AGREEMENT
FOR
SALE AND PURCHASE OF SHARES
OF
JAKOB HATTELAND ELECTRONIC AS
between
Jakob Hatteland Holding AS
as Seller,
Jakob Hatteland
and
Arrow Electronics, Inc.
as Purchaser
TABLE OF CONTENTS
Page
1. DEFINITIONS AND INTERPRETATIONS 2
2. SALE AND PURCHASE OF SHARES 4
3. PAYMENT 5
4. CLOSING 6
5. CONDITIONS 6
6. THE COMPANY'S OPERATIONS 8
7. WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS 10
8. DIVIDENDS FOR 1999 12
9. COVENANT AGAINST COMPETITION 12
10. SUPPORT FOR SELLER'S OBLIGATIONS 13
11. TERMINATION 13
12. ASSIGNMENT, ETC. 14
13. CONFIDENTIALITY 14
14. MISCELLANEOUS PROVISIONS 14
15. EXPENSES 14
16. COOPERATION 15
17. NOTICES 15
18. GOVERNING LAW - DISPUTES 15
Appendix 1: Company certificates and Articles of Association
Appendix 2: Warranties
Appendix 2A: Seller's Warranties
Appendix 2B: Purchaser's Warranties
Exhibit A Subsidiaries of the Company
Exhibit B Shares in the Company and the Subsidiaries
Exhibit C List of subsidiaries of the Seller as of the Closing Date
Exhibit D Lease Agreement
Exhibit E EDP Delivery and Services Agreement
Exhibit F Warehouse Agreement
AGREEMENT
FOR
SALE AND PURCHASE OF SHARES
This Agreement is made and entered into on this 10th day of April 2000
between Jakob Hatteland Holding AS, having its registered office at Xxxxxx,
0000 Xxxxx Xxxx, Xxxxxx, organization number 974 498 359 (as Seller)
Jakob Hatteland
and
Arrow Electronics, Inc., having its principal executive office at 00
Xxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, X.X.X.
(as Purchaser)
WHEREAS
1) The mentioned Seller owns all, i.e., 100%, of the issued and
outstanding shares of inter xxxx Xxxxx Hatteland Electronic AS, a company
duly organized and existing under the laws of Norway; and
2) The mentioned Seller is desirous to sell its shares in Jakob
Hatteland Electronic AS and the mentioned Purchaser is desirous to purchase
the shares at a price and on the terms and conditions hereinafter contained;
NOW, IT IS HEREBY AGREED AS FOLLOWS:
DEFINITIONS AND INTERPRETATIONS
1.1 In this agreement the following words and expressions shall mean:
(a) "Agreement" shall mean the present contract document and the
following Appendices and Exhibits:
Appendix 1: Company certificates and Articles of Association
Appendix 2: Warranties
Exhibit A: Subsidiaries of the Company
Exhibit B: Shares in the Company and the Subsidiaries
Exhibit C: List of subsidiaries of the Seller as of the
Closing Date
Exhibit D: Lease Agreement
Exhibit E: EDP Delivery and Services Agreement
Exhibit F: Warehouse Agreement
(b) "Closing" shall mean the closing contemplated by article 4 of
this Agreement.
(c) "Closing Date" shall mean the date on which the Closing occurs in
accordance with article 4.1, being the date when the Consideration is
transferred to the Seller and the Shares are transferred from Seller to
Purchaser.
(d) "Company" shall mean Jakob Hatteland Electronic AS, a company
organized and existing under the laws of Norway, having its registered office
at Xxxxxx, 0000 Xxxxx Xxxx, Xxxxxx with organization number 929 837 754
(e) "Consideration" shall mean the total purchase consideration for
the Shares as set out in article 3.
(f) "Effective Date" shall mean the date of signature of this
Agreement by the parties.
(g) "Group" shall mean the Company and the Subsidiaries.
(h) "Jakob Hatteland Group" shall mean Jakob Hatteland Holding AS, a
company organized and existing under the laws of Norway, and its subsidiaries
listed on Exhibit C.
(i) "Nordic Territory" shall mean Norway, Sweden, Finland, Denmark,
Lithuania, Latvia and Estonia.
(j) "Purchaser" shall mean Arrow Electronics, Inc., a company
organized and existing under the laws of the State of New York, United States
of America.
(k) "Shares" shall mean all shares in the Company, as more fully
described on Exhibit B.
