THIS ACQUISITION AGREEMENT ("Agreement") is made on December 11, 1996.
BETWEEN:
(1) PERSTORP AB, a Swedish company, the principal address of
which is X-000 00, Xxxxxxxx, Xxxxxx ("Perstorp");
(2) XXXXXXX & XXXXXX PRODUCTS CO., a Delaware company, the principal
address of which is 000 XxXxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000 (the "Purchaser").
WHEREAS:
(A) Perstorp Components, Inc. (MICH) ("Components Plymouth") and
Perstorp Components, Inc. (TENN) ("Components Springfield") are
corporations incorporated in the States of Delaware and Tennessee,
respectively, and Perstorp Components (Canada) Inc. ("Components
Canada"), is a corporation incorporated in the Province of Ontario,
Canada. All of the issued and outstanding shares of capital stock of
each of these companies is owned by Perstorp Inc, a Delaware company
("Perstorp North America"), all of the issued and outstanding shares
of capital stock of which are owned by Perstorp.
(B) Perstorp Components SA de CV ("Components Mexico") is a Sociedad
Anonima de Capital Variable incorporated in Mexico, 75% of the issued
and outstanding share capital of which is owned by Perstorp North
America.
(C) Perstorp Components S.A. ("Components Spain") is a Sociedad
Anonima incorporated in Spain, all of the issued and outstanding share
capital (other than one share) of which is owned by Perstorp Railite,
S.A., a Spanish Company ("Perstorp Railite"), Perstorp Railite, all of
the issued and outstanding share capital of which is owned by
Perstorp.
(D) Perstorp Components Ltd. ("Components UK") is a private
company incorporated in England, all of the issued and
outstanding share capital of which is owned by Perstorp.
(E) Perstorp, Perstorp North America, Perstorp Railite and the
Purchaser have reached agreement in relation to the sale and purchase
of the Shares of the Acquired Companies and the other transactions
contemplated hereby, in each case upon the terms and subject to the
conditions set forth in this Agreement and the other documents
referred to in this Agreement.
ACCORDINGLY, IT IS AGREED as follows:
INTERPRETATION
1.1 In addition to the terms defined elsewhere herein, the
following terms will have the following meanings when used in
this Agreement with initial capital letters:
"Accountants" has the meaning set forth in Section 3.4(c);
"Accountants' Determination" has the meaning set forth in Section
3.4(c);
"Accounting Period" has the meaning given to such term in
Paragraph 1.1 of Schedule 9.2;
"Accounts" means, in relation to any Acquired Company:
(a) the balance sheets of the Acquired Company as at each of August
31, 1994, August 31, 1995 and the Last Accounts Date; and
(b) the statements of profit and loss of the Acquired Company for the
years ending on August 31, 1994 and August 31, 1995, and the
eight-month period ending on the Last Accounts Date,
together with any notes, reports or statements included in or annexed
to them, and the Combined Accounts for the Acquired Companies taken as
a whole, in each case as included in Appendix 1 to the Disclosure
Letter;
"Accounts Date" means, in relation to any accounting period of
any Acquired Company, the last day of that period;
"Acquired Companies" means those companies designated as such in Part
A of Schedule 1.1 and their respective subsidiaries, if any;
"Acquired Entity" has the meaning set forth in Section 5.3;
"Adjusted Completion Date Balance Sheet" has the meaning set
forth in Section 3.4(b);
"Affiliate" of a Person means any Person controlling, controlled
by or under common control with the first Person;
"Assets" means all machinery, tools, inventory, Intellectual Property
and other assets, rights, properties, claims and interests, wherever
located, owned or used by any of the Acquired Companies;
"Business" means the manufacture, distribution and sale of
Designated Products by the Acquired Companies as a whole on the
date of this Agreement or such other time as may be referred to
herein;
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"Business Day" means a day (excluding Saturdays and Sundays) on which
banks generally are open for business in Stockholm, New York City and
Charlotte, North Carolina for the transaction of normal banking
business;
"C&A Corp" mean Xxxxxxx & Xxxxxx Corporation, a Delaware
corporation and the parent company of the Purchaser;
"Change in Control Event" means (i) any issuance of stock, merger,
consolidation, sale of assets or other transaction in which a majority
of the securities ordinarily having voting power in respect of the
election of members of the board of directors (or equivalent body) or
assets of either Perstorp Germany is directly or indirectly
transferred to or becomes beneficially owned by any Person which is
not an Affiliate of Perstorp Germany immediately prior to such
transaction or (ii) any liquidation or dissolution of Perstorp Germany
not involving the transfer of its business to another member of the
Vendor Group.
"Claim" means any claim for a breach of, or indemnity under, this
Agreement;
"Combined Accounts" means the Accounts of the Acquired Companies,
prepared on a combined basis in accordance with GAAP, denominated in
U.S. Dollars and otherwise prepared as described in Appendix 1 to the
Disclosure Letter, together with the related notes, as included in
Appendix 1 to the Disclosure Letter;
"Competing Business" means a business which is engaged in the
manufacture, distribution or sale in North America or any member state
of the European Union ("EU"), the European Economic Area, Central
Europe or Eastern Europe of a Designated Product;
"Completion" means completion of the sale and purchase of the Shares
in accordance with Section 3.1, and the other transactions referred to
in Section 3.2 (such completion being evidenced by the receipt of the
Estimated Purchase Price by Perstorp in accordance with Section 3.3);
"Completion Date" means the date on which Completion occurs (as
described in the definition of "Completion");
"Completion Date Balance Sheet" has the meaning set forth in
Section 3.4(a);
"Components Belgium" means Perstorp Components N.V., a corporation
incorporated under the laws of Belgium, all of the outstanding share
capital of which is owned by Perstorp;
"Components Sweden" means Perstorp Components AB, a corporation
incorporated in Sweden, all of the outstanding share capital of which
is owned by Perstorp;
"Components Sweden JV" means the joint venture company to be owned by
Perstorp GmbH and the Purchaser or an Affiliate of the Purchaser upon
satisfaction of the conditions and completion of the transactions
specified in the Formation Agreement with respect to the joint
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venture involving Perstorp's business of the manufacture, distribution
and sale of automotive components in Sweden, Belgium and France;
"Computer Software Agreement" means the agreement executed and
delivered at Completion in the agreed form attached as Exhibit A;
"Consent" means any consent, waiver, approval, order or authorization
of, or registration, declaration or filing with or notice to, any
Governmental Authority or other Person;
"Contract" means any contract, lease, rental agreement, tenancy,
license, engagement or commitment, written or oral, expressed or
implied;
"Costs" means all reasonable costs and expenses (including without
limitation interest, penalties, attorney's and other professionals'
fees and expenses, accounting fees and expenses and investigation,
remediation, reporting, monitoring or enforcement costs and expenses),
in each case of any nature whatsoever;
"Current Taxes" means the accrual for current Income Taxes (as defined
in Schedule 9.2) payable for an Acquired Company's fiscal year ended
August 31, 1996 and for the pre-Completion portion of the Acquired
Company's fiscal year that includes the Completion Date;
"Deferred Taxes" means the net of deferred tax assets and deferred tax
liabilities, calculated on a separate basis for each Acquired Company
in accordance with Local GAAP (it being understood that, for purposes
of computing Deferred Taxes for Components Springfield and Components
Plymouth, the valuation allowance established in determining deferred
tax assets will be calculated with reference to the actual
circumstances applying to each such Acquired Company);
"Designated Product" means any product set forth on Appendix 22
to the Disclosure Letter;
"Development License Agreement" means the agreement executed and
delivered at Completion in the agreed form attached as Exhibit B;
"Disclosure Letter" means the letter in the agreed form from Perstorp
to the Purchaser signed and exchanged before the signing of this
Agreement; provided, however, that (i) if the Disclosure Letter
references any other document a copy of which has not been provided to
Purchaser during the due diligence process, then the matter
referencing such document will not operate to modify any Warranty and
(ii) each disclosure contained in the Disclosure Letter will operate
to qualify (a) the Warranties specifically referred to in the
Disclosure Letter by number with respect to such disclosure and (b)
except for purposes of (x) the definitions of the terms "Designated
Products", "Pension Schemes", "Properties" and "Stay Bonus
Liabilities" in this Section 1 and (y) the Warranty in paragraph 25 of
Schedule 6.1, other Warranties to the extent that the applicability of
such disclosure to such other Warranties is reasonably apparent on its
face;
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"Employee" means any individual employed as of Completion by an
Acquired Company in the conduct of the Business;
"ESM" means expanding sealing material (such material being a polymer
based material (polyethen) used to stop airborne noise in hollow
sections in a car body and which is engineered to expand in an optimum
way in respect of space, temperature, sealing and the throughflow of
moisture);
"Environmental Laws" means all EU, international, national, state or
provincial or local Laws concerning health, safety or environmental
matters which are applicable to any Acquired Company, any Property,
the Business or any other business conducted by the Acquired Companies
or any predecessor thereto, each as in force and applicable at or
prior to Completion;
"Estimated Purchase Price" means $77,480,000; such amount having
been computed as set forth in Schedule 2.1;
"Event" has the meaning given to such term in Paragraph 1.1 of
Schedule 9.2;
"Exhibits" means the Exhibits to this Agreement in the agreed form;
"Exxon Claims" means the claims by Exxon Corporation or any of its
Affiliates referred to in Item 1 of Schedule 7.1(b);
"Final Completion Date Balance Sheet" has the meaning set forth in
Section 3.4(c);
"Formation Agreement" means an agreement with respect to the
establishment of Components Sweden JV signed and delivered at
Completion;
"Former Employees" means any individual formerly employed by an
Acquired Company or any predecessor to an Acquired Company whose
employment was terminated prior to or at Completion;
"French Branch" has the meaning set forth therefor in the Formation
Agreement;
"GAAP" means generally accepted Swedish accounting principles applied
on a consistent basis;
"Governmental Authority" means any EU, international, federal, state
or provincial, local or foreign government or any subdivision,
authority, department, commission, board, bureau, agency, court or
other instrumentality thereof;
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"Hazardous Material" means any pollutant, toxic substance, hazardous
waste, hazardous material, hazardous substance, petroleum or petroleum
product or derivative as defined in any Environmental Law or any
substance which is reasonably likely to cause harm (whether now or
with the passage of time) to human health, property or to the
environment or to any living organism or ecological system supported
by the environment and (i) is subject to regulation under any
Environmental Law or (ii) may give rise to liability under any
Environmental Law or common law tort concepts;
"Holding Company" means any company which (i) holds a majority of the
voting rights in another company, (ii) has the right to appoint or
remove a majority of such other company's board of directors (or
equivalent governing body), or (iii) controls a majority of the voting
rights in another company pursuant to an agreement with others;
"Indemnified Perstorp Person" has the meaning set forth in
Section 7.1(a);
"Indemnified Purchaser Person" has the meaning set forth in
Section 7.1(b);
"Intellectual Property" means all intellectual property, including
without limitation patents, trade marks, service marks, collective
marks, certification marks, trade names, design rights, copyright
(including rights in computer software and databases) and moral
rights, confidential information, trade secrets, rights in know-how
and other intellectual property rights, in each case whether
registered or unregistered and including applications for the grant of
any of the foregoing and all rights or forms of protection having
equivalent or similar effect to any of the foregoing which may subsist
anywhere in the world, but excluding the name "Perstorp," the Perstorp
logo and all intellectual property rights therein (collectively, the
"Perstorp Xxxx");
"Intellectual Property Agreement" means the agreement executed and
delivered at Completion in the agreed form attached as Exhibit D;
"Last Accounts" means the Accounts of each Acquired Company as at and
for the eight-month period ending on the Last Accounts Date. The
exchange rates used in preparing the Last Accounts are specified in
Appendix A-1 to the Disclosure Letter;
"Last Accounts Date" means April 30, 1996;
"Laws" means any laws, statutes, rules, regulations, ordinances,
orders, codes, treaties having the force of law in the applicable
jurisdiction, arbitration or other alternative dispute resolution
awards, judgments, decrees, notices, directives or other requirements
of any Governmental Authority and any judicial and administrative
interpretations thereof;
"Legal Opinion" means the legal opinions to be provided pursuant
to Section 3.2 substantially in the form set out in Schedule 3.2;
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"Local GAAP" means, in relation to an Acquired Company, the generally
accepted accounting principles, applied on a consistent basis,
ordinarily used in preparation of that Acquired Company's Accounts;
"Local Transfer Agreements" means those agreements summarily setting
forth the terms and conditions of the transfer of the Shares of
Components UK, Components Spain, Components Mexico, Components
Springfield, Components Plymouth and Components Canada;
"Losses" means any and all actions, suits, demands, assessments,
judgments, losses, liabilities, damages, Costs and, to the extent
recoverable under English Law, lost profits; provided, however, that
for purposes of so determining lost profits, (i) lost profits are
those which are reasonably foreseeable by reference to the Business as
conducted as of Completion and as contemplated to be conducted
thereafter by reference to the projected financial information
furnished by Perstorp to the Purchaser in connection with the
transactions contemplated by this Agreement and attached hereto as
Exhibit E (the "Projections") but not limited to the years set forth
therein and (ii) lost profits will exclude losses of future investment
opportunities not reflected in the Projections;
"Material Adverse Effect" means a material adverse change in or to the
business, financial condition, results of operations, assets,
operations or prospects of the Acquired Companies, taken as a whole,
but excluding any such effect to the extent resulting from the
seasonal or cyclical nature of the industry in which the Acquired
Companies participate which affect the Acquired Companies and their
competitors in substantially the same manner;
"Mexican Obligation Purchase Price" has the meaning set forth in
Section 3.2(g);
"Net Assets" means, as of any date, the aggregate amount, expressed in
U.S. dollars, of the Net Asset Value for all of the Acquired Companies
on a combined basis as determined in accordance with GAAP and shown on
