EXHIBIT 10.23
DATED 7TH JUNE, 2001
HIBERNIA DEVELOPMENT CAPITAL PARTNERS I ILP,
HIBERNIA DEVELOPMENT CAPITAL PARTNERS II ILP,
XXXXXX XXXXXXXXX
AND
XXXXX XXXXXX
AND
XXXXXX XXXXXXX
AND
MEASUREMENT SPECIALTIES, INC.
AGREEMENT
FOR THE PURCHASE OF THE SHARE CAPITAL OF
TERRAILLON HOLDINGS LIMITED
_____________________________
A & L GOODBODY
SOLICITORS
DCAG1005.DOC
TABLE OF CONTENTS
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1. DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . 3
2. SALE OF SHARES . . . . . . . . . . . . . . . . . . . . 12
3. COMPLETION AND CONDITIONS. . . . . . . . . . . . . . . 12
4. WARRANTIES AND INDEMNITIES . . . . . . . . . . . . . . 23
5. TERMINATION. . . . . . . . . . . . . . . . . . . . . . 28
6. REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 28
7. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . 34
FIRST SCHEDULE THE COMPANY AND THE VENDORS . . . . . 39
SECOND SCHEDULE SUBSIDIARIES. . . . . . . . . . . . . 40
THIRD SCHEDULE DIRECTORS . . . . . . . . . . . . . . 41
FOURTH SCHEDULE INDEMNITIES . . . . . . . . . . . . . 42
2
THIS AGREEMENT is dated 7th June, 2001 and made between
(1) Those listed as Principal Vendors in Column 1 of the Table in the
First Schedule (the "Principal Vendors") and
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(2) Measurement Specialties, Inc., a corporation organised under the laws
of the State of New Jersey, with its principal place of business in
Fairfield, New Jersey (the "Purchaser").
RECITALS:
A. Terraillon Holdings Limited (the "Company") is a company whose particulars
are set out in the First Schedule.
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B. The Vendors are the beneficial owners of the Company's entire issued share
capital. At the date hereof the Vendors are the beneficial owners of the
numbers and classes of shares in the capital of the Company set out against
each Vendors' name in Column 3 of the Table in the First Schedule and, at
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Completion the Vendors shall be the beneficial owners of the number and
classes of shares in the capital of the Company set out against each
Vendors' name in Column 4 of the Table in First Schedule, which will be
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registered in the Company's register of members in the manner set out in
Column 4 of the Table in the same Schedule.
C. The Principal Vendors have agreed to sell and the Purchaser has agreed to
purchase the Principal Vendors Shares on the terms and conditions in this
Agreement.
IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires:
"Acquired Companies" means the Company and its Subsidiaries, collectively;
-------------------
"Affiliate" means with respect to any Person, (i) each Person that
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controls, is controlled by or is under common control with any such Person
or any Affiliate of such Person, (ii) each of such Person's officers,
directors, joint venturers, members and partners and (iii) such Person's
spouse, children, siblings and parents. For purposes of this definition,
"control" of a Person shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of its management of policies,
whether through the ownership of voting interests, by contract or
otherwise;
3
"Ancillary Agreements" shall have the meaning set forth in Clause 4.2(a) of
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the Fourth Schedule;
"Applicable Contract" means any Contract (a) under which any Acquired
--------------------
Company has or may acquire any rights, (b) under which any Acquired Company
has or may become subject to any obligation or liability, or (c) by which
any Acquired Company or any of the assets owned or used by it is or may
become bound;
"Articles of Association" means the Articles of Association of the Company
------------------------
in the agreed form to be adopted by the members of the Company at or prior
to Completion;
"Auditors" means the Auditors for the time being of the Company;
---------
"Balance Sheet" shall have the meaning provided in the Clause 4.4 of the
--------------
Fourth Schedule;
"Best Efforts" means the efforts that a prudent Person desirous of
-------------
achieving a result would use in similar circumstances to ensure that such
result is achieved as expeditiously as possible; provided, however, that an
obligation to use Best Efforts under this Agreement does not require the
Person subject to that obligation to take actions that would result in a
materially adverse change in the benefits to such Person of this Agreement
and the Contemplated Transactions;
"Breach" in relation to a Warranty, means any instance of the Warranty
------
being untrue or misleading in any material respect;
"Business Day" means any day on which banks are generally open for business
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in Dublin;
"Claim" means a claim pursuant to Clause 4, for which a party is entitled
-----
or may become entitled, to indemnification, under this Agreement;
"1963 Act" means the Companies Xxx, 0000, as amended;
---------
"Company" means the company referred to in recital A;
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"Completion" means completion of the sale and purchase of the Shares under
----------
Clause 3;
"Completion Date" shall have the meaning provided in Clause 3.1.1;
----------------
"Consideration Shares" means the Shares in the capital of the Purchaser to
-----------------------
be issued by the Purchaser to the Vendors in satisfaction of US$6,800,000
of the Purchase Price as detailed in Clause 2.2 hereof;
"Consent" means any approval, consent, ratification, waiver, or other
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authorisation (including any Governmental Authorisation);
4
"Contract" means any agreement, contract, obligation, promise, or
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undertaking (whether written or oral and whether express or implied) that
is legally binding;
"Contemplated Transactions" means all of the transactions contemplated by
--------------------------
this Agreement, including;
(a) the sale of the Shares by Vendors to Purchaser;
(b) the execution, delivery, and performance of the Vesting Agreement,
Escrow Agreement, Noncompetition Agreement and Registration Rights
Agreements; ;
(c) the performance by Purchaser and Principal Vendors of their respective
covenants and obligations under this Agreement; and
(d) Purchaser's acquisition and ownership of the Shares and exercise of
control over the Acquired Companies;
"Conversion Agreement" means the Conversion Agreement made 4th March, 1999
---------------------
between the Company, Xxxxxx Xxxxxxxxx, Xxxxxxxxxxx Xxxxxx, Hibernia
Development Capital Partners I ilp and Hibernia Development Capital
Partners II ilp;
"Conversion Termination Agreement" means an agreement to be entered into at
--------------------------------
Completion by each of the Company, Xxxxxx Xxxxxxxxx, Xxxxxxxxxxx Xxxxxx,
Hibernia Development Capital Partners I ilp and Hibernia Development
Capital Partners II ilp, terminating the Conversion Agreement, as detailed
in that agreement;
"Directors" means those listed as such in the Third Schedule and the
--------- --------------
"Continuing Directors" means those described as such in the same Schedule;
"Disclosure Letter" means the letter of the same date as this Agreement
------------------
from the Principal Vendors' Solicitors to the Purchaser's Solicitors
disclosing exceptions to the Warranties;
"Encumbrance" means any charge, claim, community property interest,
-----------
condition, equitable interest, lien, option, pledge, security interest,
right of first refusal, or restriction of any kind, including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership;
"Environment" means soil, land surface or subsurface strata, surface
-----------
waters, groundwaters, drinking water supply, ambient air (including indoor
air), plant and animal life and any other environmental medium or natural
resource;
"Environmental Law" means any Legal Requirement that requires or relates to
-----------------
the protection of natural resources, the Environment, the health and safety
of the public, the regulation of Hazardous Substances, or pollution of any
type whatsoever, and the regulations and guidelines promulgated under any
such modifications, and any other Legal Requirement currently in existence,
which govern:
5
(i) the existence, cleanup and/or remedy of contamination on
property;
(ii) the emission or discharge of Hazardous Substances into the
Environment;
(iii) the Release, use, generation, transport, treatment,
storage, disposal, removal or recovery or management of
Hazardous Substances, including building materials; or
(iv) the level of Hazardous Substances in any workplace;
"Escrow Agreement" shall have the meaning provided in Clause 3.5.3;
-----------------
"Escrow Shares" means the number of Consideration Shares as detailed in
---------------
Column 8 of the Table in the First Schedule, of each of the Vendors
--------------
detailed in Column 7 of the Table in the First Schedule;
---------------
"Xxxxxx Xxxxxxxxx'x Vesting Agreement" means the agreement referred to in
--------------------------------------
Clause 3.5.4;
"GAAP" means accounting principles, standards and practices generally
----
accepted in Ireland;
"Governmental Authorisation " means any approval, consent, license, permit,
--------------------------
waiver, or other authorisation issued, granted, given, or other-wise made
available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement;
"Governmental Body" means any:
------------------
(a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other govern-ment;
(c) governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or
other tribunal); or
(d) body exercising, or entitled to exercise, any administra-tive,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature;
"Group" means any one or more or (as the context permits) each of the Group
-----
Companies;
"Group Company" means the Company or a Subsidiary;
--------------
6
"Hazardous Substances" means: (a) any toxic, hazardous or otherwise
---------------------
dangerous material, substance, waste or pollutant, including without
limitation petroleum products, flammable substances, explosives,
radioactive materials, asbestos, asbestos coating and asbestos containing
materials, polychlorinated biphenyls, toxic wastes or substances or any
other wastes, materials or pollutants defined or regulated by Environmental
Laws; and (b) any other chemical, material or substances, exposure to which
is prohibited, limited or regulated by any Governmental Body;
"Hibernia Share Subscription Agreement" means the Subscription and
----------------------------------------
Shareholders Agreement made on the 4th March, 1999 between Hibernia
Development Capital Partners I ilp, Hibernia Development Capital Partners
II ilp, the several persons named in Schedule One thereto and the Company;
"Hibernia Termination Agreement" means an agreement to be entered into at
--------------------------------
Completion by each of Hibernia Development Capital Partners I ilp, Hibernia
Development Capital Partners II ilp, Xxxxxx Xxxxxxxxx, Xxxxxxxxxxx Xxxxxx
and Xxxxxx Xxxxxxx terminating the Hibernia Share Subscription Agreement,
as detailed in that agreement;
"Intellectual Property Assets" shall have the meaning provided in Clause
------------------------------
4.22 of the Fourth Schedule;
"Interim Balance Sheet" shall have the meaning provided in Clause 4.4 of
-----------------------
the Fourth Schedule;
"Knowledge" means an individual will be deemed to have "Knowledge" of a
---------
particular fact or other matter if:
(a) such individual is actually aware of such fact or other matter;
or
(b) a prudent individual could be expected to discover or otherwise
become aware of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning
the existence of such fact or other matter;
A Person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving, or who
has at any time served, as a director, officer, partner, executor, or
trustee of such Person (or in any similar capacity) has, or at any time
had, Knowledge of such fact or other matter;
"Legal Requirement" means any federal, state, local, municipal, foreign,
------------------
international, multinational, or other administrative order, constitution,
law, ordinance, principle of common law, regulation, statute, or treaty;
"Lock Up Agreement" means an agreement to be entered into by each Vendor
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with the Purchasers' underwriters, pursuant to clause 4.2.7 in the agreed
form pursuant to which agreement each Vendor agrees not to trade its
Consideration Shares for an agreed period, as detailed in each such
agreement;
7
"Market Value" means $17.41 representing 95% of the average closing price
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per share over 30 trading days prior to and including the 30th April, 2001
on the American Stock Exchange of the common stock of the Purchaser;
"Mergers Act" means the Mergers, Take-overs and Monopolies (Control) Act,
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1978 (as amended);
"Minority Vendor Declaration" means a Declaration to be entered into by
-------------------------------
each Minority Vendor at Completion in the agreed form.
"Minority Vendor" means any person who is a member of the Company at
------------------
Completion other than the Principal Vendors as detailed in Column 1 of the
table in the First Schedule hereto.
"Net Debt" means, in relation to the Associated Companies all bank
-----------
borrowings of the Associated Companies, whether in the form of term loans,
overdrafts or debtor financing through the discounting of invoices or bills
of exchange, less all positive bank balances and cash in hand of the
Associated Companies. Bank balances, for the purposes of this definition,
were those shown in the management accounts of the Acquired Companies, at
30th April, 2001 and included items which are in the process of clearing
and, accordingly, are not reflected on the bank statement of the Acquired
Companies of that date. The parties have agreed that for the purposes of
this agreement, the amount of Net Debt is 3,852,156 pounds;
"Noncompetition Agreements" shall have the meaning provided in Clause
--------------------------
3.4.3;
"Order" means any award, decision, injunction, judgement, order, ruling,
-----
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator;
"Ordinary Course of Business" means an action taken by a Person will be
------------------------------
deemed to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such Person
and is taken in the ordinary course of the normal day-to-day
operations of such Person;
(b) such action is not required to be authorised by the board of
directors of such Person (or by any Person or group of Persons
exercising similar authority); and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any authorisation by the board of
directors (or by any Person or group of Persons exercising
Similar authority), in the ordinary course of the normal
day-to-day operations of other Persons that are in the same line
of business as such Person;
"Organisational Documents" means: (a) the articles or certificate of
--------------------------
incorporation and the bylaws of a corporation; (b) the partnership
agreement and any statement of partnership of a general partnership; (c)
8
the limited partnership agreement and the certificate of limited
partnership of a limited partnership; (d) any charter or similar document
adopted or filed in connection with the creation, formation, or
organisation of a Person; and (e) any amendment to any of the foregoing;
"Person" means any individual, corporation (including any non-profit
------
corporation), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organisation, labor union, or
other entity or Governmental Body;
"Pounds" and the designation "IR" means the currency of Ireland;
------ --
"Principal Vendors' Solicitors" means Messrs. A. & X. Xxxxxxxx;
-------------------------------
"Principal Vendors" means any entity who is a member of the Company at
--------------------
Completion other than the Minority Vendors as detailed in Column 1 of the
Table in the First Schedule hereto;
---------------
"Proceeding" means any action, arbitration, audit, hearing, investigation,
----------
litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator;
"Purchase Price" shall have the meaning provided in Clause 2.2;
---------------
"Purchaser" means Measurement Specialties, Inc;
---------
"Purchaser's Solicitors" means Messrs. XxXxxxxx & English, LLP;
-----------------------
"Real Property" shall have the meaning provided in Clause 4.19 of the
--------------
Fourth Schedule;
"Registration Rights Agreement" means an agreement to be entered into
-------------------------------
between each of the Vendors and the Purchaser pursuant to which the
Purchaser shall procure the registration of Consideration Shares, in the
agreed form;
"Related Person" means with respect to a particular individual:
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(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a
Material Interest; and
(d) any Person with respect to which such individual or one or more
members of such individual's Family serves as a direc-tor,
officer, partner, executor, or trustee (or in a similar
capacity);
9
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under
com-mon control with such specified Person;
(b) any Person that holds a Material Interest in such specified
Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar
capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person serves as
a general partner or a trustee (or in a similar capacity); and
(f) any Related Person of any individual described in clause (b) or
(c);
For purposes of this definition, (a) the "Family" of an individual includes
(i) the individual, (ii) the individual's spouse and former spouses, (iii)
any other natural person who is related to the individual or the
individual's spouse within the second degree, and (iv) any other natural
person who resides with such individual, and (b) "Material Interest" means
direct or indirect beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934 as amended (the "Exchange Act")) of voting
securities or other voting interests representing at least 20% of the
voting power of a Person or equity securities or other equity interests
representing at least 20% of the equity securities or equity interests in a
Person then outstanding;
"Release" means any spilling, leaking, pumping, pouring, emptying,
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emitting, discharging, depositing, escaping, leaching, dumping or other
releasing into the Environment, whether intentional or unintentional;
"Representative" means with respect to a particular Person, any director,
--------------
officer, employee, agent, consultant, advisor, or other representative of
such Person, including legal counsel, accountants, and financial advisors;
"Securities Act" means the Securities Act of 1933, as amended;
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"Service Provider" shall have the meaning provided in Clause 4.13 of the
-----------------
Fourth Schedule;
"Shares" means the entire issued share capital of the Company;
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"Subsidiaries" means the companies listed in the Second Schedule;
------------ ----------------
"Tax" means any tax (including any income tax, capital gains tax,
---
value-added tax, sales tax, property tax, gift tax, or estate tax), levy,
assessment, tariff, duty (including any customs duty), deficiency, or other
fee, and any related charge or amount (including any fine, penalty,
interest, or addition to tax), imposed, assessed, or collected by or under
10
the authority of any Governmental Body or payable pursuant to any
tax-sharing agreement or any other Contract relating to the sharing or
payment of any such tax, levy, assessment, tariff, duty, deficiency, or
fee;
"Tax Return" means any return (including any information return), report,
-----------
statement, schedule, notice, form, or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment,
collection, or payment of any Tax or in connection with the administration,
implementation, or enforcement of or compliance with any Legal Requirement
relating to any Tax;
"Tchibo Contract" means a contract dated 4th January 2001 designated order
----------------
number PN56043386 entered into by the Company with Xxxxxx Xxxx Kaffee Gmbh,
(trading as "Tchibo"), re. Project no. 18872 pursuant to which contract the
Company has agreed to manufacture and deliver tranches of body fat scales
to Tchibo. The First Tranche "Tranche One" being due for delivery to Tchibo
on 13th July, 2001 ("First Delivery Date"), the second Tranche ("Tranche
Two") being due for delivery to Tchibo on 23rd July, 2001 ("Second Delivery
Date");
"Threatened" means a claim, Proceeding, dispute, action, or other matter
----------
will be deemed to have been "Threatened" if any demand or statement has
been made (orally or in writing) or any notice has been given (orally or in
writing), or if any other event has occurred or any other circumstances
exist, that would lead a prudent Person to conclude that such a claim,
Proceeding, dispute, action, or other matter is likely to be asserted,
commenced, taken, or otherwise pursued in the future;
"Vendors" means each of the Minority Vendors and the Principal Vendors;
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"Vesting Agreements" means the agreements referred to in Clause 3.5.4;
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"Warranties" means the warranties, representations and undertakings in
----------
Clause 4 and the Fourth Schedule;
----------------
1.2 The Schedules referred to in this Agreement form an integral part of this
Agreement, are incorporated herein by reference and reference to this
Agreement includes reference to them.
