Exhibit 10.38
SETTLEMENT AND AMENDMENT AGREEMENT (this "Agreement") dated as of December
16, 1997 by and among Xxxxxxx & Xxxxxx Products Co. ("C&A"), Perstorp A.B.
("Perstorp"), Perstorp GmbH ("Perstorp Germany"), Xxxxxxx & Xxxxxx Holding A.B.
(formerly Perstorp Biotec A.B.) ("JV Holdings"), Xxxxxxx & Xxxxxx Automotive
Systems GmbH ("C&A Germany"), Xxxxxxx & Xxxxxx Automotive Systems N.V. (formerly
Perstorp Components N.V.)("Components Belgium"), Xxxxxxx & Xxxxxx Automotive
System A.B. (formerly Perstorp Components A.B.)("Components Sweden") and
Perstorp Components GmbH ("Components").
WHEREAS Perstorp and C&A are parties to the Acquisition Agreement dated as
of December 11, 1996 (the"Acquisition Agreement") and Perstorp, Perstorp
Germany, JV Holdings and C&A are parties to the Formation Agreement dated as of
December 11, 1996 (the "Formation Agreement") and Perstorp Germany, Components
and C&A Germany are parties to the Acquisition Agreement dated as of September
4, 1997 (the "German Acquisition Agreement"); and
WHEREAS Perstorp, C&A and the other parties hereto wish to settle
outstanding issues between Perstorp and C&A relating to the Acquisition
Agreement, the Formation Agreement and the German Acquisition Agreement and in
connection therewith amend such agreements.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Section 7.1(b) of the Acquisition Agreement is hereby amended by
deleting clauses (ii), (iv), (v), (vi), (vii) and (ix) therefrom.
2. Schedule 7.1(b) of the Acquisition Agreement is hereby amended by
deleting Items 3, 4, 6, 7, 9, 10, 11(b), 11(c), 11(d) and 11(e) therefrom.
3. Section 7.1(c) of the Formation Agreement is hereby amended by deleting
clauses (ii), (iv), (v), (vi), (vii), (ix) and (xi) therefrom.
4. Schedule 7.1(c) of the Formation Agreement is hereby amended by
deleting Item 3 therefrom.
5. Section 7.1(b) of the German Acquisition Agreement is hereby amended by
deleting clause (ii) therefrom. Section 9.15 and 9.22 of the German Acquisition
Agreement are hereby deleted.
6. Schedule 7.1(b) of the German Acquisition Agreement is hereby amended
by deleting Item 2 therefrom.
7. In consideration of the amendments and releases set forth herein,
Perstorp Germany hereby sells, transfers and assigns ("Transfers") to C&A
500,000 shares (the "Perstorp Shares") of JV Holdings. Such sale and purchase,
which is effective December 16, 1997, shall be hereinafter referred
to as the "Completion". For the purposes of the Shareholders Agreement dated as
of December 11, 1996 among C&A, Perstorp and the other parties thereto (the
"Shareholders Agreement"), the sale and purchase of the Perstorp Shares at
Completion shall be deemed to be an exercise of the C&A Call Option (as defined
in the Shareholders Agreement). Perstorp Germany shall be deemed without further
action to agree to the matters set forth in Section 9.4(b)(iii)(B) of the
Shareholders Agreement.
8. Perstorp Germany hereby represents and warrants to C&A that (a)
Perstorp Germany is conveying and C&A is acquiring the entire record and
beneficial ownership of, and good and valid title to, the Perstorp Shares, free
and clear of any and all claims, liens, pledges, charges, encumbrances, security
interests, options, trusts, commitments, voting and other restrictions or other
third-party rights (including rights of pre-exemption) of any nature whatsoever
("Encumbrances"), except for Encumbrances created by any applicable securities
laws or by C&A; (b) the Perstorp Shares constitute all of the shares of JV
Holdings in which Perstorp Germany or any of its affiliates has a direct or
indirect beneficial ownership; and (c) the Perstorp Shares include the 0.1% of
the issued shares of JV Holdings previously transferred to an individual (the
"Individual Shareholder"), which Perstorp Germany repurchased from the
Individual Shareholder prior to Completion.