the balance sheet included in the Combined Accounts as at the Last
Accounts Date (which is attached to the Disclosure Letter as Appendix
1 and shows a Net Asset Value of $108,761,000) or the Completion Date
Balance Sheet, as the case may be;
"Net Asset Value" means total assets minus the sum of (i) total
liabilities, except that, as shown on Schedule 2.1, the following
assets or liabilities will be valued at zero for purposes of the Net
Asset Value as of any date: (a) cash, (b) Tax Assets, (c) pension
assets or liabilities, (d) untaxed reserves, and (e) Retained
Liabilities and (ii) with respect to Components Mexico, the minority
shareholder interest;
"Pension Liabilities" means all liabilities and obligations of the
Acquired Companies as of Completion pursuant to the Pension Schemes to
make payments or contributions in respect of Employees or Former
Employees;
"Pension Schemes" means the plans listed in Appendix 11 to the
Disclosure Letter;
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"Permits" means any licenses, permits, consents, approvals,
registrations, certificates (including without limitation certificates
of occupancy) and other evidence of authority, variance or permission
required to be obtained under any Law or by any Governmental Authority
in respect of the conduct of the Business or any part thereof;
"Perstorp's Accountants" has the meaning set forth in Section 3.4(b);
"Perstorp GmbH" means Perstorp GmbH, a corporation incorporated in
Germany, all of the outstanding share capital of which is owned by
Perstorp;
"Perstorp Germany" means Perstorp Components G.m.b.H, a corporation
incorporated in Germany, all of the outstanding share capital of which
is owned by Perstorp GmbH;
"Pre-Completion Actions" means the actions described on Exhibit F,
certain of which have been taken by Perstorp ("Perstorp's Pre-
Completion Actions") and certain of which have been taken by Purchaser
("Purchaser's Pre-Completion Actions");
"Properties" means, in the case of each Acquired Company, the real
properties, particulars of which are specified in relation to such
Acquired Company in Appendix 12 to the Disclosure Letter;
"Purchase Price" means the Estimated Purchase Price, plus or minus, as
the case may be, (i) the difference between (a) $29,117,000, which is
the sum of the estimate of the amount of Retained Liabilities on
Schedule 2.1, and (b) the actual amount thereof as shown on the
Completion Date Balance Sheet, and (ii) the difference between (a) the
actual amount of any change in Net Assets between the Last Accounts
Date and Completion, except to the extent such change arises from
currency gains or losses, determined in accordance with Section 3.4
and (b) $4,735,000 (being the estimate of the change in Net Assets
between the Last Accounts Date and Completion as shown on Schedule
2.1) ;
"Purchaser" means, collectively, the Purchaser and any direct or
indirect wholly owned (except for directors' qualifying shares)
Subsidiaries of the Purchaser designated by the Purchaser pursuant to
Section 2.3 to purchase any one or more of the Acquired Companies;
"Purchaser's Accountants" has the meaning set forth in Section 3.4(b);
"Purchaser's Group" means the Purchaser, any Holding Company of the
Purchaser and any Subsidiary of the Purchaser or any such Holding
Company (including after Completion the Acquired Companies);
"Registered Rights" means in relation to any Acquired Company any
Intellectual Property which is the subject of registration (or
application for registration) with any competent authority whether in
the jurisdiction of incorporation of that Acquired Company or
otherwise having equivalent or similar effect anywhere in the world;
8
"Release" means any releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, storing, transportation,
escaping, leaching, burying, abandoning or disposing into the
environment;
"Relevant Business" has the meaning set forth in Section 5.3;
"Relevant Perstorp Executives" means the personnel of Perstorp listed
in Part A to Schedule 1.2;
"Relevant Vendor" means that one of the Vendors set out opposite the
Acquired Company in question in Part B of Schedule 1.1;
"Retained Liabilities" means any (i) intercompany obligations not
constituting normal trade payables incurred in the ordinary course of
business which are owing from an Acquired Company to Perstorp or an
Affiliate of Perstorp, (ii) liabilities for borrowed money, Deferred
Taxes or Current Taxes, (iii) fees or penalties arising prior to
Completion or as a result of Completion in connection with any of the
Acquired Companies' or Perstorp's bank accounts or overdraft
facilities, (iv) other liability (including without limitation capital
lease obligations and obligations under interest rate or currency
fluctuation instruments) which, in the case of clause (iv), is
required to be reflected as indebtedness on a combined balance sheet
for the Acquired Companies prepared in accordance with GAAP as of
immediately prior to the Last Accounts Date or Completion, as the case
may be, and (v) $3,000,000 relating to the calculation of the Mexican
Obligation Purchase Price as provided in Section 3.2(g);
"Schedules" means the Schedules and Appendices to this Agreement, the
Warranties or the Disclosure Letter, as the case may be, and
"Schedule" will be construed accordingly;
"Security Interest" means any security interest of any nature
whatsoever, including without limitation any mortgage, charge, pledge,
lien, assignment by way of security or other encumbrance and includes
the legal concept of any security interest (of any nature whatsoever)
in any jurisdiction;
"Shareholders Agreement" means an agreement between Perstorp GmbH, the
Purchaser and the other parties thereto with respect to Components
Sweden JV signed and delivered at Completion;
"Shares" means in relation to each of the Acquired Companies the
shares of capital stock specified opposite its name in Part A of
Schedule 1.1;
"Stay Bonus Liabilities" means the aggregate amount of the bonus
payments to be made to Employees as described in Appendix 6 to the
Disclosure Letter;
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"Subsidiary" and "Subsidiaries" means any corporation or other legal
entity in relation to which another Person owns more than 50% of the
shares of capital stock which have ordinary voting power to elect the
board of directors (or equivalent governing body);
"Tax" and "Tax Authority" have the meanings given to them in the Tax
Covenant;
"Tax Asset" means a right to repayment in respect of Tax to which any
of the Acquired Companies is entitled in respect of an Event occurring
or Accounting Period (or portion thereof) prior to Completion;
"Tax Covenant" means the provisions relating to taxes set out in
Schedule 9.2;
"Tax Return" has the meaning given to such term in Paragraph 1.1 of
Schedule 9.2;
"Termination Agreement" means the agreement executed and delivered at
Completion in the agreed form of Exhibit G;
"Transfer" has the meaning set forth in Section 2.1;
"Vendor Group" means Perstorp and any Subsidiary of Perstorp (but
excluding any Acquired Company);
"Vendors" means the Subsidiaries of Perstorp (and, in the case of
Perstorp Railite solely for purposes of Section 2.1, Xxxxxx Haya)
designated as Vendors in Part B of Schedule 1.1;
"Warranties" means the representations and warranties of Perstorp
contained in this Agreement or any document delivered pursuant to this
Agreement, including without limitation the Warranties set out in
Schedule 6.1.
1.2 In this Agreement, unless the context otherwise requires:
(a) references to "Persons" will include individuals, bodies
corporate (wherever incorporated), unincorporated associations,
joint ventures, partnerships and other legal entities, including
without limitation Governmental Authorities;
(b) the headings are inserted for convenience only and will not
affect the construction of this Agreement;
(c) any reference to a Law or an enactment is a reference to it as
from time to time amended, consolidated or re-enacted (with or
without modification) and includes all instruments or orders made
under such Law or enactment; provided, however, that references
to "Environmental Laws" are references to such Laws as in force
and applicable at or prior to Completion;
10
(d) any reference to a document in or substantially in the agreed
form is to the form of the relevant document agreed between the
parties and for the purpose of identification initialed by each
of them or on their behalf (in each case with such amendments as
may be agreed by or on behalf of Perstorp and the Purchaser);
(e) references to any legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court,
official or any other legal concept will, in respect of any
jurisdiction other than England, be deemed to include the legal
concept which in that jurisdiction most nearly corresponds to the
English legal term;
(f) references to $ are to United States dollars;
(g) references to Sections, Schedules or Exhibits are to
Sections, Schedules or Exhibits of or to this Agreement, the
Warranties or the Disclosure Letter, as the case may be;
(h) each term defined in this Agreement has the meaning assigned
to it;
(i) "or" is disjunctive but not necessarily exclusive;
(j) words in the singular include the plural and vice versa;
(k) no provision of this Agreement will be interpreted in favor of,
or against, any of the parties hereto by reason of the extent to
which any such party or its counsel participated in the drafting
thereof or by reason of the extent to which any such provision is
inconsistent with any prior draft hereof;
(l) any reference to "share of capital stock," "share capital" or
"loan stock" will be deemed to include the term most closely
approximating such terms in the applicable jurisdiction;
(m) any reference to any word, term of art or legal concept
recognized under English law will be deemed to include the word,
term of art or legal concept most closely approximating the legal
meaning or effect of the same in the applicable jurisdiction;
(n) the Recitals, the Schedules, Exhibits and documents in the agreed
form are part of the operative provisions of this Agreement and
references to this Agreement will, unless otherwise expressly
stated, include references to such Recitals, Schedules, Exhibits
and documents;
(o) each of the Warranties expressed to be given "to Perstorp's
knowledge" or "so far as Perstorp is aware" or otherwise
qualified by reference to the knowledge or awareness of Perstorp
or any Vendor will be deemed to include a further warranty that
Perstorp has made reasonable enquiries of the Relevant Perstorp
Executives; and
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(p) as used herein, where the context requires, the term "Perstorp"
shall include any Vendor and the term "Purchaser" shall include
any subsidiary of the Purchaser listed on Schedule 2.1 to
purchase the Shares, it being understood that this clause (p)
will not be interpreted to limit the obligations of Perstorp or
the Purchaser.
PURCHASE AND SALE
2.1 Immediately following the execution and delivery of this
Agreement, Perstorp will or will cause the Relevant Vendors to
sell, transfer, assign and deliver (collectively, "Transfer") all
of the Shares to the Purchaser free from all Security Interests,
options, equities, claims or other third-party rights (including
rights of pre-emption) of any nature whatsoever, together with
all rights attaching to them, and otherwise in accordance with
Schedule 2.1. The Purchase Price will be allocated among the
Shares and other transactions herein contemplated in accordance
with Schedule 2.1 and the actions specified in Schedule 2.1 will
be taken or deemed to be taken as of Completion or as otherwise
provided in Schedule 2.1. If any payment is made by Perstorp to
the Purchaser in respect of any breach of this Agreement
(including without limitation any payment pursuant to any Claim),
the payment will, to the extent permitted under applicable Law,
be treated for tax purposes as a reduction in the price paid for
the Shares of the Acquired Company in respect of which the
payment is made.
2.2 At Completion, the Purchaser will pay to Perstorp, on behalf of
the Relevant Vendors, the Estimated Purchase Price in accordance with
Section 3.3.
2.3 Perstorp hereby consents to the Purchaser's nomination of one or
more wholly owned (except for directors' qualifying shares)
Subsidiaries of Purchaser listed on Schedule 2.1 to purchase the
Shares designated thereon.
COMPLETION
3.1 A meeting will be held to consummate the sale and purchase of the
Shares and other actions to be taken at Completion, at the offices of
Xxxxx, Day, Xxxxxx & Xxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
immediately following the execution and delivery of this Agreement.
Completion shall be deemed to take place following the receipt by
Perstorp, on behalf of the Relevant Vendors as provided in Section
2.2, of the Estimated Purchase Price and Transfer of the Shares in
accordance with Sections 2.1, 2.2 and 3.3.
3.2 In connection with Completion:
(a) Perstorp will deliver to the Purchaser the evidence of authority
of Perstorp to perform its obligations under this Agreement and each
of the other documents to be executed by Perstorp in connection with
the transactions contemplated hereby, the authority of the signatories
thereof and matters pertaining to the Transfer of the Shares, all as
set forth in Schedule 3.1.
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(b) The Purchaser will deliver to Perstorp a copy of a resolution of
its board of directors (certified by a duly appointed officer as true
and correct) authorizing the execution of and performance by the
Purchaser of its obligations under this Agreement and each of the
other documents to be executed by it in connection with the
transactions contemplated hereby and the authority of the signatories
thereof, all as set forth in Schedule 3.1.
(c) Perstorp will deliver to the Purchaser letters of resignation
signed in the agreed form by each Person described in Schedule 3.1 and
terminations of the powers of attorney described in Schedule 3.1.
(d) Perstorp will procure that each Vendor delivers (or causes to
deliver) to the Purchaser evidence that all necessary corporate action
has been taken by the respective Vendors for the purpose of
authorizing the execution of and the performance by each Vendor of its
respective obligations under this Agreement and each of the other
documents (if any) to be executed by the Relevant Vendor and in each
case the authorization of the signatories thereof all as set forth in
Schedule 3.1.
(e) The Purchaser will deliver to Perstorp in relation to the
Purchaser and Perstorp will deliver to the Purchaser and the
Purchaser's financing sources in relation to Perstorp and each of
the Vendors, the Legal Opinions from counsel in the jurisdictions
specified in Schedule 3.2 substantially in the agreed form
attached to Schedule 3.2.
(f) The parties hereto will, and will procure that their relevant
Affiliates, duly execute and deliver counterparts of the Computer
License Agreement, Development Licensing Agreement, Formation
Agreement, Intellectual Property Agreement, Local Transfer
Agreements, Shareholders Agreement and Termination Agreement.
(g) The Purchaser or its nominees will purchase the outstanding
obligation of Components Mexico (which had a principal amount of
$14,082,000 as of April 30, 1996), from Perstorp North America
for a price equal to the principal amount of such obligation as
of Completion minus $3,000,000 (the "Mexican Obligation Purchase
Price").
3.3 At Completion, the Purchaser will pay or cause to be paid the
Estimated Purchase Price to Perstorp (for itself and on behalf of each
other Vendor) by electronic transfer in immediately available funds to
such accounts of Perstorp as Perstorp shall have, not later than five
Business Days prior to Completion, notified to the Purchaser. The
payments made in accordance with this Section 3.3 will constitute a
good discharge for the Purchaser of its obligations under Section 2.2
and the Purchaser will not be responsible for seeing that the funds
are applied in payment to the Vendors or any particular Vendor.
