1
EXHIBIT 10.18
AGFA-GEVAERT DPS DIVISION
TRANSFER AGREEMENT
Entered into on May 16, 2000
BETWEEN
XEIKON N.V., with registered office at Xxxxxxxxx 00, X-0000 Xxxxxxx, Registry of
Commerce of Antwerp No 265.170, ("Xeikon" or "Purchaser"), acting both on its
own behalf and on behalf of the Transferee Entities (as defined in this
Agreement)
AND
AGFA-GEVAERT N.V., with registered office at Xxxxxxxxxxx 00, X-0000 Xxxxxxx,
Registry of Commerce of Antwerp No 163.653 ("Agfa" or "Seller"), acting both on
its own behalf and on behalf of LUITHAGEN N.V., , with registered office at
Xxxxxxxxxxx 00 X-0000 Xxxxxxx, Registry of Commerce of Antwerp No 238.144
("Luithagen"), as well as of the Sales Organization Companies (as defined in
this Agreement)
2
TABLE OF CONTENTS
1 INTERPRETATION.................................................................................4
1.1. DEFINITIONS..................................................................................4
1.2. CERTAIN RULES OF INTERPRETATION..............................................................7
2 TRANSFER OF ACTIVITIES.........................................................................8
2.1. TRANSFER.....................................................................................8
2.2. STRUCTURING OF TRANSFER......................................................................8
2.3. DATE OF CLOSING..............................................................................9
3 SUBJECT MATTER OF TRANSFER.....................................................................9
3.1. SUBJECT MATTER OF THE DPS DIVISION CONTRIBUTION.............................................10
3.2. SUBJECT MATTER OF THE LUITHAGEN CONTRIBUTION................................................11
3.3. SUBJECT MATTER OF THE SO SALE...............................................................11
4 PRICE.........................................................................................11
4.1. DETERMINATION OF PRICE......................................................................11
4.2. SPECIFIC ARRANGEMENTS.......................................................................13
4.3. ISSUANCE OF XEIKON "A" SHARES...............................................................15
4.4. CONTRIBUTION IN CASH BY AGFA TO XEIKON......................................................15
4.5. ALLOCATION OF THE PRICE.....................................................................15
5 CONTINUED OPERATION OF DPS DIVISION AS GOING CONCERN..........................................16
6 CONDITIONS PRECEDENT TO CLOSING...............................................................17
7 CLOSING.......................................................................................18
8 FACILITATION OF TRANSITION....................................................................19
9 REPRESENTATIONS AND WARRANTIES................................................................22
9.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER...............................................22
9.2 REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES.............................................22
10 INDEMNIFICATION...............................................................................24
-2-
3
10.1 PRINCIPLE...............................................................................24
10.2 PROCEDURE...............................................................................24
10.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES..............................................25
10.4 LIMITATIONS.............................................................................25
11 SELLER'S ENVIRONMENTAL COVENANT...............................................................26
12 NON-COMPETITION COVENANT......................................................................26
13 STAND STILL COVENANT..........................................................................28
14. COVENANTS OF PURCHASER........................................................................29
15 FURTHER AGREEMENTS............................................................................29
15.1 TERMINATION OF AGREEMENTS...............................................................29
15.2 COOPERATION.............................................................................30
15.3 VAT REGIME OF BUILDINGS.................................................................30
16. PRESS RELEASE AND CONFIDENTIALITY.............................................................30
17. OTHER PROVISIONS..............................................................................30
17.1. ENTIRE AGREEMENT........................................................................30
17.2. NO ASSIGNMENT OR TRANSFER...............................................................30
17.3. VARIATION...............................................................................31
17.4. WAIVERS NOT PRESUMED....................................................................31
17.5. PARTIAL UNENFORCEABILITY................................................................31
17.6. COSTS AND EXPENDITURES..................................................................31
17.7. NOTICES.................................................................................31
18 GOVERNING LAW AND SUBMISSION TO ARBITRATION...................................................32
-3-
4
WHEREAS:
Agfa (as well as the Agfa Group) is, inter alia, engaged in activities in
connection with the research and development, manufacturing, marketing, sale and
servicing of toner-based digital printing equipment and related toners and
developers (the "Activities");
Xeikon (or any Transferee Entity designated by it prior to Closing) is willing
to continue the Activities by acquiring all assets, equipment inventory,
materials, intellectual property, customer and supplier lists, books, records,
documents, tools, Goodwill, stock, employees and contracts held by Agfa and
Agfa's subsidiaries and used in the context of the Activities (jointly referred
to as the "DPS Assets") and Agfa is willing to transfer the Activities to Xeikon
(or, for certain parts thereof, to any Transferee Entity designated by Xeikon
prior to Closing);
The Parties in this Agreement are setting forth the terms pursuant to which the
transfer to Xeikon (or any Transferee Entity) of the Activities (the "Transfer")
will be effected;
Xeikon prior to the execution hereof performed a due diligence with respect to
the Activities on the basis of information provided by Agfa; a list of the
documents in the dataroom is attached to the Disclosure Letter (Exhibit 9.1.);
Xeikon when entering into this Agreement is relying on the Representations and
Warranties of Agfa;
The conclusion of this Agreement has been previously approved by the board of
directors of both Xeikon and Agfa; in giving such an approval, the Xeikon board
has complied with the procedure provided for in Article 60bis of the Belgian
Company Law.
NOW THEREFORE IT IS AGREED AS FOLLOWS:
1 INTERPRETATION
1.1. Definitions
When used in this Agreement, and except where the context requires otherwise,
ACTIVITIES means activities in connection with the research and development,
manufacturing, marketing, sale and servicing of toner-based digital printing
equipment and related toners and developers;
AFFILIATE means in relation to any party any company which is for the time being
directly or indirectly controlled by that party.
-4-
5
For this purpose: (a) a company is directly controlled by another company,
beneficially owning shares carrying the majority of voting rights of the first
mentioned company; (b) a particular company is indirectly controlled by another
company if a series of companies can be specified, beginning with that company,
so related that each company of the series is directly controlled by one or more
of the companies earlier in the series;
AGFA GROUP means Agfa as well as any of its Affiliates;
BUSINESS DAY means a day on which banks are open for business in Belgium
(excluding Saturdays, Sundays and public holidays);
CLAIM means any claim, commencement of any suit, action or proceeding, or the
imposition of any penalty or assessment by a third party, against any Party to
this Agreement (including any relevant Transferee Entity or Sales Organization
Company);
CLOSING means the completion of the transaction contemplated by this Agreement
and the execution and delivery of all documents in connection therewith;
CLOSING DATE means the date or dates on which the Transfer contemplated by
Section 2 is completed in accordance with Section 7;
DAMAGES means (a) any costs, losses, damages or expenses (including interest
that may have been paid or accrued thereon), also including fees of legal and
other advisers, and/or (b) a decrease of the value of any of the transferred DPS
Assets or, as the case may be, Xeikon's assets, which by reason of the fact that
the actual facts or circumstances are not as they have been represented or
warranted by the Party making such warranty or representation, or by reason of a
breach by a Party of any of the undertakings, covenants or obligations contained
in or resulting from this Agreement, have been incurred, sustained or paid;
DISCLOSURE LETTER means the letter of the same date as this Agreement from Agfa
to Xeikon, annexed to this Agreement as Exhibit 9.1.;
DPS ASSETS means all assets, equipment inventory, materials, intellectual
property, customer and supplier lists, books, records, documents, tools,
Goodwill, stock, employees and contracts held by Agfa and Agfa's subsidiaries
and used in the context of the Activities;
DPS DIVISION means the division of Agfa that conducts the Activities;
DPS DIVISION CONTRIBUTION means the contribution of the DPS Division as per
Section 2.2 (a) hereof;
DPS EMPLOYEES means the employees as set out in Exhibit 3.1.(c)/1 who at the
time of the Execution of this Agreement are principally assigned to the
Activities;
-5-
6