1.3 Headings are inserted for convenience only and do not affect the
construction of this Agreement.
1.4 All references in this Agreement to costs, charges or expenses include any
value added tax or similar tax charged or chargeable in respect of this
Agreement.
1.5 Unless the context otherwise requires:
11
1.5.1 words importing the singular include the plural and vice versa, words
importing the masculine include the feminine, and words importing
persons include corporations;
1.5.2 where something is defined in the singular, the plural of the defined
term will be taken to mean two or more of those things which fall
within the definition; and where something is defined in the plural or
collectively, the singular of the defined term will be taken to mean
any one of those things which fall within the definition;
1.5.3 reference to writing or similar expressions includes transmission by
telecopier or electronic means;
1.5.4 references to Acts, statutory instruments and other legislation are
to legislation operative in Ireland and to such legislation amended,
extended or re-enacted (whether before or after the date of this
Agreement) and any subordinate legislation made under that
legislation, and includes equivalent laws in any other jurisdiction;
and
1.5.5 reference to any document includes that document as amended or
supplemented, whether before or after the date of this Agreement.
1.5.6 The expression "agreed form" means in relation to any document, such
document in the terms agreed between the parties thereto and hereto
and for the purposes of identification signed by or on behalf of each
of the parties hereto.
2. SALE OF SHARES
2.1 Each Vendor shall sell as beneficial owner and the Purchaser shall
purchase, free from all liens, charges and encumbrances, the number of each
class of Shares listed opposite that Vendors name in Column Four of the
table in the First Schedule.
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2.2 The Shares will be sold at an aggregate price of US$11,757,232 (the
"Purchase Price"). The Purchase Price shall be payable by Purchaser as
follows: (i) US$4,957,232 in cash and (ii) the balance of the Purchase
Price in the form of 390,494 Consideration Shares having an aggregate
Market Value of US$6,800,000.
3. COMPLETION AND CONDITIONS
3.1 COMPLETION:
12
3.1.1 Completion shall take place on the fifth Business Day after the
fulfilment of the conditions in Clause 3.3 (the "Completion Date"), at
the offices of the Principal Vendors' Solicitors;
3.1.2 The Principal Vendors and the Purchaser shall use their Best Efforts
to ensure that the conditions are fulfilled at least five Business
Days prior to 2nd July, 2001, which is the target date for Completion.
3.2 NON-FULFILMENT OF CONDITIONS:
If the conditions in Clause 3.3 are not fulfilled by the fifth Business Day
before the target date referred to in Clause 3.1.2, either the Principal
Vendors or the Purchaser may (if not in continuing breach of their own
obligations relating to that clause), at any time prior to the fulfilment
of the conditions, rescind this Agreement by notice to the other, and this
will not prejudice the other rights and remedies of the rescinding party
under this Agreement.
3.3 CONDITIONS:
The conditions referred to in Clauses 3.1 and 3.2 are:
3.3.1 Mergers
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3.3.1.1 the Minister for Enterprise, Trade and Employment stating
in writing that she does not intend to make an order under
section 9 of the Mergers Act in relation to the proposed
purchase of the Shares; or
3.3.1.2.1(if she makes an order subject to conditions) the
Purchaser accepting those conditions; or
3.3.1.3 (if no such order is made and the Minister does not state
in writing that she does not intend to make such an order),
that the relevant period within the meaning of section 6 of
the Mergers Act elapses.
3.3.2 Financing
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Purchaser having obtained adequate financing (on terms that are
acceptable to Purchaser) and approval by necessary lending
institutions to complete the purchase of the Shares.
3.3.3 Minority Vendors
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Each Minority Vendor having signed a Minority Vendor Declaration in
the agreed form and delivered such declaration together with duly
executed share transfer forms in respect of their Shares to the
Vendors' Solicitors for delivery to the Purchaser at Completion.
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3.3.4 Supplemental Disclosure
------------------------
In the event that the Vendors deliver any supplement or supplements to
the Disclosure Letter pursuant to clause 3.6.5 hereof, the Purchaser,
in its absolute discretion, accepting such supplemental disclosures to
the Disclosure Letter.
3.3.5 Compliance with Obligations
-----------------------------
The Principal Vendors having complied with all their obligations under
each of Clauses 3.4 and 3.6 hereof respectively;
3.3.6 No Claims Regarding Share Ownership or Sale Proceeds
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There must not have been made or, to the Principal Vendor's knowledge,
Threatened by any person any claim asserting that such person;
3.3.6.1 is the holder or the beneficial owner of, or has the right to
acquire or to obtain beneficial ownership of, any shares of,
or any of the voting, equity, or ownership interest in, any
of the Acquired Companies; or
3.3.6.2 is entitled to all or any portion of the Purchase Price
payable for the Shares.
3.3.7 Material Adverse Change
-------------------------
Since the date of the Agreement, there has not been any material
adverse change in the business, operations, properties, prospects,
assets, or condition of any Acquired Company and no event has occurred
or circumstances exist that may result in such a material adverse
change.
3.3.8 Consents
--------
Each of the Consents identified in part 4.2 of the Disclosure Letter
must have been obtained and must be in full force and effect.
3.3.9 Delivery of Financial Statements
-----------------------------------
Principal Vendors must have procured the delivery by the Company to
the Purchaser of financial statements for the Company for its last two
financial years prepared pursuant to United States generally accepted
accounting principles and acceptable for filing with the Securities
and Exchange Commission (SEC).
14
3.3.10 Shipment under Tchibo Contract
---------------------------------
The Company must have shipped, or have procured the shipment of all
product comprising each of Tranche One and Tranche Two due to Tchibo
under the Tchibo Contract such that it can comply with its delivery
obligations, to deliver Tranche One to Tchibo by the First Delivery
Date, and Tranche Two of the products to Tchibo by the Second Delivery
Date.
3.3.11 Escrow Agreement
-----------------
The parties hereto having negotiated and agreed the terms of an escrow
agreement, pursuant to which agreement an escrow agent will hold the
Principal Vendor's Escrow Shares on mutually acceptable terms.
3.3.12 Delivery of Documentation
---------------------------
3.3.12.1 Execution and delivery of Escrow Agreement by all parties
thereto;
3.3.12.2 Execution and delivery of Vesting Agreement by each party
required to execute a Vesting Agreement;
3.3.12.3 Execution and delivery of Xxxxxx Xxxxxxxxx'x Vesting
Agreement by the parties thereto;
3.3.12.4 Execution and delivery of Non-Compete Agreements by each of
the parties required to execute a Non-Compete Agreement;
3.3.12.5 Execution and delivery of the Registration Rights Agreement
by each party required to so execute and deliver such
agreement;
3.3.12.6 Execution and delivery of Lock Up Agreements by each of the
parties required to execute a Lock Up Agreement by
underwriters prior to Completion;
3.3.12.7 Execution and delivery of Minority Vendor Declarations by
each of the parties required to execute a Minority Vendor
Declaration;
3.3.12.8 Execution and delivery of the Hibernia Termination Agreement
by each of the parties thereto; and
3.3.12.9 Execution and delivery of the Conversion Termination
Agreement by each of the parties thereto.
3.3.13 Management Fee
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15
Hibernia shall have, at or prior to Completion, rebated ~120,000 to
the Company, such amount being half of the management fee paid by the
Company to Hibernia in March 2001. For the avoidance of doubt, the
parties hereto hereby expressly acknowledge that Hibernia is entitled
to retain the balance of such managment fee.
3.4 PRINCIPAL VENDORS' OBLIGATIONS AT COMPLETION:
Upon Completion the Principal Vendors shall:
3.4.1 Deliver or procure the delivery of to the Purchaser:
(1) transfers of the Shares duly executed by the registered holders
in favour of the Purchaser or as he may direct together with the
related share certificates or, in the case of any lost share
certificate, an indemnity in appropriate terms; and
(2) any waivers or consents necessary to enable the Purchaser or his
nominees to be registered as holders of the Shares;
3.4.2 cause any persons nominated by the Purchaser to be validly appointed
as additional directors of the Acquired Companies, and then cause the
Directors (other than the Continuing Directors) to retire from office
and from any employment with the Acquired Companies;
3.4.3 cause the Company to change its registered office to such office as
may be designated by the Purchaser at or prior to Completion.
3.4.4 deliver to the Purchaser for himself and as agent for the Company:
(1) insofar as they are not in the custody of the Company and unless
held as security by a bank, the title deeds of the Properties;
(2) all the Company's statutory and other books, certificates of
incorporation and common seals; and
(3) insofar as they are not in the custody of the Company, all the
Company's financial and accounting books and records.
3.4.5 Deliver to the Purchaser a certificate executed by Principal Vendors
representing and warranting to Purchaser that each of Principal
Vendors' representations and warranties in this Agreement was accurate
in all respects as of the date of this Agreement and is accurate in
all respects as of the Completion Date as if made on the Completion
Date (giving full effect to the Disclosure Letter and any supplements
to the Disclosure Letter that were delivered by Principal Vendors to
Purchaser prior to the Completion Date in accordance with Clause
3.6.5) and except for changes contemplated by this Agreement and
representations and warranties which address matters only as of a
specific date.
16
3.4.6 Deliver to the Purchaser a signed share transfer form duly executed
by each of the Minority Vendors in respect of all Shares held by each
such Minority Vendor, together with a Minority Vendor Declaration in
the agreed form duly executed by each of the Minority Vendors.
3.4.7 Exercise all voting rights and other powers of control which they
have in relation to the Company to make sure that the required
shareholders and directors resolutions are passed:
(1) (a) issuing appropriate shares to the Vendor's; and (b) altering
the authorised share capital of the Company to convert all C
Ordinary Shares currently authorised to be issued in the
Company's authorised share capital, and the C Ordinary Shares
already in issue, into A Ordinary Shares, such that each Vendor
at Completion holds the number of shares of each class in the
capital of the Company set out opposite that Vendors name in
column 4 of the table in the First Schedule.
(2) Adopting the Articles of Association noting the alteration in the
Company's authorised share capital required pursuant to clause
3.4.7(1).
3.4.8 Deliver to the Purchaser
3.4.8.1 This Agreement duly executed by each of the Principal Vendors.
3.4.8.2 A Vesting Agreement duly executed by each Vendor (other than
Xxxxxx Xxxxxxxxx) that is required to execute such an
agreement as detailed in column 10 of the table in the First
-----
Schedule and Xxxxxx Xxxxxxxxx'x Vesting Agreement,
---------
duly executed by Xxxxxx Xxxxxxxxx, each in respect of the
number of Consideration Shares specified in column 11 of the
table in the First Schedule.
--------------
3.4.8.3 An Escrow Agreement duly executed by each Vendor that is
required to execute such an agreement as detailed in column
7 of the table in the First Schedule in respect of the
number of Consideration Shares of each Vendor as detailed in
column 8 of the table in the First Schedule.
---------------
3.4.8.4 A Non-Compete Agreement duly executed by each Vendor that is
required to execute such an agreement as detailed in column
12 of the table in the First Schedule;
---------------
3.4.8.5 The Registration Rights Agreement duly executed by each
Vendor that is required to execute such agreement;
17
3.4.8.6 Lock-Up Agreements, duly executed by each Vendor that is
required pursuant to clause 4.2.7 to execute such an
agreement.
3.4.8.7 The Hibernia Termination Agreement, duly executed by the
parties thereto.
3.4.8.8 The Conversion Agreement Termination Agreement, duly executed
by the parties thereto;
3.4.8.9 Appropriate discharges of all charges registered in the
Company's Registration Office (more particularly described
in Annex 50 to the Disclosure Letter, other than for the
continuing bank debt).
3.5 PURCHASER'S OBLIGATIONS AT COMPLETION:
Upon Completion Purchaser shall:
3.5.1 pay the Purchase Price to the Vendors as follows:
(1) deliver cash in the amount of US$4,957,232 to Principal Vendors'
Solicitors by wire transfer or in such other manner as may be
agreed in writing between the Principal Vendors' Solicitors and
the Purchaser's Solicitors, for further distribution to the
Vendors in amounts agreed to among the Vendors in the amounts per
Vendor set forth in column 5 of the table in the First Schedule;
--------------
(2) deliver 146,435 Consideration Shares having a Market Value of
US$2,550,000 to the escrow agent referred to in Clause 3.5.3 to
eventually be distributed via the escrow agent to the Principal
Vendors, subject to the terms of this Agreement, the Vesting
Agreements, Xxxxxx Xxxxxxxxx'x Vesting Agreement and the Escrow
Agreement, in amounts per Principal Vendor, set forth in column 8
of the table detailed in the First Schedule;
---------------
(3) deliver 244,059 Consideration Shares having a Market Value of
US$4,250,000 to the Vendors. Such Consideration Shares will be
distributed immediately upon Completion to each of the Vendors in
the amounts per Vendor set forth in column 9 of the table in the
First Schedule hereto;
---------------
3.5.2 All of the Consideration Shares issued to the Vendors pursuant to
this Agreement cannot be sold until after the first anniversary of the
Completion Date and will bear a restrictive legend in substantially
the following form;
18
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"). THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT
PURPOSES ONLY AND MAY ONLY BE SOLD OR TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S (RULE 901
THROUGH 905 AND PRELIMINARY NOTES), PURSUANT TO REGISTRATION
UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION. HEDGING TRANSACTIONS INVOLVING THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE ACT.
