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EXHIBIT 10.23
SHARE PURCHASE AGREEMENT
This Agreement as of 22 November, 1996, by and between
1. Borealis Holding AB, 556182-5174, 000 00 Xxxxxxxxxxx, Xxxxxx
("Seller")
2. Xxxx Corporation Sweden AB, 556410-5673, Xxx 000,
000 00 Xxxxxxxxxxx, Xxxxxx
("Buyer")
____________
BACKGROUND
Borealis Industrier AB (the "Company"), a company duly organized and validly
existing under the laws of Sweden with Swedish corporate registration number
556034-7634, is on its own and through its Subsidiaries engaged principally in
business related to developing, manufacturing and marketing polymer systems and
components for the automotive industry.
Seller owns all of the issued and outstanding capital stock of the Company,
which consists of 33,300 shares, each having a par value of SEK 1,000
(collectively, the "Shares").
Seller wishes to sell the Shares.
Buyer is inter alia engaged in business related to the automotive industry,
principally the development, manufacturing and marketing of automotive seating,
interior and similar products.
Buyer wishes to buy the Shares.
The parties have therefore entered into the following agreement.
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DEFINITIONS
In this agreement, the following terms will have the following meanings
(equally applicable to the singular and plural forms):
"Accounting Principles" means the accounting principles applied by Company and
Subsidiaries, as defined below, which principles are reflected in the Audited
Financial Statements and are in accordance with applicable laws and the
generally accepted accounting principles in Sweden ("god redovisningssed").
"Accounts" means the consolidated balance sheets and profit and loss statements
of the Group as of 30 June 1996, including the Auditors report 1996-07-11,
prepared in accordance with the Accounting Principles and annexed as Appendix
1.
"Affiliates" means the companies listed in Appendix 2.
"Agreement" means this share purchase agreement including all appendices and
exhibits, all as may be amended in writing from time to time.
"Audited Financial Statements" means the audited consolidated financial
statements, including the balance sheet and profit and loss statement, with
notes, of Company and each of Subsidiaries, except for Tanum Komponenter AB, as
of 31 December 1995 prepared in accordance with the Accounting Principles and
certified by the external auditors of Company, Appendix 3.
"Buyer" has the meaning set forth in the introductory paragraph.
"Closing" means the closing of the sale and the purchase of the Shares in
accordance with section 2.
"Closing Date" means the tenth business day after the date on which the
condition in section 2.2.c and 2.3 is met and provided that the conditions in
section 2.2.a and 2.2.b are met on such date, or such later day as may be
agreed in writing.
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"Company" has the meaning set forth in the background paragraph.
"Force Majeure" means any event occurring outside the normal course of business
which is (i) beyond the direct control of Company or Subsidiaries and (ii) not
adequately covered by insurance, the consequence of which is so adverse to the
financial condition, business or operations of the Group as to substantially
frustrate the normal commercial activities of the Group including without
limitation but subject to the foregoing qualifications an inadequately insured
major and sudden environmental occurrence, explosion, fire or catastrophe at
the premises of Company or any of Subsidiaries, the effect of which would
decommission a substantial portion of the production for an extended period,
war, hostilities, invasion, rebellion, general labour walkouts by the personnel
of the Group or a significant proportion of them, not caused by an act of
Buyer, contamination, or natural catastrophe such as earthquake or similar
occurrence.
"Group" means Company and Subsidiaries.
"Lien" means any lien, security interest, charge, mortgage or other similar
encumbrance.
"Material Adverse Effect" means any material adverse change in, or material
adverse effect on, the financial condition, business or operations of the Group
taken as a whole and for these purposes such a change or effect would be
material if the resulting net loss or damage exceeds SEK 1,000,000.
"Material Agreements" has the meaning set forth in section 3.22.
"Parties" means Seller and Buyer.
"Purchase Price" has the meaning set forth in section 1.
"Seller" has the meaning set forth in the introductory paragraph.
"Seller Affiliates" means companies within the Borealis A/S group of companies,
except the Group.
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"Seller's knowledge" means the knowledge of the directors and management of
Seller and the knowledge of the management team, the site managers, the
environmental officers and the financial officers of the Group.
"Shares" has the meaning set forth in the background paragraph.
"Subsidiaries" means the direct and indirect owned subsidiaries of Company
listed in Appendix 4.
"Taxes" has the meaning set forth in section 3.12.
__________
1. PURCHASE PRICE
1.1 The Purchase Price for the Shares shall be SEK four hundred sixty nine
million (469,000,000)
The Purchase Price shall be paid at Closing in readily available funds in
Swedish kronor to the bank account designated by Seller at the latest ten
(10) days prior to the Closing and in accordance with section 2 below.
1.2 EQUITY
The Group's equity as per 27 October 1996 will be SEK two hundred fifty
four million four hundred thousand (254,400,000) whereby the result for
the period 1 January - 27 October 1996 will (independent whether a profit
or a loss) be adjusted with a tax rate at 28 % on taxable profits and on
tax deductible losses. Should the equity as of 27 October 1996 differ
from the amount of SEK 254,400,000, the Purchase Price will be adjusted
by such difference as set forth in paragraph 1.4 below.
Equity shall mean restricted equity consisting of share capital and
restricted reserves as of 31 December 1995 to which shall be added
profit/loss brought forward and profit/loss for 1996 up to and including
27 October 1996.
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1.3 CLOSING AUDIT
1.3.1 Seller and Buyer will together with representatives from Company and in
consultation with Company's auditors and the auditors nominated by Buyer
establish a complete balance sheet for the Group as per 27 October 1996
("Closing Audit") by the later of 27 November 1996 and thirty (30) days
after Closing.
1.3.2 The Closing Audit - which forms the basis for the establishment of the
Group's equity as per 27 October 1996 according to Section 1.2 above -
will be established in accordance with the Accounting Principles.