(l) "Subsidiaries" shall mean either individually or collectively the
following entities:
(i) Jakob Hatteland Electronics AB, a company organized and
existing under the laws of Sweden, having its registered office at Xxx 000,
000 00 Xxxxxx, 00 Xxxxxxxxxx Xx, Xxxxxx, Reg. No. 556352 8222.
(ii) Jakob Hatteland Electronic AS, a company organized and
existing under the laws of Denmark, having its registered office at
Xxxxxxxxxxxxx 00, 0000 Xxxxxxxxx, Xxxxxxx, Reg. No. 51685.
(iii) Jakob Hatteland Electronic Oy, a company organized and
existing under the laws of Finland, having its registered office at
Xxxxxxxxxx 00, XXX-00000 Xxxxxxxx, Xxxxxxx, Reg. No. 563 982.
(iv) Jakob Hatteland Electronic Os, a company organized and
existing under the laws of Estonia, having its registered office at
Xxxxxxxxx, xxx 00X, 00000 Xxxxxxx, Xxxxxxx, Reg. No. EE102 18208.
(v) Jakob Hatteland Engineering AS, a company organized and
existing under the laws of Norway, having its registered office at Xxxxxx,
0000 Xxxxx Xxxx, Xxxxxx, Reg. No. 980079031, this company again being the
only owner of:
(vi) Jakob Hatteland Engineering AB, a company organized and
existing under laws of Sweden, having its registered office at Xxx 000, 000
00 Xxxxxx, 00 Xxxxxxxxxx Xx, Xxxxxx, Reg. No. 556077-5370.
(vii) Jakob Hatteland Engineering ApS, a company organized and
existing under the laws of Denmark, having its registered office at
Xxxxxxxxxxxxx 00, 0000 Xxxxxxxxx, Xxxxxxx, Reg. No. 250 637.
(viii) Jakob Hatteland Engineering Oy, a company organized and
existing under the laws of Finland, having its registered office at
Xxxxxxxxxx 00, XXX-00000 Xxxxxxxx, Xxxxxxx, Reg. No. 757 693.
(m) "Warranties" shall mean the warranties, representations and
undertakings set out in article 7 and Appendix 2.
(n) "working day" shall mean a day (other than a Saturday or Sunday)
on which banks are open for business in Oslo and New York.
1.2 The headings used in this Agreement are for convenience purposes
only and shall not be used to limit or extend the scope or application of any
such provisions.
SALE AND PURCHASE OF SHARES
The Seller agrees to sell, transfer, assign, convey and deliver as
legal and beneficial owner to the Purchaser (or to a subsidiary of the
Purchaser designated by the Purchaser), and the Purchaser (directly or
through such subsidiary), relying on inter alia the Warranties, agrees to
purchase and receive from the Seller, all of the Shares, free from all liens,
claims, encumbrances and charges and together with all rights attaching to
the Shares, in exchange for the Consideration to be paid as set out in
article 3 hereunder.
2.2 The Purchaser has carried out a review (due diligence) of the
Company and, except to the extent of the matters covered by the Warranties or
as otherwise specified in this Agreement, takes over the Shares on an "as is"
basis.
In the course of the Purchaser's review of the Company, the
Purchaser has inter alia had access to the following information:
(a) Investor Presentation of Company issued by
PricewaterhouseCoopers Corporate Finance DA in March 1999.
(b) Financial Due Diligence Review of Company issued by
PricewaterhouseCoopers DA in Spring 1999.
(c) Limited Legal Due Diligence Review of Company issued by
Advokatfirmaet
PricewaterhouseCoopers in March 1999.
(d) Memo from Xx. Xxxx Xxxxx Xxxx to Xx. Xxxxx Hatteland dated 19
January 2000 summarizing actions taken as a consequence of comments in
abovementioned due diligence reviews.
(e) The audited consolidated balance sheet of the Group as of 31
December 1999 and the audited consolidated income statement and statement of
cash flows for the Group for the fiscal year ending on such date.
(f) Statement of the fact that any and all rights to warehouse
systems have been transferred from the Company to Autostore AS.
(g) Budget for the Company and its Subsidiaries for year 2000
dated 21 December 1999.
(h) Goods which are not basis for sale (dead goods) have been
transferred from the Company to Jakob Hatteland Supply at an amount of
NOK1,940,000, i.e. goods older than two years by 31 October 2000 and with a
turnaround of zero.