3.4
(a) As used herein, the "Completion Date Balance Sheet" means a
balance sheet which fairly presents the Net Assets on a
combined basis immediately prior to Completion, prepared in
accordance with GAAP, in a manner consistent with the
preparation of the
13
Accounts as of the Last Accounts Date, combined on the same bases
as used in preparing the Combined Accounts and otherwise in
accordance with Schedule 3.4; provided, however, that such
Completion Date Balance Sheet will in all events (i) reflect the
amount of all Stay Bonus Liabilities and (ii) be prepared using
the same currency translation rates used in preparing the
Combined Accounts as of the Last Accounts Date.
(b) The Purchaser and Perstorp will cooperate with the objective of
agreeing upon a Completion Date Balance Sheet which sets forth
their agreed upon determination of Net Assets as of Completion
and a computation of the Purchase Price derived therefrom in
accordance with Section 3.4(a) and the amount of the
post-Completion adjustment payable by Perstorp or the Purchaser,
as the case may be, to the other pursuant to this Section 3.4,
all in accordance with Schedules 2.1 and 3.4. Without limiting
the generality or effect of the foregoing, Purchaser will permit
Perstorp's auditing and accounting representatives to be present
at any physical inventory counting carried on in connection with
the preparation of the Completion Date Balance Sheet. If the
Purchaser and Perstorp have been unable so to agree within 60
calendar days after Completion, then on or prior to the 70th
calendar day after Completion the Purchaser will deliver to
Perstorp a draft Completion Date Balance Sheet setting forth the
Purchaser's determination of the Net Assets as of Completion and
a computation of the Purchase Price derived therefrom in
accordance with Section 3.4(d) and the amount of the post-
Completion adjustment payable by Perstorp or the Purchaser, as
the case may be, to the other pursuant to this Section 3.4.
Perstorp will then review such draft Completion Date Balance
Sheet during the 45 calendar day period immediately following
such delivery by the Purchaser. During all such periods,
Perstorp, the Purchaser and their respective authorized
representatives (including without limitation Ernst & Young, or
such other internationally recognized independent public
accounting firm (other than Xxxxxx Xxxxxxxx & Co. ("AA") or
Deloitte & Touche ("DT")) as Perstorp shall designate in writing
to the Purchaser ("Perstorp's Accountants"), and AA, or such
other internationally recognized independent public accounting
firm (other than Perstorp's Accountants or DT) as the Purchaser
shall designate in writing to Perstorp ("Purchaser's
Accountants"), will be entitled to review, during normal business
hours, the books, records and work papers of the Purchaser,
Perstorp and the Acquired Companies (to the extent such books,
records and work papers relate to the Business) to prepare or
review the draft Completion Date Balance Sheet and the Purchaser
and Perstorp will otherwise cooperate with each other and with
each other's authorized representatives in connection with such
preparation or review. Without limiting the generality or effect
of any other provision hereof, each of Perstorp and the Purchaser
will (i) provide the other parties hereto and their authorized
representatives access during normal business hours to their
respective facilities, personnel and books and records to the
extent relating to the Business and determined in good faith by
such party to be necessary to permit, in the case of the
Purchaser, the Purchaser and its authorized representatives to
prepare the draft Completion Date Balance Sheet as herein
provided and to permit, in the case of Perstorp, Perstorp and its
authorized representatives to review the information upon which
the draft Completion Date
14
Balance Sheet is based, and in each case to ask reasonable
questions and receive answers thereto with respect to the
Completion Date Balance Sheet; provided, however, that Perstorp
and the Purchaser will conduct any such review and questioning in
a manner that does not unreasonably interfere with the other
party's conduct of its businesses after Completion, (ii) take
such actions as may be reasonably requested by the other party to
close, or to assist in closing, as of Completion, the books and
accounting records relating to the Business, and (iii) otherwise
reasonably cooperate with each other and the representatives of
the other party hereto in the preparation or review of the draft
Completion Date Balance Sheet. Following the completion of
Perstorp's review of the draft Completion Date Balance Sheet
furnished to it by the Purchaser, Perstorp will notify the
Purchaser in writing whether Perstorp accepts the Purchaser's
computation of Net Assets as of Completion or disagrees
therewith, such notification to be made no later than the last
day of Perstorp's 45-day review period described above. If
Perstorp disagrees therewith by a notice timely made as
aforesaid, it will furnish to the Purchaser as part of such
notice a draft adjusted Completion Date Balance Sheet and
computation of Net Assets as of Completion which (i) sets forth
in reasonable detail the adjustments to the draft Completion Date
Balance Sheet furnished to Perstorp by the Purchaser and (ii)
specifies in reasonable detail Perstorp's basis for its
disagreement with the Purchaser's computation (such draft
adjusted Completion Date Balance Sheet the "Adjusted Completion
Date Balance Sheet"). If Perstorp fails so to express its
disagreement within such 45-day period, then the draft Completion
Date Balance Sheet will constitute the Completion Date Balance
Sheet for purposes of this Agreement and Perstorp will be deemed
to have accepted the Purchaser's computation of Net Assets as of
Completion and the Purchase Price derived therefrom in accordance
with Section 3.4(d).
(c) If, within 45 calendar days after the date of Perstorp's
delivery of the draft Adjusted Completion Date Balance
Sheet, the Purchaser determines in good faith that such
computation is inaccurate, the Purchaser will give notice to
Perstorp within such 45-day period (i) setting forth the
Purchaser's determination of Net Assets as of Completion and
(ii) specifying in reasonable detail the Purchaser's basis
for its disagreement with Perstorp's computation. If the
Purchaser fails so to express its disagreement within such
45-day period, then the Adjusted Completion Date Balance
Sheet will constitute the Completion Date Balance Sheet for
purposes of this Agreement and the Purchaser will be deemed
to have accepted Perstorp's computation of Net Assets as of
Completion and the Purchase Price relating thereto. Any
amount that is not in dispute will be promptly paid by the
party obligated to make such payment hereunder to the party
entitled to receive such payment hereunder. If the
Purchaser and Perstorp are unable to resolve any
disagreement between them within 10 calendar days after the
giving of notice of such disagreement, the items in dispute
will be referred for determination to the principal dispute
resolution unit of DT (the "Accountants") as promptly as
practicable. The Accountants will make a determination (the
"Accountants' Determination") as to each of the items in
dispute, which determination will be (i) in writing, (ii)
furnished to each of the parties hereto as promptly as
practicable after the items in dispute have been referred to
the Accountants, (iii) made
15
in accordance with GAAP and this Agreement, and (iv) conclusive
and binding upon each of the parties hereto. Each of the parties
hereto will use reasonable efforts to cause the Accountants to
render their decision as soon as practicable, including without
limitation by promptly complying with all reasonable requests by
the Accountants for information, books, records and similar
items. Neither party will disclose to the Accountants, and the
Accountants will not consider for any purpose, any settlement
offer made by either party. After the resolution of all
outstanding disputes, the parties will cause to be prepared a
calculation of Net Assets as of Completion and the Purchase Price
that reflects the final resolution of all outstanding issues (the
"Final Completion Date Balance Sheet"). The Final Completion Date
Balance Sheet will supersede all prior versions thereof for
purposes of this Agreement. All Costs and expenses of the
Accountants will be shared equally by the Purchaser and Perstorp.
(d) To the extent that the Estimated Purchase Price is more or less
than the Purchase Price determined or accepted, as the case may
be, as provided in this Section 3.4, Perstorp or the Purchaser,
as applicable, will, within 10 calendar days after the final
determination or acceptance, as the case may be, of the actual
Net Assets as of Completion pursuant to this Section 3.4, make
payment by wire transfer in immediately available funds of the
amount of such difference, together with interest thereon, from
Completion to the date of payment (at a rate equal to LIBOR plus
0.5%, calculated on the basis of the actual number of days
elapsed over 365), to such account as has been designated by the
Purchaser or Perstorp, as applicable, to the other.
(e) Intercompany obligations not constituting normal trade payables
incurred in the ordinary course of business which are owing from
Perstorp or any Affiliate of Perstorp to an Acquired Company, or
owing from an Acquired Company to Perstorp or an Affiliate of
Perstorp, will be settled as specified in Schedule 2.1.
(f) As part of the process contemplated by this Section 3.4, the
amount of the Retained Liabilities as of Completion will be
verified. Any disagreement with respect thereto will be settled
in the manner described above. Any net changes in the amount of
the Retained Liabilities at Completion compared to the estimate
thereof in Schedule 2.1 (aggregating $29,117,000) will be
verified in connection with the preparation of the Completion
Date Balance Sheet and paid by Perstorp or the Purchaser, as the
case may be, as provided in Section 3.4(d).
PURCHASER'S UNDERTAKINGS
4.1 The Purchaser warrants to Perstorp that the execution and delivery
of this Agreement by Purchaser and the consummation of the
transactions contemplated hereby by Purchaser have, where required,
been duly and validly authorized and no other corporate proceeding or
corporate action on the part of the Purchaser is necessary to
authorize this Agreement or to consummate the transactions so
contemplated. Prior to this Agreement, the Purchaser took, or caused
to be taken, Purchaser's Pre-Completion Actions.
16
4.2 The Purchaser agrees that, notwithstanding any breach of the
Warranties or of this Agreement, following Completion it will have no
right of termination or rescission in respect of any claims arising
under or in connection with the Warranties or this Agreement except
for fraudulent misrepresentation and will not be entitled to treat
Perstorp as having repudiated this Agreement except for fraudulent
misrepresentation. The sole remedies for any breach of any of the
Warranties, any other breach of this Agreement by Perstorp or any
event giving rise to liability under the Tax Covenant will be
indemnification as herein provided or an action for damages, specific
performance or injunctive relief, and the Purchaser will not be
entitled to rescind this Agreement, except for fraudulent
misrepresentation.
4.3 Insofar as any Acquired Company uses the word "Perstorp" (the
"Perstorp Xxxx") in its corporate name or on its notepaper,
stationery, vehicles, promotional material or products manufactured or
distributed by it, the Purchaser undertakes to Perstorp (on its own
behalf and as trustee for all members of the Vendor Group) to procure
that each Acquired Company shall (i) cease such use from and at all
times after the date being six months after Completion and (ii)
notwithstanding any other provision of this Agreement, not take any
action reasonably identified to such Acquired Company by Perstorp
which would result in the invalidation of the Perstorp Xxxx (or any
intellectual property rights therein) or materially impair Perstorp's
rights in and to the Perstorp Xxxx; provided, however, that until the
sixth-month anniversary of Completion, the Purchaser and any Acquired
Company will have a royalty-free, non-exclusive license to use and
consume inventory and supplies and otherwise to use the Perstorp Xxxx
in the conduct of the Business substantially as conducted as of
Completion. If six months after Completion there continues to be
inventory or supplies of the Business which include any Perstorp Xxxx,
the parties will use reasonable endeavors to agree to a reasonable
extension of the period in relation to such inventory or supplies. The
Purchaser will indemnify, defend and hold harmless the Vendor (for
itself and the Vendor Group) from and against any and all Losses
suffered or incurred by the Vendor and the Vendor Group relating to,
resulting from or arising out of any third-party claim arising in
whole or in part out of the use of any Perstorp Xxxx by the Acquired
Companies (or any of them) after Completion pursuant to this Section
4.3. As promptly as practicable after Completion, the Purchaser will
use reasonable efforts to cause each Acquired Company to adopt a new
corporate name which does not include the name "Perstorp" therein,
such adoption to have taken place no later than 60 days after
Completion.
4.4 The Purchaser will make available to Perstorp Germany, upon
reasonable notice and subject to the terms and conditions of this
Section 4.4, the services of Xxxx Xxxxxx, Xxxx Xxx Xxxxxxx and Xxxxxx
Xxxxxxx or any of them (collectively, the "Consultants") for an
aggregate of two days per Consultant per month for a period of 12
months, in the cases of Messrs. Leijon and Berglie, and six months, in
the case of Xx. Xxxxxxx, after Completion; provided, however, that the
Purchaser will have no obligation to make any Consultant available to
Perstorp Germany on any day on which the Purchaser, in its sole
discretion, deems such Consultant's services to be necessary in
connection with the business of the Purchaser or any of its
Affiliates. Perstorp Germany will pay the Purchaser, or the Affiliate
of the Purchaser which directly employs the Consultant, promptly after
submission of an invoice therefor, a fee for the services of such
Consultant equal to a daily rate of DEM750 (plus any VAT
17
attributable thereto), such fee to accrue on an hourly basis (based on
an 8 hour working day). Perstorp Germany will also reimburse the
Purchaser, or the Affiliate of the Purchaser which directly employs
the Consultant, promptly after submission of an invoice therefor, for
all reasonable out-of-pocket expenses incurred by the Consultant in
connection with performance of the Consultant's services for Perstorp
Germany pursuant to this Section 4.4.
RESTRICTIONS ON THE VENDOR GROUP
5.1 Subject to the provisions of Sections 5.3 and 5.4, Perstorp agrees
that the Vendor Group (excluding for this purpose Components Sweden
JV, Components Belgium, Components Sweden and Perstorp Germany) will
not (whether alone or jointly with another and whether directly or
indirectly) carry on or be engaged or (except as the owner for
investment of securities dealt in on a stock exchange and not
exceeding 5% in nominal value of the securities of that class) be
interested in any Competing Business during a period of four years
after Completion; provided, however, that the Vendor Group will be
permitted to fill up excess capacity on an occasional basis by
operating as a so called "Tier II" supplier to original equipment
manufacturers provided that:
(a) the Vendor Group does not obtain in any manner, or bid on or
otherwise seek to obtain in any manner, any programs that have
been awarded to the Acquired Companies prior to or after
Completion, without the prior consent of the Purchaser; and
(b) the facilities and equipment so utilized must be operated by the
Vendor Group primarily for purposes other than conducting any
Competing Business.