If Company's costs for the period 1 January - 27 October 1996 includes
costs incurred under the divestiture agreement with Applied Composites
AB greater than MSEK 8.0 (which amount has been included in the
calculation of the MSEK 254.4 amount) only 75 % of the excess amount
shall be included in the result calculation for the said period forming
part of the Closing Audit.
In the Company's costs for the period 1 January - 27 October 1996 will
only be included costs incurred under the divestiture agreement with
Xxxxx Skandinavien AB greater than SEK 300,000 (which amount has been
included in the calculation of the MSEK 254.4 amount).
Any difference from the book value of the value of the real properties
Granaten 28, Tidaholm, Sibbarp 24:1, Eslov and Assarebyn 1:15,
Fargelanda, shall not affect the establishment of the Group's equity as
per 27 October 1996.
1.3.3 The Closing Audit will be audited by the current auditors of Company and
the auditors nominated by Buyer. The auditors will not later than 30 days
after the establishment of the Closing Audit jointly render their opinion
concerning the equity of the Group according to the Closing Audit. Should
the auditors not be able to
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render a joint opinion concerning the equity, the value will finally be
established by a third party auditor nominated by the above mentioned
auditors or if such auditors could not agree on a third party auditor, by
an auditor appointed at either Party's request by the Stockholm Chamber
of Commerce which auditor shall be a member of the Association of
Authorised Auditors (FAR, Foreningen Auktoriserade Revisorer). The equity
established by the third party auditor shall be presented no later than
thirty (30) days after the appointment of such third party auditor.
1.3.4 Time limits provided for in 1.3.1 - 1.3.3 above shall be adjusted by
such time as may be deemed reasonable by the auditors.
1.4 PURCHASE PRICE ADJUSTMENTS
1.4.1 The Purchase Price will be adjusted by an amount equal to the
difference between the equity as per 27 October 1996 set forth
according to the Closing Audit established under 1.3 above and the
equity amount SEK 254,400,000 according to 1.2 above.
1.4.2 Settlement of the Purchase Price adjustment according to Section
1.4.1 above, will be carried out within ten (10) business days from
the presentation of the established equity. The established
adjustment amount will carry an interest from Closing in accordance
with 5 Section the Swedish Interest Act up to the due date and in
accordance with 6 Section thereafter.
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2. CLOSING
2.1 On the terms and subject to the conditions set forth in the Agreement,
Seller hereby agrees to sell the Shares on the Closing Date, and Buyer
hereby agrees to purchase the Shares and to pay to Seller the Purchase
Price.
On execution and delivery of this Agreement Seller will deliver to Buyer
evidence reasonably satisfactory to Buyer of the authority of any person
signing for Seller's behalf and Buyer will deliver to Seller evidence
reasonably satisfactory to Seller of the authority of any person signing
on its behalf.
On the delivery by Seller to Buyer of the stock certificates
representing the Shares, Buyer will have full title to and ownership of
the Shares, free and clear of any and all Liens other than Liens Buyer
created.
The Closing will take place on the Closing Date in the offices of
Xxxxxxxx & Xxxxx in Brussels, Belgium, at 11.00 am.
2.2 CONDITIONS TO BUYER'S OBLIGATIONS
Buyer's obligations to proceed to Closing in accordance with the terms
of this Agreement will at Buyer's option be subject to the following
conditions:
(a) no Force Majeure or other event has occured which fundamentally
changes the conditions and the prerequisites for this Agreement,
and which could not have been foreseen at signing hereof and which
is not due to events caused by Buyer.
(b) no withdrawal has been made by a third party of its consent,
comfort or quiet enjoyment required and given as agreed between
the parties prior to signing, provided the withdrawal is not
caused by Buyer.
(c) the Swedish Competition Authority (i) having issued an order
declaring that it will not challenge the sale or any terms of
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this Agreement, or (ii) having permitted 30 days to elapse after
notification of the transaction(s) contemplated by this Agreement
to it without initiating a special investigation provided that,
for the avoidance of doubt, in the event of any challenge by the
Swedish Competition Authority to any of the terms of this
Agreement, the provisions of section 2.8 shall apply.
2.3 CONDITIONS TO SELLER'S OBLIGATIONS
Seller's obligations to proceed with the Closing in accordance with the
terms of this Agreement will be subject to the Swedish Competition
Authority (i) having issued an order declaring that it will not
challenge the sale or any terms of this Agreement, or (ii) having
permitted 30 days to elapse after notification of the transaction(s)
contemplated by this Agreement to it without initiating a special
investigation provided that, for the avoidance of doubt, in the event of
any challenge by the Swedish Competition Authority to any of the terms
of this Agreement, the provisions of section 2.8 shall apply.
2.4 BEST EFFORTS
Each party agrees to use its best efforts to cause the conditions
precedent to its own obligations to be fulfilled as soon as possible.
2.5 NON-OCCURRENCE
If Closing has not occurred by 15 December 1996, due to the
nonfulfillment of the conditions described in Sections 2.2 or 2.3 above,
this Agreement will, on the expiry of the said date, and provided that
none of the Parties is in breach of its obligations under section 2.4
above and that the other party does not waive such obligation in
writing, terminate and become void without either party having any
liability towards the other.
If Closing has not duly occurred by reason of Buyer's or Seller's
breach of its obligations hereunder, the non-defaulting party may
terminate the Agreement and such termination will be without prejudice
to the rights of the non-defaulting party to recover
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damages and/or, in its discretion, to obtain any other available
remedies, such as specific performance.
2.6 AT CLOSING
At Closing;
(a) Seller will deliver to Buyer duly endorsed in blank share
certificates in respect of the Shares and all shares of
Subsidiaries and owned shares in Affiliates according to Appendix 2
with all dividend rights (if any) attached thereto.