3.5.3 Purchaser and the Principal Vendors will, subject to their having
agreed mutually acceptable terms, enter into an escrow agreement
pursuant to Clause 3.3.11 hereof, (the "Escrow Agreement") with First
Union National Bank.
3.5.4 Purchaser and each of the Vendors required to enter into a Vesting
Agreement as detailed in column 10 (other than Xxxxxx Xxxxxxxxx), of
the table in the First Schedule and Xxxxxx Xxxxxxxxx in respect of
---------------
Xxxxxx Xxxxxxxxx'x Vesting Agreement, will enter into a vesting
agreement in the agreed form in respect of such number of the
Consideration Shares payable to each such Vendor as is detailed in
column 11 of the table in the First Schedule;
3.5.5 The number of Consideration Shares detailed in column 11 of the table
in the First Schedule of each of the Vendors detailed in column 10 of
--------------
the First Schedule will also bear a restrictive legend in
---------------
substantially the following form:
THIS CERTIFICATE AND THE SECURITIES REPRESENTED HEREBY ARE
SUBJECT TO, AND TRANSFERRABLE ONLY IN ACCORDANCE WITH, THE
PROVISIONS OF A VESTING AGREEMENT, DATED JULY __, 2001, A
COPY OF SUCH VESTING AGREEMENT AS IT MAY BE AMENDED FROM
TIME TO TIME, IS MAINTAINED WITH THE CORPORATE RECORDS OF
MEASUREMENT SPECIALTIES, INC. (THE "COMPANY").
3.5.6 Each Vendor (a) understands that the shares of Purchaser's common
stock constituting a portion of the Purchase Price being delivered to
such Vendors have not been, and will not be, registered under the
Securities Act of 1933, as amended, (the "Securities Act") or under
any state securities laws, and are being offered and sold in reliance
upon ("Regulation S") (Rule 903(3)(iii)) promulgated under the
Securities Act, (b) agree to resell or transfer such shares only in
19
accordance with the provisions of Regulation S (Rule 901 through 905,
and Preliminary Notes), pursuant to registration under the Securities
Act or pursuant to an available exemption from registration, (c) agree
not to engage in hedging transactions with regard to such shares
unless in compliance with the Securities Act, and (d) each certifies
that he, she or it is not a US person, as defined in Rule 902(k) of
the Securities Act, and is not acquiring shares for the account or
benefit of any US person.
3.5.7 The Purchaser shall not register any transfer of the Consideration
Shares by any of the Vendors unless such transfer is made in
accordance with Regulation S, pursuant to registration under the
Securities Act, or pursuant to an available exemption from
registration.
3.5.8 A certificate executed by Purchaser to the effect that, except as
otherwise stated in such certificate, each of the Purchaser's
representations and warranties in this Agreement was accurate in all
respects as of the date of this Agreement and is accurate in all
respects as of the Completion Date as if made on the Completion Date.
3.5.9 Each of the parties thereto will enter into the Hibernia Termination
Agreement.
3.5.10 Each of the parties thereto will enter into the Conversion
Termination Agreement.
3.6 COVENANTS OF PRINCIPAL VENDORS PRIOR TO THE COMPLETION DATE:
3.6.1 Access and Investigation. Between the date of this Agreement and the
-------------------------
Completion Date, Principal Vendors will, and will cause each Acquired
Company and its Representatives to, (a) upon reasonable notice afford
Purchaser and its Representatives and prospective lenders and their
Representatives (collectively, "Purchaser's Advisors") reasonable
access to each Acquired Company's personnel, properties (including
subsurface testing), contracts, books and records, and other documents
and data, during normal business hours (b) furnish Purchaser and
Purchaser's Advisors with copies of all such contracts, books and
records, and other existing documents and data relating to the
Acquired Companies as Purchaser may reasonably request, and (c)
furnish Purchaser and Purchaser's Advisors with such additional
financial, operating, and other data and information relating to the
Acquired Companies as Purchaser may reasonably request. Provided
however that nothing in this clause shall oblige the Principal Vendors
or any Acquired Company or its Representatives to disclose any
information which is reasonably regarded by them as confidential to
the activities of the Principal Vendors otherwise then in connection
with the Acquired Companies all which is subject to confidentiality
obligations owed by any Acquired Company to any third party.
20
3.6.2 Operation of the Businesses of the Acquired Companies
Between the date of this Agreement and the Completion Date, Principal
Vendors will, and will cause each Acquired Company to:
(1) conduct the business of such Acquired Company only in the
Ordinary Course of Business;
(2) use their Best Efforts to preserve intact the current business
organisation of such Acquired Company, keep available the
services of the current officers, employees, and agents of such
Acquired Com-pany, and maintain the relations and good will with
suppliers, customers, landlords, creditors, employees, agents,
and others having business relationships with such Acquired
Company;
(3) confer with Purchaser concerning operational matters of a
material nature; and
(4) otherwise report periodically to Purchaser concerning the status
of the business, operations, and finances of such Acquired
Company.
3.6.3 Negative Covenant. Except as otherwise expressly permitted by this
------------------
Agreement, between the date of this Agreement and the Completion Date,
Principal Vendors will not, and will cause each Acquired Company not
to, without the prior consent of Purchaser, take any affirmative
action, or fail to take any reasonable action within their or its
control, as a result of which any of the changes or events listed in
Clause 4.16 of the Fourth Schedule is likely to occur.
3.6.4 Required Approvals. As promptly as practicable after the date of this
------------------
Agreement, Principal Vendors will, and will cause each Acquired
Company to, make all filings required by Legal Requirements to be made
by them in order to con-summate the Contemplated Transactions. Between
the date of this Agreement and the Completion Date, Principal Vendors
will, and will cause each Acquired Company to cooperate with Purchaser
with respect to all filings that Purchaser elects to make or is
required by Legal Requirements to make in connection with the
Contemplated Transactions.
3.6.5 Notification. Between the date of this Agreement and the Completion
------------
Date, each Vendor will promptly notify Purchaser in writing if such
Vendor or any Acquired Company becomes aware of any fact or condition
that causes or con-stitutes a Breach of any of Principal Vendors'
representations and warranties as of the date of this Agreement, or if
such Vendor or any Acquired Company becomes aware of the occurrence
after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or
21
constitute a Breach of any such repre-sentation or warranty had such
representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. Should any such fact or condition
require any change in the Disclo-sure Letter if the Disclosure Letter
were dated the date of the occurrence or discovery of any such fact or
condition, Principal Vendors will promptly deliver to Purchaser a
supplement to the Disclosure Letter specifying such change. During the
same period, each Vendor will promptly notify Purchaser of the
occurrence of any Breach of any covenant of Principal Vendors in this
Clause 3.6. For the avoidance of doubt the parties hereto hereby agree
and acknowledge that, subject to the provisions of Clause 3.3.4, the
Principal Vendors shall from the date hereof until the date of
Completion be entitled to make further disclosures against the
warranties contained in this agreement by way of supplements to the
Disclosure Letter.
3.6.6 Payment of Indebtedness. Except as expressly provided in this
-------------------------
Agreement:
3.6.6.1 Principal Vendors will cause all indebtedness owed to an
Acquired Company by any Vendor or any Related Person of any
Vendor to be paid in full prior to the Completion Date; and
3.6.6.2 The Principal Vendors will cause all indebtedness owed by any
Acquired Company to any Vendor or any Related Person of any
Vendor to be paid in full or otherwise discharged prior to, or on
the Completion Date.
3.6.7 No Negotiation. Until such time, if any, as this Agreement is
---------------
terminated pursuant to Clause 5, Principal Vendors will not, and will
cause each Acquired Company and each of their Representatives not to,
directly or indirectly solicit, initiate, or encourage any inquiries
or proposals from, discuss or negotiate with, provide any non-public
information to, or consider the merits of any unsolicited inquiries or
proposals from, any Person (other than Purchaser) relating to any
transaction involving the sale of the business or assets (other than
in the Ordinary Course of Business) of any Acquired Company, or any of
the capital stock of any Acquired Company, or any merger,
consolidation, business combination, or similar transaction involving
any Acquired Company.
3.6.8 Certificate of Net Debt. On the day before the Completion Date, the
--------------------------
Principal Vendors shall deliver to the Purchaser a certificate (the
"Certificate of Net Debt") detailing the Net Debt of the Acquired
Companies as of the close of business on 30th April, 2001 as being
3,852,156. This amount of Net Debt having been calculated by and
agreed between the Principal Vendors and the Purchaser based on the
management accounts of the Acquired Companies as at 30th April, 2001,
which accounts were prepared in accordance with GAAP. The parties
agree and acknowledge therefore that the amount of Net Debt is less
than the permissible amount of Net Debt of 4,303,600 as previously
agreed by the parties.
22
3.7 COVENANTS OF PURCHASER:
3.7.1 Approvals by Governmental Bodies. As promptly as practicable after
-----------------------------------
the date of this Agreement, Purchaser will, and will cause each of its
Related Persons to, make all filings required by Legal Requirements to
be made by them to consummate the Contemplated Transactions (including
a notification under the Mergers Act). Between the date of this
Agreement and the Completion Date, Purchaser will cooperate with
Principal Vendors with respect to all filings that Principal Vendors
are required by Legal Requirements to make in connection with the
Contemplated Transactions, and (ii) cooperate with Principal Vendors
in obtaining all consents identified in Part 4.2 of the Disclosure
Letter; provided that this Agreement will not require Purchaser to
dispose of or make any change in any portion of its business or to
incur any other burden to obtain a Governmental Authorisation.
3.7.2 Amex Listing. The Purchaser shall cause the Consideration Shares to
-------------
be authorised for listing on the American Stock Exchange in connection
with the transactions contemplated in this Agreement, upon official
notice of issuance.
3.7.3 Incentive Scheme.
-----------------
The Purchaser notes the desire of each of the executive Principle
Vendors to agree with MSI a new bonus and incentive scheme prior to or
at Completion, (such bonus and incentive schemes to include an
entitlement on the part of each such executive Principal Vendor to
participate in share option schemes of the Purchaser). The Purchaser
hereby covenants and undertakes to make a bona fide offer of a new
bonus and incentive scheme as detailed above to each executive
Principal Vendor by Completion and, in any event, by no later than
31st July, 2001. The Purchaser further covenants and agrees that it
shall use its Best Efforts to have agreed a new bonus and incentive
scheme with each Principal Vendor by Completion and, in any event, by
no later than 31st July, 2001.
4. WARRANTIES AND INDEMNITIES:
4.1 PRINCIPAL VENDORS' WARRANTIES:
The Principal Vendors, jointly and severally, shall defend, indemnify and
hold harmless the Purchaser, and shall reimburse Purchaser, for, from and
against each and every demand, claim, loss (which shall include any
diminution in value), liability, judgment, damage, cost and expense
(including, without limitation, interest, penalties, costs of preparation
and investigation, and the reasonable fees, disbursements and expenses of
attorneys, accountants and other professional advisers (individually a
"loss" and collectively "losses") imposed on or incurred by Purchaser,
directly or indirectly, resulting from or arising out of any Breach of any
23
representation or warranty made by the Principal Vendors in this Agreement,
(including in the Fourth Schedule attached hereto) subject to any
exceptions fairly and accurately disclosed in the Disclosure Letter, and
any supplements thereto, and any matter expressly provided for in this
Agreement.
4.2 WARRANTIES BY PURCHASER:
The Purchaser shall indemnify, defend and hold harmless each of the
Principal Vendors and keep each of the Principal Vendors indemnified
against all and any expenses, costs, claims, demands, losses, damages and
other liabilities whatsoever whether direct or consequential suffered or
incurred by any Principal Vendor as a result of any of the following
statements being untrue or misleading.
4.2.1 the statements contained in each of Clauses 4.2, 4.3, 4.4 and 4.5
respectively are at the date hereof true and not misleading and
further that they will have been complied with in all respects, as if
they have been entered into afresh at Completion and if, after the
signing of this Agreement and before Completion, any matter arises
which results or may result in such statements becoming untrue or
misleading, the Purchaser shall immediately notify the Principal
Vendors fully in writing prior to Completion;
4.2.2 the Purchaser is duly incorporated, validly existing and in good
standing under the laws of New Jersey. Each of the Purchaser and its
subsidiaries is duly qualified or licensed as a foreign corporation to
do business, and is in good standing, in each jurisdiction in which
the failure to be so qualified or licensed would have a material
adverse effect on the business, assets, financial commissions or
results of operations of Purchaser and its subsidiaries, taken as a
whole;
4.2.3 the Purchaser has power and authority to enter into this Agreement
and the Ancillary Agreements;
4.2.4 the execution, delivery and performance of this Agreement and the
Ancillary Agreements, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all
necessary corporate action on the part of Purchaser and no further
action is required on the part of Purchaser to authorize this
Agreement, the Ancillary Agreements or the transactions contemplated
hereby and thereby;
4.2.5 the execution, delivery and performance of the terms of this
Agreement and the Ancillary Agreements by the Purchaser do not
infringe upon any provisions of:
24
(1) any law or regulation or any order or decree of any authority,
agency or court binding on the Purchaser;
(2) the certificate of incorporation or bylaws of the Purchaser; or
(3) any loan stock, bond, debenture or other deed, mortgage, contract
or other undertaking or instrument to which the Purchaser is
party;
4.2.6 in acquiring the Shares, the Purchaser is acting as principal and not
as agent or broker for any other person;
4.2.7 the Purchaser warrants that the Consideration Shares issued as
consideration in accordance with the provisions of this Agreement,
shall have been duly and validly authorised, issued and delivered by
the Purchaser free from all encumbrances (save for any lock up,
vesting, escrow or other arrangements contemplated by this Agreement)
and shall have been issued in Compliance with US securities laws and
will be fully paid for and not subject to any call, pre-emptive or
similar rights and shall rank pari passu in all respects with the
existing common stock of the Purchaser. The Purchaser undertakes that,
each Vendor shall be entered in the register of shareholders of the
Purchaser as holder of such Consideration Shares issued to him
hereunder and under the Ancillary Agreements and so far as regards any
dividend declared or paid by reference to a record date falling on or
after the date upon which any such Consideration Shares shall be
required to be issued hereunder, rank as if they had been issued fully
paid on and from the date upon which such Consideration Shares were
issued;
4.2.8 each of the Vendors shall be entitled to sell all their fully vested
Consideration Shares in the capital of the Purchaser at any time on or
after the first anniversary of the date hereof however under no
circumstances can the Vendors sell their fully vested stock in the
capital of the Purchaser prior to the first anniversary of the date
hereof. In addition, the Principal Vendors agree to enter into a
customary lock-up agreement in the agreed form with Xxxxxxx & Company
Inc. if so requested by Xxxxxxx & Company Inc. The parties agree
however that any such underwriting Agreement shall not extend the
period during which the Vendors shall not be entitled to sell their
fully vested stock in the capital of the Purchaser past the date which
is the first anniversary of the date hereof;
4.2.9 at Completion, the Purchaser and the Vendors shall enter into a
registration rights agreement ("Registration Rights Agreement") in the
agreed form;
4.2.10 in the event that the Company xxxxxx the U.S. dollar exposure
arising from the cash portion of the Purchase Price, the Purchaser
shall assign the Euro contracts purchased for this purpose to the
Principal Vendors within 45 days of the Completion Date;
25
4.3 SEC Filings; Financial Statements
------------------------------------
4.3.1 Purchaser has furnished to Principal Vendors a true and complete copy
of each report, schedule, registration statement and definitive proxy
statement filed by Company with the Securities and Exchange Commission
("SEC") after March 31st, 2000 (the "PURCHASER SEC REPORTS"), which
are all the forms, reports and documents required to be filed by
Company with the SEC after March 31st, 2000. The Purchaser SEC Reports
(X) were prepared in accordance with, and complied in all material
respects with, the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Purchaser SEC Reports and were filed on
a timely basis and (Y) did not at the time they were filed (and if
amended or superseded by a filing prior to the date of this Agreement
then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. None
of Purchaser's subsidiaries is required to file any reports or other
documents with the SEC.