9. Immediately following Completion and no later then December 17, 0000,
Xxxxxxxx Xxxxxxx shall deliver to C&A at the offices of C&A's counsel, Xxxxxxxx
& XxXxx, the following: (a) a duly executed transfer or transfers in favor of
C&A or as it may direct, together with the relative share certificates in
respect of the Perstorp Shares, and any other duly executed instruments or
documents as may be reasonably required to permit C&A to acquire the Perstorp
Shares free and clear of any and all Encumbrances, except for Encumbrances
created by any applicable securities laws or by C&A, together with all rights
attaching to them; (b) the written resignation of those directors and deputy
directors of JV Holdings appointed by it, and Perstorp Germany hereby agrees
that it will indemnify, defend and hold harmless JV Holdings and its officers,
directors, employees and representatives and any affiliate of the foregoing from
and against all claims by such directors and deputy directors in connection with
their employment by or service as director of or resignation from JV Holdings;
and (d) a copy of a resolution of the board of directors of Perstorp Germany
(certified by a duly appointed officer as true and correct) authorizing the
Transfer of the Perstorp Shares to C&A. In addition, each party shall do all
such other things and execute all such other documents as the other party may
reasonably require to give effect to the sale and purchase of the Perstorp
Shares.
10. C&A shall use its best efforts to obtain the release of Perstorp
Germany from any guarantees, indemnities or other security which Perstorp
Germany may have given in respect of any of the obligations or liabilities of JV
Holdings to third parties and pending the obtaining of such release shall keep
Perstorp Germany fully and effectively indemnified against any such guarantees,
indemnities or other security. Perstorp and Perstorp Germany shall use their
reasonable efforts (i) to cause Bank Brussels Xxxxxxx and Handelsbanken ("JV
Lenders") not to cancel any loan facility, or accelerate any loans, of JV
Holdings and (ii) to assist C&A in obtaining new financing for JV Holdings
without any guarantee or other comfort from Perstorp Germany. Until such time as
Perstorp Germany is released by the JV Lenders from
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its guarantees of indebtedness of JV Holdings, JV Holdings shall expend cash
only for (i) expenditures in the ordinary course of business and (ii) to reduce
debt of JV Holdings that has become due and payable or is guaranteed by Perstorp
Germany. C&A shall cause JV Holdings to execute such documents and to pledge
such excess cash as Perstorp Germany may reasonably require as security for
C&A's obligations under this paragraph. Perstorp Germany shall use any pledged
cash solely for the purpose of reducing debt of JV Holdings.
11. This Agreement shall (a) constitute a final accord and satisfaction of
(i) all claims and defenses seeking adjustment of the balance sheet price
pursuant to Section 3.4 of the Acquisition Agreement: (ii) all claims and
defenses seeking adjustment of Benefit Amounts (as that term is defined in the
Acquisition Agreement); (iii) all claims and defenses seeking adjustment of the
balance sheet pursuant to Section 3.5 of the Formation Agreement; (iv) all
claims by Perstorp seeking any amount due or claimed to be due from C&A under
the German Acquisition Agreement; and (v) all claims and defenses relating to
any claim by C&A or Perstorp that the financial projections underlying the
Acquisition Agreement, the Formation Agreement, or the German Acquisition
Agreement were materially false or misleading in respect of any of the same
matters as were released in connection with subparagraphs 11(a)(i)-(iv) above
(other than claims for subrogation, contribution, indemnity, or any claim
arising from claims asserted by non-parties hereto), and (b) effect the final
complete transfer and assignment of all shares to C&A, together with all right,
title, and interest of any ownership interest, not already owned by C&A in JV
Holdings.
12. In further consideration of the amendments and releases set forth
herein and in respect of the environmental indemnity claims previously submitted
to Perstorp, Perstorp shall pay to C&A $600,000. C&A Germany shall pay to
Perstorp Germany DM 600,000 for Perstorp Germany's sale and transfer of the M17
and the Water Jet Machine (as such terms are defined in the German Acquisition
Agreement) to C&A Germany. Perstorp shall wire the net amount (based on average
buy/sell exchange rate as of the close of business on the date hereof) to C&A
immediately upon Perstorp Germany being released from its guarantee to the JV
Lenders in respect of indebtedness of JV Holdings. C&A Germany shall have the
right to use free of charge for a period of six months from the date hereof the
building where the M17 is currently situated. Perstorp shall pay for all labor,
material and services provided or performed in connection with the Restructuring
Plan (as defined in the German Acquisition Agreement) through the date of this
Agreement. The definition of the defined term "Retained Liabilities" in the
German Acquisition Agreement is hereby amended by adding the following sentence
at the end thereof: "Notwithstanding the foregoing, Retained Liabilities shall
not include the cost of labor, material or services provided or performed in
connection with the Restructuring Plan after December 16, 1997."