(b) Seller will cause Company to make the share ledger of
Company available to Buyer;
(c) A certificate in approved terms signed by Seller confirming
that as far as Seller is aware all conditions to Closing are
fulfilled.
(d) Each party will deliver to the other all certificates and
other documents required to be delivered by such party under this
Agreement.
2.7 SHAREHOLDERS MEETING
At Closing an Extraordinary General Meeting of Company's shareholders
shall be held by Buyer in order to elect a new Board of Directors chosen
by Buyer.
2.8 MODIFICATION
If the Swedish Competition Authority should request or require that any
provision or part thereof of this Agreement or other documents hereunder
be terminated, deleted or amended, the Parties will negotiate in good
faith with each other and with that authority with a view to modifying
any such provision in a manner which as closely as reasonably
practicable reflects the commercial objectives and effect of the
transaction contemplated hereby but for the avoidance of doubt, no party
will have any legally binding obligation to so agree provided that Buyer
or Seller, as the case
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may be, will have the right to waive any provision, that is for the
benefit of such waiving party, in order to satisfy the conditions of
this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer the following and acknowledges
that Buyer has entered into this Agreement in reliance on the
representations and warranties. All such representations and warranties
are true, complete and accurate as of the date hereof and will be true,
complete and accurate in all material respects on Closing Date as if
each had been made as of the Closing Date. It is, however, understood
that if a specific representation refers to a specific date such
representation would apply to such date only. The warranties are
continuing warranties and will not merge on Closing but will remain in
full force and effect.
3.1 SELLERS TITLE TO THE SHARES; SUBSIDIARIES
Seller owns and has good and marketable title to the Shares, free and
clear of all Liens. The Shares are fully transferable to Buyer.
Company owns directly or indirectly and has good and marketable title
directly or indirectly to all the outstanding shares of Subsidiaries and
to the number of shares of Affiliates, as set forth in Exhibit 3.1 a.
The Shares and the outstanding shares of Subsidiaries and Affiliates
directly or indirectly owned by Company have been duly authorized,
legally and validly issued and are fully paid. No convertible
debentures, warrants or other securities of Company or any Subsidiary or
Affiliate are issued and outstanding.
Other than set forth in Exhibit 3.1.b there is no legal, audit or any
other requirement for Seller or any shareholder in the Group to pay any
additional capital into Company, Subsidiaries or Affiliates.
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3.2 NO CONFLICT
Subject to section 7, the execution of this Agreement, the consummation
of the transaction(s) contemplated and the fulfilment of its terms will
not result in a breach of any applicable law, any judgement, decree or
order of any court, governmental body or authority applicable to Seller,
Company, any Subsidiary or any Affiliate, or the articles of association
of Seller, Company, any Subsidiary or any Affiliate, or, to the best of
Seller's knowledge, any applicable competition rules.
3.3 NO VIOLATION/CHANGE OF CONTROL
Except as disclosed in Exhibit 3.3, neither this Agreement, nor the
transaction(s) contemplated herein are in violation of the articles of
association or other organizational instruments of Company or
Subsidiaries or will, in accordance with the terms of any Material
Agreement, constitute a breach of or an event of default under such
agreement to which Seller or Company or any Subsidiary is a party or to
which any of its assets are bound, or will, in accordance with its terms
modify in any way the rights and obligations of any of the parties
thereto.
3.4 ORGANIZATION AND EXISTENCE
Each of Company, Subsidiaries and Affiliates is duly organized and
validly existing under the laws of its jurisdiction, and has the legal
capacity and corporate authority to own its property and carry on its
business as now conducted and is not in breach of its articles of
association.
3.5 ASSETS
Each of Company and Subsidiaries has right of use of the material assets
and properties used in and necessary for the conduct of its business
either as owner, holder of customer owned tools or as lessee and such
assets and properties are in good working condition for their intended
use, normal wear and tear excluded and are free and clear of any Lien,
other than reservations of title provided for in contracts or the
relevant invoices for the purchase
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of goods entered into in the ordinary course of business and other than
Liens reflected in the Accounts and the Audited Financial Statements.
There is no cancellation or other material obstacle to the deliveries to
be made to and from the Group under existing undertakings and the stocks
of the Group are in good marketable condition and saleable at prices
recorded in the books of the Group.
3.6 REAL PROPERTY
Exhibit 3.6.a sets forth a true and complete list of all real property
and interests in real property owned or otherwise held, directly or
indirectly (including sale and leaseback transactions entered into), by
Company Subsidiaries. The Property owned by Company and Subsidiaries, is
held free and clear of all Liens or rights of third parties except as
set forth in Exhibit 3.6.a.
Exhibit 3.6.b is a complete list of all leases to third parties by
Company and Subsidiaries.
Exhibit 3.6.c attached hereto is a true and complete list of all leases,
subleases, and other agreements under which Company and Subsidiaries use
or occupy or have the right to use and/or occupy any real property.
No real estate or leasehold interest, owned, leased, occupied or used by
Company, any Subsidiary or any Affiliate, is subject to any official or
governmental complaint or notice of violation of any applicable zoning
or building code.
Except as set forth in Exhibit 3.6.b and c, neither Company nor
Subsidiaries whether as tenant or landlord is in default in any material
respect under any real property lease and no written claim of any
default thereunder has been received by Seller which has not been cured.
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3.7 INSURANCE
Each of Company and Subsidiaries is fully insured according to normal
business practice either by way of global policy held by Seller or a
Seller Affiliate or by policies listed in Exhibit 3.7.
Nothing has been done or omitted to be done which reasonably would or
might make the policies listed in Exhibit 3.7 void or voidable and all
premiums due have been duly paid and, as of the date of this Agreement,
there is no claim outstanding under such policies.