5.2 Subject to the provisions of Sections 5.3 and 5.4, Perstorp agrees
to procure that while Perstorp Germany is a member of or controlled by
the Vendor Group, Perstorp Germany will not (whether alone or jointly
with another, and whether directly or indirectly) during a period of
four years after Completion:
(i) obtain in any manner, or bid on or otherwise seek to obtain
in any manner, any programs for Designated Products that
have been be awarded to any Acquired Company prior to or
after Completion, without the prior consent of the
Purchaser; and
(ii) establish or attempt to establish or be interested in any
manufacturing facility for the production of Designated
Products either outside Germany or, for purposes of
expansion at any new location within Germany unless such
expansion in Germany relates to the relocation of existing
operations or is pursuant to the express written request of
any material customer of Perstorp Germany as of Completion.
5.3 The Purchaser hereby agrees that the restrictions placed on the
Vendor Group pursuant to Sections 5.1 and 5.2 will not prevent the
Vendor Group from acquiring another company, group of companies or
business (the "Acquired Entity") whose business includes any
18
Competing Business (the "Relevant Business"), provided that the annual
turnover of the Relevant Business as shown in the most recently
audited annual accounts of the Acquired Entity prior to the
acquisition did not account for more than 25% of the aggregate
turnover of the Acquired Entity as shown by such accounts. If,
however, any member of the Vendor Group acquires any Relevant
Business, Perstorp will promptly notify the Purchaser and will procure
that the Relevant Business is offered for sale to the Purchaser at not
more than that part of the purchase price paid by the Vendor's Group
for the Acquired Entity allocated in accordance with GAAP to the
Relevant Business of such Acquired Entity and the Purchaser will be
given three months to decide whether to accept such offer and to
negotiate appropriate terms. If the Purchaser shall decide not to
accept such offer, Perstorp will cause the member of the Vendor Group
that has acquired such Relevant Business to dispose of such Relevant
Business within 18 months of the date such offer is declined.
5.4 Except insofar as may be required by Law and in any event only
after prior consultation with the Purchaser (to the extent reasonably
practicable), no member of the Vendor Group will at any time disclose
to any Person or use to the detriment of the Purchaser or any Acquired
Company any trade secret or other confidential information which it
holds in relation to any Acquired Company or its affairs. The Vendor
Group will require its employees not to disclose to any Person, or use
to the detriment of the Purchaser or any Acquired Company, any trade
secrets or other confidential information which any such employee
holds in relation to any Acquired Company or its affairs, and the
Purchaser will have a right to enforce such prohibition directly. In
addition, no entity in the Vendor Group will, during the period of
four years after Completion, solicit or entice away from Purchaser or
any Acquired Company any Employee who at any time was in possession of
confidential information relating to, or able to influence the
customer connection of, the Purchaser or any Acquired Company in
relation to the Business, or attempt or knowingly assist or procure
any Person to do any of the foregoing things.
5.5 Perstorp acknowledges and agrees that each of Sections 5.1, 5.2,
5.3 and 5.4 constitutes an entirely separate and independent
restriction and that the duration, extent and application of each
restriction are no greater than is reasonable and necessary for the
protection of the interests of the Purchaser but that, if any such
restriction were to be adjudged by any court or authority of competent
jurisdiction to be void or unenforceable but would be valid if part of
the wording thereof were to be deleted and/or the period thereof were
to be reduced and/or the area dealt with thereby were to be reduced,
the said restriction will apply within the jurisdiction of that court
or competent authority with such modifications as are necessary to
make it valid and effective.
5.6 Perstorp and the Purchaser acknowledge that any breach of any of
the covenants contained in Sections 5.1 through 5.4 would cause an
irreparable injury to the Purchaser and that damages and remedies at
law for any breach of such would be inadequate. Perstorp and the
Purchaser acknowledge that, in addition to any other remedies
available to the Purchaser, the Purchaser will be entitled to
injunctive relief and other equitable relief to prevent an actual,
intended, likely or probable breach of such covenant.
19
5.7 At the request and expense of the Purchaser, Perstorp will take
all actions reasonably requested by the Purchaser to enforce for the
benefit of the Purchaser all confidentiality agreements entered into
by Perstorp, its Affiliates or any representative relating to the
possible sale of the Acquired Companies or any of them.
5.8 Perstorp will give the Purchaser at least six months' notice in
writing prior to (a) closing or materially curtailing the business or
operations of Perstorp Germany with respect to any Designated Products
supplied to any Acquired Company or to any Affiliate of Components
Sweden JV or (b) selling or otherwise disposing of a material portion
of the capital stock or assets used with respect to Designated
Products of Perstorp Germany supplied to any Acquired Company or to
any Affiliate of Components Sweden JV; provided, however, that with
respect to any event described in clause (b), if the purchaser of such
stock or assets agrees in writing to assume and perform, without
variation, all of the supply arrangements described in Section 9.4(b)
between or among Perstorp Germany and each Acquired Company or each
company which is an Affiliate of Components Sweden JV on the same
terms and conditions as exist with respect to such agreements
immediately prior to such notice, then Perstorp will only be required
to give the Purchaser notice in writing when in Perstorp's reasonable
determination such notice will not materially prejudice or otherwise
materially and adversely affect its negotiations with the purchaser of
the stock or assets of Perstorp Germany. If requested by either
Perstorp or the Purchaser, such parties will, and will cause any of
their Affiliates to, use reasonable efforts to enter into formal
written agreements which set forth to the extent practicable, such
agreements and arrangements as then in operation.
5.9 During the period from Completion until the fourth anniversary of
Completion, the Purchaser will procure that none of C&A Corp or any of
its Subsidiaries will obtain in any manner, bid on or otherwise seek
to obtain in any manner any programs for Designated Products that have
been awarded to Perstorp Germany prior to Completion, without the
prior consent of Perstorp. The Purchaser acknowledges and agrees that
the duration, extent and application of the restriction set forth in
this Section 5.9 are no greater than is reasonable and necessary for
the protection of the interests of Perstorp but that, if any such
restriction were to be adjudged by any court or authority of competent
jurisdiction to be void or unenforceable but would be valid if part of
the wording thereof were to be deleted and/or the period thereof were
to be reduced and/or the area dealt with thereby were to be reduced,
the said restriction will apply within the jurisdiction of that court
or competent authority with such modifications as are necessary to
make it valid and effective. Until the fourth anniversary of
Completion, the Purchaser will not, and will cause the Acquired
Companies not to, solicit or entice away from Perstorp Germany any
employee of Perstorp Germany who at any time was in possession of
confidential information relating to, or able to influence the
customer connection of, Perstorp Germany in relations to its business,
or attempt or knowingly assist or procure any Person to do any of the
foregoing. Perstorp and the Purchaser acknowledge that any breach of
any of the covenants contained in this Section 5.9 would cause an
irreparable injury to Perstorp and that damages and remedies at law
for any breach of such would be inadequate. Perstorp and the Purchaser
acknowledge that, in addition to any other remedies available to
Perstorp, Perstorp will be entitled to injunctive relief and other
equitable relief to prevent an actual, intended, likely or probable
breach of such covenant.
20
5.10 During the period from Completion until the fourth anniversary of
Completion:
(a) Perstorp will procure that Perstorp Germany does not
cease to be an Affiliate of Perstorp until it has
undertaken (in a form reasonably satisfactory to the
Purchaser) to be bound by the terms of the covenants in
Sections 5.1 to 5.8 above; and
(b) the Purchaser will procure that none of the Acquired
Companies ceases to be an Affiliate of the Purchaser
until it has undertaken (in a form reasonably
satisfactory to Perstorp) to be bound by the terms of
the covenants in Section 5.9 above.
5.11 No provision of this Agreement, by virtue of which this Agreement
is subject to registration (if such be the case) under the Restrictive
Trade Practices Act 1976 and which is not a non- notifiable agreement
pursuant to Section 27A of that Act, will take effect until the day
after particulars of this Agreement have been furnished to the
Director General of Fair Trading pursuant to Section 24 of that Act.
For this purpose, the expression "this Agreement" includes any
agreement or arrangement of which this Agreement forms a part and
which is so registrable or by virtue of which this Agreement is
registrable. The parties will furnish such particulars as soon as
practicable after Completion.
WARRANTIES
6.1 Perstorp represents and warrants, for itself and on behalf of each
Vendor, to the Purchaser as to each matter set forth in Schedule 6.1,
including without limitation as to each matter set forth in Annex 1 to
Schedule 6.1 (which sets forth particular representations relating to
some or all of the Acquired Companies). Perstorp acknowledges that the
Purchaser has entered into this Agreement in reliance upon the
Warranties. The Warranties (a) are given as of Completion and (b) are
subject to the limitations of Section 7 to the extent set forth in
Section 7.
6.2 Each of the Warranties will be construed as a separate warranty
and (save as expressly provided to the contrary) will not be limited
or restricted by reference to or inference from the terms of any other
Warranty or any other term of this Agreement or any document entered
into pursuant to this Agreement.
6.3 The rights and remedies of the Purchaser in respect of the
Warranties will not be affected by (i) Completion (except as provided
in Section 4.2), (ii) any due diligence or other review conducted by
or on behalf of the Purchaser or any information furnished to or
obtained by it (other than as provided in the Schedules or the
Disclosure Letter), or (iii) any other event or matter whatsoever,
other than a specific and duly authorized written waiver or release
executed by the Purchaser.
21
INDEMNIFICATION; LIMITATIONS ON CLAIMS
7.1 Indemnification Covenant
(a) From and after Completion, the Purchaser and (except to the
extent prohibited by restrictions on financial assistance
under any applicable Laws) the Acquired Companies will
jointly and severally indemnify, defend and hold harmless
Perstorp, the Vendors and their respective officers,
directors, employees and representatives and any Affiliate
of any of the foregoing (collectively, the "Indemnified
Perstorp Persons") from and against any and all Losses
suffered or incurred by any such Person, directly or
indirectly, relating to, resulting from or arising out of
any breach of, or misrepresentation in, the representations,
warranties and covenants by the Purchaser contained in this
Agreement.
(b) From and after Completion, Perstorp and the Vendors will,
jointly and severally, indemnify, defend and hold harmless
the Purchaser, each Acquired Company and their respective
officers, directors, employees and representatives and any
Affiliate of any of the foregoing (collectively the
"Indemnified Purchaser Persons") from and against any and
all Losses suffered or incurred by any such Person, directly
or indirectly, relating to, resulting from or arising out of
(i) the failure of Perstorp or any Vendor to perform any of
their respective covenants, obligations or agreements
contained in this Agreement, (ii) any breach by Perstorp or
any Vendor of any of the Warranties, (iii) any of the
Retained Liabilities to the extent such Retained Liabilities
were not reflected on the Completion Date Balance Sheet or
the subject of any adjustment pursuant to Section 3.4,
(iv) any product manufactured or sold by any Acquired
Company, or any Affiliate (not being a member of the
Purchaser's Group) or predecessor thereof, that is not a
Designated Product, (v) any liability to third parties
arising out of any business that was sold or otherwise
disposed of, or dissolved, liquidated or otherwise
terminated, by any Acquired Company, or any Affiliate (not
being a member of the Purchaser's Group) or predecessor
thereof, prior to Completion, including without limitation
liabilities arising under the contract relating to the sale
of the Fort Xxxxx, Indiana assets and liabilities arising
under law in connection with such sale, (vi) any property
(including without limitation any land, plant, equipment or
other facility and any operations or Releases thereon or
therefrom) (A) owned, leased or operated by any Acquired
Company, or any Affiliate or predecessor thereof, prior to
but not as of Completion, or (B) owned or leased by any such
Person as of Completion, but no longer used in the Business
by any Acquired Company, including without limitation the
Fort Xxxxx, Indiana leasehold properties, (vii) any
liability arising under any indemnification or other
provision under any Contract pursuant to which any business
or property described in clauses (v) or (vi) above was
acquired, sold, dissolved, liquidated or otherwise disposed
of or terminated or arising under Law in connection with any
such acquisition, sale, dissolution, liquidation or other
disposition or termination, (viii) any matter described on
Schedule 7.1(b), (ix) any Stay Bonus Liability not reflected
on the Completion Date Balance Sheet and (x) any Claims of
Xxxxx Xxxxxxx in respect of any amounts owed or alleged to
be owed under loans
22
made or alleged to be made by him to Components Mexico on or
prior to Completion. The provisions of Section 7.1(b)(i) through
7.1(b)(x) are independent and not exclusive and any limitation
herein applicable to a Claim under one such provision and not to
another such provision will not apply to the latter provision,
except as otherwise provided herein. The Purchaser is taking the
benefit of the Warranties and the indemnities set forth above for
itself and as trustee for and on behalf of the Acquired
Companies.
7.2 Operation and Limitations on Indemnification
(a) The provisions of Sections 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9,
7.10(a), 7.11 and 7.12 will, to the exclusion of the remaining
provisions of Section 7 of this Agreement, operate to limit or
reduce any Claim for a breach of the Warranties (other than
Paragraphs 4, 14 and 17 of the Warranties (the "Perpetual
Warranties")) and any Claim relating thereto pursuant to Section
7.1(b)(ii).
(b) The provisions of Sections 7.3, 7.4, 7.6, 7.7(a), 7.9, 7.10(a),
7.11 and 7.12 will, to the exclusion of the remaining provisions
of Section 7 of this Agreement, operate to limit or reduce the
liability of Perstorp and the Vendors in respect of all Claims
for breach of the Perpetual Warranties and any Claim relating
thereto under Section 7.1(b)(ii).