ENCUMBRANCE means any claim, charge, mortgage, security, servitude, lien,
option, right of pre-emption or first refusal, power of sale or hypothecation,
right of use, or lease or rent of any kind whatsoever;
EXECUTION means the signing by the Purchaser and the Seller of this Agreement;
EXECUTION DATE means the date on which the Purchaser and the Seller sign this
Agreement;
GOODWILL shall mean the customer base and reputation developed by the Agfa Group
in connection with the Activities, all information relating to existing, prior
and prospective customers as well as the notoriety of the trademarks and
tradenames assigned to Xeikon or any relevant Transferee Entity by virtue of
this Agreement;
INDEMNIFIED PARTY means the Party that is entitled to indemnification under this
Agreement;
INDEMNIFYING PARTY means the Party that has to indemnify the Indemnified Party
under this Agreement;
INDEMNIFICATION NOTICE means the notice provided by the Indemnified Party to the
Indemnifying Party in accordance with Article 10 hereof, in the event the
Indemnified Party believes being entitled to indemnification under this
Agreement;
INTELLECTUAL PROPERTY means all intellectual property rights used by the Agfa
Group in connection with the Activities, i.e. all trademarks and rights of use
in trademarks as mentioned in Section I of Exhibit 3.1.(a), all patents and
patent applications as mentioned in Section II of Exhibit 3.1.(a), the know how
as mentioned in Section III of Exhibit 3.1.(a), all copyrights as described in
Section IV of Exhibit 3.1.(a), all design rights as set out in Section V of
Exhibit 3.1.(a), all domain names and web server content as mentioned in Section
VI of Exhibit 3.1.(a), and all rights under licensing or other agreements as
mentioned in Section VII of Exhibit 3.1.(a);
INVENTORY means the raw materials, spare parts, consumables, work in process and
finished products related to the Activities as well as digital printing presses;
LUITHAGEN CONTRIBUTION means the transfer by Luithagen N.V. of any DPS-related
real estate (as referred to in Section 3.2) to Xeikon by way of contribution in
kind against shares;
MATERIAL ADVERSE EFFECT means a substantial negative impact on the business,
operations, assets and liabilities, and results (profit or loss) of the
Activities (considered as a whole);
PARTIES means Xeikon and Agfa;
PURCHASER means Xeikon;
-6-
7
REPRESENTATIONS AND WARRANTIES means the warranties and representations set out
in Schedule 9 and Section 9.2 of this Agreement and REPRESENTATION AND/OR
WARRANTY means any one of them;
RIGHT TO RETURN ARRANGEMENT means the agreement entered into between Agfa and
certain labor unions on 18 February 2000 of which the details are set out in
Exhibit 3.1.(c)/2;
SALES ORGANIZATION COMPANIES means the entities set out in Exhibit 2.1./1, other
than Agfa, that currently conduct part of the Activities;
SELLERS shall be deemed to jointly refer to Agfa, Luithagen and each of the
Sales Organization Companies;
SO SALE means the transfer, by the Sales Organization Companies, of all DPS
Assets held or used by each of the Sales Organization Companies (except for
Goodwill, fixed assets and digital printing presses) which will be sold to
Xeikon or a Transferee Entity, either at Closing or as soon as possible
thereafter, at a date mutually agreed between the Parties but in no event later
than September 30, 2000;
TAXES means any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature, and all interest, penalties or
similar liabilities with respect thereto;
TRANSFER means the transfer to Xeikon (or any Transferee Entity) of the
Activities;
TRANSFEREE ENTITIES means the entities set out in Exhibit 2.1./2 to which part
of the DPS Assets can be transferred pursuant to the SO Sale.
The index, captions and headings are for convenience only and shall not define,
limit or affect the scope, intent, construction or interpretation of this
Agreement or any provision hereof.
1.2. Certain rules of interpretation
The Schedules, Exhibits and other annexes to this Agreement form an integral
part of this Agreement and references to this Agreement shall include any of its
Schedules, Exhibits and other annexes and references to Sections, Schedules and
Exhibits shall refer to Sections of and Schedules and Exhibits to this
Agreement.
The words "herein", "hereof", "hereunder", "hereby", "hereto", "herewith" and
words of similar import shall refer to this Agreement as a whole and not to any
particular article, section, subsection or other subdivision.
The words "include", "includes", "including" and all forms and derivations
thereof shall mean including but not limited to.
Words of the singular number shall include correlative words of the plural
number and vice versa.
-7-
8
Unless otherwise provided herein, all references to a fixed time of a day shall
mean Brussels, Belgium time as in effect on such day and references to a "day"
shall mean a Business Day.
2 TRANSFER OF ACTIVITIES
2.1. Transfer
Agfa agrees to transfer to Xeikon, subject to the terms and conditions of this
Agreement, the Activities (the "Transfer").
Xeikon in this connection acknowledges and agrees that part of the Activities
currently is carried on by entities other than Agfa; Exhibit 2.1./1 sets forth a
list of those entities (the "Sales Organization Companies"). It is contemplated
that, pursuant to Section 2.2, the Sales Organization Companies will transfer
certain DPS Assets directly to Xeikon.
Xeikon shall have the right to opt for certain DPS Assets to be transferred
either at Closing or as soon as possible thereafter, at a date mutually agreed
between the Parties but in no event later than September 30, 2000, to one or
more entities set out in Exhibit 2.1./2 and designated by Xeikon on or prior to
the Closing (the "Transferee Entities"). If such option is exercised, it is
agreed that the relevant Transferee Entity shall acquire, with retroactive
effect, all rights and obligations of Xeikon under this Agreement, provided,
however, that Xeikon (a) shall remain jointly liable for any obligations by such
Transferee Entity on account of the transfer of DPS Assets and (b) shall
continue to exercise, on behalf and for the account of the Transferee Entity,
all rights under this Agreement, including rights to indemnification.
By signing this Agreement, Agfa undertakes ("maakt zich xxxxx") that each of the
Sales Organization Companies will in fact effect the above-mentioned transfer of
certain DPS Assets either to Xeikon or to any Transferee Entity at the terms and
conditions of this Agreement. Agfa acknowledges that the punctual and proper
completion of such transfer is of the essence to Xeikon. Agfa accepts that
Xeikon will be entitled to demand interim measures and/or penalty payments in
order to enforce such completion by way of injunctive relief.
2.2. Structuring of Transfer
It is agreed that the Activities will be transferred to Xeikon as follows:
(a) The transfer of the DPS Assets held or used by Agfa in connection with the
Activities (hereafter referred to as the "DPS Division Contribution") shall
take the form of a contribution by Agfa to Xeikon of a division ("inbreng
van een bedrijfstak") in accordance with Articles 174/54 et seq. of the
Belgian Company Law. In this connection, Agfa undertakes to acquire, prior
to Closing, from each Sales Organisation Company, all Goodwill, fixed assets
and digital printing presses; held by that Sales Organisation Company and to
subsequently transfer those portions of the
-8-
9
Activities, as part of the DPS Division Contribution, to Xeikon. A copy of
the contribution proposition ("inbrengvoorstel") referred to in Article
174/56 of the Belgian Company Law is attached as Exhibit 2.2.(a). Both Agfa
and Xeikon undertake that this document shall be filed, in accordance with
Article 174/56 of the Belgian Company Law, with the Antwerp Court of
Commerce within three Business Days from Execution.
(b) In addition, Agfa shall cause Luithagen. to transfer any DPS-related real
estate (as referred to in Section 3.2) to Xeikon by way of contribution in
kind against shares (hereafter referred to as the "Luithagen Contribution").
Moreover, Agfa (or the relevant Transferring Entity) hereby grants to Xeikon
a purchase option on land, as specifically marked in Exhibit 3.1.(d)/1,
exercisable at a price of 1,100 Belgian francs per square meter during a
period of two years starting from the Execution hereof. If this purchase
option expires without being exercised, Xeikon will have a right of first
refusal on the same land or part thereof in case of a good faith offer from
a third party, that Agfa is willing to accept.
(c) In addition, Agfa shall cause the Sales Organization Companies to engage in
the SO Sale. The SO Sale will be implemented on a country by country basis
and pursuant to separate agreements that shall, to any extent practicable,
be consistent with the terms of this Agreement. However, the Parties
acknowledge that the various national laws that may be applicable as well as
business necessities, may require changes to the existing arrangements so as
to avoid adverse consequences for either of the Parties. Accordingly, it is
agreed that in the context of the SO Sale adaptations to the existing
arrangements may have to be discussed, provided that these adaptations will
be consistent with the balance of the rights and obligations between the
Parties in this Agreement.
2.3. Date of Closing
Xeikon and Agfa shall, subject to the satisfaction or waiver of all
Conditions Precedent set out in Section 6, effectuate the Transfer and take
all other actions set out in Section 7 as soon as reasonably practicable and
legally permissible after the Execution. Agfa acknowledges that an
expeditious Closing is of the essence to Xeikon.
3 SUBJECT MATTER OF TRANSFER
Agfa shall transfer or cause to be transferred to Xeikon (or, in the case of the
subject matter of Section 3.3 at Xeikon's option, to a Transferee Entity) all
DPS Assets, which include, without limitation, the items set out below.
