EXHIBIT 10.8
AGREEMENT FOR THE SALE OF SHARES IN
RIJNHOUT FOOD GROUP B.V.
The undersigned:
1. The private company with limited liability HOUDSTERMAATSCHAPPIJ X.X.
RIJNHOUT B.V., established in Zwijndrecht but maintaining offices in 2291
XJ Barendrecht at Xxxxxxxxxxxxxx 00x, represented in this matter by its
sole director Mr X.X. Rijnhout, hereinafter referred to as the Seller,
and
2. INTERNATIONAL PRODUCE HOLDING COMPANY, a company incorporated and existing
under the laws of the State of Delaware (USA), established in and having
its registered office at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
(XXX) represented in this matter by Xx. Xxxxxx Xxxxxxx, hereinafter
referred to as the Buyer,
WHEREAS:
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The Seller is holder of all the issued shares, consisting of 40 (forty) shares,
each with a nominal value of Hfl. 1,000.00, numbered 1 to 40 inclusive, in the
capital of the private company with limited liability RIJNHOUT FOOD GROUP B.V.
(hereinafter referred to as "the Company"), established in Zwijndrecht but
maintaining offices in Barendrecht.
The Company is in turn the sole shareholder of its operating companies, these
being (a) the private company with limited liability KONINKLIJKE EXPORTHANDEL
JAC. VAN NAMEN & ZONEN B.V. and (b) the private company with limited liability
RIJNHOUT GROENTEN B.V. (hereinafter referred to as "the Operating Companies"),
both operating companies also established in Zwijndrecht but maintaining offices
in Barendrecht. The Company and the Operating Companies are hereinafter jointly
referred to as "the Companies".
The Seller wishes to sell and transfer ownership of 51% of the issued share
capital of the Company to the Buyer and the Buyer wishes to purchase and acquire
ownership of 51% of the shares in the issued capital of the Company. The said
51% of the shares is in the issued capital of the Company are hereinafter
referred to as "the Shares".
Parties have reached agreements on the conditions under which the purchase and
sale of the Shares shall take place.
Parties wish to make the following written record of the agreement reached.
HAVE AGREED AS FOLLOWS:
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Article 1 (purchase and sale)
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1. The Seller hereby sells the Shares to the Buyer and the Buyer purchases the
Shares from the Seller. The purchase and sale of the Shares shall take
place with all rights attached thereto. The Shares shall be for the account
and risk of the Buyer from 1 January 1996.
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2. The transfer of the Shares by the Seller to the Buyer shall take place by
virtue of the execution of the Deed of Transfer, also including
acknowledgement of this transfer by the Company, before Xx. X.X.X.X.
Vinken, civil law notary in Hendrik Ido Ambacht, or his deputy at latest
three days after the Ministry of Justice approved the amendment of the
articles of association mentioned hereafter.
The date of transfer is hereinafter referred to as the "Transfer date". The
draft of the Deed of Transfer is attached to this agreement as Appendix I.
3. Because the division of the share capital in coupons makes the transfer of
exactly 51% of the issued share capital impossible, the Seller shall amend
the articles of association before the transfer to the effect that the
authorized capital of the Company shall be divided into 20,000 (twenty
thousand) shares each with a nominal value Hfl. 10, of which 4,000 (four
thousand) shares each with a nominal value of Hfl. 10 shall be issued after
the amendment of the articles of association, so that pursuant to this
agreement the Seller shall transfer 2,040 (two thousand and forty) shares
with a nominal value of Hfl. 10.-in the issued capital of the Company.
4. On the Transfer Date the Seller shall hand over to the Buyer a copy of the
register of shareholders of the Company and copies of the registers of
shareholders of the Operating Companies.
Article 2 (purchase price and repayment of current account)
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1. The purchase price of the shares shall be paid by the Buyer to the Seller
in installments and the total amount shall in part depend on the profits
achieved in the years 1996, 1997, 1998 and 1999, whereby in this context
profit is defined as the profit before tax and interest as reported in the
annual accounts of the Company as adopted and including an auditor's
statement approving them. The profits as so defined shall hereinafter be
referred to as "EBIT". The purchase price shall be made up and determined
as follows:
a. On the passing of the Deed of Transfer, Buyer shall make a payment to
the Seller of Hfl. 2,509,200 (in words: two million five hundred and
nine thousand and two hundred guilders) on such account as shall be
designated by the notary.
b. Subsequently, four annual installments of Hfl. 418,200 (in words: four
hundred and eighteen thousand and two hundred guilders) will be paid,
which may, however, be increased or lowered depending on the EBIT
achieved in the year concerned. If the EBIT, as reported in the annual
accounts, including an auditor's statement approving them, is equal in
the years 1996, 1997, 1998 and 1999 to the average EBIT in the years
1993, 1994 and 1995, that is Hfl. 1,870,000 (in words: one million
eight hundred and seventy thousand guilders -hereinafter referred to
as the "Target EBIT"), in the year concerned the said amount of Hfl.