4.3.2 Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in the Purchaser SEC
Reports, including any Purchaser SEC Reports filed after the date
hereof until Completion, other than the consolidated financial
statements of the Acquired Companies or the pro forma financial
information derived therefrom, as to which the Purchaser makes no
representations or warranties (X) complied as to form in all material
respects with the published rules and regulations of the SEC with
respect thereto, (Y) was prepared in accordance with United States
generally accepted accounting principles, applied on a consistent
basis throughout the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited statements, for the
absence footnotes as permitted by Form 10-Q of the Exchange Act) and
(Z) fairly presents the consolidated financial position of Purchaser
and its subsidiaries at the respective dates thereof and the
consolidated results of operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were
or are subject to normal year-end adjustments.
4.3.3 Purchaser has previously furnished to Principal Vendors a complete
and correct copy of any amendments or modifications, which have not
yet been filed with the SEC but which are required to be filed, to
agreements, documents or other instruments which previously had been
filed by Purchaser with the SEC pursuant to the Securities Act or the
Exchange Act.
4.3.4 The financial information included in the press release dated June
4th, 2001 issued by the Purchaser in connection with the Purchaser's
announcement of its results of operations for its fiscal year ended
March 31st, 2001 (including, without limitation, the Purchaser's
consolidated financial statements contained therein) was prepared in
accordance with United States generally accepted accounting principles
26
and fairly presents the consolidated financial position of the
Purchaser and its subsidiaries at the respective dates thereof and the
consolidated results of operations for the periods indicated (except
as maybe indicated in the notes thereto).
4.4 Absence of Certain Changes or Events.
------------------------------------------
4.4.1 Since March 31st, 2001, there has not been, occurred or arisen any
event or condition which has had a material adverse effect on the
business, assets (including intangible assets), financial conditions
or results of operations of Purchaser and its subsidiaries, taken as a
whole.
4.5 No Undisclosed Liabilities.
----------------------------
4.5.1 Neither Purchaser nor any of its subsidiaries has any liabilities
(absolute, accrued, contingent or otherwise) which are, individually
or in the aggregate, material to the business, results of operations
or financial condition of Purchaser and its subsidiaries, taken as a
whole, except (i) liabilities provided for in Purchaser's balance
sheet as of March 31st, 2001, (ii) liabilities incurred since March
31st, 2001 in the ordinary course of business, consistent with past
practice, and (iii) contractual and other liabilities incurred in the
ordinary course of business which are not required by United States
generally accepted accounting principles to be reflected on a balance
sheet.
4.6 Principal Vendors Indemnity
-----------------------------
4.6.1 The Principal Vendors shall, subject to Clause 4.6.2 indemnify,
defend and hold harmless the Purchaser and keep the Purchaser
indemnified against any and all expenses, costs, claims, demands,
losses, damages and other liabilities whatsoever suffered or incurred
by the Company arising out of or in respect of:
(i) the Company's failure to deliver Tranche One of the products to
Tchibo by the First Delivery Date;
(ii) the Company's failure to deliver Tranche Two of the products to
Tchibo by the Second Delivery Date; and
(iii) Tchibo's rejection of Tranche One and/or Tranche Two because of
failure of products in either such Tranche to pass Tchibo's quality
control requirements,
all as detailed in the Tchibo Contract.
The Principal Vendors shall have no other liability to the Company or
the Purchaser pursuant to the Tchibo Contract and, for the avoidance
of doubt, the parties hereby agree that none of the Principal Vendors
shall have any liability to either the Company or the Purchaser for
any breach by the Company following Completion of the exclusivity
27
obligation undertaken by the Company pursuant to the Tchibo Contract
or by any failure to deliver any further tranches of product due to
Tchibo under the Tchibo Contract for any failure of such further
tranches of product to pass Tchibo's quality control tests.
4.6.2 The Principal Vendor's liability to the Purchaser pursuant to Clause
4.6.1 above shall only apply to any expenses, costs, claims, demands,
losses or damages incurred by the Company pursuant to the Tchibo
Contract in excess of DM1,000,000 and, it is hereby expressly agreed
and acknowledged that the limitations detailed in Clause 6, other than
Clause 6.2.1.2 shall also limit any liability of any Principal Vendor
pursuant to Clause 4.6.1. The parties further agree that any amount
which the Principal Vendors become liable to pay to the Company
pursuant to Clause 4.6 shall not count towards the de minimus
limitations detailed in Clause 6.2.1.2 hereof.
5. TERMINATION
5.1 Termination Events.
-------------------
This Agreement may, by notice given prior to or on the Completion Date, be
terminated:
5.1.1 by either Purchaser or Principal Vendors if a material Breach of any
provision of this Agreement has been committed by the other party and
such Breach has not been waived;
5.1.2 by mutual consent of Purchaser and Principal Vendors; or
5.1.3 by either Purchaser or Principal Vendors if the Completion has not
occurred (other than through the failure of any party seeking to
terminate this Agreement to comply fully with its obligations under
this Agreement) on or before close of business in Ireland on 5th July,
2001, or such later date as the parties may agree upon.
6. REMEDIES
6.1 MINORITY VENDORS:
THE PURCHASER SHALL NOT BE ENTITLED TO RECOVER ON ANY CLAIM PURSUANT TO
CLAUSE 4.1 FROM ANY MINORITY VENDOR AND, FOR THE AVOIDANCE OF DOUBT, THE
PARTIES HEREBY EXPRESSLY AGREE THAT NONE OF THE CONSIDERATION SHARES TO BE
ISSUED BY PURCHASER TO THE MINORITY VENDORS SHALL BE ESCROW SHARES.
28
6.2 LIMITATIONS:
NOTWITHSTANDING THE PROVISIONS OF CLAUSES 4.1, 4.2 AND 6.1, AND SUBJECT TO
CLAUSE 6.13 HEREOF THE PARTIES WILL NOT BE LIABLE FOR ANY CLAIM
6.2.1 UNLESS:
6.2.1.1 TIME: NOTICE OF IT IS GIVEN IN WRITING WITHIN ONE YEAR
FOLLOWING COMPLETION, SETTING OUT DETAILS OF THE EVENT OR
CIRCUMSTANCES GIVING RISE TO THE CLAIM, THE LEGAL GROUNDS ON
WHICH THE CLAIM IS BASED AND THE TOTAL AMOUNT OF THE LIABILITY;
AND
6.2.1.2 DE MINIMIS: THE AGGREGATE AMOUNT OF THE PRINCIPAL VENDORS'
LIABILITY FOR ALL DULY NOTIFIED CLAIMS (WHICH EACH INDIVIDUALLY
EXCEED US$17,000) EXCEEDS US$170,000, IN WHICH CASE ALL SUCH DULY
NOTIFIED CLAIMS (WHICH EACH INDIVIDUALLY EXCEED US$17,000) WILL
LIE.
6.2.2 MAXIMUM AMOUNT:
THE MAXIMUM AGGREGATE LIABILITY OF THE PRINCIPAL VENDORS FOR ALL
CLAIMS UNDER THIS AGREEMENT SHALL BE THE AMOUNT REACHED BY MULTIPLYING
THE MARKET VALUE FIGURE BY THE NUMBER OF ESCROW SHARES. ANY SUCH
LIABILITY MAY ONLY BE SATISFIED OUT OF THE ESCROW SHARES, AND SHALL BE
EFFECTED BY THE RETURN TO PURCHASER OF THE APPLICABLE NUMBER OF ESCROW
SHARES. THE NUMBER OF ESCROW SHARES TO BE RETURNED TO THE PURCHASER
SHALL BE SUCH NUMBER OF ESCROW SHARES HAVING A MARKET VALUE EQUAL TO
THE DOLLAR AMOUNT OF THE CLAIM MADE BY THE PURCHASER PURSUANT TO
CLAUSE 4.1.
6.3 FURTHER LIMITATIONS:
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT AND IN
PARTICULAR THE PROVISIONS OF CLAUSE 4.1:
6.3.1 NOTHING IN THIS AGREEMENT WILL BE DEEMED TO RELIEVE THE PURCHASER
FROM ANY COMMON LAW OR OTHER DUTY TO MITIGATE ANY LOSS OR DAMAGE
INCURRED BY HIM;
6.3.2 SUBJECT TO CLAUSE 7.11.2, NO PERSON OTHER THAN THE PURCHASER WILL BE
ENTITLED TO MAKE A CLAIM OR OTHER CLAIM UNDER THIS AGREEMENT, NEITHER
WILL THE AMOUNT OF THE CLAIM BE CALCULATED BY REFERENCE TO LOSS OR
DAMAGE SUFFERED BY ANY PERSON OTHER THAN THE PURCHASER;
29
6.3.3 IF ANY CIRCUMSTANCES GIVING RISE TO A CLAIM ARISE, THE PURCHASER
SHALL GIVE WRITTEN NOTICE TO THE PRINCIPAL VENDORS AND KEEP THE
PRINCIPAL VENDORS FULLY INFORMED OF ALL MATERIAL DEVELOPMENTS;
6.3.4 THE PRINCIPAL VENDORS WILL NOT BE LIABLE IN RESPECT OF ANY CLAIM TO
THE EXTENT THAT IT ARISES OR IS INCREASED OR EXTENDED AS A RESULT OF
ANY OCCURRING WITH RETROSPECTIVE EFFECT A CHANGE IN THE LAW OR IN ANY
REGULATION, REQUIREMENT OR CODE OF CONDUCT OF ANY RELEVANT AGENCY OR
REGULATORY BODY OR ANY PARLIAMENTARY STATEMENT, OR STATEMENT BY THE
REVENUE COMMISSIONERS CONCERNING ANY CHANGE IN REVENUE PRACTICE.
6.4 Recovery from Third Parties:
-------------------------------
6.4.1 If at any time the Purchaser or the Company is entitled to recover
from insurers or any other third parties whether by payment, discount,
credit, relief or otherwise howsoever (in this clause called a "Third
Party Claim") in relation to any matter giving rise to a Claim the
Purchaser shall:
6.4.2 Notify the Principal Vendors as soon as reasonably practicable and
provide such information and assistance as the Principal Vendors may
require relating to the entitlement and the action taken or proposed
to be taken by the Purchaser or the Company;
6.4.3 Take (at the expense of the Principal Vendors) such reasonable steps
or proceedings as the Principal Vendors may require, and act in
accordance with any requirements of the Principal Vendors, subject to
the Purchaser being indemnified by the Principal Vendors against all
reasonable costs and expenses incurred in that connection; and
6.4.4 Keep the Principal Vendors informed of the progress of any such
steps, proceedings or actions and the amount of the relevant Claim
against the Principal Vendors will be reduced to the extent of any
amount recovered or of which advantage is otherwise obtained or, if
payment has already been made by the Principal Vendors, the Purchaser
shall make a refund as appropriate.
6.4.5 Steps taken by Principal Vendors to cause the Purchaser to pursue, or
co-operate in pursuit of, a Third Party Claim will not be taken as an
admission of the relating Claim or that the Principal Vendors are
liable in any particular amount or at all.
30
6.5 Co-operation.
------------
6.5.1 The Purchaser shall allow, and shall cause the Group to allow, the
Principal Vendors and their professional advisers to investigate any
matter or circumstance alleged to give rise to a Claim.
6.5.2 For that purpose, the Purchaser shall give and shall cause the
Company to give all reasonable assistance requested on reasonable
notice by the Principal Vendors or their accountants, solicitors or
other professional advisers, including reasonable access to and copies
of any relevant documents or information in the possession of the
Purchaser or the Group.
6.5.3 The provision of co-operation under this clause, or the request for
co-operation, will not be taken as prejudicing the rights of any party
with regard to the validity or extent of any Claim.
6.6 Third Party Claims/Notice to Warranting Party.
--------------------------------------------------
In the case of any claim asserted by a third party against a Person
entitled to recover under a warranty under this Agreement (the "Warranted
Party"), notice shall be given by the Warranted Party to the Party giving
the relevant warranty (the "Warranting Party") promptly after such
Warranted Party has actual knowledge of any claim as to which Claim may be
sought, and the Warranted Party shall permit the Warranting Party (at the
cost and expense of such Warranting Party) to assume the defence of any
claim or litigation resulting therefrom; provided, however, that (i) the
counsel for the Warranting Party who shall conduct the defence of such
claim or litigation shall be reasonably satisfactory to the Warranted
Party, (ii) the Warranted Party may participate in such defence at such
Warranted Party's expense, and (iii) the omission by any Warranted Party to
give notice as provided herein shall not relieve the Warranting Party of
its warranty obligation under this Agreement except to the extent that such
omission results in a failure of actual notice to the Warranting Party and
such Warranting Party is materially damaged as a result of such failure to
give notice. Except with the prior written consent of the Warranted Party,
no Warranting Party, in the defence of any such claim or litigation, shall
consent to entry of any judgement or enter into any settlement that
provides for injunctive or other non-monetary relief affecting the
Warranted Party or that does not include as an unconditional term thereof
the giving by each claimant or plaintiff to such Warranted Party of a
release from all liability with respect to such claim or litigation. In the
event that the Warranted Party shall in good faith determine that the
conduct of the defence of any Claim hereunder or any proposed settlement of
any such Claim by the Warranting Party might be expected to affect
adversely in a meaningful way the ability of Purchaser to conduct its
business, or that the Warranted Party may have available to it one or more
defences or counterclaims that are inconsistent with one or more of those
that may be available to the Warranting Party in respect of such claim or
any litigation relating thereto, the Warranted Party shall have the right
at all times to take over and assume control of the defence, settlement,
31
negotiations or litigation relating to any such claim at the sole cost of
the Warranted Party, provided that if the Warranted Party does so take over
and assume control, the Warranted Party shall not settle such claim or
litigation without the written consent of the Warranting Party, such
consent not to be unreasonably withheld. In the event that the Warranting
Party does not accept the defence of any matter as above provided, the
Warranted Party shall have the full right to defend against any such claim
or demand and shall be entitled to settle or agree to pay in full such
claim or demand subject to such Warranted Party*s rights to recover under a
warranty under this Agreement. In any event, the Warranting Party and the
Warranted Party shall reasonably cooperate in the defence of any claim or
litigation subject to this Clause 6.6 and the records of each shall be
available to the other with respect to such defence, except to the extent
such records are subject to attorney/client privilege; provided, however,
that the Parties shall negotiate and enter into a joint defence agreement
satisfactory to each Party if such an agreement would avoid the waiver of
such attorney/client privilege.