-9-
10
3.1. Subject Matter of the DPS Division Contribution
(a) all Intellectual Property, defined in Exhibit 3.1.(a), in accordance with
the principles set out therein;
(b) all supplier contracts relating to the Activities, provided that Agfa
shall ensure that Xeikon is not required to assume or continue supplier
contracts that entail commitments at conditions (including conditions
relative to duration) that significantly deviate from standard market
conditions;
(c) the DPS Employees that are employees of Agfa; Agfa shall cause the
aforementioned employees to transfer to Xeikon, provided that Xeikon
acknowledges that all such employees (as well as the employees of
Agfa-Gevaert Belgium N.V.) have, should their employment with Xeikon be
terminated other than on urgent grounds ("dringende reden"), a right
(which may be waived by the relevant employee prior to or after Closing)
to apply for the resumption of their employment with Agfa in accordance
with the the "Right to Return Arrangement";
(d) certain real estate located in Heultje (Westerlo) and used or held by the
Agfa Group (with the exception of Luithagen N.V.) in connection with the
Activities, and as identified on Exhibit 3.1.(d)/1, including a
specifically marked strip of land linking the land and buildings
transferred to Xeikon to the Fabrieksstraat, subject to a right of way in
the form of an easement ("erfdienstbaarheid") to the Fabrieksstraat to
the benefit of Agfa;
(e) all furniture, tools, equipment and fixed assets of whatever nature (with
the exception of items that are to be considered real property by reason
of incorporation - "onroerend door incorporatie") exclusively used by
Agfa in connection with the Activities or not exclusively used by Agfa in
connection with the Activities, but necessary for the continuation of the
Activities as currently conducted and not enumerated in Exhibit 3.1(e);
provided that Agfa in accordance with the Agreement referred to in
Section 8.3 will be given the possibility to continue to use the items
referred to in Exhibit 3.1(e) (last page)
(f) all rights, permits, authorisations, premiums and subsidies held by the
Agfa Group with respect to the Activities, to the fullest extent
permitted by law; provided that Xeikon undertakes, with respect to the
Heultje plant, to maintain employment at current levels (i.e. 18
employees) for a period expiring on February 1, 2003; (g) all customer
contracts, provided that Agfa shall procure the right for Xeikon to
renegotiate any existing contracts that entail supply commitments at
conditions (including conditions relative to duration) that significantly
deviate from standard market conditions, and further provided that Xeikon
(and any Transferee Entity) shall endeavour to uphold such customer
service levels as not to hinder the collection of receivables by Agfa (or
any Sales Organisation Company);
-10-
11
(h) all Goodwill of Agfa in relation to the Activities, to such effect that
Xeikon shall be, after Closing, the sole party having the right, without
territorial limitation, to represent itself as carrying on the Activities
in succession to the Agfa Group;
(i) all the Inventory used by Agfa in connection with the Activities provided
that this will only include raw materials that are reasonably deemed by
Xeikon to be fit for production of marketable products;
(j) for the avoidance of doubt, the DPS Division as contributed by Agfa will
also comprise the fixed assets, Goodwill and Inventory acquired by Agfa
from the Sales Organization Companies prior to Closing.
3.2. Subject Matter of the Luithagen Contribution
Luithagen shall contribute to Xeikon certain land located in Heultje and used by
the Agfa Group in connection with the Activities (as indicated on Exhibit
3.2./1). Part of the building known as "Gebouw nr. 653" and the land on which
that building has been erected will be leased by Luithagen to Xeikon for a
period of three years subject to earlier termination by Xeikon against a
one-time lease fee (not including costs) of Euro 0,03 and subject to a lease
agreement with customary provisions, a draft (prepared by Agfa) is attached as
Exhibit 3.2./2; the Parties acknowledge that the contribution by Luithagen of
the aforementioned land will require a delineation ("afpaling") of certain
tracts of land ("percelen").
3.3. Subject Matter of the SO Sale
(a) Agfa shall cause each of the Sales Organization Companies to transfer to
Xeikon or to a Transferee Entity identified by Xeikon all DPS Assets that
are held or used by such Sales Organization Companies in connection with
the Activities (except for Goodwill, fixed assets and digital printing
engines), provided that no real estate used or held by the Sales
Organization Companies in connection with the Activities, will be
transferred to Xeikon.
(b) Agfa also shall cause each of the Sales Organisation Companies to comply
with the various obligations referred to in Section 3.1, as applicable,
mutatis mutandis, to the SO sale.
4 PRICE
4.1. Determination of Price
The Transfer is agreed against the following consideration (together the
"Price"):
4.1.1. Consideration for the DPS Division Contribution
-11-
12
The consideration for the DPS Division Contribution will consist of:
(i) 1,322,974 newly issued Xeikon "A" shares ; and
(ii) an additional number of newly issued Xeikon "A" shares to be paid
for the aggregate of the value of the Inventory that is acquired
by Xeikon as part of the DPS Division Contribution, whereby every
48,790 Xeikon "A" shares shall be considered to represent a value
of Euro 1 million; the value of which shall be determined in
accordance with the following rules :
- finished products (other than printing presses), work-in-process,
consumables, spare parts and raw materials: at production cost or,
in the case of items acquired from third parties, at acquisition
cost (to be increased with reasonably incurred transport and
import costs in case of items physically located at the Sales
Organisation Companies);
- 16 digital printing presses (unused and new) and 35 digital
printing presses (unused and obsolete or used) as set out in
Exhibit 4.1.1 for an aggregate value of EUR 2,450,000, provided
that, in the case of a transaction relating to one or more of
these presses that has occurred prior to Closing with the consent
of Xeikon, the contribution of the relevant printing press will be
replaced by the contribution of the transaction consideration net
of direct transaction costs, either in cash or in the form of a
receivable on the relevant customer.
On the basis of the items included on the Opening Balance Sheet, it is
currently estimated that this will give rise to the issuance of 323,902
Xeikon "A" shares; this number will be adjusted on the basis of the
reciprocal ("tegensprekelijke") pre-closing audit to be conducted in
accordance with the following procedure.
The pre-closing audit will relate to a draft statement prepared by Agfa
of its Inventory as per 9 June 2000; that draft statement will be
communicated to Xeikon's auditors at the latest on 15 June 2000. The
audit carried out by Xeikon's auditors will not affect Xeikon's rights
under the Representations and Warranties as set out in Schedule 9 to this
Agreement. Immediately upon Closing, a further reciprocal Closing audit
shall be carried out to ascertain any changes in the Inventory during the
period from 9 June through the date of the Closing whereby movements
within the Inventory will be subject to the substitution principle: any
increases in raw materials, work-in-process or finished goods (other than
digital printing presses) will be valued in accordance with the
principles set out in Section 4.1.1, but any such increase will be set
off against receivables relating to the sale of such products during the
period from 9 June through the date of the Closing. Adjustments resulting
from any changes during the aforementioned period will be settled in cash
between the Parties as soon as practicable after Closing.
-12-
13
4.1.2. Consideration for the Luithagen Contribution
The consideration for the Luithagen Contribution will consist of 19,001
newly issued Xeikon "A" shares.
4.1.3. The consideration for the SO Sale
The consideration for the SO Sale shall consist of an amount in cash
equal to the agreed upon value (as per section 4.1.1 (ii)) of the
Inventory sold by any Sales Organisation Company
4.1.4. Limitation on number of new Xeikon "A" shares to be issued
It is understood and agreed that the aggregate number of Xeikon "A"
shares held (whether directly or beneficially) by the Agfa Group
immediately after Closing (whether or not as a result of the issuance
contemplated by this Section 4) shall not exceed 25.5% of the number of
Xeikon "A" shares representing the fully diluted capital of Xeikon upon
completion of the capital increase that is decided in connection with the
Transfer. For the purpose of computing the preceding number, "fully
diluted capital" shall be deemed to refer to Xeikon "A" shares (a) that
have been issued, (b) that may be issued pursuant to the exercise of
warrants that have not yet been created but the creation of which has
been approved by the board of directors of Xeikon at the time of Closing
(and Xeikon represents that the board of directors prior to the Execution
hereof has approved the creation of warrants entitling the holders
thereof to subscribe for an aggregate of approximately 265,000 "A"
shares).
Consequently, if the shares of which the issuance is envisaged in
accordance with Section 4.1.1 or 4.1.2, would result in the crossing of
the limit of this 25.5% shareholding, then Parties shall immediately
confer in order to adapt their arrangements, with a view to causing one
or more of the Sales Organisation Companies to transfer their digital
printing presses to Xeikon for cash
4.2. Specific arrangements
(a) Invoices between Agfa and Xeikon
All invoices between Agfa and Xeikon, insofar as they primarily relate to
the Activities, will be netted as soon as practicable after Closing and
the difference will be paid or credited by the relevant party to an
account designated for such purpose by the other party.