418,200 shall be paid. If, however, the EBIT for any of the said years
is lower or higher than the said Target EBIT the amount of Hfl.
418,200 to be paid for the year concerned shall be increased or
decreased in proportion, with the understanding, however, that the
amount to be paid by the Buyer in
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any year shall never be more than Hfl. 836,400. (Example: Assume EBIT
for 1996 is Hfl. 2,000,000.- The installment for the year 1996 is then
2,000,000/1,870,000 x 418,200 = 447,273). Seller shall never have the
obligation to pay back any part of the purchase price, even if the
EBIT of the respective year should be negative.
c. Each of the installments referred to in b. shall be paid by the Buyer
to the Seller within fourteen days after the general meeting of
shareholders of the Company has adopted the annual accounts for the
year concerned, on such account as shall be designated by the Seller.
To secure the obligation of the Buyer to pay the said installments on
behalf of Seller a right of pledge will be established on 80 shares to
be acquired by the Buyer on the Transfer Date. Buyer will retain the
voting rights on the shares to be pledged.
d. Changes to the principles of valuation and the methods of determining
the results in the annual accounts shall be eliminated for the
purposes of determining the EBIT.
e. The current account arrangement between Seller and the Company shall
be terminated as of the date of Transfer. Before the transfer of the
shares takes place, Seller shall give Buyer a statement of the amount
he owes on the basis of this current account arrangement to the
Company (including the interest at 6% per annum to be calculated from
1 January 1996). Parties will request the Notary to use (part of) the
purchase price to repay the amount of money Seller owes to the
company. As far as required Seller hereby gives full and irrevocable
power of attorney to Buyer to instruct the notary in this matter.
f. If the Companies' agent in North America, Mrs. Honingberg, solely and
exclusively because of the closing of this Agreement, terminates her
agreements with the Companies, and such termination has a negative
effect on the North American revenues (considering such revenues as
the average of the years that ended December 31, 1993, 1994 and 1995),
which cannot be compensated by any other agreement or business
combination in such territory, and consequently the Target EBIT for
1997 can not be reached, then such negative effect shall not be
considered for purposes of determination of the Target EBIT.
Article 3 (Management)
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1. From the Transfer Date the Board of Managing Directors of the Company shall
consist of the following persons:
- Mr. X.X. Rijnhout
- Mrs. A.N.E. Ros-Bank
- Mr. Th. C. Slijkerman.
Contracts of employment/management have been concluded with said persons,
copies of which employment/management contracts are attached to this deed
as appendices 2, 3 and 4. On the Transfer Date - after the Transfer of the
Shares took place - a general meeting of shareholders of the Company shall
be held at which meeting Mr. Th. C. Slijkerman shall be appointed a
(managing) director of the Company.
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2. As Appendices 5a and 5b to this deed, declarations are attached from Mr.
Th. C. Slijkerman and X.X. van xx Xxxxxx, who are currently entered in the
commercial register as members of the Supervisory Board of Koninklijke
Exporthandel Jac. van Namen & Zonen B.V. to the effect that they shall
resign as members of the Supervisory Board with effect from the date of
transfer of the shares and that they have no further claim of the Company
arising from the performance of their duties or their resignations. The
parties herewith discharge Mr. Slijkerman and Mr. van den Heuvel from their
duties in their capacity as supervising director as from the date of their
resignation.
3. New provisions regarding the powers of the directors, the appointment of a
Supervisory Board and its powers shall be drawn up in accordance with the
model attached to this deed as Appendix 6. Seller and Buyer have agreed
that the Supervisory Board shall consist of three members, two of whom
shall be appointed by the Buyer and one by the Seller. Furthermore, the
provision in the articles of association that a member of the board can
only be dismissed by two thirds of the votes (Article 17, paragraph3)
shall be scrapped.
Seller shall ensure that the articles of association of the Company are
amended in accordance with this article prior to the transfer of the
shares.
Article 4 (warranties and liability)
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1. The Seller warrants to the Buyer that the declarations included in Appendix
7 ("warranties") are completely accurate on the Date of Transfer.