In addition to the policies listed in Exhibit 3.7, Company and
Subsidiaries are insured under a policy held by Seller or Seller
Affiliate, covering inter alia property damage, interruption and product
liability. Seller will cause this insurance to be maintained up to and
including 30 days after the Closing Date.
Neither Seller nor Company nor Subsidiaries have been notified by any
insurer that it will discontinue the insurance or materially change the
conditions in the insurances listed in Exhibit 3.7 or that Seller,
Company or any Subsidiary is required to or that it is advisable for any
of them to carry out any maintenance, repairs or other work in relation
to any of the assets of Company or Subsidiaries.
3.8 EMPLOYMENT MATTERS
a) Exhibit 3.8.a lists all employees and officers of Company
with a salary in excess of SEK 500.000 per annum including all
benefits.
b) Except as set forth in Exhibit 3.8.b or expressly provided
for in the general and local collective bargaining agreements
applicable to Company and Subsidiaries and their respective
employees, or established or required by Swedish law, there are no
deferred compensation agreements, bonus plans, profit sharing
plans, pension plans, severance or retirement plans, employees
stock option or purchase plans, private life insurance plans or
hospitalization insurance plans in effect
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with respect to any current or former director, officer or other
employee of Company or any Subsidiary.
Neither Company nor any Subsidiary has, effective after 1 July
1996, granted any general wage increase, or adopted any bonus,
profit sharing, pension, savings or other employee benefit plan or
amendment thereto or entered into any employment contracts except
in the ordinary course of business.
Neither Company nor any Subsidiary has any current, future or
contingent liability in respect of current or past employees in
respect of pension or related retirement benefits that are not
either fully insured by a third party, fully funded or fully
provisioned in the Audited Financial Statements and the Accounts
except as indicated in Exhibit 3.8.b.
c) As of signing of this Agreement there is no pending claim
by any current or former Company or Subsidiary director, officer or
employee against Company or any Subsidiary or labour or union
litigation in respect of Company or any Subsidiary. As of signing,
Company and Subsidiaries have not received notice of any
outstanding labour disputes including go-slows, stoppages or
grievances with respect to Company and Subsidiary employees which
would have or result in a Material Adverse Effect. Neither Company
nor any Subsidiary has received notice of any claim that it has not
complied with any employment-, labour- or related laws.
d) Neither Company nor any of Subsidiaries has entered into
reemployment undertakings other than as set forth in Exhibit 3.8.d.
The reemployment undertakings related to Applied Composites AB and
to Xxxxx Skandinavien AB will not cause Company to incur costs
which would otherwise not be incurred, provided that Company takes
all appropriate measures in case of the execution by a beneficiary
of a reemployment undertaking.
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3.9 FINANCIAL STATEMENTS
Except as otherwise provided in this Agreement and in Exhibit 3.9, and
except for the values of the real estates Granaten 28, Tidaholm, Sibbarp
24:1, Eslov and Assarebyn 1:15, Fargelanda, the Accounts and the Audited
Financial Statements, give an accurate and complete view of Company's
and Subsidiaries' financial condition as of the respective date and the
results of their operations during the respective periods. The Accounts
and the Audited Financial Statements have been prepared in accordance
with the Accounting Principles.
3.10 BOOKS AND RECORDS
All Company and Subsidiary books and records have been properly
maintained in accordance with the legal requirements of Company's and
Subsidiaries' jurisdiction and are, together with all company minutes,
agreements, permits, etc., kept with Company and Subsidiaries
respectively.
3.11 SHAREHOLDER CONTRIBUTIONS
Neither Company nor any Subsidiary has debt or obligation to make a
payment of any kind to Seller or any Seller Affiliate, other than in the
ordinary course of business.
3.12 TAXES
The Audited Financial Statement and the Accounts are correct and contain
adequate reserves for all unpaid real property, personal property,
income, social security, customs, duties and all other taxes and
governmental or authority charges (collectively the "Taxes") for Company
and Subsidiaries, including interest and penalties in respect thereof,
for the financial year ended December 31, 1995, and all fiscal periods
ended prior thereto and for the period 1 January through 30 June 1996.
Company and Subsidiaries have timely and accurately filed all required
returns and reports covering the Taxes and paid all Taxes fallen due.
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3.13 LITIGATION AND CLAIMS
As of signing of this Agreement and except as disclosed in Exhibit 3.13,
there are no civil, criminal or administrative actions or
investigations, litigation or arbitration proceedings pending
irrespective of its kind or, to the best of Seller's knowledge,
threatened, or any claim asserted against Company which individually or
in aggregate could result in a Material Adverse Effect.
3.14 DIVIDENDS
Since 31 December 1995 up to and including Closing, Company has not
declared any dividends, paid any management charges or group
contributions to Seller or Seller Affiliate or made any other
distribution of its profits or unrestricted equity to Seller or Seller
Affiliate or made any disposition to such effect.
3.15 INTELLECTUAL PROPERTY
The conduct by Company and each of Subsidiaries of their present
business activities does not to the best of Seller's knowledge infringe
upon or violate the proprietary rights of any third party.
All know-how, business secrets and other intellectual property rights
which Company and Subsidiaries use or require for the proper conduct of
their business as currently pursued are either vested in Company or
licenced to Company or its Subsidiaries as the case may be.
Neither Company nor any Subsidiary has granted licences or other rights
other than as set forth in Exhibit 3.15.
There is no claim, litigation or legal action as to any such knowhow,
business secret or intellectual property right pending or to the best of
Seller's knowledge anticipated.