(b) Agfa Group repurchase obligations
-13-
14
Xeikon (or any Transferee Entity) will assume the repurchase obligations
that have been assumed by the Agfa Group in connection with capital
leases of Chromapress equipment (as listed in Exhibit 4.2.(b)), it being
understood that Xeikon's (and any Transferee Entity's) aggregate
liability (defined as the difference between (a) any amounts payable by
Xeikon (or the Transferee Entity) in the event of default by the lessee
and (b) the actual revenue received by Xeikon (or the Transferee Entity)
upon the resale of the relevant equipment) will not exceed Euro 2
million.
Agfa will fully and upon first demand indemnify Xeikon for any amounts in
excess of the aforementioned threshold, provided that this undertaking
shall only apply with respect to liabilities that result from agreements
that within a period of one year from the Closing have been reasonably
identified by Xeikon as likely to result in repurchase obligations.
(c) Specific claims
It is expressly agreed that the Price has been determined on the basis
that (with the sole exception of the Agfa Group repurchase obligations
referred to above and the pension obligations referred to in Section
4.2(d)) no obligations or liabilities in connection with the Activities
and relating to the period prior to Closing will be assumed by Xeikon or
a Transferee Entity. Accordingly, Agfa will fully reimburse Xeikon (or
any Transferee Entity) for all Damages incurred by Xeikon (or any
Transferee Entity) pursuant to any Claim not provided for on the Opening
Balance Sheet and that is made in connection with:
(i) any obligations or liabilities that are incumbent on, or are
assumed by, Xeikon subsequent to the Closing Date, to the extent
such obligations or liabilities relate to any consideration that
has been received or invoiced by any company of the Agfa Group
prior to the Closing Date (including but not limited to rebates
payable under the Agfa Chromapress 2000 Toner Rebate Program); and
(ii) any liabilities, claims, damages and expenses that are incurred by
Xeikon or any Transferee Entity in connection with the Activities
as transferred and relating to any periods prior to Closing,
except to the extent that such liabilities, losses, claims, costs,
damages or expenses are attributable to any breach of a
representation, warranty or covenant undertaken by Xeikon under
this Agreement. For the avoidance of doubt, such liabilities shall
not include liabilities relating to the period subsequent to
Closing (a) in connection with the Xeikon Transferred DPS
Employees, and (b) in connection with any contract that is
transferred, including service and warranty obligations
(notwithstanding the assumption of repurchase obligations
mentioned above).
Agfa shall effect such reimbursements upon first demand to an account
designated for that purpose by Xeikon (or any Transferee Entity).
-14-
15
Without prejudice to any liabilities that might arise under Sections 9
and 10 hereof, Xeikon shall indemnify and hold harmless Agfa against any
liabilities, losses, claims, costs, damages or expenses that are incurred
by Agfa or any Sales Organization Company in connection with the
Activities as acquired from Agfa and that relate to any periods following
Closing, except to the extent that such liabilities, losses, claims,
costs, damages or expenses are attributable to any breach of a
representation, warranty or covenant undertaken by the Seller under this
Agreement, or to the extent that they relate to any consideration that
has been received or invoiced by any company of the Agfa Group prior to
the Closing Date.
(d) Salaries, emoluments and pension benefits
All salaries and other emoluments relating to the DPS Employees shall be
borne by the Agfa Group up to the Closing Date and all necessary
apportionments shall be made. In addition, on the Closing Date or as soon
as practicable thereafter Agfa and/or the Agfa pension fund shall ensure
(a) that all pension liabilities towards the DPS Employees shall be fully
covered on a projected basis on that date and that sufficient assets
shall be transferred (with effect as of the Closing Date) to a pension
plan designated by Xeikon (with respect to DPS Employees whose pension
rights are insured by third parties, similar actions will be taken), and
(b) that the pro-rated part through the Closing Date of the vacation pay
("vakantiegeld") and the year-end bonus ("eindejaarspremie") will be
transferred in cash to Xeikon or to the relevant Transferee Entity.
Pension liabilities for the DPS Employees shall be calculated according
to the methodology set out in IAS Statement No. 19 (revised) (provided
that the benefits valued shall be retirement benefits, death in service
benefits and post retirement benefits) and on the basis of the
assumptions set out in Exhibit 4.2 (d).
4.3. Issuance of Xeikon "A" shares
The Closing shall coincide with a Xeikon special shareholders' meeting at
which it is proposed to approve the issuance of the Xeikon "A" shares in
connection with the DPS Division Contribution and the Luithagen
Contribution.
4.4. Contribution in cash by Agfa to Xeikon
Insofar as the arrangements set forth in this Section 4 result in the
payment of any cash to Agfa, Parties shall discuss the possibility of
contributing such amount in cash by Agfa to Xeikon in return for the
issuance of Xeikon "A" Shares.
4.5. Allocation of the Price
For the avoidance of doubt, Parties hereby confirm that the allocation of
the Price, as provided for in this Section 4, will not have any effect in
connection
-15-
16
with any indemnification that may be due by Agfa (or any Sales
Organisation Company) to Xeikon (or any Transferee Entity).
5 CONTINUED OPERATION OF DPS DIVISION AS GOING CONCERN
5.1 Agfa during the period from the Execution hereof through the Closing
Date shall (and shall cause all Sales Organization Companies to) continue
to operate the Activities in the normal course of business, as a going
concern and with a view to fully preserving the value thereof.
5.2 Agfa undertakes (both for its own account and for the account of the
Sales Organization Companies), until Closing, not to proceed, without the
prior written approval of Xeikon, such approval not to be unreasonably
withheld, with the execution of any material contracts or with the
assumption of any material commitments other than in the normal course of
business and in accordance with past practice. In this context Agfa
undertakes not to enter into leasing arrangements related to the
Activities with customers that cannot reasonably be considered
creditworthy. Agfa furthermore undertakes to notify Xeikon forthwith of
any events or circumstances that reasonably may be expected to have a
Material Adverse Effect. Agfa also undertakes that, prior to Closing,
none of the digital printing presses referred to in Section 4.1.1 will be
sold, leased or Encumbered without the prior written approval of Xeikon.
Finally, Agfa undertakes to apply for an "Article 442bis W.I.B."
certificate with a validity period that includes the Closing Date.
5.3 Agfa from the Execution of this Agreement and through Closing shall
cooperate in good faith (and shall cause its Affiliates, employees and
agents to cooperate in good faith) with Xeikon (as well as with Xeikon's
Affiliates, employees and agents) with a view to permitting Xeikon to
prepare itself in optimal conditions to continue the Activities as of the
Closing Date.
5.4 From the Execution hereof and through Closing, Agfa and Xeikon will
consult with each other with respect to and will coordinate their
marketing and commercial efforts in connection with the Activities
allowing Xeikon to present itself as Agfa's successor in this respect
(including but not limited to the presence on DRUPA 2000 in accordance
with the principles set out in letters exchanged between Messrs. A. Buts
and W. Van Leuven dated April 28, 2000 and May 2, 2000.
5.5 Immediately upon the Execution hereof, a designated Transferee Entity
will have the right to freely contact DPS Employees currently employed by
designated Sales Organisation Companies, and to offer those DPS Employees
employment at conditions equivalent to their current employment
conditions, provided that such an employment offer is made subject to the
condition precedent of Closing.
-16-
17
6 CONDITIONS PRECEDENT TO CLOSING
6.1 The completion of the transactions set out in this Agreement is subject
to the satisfaction, prior to or on the Closing Date, of each of the
following conditions:
- approval of the issuance, by a special shareholders' meeting of
Xeikon, of the shares referred to in Section 4.1.1;
- the delivery by OVAM, of a "bodemattest" and any other approvals
necessary to enable the transfer to Xeikon of any real estate referred
to in Section 3;
- the delivery of a registered letter by Agfa to the competent authority
in relation to the investment subsidy granted to it (dossier G 95
00585), notifying the mentioned authority of the integration of the
DPS Division into Xeikon;
- no preliminary or permanent injunction or other order shall have been
issued by any court of competent jurisdiction, or by any governmental
or regulatory body, nor shall any statute, rule regulation or
executive order have been promulgated or enacted by any governmental
authority which prevents the consummation of the transactions
contemplated in this Agreement.
6.2 The Purchaser (or any Transferee Entity) shall not be obliged (a) to
complete the transfer of any DPS Asset unless the transfer of all DPS
Assets is completed in accordance with this Agreement or (b) to complete
the DPS Division Contribution unless the Luithagen Contribution is
completed simultaneously, and vice versa.
6.3 Both Parties shall make all reasonable efforts to achieve satisfaction
of the Conditions Precedent as soon as possible. Notwithstanding article
1179 of the Civil Code, the satisfaction of the Conditions Precedent
shall have no retroactive effect.