(i) All possible payments from Autostore AS to the Compnay as
compensation for the rights to warehouse systems have been fulfilled by
Autostore AS.
(j) Statement of the fact that all the shares in Jakob Hatteland
Logistics AS have as of the date hereof been sold from the Company to the
Seller for a purchase price equivalent to the actual value being equivalent
to the face value (nominal amount of the shares) NOK 150,000. The shares in
Jakob Hatteland Logistics AS are being sold as of 1 January 2000.
2.3 The Shares shall be transferred to the Purchaser on Closing Date as
set out in article 4.
3. PAYMENT
3.1 As full Consideration for the sale, transfer, assignment, conveyance
and delivery of all the Shares, the Purchaser shall pay a Consideration of:
NOK 420 million plus 775,000 shares (the "Consideration Shares") of
common stock of the Purchaser.
The Consideration is to be transferred to the Seller on Closing as
described in article 4 hereunder.
3.2 The Purchaser will use its best efforts to file with the United
States Securities and Exchange Commission, as promptly as practicable after
the Closing, a registration statement covering the Consideration Shares and
will use its best efforts to cause such registration statement to become
effective.
3.3 The Purchaser agrees that, if the share price of the common stock of
the Purchaser does not exceed $40 per share during any period of ten
consecutive days within the two year period following the date when the
Consideration Shares may be sold pursuant to the registration statement
referred to in article 3.2, the Purchaser will pay the Seller the difference
between the average share price of the common stock of the Purchaser during
the ten days preceding the second anniversary of the date when the
Consideration Shares may be sold and $40, multiplied by the number of
Consideration Shares held by the Seller on the second anniversary of the
Closing Date.
4. CLOSING
4.1 Closing shall take place 6 - six - working days after any and all
approvals and/or authorisations and/or clearances required pursuant to
article 5.1 have been obtained.Closing shall take place at Company's premises
at Xxxxx Xxxx, Norway.
4.2 On Closing, the Seller shall cause all of the Shares to be
transferred to the Purchaser by registration in the Company's shareholders
book.
4.3 On Closing, the Purchaser shall cause the cash portion of the
Consideration to be transferred to a bank account designated by the Seller in
writing to the Purchaser at least three working days prior to Closing and
shall deliver to the Seller at the Closing a certificate or certificates
representing the Consideration Shares registered in the name(s) designated by
the Seller in writing to the Purchaser at least five working days prior to
Closing.
4.4 Upon Closing, the Purchaser will become the only owner of the
Shares.
5. CONDITIONS
5.1 As soon as possible after the Effective Date of this Agreement, and
in any event by 1 May 2000, the Purchaser shall submit a report on the sale
and purchase of Shares to the Norwegian Ministry of Industry pursuant to the
Norwegian Acquisition Act of December 23, 1994 no. 79.
Upon the Purchaser's request, the Seller and the Company shall
assist the Purchaser in obtaining the necessary information needed for the
report and also if requested, assist in filing the report. The Purchaser
shall keep the Seller and the Company informed on the progress of the report
to the Ministry of Industry.
Closing shall take place unless the Ministry of Industry does not
approve the transaction or imposes conditions which in the Purchaser's
reasonable opinion will have a material negative impact on the acquisition
and/or the Purchaser's ability to develop the business of the Group.
5.2 In case the sale/purchase arrangement as described in this Agreement
requires any other approval from competition or other authorities in any
country in the Nordic Territory or by the Commission of the European Union,
or alternatively by the EFTA Surveillance Authority, the Purchaser shall
provide that the necessary report or application is submitted to the
appropriate authority in due time.
Upon the Purchaser's request, the Seller and the Company shall
assist the Purchaser in obtaining the necessary information needed for the
report or application and also if requested, assist in filing the report or
application. The Purchaser shall keep the Seller and the Company informed on
the progress of the report or application towards the appropriate authority.
The Purchaser shall carry the risk for any conditions which may be
imposed by the relevant competition authorities in respect of the
transaction.
5.3 Upon Closing, Xx. Xxxxx Hatteland shall leave any position in the
Company and its Subsidiaries.
5.4 Upon Closing, Xx. Xxxx Xxxxx Xxxx shall leave any position in the
Company and its Subsidiaries.