13. The parties agree to release each other and covenant not to xxx with
respect to all claims, causes of action, demands, proceedings, obligations,
contracts, agreements, debts, liabilities, loss, expenses, attorneys' fees, and
costs, whether known or unknown, suspected or unsuspected, developed or
undeveloped, whether in law or equity, whether common law or statutory, which
any party has, has ever had, or may hereafter in the future have against any
other party ("Claims") as to which the accord and satisfaction set forth in
Paragraph 11 is given. In addition C&A hereby agrees to release and indemnify to
the fullest extent permitted by law any director or deputy director of JV
Holdings appointed by Perstorp to the extent (for the purposes of both the
release and the indemnification) that such director or deputy director acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interest of JV Holdings.
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14. By entering into this Agreement, none of the parties hereto admits to
any of the allegations made by any other party or to any liability or breach of
any agreement or other wrongdoing of any kind, all of which each party expressly
denies. The parties hereto acknowledge that this is a settlement and compromise
of disputed claims and, as such, shall not constitute nor be treated, deemed, or
otherwise construed as an admission, waiver, evidence or concession by any other
party hereto.
15. Each party represents that, in executing this Agreement, it has relied
solely on the advice given by its own respective counsel and that it is not
relying on any inducement, promise, representation, or statement made by any
other party hereto, except as expressly set forth herein.
16. This Agreement shall not create any rights in any third parties. This
Agreement constitutes the entire agreement between the parties concerning the
subject matter hereof and supersedes and renders of no force or effect any and
all contemporaneous or prior agreements, understandings, representations, or
statements with respect to said subject matter. This Agreement may not be
changed, amended, modified, extended, compromised, or waived except by a writing
executed by the parties hereto. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and to their respective heirs,
successors and assigns. Except as expressly amended by this Agreement, the
Acquisition Agreement, the Formation Agreement and the German Acquisition
Agreement shall continue to be in full force and effect and are hereby in all
respects ratified and confirmed.
17. This Agreement may be signed in counterparts, and the signature of
each person below constitutes his or her representation that he or she is fully
authorized to sign this Agreement on his behalf and on behalf of any persons and
entities on behalf of whom any obligations, undertakings, or releases are being
made or given.
18. Each party hereto represents that it has full power and authority to
execute, deliver and perform its obligations under this Agreement; that the
execution, delivery and performance by it of this Agreement and the consummation
by it of the transactions contemplated hereby have been duly authorized by all
necessary corporate action; that no other proceedings on its part are necessary
to authorize this Agreement or the transactions contemplated hereby; and that
this Agreement has been duly executed and delivered by it, and constitutes the
legal, valid and binding obligation of it, enforceable against it in accordance
with the terms hereof, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting rights of creditors generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
19. Each party hereto represents that no precompletion consent, approval,
authorization, license or order of, registration or filing with, or notice to
any governmental agency is necessary to be obtained, made or given by it in
connection with the execution, delivery and performance by it of this Agreement,
or the consummation by it of the transactions contemplated hereby.
20. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual interest, and no rule of strict
construction will be applied against any party.
21. In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein, shall, for any reason,
be held to invalid, illegal or unenforceable in any respect, then to the maximum
extent permitted by law, such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement or any other such instrument.
Furthermore, in lieu of any such invalid or unenforceable term or provision, the
parties hereto intend that there shall be added as a part of this Agreement a
provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.
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IN WITNESS WHEREOF this Agreement has been signed on behalf of the parties the
day and year first before written.
Xxxxxxx & Xxxxxx Products Co.
By: /s/ J. Xxxxxxx Xxxxx
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Xxxxxxx & Xxxxxx Automotive Systems GmbH
By: /s/ J. Xxxxxxx Xxxxx
--------------------
Perstorp A.B.