(c) The provisions of Sections 7.9 and 7.11 will, to the exclusion of
the remaining provisions of Section 7 of this Agreement, operate
to limit or reduce the liability of Perstorp and the Vendors in
respect of Claims pursuant to Section 7.1(b)(i) and 7.1(b)(iii).
(d) The provisions of Sections 7.8 (to the extent that the Claim
under Sections 7.1(b)(iv), (v), (vi) or (vii) arises out of a
matter which is within the scope of Paragraphs 19, 20 or 20.1 of
the Warranties), 7.9, 7.10(a), 7.11 and 7.13 will, to the
exclusion of the remaining provisions of Section 7 of this
Agreement, operate to limit or reduce the liability of Perstorp
and the Vendors in respect of Claims pursuant to Sections
7.1(b)(iv), (v), (vi), (vii) and (x).
(e) The provisions of Sections 7.3(b), 7.6, 7.7(b) and (c), 7.8 (to
the extent that the Claim under Section 7.1(b)(viii) arises out
of a matter which is within the scope of Paragraphs 19, 20 or
20.1 of the Warranties or any of the matters listed in Item 9 of
Schedule 7.1(b) (an "Environmental Claim")), 7.9, 7.10(a), 7.11,
7.14 (except where the Claim is an Environmental Claim) and 7.15
will, to the exclusion of the remaining provisions of Section 7
of this Agreement, operate to limit or reduce the liability of
Perstorp and the Vendors in respect of Claims pursuant to Section
7.1(b)(viii).
(f) The provisions of the Tax Covenant will not operate to limit or
reduce the liability of Perstorp and the Vendors in respect of
any breach of the Warranties relating to Taxes
23
and, as to all matters subject to the Tax Covenant, the
provisions of the Tax Covenant will be applied without regard to
this Section 7.
7.3 Specific Disclosure; Reserves. Perstorp and the Vendors
will not be liable for any Claim for breach of Warranty in
respect of any fact, matter, event or circumstance to the extent:
(a) except in relation to any breach of the Warranties relating
to Taxes, such fact, matter, event or circumstance has been
disclosed in the Disclosure Letter, the Schedules or the
Exhibits so long as a copy of any document referenced in
such disclosure has been provided to Purchaser prior to the
date hereof and the matter disclosed refers by number to the
specific Warranty at issue or the applicability of such
disclosure to the specific Warranty at issue is reasonably
apparent on its face; or
(b) a specific reserve or specific accrual for such fact, matter,
event or circumstance has been made in the Completion Date
Balance Sheet to the extent that such specific reserve or
specific accrual was not made in the Last Accounts.
Nothing herein will limit any covenant of the parties hereunder,
including without limitation the Tax Covenant and any covenant
providing for indemnity (other than indemnity for breach of Warranty).
7.4 Survival of Warranties. Except for the Perpetual Warranties,
neither Perstorp nor the Vendors will be liable for any Claim in
respect of a breach of any of the Warranties unless an Indemnified
Purchaser Person has given written notice of such Claim in reasonable
detail, including such Person's estimate, to the extent then
reasonably practicable, of the amount thereof, on or before April 30,
1998. The Perpetual Warranties will survive Completion for the period
of the respective statute of limitations applicable thereto.
7.5 Hurdle and Basket. Perstorp and the Vendors will not be liable for
any Claim for breach of any of the Warranties (other than the
Perpetual Warranties), (a) in respect of any individual Claim or
series of related Claims arising from similar facts or circumstances,
unless the amount thereof exceeds $10,000, and (b) unless the
aggregate amount of such Claims exceeds $1,000,000, in which event
Perstorp and the Vendors will be liable only for the amount of such
excess. For the avoidance of any doubt, amounts claimed for which
Perstorp and the Vendors have no liability by virtue of clause (a)
above will not be capable of being aggregated with other claims for
the purposes of clause (b), and the foregoing limitations will not
apply to any Claim for indemnification other than a Claim under
Section 7.1(b)(ii).
7.6 Cap. The aggregate liability of Perstorp and the Vendors in
respect of all Claims for breaches of Warranties under Sections
7.1(b)(ii) and 7.1(b)(viii) (but not any other provision of Section
7.1(b)) will not in any event exceed $106,597,000, increased or
decreased, as the case may be, by the net amount of any changes
referred to in clause (ii) of the definition of the term "Purchase
Price" in Section 1.1; provided, however, that the aggregate liability
of
24
Perstorp and the Vendors for all Claims in respect of the matters
listed in Item 9 of Schedule 7.1(b) will not exceed $5,000,000.
7.7 Other Limitations. Perstorp and the Vendors will not be liable in
respect of any Claim:
(a) to the extent (but only to the extent) that any such Claim arises
or is increased as a result of:
(i) any change in Law made after Completion; or
(ii) any change after Completion in any accounting
policy of any Acquired Company;
(b) to the extent of the proceeds of any recovery actually
received by any Indemnified Purchaser Person under any
policy of insurance procured on or after Completion and
applicable to the relevant Acquired Company in respect of
the subject matter of such Claim or any part thereof
(reduced by the costs of collection, including without
limitation all attorneys' and other professionals' fees and
expenses, any deductible, self-retention, captive retention,
co-pay or similar arrangements and any retrospective or
other premium adjustments resulting therefrom (collectively,
"Costs of Recovery" save where such costs are borne by
Perstorp pursuant to clause (ii) in the proviso to this
sentence)), Perstorp hereby acknowledging that all decisions
as to whether to pursue any such insurance recovery are to
be made by the Indemnified Purchaser Person in the sole
discretion of the Indemnified Purchaser Person and that,
subject only to clause (ii) in the proviso to this sentence,
all decisions as to the processing of insurance claims are
to be handled in accordance with Schedule 9.3 and otherwise
in the ordinary course of business of the Indemnified
Purchaser Person; provided, however, that (i) following the
giving of a notice of a Claim, at the request of Perstorp,
the Purchaser will furnish Perstorp information in
reasonable detail as to the scope of insurance maintained
applicable to the Indemnified Purchaser Person to whom such
Claim relates, and (ii) if Perstorp determines in good faith
that any such insurance applies to reduce the Loss to which
such Claim relates, then the Purchaser will, or will cause
the relevant Indemnified Purchaser Person to, take such
actions as Perstorp may reasonably request, including
without limitation executing appropriate powers of attorney
and instruments of subrogation, to allow Perstorp to recover
under any such insurance in respect of such Loss or portion
thereof, provided, that all Costs of Recovery are reimbursed by
Perstorp to the Purchaser or, at the Purchaser's option, paid to
the relevant Indemnified Purchaser Person by Perstorp five days
before such Costs of Recovery become due and payable to any third
party. Nothing in the immediately preceding proviso will,
however, diminish or otherwise affect Perstorp's obligation to
indemnify any Indemnified Purchaser Person pursuant to any
provision of this Agreement without prejudice to any rights of
Perstorp under this Section 7.7(b).
25
(c) based upon a liability which is contingent until such
contingent liability becomes an actual liability or an
Indemnified Purchaser Person incurs any Loss as a result
thereof; provided, however, that if any Indemnified
Purchaser Person gives notice of the contingent liability
describing such contingent liability in reasonable detail
based on the information then reasonably available to the
Purchaser before the expiration of the relevant period
("Survival Period") within which Claims may be notified to
Perstorp pursuant to Sections 7.4, 7.13 or 7.15 (as the case
may be), the Indemnified Purchaser Person may thereafter
make a Claim or initiate proceedings in respect thereof, so
long as such Claim is initiated within 18 months of the
later of (i) the giving of such notice and (ii) the
expiration of the applicable Survival Period, provided
further, however, that for all purposes of this Agreement,
any Loss relating to, resulting from or arising out of the
subject matter of any Claim or proceedings so initiated will
constitute a Loss whether arising prior to or after notice
thereof is given as aforesaid or the initiation of such
Claim or proceedings.
7.8 Remediation
(a) To the extent that a breach of Paragraphs 19, 20 or 20.1 of the
Warranties or any Environmental Claim is capable of remedy in
whole or in part, no Indemnified Purchaser Person will be
entitled to indemnification under Section 7.1(b)(ii) as to any
portion thereof which is so capable of remedy until Purchaser has
given written notice of such breach in accordance with Section
7.8(b) and (i) Perstorp has not elected to remedy such breach in
accordance with Section 7.8(c)(ii) or (ii) if Perstorp has
elected to remedy such breach in accordance with Section
7.8(c)(ii), such breach is not remedied by Perstorp following
such election as soon as reasonably possible. To the extent a
breach of Paragraphs 19, 20 or 20.1 or any Environmental Claim is
not capable of remedy in whole or in part, the Indemnified
Purchaser Persons will be entitled to indemnification in
accordance with Section 7.1 without regard to the provisions of
this Section 7.8.
(b) Following Completion, the Purchaser will procure that notice
of a breach of Paragraphs 19, 20 or 20.1 of the Warranties
or any Environmental Claim (which notice must be in
reasonable detail to the extent then reasonably practicable)
is given to Perstorp as promptly as practicable after any of
the executive officers of the Purchaser (which for this
purpose means solely Xxxxxxx & Xxxxxx Products Co.) or
Managing Director of any Acquired Company, but only as to
the Acquired Company as to which he or she is a Managing
Director (such executive officers and Managing Directors,
collectively, "Responsible C&A Executives") has actual
knowledge of facts which a reasonable person (having
knowledge of this Agreement) would believe reasonably likely
to impose liability on Perstorp pursuant to the
indemnification provisions of this Agreement; provided,
however that (i) any failure so to notify Perstorp will not
relieve Perstorp or any Vendor of any liability in respect
of the matter except to the extent that Perstorp is actually
prejudiced, and (ii) that the burden of proving the
existence and extent (if any) of such prejudice shall be
borne by Perstorp.
26
(c) Following receipt by Perstorp of a notice from the Purchaser in
accordance with Section 7.8(b):
(i) the Purchaser will on Perstorp's reasonable request allow,
and will cause the relevant Acquired Company reasonably to
allow, Perstorp and its advisors to investigate the fact,
matter or circumstance alleged to give rise to the Claim
and, subject to the Purchaser and relevant Acquired Company
being paid all reasonable costs and out-of-pocket expenses,
to have such copies as Perstorp may reasonably request of
any documents or other information in the possession of
Purchaser or the relevant Acquired Company (other than
documents and information which are confidential,
privileged, subject to the attorney's work product doctrine
or otherwise protected against disclosure, unless Perstorp
and the Purchaser agree in writing to joint defense
privilege protection) which relate to the alleged Claim; and
(ii) Perstorp will be entitled to elect by written notice within
30 calendar days of receipt of the Purchaser's notice in
accordance with Section 7.8(b) to remedy the fact, matter or
circumstance referred to in the Purchaser's notice, provided
that Perstorp shall have given to each Indemnified Purchaser
Person an undertaking reasonably acceptable to the Purchaser
in which Perstorp unconditionally confirms its obligations
(subject to the limitations on liability hereunder) to
indemnify and hold harmless each Indemnified Purchaser
Person from and against any and all Losses suffered or
incurred by any such Person, directly or indirectly,
relating to, resulting from or arising out of such fact,
matter or circumstance and such remediation.
(d) Following receipt by the Purchaser of a notice from Perstorp in
accordance with Section 7.8(c)(ii), the Purchaser will, and each
Indemnified Purchaser Person, will use reasonable efforts to:
(i) allow, and cause the relevant Acquired Company to allow,
Perstorp and its advisors reasonable access to the Assets
for the purposes of remedying the fact, matter or
circumstance in respect of which a notice has been given to
the Purchaser in accordance with Section 7.8(c)(ii);
(ii) provide Perstorp all material information in the possession
or control of the Purchaser's Group which reasonably relates
to the relevant fact, matter or circumstance (other than
information which is confidential, privileged, subject to
the attorney's work-product doctrine or otherwise protected
against disclosure, unless Perstorp and the Purchaser agree
in writing to joint defense privilege protection) and
material information which subsequently comes into the
possession or control of the Purchaser's Group which
reasonably relates to such fact, matter or circumstances
(except as aforesaid); and
27
(iii) subject to Perstorp paying all reasonable costs and
out-of-pocket expenses of any Indemnified Purchaser Person,
take all such actions as Perstorp may reasonably request to
assist Perstorp and its advisors in relation to the
remediation undertaken by Perstorp pursuant to Section
7.8(c)(ii).
(e) To the extent a matter constituting a breach of Paragraphs
19, 20 or 20.1 of Schedule 6.1 also constitutes a breach of
another Warranty in Schedule 6.1 or gives rise to a Claim
pursuant to Section 7.1(b)(iv), (v), (vi) or (vii), and the
Purchaser makes a Claim in respect of such matter pursuant
to Section 7.1(b)(ii) with respect to such other Warranty or
pursuant to Section 7.1(b)(iv), (v), (vi) or (vii), Section
7.8 will be applicable to such Claim solely in respect of
such matter.
7.9 Subsequent Recoveries. Following Completion, if any amount is paid
by Perstorp in discharge of all or part of any Claim and such amount
(or part thereof) is subsequently recovered (whether by payment,
discount, credit, set-off or otherwise) by the Purchaser or any
Acquired Company from an unrelated third party in respect of the
matter in relation to which the Claim was made, the Purchaser will, or
will procure that the relevant Acquired Company will, to the full
extent permitted by Law, forthwith repay to Perstorp (for the account
of the Relevant Vendor) a sum corresponding to such amount recovered
from the third party less all obligations, retrospective or other
premium adjustments, costs and expenses (including without limitation
attorney's and other fees and expenses) of such recovery and less the
net tax cost to the Purchaser or the relevant Acquired Company of such
recovery.