6.7 Procedure for Claims- Other Claims.
--------------------------------------
A Claim for any matter not involving a third-party claim may be asserted by
written notice to the party from whom recover for breach of warranty is
sought.
6.8 Survival of Representations and Warranties.
----------------------------------------------
All representations, warranties, covenants and obligations in this
Agreement and any other certificate or document delivered pursuant to this
Agreement will survive the Completion Date for one year from the date
hereof.
6.9 Exclusivity of Remedies.
-------------------------
The remedies provided for in this Clause 6 are subject to Clause 6.13
hereof, exclusive and shall be in lieu of all other remedies for breach of
this Agreement, including without limitation for breaches of the
representations, warranties, covenants and agreements hereunder and the
Purchaser shall not be entitled to seek recovery beyond the Escrow Shares;
6.10 Insured Claims.
---------------
In case any event shall occur that would otherwise entitle either party to
assert a Claim hereunder, no Loss shall be deemed to have been sustained by
the Warranted Party to the extent of any proceeds received (or, with
reasonable diligence exercised by the Warranted Party, should have been
received) by the Warranted Party from any insurance policies with respect
thereto.
6.11 Treatment of Claim Payments.
------------------------------
Any payment made to the Purchaser will be treated for all purposes as a
reduction in the Purchase Price under Clause 2.2.
6.12 Securityholder Agent.
----------------------
32
6.12.1 Upon consummation of the transactions contemplated herein, and
without further act of any Principal Vendor, Xxxx Xxxxxxx, of Hibernia
Capital Partners Limited shall be appointed attorney-in-fact (the
"Securityholder Agent") for each Principal Vendor for and on behalf of
--------------------
each such Principal Vendor, to give and receive notices and
communi-ca-tions, to authorize delivery to the Purchaser of the Escrow
Shares from the Escrow Fund (as defined in the Escrow Agreement) in
satisfaction of claims by Purchaser under the warranty provisions
contained in Clause 4.1 hereof, to object to such deliveries, to agree
to, negotiate, enter into settlements and compromises of, and demand
arbitration and comply with orders of courts and awards of arbitrators
with respect to such claims, to execute and deliver any forms or other
documents to effect the transfer of all or part of the Escrow Shares
and to take all actions necessary or appropriate in the judgment of
Securityholder Agent for the accomplishment of the foregoing. Notices
or communications to or from the Securityholder Agent shall constitute
notice to or from each of the Principal Vendors.
6.12.2 Each decision, act, consent or instruction of the Securityholder
Agent shall constitute a decision of all the Vendors for whom a
portion of the Escrow Shares otherwise issuable to them are deposited
in the Escrow Fund and shall be final, binding and conclusive upon
each Vendor and their successors or transferees, and the Escrow Agent
and the Purchaser may rely upon any such decision, act, consent or
instruction of the Securityholder Agent as being the decision, act,
consent or instruction of each every Principal Vendor. The Escrow
Agent and the Purchaser are hereby relieved from any liability to any
person for any acts done by them in accordance with such decision,
act, consent or instruction of the Securityholder Agent.
6.12.3 The agency described in this Clause 6.12 may be changed by the
Principal Vendors from time to time upon not less than thirty (30)
days prior written notice to the Purchaser; provided that the
Securityholder Agent may not be removed unless holders of a two-thirds
interest of the Escrow Shares agree to such removal and to the
identity of the substituted agent. The Securityholder Agent may resign
upon not less than thirty (30) days prior written notice to the
Purchaser and to all holders of an interest in the Escrow Shares. Any
vacancy in the position of Securityholder Agent may be filled by
approval of the holders of a majority in interest of the Escrow
Shares.
6.12.4 The Securityholder Agent shall not be entitled to compensation for
his or her services rendered hereunder. However, the Securityholder
agent shall be reimbursed by the Principal Vendors for reasonable
counsel fees and other reasonable out-of-pocket expenses incurred in
connection with the provisions of this Agreement and the Escrow
Agreement.
6.12.5 The Securityholder Agent may act upon any instrument or other
writing believed by such Securityholder Agent in good faith to be
genuine and to be signed or presented by the proper person and shall
not be liable for any act done or omitted hereunder as Securityholder
Agent, except for his or her own willful default or gross negligence.
The Principal Vendors on whose behalf the Escrow Shares were
contributed to the Escrow Fund shall, jointly and severally, indemnify
the Securityholder Agent and hold the Securityholder Agent harmless
33
against any loss, liability or expense incurred without willful
default or gross negligence on the part of the Securityholder Agent
and arising out of or in connection with the acceptance or
administration of the Securityholder Agent's duties hereunder,
including the reasonable fees and expenses of any legal counsel
retained by the Securityholder Agent.
6.13 Provisions.
----------
In the event that one or more of the Principal Vendors has committed fraud
then the limitations detailed in this Clause 6 shall not apply to any claim
in respect of that fraud brought by the Purchaser against such Principal
Vendor(s) provided however, it is expressly agreed and acknowledged that in
the event of a claim for fraud being taken by the Purchaser against any
Principal Vendor or Vendors then the Purchaser shall only have a right of
recovery as against the Principal Vendor or Vendors found to have actually
committed such fraud and the Purchaser expressly acknowledges that it shall
not have any right whatsoever to pursue any Principal Vendor or Vendors
found not to have committed such fraud. Notwithstanding the provisions of
Clause 6.9, nothing contained herein shall be deemed a waiver by any party
of the right to specific performance or equitable relief.
7. MISCELLANEOUS PROVISIONS
7.1 Transfers to be stamped.
--------------------------
Following Completion, the Purchasers shall promptly deliver to the Revenue
Commissioners the transfers referred to in Clause 3.4.1(1) for assessment
of stamp duty, and shall promptly pay the duty assessed.
7.2 Announcements.
-------------
The Principal Vendors and the Purchaser shall not make any announcement to
shareholders, employees, customers or suppliers, or to securities markets
or other authorities or to the media or otherwise, regarding the
subject-matter of this Agreement without reasonably first consulting with
the other parties to this Agreement notwithstanding the foregoing, the
Purchaser shall be permitted to describe the subject matter of this
Agreement and the Ancillary Agreements in its registration statement to be
filed with the SEC and to file this Agreement and the Ancillary Agreements
with the SEC to the extent required by law.
7.3 Waiver of Pre-emption Rights.
-------------------------------
The Principal Vendors hereby waive all pre-emption rights to which they may
be entitled under the Articles of Association of the Company or otherwise.
34
7.4 Costs and Expenses.
--------------------
Each party to this Agreement will pay his own costs of and incidental to
this Agreement and its implementation including without limitation their
respective attorney's and investment banker/broker fees, if any, incurred
in connection with this Agreement. The parties further agree that in the
event that this Agreement is signed but Completion does not take place then
the costs incidental to the preparation of financial statements for the
Company for the preceding two financial years shall be paid 50% by the
Purchaser and, so far as is permitted by law, 50% by the Company. In the
event that Completion occurs, then the cost of preparation of such
financial statements, shall so far as is permitted by law, be borne and
paid by the Company. The parties to this Agreement agree that
notwithstanding the previous provisions of this Clause that the payment by
the Company of IR 70,000 (in aggregate) to Xxxxxx & Company during the
period 1st August, 2000 to 31st December, 2000 be and is hereby approved
and ratified.
7.5 Severability.
------------
All the clauses restrictive of competition in this Agreement are distinct
and severable, and if any clause is held unenforceable, illegal or void in
whole or in part by any court, regulatory authority or other competent
authority, it shall to that extent be deemed not to form part of this
Agreement, and the enforceability, legality and validity of the remainder
of this Agreement will not be affected.
7.6 Whole Agreement.
----------------
This Agreement (together with any documents to be executed under Clause 3)
and the Disclosure Letter supersede all prior representations,
arrangements, understandings and agreements, and sets forth the entire,
complete and exclusive agreement and understanding between the parties.
7.7 Survival.
--------
The provisions of this Agreement which have not been performed at
Completion will remain in full force and effect notwithstanding Completion.
7.8 Notices.
-------
7.8.1 Any notice or other communication to be given or served under this
Agreement shall be in writing, addressed to the relevant party and
expressed to be a notice or communication under this Agreement and,
without prejudice to the validity of another method of service, may be
delivered or sent by pre-paid, registered, airmail, post or via
telecopier, addressed as follows:
(i) if to the Principal Vendors or the Company to:
35
A & L Goodbody (Solicitors)
International Financial Services Centre
Xxxxxx 0
Ireland
Attention: Xxxxxxx Xxxxx, Esq.
Telecopier: (000) 0 000 0000
(ii) if to the Purchaser to each of:
Measurement Specialties Inc
00 Xxxxxx Xxxxx Xxxx
Xxxxxxxxx
Xxx Xxxxxx 07 004
Attention: Xxxxxx X. Xxxxxx Xx.
Telecopier: (973) 808 - 1787
With a copy to
XxXxxxxx & English, LLP
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
or to such other address or telecopier number as the addressee may
have previously substituted by notice.
7.8.2 A notice or other communication will be deemed to have been duly
served or given:
(1) in the case of delivery, at the time of delivery;
(2) in the case of posting, five days after posting (and proof that
the envelope containing the notice or communication was properly
addressed, will be sufficient evidence that the notice or other
communication has been duly served or given); or
(3) in the case of telecopier, upon transmission, subject to the
correct code or telecopier number being received on the
transmission report and receipt by the addressee of the complete
text in legible form
(4) in the case of delivery via overnight mail, the day following the
day such notice or communication was sent
36
but if a notice is given or served at business premises other
than during usual business hours on a Business Day, it will be
deemed to be given or served on the next following Business Day.
7.8.3 A party giving or serving a notice or other communication
hereunder by telecopier shall also give or serve a copy by post,
but without prejudice to the validity and effectiveness of the
service by telecopier.
7.8.4 All notices or other communications shall be in the English
language.
7.9 Service of Agent.
------------------
Without prejudice to any other mode of service:
7.9.1 the Purchaser irrevocably appoints Mr. Xxxxx Xxxxxx of Xxxxxx Xxxxxxx
Solicitors, Dublin, Ireland as agent and, each of the Principal
Vendors hereby irrevocably appoints Mr. Xxxxxxx Xxxxxx of the Vendors
Solicitors as agent for service of process relating to any proceedings
before the courts of Ireland in connection with this Agreement, and
each party agrees to maintain as its agent the process agent in
Ireland so notified hereby during the term of this Agreement and
thereafter during such period as any action may be taken under it; and
7.9.2 each party agrees that failure by a process agent to notify it of the
process will not invalidate the proceedings concerned.
7.10 Disclosure Letter.
------------------
7.10.1 The disclosures in the Disclosure Letter, and those in any
supplement thereto, must relate only to the representations and
warranties in the Clause of the Agreement to which they expressly
relate and not to any other representation or warranty in this
Agreement.
7.10.2 In the event of any inconsistency between the statements in the body
of this Agreement or the Schedules and those in the Disclosure Letter
(other than an exception expressly set forth as such in the Disclosure
Letter with respect to a specifically identified representation or
warranty), the statements in the body of this Agreement or Schedules
will control.
7.11 Assignment/Third Party Beneficiaries.
--------------------------------------
7.11.1 Subject to Clause 7.11.2, neither party may assign any of its rights
under this Agreement without the prior consent of the other parties,
which will not be unreasonably withheld, except that Purchaser may
assign any of its rights under this Agreement to any wholly owned
subsidiary of Purchaser.
7.11.2 The Parties hereby expressly agree that the Purchaser shall be
entitled to assign any of its rights under this Agreement to any party
purchasing the entire issued share capital of the Company from the
Purchaser and to any party that acquires all the assets of the Company
as at Completion from the Purchaser.
37
7.11.3 Subject to subclauses 7.11.1 and 7.11.2 respectively, this Agreement
will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties.
Nothing expressed or referred to in this Agreement will be construed
to give any Person other than the parties to this Agree-ment any legal
or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and all
of its provisions and conditions are for the sole and exclusive
benefit of the parties to this Agreement and their successors and
assigns.
7.12 Governing Law.
--------------
This Agreement and all relationships created by it will in all respects be
governed by and construed in accordance with Irish law.
7.13 Jurisdiction.
------------
7.13.1 It is irrevocably agreed that the Irish courts are to have exclusive
jurisdiction to settle any disputes which may arise out of or in
connection with this Agreement or its performance and accordingly that
any suit, action or proceedings so arising may be brought in such
courts.
7.13.2 The Purchaser irrevocably waives (and irrevocably agrees not to
raise) any objection which it may have now or subsequently to the
laying of the venue of any proceedings in any such court as is
referred to in this Clause 9.13 and any claim that any such
proceedings have been brought in an inconvenient forum and further
irrevocably agrees that a judgement in any proceedings brought in any
such court as is referred to in this Clause 9.13 will be conclusive
and binding upon the Purchaser and may be enforced in the courts of
any other jurisdiction.
7.14 Cooperation
-----------
From time to time following the date hereof, Principal Vendors and
Purchaser shall, and shall cause their respective Affiliates to, execute,
acknowledge and deliver all such further conveyances, notices, assumptions,
releases and acquittances and such other instruments, and shall take such
further actions, as may be necessary or appropriate to assure fully to
Purchaser and its respective successors or assigns, all of the properties,
rights, titles, interests, estates, remedies, powers and privileges
intended to be conveyed to Purchaser under this Agreement and the Ancillary
Agreements and to assure fully to Principal Vendors and their successors
and assigns, the obligations of Purchaser under this Agreement and the
Ancillary Agreements, and to otherwise make effective the transactions
contemplated hereby and thereby.
38
7.15 Counterparts
------------
(a) This Agreement may be executed in writing simultaneously and by one or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same agreement, which
shall be sufficiently evidenced by any one of such original
counterparts.
(b) For the purpose of this clause "writing" shall mean written signature
or signature produced or substituted for such written signature and
shall be deemed to include a signature sent by facsimile or by other
electronic means.
IN WITNESS whereof this Agreement has been entered into the date and year first
herein written.
39
FIRST SCHEDULE Parties,
recs. A & B
& cl. 2.1
THE COMPANY AND THE PRINCIPAL VENDORS
Terraillon Holdings Limited. Registered in Ireland no. 295136
Capital at the date hereof: authorised 17,025,000 IR pounds divided into
5,000,000 A Ordinary Shares of 1 IR pound each, 5,000,000 B Ordinary Shares of 1
IR pound each, 250,000 C Ordinary Shares of 0.10p IR pounds each and 7,000,000
Cumulative Preference Shares of 1 IR pound each of which 66,000 A Ordinary
Shares of 1 IR pound each, 203,500 B Ordinary Shares of 1 IR pound each and
77,000 C Ordinary Shares of 1 IR pound each are issued and fully paid.
Capital at the date of Completion: Authorised 17,000,000 IR pounds divided into
5,000,000 A Ordinary Shares of 1 IR pound each 5,000,000 B Ordinary Shares of 1
IR pound each and 7,000,000 Cumulative Preference Shares of 1 IR pound each of
which 135,667 A Ordinary Shares of 1 IR pound each, and 203,500 B Ordinary
Shares of 1 IR pound each will be issued and fully paid.
