 998)
F-17
70
CERT 4 FOR 1 SHARE (NR. 999)
CERT 5 FOR 1 SHARE (NR. 1000
SHARE 999 AND 1000 ARE HELD
BY XX. XXXXXX XXXXXXXXX AND
XX. XXXXX XXXXXX
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: THE MANUFACTURE, TRADE AND
DISTRIBUTION OF MACHINERY AND SYSTEMS OF ALL KIND, ESPECIALLY
OF PRINTING EQUIPMENT, LASER ENGRAVING MACHINES, LABELING
SYSTEMS AND OTHER MACHINES FOR THE PACKAGING INDUSTRY AS WELL
AS ALL SERVICES IN CONNECTION THEREWITH.
(29) ROMACO UK LTD. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO UK LIMITED
b. Jurisdiction and the date of incorporation: UNITED KINGDOM
MARCH 21, 1984
c. Capitalization of the Company:
Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
------ ------ ------ ------------
ORDINARY 1,000,000 1,000,000 ROMACO HOLDINGS UK
PAR VALUE (POUND)1.00 LIMITED - 1,000,000
EACH
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: SELLING, INSTALLATION, AND
SERVICING OF PROCESSING AND PACKAGING MACHINERY AND INSPECTION
EQUIPMENT TO THE PHARMACEUTICAL AND OTHER INDUSTRIES.
(30) ROMACO INC. - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO INC.
F-18
71
b. Jurisdiction and the date of incorporation: DELAWARE
DECEMBER 3, 1990
c. Capitalization of the Company:
Number of Name of Registered
Class of Authorized Outstanding Owner/Number of
Shares Shares Shares Shares Owned
------ ------ ------ ------------
COMMON 200 WITHOUT 145 ROMACO A.G. (FORMERLY FRYMA MACHINEN
PAR VALUE AG) - 45 (CERT. 5)
ROMACO HOLDINGS UK LTD. - 100 (CERT. 4)
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: NEW JERSEY.
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
(31) XXXXXXX VERPAKUNGSTECHNIK, VERWALTUNGS UND BETEILIGUNGS GMBH - CONSOLIDATED
SUBSIDIARY
a. Legal Name: XXXXXXX VERPAKUNGSTECHNIK, VERWALTUNGS UND
BETEILIGUNGS GMBH
b. Jurisdiction and the date of incorporation: GERMANY
c. Capitalization of the Company:
Stated Number of Name of Registered
Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
100% HELD BY ROMACO N.V. OR
CONSOLIDATED SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
F-19
72
(32) MELTEC INDUSTRIELLE LESE UND KONTROLLSYSTEME GMBH - CONSOLIDATED SUBSIDIARY
a. Legal Name: MELTEC INDUSTRIELLE LESE UND KONTROLLSYSTEME GMBH
b. Jurisdiction and the date of incorporation: GERMANY
c. Capitalization of the Company:
Stated Number of Name of Registered
Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
100% HELD BY ROMACO N.V. OR
CONSOLIDATED SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
(33) ROMACO (SCHWEIZ) AG - CONSOLIDATED SUBSIDIARY
a. Legal Name: ROMACO (SCHWEIZ) AG
b. Jurisdiction and the date of incorporation: SWITZERLAND
c. Capitalization of the Company:
Number of Name of Registered
Stated Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
100% HELD BY ROMACO N.V. OR
CONSOLIDATED SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
(34) FRYMA HOLDING AG - CONSOLIDATED SUBSIDIARY
F-20
73
a. Legal Name: FRYMA HOLDING AG
b. Jurisdiction and the date of incorporation: SWITZERLAND
c. Capitalization of the Company:
Number of Name of Registered
Stated Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
100% HELD BY ROMACO N.V. OR
CONSOLIDATED SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
(42) FRYMA AG - CONSOLIDATED SUBSIDIARY
a. Legal Name: FRYMA AG
b. Jurisdiction and the date of incorporation: SWITZERLAND
c. Capitalization of the Company:
Number of Name of Registered
Stated Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
100% HELD BY ROMACO N.V. OR
CONSOLIDATED SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
(43) FRYMA LIMITED- CONSOLIDATED SUBSIDIARY
a. Legal Name: FRYMA LIMITED
F-21
74
b. Jurisdiction and the date of incorporation: UNITED KINGDOM
SEPTEMBER 18, 1984
c. Capitalization of the Company:
Name of Registered
Class of Authorized Issued/Paid Owner/Number of
Shares Capital Capital Shares Owned
------ ------- ------- ------------
ORDINARY 75,000 (POUND)75,000/ ROMACO HOLDINGS UK LTD. -
75,000 SHARES 75,000
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company: IMPORTING OF MACHINERY FOR
THE PHARMACEUTICAL, COSMETIC AND FOOD INDUSTRIES.
(44) INDEX MANUFACTURING - CONSOLIDATED SUBSIDIARY
a. Legal Name: INDEX MANUFACTURING CO., INC.
b. Jurisdiction and the date of incorporation: NEW JERSEY
OCTOBER 4, 1973
c. Capitalization of the Company:
Number of Name of Registered
Stated Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
100% HELD BY ROMACO N.V. OR
CONSOLIDATED SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation:
e. Security Interests with respect to the capital stock of the
Company: NONE.
f. Primary business of the Company:
F-22
75
PART B
------
UNCONSOLIDATED SUBSIDIARIES
---------------------------
(34) RANDOMAT INTERNATIONAL B.V. - UNCONSOLIDATED SUBSIDIARY
a. Legal Name: RANDOMAT INTERNATIONAL B.V.
b. Jurisdiction and the date of incorporation: THE NETHERLANDS
JUNE 19, 1985
c. Capitalization of the Company:
Name of Registered
Class of Authorized Issued/Paid Owner/Number of
Shares Capital Capital Shares Owned
------ ------- ------- ------------
NLG 10,000,000 NLG 5,700,000 100% HELD BY ROMACO FINANCE
B.V.