Xx. Xxxx Xxxxx Xxxx shall, however, be at the disposal as
consultant towards the Company upon the request of the Company and to the
extent requested by Company as from Closing to 31 December 2000. The Company
will be invoiced monthly for such consultancy service for an amount
corresponding to a relative share of all related costs, hereunder agreed
salary and social expenses. The invoice shall be paid within two weeks of
its issuance.
5.5 Purchaser is informed that Mr. Sven Age Hjortland and Xx. Xxxx
Xxxxxxx, being employees of the Company, soon will leave employment by the
Company and commence employment by the Seller or by a subsidiary of Seller.
5.6 Jakob Hatteland Logistics AS shall provide services to the Group
pursuant to the Warehouse Agreement attached hereto as Exhibit F, effective
as from the Closing Date.
5.7 The Company shall enter into a 10 year lease (with a 5 year renewal
option) of certain properties pursuant to the lease agreement attached hereto
as Exhibit D, effective as from the Closing Date.
5.8 The Company and its Subsidiaries shall continue purchasing data
services through "RAMBASE" from Jakob Hatteland Computer AS according to an
EDP Delivery and Service Agreement between the latter and the Company (and
which includes data services for the Subsidiaries) in the form attached to
this Agreement as Exhibit E, effective as from the Closing Date.
5.9 The Purchaser shall provide that itself and its subsidiaries or
affiliated companies in the Nordic Territory shall enter into a new EDP
Delivery and Service Agreement with Jakob Hatteland Computer AS in the form
attached to this Agreement as Exhibit E. Purchaser guarantees that the
agreements referred to in article 5.8 hereabove and in this article 5.9 shall
apply for a period of at least three years after implementation of Rambase in
all Nordic Arrow companies.
5.10 Purchaser shall be entitled to use the name "Jakob Hatteland
Electronic" until the Rambase conversion is completed and thereafter, in
conjunction with the Arrow name, for a period not to exceed two years.
Following such two year period, Purchaser shall not use such name or any
variation thereof.
5.11 The Seller shall be responsible for sales invoices which are issued
prior to Closing and which have not been paid within six (6) months after
Closing whereby the invoices in question are to be transferred to the Seller
against payment to the Purchaser of the full invoiced amounts.
In case sales invoices already have been written off wholly or
partially prior to the Closing Date only the net amount is to be paid by the
Seller.
Invoices which have been written off already prior to the Closing
Date, but where payment higher than the net amount has been made shall be
basis for a reduction in the amount payable by the Seller according to the
paragraphs hereabove in article 5.11 for the amount which has been paid
beyond the reduced value of the invoice. Recoveries by the Company under
insurance policies for not paid invoices shall also be a basis for reduction
of the amount to be paid by the Seller.
5.12 Insurance which has been taken out for invoices shall continue for
at least one year from the Closing Date.
5.13 The Company shall carry out collection of invoices after Closing in
the same way and to the same extent as prior to Closing.
5.14 Prior to the Closing, the Company has financed its operations in a
joint finance arrangement with the Seller and other subsidiaries of the
Seller. Due to the transaction provided for in this Agreement the financing
of the Company will have to be arranged for separately from the finance
arrangement on the Closing Date. The Purchaser shall cause arrangements to
be made so that, with effect from the Closing Date, the financing of the
operations of the Company shall be independent of the Seller and its other
subsidiaries.
5.15 If the Company or any Subsidiary has guaranteed, or provided
security or collateral in respect of, any indebtedness of the Seller or any
affiliate of the Seller other than a member of the Group, the Seller shall
procure the release of such guarantee or security.
5.16 It shall be a condition to Closing in the case of the Purchaser
that the Seller's Warranties are true and accurate at the Closing Date, with
the same force and effect as if made at and as of the Closing Date . It
shall be a condition to Closing in the case of the Seller that the
Purchaser's Warranties are true and accurate at the Closing Date, with the
same force and effect as if made at and as of the Closing Date.
6. THE COMPANY'S OPERATIONS
6.1 From the Effective Date until Closing, the Seller shall cause the
Company and the Subsidiaries to continue their ordinary course of business,
and the Company and the Subsidiaries shall not make any unusual or material
investments or capital expenditures (in the context of each such company's
business) or enter into transactions other than normal day-to-day business
without the prior written consent of the Purchaser.