40
SECOND SCHEDULE
cl. 1.1
============================ ============================= =======
Name Jurisdiction of Incorporation Status
---------------------------- ----------------------------- -------
Xxxxxx UK Ltd. England Trading
Terraillon Corp. United States Trading
Xxxxxx Industries Ltd. Ireland Trading
Terraillon SA France Trading
Gewako Switzerland Trading
Xxxxxx Limited Ireland Dormant
Xxxxxx International Limited Ireland Dormant
Xxxxxx Technology Limited Ireland Dormant
Terraillon Benelux Dormant
Terraillon Espagne Dormant
Terraillon Asia Dormant
---------------------------- ----------------------------- -------
41
THIRD SCHEDULE
DIRECTORS cl. 1.1
================ =========== ==========
Name of Director Company/ies Continuing
Director
(Y/N)
---------------- ----------- ----------
Xxxxxx Xxxxxxxxx Y
Xxxxx Xxxxxx Y
Xxxxx Xxxxxxx N
Xxxxx XxXxxxxx N
Xxxx Xxxxxxx N
Xxxxxxx Xxxxx N
Xxxxxx Xxxxxxxx N
================ =========== ==========
42
FOURTH SCHEDULE
WARRANTIES cls. 1.1 & 4.1
4.1 ORGANISATION AND GOOD STANDING.
(a) Part 4.1 of the Disclosure Letter contains a complete and
accurate list for each Acquired Company of its name, its
jurisdiction of incorporation, other jurisdictions in which it is
authorised to do business, and its capitalisation (including the
identity of each stockholder and the number of shares held by
each). Each Acquired Company is a corporation duly organised and
validly existing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to conduct
its business as it is now being conducted, to own or use the
properties and assets that it purports to own or use, and to
perform all its obligations under Applicable Contracts. Each
Acquired Company is duly qualified to do business as a foreign
corporation under the laws of each state or other jurisdiction in
which either the ownership or use of the properties owned or used
by it, or the nature of the activities conducted by it, requires
such qualification.
(b) Principal Vendors have delivered to Purchaser copies of the
Organisational Documents of each Acquired Company, as currently
in effect.
4.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Principal Vendors, enforceable against Principal
Vendors in accordance with its terms, subject to the laws of
general application relating to bankruptcy, insolvency and the
relief of debtors and to the rules governing specific
performance, injunctive relief or other equitable remedies. Upon
the execution and delivery by Principal Vendors of the
Noncompetition Agreements, Vesting Agreements and Escrow
Agreement (collectively, the "Ancillary Agreements"), the
Ancillary Agreements will constitute the legal, valid, and
binding obligations of Principal Vendors, enforceable against
Principal Vendors in accordance with their respective terms,
subject to the laws of general application relating to
bankruptcy, insolvency and the relief of debtors and to the rules
governing specific performance, injunctive relief or other
equitable remedies. Principal Vendors have the requisite power,
authority, and capacity to execute and deliver this Agreement and
the Ancillary Agreements and to perform their obligations under
this Agreement and the Ancillary Agreements.
43
(b) Except as set forth in Part 4.2 of the Disclosure Letter, neither
the execution and delivery of this Agreement nor the consummation
or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of (A)
any provision of the Organisational Documents of the
Acquired Companies, or (B) any resolution adopted by the
board of directors or the stockholders of any Acquired
Company;
(ii) to the Principal Vendors knowledge contravene, conflict
with, or result in a violation of, or give any Governmental
Body or other Person the right to challenge any of the
Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order
to which any Acquired Company or Vendor, or any of the
assets owned or used by any Acquired Company, may be
subject;
(iii) contravene, conflict with, or result in a violation of any
of the terms or requirements of, or give any Governmental
Body the right to revoke, withdraw, suspend, cancel,
terminate, or modify, any Governmental Authorisation that is
held by any Acquired Company or that otherwise relates to
the business of, or any of the assets owned or used by, any
Acquired Company;
(iv) cause Purchaser or any Acquired Company to become subject
to, or to become liable for the payment of, any Tax;
(v) cause any of the assets owned by any Acquired Company to be
reassessed or revalued by any taxing authority or other
Governmental Body;
(vi) to the Principal Vendors knowledge contravene, conflict
with, or result in a violation or breach of any provision
of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any
Applicable Contract; or
(vii) to the Principal Vendors knowledge result in the imposition
or creation of any Encumbrance upon or with respect to any
of the assets owned or used by any Acquired Company;
(viii) to the Principal Vendors knowledge except as set forth in
Part 4.2 of the Disclosure Letter, no Vendor or Acquired
Company is or will be required to give any notice to or
obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions;
44
4.3 CAPITALIZATION.
(a) Company. The authorised capital stock of the Company consists of
-------
17,025,000 shares, composed of 5,000,000 "A" Ordinary Shares, par
value 1 Pound per share, of which 66,000 "A" Ordinary Shares are
issued; 5,000,000 "B" Ordinary Shares, par value 1 pound per
share, or which 203,500 are issued; 250,000 "C" Ordinary Shares,
par value 0.10 pound per share, of which 77,000 are issued and
7,000,000 Cumulative Preference Shares, par value 1 pound per
share, none of which are issued. All of such issued and
outstanding shares have been validly issued and are fully paid
and were not issued in violation of any pre-emptive rights. There
are no options, warrants, calls, subscriptions, conversion or
other rights, agreements or commitments obligating the Company to
issue any additional shares or any other securities convertible
into, exchangeable for or evidencing the right to subscribe for
any shares of the Company.
(b) Subsidiaries and Other Equity Investments. Except as set forth in
-----------------------------------------
the Part 4.3 of the Disclosure Letter, the Company does not own,
directly or indirectly, any shares of any corporation or any
equity investment in any partnership, association or other
business organisation. With respect to each Subsidiary that is an
issuer of any shares owned of record by the Company or its
Subsidiaries, the Part 4.3 of the Disclosure Letter sets forth a
true and complete list of its name and jurisdiction of
incorporation. Except as set forth in the Part 4.3 of the
Disclosure Letter, neither the Company nor any Subsidiary is a
party to or bound by any contract or agreement to issue or sell
or redeem, purchase or otherwise acquire any shares or any other
security of any Subsidiary or any other security exercisable or
exchangeable for or convertible into any shares or any other
security of any Subsidiary, and there is no outstanding option,
warrant, contract, agreement or arrangement to purchase any
shares or any other security of any Subsidiary or any other
security exercisable or convertible into any shares or any other
security of any Subsidiary.
4.4 FINANCIAL STATEMENTS. Principal Vendors have delivered to Purchaser:
audited consolidated balance sheets of the acquired companies as at
December 31 in each of the years 1999 and 2000, and the related
audited consolidated statements of income, changes in shareholders'
equity, and cash flow for each of the fiscal years then ended,
together with the report thereon of Deloitte and Touche, independent
certified public accountants and (b) a consolidated balance sheet of
the Acquired Companies as at December 31, 2000 (including the notes
thereto, the "Balance Sheet"), and the related consolidated statements
of income, changes in shareholders' equity, and cash flow for the
fiscal year then ended, together with the report thereon of Deloitte
and Touche, independent certified public accountants including in each
case the notes thereto together the ("Financial Statements"). Such
Financial Statements and notes have been prepared in accordance with
the law, on a basis consistent throughout the periods involved and in
accordance with GAAP. Financial statements and notes give a true and
fair view of the state of affairs of the Acquired Companies and
correctly state their assets, liabilities and profits or losses as at
45
those dates or for the periods concerned. The Principal Vendors have
also delivered to the Purchasers an unaudited consolidated balance
sheet of the Acquired Companies as at March 31st, 2001 (the "Interim
Balance Sheet") and the related unaudited consolidated statements of
income, changes in the stockholders equity and cash flow for the 3
months then ended, such financial statements and notes have been
prepared on a basis consistent and adopted on the same assumptions as
those made in preparing previous management accounts for the Company
and show a reasonably accurate view of the statement of affairs and
profit and loss of the Acquired Companies as at the period in respect
of which they have been prepared subject to normal year end
adjustments.
4.5 BOOKS AND RECORDS. The books of account, minute books, stock record
books, and other records of the Acquired Companies, all of which have
been made available to Purchaser, are complete and correct and have
been main-tained in accordance with applicable laws. The minute books
of the Acquired Com-panies contain accurate and complete records of
all meetings held of, and corporate action taken by, the stockholders,
the Boards of Direc-tors, and committees of the Boards of Directors of
the Acquired Companies, and no meeting of any such stockholders, Board
of Directors, or committee has been held for which minutes have not
been prepared and are not contained in such minute books. At the
Completion, all of those books and records will be in the possession
of the Acquired Companies.
4.6 TITLE TO PROPERTIES; ENCUMBRANCES. Part 4.6 of the Disclosure Letter
contains an accurate list of all real property, leaseholds, or other
interests therein owned by any Acquired Company. The Acquired
Companies own (with good and marketable title in the case of real
property) all the properties and assets (whether real, personal, or
mixed and whether tangible or intangible) that they purport to own,
including all of the properties and assets reflected in the Balance
Sheet and the Interim Balance Sheet (except for personal property sold
since the date of the Balance Sheet and the Interim Balance Sheet, as
the case may be, in the Ordinary Course of Business), and all of the
properties and assets purchased or otherwise acquired by the Acquired
Companies since the date of the Balance Sheet (except for personal
property acquired and sold since the date of the Balance Sheet in the
Ordinary Course of Business and consistent with past practice). All
material properties and assets reflected in the Balance Sheet and the
Interim Balance Sheet are free and clear of all Encumbrances, except
as disclosed in Part 4.6 of the Disclosure Letter. The Acquired
Companies hold valid and binding lease agreements for all personal
property which is used in and material to the operation of the
Acquired Companies and which is not owned by the Acquired Companies.
4.7 CONDITION AND SUFFICIENCY OF ASSETS.
The buildings, plants, structures, and equipment of the Acquired Companies
are to the Principal Vendors knowledge structurally sound, are in good
46
operating condition and repair, and are adequate for the uses to which they
are being put to the knowledge of the Principal Vendors, and none of such
buildings, plants, structures, or equipment is in need of maintenance or
repairs except for ordinary, routine maintenance and repairs that are not
material in nature or cost. To the Knowledge of the Principal Vendors the
building, plants, structures, and equipment of the Acquired Companies are
sufficient for the continued conduct of the Acquired Companies' businesses
after the Completion in substantially the same manner as conducted prior to
the Completion.
4.8 ACCOUNTS RECEIVABLE. Part 4.8 of the Disclosure Letter contains a
complete and accurate list of accounts receivable ("Accounts
--------
Receivable") of the Acquired Companies as of December 31, 2000 and
----------
sets forth the aging of such Accounts Receivable. All Accounts
Receivable that are reflected on the Balance Sheet, Interim Balance
Sheet or on the accounting records of the Acquired Companies as of the
Completion Date represent or will represent valid obligations arising
from sales actually made or services actually performed in the
Ordinary Course of Business. Unless paid prior to the Completion Date,
and except as disclosed in Part 4.8 of the Disclosure Letter, the
Accounts Receivable are or will be as of the Completion Date current
and collectible net of the respective reserves after debtor financing
shown on the Balance Sheet, Interim Balance Sheet or on the accounting
records of the Acquired Companies as of the Completion Date (which
reserves to the knowledge of the Principal Vendors are adequate and
calculated consistent with past practice).
4.9 INVENTORY. All inventories of the Acquired Companies are useable or
saleable in the Ordinary Course of Business, save as otherwise
provisioned in the Financial Statements of the Company.
4.10 NO UNDISCLOSED LIABILITIES. Except as set forth in Part 4.10 of the
Disclosure Letter, the Acquired Companies have no liabilities or
obligations of any nature except for current accounts payable
liabilities incurred in the Ordinary Course of Business since the date
of the Interim Balance Sheet.
4.11 TAXES. Each of the Acquired Companies has accurately prepared and
filed all Tax Returns required to be filed prior to the date of this
Agreement. True and complete copies of each of the most recent of any
such material return or statement, and such other returns and
statements requested by Purchaser, have been provided to Purchaser.
All such returns were true and correct in all material respects. Any
Tax required to be paid or withheld with respect to the periods
covered by such returns and statements have been paid or withheld. The
liabilities for unpaid Taxes shown on the Balance Sheet and the
Interim Balance Sheet are and will be sufficient to pay all Taxes
accrued through the date thereof and not reported on and paid with
returns filed by the Acquired Companies prior to the Completion Date.
No Tax liability will be incurred by the Acquired Companies as a
result of the transactions contemplated by this Agreement. None of the
Acquired Companies has been delinquent in the payment of any Tax, or
in the filing of any Tax Return, and the Acquired Companies have not
requested any extension of time in which to file any Tax Return with
respect to any period prior to the Completion Date. Except as
described in Part 4.11 of the Disclosure Letter, (i) none of the
47
Acquired Companies has had any Tax deficiency proposed or assessed
against it; (ii) no audit of any Tax return of the any of the Acquired
Companies is in progress or threatened; (iii) no director, officer or
employee of an Acquired Company responsible for Tax matters expects
any Governmental Body to assess any additional Taxes for any period
for which Tax Returns have been filed; and (iv) no waiver or agreement
by an Acquired Company is in force for the extension of time for the
assessment or payment of any Tax. No Vendor nor any other officer or
employee of an Acquired Company, has been contacted by a Governmental
Body in connection with any personal liability for employment or sales
Taxes that would otherwise be due and payable by an Acquired Company.
No claim has ever been made by any Governmental Body in a jurisdiction
where an Acquired Company does not file Tax Returns that it is or may
be subject to taxation by that jurisdiction. There are no security
interests on any of the assets of the Acquired Companies that arose in
connection with any failure (or alleged failure) to pay any Tax. The
Acquired Companies are not and have never been party to or bound by
any tax sharing agreement.
4.12 NO MATERIAL ADVERSE CHANGE. Since the date of the Balance Sheet, there
has not been any material adverse change in the business, operations,
properties, prospects, assets, or condition of any Acquired Company,
and no event has occurred or circumstance exists that may result in
such a material adverse change.
4.13 EMPLOYEE BENEFITS.
(a) Part 4.13 of the Disclosure Letter sets forth a true and complete
list of all written and oral pension, profit sharing, retirement,
deferred compensation, stock purchase, stock option, incentive
compensation, bonus, vacation, severance, sickness or disability,
hospitalization, individual and group health and accident
insurance, individual and group life insurance and other material
employee benefit plans, programs, commitments or funding
arrangements maintained by the Acquired Companies, to which any
Acquired Company is a party, or under which any Acquired Company
has any obligations, present or future (other than obligations to
pay current wages, salaries or sales commissions terminable on
notice of thirty (30) days or less) in respect of, or which
otherwise cover or benefit, any of the current or former
officers, employees or sales representatives (whether or not
employees) of any Acquired Company, or their beneficiaries
(hereinafter individually referred to as "Employee Benefit Plan"
---------------------
and collectively referred to as "Employee Benefit Plans").
------------------------
Principal Vendors have delivered or made available to Purchaser
true and complete copies of all documents, as they may have been
amended to the date hereof, embodying the terms of the Employee
Benefit Plans.