2. The investigations conducted by the Buyer and the information given by the
Seller to the Buyer shall in no way act to discharge the Seller from his
obligations under the warranties unless this is explicitly stipulated in
this agreement and the accompanying appendices.
3. In the event of infringement by the Seller of one or more warranties under
this agreement or in the event that the Seller is in breach of other
obligations under this agreement, the Seller shall be liable towards the
Buyer for any resulting damage, including the costs reasonably incurred by
the Buyer and/or Companies in respect thereof and the statutory interest to
be calculated from the Transfer date, all this without prejudice to any
other rights which the Buyer may have by reason of such an infringement.
Any such damages and costs shall be treated as a correction of the purchase
prices for the Shares.
4. The following restriction shall applly with respect to the damages by
reason of breach of the warranties.
The Seller is only liable if the damage after the deduction of
unprecedented advantages not shown in the Transfer Account, exceeds a total
of Hfl. 55,000.-. If that is the case, the Seller is then liable for the
full amount (therefore not only for the excess amount).
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5. Without prejudice to the provisions of sub-section 6 of this article, the
liability of the Seller for infringements from the Transfer Date shall
apply:
a. for an unlimited period with respect to the warranties given in
Appendix 7, numbers 1, 2 and 7;
b. with respect to the guarantees relating to taxes and social security
contributions (Appendix 7, number 5) for such period as the relevant
authorities can still impose (supplementary) demands for the period
prior to the Transfer Date, plus 1 year after the end of said period;
c. up to 36 months after the Transfer Date with respect to the other
warranties in Appendix 7, unless otherwise stipulated there.
6. The restriction of the liability as referred to in sub-sections 4 and 5 of
this article shall, however, not apply if the inaccuracy of the relevant
warranties on the Transfer date was known to the Seller or could reasonably
have been known to the Seller.
7. In the event of an infringement, the Buyer shall notify in writing by
registered mail the Seller thereof as soon as possible. The Buyer shall
then be free, if a fact proves to be other than was guaranteed on the basis
of more than one warranty, to decide which warranty he shall invoke. The
Seller has the right - at his own expense - to raise a defence against
claims the absence of which is warranted in this agreement.
Article 5 (indemnity)
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1. The Seller shall indemnify the Buyer and the Companies against:
a. all claims which arise from the obligations of the Companies by virtue
of the warranties provided by them or sureties given by them with
respect to, or liabilities accepted by them or arising from law
(whether or not jointly and severally) for obligations (including:
fiscal liabilities) of third parties, all this is so far as no
adequate provision has been made for them in the Transfer Account as
of 31 December 1995.
b. Claims of third parties arising from obligations entered into in the
past by the Companies together with the third parties as referred to
under a. above, all in so far as no provisions has been made for them
in the Transfer Account as of 31 December 1995.
2. As Appendix 8 to this deed shall be attached a declaration by ING Bank N.V.
to the effect that this bank shall not avail of its power to terminate the
credit relationship with the Companies as a sole result of the transfer of
the Shares by the Seller to the Buyer and that it releases the Companies
from the joint and several liability for the Seller's debts to the bank.
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Article 6 (non-competition and confidentiality clause)
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1. The Seller is forbidden from establishing, carrying on, jointly running or
having someone else run a business similar to or in competition with the
business of the Companies for a period of seven years after the Transfer
Date, as well as working for such a business of a third party, whether for
remuneration or not, this on penalty of a fine, payable immediately without
notice of default of Hfl. 1,000,000 plus Hfl. 10,000 for each day that any
breach continues. This non-competition clause applies worldwide.
2. Except in so far as legally or otherwise required, the Seller shall not
publish or any way provide to third parties or otherwise make accessible,
directly or indirectly, any information relating to a confidential or
secret aspect of the business of the Companies.
3. The obligations stipulated above have also been accepted by Mr. X.X.
Rijnhout in his private capacity, who in evidence thereof has cosigned
this agreement.
Article 7 (future acquisitions by Buyer)
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The Buyer proposes acquiring majority interests in Europe and Asia in businesses
similar to that conducted by the Companies, this is, in businesses dedicated to
the distribution of fresh produce. The Buyer or its affiliated companies may do
this directly by acquiring interests, or it may be done indirectly by acquiring
interests through the Company. For purposes of this Article, "affiliated
companies" shall mean (i) any corporation of which more than 50% of its stock is
owned by Buyer; (ii) any corporation which owns more than 50% of the stock of
Buyer; (iii) any corporation which its stock is owned more than 50% by the
corporation described in (ii).