6.4 Failing satisfaction of any of the Conditions Precedent, the Parties
shall cooperate in good faith with a view to the expeditious satisfaction
thereof, where necessary by altering the terms of this Agreement in a
manner that respects the balance between the Parties' rights and
obligations as set out in this Agreement.
6.5 The Parties confirm that they have jointly determined that the conclusion
of this Agreement, the consummation of any of the transactions
contemplated hereby or the Closing is not subject to prior approval by or
notification to any competition authority.
6.6 It is agreed that (a) Xeikon, in its discretion, shall have no obligation
to proceed with Closing if Xeikon discovers any fact or circumstance
which was unknown
-17-
18
to (and reasonably could not have been known to) Xeikon at the time of
the conclusion of this Agreement, where such fact or circumstance
reasonably may be expected to have a Material Adverse Effect and (b)
Agfa, in its discretion, shall have no obligation to proceed with Closing
if Agfa discovers any fact or circumstance which was unknown to (and
reasonably could not have been known to) Agfa at the time of the
conclusion of this Agreement, where such fact or circumstance reasonably
may be expected to have a Material Adverse Effect on the business and
affairs of Xeikon; for the avoidance of doubt, variations in the Xeikon
share trading price that may not reasonably be considered to result from
a Material Adverse Effect on the business and affairs of Xeikon shall not
trigger the aforementioned right.
6.7 It also is agreed that Agfa shall, with respect to the period up to
Closing, promptly after becoming aware thereof notify Xeikon of any facts
or circumstances that are outside of control of the Agfa Group and that
constitute a breach of one or more representations or warranties or
result in any representations no longer being true and complete, where
such facts or circumstances reasonably may be expected to have a Material
Adverse Effect. In the event such notice is given, and where the
conditions for giving such notice are satisfied, the Parties shall
immediately confer in good faith with a view to agreeing on an adjustment
of the consideration referred to in Section 4.1. If the Parties, in spite
of having made all good faith efforts, fail to agree on such an
adjustment, Xeikon shall have the option (a) not to proceed with Closing
or (b) proceed with Closing, provided that in the latter case the facts
and circumstances so notified by Agfa shall be considered to be
disclosed.
6.8 The same procedure as set out in the preceding paragraph applies in case
of an update made by Agfa between the Execution and Closing Date of those
representations and warranties of the Seller with respect to Intellectual
Property (Section 4 of Schedule 9) which were made subject to the best of
Sellers' knowledge, provided that Agfa shall be entitled to make such an
update only if and to the extent that it consists of facts or
circumstances dating from after the Execution and being outside of the
control of the Agfa Group.
7 CLOSING
7.1 The completion of the transaction contemplated by this Agreement and the
execution and delivery of all documents in connection therewith (the
"Closing") shall take place in the offices of Xeikon in Mortsel at 10:00
AM on the Closing Date.
7.2 At Closing, the following actions shall be taken:
- Agfa shall deliver to Xeikon a certificate signed by two Agfa
directors and certifying that the representations and warranties
set out in Schedule 9 and Section 9.2 are true and correct as of
the Closing Date, and that Agfa has
-18-
19
performed and complied with all other obligations under this
Agreement to the extent required as of the Closing Date.
- Xeikon shall deliver to Agfa a certificate signed by two Xeikon
directors and certifying that the representations and warranties
set out in Section 9.2 are true and correct as of the Closing
Date, and that Xeikon has performed and complied with all other
obligations under this Agreement to the extent required as of the
Closing Date.
- A special Xeikon shareholder meeting will be held before a notary
designated by Xeikon, during which it will be proposed to the
Xeikon shareholders to approve the issuance of the new "A" shares
referred to in Section 4 to Agfa and Luithagen, respectively.
- Conditional upon approval by the Xeikon special shareholder
meeting, the newly issued shares will be recorded in the Xeikon
share registry and countersigned by Agfa.
- to any extent practicable, the execution of the contracts relating
to the completion of the SO Sale;
- such other actions as may be necessary or appropriate to complete
the arrangements contemplated hereby.
7.3. Agfa covenants and undertakes to assume all costs relating to the
transport, packaging, insurance and delivery to a location identified by
Xeikon (or, if requested by Xeikon, destruction) of the printing presses
referred to in Section 4.1.1.
8 FACILITATION OF TRANSITION
8.1 The Seller covenants and undertakes to make all reasonable efforts upon
due consultation with the Purchaser (both internally and in contacts with
customers, suppliers or other relevant parties) (a) to ensure that the
Activities continue in the normal course of business and without
interruption, both prior to and for a reasonable period of time after
Closing, and that Xeikon or the relevant Transferee Entity will obtain
the full benefit of the Activities, and (b) to ensure the smooth
transition, to Xeikon or to the relevant Transferee Entity, of all DPS
Assets (and in particular Intellectual Property, customers and employees)
that are the subject of the Transfer and shall execute such documents and
take such other steps (or procure other parties to do so) as are
necessary or appropriate for vesting in Xeikon or any relevant Transferee
Entity all its rights and interests in the DPS Assets (including any
security interests) and for transferring to Xeikon or any relevant
Transferee Entity all administrative or other licenses, permits,
certificates, consents, approvals and authorizations held by the Sellers
in connection with the Activities.
-19-
20
8.2 A number of minimum arrangements in this respect will be detailed in
accordance with the principles set out in Section 8 after the Execution
of this Agreement. Such arrangements will be laid down in Exhibit 8.2 to
this Agreement prior to Closing.
8.3 With respect to assets held or used by the Agfa Group in connection with
the Activities, but not transferred (e.g. real estate), the Sellers shall
grant Xeikon and any relevant Transferee Entity the right to use such
assets prior to the relocation of the transferred DPS Assets (e.g.
employees).
8.4 The Seller shall cause to be delivered, as soon as reasonably
practicable, to Xeikon or to any relevant Transferee Entity:
- such documents as are required to complete the Transfer of the
DPS Assets and vest title to these DPS Assets in Xeikon or any
relevant Transferee Entity;
- all books of account, payroll records, income records, stock and
other records, information relating to the Activities (including
but not limited to documentation and information relating to
customers and suppliers, and including in any event a list of all
the customers of the Agfa Group in connection with the Activities
during the last two years, a list of purchasers to which
outstanding quotations have been given and a list of unfulfilled
orders as at the Closing Date), relevant computer programs
(including, where available, the source codes thereof) and other
books, documents and information which relate to the Activities,
so as to enable Xeikon or any relevant Transferee Entity to fully
continue, as of Closing, the Activities as presently conducted
without any interruption;
- all designs and drawings, plans, instructional and promotional
material, sales publications, advertising materials, terms and
conditions of sale and other technical material and sales matter
which relate to the Activities, together with any plates, blocks,
negatives and similar material relating to them;
- a list of sales distributors, identifying sales by units and the
territory served during the last twelve months, and copies of all
the current agreements with the distributors;
- the originals or, where not practicable, true and complete copies
of all taxation and social contribution certificates, returns,
records, correspondence and other documents relating to the
Activities;
- all other deeds, agreements, records, books, or documents which
are necessary or appropriate to continue, as of Closing, the
Activities as presently conducted without any interruption.
-20-
21
8.5 Xeikon as well as any Transferee Entity in connection with the Activities
shall have the right to continue using Agfa trademarks and tradenames
that are not being transferred for a period of six months as from
Closing.
8.6 The Sellers shall discontinue as soon as practicable the use of any
trademarks and/or tradenames relating to the Activities except with a
view to facilitating transition in accordance with this Section 8.
8.7 Agfa undertakes (both on its own behalf and on behalf of each of the
Sales Organization Companies) that it shall proceed with or cooperate
with respect to any formalities that may be required to transfer any DPS
Assets that are not automatically transferred.
8.8 Both Parties shall make all reasonable efforts to ensure that, with
respect to any agreement or commitment with third parties to which the
Sellers are a party or by which they or any of their assets may be bound,
the relevant third party agrees to the assignment by the relevant company
of the Agfa Group to Xeikon (or any relevant Transferee Entity) of such
agreement or commitment.
8.9 With respect to agreements and commitments with third parties to which
the Sellers are a party or by which they or any of their assets may be
bound and which Xeikon or any relevant Transferee Entity in accordance
with this Agreement or with applicable law is willing or required to
continue, in the event one or more third parties are unwilling or unable
to continue such an agreement or commitment vis-a-vis Xeikon or any
Transferee Entity, Agfa to any extent feasible shall conclude
arrangements with Xeikon or any relevant Transferee Entity aimed at
passing on to Xeikon or any relevant Transferee Entity the economic
benefit and burden of the relevant agreements and commitments.