7.10 Third-Party Claims; Exxon Claims. (a) Following Completion, if
the Purchaser receives notice of any third-party claims against the
Purchaser or any Acquired Company as to which the Purchaser intends to
submit a request for indemnity hereunder, the Purchaser will procure
that notice of that fact is given to Perstorp as soon as reasonably
practicable after a Responsible C&A Executive has received actual
knowledge of facts which a reasonable person (having knowledge of this
Agreement) would believe reasonably likely to impose liability on
Perstorp pursuant to the indemnification provisions of this Agreement
(but any failure to notify in accordance with this Section will not
relieve Perstorp of liability in respect of such Claim to the extent
that Perstorp is not actually prejudiced thereby) and, as regards any
such claim, will not compromise or settle any such claim without the
consent of Perstorp (such consent not to be unreasonably withheld or
delayed). Following Completion, the Purchaser will take or procure the
taking of (subject to Perstorp paying all reasonable costs and
out-of-pocket expenses and confirming without qualification its
obligations fully to indemnify in respect of such Claim) all such
actions as Perstorp may reasonably request to contest, or otherwise in
connection with, the claim or liability and will make available to
Perstorp all such information (other than information which is
confidential, privileged, subject to the attorney's work-product
doctrine or otherwise protected against disclosure, unless Perstorp
and the Purchaser agree in writing to joint defense privilege
protection or Perstorp otherwise agrees to maintain the
confidentiality of such information in a manner reasonably sufficient
to protect it against disclosure) and assistance as may reasonably be
requested by Perstorp in respect of such claim or liability, all at
Perstorp's sole cost and expense. If so required by Perstorp in
writing, Perstorp will have the right if it wishes (and has confirmed
without qualification its obligation
28
fully to indemnify each Indemnified Purchaser Person hereunder) to
control any relevant proceedings and the Purchaser will retain counsel and/or
accountants chosen by Perstorp and reasonably satisfactory to the Purchaser to
proceed on behalf of each Indemnified Purchaser Person (at the expense of
Perstorp) in relation to any such Claim in accordance with the instructions of
Perstorp and give to such counsel and/or accountants all and every assistance
and information as they may require except as aforesaid. Perstorp will not be
liable in respect of any Claim to the extent it is settled or compromised in
breach of this Section 7.10, provided that Perstorp has confirmed without
qualification its obligation fully to indemnify each Indemnified Purchaser
Person and is actually prejudiced by such settlement or compromise.
(b) The provisions of this Section 7.10(b) shall apply in relation to
the Exxon Claims in substitution for those set out in Section
7.10(a).
(i) Perstorp will have the right (at its sole expense) to
full conduct of each Exxon Claim, in the name of the
relevant Indemnified Purchaser Person, and will be
entitled to compromise or agree to settle such Exxon
Claim without the consent of such Indemnified Purchaser
Person, provided the compromise or settlement imposes
no obligation on, nor results in the waiver of any
rights of, any Indemnified Purchaser Person and
provided further that nothing herein will diminish or
otherwise affect the rights of any Indemnified
Purchaser Person to indemnity under Section 7.1(b) in
respect of any Loss arising therefrom or any other
Exxon Claim;
(ii) the Purchaser will:
(A) procure that Perstorp is notified of each new Exxon Claim as
soon as reasonably practicable after any Responsible C&A
Executive obtains actual knowledge thereof;
(B) procure that Perstorp receives, as soon as reasonably
practicable, copies of all written communications and the
substance of all material oral communications pertaining to
each Exxon Claim (other than information which is
confidential, privileged, subject to the attorney's
work-product doctrine or otherwise protected against
disclosure, unless Perstorp and the Purchaser agree in writing
to joint defense privilege protection or Perstorp otherwise
agrees to maintain the confidentiality of such information in
a manner reasonably sufficient to protect it against
disclosure);
(C) procure that Perstorp is provided with all such assistance as
Perstorp may reasonably request in connection with the Exxon
Claims including reasonable access to employees of any of the
Acquired Companies having direct knowledge of the underlying
facts relating thereto and copies of any documents or other
information in their possession (other than information which
is confidential, privileged, subject to the
29
attorney's work-product doctrine or otherwise protected
against disclosure, unless Perstorp and the Purchaser agree
in writing to joint defense privilege protection or Perstorp
otherwise agrees to maintain the confidentiality of such
information in a manner reasonably sufficient to protect it
against disclosure);
(D) procure that no Indemnified Purchaser Person accepts,
settles, compromises or otherwise binds Perstorp in respect
of any Exxon Claim without the prior written consent of
Perstorp (to be given or withheld in its sole discretion);
and
(iii) the obligations of the Purchaser under (ii) above are subject to
each Indemnified Purchaser Person being indemnified by Perstorp
in respect of all Losses incurred by such Person in connection
therewith and such obligation shall not apply to the extent any
such Indemnified Purchaser Person is required to act otherwise by
any Governmental Authority or court of competent jurisdiction or
other tribunal. Breach of the obligations under Section
7.10(b)(ii) will not relieve Perstorp of any liability under this
Agreement save to the extent that Perstorp is able to demonstrate
that Perstorp is actually prejudiced thereby it being understood
that the burden of proving the existence and extent (if any) of
such prejudice shall be borne by Perstorp.
7.11 No Double Recovery. The Indemnified Purchaser Persons will not be
entitled to recover in respect of (a) any Claim more than once in
respect of any matter to the extent that to do so would constitute
double recovery or (b) any Retained Liability to the extent that the
Purchase Price has been reduced thereby.
7.12 Prior Writeoffs. In calculating the liability of Perstorp in
respect of any Claim relating to the accounts receivable or inventory
of any Acquired Company, applying the accounting policies, principles
and practices adopted in relation to preparation of the Last Accounts
(and ignoring the effect of any change in Law made after Completion),
such Claim will be reduced to the extent that any account receivable
or inventory specifically written off in the Completion Date Balance
Sheet has been actually recovered (net of any related costs) prior to
the payment of such Claim and not previously credited (pursuant to
this sentence) against a Claim relating to the accounts receivable or
inventory of any Acquired Company. For purposes of the preceding
sentence, (a) recoveries of accounts receivable may not be credited
against claims relating to inventories or recoveries of inventories
credited against claims relating to accounts receivable, and (b)
write-ups of accounts receivable or inventories shall not constitute
actual recoveries of such assets.
7.13 General Ten Year Limit. Perstorp and the Vendors will not be
liable for any Claim with respect to a matter described in clauses
(iv), (v), (vi) or (vii) of Section 7.1(b) unless an Indemnified
Purchaser Person shall have given written notice of such Claim in
reasonable detail, including such Indemnified Purchaser Person's
estimate, to the extent reasonably practicable, of the amount thereof,
on or before November 30, 2006.
30
7.14 Specific Indemnity Basket. With respect to any Claims for
indemnity under Section 7.1(b)(viii), other than Claims in respect of
matters listed in Item 9 of Schedule 7.1(b), Perstorp and the Vendors
will be liable for:
(i) 50% of the first $1,000,000 of Losses to which such Claims
relate; and
(ii) 100% of all other Losses to which such Claims relate; it
being understood that in no event will the aggregate
exposure of all Indemnified Purchaser Persons with respect
to Losses to which Claims for indemnification under Section
7.1(b)(viii) relate exceed $500,000 and that nothing herein
affects the limitation on liability under Section 7.6.
7.15 Specific Indemnity Time Limits. Perstorp and the Vendors will not
be liable for any Claim under Section 7.1(b)(viii) unless an
Indemnified Purchaser Person has given written notice of the Claim in
reasonable detail, including such Indemnified Purchaser Person's
estimate, to the extent reasonably practicable, of the amount thereof,
(x) on or before February 28, 2010 in respect of any Claim under
Section 7.1(b)(viii) in respect of such matter described in Item 1 of
Schedule 7.1(b) and (y) on or before November 30, 2006 in respect of
any other Claim under Section 7.1(b)(viii).
7.16 Notification of Certain Claims. Purchaser will give written
notice to Perstorp of any matter of which it becomes aware as to which
it intends to make a Claim in respect of the Perpetual Warranties or
any matter described in clauses (iv), (v), (vi), (vii) or (viii) of
Section 7.1(b) as promptly as practicable after a Responsible C&A
Executive has actual knowledge of facts which a reasonable person
(having knowledge of this Agreement) would believe reasonably likely
to impose liability on Perstorp pursuant to the indemnification
provisions of this Agreement; provided, however, that (i) any failure
so to notify Perstorp will not relieve Perstorp or any Vendor of any
liability in respect of the matter except to the extent that Perstorp
is actually prejudiced in obtaining any recovery with respect to such
Claim from a third party, and (ii) that the burden of proving the
existence and extent (if any) of such prejudice shall be borne by
Perstorp.
VENDORS' ACCESS TO INFORMATION
8.1 Following Completion, the Purchaser will allow, and will cause the
relevant Acquired Company to allow, Perstorp and its accountants and
other professional advisers to investigate the matter or circumstances
alleged to give rise to any Claim and whether and to what extent any
amount is payable in respect of such Claim pursuant to the terms of
this Agreement and, subject to their being paid all reasonable
out-of-pocket costs and expenses, to have such copies as Perstorp may
reasonably request of any documents or other information in the
possession of the Purchaser or the relevant Acquired Company (other
than documents and information which are confidential, privileged,
subject to the attorney's work-product doctrine or otherwise protected
against disclosure, unless the parties have agreed in writing to joint
defense privilege protection, the terms of which the parties will
negotiate in good faith or Perstorp otherwise
31
agrees to maintain the confidentiality of such information in a manner
reasonably sufficient to protect it against disclosure).
8.2 Following Completion, as soon as reasonably practicable after
making a Claim, the Purchaser will provide to Perstorp all material
information in the possession or control of the Purchaser's Group
which relates or may relate to the Claim (other than information which
is confidential, privileged, subject to the attorney's work-product
doctrine or otherwise protected against disclosure, unless the parties
have agreed in writing to joint defense privilege protection or
Perstorp otherwise agrees to maintain the confidentiality of such
information in a manner reasonably sufficient to protect it against
disclosure) and as soon as reasonably practicable thereafter will
provide (a) any material information which subsequently comes into the
possession or control of the Purchaser's Group which relates or may
relate to the Claim (except as aforesaid), and (b) any material
information in the possession or control of the Purchaser's Group
which subsequently becomes relevant to the Claim (except as
aforesaid).
8.3 Following Completion, after making a Claim, the Purchaser will
provide reasonable access to such employees of the Purchaser's Group
as Perstorp may reasonably request to discuss the Claim until such
Claim is withdrawn, settled or determined (Perstorp to pay or promptly
reimburse the Purchaser for the actual out-of-pocket expenses incurred
by any such employees in so doing).
OTHER COVENANTS
9.1 The provisions of Schedule 9.1 relating to the Pension Schemes and
other pension arrangements will have effect on and from Completion.
9.2 The provisions of Schedule 9.2 relating to the Tax Covenant will
have effect on and from Completion.
9.3 The provisions of Schedule 9.3 relating to Insurances will have
effect on and from Completion.
9.4 Effective as of Completion, (a) except as set forth in clause (b)
below and in the agreements specified in Section 3.2(f), Perstorp will
procure that all existing agreements, arrangements and understandings
between members of the Vendor Group and any of the Acquired Companies
will terminate, and (b) for a period of twelve months after
Completion, each member of the Vendor Group and each Acquired Company
will continue the supply arrangements described in Appendix 28 to the
Disclosure Letter (including the executory Contracts listed thereon)
on the same financial terms (without pass through of any manufacturing
or raw material cost increases except to the extent such cost
increases are traditionally passed through in accordance with standard
industry practice (which exception shall not apply to the change in
materials required to be made by Perstorp Germany to remedy the
problem with front floor mats disclosed in paragraph 24 of the
Disclosure Letter)) as are in effect at Completion (i) so long as the
products and/or services supplied pursuant to such arrangements
satisfy all relevant customer quality standards and other requirements
and
32
(ii) provided that all such terms are consistent in all material
respects with the Warranty set forth in Paragraph 28 of the Warranties
(provided, however, that the financial terms will only be deemed to be
changed in a material respect for the purposes hereof if they have
been changed in a manner adverse to the relevant Acquired Company
since September 1, 1995) and the parties will take all reasonable
steps to provide that such supply arrangements are formalized as soon
as practicable after Completion on non-financial terms and conditions
mutually acceptable to the parties, (c) C&A will procure that each
relevant Acquired Company, and Perstorp will procure that each
Relevant Vendor, will, commencing as promptly as reasonably
practicable after completion, negotiate in respect of the possible
extension of the supply arrangements between Perstorp Germany and
Components Spain on mutually acceptable commercially reasonable terms
beyond the 12-month period referred to above (provided, however, that
no party will have any liability to any other Person in the event that
such agreements are not so extended, regardless of the reason
therefor); subject to the foregoing, it is the intent of the parties
to adopt the existing terms if such terms are commercially reasonable
and to continue the term thereof for the remainder of the existing
program, assuming satisfactory performance, and (d) each member of the
Vendor Group will be deemed without further action to have waived all
claims, rights and causes of action whatsoever against all directors,
officers, employees and agents of any of the Acquired Companies in
respect of any act or failure to act prior to Completion, including
without limitation any misrepresentation, inaccuracy or omission in or
from any information or advice supplied by such persons or other
action taken or omitted to be taken in connection with this Agreement
or the preparation of the Disclosure Letter, provided that nothing in
this Section 9.4(c) will exclude, or constitute a waiver of any
liability for, (i) embezzlement or theft of assets, (ii) collusion by
any such person with the Purchaser to defraud Perstorp or any of the
Acquired Companies in connection with this Agreement or the
transactions contemplated by this Agreement, or (iii) any rights of
any Acquired Company against any such Person. Notwithstanding any
other provision hereof, any such person will not be an Indemnified
Purchaser Person for purposes of Section 7.1(b) in respect of any
matter described in clauses (c)(i) and (ii) of the immediately
preceding sentence (but nothing in this sentence will limit the rights
of any other Indemnified Purchaser Person). Nothing herein will affect
the claim of Components Spain referred to in Paragraph 15(a) of the
Disclosure Letter.