Both the acquisition of interests in similar businesses by the Buyer directly
and acquisition indirectly through the Company may effect the equity value of
the Company. In order to prevent the Seller as a minority shareholder from
suffering a disadvantage from the Buyer's acquisition policy, the parties have
agreed as follows:
a. If the Buyer proposes acquiring an interest in a business similar to that
conducted by the Companies in Europe and Asia, the Buyer shall give the
minority shareholders the opportunity to participate jointly for up to 49%
in any such acquisition provided that (i) Buyer and/or its affiliated
companies shall retain voting control over such joint interest in an
acquired company; (ii) such participation by the minority shareholders is
not restricted by any law, decree or governmental regulation; and, (iii)
such participation by the minority shareholders is not restrained by any
provision of a contract, agreement, instrument or obligation to which the
Buyer and/or its affiliated companies may be bound.
b. If the Buyer proposes acquiring a business similar to that conducted by the
Companies in Europe and Asia indirectly through the Company the minority
shareholders shall have to contribute pro rata to the necessary capital. If
the minority shareholders, for whatever reason, are unwilling or unable to
participate in the capital increase which is necessary for a proposed
acquisition, they shall permit their relative share in the issued capital
of the Company to be reduced.
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c. If, however, one or more of the minority shareholders - supported by expert
opinions from at least two external experts - can plausibly demonstrate
that the equity value of the Company would suffer as a result of
acquisitions as referred to under a. and b. and the minority shareholders
object with at least forty percent of the votes represented in the general
meeting of shareholders to such an acquisition, the Buyer now accepts for
such an event the obligation to buy out the shareholders who have declared
their opposition to such an acquisition, in which case the purchase price
shall be fixed according to the following method.
1. The purchase of such a minority equity participation shall be in cash
and the equity value together with the earn out (as stipulated in
Article 2, section 1, sub-section b), if applicable, will be
determined based on the same valuation method as was used for the
acquisition of the Shares, which is as follows:
(a) Value of shares: ten times the average earnings before interest
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and after taxes ("EBIAT"), over the last three years, minus the long
term debt, the permanent portion of the short term debt and any other
debt now sown in the balance sheet, divided by the then outstanding
number of Shares; and,
(b) Unpaid Earn Out: the average EBIT over the then immediately
preceding 3 years.
2. Unless there has been a material change on the long term debt, in the
permanent portion of the short term debt or other debt has been
incurred ("Material Change"), the audited financial statements of the
immediately preceding 3 years will be used for valuation.
3. If a material change has occurred or if more than 6 months have
elapsed from the closing of the last financial statements, then an
audit will be carried out and the valuation will be calculated as
follows:
(i) EBIT and EBIAT will be based on the average of the last 3
years;
(ii) long term debt, will be determined according to the closing of
the previous month before the agreed transaction date:
(iii) the permanent portion of the short term debt will be based upon
the preceding 12 months, before the agreed transaction date;
and,
(iv) other debt and receivables incurred since the last audited
financial statement will be taken into account.
d. The seller undertakes to impose the stipulations of this article in a
perpetual clause on third parties to whom he - with due observance of the
blocking rules in the Company's articles of association - sells shares in
the capital of the Company.
Article 8 (Transfer of annuity and pension commitment)
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The Seller and the Buyer undertake to ensure that the annuity commitment towards
Mr X.X. Rijnhout entered into by the Company and the pension commitment under
its own management towards Mr X.X. Rijnhout shall be
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assumed by the Seller, this with the permission of and subject to the condition
imposed by the tax authorities at a time to be determined by the Seller at its
sole discretion. As long as the said commitments are not assumed by Seller, the
Seller warrants the Buyer that any claim resulting form said commitments shall
not exceed the amount of the relevant provisions in the Transfer Account unless
said claims are adequatly covered by insurance.
Article 9 (Sale and Delivery of land at Vrouwgelenweg)
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Seller warrants that on the date of transfer at the latest the Company shall
sell and transfer to the Seller title to the registered properties consisting of
a plot of land with shed and a wooden bridge on it, situated at Vrouwgelenweg in
Hendrik Ido Ambacht and a plot of land on Vrouwgelenweg in Hendrik Ido Ambacht,
entered in the land registry of the municipality of Hendrik Ido Ambacht, section
E, number 9592, size 40 are and 10 centiare and municipality of Hendrik Ido
Ambacht section E 9593 size 20 are and 85 centiare for the purchase price of
Hfl. 298,486, cost for the buyer's account. Seller shall accept said registered
properties from the Company in their condition as of the date of delivery and
shall require no indemnity of any nature whatever from the Company.