8.10 The Seller undertakes to promptly refer to Xeikon or any relevant
Transferee Entity all enquiries relating to the Activities and assign to
Xeikon or any relevant Transferee Entity all orders relating to the
Activities which they may receive after Closing.
8.11 Until and up to the completion of the transfer by each Sales Organization
Company (including any transition arrangements made with each Sales
Organization Company in that respect), Agfa shall cause each Sales
Organisation Company to act as a bonus pater familias and to continue to
operate its Activities in the normal course of business and without
interruption, as a going concern and with a view to fully preserving the
value thereof and transfering the full benefit to Xeikon or any relevant
Transferee Entity.
As consideration for the services by a Sales Organization Company in
accordance with the preceding paragraph, a commission of 3% of the net
turnover of such Sales Organization Company for the period between
Closing and the date of the completion of the transfer by each Sales
Organization Company shall be due by Xeikon.
-21-
22
Moreover, Agfa shall prepare in a careful and professional manner profit
& loss accounts for each Sales Organization Company, giving a true and
fair view of the results (profits or losses) of the Activities as
conducted by each Sales Organization Company during the period indicated
thereon, in a format and methodology identical to the format and
methodology of the profit & loss accounts made available during due
diligence. Any profits shall be payable to, and any losses due by,
Xeikon.
Any payments that may be due pursuant to the foregoing paragraphs shall
be made at the time of completion of the relevant SO Sale to an account
designated by Agfa or Xeikon as the case may be.
9 REPRESENTATIONS AND WARRANTIES
9.1 Representations and Warranties of the Seller
The Seller represents and warrants to the Purchaser that the Representations and
Warranties as attached here as Schedule 9.1. are true and correct on the date of
the Execution of this Agreement and on the Closing Date, save as set out in the
Dislosure Letter. Xeikon enters into this Agreement in reliance on these
Representations and Warranties.
Agfa makes the Representations and Warranties with respect to the Activities as
a whole, including the Representations and Warranties with respect to the
portion of the Activities that is conducted by the Sales Organizations.
These Representations and Warranties shall apply notwithstanding Xeikon's due
diligence and without prejudice to common law, shall be deemed to be made on and
as of the date of the Execution hereof and again on and as of the Closing Date,
and shall survive the Closing for the purpose of enabling the Purchaser to make
indemnification claims.
It is agreed that, where the application of the provisions of Section 4.2
("Specific Arrangements") would lead to a different result than the application
of the provisions of the Representations and Warranties (as qualified by the
Disclosure Schedule), only the provisions of Section 4.2 shall be applied.
9.2 Representations and Warranties of both Parties
The Seller respectively the Purchaser represent and warrant that :
- The Seller respectively the Purchaser is in every respect duly
incorporated and registered and validly existing for an indefinite
duration under the laws of their respective jurisdictions.
-22-
23
- The Seller respectively the Purchaser has full corporate power, capacity
and authority to enter into this Agreement and to perform and consummate
the transactions contemplated therein.
- The execution and delivery of this Agreement has been duly authorized by
the board of directors of the Seller respectively the Purchaser and no
further corporate action is required. All persons who execute this
Agreement and all attachments, schedules, and other documents (including
but not limited to the Disclosure Letter) delivered on behalf of the
Sellers respectively the Purchaser have been duly authorized by all
necessary corporate action of the Seller respectively the Purchaser.
- This Agreement is valid and binding upon the Seller respectively the
Purchaser and enforceable in accordance with its terms by the Purchaser
respectively the Seller.
- Parties have full corporate power, capacity and authority to own their
assets and to carry on their business as currently conducted, and said
business has been conducted at all times in conformity with their
respective articles of association and all applicable laws and
regulations.
- Parties are duly qualified to do business in each jurisdiction in which
the properties owned or leased by them or the operation of their business
requires such qualification.
- No action or petition is pending or, to the best of their knowledge,
threatened, and no order is passed to declare any of the Parties
bankrupt, nor has any of the Parties filed or commenced any proceeding
for judicial or extra-judicial arrangement or settlement with their
respective creditors nor is there any moratorium, liquidation or
receivership procedure pending or, to the best of their knowledge,
threatened against them. The Parties have not stopped payment nor (except
as contemplated by this Agreement) ceased to carry on business, nor are
they insolvent, nor are they confronted with any of the conditions for
bankruptcy, liquidation or administration or a similar institution under
their respective jurisdictions.
- Save as disclosed in the Disclosure Letter, no consent, approval or
notification or any other action or forbearance by any person under any
(oral or written) agreement, instrument or other document to which the
Sellers respectively the Purchaser are a party or by which the Sellers
respectively the Purchaser are bound, or under any law, regulation, court
decision or arbitral award (including European or national competition
law) is required prior or after both the conclusion and the performance
of this Agreement or the consummation of the transactions contemplated
hereby.
- The conclusion and performance of this Agreement and the consummation of
the transactions contemplated hereby do not and will not : (i) contravene
or
-23-
24
conflict with the articles of association of or any other agreement
concluded by the Sellers respectively the Purchaser, (ii) contravene or
conflict with or constitute a violation of any provision of any law,
regulation, judgment, injunction, order or decree which are binding upon
or applicable to the Sellers, the Activities or any DPS Assets, or the
Purchaser, (iii) constitute a default under or give rise to any right of
modification, termination, or acceleration of any right or obligation of
the Sellers or the Purchaser under any (oral or written) agreement or
other instrument binding upon the Sellers or the Purchaser, (iv)
constitute an infringement on any license, permit or other similar
authorization held by the Sellers or the Purchaser, or (v) result in the
creation or imposition of any Encumbrance on any DPS Asset of the
Sellers.
10 INDEMNIFICATION
10.1 Principle
Agfa or, as the case may be, Xeikon (the "Indemnifying Party") undertakes to
indemnify and hold harmless Xeikon (or, at Xeikon's election, the Transferee
Entity or Entities), or, as the case may be, Agfa (the "Indemnified Party"),
with respect to any Damages arising out of or in connection with any
representations, warranties, covenants or obligations made or assumed by Agfa or
Xeikon, as the case may be, under this Agreement for an amount equal to the
amount of such Damages.
10.2 Procedure
The Indemnified Party in the event it believes being entitled to indemnification
under this agreement shall provide the Indemnifying Party with a notice (the
"Indemnification Notice") that sets out in reasonable detail the circumstances
or events that in its opinion give rise to indemnification by the Indemnifying
Party, as well as (on the basis of the then existing situation and the then
available information) a good faith estimate of the Damages.
If the Indemnification Notice has not been contested by the Indemnifying Party
within sixty (60) Business Days as of the Indemnification Notice, the
Indemnifying Party shall be deemed to have irrevocably accepted the
indemnification claim and shall be obliged to pay the amount claimed by the
Indemnified Party within ten (10) Business Days to an account designated for
such purpose by the Indemnified Party.
In case the indemnification claim is contested in accordance with the provisions
of this Article, the Indemnifying and Indemnified Party shall in good xxxxx
xxxxxx with a view to reaching an agreement on the indemnificatin claim, during
a period of forty (40) Business Days. If no agreement has been reached after
such forty (40) Business Days, the indemnification claim shall be settled by the
arbitration procedure referred to in Section 18.
In case an indemnification claim is brought by a third party, including by
reason of actions of a tax administration or social administrations, against the
Indemnified Party,
-24-
25
the Indemnified Party shall (without prejudice to its right to take all measures
that it deems necessary or appropriate to protect its interests) give notice
thereof to the Indemnifying Party. The Indemnified Party shall defend all
indemnification claims brought by a third party, but shall consult with the
Indemnifying Party on a reasonable basis with respect to issues of such defense
(subject to the Indemnifying Party not unduly delaying such defense), and shall
not settle any such indemnification claim or acquiesce in any interim or
definitive judgment without the Indemnifying Party's approval (which shall not
unreasonably be withheld or delayed).
Any payments under this Section 10 shall be made without set-off or
counterclaim, and shall be free and clear of and without deduction or
withholding for or on account of, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature, and all interest,
penalties or similar liabilities with respect thereto ("Taxes"). If any Taxes
are required by law to be deducted or withheld in connection with any such
payment, the Indemnifying Party will increase the amount paid so that the full
amount of such payment is received by the Indemnified Party as if no such
deduction or withholding had been made.