9.5 Perstorp consents to the hiring of Xxxxxx Xxxxxxx and Xxxx Xxxxxx
by the Purchaser or any Affiliate thereof, including without
limitation, Xxxxxxx & Xxxxxx Europe Limited.
9.6 Perstorp, on behalf of itself and each other member of the Vendor
Group, hereby agrees that any restriction in favor of Perstorp or such
other member of the Vendor Group prohibiting or restricting any third
party from supplying any inventory, supplies, service or other
Property or right (including without limitation intellectual property
rights) used in the Business post-Completion, including without
limitation the restriction applicable to any third party with respect
to the manufacture or sale of products (or components thereof) using
ESM Technology, is hereby irrevocably waived as to Purchaser and its
Affiliates, including without limitation the Acquired Companies.
33
9.7 In the event that any item that would constitute Intellectual
Property Rights, as that term is defined in the Intellectual Property
Agreement, is owned, or the right to use thereof is held, by Perstorp
or any other member of the Vendor Group other than Perstorp Germany,
Perstorp will, or will cause such other member of the Vendor Group to,
take such action as Purchaser may request in order to vest in each C&A
Company (as that term is defined in the Intellectual Property
Agreement) such rights, if any, in respect of such Intellectual
Property Rights as the C&A Companies would have had had Perstorp or
such other member of the Vendor Group been a party to the Intellectual
Property Agreement from the date thereof and such item constituted
Intellectual Property Rights thereunder provided that each C&A Company
agrees to be bound by such conditions in relation to such rights as
would have applied in such circumstances.
ENTIRE AGREEMENT
10. This Agreement and the documents referred to herein set out the
entire agreement and understanding among the parties in respect of the
issuance, sale and purchase of the Shares. No party has entered into
this Agreement in reliance upon any representation, warranty or
undertaking of any other party which is not expressly set out in this
Agreement or any other document referred to herein. Notwithstanding
the foregoing, nothing in this Agreement will exclude any liability
for fraudulent misrepresentation.
VARIATION AND ASSIGNMENT
11.1 No variation of this Agreement (or of any of the documents
referred to herein) will be valid unless it is in writing and signed
by or on behalf of each of the parties hereto. The expression
"variation" will include any amendment, variation, supplement,
deletion or replacement however effected. In the event of any conflict
between the provisions of this Agreement and any of the provisions of
the Local Transfer Agreements, the provisions of this Agreement will
be controlling (and, in particular, the parties acknowledge that no
party to any Local Transfer Agreement will have any claim against the
other party other than under the terms of this Agreement). The
capitalized terms Net Assets and Retained Liabilities when used in the
Local Transfer Agreements will have the same meaning as in this
Agreement, but with reference to the particular Acquired Company.
11.2 No party may assign or delegate all or any of its rights or
obligations hereunder without the prior written consent of the other
party, except that as contemplated by Section 2.3 the Purchaser may
assign or delegate any of its rights or obligations hereunder to any
wholly owned (except for directors' qualifying shares) Subsidiary of
the Purchaser; provided, however, that no such delegation will relieve
the Purchaser of any of its obligations hereunder to Perstorp.
34
ANNOUNCEMENTS
12. The initial press releases announcing this Agreement will be in
substantially such forms as each of the parties previously furnished
to the other.
COSTS
13. Each of the parties hereto will pay its own Costs incurred in
connection with the negotiation, preparation and, subject to Sections
7.1 and 7.2, implementation of this Agreement. The Purchaser will pay
all stamp duty and stamp duty reserve tax (if any) and other tax on
the transfer of any Shares except that Perstorp will pay, or cause the
Relevant Vendor to pay, all amounts due in respect of the Michigan
Single Business Tax. This Section 13 will not affect any Warranties
regarding Taxes or the Tax Covenant.
INVALIDITY
14. If any provision of this Agreement is held to be invalid or
unenforceable, then such provision will (so far as it is invalid or
unenforceable) be given no effect and will be deemed not to be
included in this Agreement but without invalidating any of the
remaining provisions of this Agreement. The parties will then use all
reasonable endeavors to replace the invalid or unenforceable
provisions by a valid provision the effect of which is as close as
possible to the intended effect of the invalid or unenforceable
provision.
COUNTERPARTS
15. This Agreement may be entered into in any number of counterparts
and by the parties to it on separate counterparts, each of which, when
executed and delivered, will be an original, but all the counterparts
will together constitute one and the same instrument.
REGISTRATION
16. No provision of this Agreement (or of any agreement or arrangement
of which this Agreement forms part) which is subject to registration
under the provisions of any legislation in any jurisdiction will take
effect until particulars of this Agreement (or such other agreement or
arrangement) have been registered in accordance with the terms of such
legislation.
NOTICES
17.1 Any notice or other communication required or permitted to be
given under this Agreement will be in writing and signed by or on
behalf of the party giving it and may be served by hand delivery,
delivery by a recognized multinational courier service such as UPS,
DHL or Federal Express or transmission by facsimile to the address and
for the attention of the relevant party set out in Section 17.2 (or as
otherwise notified from time to time hereunder). Any notice so
delivered will be deemed to have been received:
35
(a) in the case of fax, 12 hours after the time of dispatch; and
(b) in the case of hand delivery or delivery by courier service, upon
such delivery.
17.2 The addresses of the parties for the purpose of Section 17.1 are
as follows:
Perstorp:
Name: Perstorp AB
Address: X-000 00
Xxxxxxxx, Xxxxxx
For the attention of: Mr. Mats Tuner
Fax: 0046 43 53 88 13
With copies to: 1. Xxxxxxxxxx Swartling
Box 1384
X-000 00 Xxxxxxxxxxx
Xxxxxx
For the attention of: Xxxxxx Xxxxxxxxx
Fax: 0046 42 18 42 71
2. Freshfields
00 Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
For the attention of: Xxxxxxxx Xxxx
Fax: 011 44 171 832 7001
Purchaser:
Name: Xxxxxxx & Xxxxxx Products Co.
Address: 000 XxXxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
For the attention of: Mr. J. Xxxxxxx Xxxxx
Fax: (000) 000-0000
36
With copies to: Xxxxxxx & Xxxxxx Products Co.
Address: 000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
For the attention of: Xxxxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
And to: Xxxxx, Day, Xxxxxx & Xxxxx
Address: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
For the attention of: Xxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
17.3 In proving such notice, it will be sufficient to prove that the
envelope containing such notice was properly addressed and delivered
to the address shown thereon or that the facsimile transmission was
made; provided, however, that, in the case of facsimile transmission,
hand delivery or delivery by a recognized multinational courier
service such as UPS, DHL or Federal Express is made on the parties
hereto (but not the lawyers contemplated to receive copies) within
five Business Days thereof.
GOVERNING LAW AND JURISDICTION
18.1 This Agreement will be governed by and construed in accordance
with the laws of England, without giving effect to the principles of
conflict of laws thereof.
18.2 Except as specifically provided in Sections 3.4, all disputes
arising in connection with the Agreement will be finally and
exclusively settled under the Rules of Arbitration of the
International Chamber of Commerce, by three Arbitrators appointed in
accordance with those Rules. The place of arbitration will be in
London, England. The language of the arbitration will be English.
FURTHER ASSURANCE
19.1 Perstorp and the Purchaser will each do, or procure to be done,
all such further acts and things and execute, and procure the
execution of, all such documents as may from time to time reasonably
be required, whether on or after Completion, for the purpose of giving
effect to the provisions of this Agreement and each hereto agrees to
use reasonable efforts to take, or cause to be taken, to do, or cause
to be done, all things necessary, proper or advisable to consummate
the transaction contemplated hereby, including obtaining all necessary
waivers, consents and approvals.
37
19.2 At any time following Completion, either Perstorp or the
Purchaser may require the other as promptly as practicable to cause
each Vendor and Perstorp Germany or each buyer listed as such on
Schedule 2.1, as applicable, to execute and deliver to the requiring
party a legally binding undertaking satisfactory to the requiring
party, in its reasonable judgment, to perform all of its obligations
under this Agreement as if it were a party hereto as of Completion,
provided, however, that any such undertaking will terminate as to any
Vendor, Perstorp Germany, or any such buyer at such time as such
company is no longer a Subsidiary of Perstorp or the Purchaser, as the
case may be; provided further, however, that no such undertaking or
termination thereof will in any way diminish or limit any liability or
obligation of Perstorp or the Purchaser hereunder.
PARENT COMPANY GUARANTEES
20.1 Perstorp guarantees the performance by each Vendor of all its
obligations under or pursuant to this Agreement (including any
documents of transfer or otherwise entered into pursuant to the terms
of this Agreement).
20.2 The Purchaser guarantees the performance by each buyer listed as
such on Schedule 2.1 of all its respective obligations under or
pursuant to this Agreement (including any documents of transfer or
otherwise entered into pursuant to the terms of this Agreement).
20.3 The liability of Perstorp and the Purchaser under their
respective guarantees under Sections 20.1 and 20.2 respectively shall
not be discharged or impaired by any amendment to or variation of this
Agreement, any release of or granting of time or other indulgence to
the Vendor or any third party or any other act, event or omission
which but for this Section would operate to impair or discharge the
liability of Perstorp or the Purchaser under their respective
guarantees.
38
AS WITNESS this Agreement has been signed on behalf of the parties the
day and year first before written.
PERSTORP AB
By: /s/ Mats Tuner
--------------------------------
Name:
-----------------------------
Title:
----------------------------
in the presence of:
Witness Signature:
-----------------
Full Name:
-------------------------
Address:
---------------------------
Occupation:
------------------------
XXXXXXX & XXXXXX PRODUCTS CO.
By: /s/ J. Xxxxxxx Xxxxx
--------------------------------
Name:
-----------------------------
Title:
----------------------------
in the presence of:
Witness Signature:
-----------------
Full Name:
-------------------------
Address:
---------------------------
Occupation:
------------------------
39
SCHEDULE 6.1
The Warranties
Accounts
1. (a) Attached to the Disclosure Letter as Appendix 1 are the
Accounts and a reconciliation of Local GAAP to be used in preparing
the Accounts to GAAP used in preparing the Combined Accounts (where
applicable), and showing all matters referred to in Appendix 1 to the
Disclosure Letter. The Accounts have been prepared in accordance with
GAAP or, where indicated, Local GAAP, consistently applied throughout
the periods indicated, except as otherwise noted therein, and present
fairly, in all material respects, the financial position of the
Acquired Companies and the Business, at the dates indicated and the
results of operations of the Acquired Companies and the Business for
the periods stated therein. The Accounts as of and for the fiscal
years ending August 31, 1994 and August 31, 1995 (other than the
supplemental consolidating information and the Accounts of Components
Plymouth and Components Springfield described as unaudited therein)
have been audited by the independent accountants whose reports are
included in Schedule 6.1.1. The results of Components Plymouth and
Components Springfield have been included in the audited financial
statements of Perstorp North America for such fiscal years, and the
auditors have rendered an unqualified opinion thereon. The Accounts as
of and for the eight months ended the Last Accounts Date include
statements approving their use and confirming that the accounting
principles followed were the same as for the audited Combined Accounts
and Accounts. The Combined Accounts include a schedule setting forth
exchange rates used for translating all non-U.S. Dollar denominated
accounts.
(b) There are no liabilities, fixed or contingent, relating to,
resulting from or arising out of the Business except for (i)
liabilities reflected in, or for which reserves are reflected in, the
balance sheet included within the Combined Accounts as of the Last
Accounts Date (which reserves are adequate under GAAP or, as applied
to Accounts of a particular Acquired Company, Local GAAP, if
applicable), (ii) liabilities incurred in the ordinary course of
business of the Business since the Last Accounts Date, none of which,
individually or in the aggregate, is material in amount or to the
continued conduct of the Business as presently conducted, and all of
which will be discharged prior to Completion or reflected in the
Completion Date Balance Sheet, and (iii) Retained Liabilities listed
on Schedule 2.1.
(c) Set forth in the independent accountants' reports included in
Schedule 6.1.1 and, in respect of the Accounts of Components Plymouth
and Components Springfield, in Appendix 1 to the Disclosure Letter, is
a description of the accounting policies, procedures and practices
with respect to reserves relating to inventory and receivables which
were used in the preparation of the Accounts, and such reserves are
adequate under GAAP or, as applied to Accounts of a particular
Acquired Company, Local GAAP, if applicable.
(d) The Combined Accounts have been accurately extracted from the
Accounts.
(e) Set forth in Appendix 1 to the Disclosure Letter is a list as of
the Last Accounts Date of (i) all intercompany obligations not
constituting normal trade payables incurred in the ordinary course of
business which are owing from Perstorp or any Affiliate of Perstorp to
an Acquired Company, or owing from an Acquired Company to Perstorp or
any Affiliate of Perstorp and, separately, (ii) all intercompany
obligations constituting normal trade payables incurred in the
ordinary course of business which are owing from Perstorp or any
Affiliate of Perstorp to an Acquired Company, or owing from an
Acquired Company to Perstorp or any Affiliate of Perstorp.
Books and Records
2. The books and records of the Acquired Companies are up to date and
in all material respects accurately reflect, in accordance with Local
GAAP, their assets and liabilities and material transactions entered
into by them. There are no additional sets of books, duplicate sets,
"second sets" or other documents or records of the Acquired Companies
kept by or for the Acquired Companies which purport to show the
financial condition of the Business. The stock records and stock
ledgers of each of the Acquired Companies are complete and up to date
and all books and records of the proceedings of the stockholders,
directors and committees of each of the Acquired Companies reflect all
material proceedings to date of the respective stockholders, directors
and committees thereof.