(b) Except as set forth in Part 4.13 of the Disclosure Letter, each
Employee Benefit Plan described therein is in full force and
effect in accordance with its terms and is being maintained,
administered and operated in all material respects in accordance
48
with its terms. There are to the knowledge of the Principal
Vendors no material actions, suits or claims pending (other than
routine claims for benefits), or threatened, against any Employee
Benefit Plan, against any Acquired Company, or any administrator,
fiduciary, accountant, actuary, attorney or other third-party
service provider (collectively, the "Service Providers") with
respect to an Employee Benefit Plan. To the knowledge of the
Principal Vendors the Acquired Companies and Service Providers
have performed all material obligations required to be performed
by them with respect to, and they are not in default under or in
violation of, any Employee Benefit Plan, in any material respect,
and the Acquired Companies and the Service Providers are in
compliance in all material respects with all Legal Requirements
applicable to the Employee Benefit Plans.
(c) Except as set forth in Part 4.13 of the Disclosure Letter, no
Acquired Company is a party to any agreement to provide nor does
it have an obligation to provide any individual, or such
individual's spouse or dependent, with any benefit following his
or her retirement or termination of employment, nor his or her
spouse, any dependent or any beneficiary subsequent to his or her
death, with retirement, medical or life insurance or any benefit
under any employee pension benefit plan and any employee welfare
benefit plan.
(d) No Employee Benefit Plan, Service Provider, or Acquired Company
has any liability to any plan participant, beneficiary or other
Person under any Legal Requirement attributable to the breach of
any obligation with respect to any Employee Benefit Plan. No
Acquired Company is delinquent or in arrears with respect to any
contributions due under any Employee Benefit Plan. The Acquired
Companies have satisfied all contribution obligations that have
accrued prior to the Completion Date.
4.14 COMPLIANCE WITH LEGAL REQUIREMENTS;
GOVERNMENTAL AUTHORISATIONS
(a) To the knowledge of the Principal Vendors except as set forth in
Part 4.14 of the Disclosure Letter:
(i) each Acquired Company is, and at all times since April 1,
1999 has been, in full compliance with each Legal
Requirement that is or was applicable to it or to the
conduct or operation of its business or the ownership or use
of any of its assets;
(ii) no event has occurred or circumstance exists that (with or
without notice or lapse of time) (A) may constitute or
result in a violation by any Acquired Company of, or a
failure on the part of any Acquired Company to comply with,
any Legal Requirement, or (B) may give rise to any
obligation on the part of any Acquired Company to undertake,
or to bear all or any portion of the cost of, any remedial
action of any nature; and
49
(iii) no Acquired Company has received, at any time since April
1, 1999, any notice or other communication (whether oral or
written) from any Governmental Body or any other Person
regard-ing (A) any actual, alleged, possible, or potential
violation of, or failure to comply with, any Legal
Requirement, or (B) any actual, alleged, possible, or
potential obligation on the part of any Acquired Company to
undertake, or to bear all or any portion of the cost of, any
remedial action of any nature.
(b) Part 4.14 of the Disclosure Letter contains a complete and
accurate list of each Governmental Authorisation that is held by
any Acquired Company or that otherwise relates to the business
of, or to any of the assets owned or used by, any Acquired
Company. Each Governmental Authorisation listed or required to be
listed in Part 4.14 of the Disclosure Letter is valid and in full
force and effect. Except as set forth in Part 4.14 of the
Disclosure Letter:
(i) each Acquired Company is, and at all times since April 1,
1999 has been, in full compliance with all of the terms and
requirements of each Governmental Authorisation identified
or required to be identified in Part 4.14 of the Disclosure
Letter;
(ii) no event has occurred or circumstance exists that may (with
or without notice or lapse of time) (A) constitute or result
directly or indirectly in a violation of or a failure to
comply with any term or requirement of any Governmental
Authorisation listed or required to be listed in Part 4.14
of the Disclosure Letter, or (B) result directly or
indirectly in the revocation, withdrawal, suspension,
cancellation, or termination of, or any modification to, any
Governmental Authorisation listed or required to be listed
in Part 4.14 of the Disclosure Letter;
(iii) no Acquired Company has received, at any time since April
1, 1999, any notice or other communication (whether oral or
written) from any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or potential
violation of or failure to comply with any term or
requirement of any Governmental Authorisation, or (B) any
actual, proposed, possible, or potential revocation,
withdrawal, suspension, cancellation, termi-nation of, or
modification to any Governmental Authorisation; and
(iv) all applications required to have been filed for the renewal
of the Governmental Authorisations listed or required to be
listed in Part 4.14 of the Disclosure Letter have been duly
filed on a timely basis with the appropriate Governmental
Bodies, and all other filings required to have been made
with respect to such Governmental Authorisations have been
duly made on a timely basis with the appropriate
Governmental Bodies.
50
(c) The Governmental Authorizsations listed in Part 4.14 of the
Disclosure Letter collectively constitute all of the Governmental
Authorisations necessary to permit the Acquired Companies to
lawfully conduct and operate their businesses in the manner they
currently conduct and operate such businesses and to permit the
Acquired Companies to own and use their assets in the manner in
which they currently own and use such assets.
4.15 LEGAL PROCEEDINGS; ORDERS
(a) Except as set forth in Part 4.15 of the Disclosure Letter, there
is to the knowledge of the Principal Vendors no pending
Proceeding and has not been any Proceeding since April 1, 1999:
(i) that has been commenced by or against any Acquired Company
or that otherwise relates to or may affect the business of,
or any of the assets owned or used by, any Acquired Company;
or
(ii) that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any
of the Contemplated Transactions. To the Knowledge of
Principal Vendors, (1) no such Proceeding has been
Threatened, and (2) no event has occurred or circumstance
exists that may give rise to or serve as a basis for the
commencement of any such Proceeding. Principal Vendors have
delivered to Purchaser copies of all pleadings,
correspondence, and other documents relating to each
Proceeding listed in Part 4.15 of the Disclosure Letter. The
Proceedings listed in Part 4.15 of the Disclosure Letter
will not have a material adverse effect on the business,
operations, assets, condition, or prospects of any Acquired
Company.
(b) Except as set forth in Part 4.15 of the Disclosure Letter:
(i) there is no Order to which any of the Acquired Companies, or
any of the assets owned or used by any Acquired Company, is
subject;
(ii) no Vendor is subject to any Order that relates to the
business of, or any of the assets owned or used by, any
Acquired Company; and
(iii) to the Knowledge of Principal Vendors, no officer,
director, agent, or employee of any Acquired Company is
subject to any Order that prohibits such officer, director,
agent, or employee from engaging in or continuing any
51
conduct, activity, or practice relating to the business of
any Acquired Company.
(c) Except as set forth in Part 4.15 of the Disclosure Letter:
(i) each Acquired Company is, and at all times since April 1,
1999 has been, in full compliance with all of the terms and
requirements of each Order to which it, or any of the
assets owned or used by it, is or has been subject;
(ii) no event has occurred or circumstance exists that may
constitute or result in (with or without notice or lapse of
time) a violation of or failure to comply with any term or
requirement of any Order to which any Acquired Company, or
any of the assets owned or used by any Acquired Company, is
subject; and
(iii) no Acquired Company has received, at any time since April
1, 1999, any notice or other communication (whether oral or
written) from any Governmental Body or any other Person
regarding any actual, alleged, possible, or potential
violation of, or failure to comply with, any term or
requirement of any Order to which any Acquired Company, or
any of the assets owned or used by any Acquired Company, is
or has been subject.
4.16 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as set forth in Part 4.16 of the Disclosure Letter, since the date
of the Balance Sheet, the Acquired Companies have conducted their
businesses only in the Ordinary Course of Business and there has not been
any:
(a) change in any Acquired Company's authorised or issued share
capital; grant of any share option or right to purchase shares of
any Acquired Company; issuance of any security convertible into
such share capital; grant of any registration rights of any of
the Acquired Companies securities; purchase, redemption,
retirement, or other acquisition by any Acquired Company or
declaration or payment of any dividend or other distribution or
payment in respect of any of its shares;
(b) amendment to the Organisational Documents of any Acquired
Company;
(c) payment or increase by any Acquired Company of any bonuses,
salaries, or other compensation to any shareholder, director,
officer, or (except in the Ordinary Course of Business) employee
or entry into any employment, severance, or similar Contract with
any director, officer, or employee;
(d) adoption of, or increase in the payments to or benefits under,
any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other employee benefit plan
for or with any employees of any Acquired Company;
52
(e) damage to or destruction or loss of any asset or property of any
Acquired Company, whether or not covered by insurance, materially
and adversely affecting the properties, assets, business,
financial condition, or prospects of any Acquired Company;
(f) entry into, termination of, or receipt of notice of termination
of (i) any license, distributorship, dealer, sales
representative, joint venture, credit, or similar agreement, or
(ii) any Contract or transaction involving a total remaining
commitment by or to any Acquired Company of at least 25,000 IR
pounds;
(g) sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property
of any Acquired Company or mortgage, pledge, or imposition of any
Encumbrance on any material asset or property of any Acquired
Company, including the sale, lease, or other disposition of any
of the Intellectual Property Assets;
(h) cancellation or waiver of any claims or rights with a value to
any Acquired Company in excess of , individually or in the
aggregate, 25,000 IR pounds;
(i) material change in the accounting methods used by any Acquired
Company; or
(j) agreement, whether oral or written, by any Acquired Company to do
any of the foregoing.
4.17 CONTRACTS; NO DEFAULTS.
(a) Part 4.17(a) of the Disclosure Letter contains a complete and
accurate list, and Principal Vendors have delivered to Purchaser
true and complete copies (if in writing) of:
(i) (A) subject to (i) (B) below, each Applicable Contract
that involves payment by the one or more Acquired
Companies to any third party of an amount or value in
excess of 25,000 IR pounds during the calendar year
ended December 31, 2000 or that is reasonably expected
to involve payment by the one or more Acquired
Companies to any third party of more than IR 25,000
Pounds during the calendar year ending December 31,
2001;
(B) each Employment Contract entered into by one or more of
the Acquired Companies that involves payment of more
than US$75,000 to any person in any one calendar year
53
(ii) each Applicable Contract that involves payment to one or
more Acquired Companies by any third party of an amount or
value in excess of 25,000 IR pounds during the calendar year
ended December 31, 2000 or that is reasonably expected to
involve payment to one or more Acquired Companies by any
third party of more than 25,000 IR pounds during the
calendar year ending December 31, 2001;
(iii) each lease, rental or occupancy agreement, license,
instalment and conditional sale agreement, and other
contract affecting the ownership of, leasing of, title to,
or any leasehold or other interest in, any real or personal
property;
(iv) each licensing agreement or other contract with respect to
any of the Intellectual Property Assets, including
agreements with current or former employees, consultants, or
contractors regarding the appropriation or the
non-disclosure of intellectual property rights;
(v) each collective bargaining agreement and other Applicable
Contract to or with any labor union or other employee
representative of a group of employees;
(vi) each joint venture, partnership, and other Applicable
Contract (however named) involving a sharing of profits,
losses, costs, or liabilities by any Acquired Company, with
any other Person;
(vii) each Applicable Contract containing covenants that in any
way purport to restrict the business activity of any
Acquired Company or any Affiliate of an Acquired Company or
to limit the freedom of any Acquired Company or any
Affiliate of an Acquired Company to engage in any line of
business or to compete with any Person;
(viii) each Applicable Contract providing for payments to or by
any Person based on sales, purchases, or profits, other than
direct payments for goods;
(ix) each power of attorney that is currently effective and
outstanding;
(x) each Applicable Contract for capital expenditures for an
amount in excess of 75,000 IR pounds;
(xi) each written warranty, guaranty, and or other similar
undertaking with respect to contractual performance extended
54
by any Acquired Company other than in the Ordinary Course of
Business for an amount in excess of 25,000 IR pounds;
(xii) each non-competition agreement, non-solicitation agreement
and confidentiality agreement that runs to the benefit of
any of the Acquired Companies or Principal Vendors with
regard to the business of the Acquired Companies;
(xiii) each broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market
research, marketing consulting and advertising agreement;
(xiv) each Applicable Contract relating to indebtedness for an
amount in excess of 50,000 IR pounds;
(xv) each Applicable Contract with any Governmental Authority;
(xvi) each Applicable Contract between or among any Acquired
Company and any Affiliate of any Acquired Company; and
(xvii) each contract, whether or not made in the ordinary course
of the Business, which is material to the Company or the
conduct of the Business, or the absence of which would have
a material adverse effect.
(b) Except as set forth in Part 4.17(b) of the Disclosure Letter,
each contract identified or required to be identified in Part
4.17(a) of the Disclosure Letter is in full force and effect.
(c) To the Knowledge of the Principal Vendors, except as set forth in
Part 4.17(c) of the Disclosure Letter, no event has occurred or
circumstance exists that (with or without notice or lapse of
time) may contravene, conflict with, or result in a violation or
breach of, or give any Acquired Company or other Person the right
to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate, or modify any contract identified in Part 4.17(a) of
the Disclosure Letter.
(d) Except as set forth in Part 4.17(d) of the Disclosure Letter, no
customer of any Acquired Company is entitled to or customarily
receives discounts, allowances, volume rebates or similar
reductions in price or trade terms other than in the Ordinary
Course of Business.
4.18 INSURANCE.
(a) Part 4.18 of the Disclosure Letter lists all material policies or
binders of fire, liability (including product liability),
worker's compensation, vehicular, casualty, title or other
55
insurance held by or on behalf of any Acquired Company
(specifying the insurer, the policy number or covering note
number with respect to binders, the amount of coverage thereunder
and describing each pending claim thereunder other than routine
claims for coverage under a group medical plan insurance policy).
(b) All policies described in Part 4.18 of the Disclosure Letter are
sufficient for compliance with all Legal Requirements and of all
applicable agreements to which any Acquired Company is a party or
by which any Acquired Company is bound, (ii) are valid,
outstanding and enforceable policies, and (iii) except as listed
on Part 4.18 of the Disclosure Letter, will not be affected by,
terminate, or lapse by reason of, the transactions contemplated
by this Agreement. No Acquired Company is in default with respect
to any provision contained in any policy described in Part 4.18
of the Disclosure Letter or has failed to give any material
notice or present any material claim under any such policy in a
due and timely fashion. Except for claims set forth in Part 4.18
of the Disclosure Letter and routine medical claims, there are no
outstanding unpaid claims under any such policy.
(c) No Acquired Company has received a notice of cancellation or
non-renewal of any such policy or binder and, there is no
material inaccuracy in any application for any such policy or
binder, failure to pay premiums when due or other similar state
of facts which would form the basis for termination of any such
insurance. Part 4.18 of the Disclosure Letter contains a brief
description of the Acquired Companies' general liability loss
history under the policies of insurance therein listed.
4.19 ENVIRONMENTAL MATTERS.
Except as set forth in Part 4.19 of the Disclosure Letter:
(a) There have not to the knowledge of the Principal Vendors been any
activities, events or conditions in, on or under the Acquired
Company Real Property or any other real property which has been
owned, leased, occupied or under the control of any Acquired
Company (for purposes of this Section 4.19, collectively, the
"Real Property") at any time such Real Property was owned,
leased, occupied or controlled by the Acquired Companies or, to
Vendors Knowledge, at any time prior thereto, involving the
presence, handling, use, generation, treatment, storage, or
disposal of any Hazardous Substances in violation of applicable
Environmental Laws.