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3.16 ENVIRONMENT
At Closing,
a) Company and Subsidiaries have obtained all material permits,
licenses and other authorizations which are required for
operation of their business under any applicable laws, statutes,
directives and regulations ("Environmental Laws") relating to
pollution or protection of public health and the environment,
including laws, rules, regulations, policies or guidelines relating
to emissions, discharges, releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including without limitation ambient air,
surface water, ground water or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants,
chemicals, industrial, toxic or hazardous substances or wastes or
any other material, the presence of which required investigation or
disclosure under Environmental Laws. (Buyer is aware that the
Ljungby plant is under present application for extended trial
period and the plant in Aviken is consented to by the local
authorities but not formally applied for to such authorities.);
b) Except as provided for above, each of Company and Subsidiaries is
in compliance in all material respects with all required permits,
licenses, decrees, judgments, orders, authorizations and
Environmental Laws. Neither Seller nor Company nor any of
Subsidiaries has received written notice of, any claim, action,
demand, suit, proceeding, hearing, study or investigation,
based on or related to the manufacture, processing, distribution,
storage, disposal, transport, or handling, the emission, discharge
or release into the environment, of any pollutant, contaminant,
chemical, or industrial, toxic or hazardous substance or waste or
any other material, the presence of which requires investigation
or disclosure under Environmental Laws, which have not been
properly discharged of under Environmental Laws applicable as of
signing of this Agreement and which
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could reasonably be expected to have a Material Adverse Effect
on Company and Subsidiaries. There is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice or
demand letter, notice of violation, investigation or proceeding
pending or threatened against Company or Subsidiaries relating to
Environmental Laws or any regulation, code, plan, order, decree,
judgment or injunction promulgated or approved thereunder;
c) All measures required in relation to any pollution created
by any company in the Group has been undertaken in as far as such
measures results from pollution and/or contamination caused by any
company in the Group prior to Closing, and no unsettled claims by
third parties exist for environmental damage caused by a company in
the Group prior to Closing or due to such event which existed at
the time of Closing and which could not have been remedied by
Buyer.
d) As to claims made under this section 3.16 Seller shall be
invited at its own cost to participate in any such investigations
and procedures related thereto and shall at Buyer's request grant
such reasonable assistance as may be deemed required. In addition,
provided that such defense is reasonable, Buyer shall exercise any
defense Seller would ask Buyer to exercise together with Seller
against such investigations and claims.
3.17 BUSINESS ARRANGEMENT
Except as set forth in Exhibit 3.17, neither Company nor any Subsidiary
is bound by any agreement that restrict its business activity or its
disposition of its assets.
3.18 INDEBTEDNESS
Accurate descriptions of (i) all material loan, credit, overdraft
facilities agreements and (ii) other indebtedness, incurred outside the
ordinary course of business, and (iii) Company and Subsidiary securities
pledged therefor, are set forth in Exhibit 3.18.
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3.19 ACCOUNT RECEIVABLE
Except as set forth in Exhibit 3.19, all accounts receivable shown in
the Accounts are good and collectible in the ordinary course of
business.
3.20 COMPLIANCE WITH LAW
In respect of issues other than environmental which have been
specifically addressed under section 3.16, Company and Subsidiaries are
in compliance with, and are not in default or violation in any respect
of any applicable law, regulation, permit or ordinance affecting its
properties or the operation of its businesses, where such non-compliance
individually or in the aggregate could have a Material Adverse Effect.
3.21 INTER-COMPANY ARRANGEMENTS
As of Closing, all amounts owed to Company or Subsidiaries by Seller or
any Seller Affiliate, except for those relating to purchases of products
under market terms and contractual conditions normal in the ordinary
course of business, will have been paid. All guarantees given by or
binding on Company or any Subsidiaries in respect of any or obligations
of Seller or any Seller Affiliate will have been fully and effectively
released without any payment or other consideration for such release by
Company or Subsidiaries. Except as set forth in Exhibit 3.21, there are
no agreements, guarantees, indemnity arrangements or other rights,
obligations or debts between Company or any Subsidiary on the one hand
and Seller, any Seller Affiliate or any Affiliate on the other hand
other than in the ordinary course of business.
3.22 MATERIAL AGREEMENTS
3.22.1 In this Agreement "Material Agreement" means all binding
contracts, agreements, understandings or obligation as amended,
supplemented or modified, whether oral or written, (in this Section
"Contracts") which fulfil any of the criteria described below to
which any of Company and Subsidiaries
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(in this Section "the Companies") is a party, and provided
the loss of such Contract would have a Material Adverse Effect.
(i) Each Contract which involves performance of service or
delivery of goods and/or materials by any of the Companies of an
amount or value in excess of SEK 1,000,000;
(ii) Each finance or equipment lease, rental agreement, licence,
instalment and conditional sale agreement in relation to any
property, except such Contracts having a value per item or
aggregate payments in any one year of less than SEK 1,000,000.
(iii) Each joint venture contract, partnership arrangement,
research and development agreement or other Contract involving a
sharing of profits, losses, costs, or liabilities by any of the
Companies with any other person which Contract accounts for more
than SEK 1,000,000.
(iv) Those agreements listed in Exhibit 3.18 under section 3.18.
(v) Each written warranty, guarantee or other similar undertaking
with respect to contractual performance extended by any of the
Companies other than in the ordinary course of business.
3.22.2 Neither Company nor any Subsidiary is liable or potentially liable
under any binding guarantee other than guarantees within the Group
and guarantees listed in the Audited Financial Statement and in
Tanum Komponenter AB's financial statements as of 31 December 1995,
which would if called have a Material Adverse Effect.
3.22.3 All Material Agreements are valid and in full force and effect and
constitute legal, valid and binding obligations of Company and/or
the Subsidiaries and no notice of cancellation or renegotiation has
been given to or received by Company or any of Subsidiaries with
respect to any Material Agreement.
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3.22.4 Except as described in Exhibit 3.22.4 there are no supply or
purchase contracts which are Material Agreements and which cannot
be terminated in accordance with their terms by notice of twelve
months or less.