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company:
f. Primary business of the Company:
(35) ROSCHERWERKE GMBH - UNCONSOLIDATED SUBSIDIARY
a. Legal Name: ROSCHERWERKE GMBH
b. Jurisdiction and the date of incorporation: GERMANY
c. Capitalization of the Company:
Number of Name of Registered
Stated Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
DM 2,330,000.00 100% HELD BY ROMACO N.V. OR
ROMACO N.V. SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company:
F-23
76
f. Primary business of the Company:
(36) ROBANNIC IMMOBILIEN- UNCONSOLIDATED SUBSIDIARY
a. Legal Name: ROBANNIC IMMOBILIEN VERWALTUNG GMBH
b. Jurisdiction and the date of incorporation: GERMANY
SEPTEMBER 11, 1995
c. Capitalization of the Company:
Number of Name of Registered
Stated Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
DM 2,330,000.00 100% HELD BY ROMACO N.V. OR
ROMACO N.V. SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company:
f. Primary business of the Company:
(37) MODULATUS GRUNDSTUCKSVERMIETUNGSGESELLSCHAFT GMBH - UNCONSOLIDATED
SUBSIDIARY
a. Legal Name: MODULATUS GRUNDSTUCKSVERMIETUNGSGESELLSCHAFT GMBH
b. Jurisdiction and the date of incorporation: GERMANY
c. Capitalization of the Company:
Number of Name of Registered
Stated Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
DM 26,000 100% HELD BY ROMACO N.V. OR
ROMACO N.V. SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company:
f. Primary business of the Company: REAL ESTATE
F-24
77
(38) MODULATUS GRUNDSTUCKVERMIETUNGSGESELLSCHAFT GMBH & CO OBJECT WORMS KG -
UNCONSOLIDATED SUBSIDIARY
a. Legal Name: MODULATUS GRUNDSTUCKVERMIETUNGSGESELLSCHAFT GMBH &
CO OBJECT WORMS KG
b. Jurisdiction and the date of incorporation: GERMANY
c. Capitalization of the Company:
Type of Partnership Owner/
Company Partnership Interest
------- --------------------
LIMITED PARTNERSHIP 100% HELD BY ROMACO N.V. OR
ROMACO N.V. SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company:
f. Primary business of the Company:
(39) GEBA VERWALTUNGS GMBH- UNCONSOLIDATED SUBSIDIARY
a. Legal Name: GEBA VENRWALTUNGS GMBH
b. Jurisdiction and the date of incorporation: GERMANY
c. Capitalization of the Company:
Number of Name of Registered
Stated Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
100% HELD BY ROMACO N.V. OR
ROMACO N.V. SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company:
f. Primary business of the Company:
F-25
78
(40) GEBA VERWALTUNGS GMBH & CO KG - UNCONSOLIDATED SUBSIDIARY
a. Legal Name: GEBA VERWALTUNGS GMBH & CO KG
b. Jurisdiction and the date of incorporation: GERMANY
c. Capitalization of the Company:
Number of Name of Registered
Stated Share Authorized Outstanding Owner/Number of
Capital Shares Shares Shares Owned
------- ------ ------ ------------
100% HELD BY ROMACO N.V. OR
ROMACO N.V. SUBSIDIARY
d. Jurisdictions in which the Company is qualified to do business
as a foreign corporation: N/A
e. Security Interests with respect to the capital stock of the
Company:
f. Primary business of the Company:
F-26
79
AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT
-------------------------------------------
THIS AMENDMENT NO. 1 TO THE STOCK PURCHASE AGREEMENT
("Amendment No. 1") among XXXXXXX & XXXXX, INC., an Ohio corporation ("R&M
Parent"), XXXXXXX & XXXXX HOLDINGS, INC., a Delaware corporation ("Buyer"), and
XXXXX XXXXXXX-XXXXX ("Seller") (the "Purchase Agreement") is made and entered
into by R&M Parent, Buyer, and Seller as of August 28, 2001 under the following
circumstances:
A. Buyer, Seller, and R&M Parent desire to amend
certain provisions of the Purchase Agreement as set forth
herein; and
B. Capitalized terms used herein as defined terms and
not defined in this Amendment shall have the meaning ascribed
to them in Section 1 of the Purchase Agreement;
NOW, THEREFORE, BUYER, SELLER, AND R&M PARENT HEREBY AMEND THE
PURCHASE AGREEMENT AS FOLLOWS:
The parties to the Purchase Agreement hereby delete from the
Purchase Agreement all references to the R&M Parent Note
Agreement. The parties will, in lieu of executing such
agreement, include in R&M Parent Note A and R&M Parent Note B
all of the provisions that would have been included in the
separate R&M Parent Note Agreement.
The Parties agree that the BFS Stock Purchase Agreement does not
have to be executed or delivered at Closing. Seller hereby
agrees that Seller has taken, or will take, all actions which
the Seller or Seller's spouse would have been required to take
if the BFS Stock Purchase Agreement had been executed.
IN WITNESS WHEREOF, R&M Parent, Buyer, and Seller have each
caused this Amendment No. 1 to be duly executed and delivered as of the day and
year first above written.
"Seller"
Xxxxx Xxxxxxx-Xxxxx
/S/ XXXXX XXXXXXX-XXXXX
-----------------------
"Buyer" "R&M Parent"
XXXXXXX & XXXXX HOLDINGS, INC. XXXXXXX & XXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------ -------------------------------
Title: President Title: President and CEO
--------------------- -------------------------
F-27