Without limiting the generality of the foregoing, the Seller shall
procure that:
(a) the Company and each Subsidiary use their respective best efforts
to preserve their respective assets, businesses and relationships with
customers, suppliers and others having business relationships with each of
them;
(b) neither the Company nor any Subsidiary shall, sell, lease,
mortgage, pledge or otherwise acquire or dispose of any of the properties,
assets or rights (including leaseholds) or cancel, compromise or otherwise
terminate or agree to cancel, compromise or otherwise terminate, any debts or
claims, of the Company or such Subsidiary except in the ordinary course of
business;
(c) except for increases or changes in the ordinary course of
business consistent with past practice and within the limits provided for in
the Budget referred to in article 2.2(g), neither the Company nor any
Subsidiary shall, increase or otherwise change the rate or nature of the
compensation (including, without limitation, wages, salaries, bonuses and
other benefits) paid, payable or available to any of the employees of the
Company or any Subsidiary;
(d) neither the Company nor any Subsidiary shall: (i) change or amend
its Articles of Incorporation or bylaws or (ii) issue or sell any shares of
its capital stock of any class, or issue or sell any securities convertible
into, or options with respect to, any shares of its capital stock of any
class or enter into any agreement obligating it to do any of the foregoing;
(e) neither the Company nor any Subsidiary shall, cancel or permit
any insurance policies covering its business to lapse or terminate, unless
renewed or replaced by like coverage;
(f) except as provided in article 8 neither the Company nor any
Subsidiary shall pay any dividends or make any distributions with respect to
their respective capital stock, other than dividends or distributions paid by
any wholly-owned Subsidiary to the Company, or otherwise distribute any
profits, retained earnings or capital or reserves;
(g) neither the Company nor any Subsidiary shall borrow or agree to
borrow any funds, guarantee or agree to guarantee the indebtedness of any
third parties or incur or become subject to any absolute or contingent
obligation or liability, except obligations or liabilities incurred in the
ordinary course of business;
(h) neither the Company nor any Subsidiary shall enter into any
agreement or arrangement granting any rights to purchase any of its assets,
properties or rights, or requiring the consent of any party to the transfer
or assignment of any of such assets, properties or rights;
(i) neither the Company nor any Subsidiary shall release any
provisions or reserves reflected in the Accounts;
(j) neither the Company nor any Subsidiary shall pay its creditors
otherwise than in the ordinary course or change its policy in relation to the
payment of creditors;
(k) neither the Company nor any Subsidiary shall enter into or
terminate any supply agreement or franchise agreement with any supplier
relating to products sold by the Company or such Subsidiary;
(l) other than rental contract in Copenhagen previously disclosed to
Purchaser, neither the Company nor any Subsidiary shall enter into any
contract or commitment which is outside the ordinary course of its business;
and
(m) Purchaser and its advisors are given as soon as reasonably
practicable on request, access to such facilities and information regarding
the assets, liabilities, contracts and affairs of the Company and each
Subsidiary as Purchaser may reasonably require.
7. WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS
7.1 Subject to the terms of this Agreement, and in addition to the
rights of the parties under Norwegian law, the Seller and the Purchaser
respectively hereby give the representations and warranties set out in
Appendix 2A and B and this article 7.
7.2 The Seller and the Purchaser represent that their respective
Warranties are true and accurate at the Effective Date and will be true and
accurate at the Closing Date on the basis that such Warranties are repeated
as of the Closing Date.
7.3 When a Warranty is subject to the best of the Seller's knowledge
and belief, such knowledge and belief shall comprise all actual information
being known by the Seller, as well as any information they, when acting with
due care and diligence, should have known or acquired.
7.4 Information relating to the Company or the Subsidiaries of which
the Purchaser has actual knowledge prior to Closing shall prejudice any claim
by the Purchaser under the Warranties. The parties acknowledge that they
have entered into this Agreement in reliance upon inter alia the Warranties.
7.5 The Seller undertakes to give to the Purchaser and its
representatives both before and after Closing all such information and
documentation relating to the Company and its Subsidiaries as the Purchaser
shall reasonably require to enable it to satisfy itself as to the accuracy
and observance of the Warranties.
7.6 The Seller shall procure that any company affiliated with the
Seller or with Jakob Hatteland that currently purchases product from, or
sells product to, the Group shall continue to trade with Group following the
Closing and to regard the Group as preferred suppliers on the same basis as
at present provided that the terms and prices offered by the Group continue
to be competitive. The foregoing shall not apply to Jakob Hatteland Supply AS
and the affiliated company Hattelco Holding AS.