3.22.5 There are no existing defaults by any party to any Material
Agreements.
3.23 CHANGES SINCE 31 DECEMBER 1995
Except as set forth in Exhibit 3.23, since 31 December 1995 through 30
June 1996 there has not occurred, arisen or been created, any material
change in the business operations or internal conditions (financial or
otherwise) of Company or any Subsidiary, which is not reflected in the
Accounts.
The discontinuation of the manufacturing of mobile cold storages will
not cause the company to incur costs due to the discontinuation of the
production, including but not limited to unnecessary investments,
corresponding to not yet depreciated investments, lay offs and
other closing costs to be taken in direct relation to the cessation of
the production.
Since 30 June 1996 through the date hereof and except as set forth in
Exhibit 3.23.
a) the business and affairs of Company and Subsidiaries have
been conducted and carried on only in the ordinary course of
business;
b) Company and Subsidiaries have not made any change in any
method of accounting practice or policy;
c) there has been no change in the share capital of Company
and Subsidiaries;
d) the Group has not surrendered to Seller or any Seller Affiliate
any of its tax reserve credits and benefits as of January 1, 1996;
and
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e) the Group has not entered into any non arms length employment or
consultant contract(s).
3.24 INTERIM OPERATION
During the period starting on the date of signing of this Agreement and
up to Closing, Seller will cause Company and each of Subsidiaries to be
operated in a prudent manner, in the normal course of its business and
in accordance with the following (except as otherwise authorized in
writing by Buyer):
(i) No dispositions of any significant assets other than in the
ordinary course of business;
(ii) No major expenditures, transactions, commitments, undertaking or
actions outside the normal course of business.
Seller will cause Company and each of Subsidiaries to keep Buyer
contemporaneously informed of any business decisions within the ordinary
course of business, (except for day to day matters) and of other not
insignificant events.
Seller further undertakes to keep Buyer informed of the development of
Company's business by providing Buyer with copies of the Company's
management reports.
Seller will advice Buyer without delay of any anticipated material
adverse change.
Until Closing, Seller will give Buyer and its representatives access
during normal business hours to Company premises and to all relevant
Group books, records and documents and provide to Buyer copies thereof
as requested by Buyer in consultation with the managing director of
Company.
3.25 AFFILIATES
All material information regarding the Affiliates and their businesses
known to Company and Subsidiaries has been
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disclosed to Buyer.
4. INDEMNIFICATION BY SELLER
4.1 SELLER'S INDEMNIFICATION OBLIGATION
a) Subject to the terms of this section, Seller hereby agrees to
indemnify and hold harmless Buyer, Company and each Subsidiary from
any losses, damages, claims, liabilities or expenses directly or
indirectly suffered or incurred by Buyer, Company or any Subsidiary
as a result of or on account of any of Seller's representation,
warranty or covenant ("Losses") however caused provided that Seller
shall not be liable under this section in respect of any claim
arising out of facts or circumstances expressly stated in this
Agreement with its appendices and exhibits or excepted from
Seller's liability as provided hereinafter.
b) Seller will pay to Buyer any amounts to which Buyer is
entitled as indemnification hereunder as soon as practicable and in
no event later than 30 days after a claim for such indemnification
has been submitted by Buyer to Seller, or if such claim is disputed
by Seller, as soon as practicable but not later than 30 days after
a valid and final judgement in respect of such claim has been
entered.
In the event of a claim by Buyer for indemnification by Seller
hereunder, in respect of a matter which in Seller's reasonable
opinion is capable of cure, Seller will have the right,
exercisable upon written notice within seven days to Buyer, to
attempt to cure the breach of representation or warranty in
question for a period of 30 days following the date of notice by
Buyer to Seller claiming indemnification with respect thereto.
c) The amount of any Loss shall be calculated taking into account any
tax benefits which can be realized under any applicable law by
Buyer, Company, or any Subsidiary on account of the Loss.
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The amount of any Loss related to the divestiture agreement with
Applied Composites AB shall be reduced to 75 % of the actual Loss.
The amount of any Loss related to the specific environmental
matters referred to in Section 3.16 c shall be reduced to 50 % of
the actual Loss, if such Loss is due to new legislation enacted
after Closing and which new legislation gives rise to obligations
ordered by authorities under such laws.
d) The payment of indemnification claims under this Agreement
will be deemed to be in the nature of reduction of the Purchase
Price.
e) Interest will be calculated on the indemnifiable Loss as
from Closing Date or, if the Loss is related to a payment after
Closing by Company or any Subsidiary, as from the date of such
payment.
The interest rate will be in accordance with 5 Section , the
Swedish Interest Act up to 30 days after the date of Buyer's claim
and in accordance with 6 Section thereafter until payment is
made.
f) In the event of a claim by Buyer for indemnification in
respect of accounts receivable other than due by Seller, which
claim is paid by Seller, Buyer will cause Company or the respective
Subsidiary to assign to Seller, the accounts receivable in
question.
4.2 INDEMNIFICATION LIMITATION
Seller will not be obligated to indemnify Buyer for any Loss for which
the Purchase Price has been adjusted pursuant to Section 1.4.
a) Save as for claims related to the divestiture agreement
with Applied Composites AB and to the discontinuation of the
manufacturing of mobile cold storages, Seller will not be obliged
to indemnify Buyer for any Loss unless the aggregate amount of all
Losses is greater than SEK 3,000,000 (it is
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understood that if the Losses exceed such SEK 3,000,000, the Buyer
shall be entitled to indemnification for the aggregate amount of
all Losses).