By: /s/ Mats Tuner
--------------------
Perstorp GmbH
By: /s/ Xxx Xxxxxxxxx
--------------------
Xxxxxxx & Xxxxxx Holding A.B.
(formerly Perstorp Biotec A.B.)
By: /s/ J. Xxxxxxx Xxxxx
--------------------
Xxxxxxx & Xxxxxx Automotive Systems N.V.
(formerly Perstorp Components N.V.)
By: /s/ J. Xxxxxxx Xxxxx
--------------------
Xxxxxxx & Xxxxxx Automotive System A.B.
(formerly Perstorp Components A.B.)
By: /s/ J. Xxxxxxx Xxxxx
--------------------
Perstorp Components GmbH
By: /s/ Mats Tuner
--------------------
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LETTER AMENDMENT AGREEMENT
Re: Settlement and Amendment Agreement entered into on December
16, 1997 among Xxxxxxx & Xxxxxx Products Co., Perstorp AB and
the other parties defined therein (the ASettlement Agreement@)
We confirm that the following amendments and clarifications have
been agreed to by the parties to the Settlement Agreement. Capitalized
terms not defined herein have the meanings given to them in the Settlement
Agreement. Reference is made below to the paragraphs in the Settlement
Agreement.
2. Schedule 6.1 of the Acquisition Agreement is hereby amended by
deleting all Items, except Items 4(a)-(c), 14 and 17.
3. Section 7.1(b) of the Formation Agreement is hereby amended by
deleting clause (ii).
4. Schedule 6.1 of the Formation Agreement is hereby amended by
deleting all Items, except Items 4(a)-(d), 14, 17 and 34-39.
5. Section 9.12 of the German Acquisition Agreement is hereby
deleted. For the avoidance of doubt and not by way of
limitation, it is clarified that Perstorp Germany will retain
its liabilities under that agreement with respect to the
Restructuring Employees and that C&A Germany will retain the
Restructuring Plan Hold-Back Amount.
6. Schedule 6.1 of the German Acquisition Agreement is hereby
amended by deleting all Items, except Items 4.2, 12 and 15.1.
With reference to Item 4.2, C&A and C&A Germany confirm that
the draft Completion Date Statement of Net Assets provided by
Xxxxxx Xxxxxxxx, dated as of October 30, 1997, shall be deemed
to be the Final Completion Date Statement of Net Assets.
8. Neither Perstorp nor any Affiliate has any claims against JV
Holdings or its Affiliates and JV Holdings and its Affiliates
have no debts or other obligations to Perstorp or any of its
Affiliates other than (i) trade payables, if any, incurred in
the ordinary course of business and (ii) a loan in the amount
of 75,000,000 Belgian francs which shall become due on August
1, 1998. Perstorp shall use best efforts to assist C&A in the
refinancing of this loan. This Settlement Agreement shall not
affect any trade payables owed by Perstorp and its Affiliates
to C&A and its Affiliates or owed by C&A and its Affiliates to
Perstorp and its Affiliates. All such trade payables shall be
honored in accordance with their terms.
10. C&A releases and forever discharges Perstorp (not Perstorp
Germany) from guarantees to the JV Lenders in respect of
indebtedness of JV Holdings and guarantees to Perstorp the
repayment of the loan referred to in paragraph 8 (ii) above,
when such loan becomes due. Further, Perstorp's obligation in
connection with the refinancing of JV Holdings and its present
subsidiaries
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is limited to providing assistance (including by making
telephone calls, writing letters and participating in meetings
if requested by C&A) to C&A in arranging such refinancing as
soon as practically possible on such terms as C&A may achieve,
but without any obligation on the part of Perstorp to incur
any costs or expenses or to compensate C&A if C&A fails to
achieve refinancing. C&A shall pledge to Perstorp (in
accordance with an agreement to be entered into between C&A
and Perstorp) 350,000 of the Perstorp Shares in JV Holdings as
security for its obligations in respect of indebtedness owed
to the JV Lenders until such time as Perstorp is released by
the JV Lenders from its guarantees of indebtedness of JV
Holdings, and until such pledge agreement is executed, the
Perstorp Shares to be pledged shall be in the possession of
Perstorp or, to the extent required to produce a share
certificate representing the Perstorp Shares to be pledged,
shall be held in trust for Perstorp in its capacity as pledgee
by a third party acceptable to Perstorp. Such pledge agreement
shall provide that C&A retains all rights, title and interest
in and to such shares, unless C&A defaults under such
agreement, and shall have such other terms as are reasonable
in the circumstances. The pledge shall immediately be released
without any further action on the part of either party (x) if
at any time Perstorp is released by the JV Lenders from its
guarantees of indebtedness of JV Holdings or (y) if at any
time such pledge becomes a default under C&A's bank
arrangements provided (in the case of this clause (y)) that
C&A uses its best reasonable efforts to provide Perstorp with
a substantially similar guarantee in a form reasonably
acceptable to Perstorp. C&A represents and warrants to
Perstorp that it is not currently in default under such bank
arrangements.