7.2 (a) The Seller shall defend, indemnify and hold the Purchaser, the
Company and each of the Subsidiaries, their respective successors and assigns
and each of their respective directors, officers, employees, agents and
representatives harmless against and in respect of all claims, losses,
damages and liabilities suffered directly or indirectly as a result of or in
connection with:
(i) any and all liabilities for Taxes (as defined in paragraph
22 of Appendix 2A), including, without limitation, transfer taxes, capital
gains taxes, income taxes, registration taxes, stamp duties and value added
taxes, arising in connection with or as a result of the transfer of Jakob
Hatteland Logistics AS referred to in article 2.6 and the transfer of the
apartment in Copenhagen referred to in paragraph 25 of Appendix 2A;
(ii) any and all losses, damages, liabilities or costs resulting
directly or indirectly from or related to any of the employment matters
referred to in article 5;
(iii) any and all losses, damages or costs resulting from any and
all: (A) misrepresentations or breaches of warranty, agreement or
undertaking hereunder on the part of the Seller; and (B) failures by the
Seller to perform or otherwise fulfill any undertaking or other agreement or
obligation contemplated hereunder (except as otherwise agreed);
(iv) any and all losses, damages or costs resulting from matters
relating to hazardous waste, pollution or any other cause of environmental
harm in existence or resulting from acts, omissions or circumstances on or
before the Closing Date or caused by the action or inaction of the Seller,
the Company or any Subsidiary on or before the Closing Date;
(v) any and all liabilities for Taxes relating to the Company
or any Subsidiary for any period ending on or prior to 31 December 1999, or
which arises in whole or in part in respect of, or in consequence of, any
acts, omissions or transactions occurring or entered into on or before 31
December 1999 (except to the extent provided for in the audited consolidated
balance sheet of the Group as of 31 December 1999); and
(vi) any and all actions, suits, proceedings, claims,
liabilities, demands, assessments, judgments, costs and expenses, including
reasonable attorneys' fees, related to any of the foregoing or such
indemnification;
(b) In the event that the claim for indemnification under article
7.7(a) is capable of being satisfied in the alternative by indemnifying the
Purchaser or by indemnifying the Company or one of the Subsidiaries, the
Purchaser shall choose the party to be indemnified.
(c) The indemnification obligations of the Seller under article
7.7(a)(iii) for breaches of representations and warranties (other than the
representations and warranties contained in paragraphs 11 and 22 of Appendix
2A) (i) shall accrue only if the aggregate of all losses, damages,
deficiencies, liabilities and any other amounts for which indemnification is
sought by the Purchaser, the Company and the Subsidiaries pursuant to article
7.7(a)(iii) in respect of such representations and warranties shall have
first exceeded NOK one (1) million, in which case such indemnification
obligation shall apply to the entire amount and (ii) shall be limited to an
amount (the "Indemnification Limit") equal to NOK 420 million in the
aggregate on the Closing Date and as thereafter decreased in accordance with
the next sentence. The Indemnification Limit shall be decreased each month
following the Closing Date by NOK 28 million until the Indemnification Limit
is NOK 100 million. The Indemnification Limit shall remain NOK 100 million
until the end of Warranty Period.
7.8 The covenants and undertakings contained in this agreement shall
survive the Closing Date without limitation. The representations and
warranties shall survive the Closing Date and any investigation made at any
time with respect thereto until the expiration of the Warranty Period which
shall be the period from the Effective Date and until the expiration of
fifteen (15) months from the Closing Date; provided however, that with
respect to the warranties contained in paragraphs 11 and 22 of Appendix 2A,
the Warranty Period shall extend until the expiration of the relevant statute
of limitations.
If a claim, loss, damage, liability or expense has occurred before
the conclusion of the Warranty Period but the amount thereof cannot be
quantified, the Purchaser may claim compensation, provided that the claim is
made no later than 3 months after the expiry of the Warranty Period and a
quantified claim is made as soon as information is available of the amount.
7.9 If a claim brought against the Seller is recovered in whole or in
part by the Purchaser or the Company from a third party prior to the
assertion of the claim, such recovery shall be credited against the amount
otherwise payable by the Seller. Any such amount recovered subsequent to
payment by the Seller shall be refunded to the Seller.