10.3 Survival of Representations and Warranties
The Representations and Warranties of the Parties shall survive the Closing for
the purpose of this Section 10. No Indemnification Notices may be given under
this Section 10 after a period of two years from the Closing Date, provided that
(a) Indemnification Notices relating to a breach of any Representations and
Warranties that relate to the Seller's title to any real property may be made
until the expiration of a period ending two months after receipt of any
indemnification claims relating to the relevant real property; (b)
Indemnification Notices relating to taxation and social security matters may be
made until the expiration of a period ending two months after the date on which
the applicable statutes of limitation have tolled and (c) Indemnification
Notices relating to a breach of the Representations and Warranties laid down in
Section 4.3 of Schedule 9 may be made during a three-year period from the
Closing Date insofar as they relate to the research and development projects
enumerated in Exhibit 10.3.
10.4 Limitations
The Parties shall have no liability under this Section 10 for any Damages of
less than Euro 30,000, provided that if Damages exceed Euro 30,000, the relevant
Party shall be liable for the entire amount of the Damages and not merely for
the amount exceeding Euro 30,000. In addition, it is agreed that the Parties
shall have no liability under this Section 10 except if the cumulative amounts
of all Damages reaches Euro 300,000.
In any event, the Parties' liability under this Section 10 for any Damages
resulting from a breach of any of the Representations and Warranties as set out
in Schedule 9.1 and Section 9.2 of this Agreement shall be capped at one third
(1/3) of the aggregate
-25-
26
of (a) the total number of shares issued under this Agreement multiplied by Euro
20,5 and (b) any cash paid under this Agreement to the Agfa Group.
In order to compute the aforementioned thresholds, it is agreed that Damages
arising out of identical issues shall be taken together to determine whether
such threshold is exceeded and that, with respect to Damages relating to
taxation and social security matters, each additional assessment shall be taken
as a single claim although such assessment may relate to different issues, and
several additional assessments shall also be taken as a single claim to the
extent they relate to identical matters.
For the avoidance of doubt, Parties agree that these limitations shall not apply
in the case of a breach of the convenants or undertakings assumed under Section
12 of this Agreement.
11 SELLER'S ENVIRONMENTAL COVENANT
11.1. Agfa has discussed the condition of the soil, subsoil and groundwater of
the DPS-related real estate in detail with the competent authority
(Openbare Afvalstoffenmaatschappij voor het Vlaamse Gewest (OVAM)).
As a result of these discussions, Agfa has applied for a specific
certificate (bodemattest) from this authority. Moreover, Agfa has
undertaken a unilateral, irrevocable and unconditional commitment to
conduct a clean-up action and, in general, to respect all obligations
deriving from applicable laws and regulations (bodemsaneringsdecreet) and
has obtained a valid and binding bank guarantee to cover its obligations
in this respect, in accordance with a cost estimate prepared by an
authorised expert (Environmental Resources Management N.V.).
Xeikon acknowledges the right of Agfa to conduct such a clean-up action,
provided that such a clean-up action is organised in a manner that will
not disrupt or unduly hinder the continuity of Xeikon's business
activities.
Agfa is fully responsible for the timely and succesful initiation and
completion of the clean-up action and, in general, the observance of all
obligations deriving from the above-mentioned applicable laws and
regulations and referenced on the "bodemattest" and shall hold Xeikon
fully harmless for any Claims addressed against Xeikon in this respect.
12 NON-COMPETITION COVENANT
12.1 Agfa covenants and undertakes (and Agfa shall cause this covenant and
undertaking to be complied with by all Sales Organization Companies as
well as by its Affiliates), that it will not, whether directly or
indirectly, whether remunerated or not, whether itself or through agents,
Affiliates, group
-26-
27
companies, intermediaries, joint ventures, alliances, or as a director,
manager, shareholder of any entities or as a subcontractor or in any
other way:
(i) for a period of three years commencing on the first Business Day
after Closing, in any of the countries where the Activities are
carried on, carry on or be interested in a business (other than a
passive investment not exceeding 10% of the capital of any entity)
that directly or indirectly competes with the Activities as
continued by Xeikon and/or by any of the Transferee Entities;
(ii) use or divulge any Confidential Information (as such term is
defined in the Non-Disclosure Agreement signed between the Parties
on December 16, 1999) that relates to the Activities or the DPS
Division; this undertaking of confidentiality moreover shall be
applicable to every item of information that a reasonable person
would or should consider to be confidential, even if such
confidential character does not result from the aforementioned
Non-Disclosure Agreement;
(iii) starting on the Execution Date hereof and for a period ending
three years after Closing, solicit or entice away (or endeavor to
solicit or to entice away) from or, except with the prior approval
of Purchaser or in accordance with the Right to Return
Arrangement, employ any individuals who at the time of
solicitation, enticement or employment attempt thereof are a
director, employee or consultant of Xeikon or any of its
Affiliates or of any Transferee Entity (except if fired or
terminated by Xeikon) or; specifically in relation to the Right to
Return Arrangement, Agfa undertakes that it shall not encourage
or, to the extent permissible under law, permit, any individual
that has made use of the Right to Return Arrangement to seek or
accept employment with a company that competes with Xeikon,
whether at the present time or at the time at which such
employment is sought or accepted;
(iv) for a period of three years commencing on the first Business Day
after Closing, in relation to any business activity which Sellers
are precluded from carrying on pursuant to this Section 12,
solicit, entice away or endeavor to entice away from Xeikon or any
relevant Transferee Entity any person, firm, company or other
organization which currently is or was at any time during a period
of six months preceding the Closing Date a customer or supplier of
the Sellers in connection with the Activities.
12.2 In case the Seller breaches any of the covenants or undertakings assumed
by it under this Section 12, then it shall forfeit to the benefit of
Xeikon at first demand, with respect to each instance of breach, a
lump-sum indemnity of Euro 60,000, to be increased by Euro 2,000 for each
day, or part thereof, that such breach continues after the third day
after receipt of the notification of such breach, without prejudice to
Purchaser's right to prove the existence of higher
-27-
28
damages or to seek specific performance or injunctive relief in respect
of such breach.
12.3 In the event Xeikon believes being entitled to indemnification under this
Section 12 of the Agreement, it shall provide Agfa with a notice that
sets out in reasonable detail the circumstances or events that in its
opinion give rise to indemnification under this Section 12.
Upon reception of the notice, the Parties shall confer in good faith with
a view to reaching an agreement on such claim. If no agreement has been
reached after forty (40) Business Days, the claim shall be settled by the
arbitration procedure referred to in Section 18.
12.4 Seller acknowledges that any breach of any of the covenants or
undertakings assumed by it on behalf of the Agfa Group under this Section
12 may result in serious and irreparable damage to Xeikon and/or the
Transferee Entities for which it is appropriate to seek, on an urgent
basis, injunctive relief as well as specific performance.
12.5 The restrictions contained in this Section 12 are considered reasonable
by the Parties; but, in the event that any such restriction shall be
found to be void but would be valid if part of it were deleted or reduced
in scope, that restriction shall apply with such deletion or reduction as
may be necessary to make it valid and enforceable.
13 STAND STILL COVENANT
13.1 Agfa (acting both on its own behalf and on behalf of each of its
Affiliates) hereby undertakes not to increase, whether directly or
indirectly, whether itself or through agents, Affiliates, group
companies, intermediaries, joint ventures, alliances, or as a director,
manager, shareholder of any entities or in any other way, during a period
expiring one year after Closing, the ownership or control of Xeikon
shares (or of any securities convertible in Xeikon shares) in excess of
an amount equal to the sum of (a) the amount of Xeikon shares held,
directly or indirectly, by companies of the Agfa Group as of the
Execution Date of this Agreement (and Agfa represents that the Agfa Group
holds an aggregate of 5,882,300 Xeikon "A" shares), and (b) the number of
Xeikon shares that will be issued to the Agfa Group in accordance with
this Agreement.
13.2 Any infringement of this undertaking shall give rise to Agfa forfeiting
at first demand by Xeikon, to the benefit of Xeikon, liquidated damages
in an amount equal to the average per share trading price in the month
preceding the relevant infringement, per share that has been acquired in
violation of this commitment.
13.3 Furthermore, Agfa undertakes to hold Xeikon harmless against any Claims
by third party shareholders from Xeikon, in consideration of Agfa's
violation of this commitment.
-28-
29
13.4. Agfa also shall cause Luithagen to retain for a period of three years
after Closing any shares received by Luithagen in connection with the
Luithagen contribution.
14. COVENANTS OF PURCHASER
14.1. Xeikon covenants that all DPS Employees shall transfer to Xeikon (or any
Transferee Entity) at employment conditions that in the aggregate are
equivalent to their current employment conditions.
14.2. Xeikon covenants that the Xeikon Transferred DPS Employees whose
principal place of employment is located outside Belgium in a country
where Xeikon has at present no affiliate will not experience any
disadvantage in their employment conditions due to the fact that Xeikon
has at present no affiliate in such country.