11. The Settlement Agreement (as amended) shall constitute a final
accord and satisfaction and shall be in full and final
settlement of all matters referred to in paragraph 11 of the
Settlement Agreement including also all Claims against
Perstorp and its Affiliates and C&A and its Affiliates arising
out of (a) breaches of warranties and representations in the
Acquisition Agreement, the Formation Agreement and the German
Acquisition Agreement which have been deleted by the
Settlement Agreement (as amended), (b) the indemnification
provisions in the said three agreements which have been
deleted by the Settlement Agreement (as amended), (c) breaches
or omittance to perform any post-closing obligation in the
said three agreements which have been deleted by the
Settlement Agreement (as amended) and (d) the statement of net
assets pursuant to Section 3.4 of the German Acquisition
Agreement. Paragraph 11 (a) (v) of the Settlement Agreement is
hereby amended by deleting the word Amaterially@ and by
deleting the following: Ain respect of any of the same matters
as were raised in connection with subparagraphs 11(a) (i) -
(iv) above (other than claims for subrogation, contribution,
indemnity, or any claim arising from claims asserted by
non-parties hereto)@.
13. The release means that the Claims as to which the accord and
satisfaction set forth in Paragraph 11 is given are released
and forever discharged and neither Perstorp nor any of its
Affiliates shall accept any of the released
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claims under the Acquisition Agreement, the Formation
Agreement or the German Acquisition Agreement.
The Settlement Agreement (as amended) is in respect of each of the agreements
being amended subject to the governing law and dispute resolution provisions
applicable in the respective agreement that is amended.
Each of Perstorp and C&A guarantees, in respect of each of the agreements being
amended and in accordance with the applicable provisions therein, all
obligations of their Affiliates contained in the Settlement Agreement (as
amended).
The clarifications and amendments herein prevail over the provisions in the
Settlement Agreement to the extent of any inconsistency. Except as expressly
amended by this Letter Amendment Agreement, the Settlement Agreement shall
continue to be in full force and effect and is hereby in all respects ratified
and confirmed.
The amendments and clarifications herein shall be deemed to take effect from the
effectiveness of the Settlement Agreement on December 16, 1997.
This Letter Amendment Agreement shall not be valid, legal or binding on any
party to any extent whatsoever unless executed by each party hereto and
delivered by each such party and received by each such other party.
[This space was left blank intentionally.]
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Please have this Letter Amendment Agreement signed and returned confirming that
this is the agreement of the parties with respect to the amendment and
clarifications that have on this 22nd day of December 1997 been made to the
Settlement Agreement.
Yours sincerely,
Perstorp AB
By: /s/ Mats Tuner
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Perstorp GmbH
By: /s/ Mats Tuner
--------------------
Perstorp Components GmbH
By: /s/ Mats Tuner
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Xxxxxxx & Xxxxxx Products Co.
By: /s/ J. Xxxxxxx Xxxxx
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Xxxxxxx & Xxxxxx Automotive Systems GmbH
By: /s/ J. Xxxxxxx Xxxxx
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Xxxxxxx & Xxxxxx Holdings AB
(formerly Perstorp Biotec AB)
By: /s/ J. Xxxxxxx Xxxxx
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Xxxxxxx & Xxxxxx Automotive Systems N.V.
(Formerly Perstorp Components (N.V.)
By: /s/ J. Xxxxxxx Xxxxx
--------------------
Xxxxxxx & Xxxxxx Automotive Systems AB
(formerly Perstorp Components AB)
By: /s/ J. Xxxxxxx Xxxxx
--------------------
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