Article 10 (participation Mr Slijkerman)
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1. Seller wishes to sell 20% of the outstanding capital of the Company to Mr
Th. C. Slijkerman, residing at Zwijndrecht, The Netherlands, or to a
limited liability company (B.V.) controlled by said Mr Slijkerman
(hereinafter referred to as "Slijkerman"). Buyer declares now for then that
it agrees to Slijkerman's participation and that it shall not evoke the
statutory blocking restriction.
2. Seller has stipulated with regard to the shares to be acquired by
Slijkerman that Seller will be entitled to buy them back from Slijkerman,
who shall be obliged to sell them in the following cases:
- upon Mr. Th.C. Slijkerman reaching the age of sixty;
- in the event of Mr Th.C. Slijkerman's death before said age;
- in the event of Mr Th.C. Slijkerman's dismissal as managing director of
the Company, other than at his own request.
Buyer declares now for then that in the said cases it will not exercise any
rights based on the share transfer restriction in the articles of
association with respect to the shares in question.
3. In the event Buyer purchases additional shares from Slijkerman or the
Seller the purchase price will be determined according to the same
valuation method as mentioned in article 7.
Article 11 (costs)
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Each of the parties shall bear its own costs relating to this transaction for
accountants and fiscal and legal advice. The costs of this deed and the costs
of the deed of transfer shall be borne by the Buyer.
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Article 12 (Exclusion of cancellation)
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Parties waive their right for whatever reason to claim cancellation or
dissolvement of the agreement and the deed of delivery wholly or in part.
Article 13 (Appendices)
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The appendices to this agreement constitute an integral part of the agreement.
Any reference to this agreement shall also involve a reference to said
appendices.
Article 14 (Applicable law)
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This agreement is governed by the law of the Netherlands. Disputes arising from
this agreement shall be submitted to the court with jurisdiction in the District
of Rotterdam or shall be settled at the sole discretion of Buyer by arbitration
in accordance with the Rules of the Netherlands Arbitration Institute
(Nederlands Arbitrage Instituut). The arbitral tribunal shall be composed of
three arbiters when the claim amounts to more than Hfl. 100,000 or one arbiter
when the claim is less than Hfl. 100,000
The losing party shall have to reimburse to the other party not only the costs
awarded in the verdict but also the other costs reasonably incurred by the other
party or the Companies.
Article 15 (Notifications)
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All notifications by virtue of this agreement must be made in writing and sent
by registered delivery to the following addresses:
The Seller: Houdstermaatschappij X.X. Rijnhout B.V.
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Att. Mr X.X. Rijnhout
Onderdijkse Xxxxxx 000
0000 XX XXXXXXX IDO AMBACHT
Xxxxxx en Legger Advocaten
Att. Xx X.X. Xxxxxx
Postbus 1034
3300 BA DORDRECHT
The Buyer: International Produce Holding Company
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C/O Pulsar International, S.A. de C.V.
Att. Lic. Xxxxxxxxx X. Xxxxxxx Xxxxxx
Edificio Xxxxx Xxxx, Mezzanine
Ave. Xxxxx no. 300, Col Xxxxx del Campestre
SAN XXXXX XXXXX XXXXXX, Nuevo Xxxx,
Mexico
Van den Boomen Advocaten
Att. Mr M.J.P.N. Steijven
Postbus 193
5580 AD WAALRE
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Article 16 (Final provision)
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If one or more of the provisions in this agreement prove to be non-binding, the
remaining provisions hereof shall remain in force as between the parties.
Parties undertake to replace non-binding provisions with such provisions which
are binding and which diverge as little as possible - with a view to the purpose
and scope of this agreement - from the non-binding provisions.
So executed and signed in triplicate in Barendrecht on the 18th of October 1996.
/s/ X.X. RIJNHOUT /s/ XXXXXX XXXXXXX
Seller Buyer
In evidence of agreement with the provisions of Article 6:
/s/ X.X. RIJNHOUT
X.X. Rijnhout
Appendices
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1. Deed of Transfer
2. Employmentcontract Mr X.X. Rijnhout
3. Employmentcontract Mrs. A.N.E. Ros-Bank
4. Managementcontract T.S. Agro/Mr Th.C. Slijkerman
5. a. Declaration by Mr Th.C. Slijkerman
b. Declaration by Mr X.X. van den Heuvel
6. Draft Articles of Association concerning Management and Supervisory Board
7. Warranties
8. Declaration by ING Bank N.V.