15 FURTHER AGREEMENTS
15.1 Termination of Agreements
Subject to the occurrence of Closing, the Parties hereby consent to the
termination, as of the Closing Date, without liability for either party, of all
agreements previously concluded between Xeikon (or any Affiliate of Xeikon) and
Agfa (or any Affiliate of Agfa) and that relate to the activities of the DPS
Division, such as (i) the Purchase & Supply Agreement Toner and Developer dated
15 June 1992, the Amendment Purchase & Supply Agreement Toner and Developer
dated September 1994, the Purchase & Supply Agreement Toner and Developer dated
January 1996; (ii) the Engine Agreement dated March 1994, the Engine Agreement
dated February 1996; (iii) the "Beginselakkoord" dated April 1997 and the March
0000 Xxxxx Xxxxxxxxx; (iv) the "Xxxxx Toner" Agreement dated 1 February 1999;
and (v) the T&D Framework Agreement dated 1999.
Subject to the occurrence of Closing, the Parties (both on their own behalf and
on behalf of any of their Affiliates) hereby mutually, immediately and
irrevocably release and renounce all claims (including but not limited to
warranty claims, but excluding claims for payment of invoices) under or in
connection with the aforementioned agreements.
With respect to the matters previously governed by the March 1998 Eagle
Agreement, Parties agree that Agfa will be entitled to receive from Xeikon, with
respect to Xeikon sales in the years 2002, 2003 and 2004, to a per-unit royalty
of Euro 1,500 with respect to all Eagle Units sold in those calendar years in
which Xeikon sells more than 500 Eagle Units. Agfa hereby undertakes a
commitment for a seven-year guaranteed supply, to Xeikon, of Eagle laser modules
or, in case Agfa decides to discontinue its manufacturing of such modules, a
commitment to transfer to Xeikon a non-exclusive, royalty-free license (with the
right to sublicense manufacturing) to all of Agfa's Intellectual Property and
know how relating to such modules as well as all process
-29-
30
documentation, and shall also, on a best efforts basis, assist Xeikon in
identifying third parties that are able to continue the manufacturing of such
modules so as to allow Xeikon to continue the sale of such modules.
15.2 Cooperation
The Parties acknowledge that certain exchange and notification of information or
other actions may be required from time to time with respect to this Agreement
even after the Closing Date. The Parties and their respective representatives
shall use their reasonable efforts to cooperate with one another in the
expeditious completion of all such notifications and actions required.
15.3 VAT Regime of Buildings
To the extent it would appear that one or more of the buildings to be
transferred would be considered as "new" for VAT purposes, the Parties agree to
make such transfer under application of the VAT regime.
16. PRESS RELEASE AND CONFIDENTIALITY
Both Parties agree that the arrangements set forth in this Agreement shall be
the subject of jointly approved press releases along the terms set forth in
Exhibit 16.1. which shall be made public by each of the parties upon the
execution hereof.
Both parties acknowledge that their shares are traded on one or more regulated
markets and undertake (both on their own behalf and on behalf of each of their
Affiliates) not to disclose any information with respect to the terms of this
Agreement, except as required by applicable law or a court or administrative
decision and subject to the publication of the aforementioned press releases.
17. OTHER PROVISIONS
17.1. Entire Agreement
This Agreement together with all of its annexes contains the entire Agreement of
the Parties relating to the subject matter hereof and supersedes all overall
statements and prior writings with respect hereto.
17.2. No assignment or transfer
This Agreement shall be binding upon and inure to the benefit of the Parties and
their respective legal successors. No party may, directly or indirectly, assign
or transfer this Agreement or any right, obligation or interest therein in whole
or in part without the prior written consent of the other parties, except as
provided herein.
-30-
31
17.3. Variation
No variation or amendment of this Agreement shall be effective unless in writing
and signed by or on behalf of each of the Parties to this Agreement.
17.4. Waivers not presumed
No failure or delay on the part of the Parties in exercising in whole or in part
any right under this Agreement, shall operate as a waiver of, or impair, any
such right, the further exercise thereof, or the exercise of any other right. No
waiver shall be effective unless given in writing in accordance with the notice
provisions of this Agreement.
17.5. Partial unenforceability
Any non-essential provision of this Agreement which is prohibited or
unenforceable in any respect in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability, without affecting, impairing or
invalidating the remaining provisions of this Agreement or the enforceability
thereof. The parties shall use their best efforts to replace the invalid
provision by a provision that achieves the original intent of the parties to the
fullest extent possible, while respecting to any possible extent the balance of
the Parties' rights and obligations.
17.6. Costs and expenditures
The Seller and the Purchaser shall be responsible for all costs and expenditures
they incur in connection with the negotiation, conclusion and implementation of
this Agreement. Neither Xeikon nor the DPS Division shall bear any fees or
expenses of external counsel or advisors of the Seller.
17.7. Notices
Any notice or other communication requiring to be given or served under or in
connection with this Agreement shall be in writing and shall be sufficiently
given or served if delivered or sent :
In the case of the Sellers to Agfa-Gevaert N.V. at :
Xxxxxxxxxxx 00, 0000 Xxxxxxx
Fax: + 00.0.000.0000
Attention: Xxxxxxx Xxxxxxxx
In the case of the Purchaser to Xeikon N.V. at :
Xxxxxxxxx 00, 0000 Xxxxxxx
Fax: x00.0.000.0000
Attention: Alfons Buts
-31-
32
or to such other address as the addressee may from time to time have notified
for the purpose of this Section 17.
Any such notice or other communication shall be delivered by hand or sent by
courier or registered mail. If sent by hand or by courier or registered mail
such notice or communication shall conclusively be deemed to have been given or
served at the time of receipt by the addressee. A copy of all notices shall be
sent, in the same way and at the same time as the original notice is sent, to
the person specified above.
18 GOVERNING LAW AND SUBMISSION TO ARBITRATION
This Agreement and the documents to be entered into pursuant to it, save as
expressly referred to therein, shall be governed by and construed in accordance
with Belgian law.
Any disputes that may arise between the Parties in connection with this
Agreement shall be settled by way of Cepina arbitration. The arbitral tribunal
shall be composed of three arbiters. The place of arbitration shall be Brussels
and the proceedings shall be conducted in the English language.
This Agreement has been duly executed by the Parties on May 16, 2000 in Mortsel,
in two original counterparts, each party by executing this Agreement
acknowledging having received one original. Agfa hereby authorizes Ms. Annick
Eeckloo and/or Xx. Xxxxx Xxxxxxxxxxx, and Xeikon authorizes Ms. Dominique Van
Audenrode and/or Mr. Frederic Hinnekens to initial any Exhibits on their
respective behalf.
FOR AND ON BEHALF OF XEIKON N.V. FOR AND ON BEHALF OF AGFA GEVAERT N.V.
------------------------ ------------------------
Alfons Buts Xxxxx Xxxxxx
Managing Director Managing Director
------------------------ ------------------------
Jan Van Daele Xx. Xxxxx Xxxxxx
Director Managing Director
-32-
33
LISTS OF EXHIBITS
1) Exhibit 2.1./1 : list of the Agfa DPS Sales Organization Companies
2) Exhibit 2.1./2 : list of Transferee Entities
3) Exhibit 2.2.(a) : copy of the contribution proposition
4) Exhibit 3.1.(a) : Intellectual Property Rights
5) Exhibit 3.1.(c)/1 : list of DPS Employees
6) Exhibit 3.1.(c)/2 : copy of the Right to Return Arrangement
7) Exhibit 3.1.(d)/1 : drawing of real estate used in Heultje in connection
with the DPS Activities transferred to Xeikon (including
purchase option)
8) Exhibit 3.1.(d)/2 : drawing of the right of way (erfdienstbaarheid) for Agfa
9) Exhibit 3.1.(e): list of shared assets
10) Exhibit 3.2./1: list of contribution of land by Luithagen
11) Exhibit 3.2./2: Agfa draft of lease arrangement for building G 653 and xxxx houses
12) Exhibit 4.1.1: list of 51 digital printing presses forming part of the Inventory of
the Agfa Group as per 30 April 2000
13) Exhibit 4.2.(b) : overview leasing contracts DPS
14) Exhibit 4.2.(d) : list of parameters to calculate the pension liabilities for the
transferred DPS Employees
15) Exhibit 8.2. : list of transition arrangements, annexed after execution of the
Transfer Agreement
16) Exhibit 9.1. : Disclosure Letter (including an index of the documents of the
dataroom)
17) Exhibit 9.2. : pro forma opening balance sheet per April 30, 2000
18) Exhibit 10.3. : list of R & D projects
19) Exhibit 16.1.: draft press releases
-33-