It is further understood that Losses for which Seller's liability
has expired as set forth in subsection b) and c) below will
neither be subject to any payment obligation of Seller nor
included in the of the aggregate amount except if the aggregate
amount of Losses, for which claims have been duly made on and
before 28 February 1998 and of Losses under subsection c) (iii)
below, for which claims have been duly made within the time limit
set out therein, exceeds SEK 3,000,000, then the cumulative amount
of such Losses will be recoverable.
b) Except as provided in subsection 4.2.c below, any claims
for indemnification hereunder will be made in writing not later
than 60 days after Buyer becomes aware of the breach in question,
describing in reasonable detail the nature of the claim and a good
faith estimate of the amount claimed. Seller's obligation to
indemnify Buyer in respect of such claim will only apply to claims
made on or before 28 February 1998.
c)(i)Any claims for indemnification in respect of liabilities for taxes
and social charges will be made by Buyer in writing as soon as
possible after liability has been claimed with Buyer, Company or
any Subsidiary by the relevant authority, and Seller's obligation
to indemnify Buyer in respect of such liability terminate on the
earlier of three months thereafter or three months after valid and
final judgment with respect to such liability has been entered by
a court or tax authority of competent jurisdiction.
(ii) Any claims for indemnification in respect of environmental matters
will be made by Buyer in writing not later than 60 days after Buyer
becomes aware of the breach in question, describing in reasonable
detail the nature of the claim and a good faith estimate of the
amount claimed. Seller's obligation
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to indemnify Buyer in respect of such claim will only apply to
claims made on or before 1 March 2004.
(iii) Any claims for indemnification in respect of the representation
and warranty given under the last sentence of section 3.8 d and
for environmental claims in relation to the divestiture agreements
with Xxxxx Skandinavien AB, Hagglunds Vehicle AB and Applied
AB will be made by Buyer in writing not later than 60 days after
Buyer becomes aware of the breach in question, describing in
reasonable detail the nature of the claim and a good faith
estimate of the amount claimed. Seller's obligation to indemnify
Buyer in respect of such claim will only apply to claims made on
or before the original expiry date of the respective reemployement
undertaking and the expiry of the environmental representations
and warranties under the said divestiture agreements, as the case
may be.
d) The aggregate amount for which Seller may be liable under
this section shall in no case exceed the Purchase Price.
4.3 THIRD PARTY CLAIMS
When Buyer becomes aware of any claim, suit, action or proceeding by a
third party - including tax authorities - against Company or any
Subsidiary which may give rise to a Loss which may be indemnifiable
under this section, Buyer will, unless it is evident that time will not
allow such procedure:
a) not make any admission of liability, agreement or
compromise to or with any person or entity in respect thereto
without the Seller's prior written consent, which consent will not
be unreasonably withheld;
b) permit Seller and its professional advisors to have reasonable
access to Company's and Subsidiaries' personnel and to any
relevant accounts, documents and records within the possession
and control of Company or any Subsidiary to enable Seller and its
professional advisors to assess the merits and potential liability
in respect of its claim,
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suit, action or proceeding and to take copies of such relevant
accounts, documents and records at their own expense; provided,
however, that Seller will have no rights under this section if
Buyer agrees to discharge and release Seller from its
indemnification obligation hereunder in of the Loss or portion
thereof which arises out of the claim, action or proceeding;
c) give prompt notice to Seller, and Seller will have the
right at its election to cooperate in the defense of such
third-party claim at its own expense by giving prompt notice to
Buyer. Buyer will, in handling the defense, do so acting in good
faith and taking into consideration the reasonable interests of
Seller.
5. REPRESENTATIONS AND WARRANTIES OF BUYER AND SELLER
Each of Buyer and Seller warrants that it is a corporation duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction and has all corporate power and authority to
make and perform its respective obligations under this Agreement.
This Agreement has been duly authorized and, upon execution and delivery
by Buyer and Seller, is a valid and binding obligation of Buyer and
Seller enforceable against them in accordance with its terms.
6. JOINT COVENANTS
6.1 PUBLICITY
No press release or other announcement concerning the transaction
contemplated by this Agreement or any auxiliary matter will be made by
either party except on prior notice to and with the consent of the other
party, provided that nothing in this Agreement prevents either party or
any affiliated company from making, in consultation with the other
party, any announcement of filing
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required by applicable law or regulation or by the rules and regulations
of any Stock Exchange on which it is listed.
6.2 CONFIDENTIALITY
Seller covenants up to and including the fifth anniversary of Closing
not to make use of or disclose any confidential information which is a
business or trade secret in Company's existing business as of Closing.
The non-disclosure obligation will not, however, apply to any
information which was generally avilable to the public or has become -
through no act or failure of Seller - public information or generally
available to the public, or which may be required by law or called for
by the requirements of any Stock Exchange.
6.3 NON COMPETE
Seller and Seller's Affiliates will neither directly nor indirectly
through third parties for a period of three years from Closing enter
into business arrangements in direct competition with Company's or
Subsidiaries' business as pursued as of the Date of Closing including
but not limited to, in Europe, Canada, United States, Mexico, China,
India, Singapore, Thailand, Korea, Malaysia or Indonesia and will not,
during a period of two years from Closing, solicit for employment or
offer employment to the employees listed in Exhibit 3.8.a.
6.4 REMEDIES
The remedies being the representations and warranties herein given and
indemnifications being the reduction in Purchase Price and interest
provided for in this Agreement shall be exclusive.
7. COMPLIANCE WITH COMPETITION REGULATIONS
The Parties shall immediately upon effectivity of this Agreement jointly
notify the Swedish Competition Authority of the acquisition by Buyer.
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8. RELEASE OF SELLER'S PARENT GUARANTEE
As to the parent guarantee by Seller set forth in Exhibit 3.21 Buyer
undertakes to procure the release of the guarantor from such guarantee
as of the Closing Date.