7.10 If the Purchaser or the Company receives any claim, which is likely
if the claim is merited to give rise to a claim by the Purchaser against the
Seller, the Seller shall be duly notified by the Purchaser and be given a
reasonable opportunity at their own expense to take part in the handling of
the matter and the defense of the claim; however, the Purchaser shall retain
the main responsibility for the handling of any such matter.
8. DIVIDENDS FOR 1999
8.1 The dividend from the Company to its shareholder arising from the
financial year ending 31 December 1999 is to be decided in general meeting
during Spring 2000 and shall be for the benefit of the Seller. The Purchaser
and the Seller agree that this dividend is to be NOK 10 million and is to be
paid within six working days after the Shareholder's meeting, which is to be
held within the month of April 2000.
9. COVENANT AGAINST COMPETITION
9.1 For the purposes of this article 9.1, "Relevant Period" shall mean a
period commencing on the date hereof and ending on the date which is three
years after the Closing Date and the "Covenanting Parties" shall mean the
Seller and Jakob Hatteland. As a further inducement to Purchaser to enter
into the transactions contemplated hereunder each of the Covenanting Parties
hereby agrees that neither any of the Covenanting Parties, nor any person
controlled, directly or indirectly, by any of the Covenanting Parties, shall
for the Relevant Period, in any way, directly or indirectly, (i) own, manage,
operate, control or actively participate in as a director, officer or
shareholder or in any other capacity, any enterprise which engages in, or
otherwise carries on, any business activity in or into any country in which
the Company or any Subsidiary carries on business as of the date of this
Agreement in competition with the Company or any Subsidiary or (ii) except as
provided in articles 5.3, 5.4 and 5.5, solicit for employment, employ or hire
any director, officer or other employee of the Company or any Subsidiary. If
any of the prohibitions or restrictions contained in this article is judged
to go beyond what is reasonable in the circumstances but would be judged
reasonable and necessary if any activity were deleted or a period or area
were reduced, then the prohibitions or restrictions apply with that activity
deleted or period or area reduced by the minimum amount necessary. The Seller
represents that the business as currently conducted of the Jakob Hatteland
Group does not compete with the business of the Group. For the avoidance of
doubt, it is agreed that notwithstanding this article 9.1, the Jakob
Hatteland Group can continue its business as currently conducted without
limitations to other areas.
10. SUPPORT FOR SELLER'S OBLIGATIONS
10.1 Jakob Hatteland hereby undertakes to procure that at all times
during the period from the Closing Date until the date which is fifteen
months after the Closing Date the Seller shall maintain a minimum net worth
equal to the amount of the Indemnification Limit at any such time.
11. TERMINATION
11.1 This Agreement may be terminated at any time prior to Closing:
(a) by the mutual written consent of Purchaser and Seller;
(b) by either Purchaser or Seller if the transactions contemplated
hereby are not consummated on or before December 31, 2000 (or such later date
as may be agreed in writing by the parties hereto);
(c) by Purchaser if the Seller shall breach in any material
respect any of its representations, warranties or obligations hereunder and
such breach shall not have been cured or waived;
(d) by Seller if Purchaser shall breach in any material respect
any of its representations, warranties or obligations hereunder and such
breach shall not have been cured or waived.
12. ASSIGNMENT, ETC.
12.1 The rights and obligations of the Seller and the Purchaser under
this Agreement shall only be assignable upon separate agreement between the
parties, provided that the Purchaser may assign its rights and obligations
under this Agreement to any of its affiliates, provided that the Purchaser
shall remain liable with respect to any such obligations.
13. CONFIDENTIALITY
13.1 The parties hereto agree to hold in strict confidence the content
in this Agreement, except otherwise as mutually agreed and except to the
extent that law or stock exchange regulations binding on the Seller or the
Purchaser require otherwise; however, it being understood that detailed
information is to be given to the employees in the Company and the
Subsidiaries, and to the extent required by law, to the Purchaser's
employees, and that press releases will be issued by the Seller and the
Purchaser immediately after the Effective Date. The Seller and the Purchaser
each agrees to provide the other with a copy of their respective press
releases in draft form in advance of the release of the same.
14. MISCELLANEOUS PROVISIONS
14.1 All prior negotiations and agreements between the parties hereto
with respect to the transactions provided for herein are superseded by this
Agreement, and there are no representations, warranties, understandings or
agreements with respect to such transactions other than those expressly set
forth herein.