(b) There have not to the knowledge of the Principal Vendors been any
Releases of any Hazardous Substances at, to or from any of the
Real Property (including without limitation any such Releases at
any other property of any Hazardous Substances generated by any
Acquired Company at any time since the Real Property has been
owned, leased, occupied or controlled by any Acquired Company) or
56
at any time prior thereto that (i) is or was in material
violation of applicable Environmental Law to the extent that such
Environmental Laws provide applicable standards defining
acceptable levels of Hazardous Substances; (ii) could reasonably
be expected to result in the imposition of a claim being attached
to any Real Property that could have a material adverse effect on
the Company.
(c) (i) Each Acquired Company has been at all times and is now in
material compliance with all, and has not received notice that it
is otherwise subject to any unsatisfied liability under any,
Environmental Laws; (ii) there is no pending or, to Vendors
Knowledge, threatened litigation, investigation or enforcement
action, administrative order or notice of violation brought under
any Environmental Law concerning any of the Acquired Companies'
operations or the Real Property; and (iii) none of the Acquired
Companies has received any unsatisfied request for information,
notice of claim, demand or other notification or allegation that
it is or may be potentially responsible for any threatened or
actual Release of Hazardous Substances.
(d) Part 4.19 of the Disclosure Letter contains a complete list of
all environmental audits or reports regarding the Real Property
performed by or on behalf of any Acquired Company during the past
five years, and Principal Vendors have made copies of all such
audits or reports available to Purchaser.
4.20 EMPLOYEES.
(a) Part 4.20 of the Disclosure Letter contains a complete and
accurate list of the following information for each employee or
director of the Acquired Companies, including each employee on
leave of absence or layoff status: employer; name; job title;
current compensation paid or payable and any change in
compensation since January 1, 2000; vacation accrued; and service
credited for purposes of vesting and eligibility to participate
under any Acquired Company's pension, retirement, profit-sharing,
thrift-savings, deferred compensation, stock bonus, stock option,
cash bonus, employee stock ownership (including investment credit
or payroll stock ownership), severance pay, insurance, medical,
welfare, or vacation plan, or any other employee benefit plan.
(b) To the knowledge of the Principal Vendors no employee or director
of any Acquired Company is a party to, or is otherwise bound by,
any agreement or arrangement, including any confidentiality,
noncompetition, or proprietary rights agreement, between such
employee or director and any other Person ("Proprietary Rights
57
Agreement") that in any way adversely affects or will affect (i)
the performance of his duties as an employee or director of the
Acquired Companies, or (ii) the ability of any Acquired Company
to conduct its business, including any Proprietary Rights
Agreement with Principal Vendors or the Acquired Companies by any
such employee or director. To Principal Vendors' Knowledge, no
director, officer, or other key employee of any Acquired Company
intends to terminate his employ-ment with such Acquired Company.
(c) Part 4.20 of the Disclosure Letter also contains a complete and
accurate list of the following information for each retired
employee or director of the Acquired Companies, or their
dependants, receiving benefits or scheduled to receive benefits
in the future: name, pension benefit, pension option election,
retiree medical insurance coverage, retiree life insurance
coverage, and other benefits.
4.21 LABOR RELATIONS; COMPLIANCE. Since April 1, 1999, no Acquired Company
has been or is a party to any collective bargaining or other labor
Contract. Since April 1, 1999, there has not been, there is not
presently pending or existing, and to Principal Vendors' Knowledge
there is not Threatened, (a) any strike, slowdown, picketing, work
stoppage, or employee grievance process, (b) any Proceeding against or
affecting any Acquired Company relating to the alleged violation of
any Legal Requirement per-taining to labor relations or employment
matters, including any charge or complaint filed by an employee or
union with any Governmental Body, organisational activity, or other
labor or employment dispute against or affecting any of the Acquired
Companies or their premises, or (c) any application for certification
of a collective bargaining agent. To Principal Vendors' Knowledge no
event has occurred or circumstance exists that could provide the basis
for any work stoppage or other labor dispute. There is no lock-out of
any employees by any Acquired Company, and no such action is
contemplated by any Acquired Company. Each Acquired Company has
complied in all respects with all Legal Requirements relating to
employment, equal employment opportunity, nondiscrimination,
immi-gration, wages, hours, benefits, collective bargaining, the
payment of social security and similar taxes, occupational safety and
health, and plant closing. No Acquired Company is liable for the
payment of any compensation, damages, taxes, fines, penalties, or
other amounts, however designated, for failure to comply with any of
the foregoing Legal Requirements.
4.22 INTELLECTUAL PROPERTY.
(a) Intellectual Property Assets. The term "Intellectual Property
------------------------------
Assets" includes:
(i) the names of each of the Acquired Companies, all fictional
business names, trading names, registered and unregistered
trademarks, service marks, and applications (collectively,
"Marks") of the Acquired Companies or owned, used or
licenced by any Acquired Company as licencee or licensor;
(ii) all patents, patent applications, and inventions and
dis-coveries that may be patentable (collectively,
"Patents") of the Acquired
58
Companies or owned, used or licenced by any Acquired Company
as licencee or licensor;
(iii) all copyrights in both published works and unpublished
works (collectively, "Copyrights") of the Acquired Companies
or owned, used or licenced by any Acquired Company as
licencee or licensor; and
(iv) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data,
process tech-nology, plans, drawings, and blue prints
(collectively, "Trade Secrets") of the Acquired Company or
owned, used, or licensed by any Acquired Company as licensee
or licensor.
(b) Agreements. Part 4.22(b) of the Disclosure Letter contains a
----------
complete and accurate list and summary description, including any
royalties paid or received by the Acquired Companies, of all
Contracts relating to the Intellectual Property Assets to which
any Acquired Company is a party or by which any Acquired Company
is bound, except for any license implied by the sale of a product
and perpetual, paid-up licenses for commonly available software
programs with a value of less than 1,000 IR pounds under which an
Acquired Company is the licensee. There are no outstanding and,
to Principal Vendors' Knowledge, no Threatened disputes or
disagreements with respect to any such agreement.
(c) Know-How Necessary for the Business.
---------------------------------------
(i) The Intellectual Property Assets are to the knowledge of the
Principal Vendors all those necessary for the operation of
the Acquired Companies' businesses as they are currently
conducted. One or more of the Acquired Companies is the
owner of all right, title, and interest in and to each of
the Intellectual Property Assets, free and clear of all
liens, security interests, charges, encumbrances, equities,
and other adverse claims, and has to the knowledge of the
Principal Vendors the right to use without payment to a
third party all of the Intellectual Property Assets.
(ii) Except as set forth in Part 4.22(c) of the Disclosure
Letter, all former and current employees of each Acquired
Company have executed written Contracts with one or more of
the Acquired Companies that assign to one or more of the
Acquired Companies all rights to any inventions,
improvements, discoveries, or informa-tion relating to the
business of any Acquired Company. To Principal Vendors'
Knowledge, no employee of any Acquired Company has entered
into any Contract that restricts or limits in any way the
scope or type of work in which the employee may be engaged
or requires the employee to transfer, assign, or disclose
59
information concerning his work to anyone other than one or
more of the Acquired Companies.
(d) Patents.
-------
(i) Part 4.22(d) of the Disclosure Letter contains a complete
and accurate list and summary description of all Patents.
One or more of the Acquired Companies is the owner of all
right, title, and interest in and to each of the Patents,
free and clear of all liens, security interests, charges,
encumbrances, entities, and other adverse claims.
(ii) All of the issued Patents are currently in compliance with
formal legal requirements (including payment of filing,
examination, and maintenance fees and proofs of working or
use), are valid and enforceable, and are not subject to any
maintenance fees or taxes or actions falling due within
ninety days after the Completion Date.
(iii) No Patent has been or is now involved in any interfer-ence,
reissue, reexamination, or opposition proceeding. To
Principal Vendors' Knowledge, there is no potentially
interfering patent or patent application of any third party.
(iv) No Patent is, to Principal Vendors' Knowledge, infringed or
has been challenged or threatened in any way. To Vendors
Knowledge none of the products manufactured and sold, nor
any process or know-how used, by any Acquired Company
infringes or is alleged to infringe any patent or other
proprietary right of any other Person.
(v) All products made, used, or sold under the Patents have been
marked with the proper patent notice.
(e) Trademarks.
----------
(i) Part 4.22(e) of Disclosure Letter contains a complete and
accurate list and summary description of all Marks. One or
more of the Acquired Companies is the owner of all right,
title, and interest in and to each of the Marks, free and
clear of all liens, security inter-ests, charges,
encumbrances, equities, and other adverse claims.
(ii) All Marks that have been registered with any Governmental
Body are currently in compliance with all formal legal
requirements (including the timely post-registration filing
of affidavits of use and incontestability and renewal
applications), are valid and enforceable, and are not
60
subject to any maintenance fees or taxes or actions falling
due within ninety days after the Completion Date.
(iii) No Xxxx has been or is now involved in any opposition,
invalidation, or cancellation and, to Principal Vendors'
Knowledge, no such action is Threatened with the respect to
any of the Marks.
(iv) To Principal Vendors' Knowledge, there is no potentially
interfer-ing trademark or trademark application of any third
party.
(v) No Xxxx is, to Principal Vendors' Knowledge, infringed or
has been challenged or threatened in any way. To Vendors
Knowledge none of the Marks used by any Acquired Company
infringes or is alleged to infringe any trade name,
trademark, or service xxxx of any third party.
(vi) All products and materials containing a Xxxx xxxx the proper
registration notice where permitted by law.
(f) Copyrights.
----------
(i) Part 4.22(f) of the Disclosure Letter contains a complete
and accurate list and summary description of all Copyrights.
One or more of the Acquired Companies is the owner of all
right, title, and interest in and to each of the Copyrights,
free and clear of all liens, security interests, charges,
encumbrances, equities, and other adverse claims.
(ii) All the Copyrights have been registered and are currently in
compliance with formal legal requirements, are valid and
enforceable.
(iii) No Copyright is, to Principal Vendors' Knowledge, infringed
or has been challenged or threatened in any way. To Vendors
Knowledge none of the subject matter of any of the
Copyrights infringes or is alleged to infringe any copyright
of any third party or is a derivative work based on the work
of a third party.
(iv) All works encompassed by the Copyrights have been marked
with the proper copyright notice.
(g) Trade Secrets.
--------------
(i) With respect to each Trade Secret, the documentation
relating to such Trade Secret is current, accurate, and
sufficient in detail and content to identify and explain it
61
and to allow its full and proper use without reliance on the
knowledge or memory of any individual.
(ii) Principal Vendors and the Acquired Companies have taken all
rea-sonable precautions to protect the secrecy,
confidentiality, and value of their Trade Secrets.
(iii) One or more of the Acquired Companies has good title and an
absolute (but not necessarily exclusive) right to use the
Trade Secrets. The Trade Secrets are not to Vendors
Knowledge part of the public knowl-edge or literature, and,
to Principal Vendors' Knowledge, have not been used,
divulged, or appropriated either for the benefit of any
Person (other than one or more of the Acquired Companies) or
to the detriment of the Acquired Companies. To Vendors
Knowledge no Trade Secret is subject to any adverse claim or
has been challenged or threatened in any way.
4.23 CERTAIN PAYMENTS. To Principal Vendors' Knowledge no Acquired Company
or director, offi-cer, agent, or employee of any Acquired Company, any
other Person associated with or acting for or on behalf of any
Acquired Company, has directly or indirectly (a) made any
contribution, gift, bribe, rebate, payoff, influence payment,
kick-back, or other payment to any Person, private or public,
regardless of form, whether in money, property, or services (i) to
obtain favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, (iii) to obtain special
concessions or for special con-cessions already obtained, for or in
respect of any Acquired Company or any Affiliate of an Acquired
Company, or (iv) in violation of any Legal Requirement, (b)
established or maintained any fund or asset that has not been recorded
in the books and records of the Acquired Companies.
4.24 RELATIONSHIPS WITH RELATED PERSONS. No Vendor or any Related Person of
Principal Vendors or of any Acquired Com-pany has, or since January 1,
1999 has had, any interest in any property (whether real, personal, or
mixed and whether tangible or intangible), used in or pertaining to
the Acquired Companies' businesses. No Vendor or any Related Person of
Principal Vendors or of any Acquired Company is, or since January 1,
1999 has owned (of record or as a beneficial owner) an equity interest
or any other financial or profit interest in, a Person that has (i)
had business dealings or a material financial interest in any
transaction with any Acquired Company other than business dealings or
transactions conducted in the Ordinary Course of Business with the
Acquired Companies at substantially prevailing market prices and on
substantially prevailing market terms, or (ii) engaged in competition
with any Acquired Company with respect to any line of the products or
services of such Acquired Company (a "Competing Business") in any
market presently served by such Acquired Company except for less than
one percent of the outstanding capital stock of any Competing Business
that is publicly traded on any recognised exchange or in the
over-the-counter market. Except as set forth in Part 4.25 of the
Disclosure Letter, no Vendor or to Vendors Knowledge any Related
62
Person of Principal Vendors or of any Acquired Company is a party to
any Contract, other than employment contracts with the Acquired
Companies with, or has any claim or right against, any Acquired
Company.
4.25 BROKERS OR FINDERS. Principal Vendors and their agents have incurred
no obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in
connection with this Agreement other than any fees payable to Xxxxxx &
Company, LLC, which shall be the sole obligation of Principal Vendors.
4.26 From time to time following the date hereof, Principal Vendors and
Purchaser shall, and shall cause their respective Affiliates to,
execute, acknowledge and deliver all such further conveyances,
notices, assumptions, releases and acquittances and such other
instruments, and shall take such further actions, as may be necessary
or appropriate to assure fully to Purchaser and its respective
successors or assigns, all of the properties, rights, titles,
interests, estates, remedies, powers and privileges intended to be
conveyed to Purchaser under this Agreement and the Ancillary
Agreements and to assure fully to Principal Vendors and their
successors and assigns, the assumption of the liabilities and
obligations intended to be assumed by Purchaser under this Agreement
and the Ancillary Agreements, and to otherwise make effective the
transactions contemplated hereby and thereby.
SIGNED by each of
XXXX XXXXXXX AND
XXXX XXXXXX
on behalf of
HIBERNIA GP LIMITED,
GENERAL PARTNER OF
HIBERNIA DEVELOPMENT CAPITAL PARTNERS I, ILP
in the presence of:
---------------------------------
Signature
---------------------------------
Signature
63
SIGNED by each of
XXXX XXXXXXX AND
XXXX XXXXXX
on behalf of
HIBERNIA GP LIMITED,
GENERAL PARTNER OF
HIBERNIA DEVELOPMENT CAPITAL PARTNERS II, ILP
in the presence of:
---------------------------------
Signature
---------------------------------
Signature
SIGNED by XXXXXX XXXXXXXXX in the
presence of:
---------------------------------
Signature
SIGNED by XXXXX XXXXXX
in the presence of:
Signature
---------------------------------
Signature
SIGNED by XXXXXX XXXXXXX
in the presence of:
Signature
---------------------------------
Signature
64
SIGNED by XXXXXX XXXXXX XX.
on behalf of
MEASUREMENT SPECALTIES INC
in the presence of:
---------------------------------
Signature
---------------------------------
Title
65