As to the parent guarantee by Borealis A/S to FR Fastighetsrenting AB
set forth in Exhibit 3.21 Buyer undertakes to procure the release of
Borealis A/S from the guarantee not later than 30 June 1998. The Buyer
and the Buyer's Swedish subsidiary - Xxxx Corporation Sweden AB - will
on the Closing Date issue to Borealis A/S a joint and several
undertaking to reimburse Borealis A/S for any payments made by Borealis
A/S under its gurantee to FR Fastighetsrenting AB related to the time
after Closing Date (including any costs incurred by Borealis A/S in
connection herewith). Such undertaking will be in the format provided
for in Appendix 8. Further Borealis A/S will have full recourse against
the Company for any such payment or cost.
Seller shall assist Buyer and Company in defending itself against any
challenge or claim instituted by FR Fastighetsrenting AB against Company
provided Company continues to fulfill its current obligations under the
Lease Contracts in connection with the leases and options as to the real
estate Xxxxxxxx 00, Xxxxxxxx and Assarebyn 1:15, Fargelanda.
Buyer will cause Company to keep Borealis A/S
contemporaneously informed on its payment to FR
Fastighetsrenting AB and on any request by FR Fastighetsrenting
AB for changes to the payment scheme or to its agreement with
FR Fastighetsrenting AB
9. NAME CHANGE
Buyer shall cause Company and each Subsidiary to delete the word
"Borealis" from its respective corporate name and trade marks and trade
names without undue delay after Closing and not later than 31 December
1996.
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Buyer shall further cause Company and Subsidiaries within the same time
period to cease to use the logotypes of "Borealis" presently used by
Company and Subsidiaries.
10. DISCHARGE OF DIRECTORS LIABILITY
Buyer shall as soon as possible, at the ordinary shareholders meeting of
Company and each Subsidiary, cause the directors and managing directors
of Company and each Subsidiary to be discharged from liability for their
administration of Company and each Subsidiary as from 1 January 1996 up
to and including the Closing Date, provided that the respective external
auditors of Company and Subsidiaries recommend such discharge from
liability.
11. EFFECTIVITY
This Agreement is effective upon the signing of both Parties and the
approval hereof by the respective board of directors of the Parties.
12. MISCELLANEOUS
12.1 ENTIRE AGREEMENT
This Agreement, including all appendices and exhibits, supersedes any
other agreements, oral or written, between the parties, including
Seller's Affiliates - except for the confidentiality agreement entered
into 14 May 1996, which however shall cease to be valid on Closing -
with respect to the subject matter.
12.2 AMENDMENTS
This Agreement may be amended only in writing by both parties.
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12.3 NOTICES
Any notice, consent and other communication to be provided under this
Agreement shall be provided in accordance with the following notice
information:
If to Seller; to Borealis Holding AB, S- 444 86 Stenungsund, Sweden,
with copy to Xx Xxxxxx Xxxxx, Borealis Coordination Center N.V., Woluwe
Garden, Woluwedal 26, B-1932 Sint-Xxxxxxx-Woluwe, Belgien.
If to Buyer; to Xxxx Corporation, att: General Counsel and head of the
legal Department, Xxxxxxxxxx, XX 00000, XXX, telefax: 0-000-0000000.
Messages shall be submitted by courier or telefax, courier to be deemed
received two business days after remittance and telefax the business day
of the remittance subject to confirmed telefax receipt.
12.4 COSTS
Seller and Buyer will each bear its own fees and expenses, including
legal fees and expenses, incurred in connection with the negotiation,
preparation and execution of this Agreement and the transactions
contemplated.
12.5 NO WAIVER
Save as provided for as to the right to grant specific waivers, the
failure of any party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver of any right
hereunder, nor shall it deprive that party of the right thereafter to
insist upon the strict adherence to that term or any other of this
Agreement.
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12.6 EXECUTION
This Agreement shall be executed in two counterparts.
12.7 LANGUAGE
This Agreement is executed in the English language and shall be
construed and interpreted in accordance with the English language text.
12.8 ILLEGALITY
Save as provided for in article 2.8, in the event any provision of this
Agreement is declared illegal or unenforceable, it is the intent of the
parties that the remaining provisions shall continue in full force and
effect, provided that the fundamental considerations which induced the
parties to enter this Agreement remain valid.
12.9 FURTHER ASSISTANCE
Seller shall do everything reasonably required of it upon notice from
Buyer to carry out and give full effect to this Agreement.
12.10 GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with the
laws of Sweden (excluding the law 1987:822 on International Sales).
All disputes arising in connection with this Agreement shall be finally
settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by three arbitrators appointed in
accordance with the said Rules. The arbitration shall take place in
London, UK, and the language to be used in the proceedings
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shall be English.
---------------------
The Parties and the undersigned guarantors confirm that this agreement was
entered into as of 22 November 1996.
the 9 December 1996 the 9 December 0000
XXXXXXXX XXXXXXX XX XXXX CORPORATION
SWEDEN AB
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------ -------------------------
Borealis A/S hereby guarantees as for its own debt for the undertakings by
Borealis Holding AB set forth in sections 3, 4 and 8 of this Agreement above.
Borealis A/S hereby submits itself to arbitration in accordance with section
12.10 above and accepts irrevocably and unconditionally the nomination of
arbitrator by Borealis Holding AB as a nomination of its own and hence to be
deemed as jointly nominated by them.
the 9 December 1996
BOREALIS A/S
/s/ Xxxxxx Xxxxx
---------------------
Xxxx Corporation hereby guarantees as for its own debt for the undertakings by
Buyer set forth in sections 1, 2, 5, 8 and 9 of this Agreement above. Xxxx
Corporation hereby submits itself to arbitration in accordance with section
12.10 and accepts irrevocably and unconditionally the nomination of arbitrator
by Buyer as a nomination of
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its own and hence to be deemed as jointly nominated by them.
the 9 December 1996
XXXX CORPORATION
/s/ Xxxxxxx X. Xxxxxx
----------------------