14.2 No change, termination or attempted modification of any of the
provisions of this Agreement shall be binding on the Seller or the Purchaser
unless in writing and signed by the party to be bound. No modification,
termination, rescission, discharge or cancellation of this Agreement shall
affect the right of the Purchaser to enforce any claim, whether or not
liquidated, that accrued prior to the date of such modification, termination,
rescission, discharge or cancellation of this Agreement.
14.3 If for any reason any term, warranty, representation, covenant or
condition herein shall be declared or deemed void, invalid or unenforceable,
the remaining part of the provisions of this Agreement shall apply.
14.4 Nothing in this Agreement is intended or shall be construed to
give any person other than the parties hereto or any person particularly
referred to herein any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
15. EXPENSES
15.1 Purchaser and Seller will bear their own expenses in connection
with the Agreement.
16. COOPERATION
16. 1 Each of the parties hereto shall use its reasonable best efforts
to take or cause to be taken all actions, to cooperate with the other parties
hereto with respect to all actions, and to do or cause to be done all things
necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement.
17. NOTICES
17.1 All notices, requests, demands and other communications shall be
in writing (including e-mail or telefax) and shall be addressed as follows:
The Seller:
Xx. Xxxxx Hatteland
Xxxxxx
0000 Xxxxx Xxxx
Xxxxxx
Telefax: 47-52-76-5100
The Purchaser:
Arrow Electronics, Inc.
00 Xxx Xxxxx
Xxxxxxxx, XX 00000
X.X.X.
Telefax: 0-000-000-0000
Attention: Xxxxxx X. Xxxxxxx
With a copy to:
Winthrop, Stimson, Xxxxxx & Xxxxxxx
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Telefax: 44 02 7283 1656
Attention: Xxxxx X. Xxxxx
or to such other address or to such other person as any party hereto shall
have last designated by
written notice to the other party.
18. GOVERNING LAW - DISPUTES
18.1 This Agreement is to be governed by Norwegian law.
18.2 Any dispute regarding the interpretation or implementation of this
Agreement, which cannot be settled amicably between the parties, shall be
resolved by arbitration in Oslo pursuant to Chapter 32 of the 1915 Civil
Procedures Act. Within 30 days of the date of a party's written demand that
the matter be referred to arbitration (the "Request"), each of the parties
shall appoint one arbitrator. The two arbitrators so appointed shall within
60 days of the Request jointly appoint a third arbitrator, who shall be the
chairman of the arbitration tribunal. If a party or the two appointed
arbitrators fail to appoint an arbitrator within the specified time limits
pursuant to the foregoing, such appointment(s) shall be made by the Chief
Justice of the Oslo City Court.
The arbitration proceedings shall be conducted in the English language. All
briefs and documents shall be prepared in English or with English language
copies prepared by authorised translators. The arbitration award shall be
final and binding on the parties.
18.3 The parties shall keep confidential and shall not disclose to any
person, except as may be required by law or applicable stock exchange
regulations, the existence of any controversy hereunder, the referral of any
such controversy to arbitration, or the status or resolution thereof.
This Agreement is executed in three (3) counterparts each of which shall be
deemed an original and all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by themselves or their respective duly authorized representatives on
the day and year.
Jakob Hatteland Holding AS, as Seller:
-------------------------------------
Arrow Electronics, Inc., as Purchaser:
-------------------------------------
Jakob Hatteland, with respect to article 5.10, article 9 and article 1
The undersigned Jakob Hatteland (with respect to article 5.10, article 9 and
article 10), Jakob Hatteland Electronic AS, Jakob Hatteland Computer AS and
Jakob Hatteland Logistics AS hereby declare that we have thoroughly read
through this Agreement and are familiar with all provisions set forth herein,
including its appendices and exhibits, and acknowledges that we will act in
accordance with the provisions in the Agreement when appropriate. Jakob
Hatteland Electronic AS, furthermore, confirms that the sale of Shares in the
Companies is in conformity with the positive opinion of the Board of
Directors of the Company.
Jakob Hatteland Electronic AS Jakob Hatteland Logistics AS
----------------------------- ----------------------------
Jakob Hatteland Jakob Hatteland Computer AS
----------------------------- ----------------------------