Position since Last Accounts Date
3. Since the Last Accounts Date, (a) the Business has been conducted
only in the ordinary course thereof, consistent with past practice,
and (b) there has been no Material Adverse Effect, nor to the best
knowledge of Perstorp have any events occurred, nor to the best
knowledge of Perstorp do there exist any circumstances, which might
reasonably be expected to result, either before or after Completion,
in any such Material Adverse Effect. Between the Last Accounts Date
and the date of this Agreement, there has not occurred any material
deterioration in any Acquired Company's relations with Employees,
Former Employees, unions, suppliers, customers, joint venture partners
or licensors of Intellectual Property. Since the Last Accounts Date,
no Acquired Company has taken any action:
(a) to declare, pay or make any dividend or other distribution
(whether in cash or otherwise);
(b) except as expressly contemplated by this Agreement, to allot,
issue, purchase or redeem, or agree to allot, issue, purchase or
redeem, any share capital or capital stock, any option, right or
warrant relating to share capital or capital stock or any loan
capital;
(c) to increase or agree to increase the remuneration, fees or
compensation payable to any of its directors, officers, employees
or agents (except for increases to non-executive personnel in the
ordinary course of business or non- discretionary increases
pursuant to Contracts listed on Appendix 6 to the Disclosure
Letter) or enter into any employment Contract with respect to the
performance of personal services (other than the Acquired
2
Companies' standard terms of employment) which is not terminable
at will without any Acquired Company incurring any liability as a
result of such Contract or termination;
(d) to create or suffer to exist any Security Interest on any assets
other than Permitted Security Interests;
(e) to transfer, license or otherwise dispose of any Assets, or agree
to Transfer, license or otherwise dispose of any Assets, except
for sales of inventory and dispositions of obsolete equipment, in
each case, in the ordinary course of business;
(f) to make (or agree to make) any payment other than routine
payments in the ordinary and usual course of trading; or
(g) to enter into any foreign exchange or interest rate contracts or
other speculative instruments, other than in the ordinary course
of business consistent with past practice.
The Shares
4.
(a) The Shares represent all of the issued and outstanding shares of
capital stock or share capital of the Acquired Companies. The
Shares are duly authorized, validly issued and outstanding, fully
paid or credited as fully paid and nonassessable and are owned
beneficially and of record by the Relevant Vendor free and clear
of any and all Security Interests, shareholder agreements, voting
trusts or other rights of any third party in respect thereof.
(b) There are no outstanding subscriptions, options, warrants, calls,
rights, agreements or commitments relating to the issuance, sale,
purchase or redemption of any Shares. None of the Shares has been
issued in violation of, or is subject to, any preemptive rights
or other Contract except for this Agreement, and there are no
outstanding convertible or exchangeable securities, calls or
options relating to any Shares or that may require any Acquired
Company to issue to any person or entity any shares of its
capital stock. There are no voting trust agreements or other
Contracts restricting the voting, dividend rights or disposition
of any Shares.
(c) Immediately prior to Completion, each Relevant Vendor will own
the Shares free and clear of all Security Interests, or other
rights in or to any Shares, and will transfer their entire right,
title and interest in and to the Shares to Purchaser.
(d) None of the Acquired Companies, directly or indirectly, owns
(beneficially or of record) any stock or other ownership
interests in, or controls, any other legal entity.
3
The Acquired Companies' Assets
5. Prior to the date hereof, Perstorp has made available to the
Purchaser copies of the most recent asset registers of the Acquired
Companies prepared in the ordinary course of business. Except as
listed or described in Appendix 5 to the Disclosure Letter, the Assets
include all the tangible and intangible personal property owned or
used by the Acquired Companies in the conduct of the Business as
presently conducted, and the Acquired Companies have, and immediately
after Completion will have, a contractual right or title to the Assets
constituting tangible and intangible personal property free and clear
of all Security Interests or other rights in and to such Assets, other
than (a) Security Interests that are listed or described on Appendix 5
to the Disclosure Letter, (b) mechanics', carriers', workmen's,
repairmen's or other like Security Interests arising by operation of
Law, incurred in the ordinary course of business and reflected in the
Completion Date Balance Sheet, (c) Security Interests for taxes,
assessments and other governmental charges (1) which are not due and
payable or which may thereafter be paid without penalty or (2) which
are being contested in good faith and are reflected in the Last
Accounts, (d) Security Interests arising under worker's compensation,
unemployment insurance and similar laws, and (e) other minor
imperfections of title or encumbrances, if any, which (i) do not in
any material respect affect the marketability or value of the property
subject thereto and (ii) in all events do not impair the use of the
property subject thereto in the Business as presently conducted. (The
items referred to in clauses (a) through (e) of the immediately
preceding sentence are herein referred to as "Permitted Security
Interests".) Except as set forth on Appendix 5 to the Disclosure
Letter, the Assets constituting tangible personal property used by the
Acquired Companies in the conduct of the Business as presently
conducted are, in all material respects having regard to their age and
usage, in good condition, normal wear and tear excepted, are regularly
maintained in good order, are capable of being used for their intended
purpose for the duration of their expected life, and are adequate to
satisfy all customer quality standards in all material respects and
comply with all safety requirements imposed under applicable Law in
all material respects.
Contractual Matters
6.1 Except as listed or described in Appendix 6 to the Disclosure
Letter, no Acquired Company is a party or bound to any Contract that
is of a type described below:
(a) any purchase or supply Contract under which any Acquired Company
has an obligation exceeding $50,000 or any sales Contract which
will, by virtue of the acquisition of the Shares by the
Purchaser, result in such third party being relieved of any
obligation or becoming entitled to exercise any right of
termination or any right of payment, pre- emption or other option
thereunder (whether with or without notice);
(b) any Contract which requires or may require, or confers any right
to require, the issue of any share capital or shares of its
capital stock now or at any time in the future;
4
(c) any guarantee, indemnity or suretyship by it in respect of the
obligations of any third party (including Perstorp and Affiliates
of Perstorp), except for guarantees of obligations of Employees
listed on Appendix 6 to the Disclosure Letter;
(d) any employment, severance, consulting or other Contract with an
Employee or Former Employee whose annual remuneration exceeds
$100,000;
(e) any Contract with any Employee or Former Employee providing for
any bonus, stock option, stock ownership, stock purchase, stock
appreciation right or similar benefit;
(f) any Contract for the installment or other deferred purchase or
sale of any real or personal property which requires aggregate
future payments in excess of $50,000;
(g) any collective bargaining Contract with any labor union;
(h) any Contract for capital expenditures or the acquisition or
construction of fixed assets which requires aggregate future
payments thereunder in excess of $50,000;
(i) any Contract relating to cleanup, abatement, investigation,
monitoring or other actions in connection with liabilities,
actions or procedures under Environmental Laws;
(j) any Contract granting to any person a first-refusal, first- offer
or similar preferential right to purchase or acquire any material
Asset other than inventory having an aggregate value of less than
$50,000;
(k) any license or royalty Contract or other Contract with respect to
Intellectual Property, other than licenses granted or received in
the ordinary course of business, which pursuant to the terms
thereof requires future payments to or by any Acquired Company;
(l) any indenture, mortgage, loan or credit Contract under which
it has borrowed any money or issued any note, bond,
indenture or other evidence of indebtedness for borrowed
money, guaranteed indebtedness for money borrowed by others
which has not been repaid on or prior to the date hereof,
granted or agreed to grant any Security Interest other than
a Permitted Security Interest on any of its assets which has
not been paid or otherwise discharged on or prior to the
date hereof or incurred, primarily or secondarily, actually
or contingently, any liability or obligation in respect of
any item that would constitute indebtedness of the relevant
person on a balance sheet of such person prepared in
accordance with GAAP;
(m) any Contract with any manufacturer's representative or other
sales agent or relating to distribution or commission
arrangements which is not terminable without cost on 90 calendar
days' or less notice;
5
(n) any Contract under which it is (i) a lessee of, or holds or uses,
any machinery, equipment, vehicle or other tangible personal
property owned by a third party or (ii) a lessor of, or makes
available for use by any third party, any tangible personal
property owned by it, in any such case which requires aggregate
annual payments in excess of $50,000;
(o) any other Contract which involves aggregate future payment by or
to it in excess of $50,000 other than a purchase or sales order
or other Contract entered into in the ordinary course of the
conduct of the Business;
(p) any Contract with respect to a joint venture or partnership
arrangement;
(q) any Contract granting a power of attorney, agency or proxy
other than such of the foregoing granted pursuant to
standard forms executed by any Acquired Company in the
ordinary course of the conduct of the Business;
(r) any Contract with respect to letters of credit, surety or other
bonds or pursuant to which any of its assets or properties are or
are to be subjected to a Security Interest other than a Permitted
Security Interest;
(s) any confidentiality Contract or Contract limiting or restricting
the ability of any of the Acquired Companies to enter into or
engage in any market or line of business in or related to the
Business;
(t) any retroactive or retrospective premium adjustment or similar
Contract pursuant to which it could (whether or not subject to
contingencies) be required to make payments with respect to or as
a result of losses, costs or expenses paid or incurred by another
Person providing insurance coverage;
(u) any Contract to which (i) such Acquired Company and
(ii) Perstorp or any Affiliate of Perstorp are parties;
(v) any Contract regarding the filing of Tax returns or relating in
whole or in part to the sharing of Tax benefits or liabilities
(including Tax indemnities);
(w) any Contract under which any of the Acquired Companies is a
lessee of real property or a lessor of real property; or
(x) any other Contract that (i) is reasonably likely to result in a
Material Adverse Effect or (ii) is outside the ordinary course of
business of the Acquired Companies, consistent with past
practice, and is otherwise material to the conduct of the
Business, the operation or use of the Assets by the Business or
the financial position or results of operations of the Acquired
Companies, taken as a whole.
6
7.
(a) Except as set forth in Appendix 6 to the Disclosure Letter,
each Contract listed or described or required to be listed
or described in Appendix 6 to the Disclosure Letter is a
valid and binding obligation of the Acquired Company party
thereto, is in full force and effect and, insofar as
Perstorp or any of the Acquired Companies or Vendors is
aware, is a valid and binding obligation of the party or
parties thereto other than the Acquired Company party
thereto. Perstorp has made available to the Purchaser
copies of each Contract listed in Appendix 6 to the
Disclosure Letter, and no Contract so listed or required to
be listed has been terminated, amended or otherwise varied
since such copies were so made available.
(b) No Acquired Company has received notification of any claim
for breach of contract in respect of any Contract listed or
required to be listed in Appendix 6 to the Disclosure
Letter, each Acquired Company has performed all material
obligations required to be performed by it through the date
hereof under each Contract to which it is a party and is not
(with or without the lapse of time or the giving of notice
or both) in breach or default in any material respect
thereunder, and insofar as Perstorp is aware no event has
occurred resulting in a right of acceleration, termination
or similar right, and no litigation or similar proceedings
have been instituted, in relation to any such Contract.
Debts
8. Except for borrowings or loans to third parties disclosed in the
Last Accounts and apart from any intra-company borrowings to be
terminated pursuant to the Agreement, the Acquired Companies have no
outstanding loans to third parties which have arisen otherwise than in
the normal course of its business or liabilities for borrowed money.
No Acquired Company has any (i) liability or obligation of any nature
or kind (absolute, accrued, contingent or otherwise) that may have a
Material Adverse Effect on the use or operation of the Business after
Completion or (ii) any indebtedness for borrowed money or any Retained
Liability of any kind that is not shown or that are in excess of
amounts shown in the balance sheet included in the Last Accounts.
Good Standing
9. Each of the Acquired Companies (i) is duly organized, validly
existing and, to the extent such concept exists, in good standing
under the laws of the jurisdiction specified in relation to it in
Appendix 9 to the Disclosure Letter, and (ii) has full corporate power
and authority to own, lease or otherwise hold the Assets relating to
the Business owned, leased or otherwise held by it and to carry on its
respective business as it is now being or proposed to be conducted.
Each Acquired Company is duly qualified to conduct business as a
foreign corporation, to the extent such concept exists, in the
jurisdictions listed with respect to such Acquired Company in Appendix
9 to the Disclosure Letter, which are the only jurisdictions in which
its ownership or lease of property or conduct of the Business makes
such qualification necessary, except for such jurisdictions in which
the failure to be so qualified would not,
7
individually and when considered with any other such failure,
constitute a Material Adverse Effect. Perstorp has provided to the
Purchaser complete and correct copies of the certificate of
incorporation or by-laws (or similar constituent instruments) of each
Acquired Company as in effect immediately prior to Completion.
Directors and Employees
10.
(a) Perstorp has made available to the Purchaser a list of all
the Employees whose annual salary exceeds $100,000 or who
have a fixed term of service of one year or longer than one
year, together with details of their remuneration, and a
copy of each Acquired Company's employee handbook and
standard form letter of employment, if any, and conditions
of employment. Such documents have not been terminated or
varied since such copies were made available. Perstorp has
also made available a list and details of the remuneration
of the members of the board of directors and officers of
each Acquired Company.
(b) Appendix 10 to the Disclosure Letter sets forth a list of all
country club memberships, cars and other perquisites made
available to Employees.
(c) The Acquired Companies, in relation to each of their
respective Employees and so far as relevant to each of their
Former Employees, have complied in all material respects
with their Contracts of employment, any relevant collective
bargaining Contracts or codes of conduct, all relevant Laws
relating to their conditions of service or to the relations
between them (or their recognized trade union or other
representatives) and their respective employees.
(d) Except as set forth in Appendix 10 to the Disclosure Letter, the
terms of employment of all Employees are such that their
employment may be terminated by not more than four weeks' notice
(or such longer periods as may be required by law) given at any
time without liability for any payment including by way of
compensation or damages (except for unfair dismissal or a
statutory redundancy payment).
(e) The Acquired Companies have not made, announced or proposed any
changes to the emoluments or benefits of or any bonus to any
Employee and are under no obligation to make any such changes
with or without retrospective operation.
(f) The Acquired Companies have not within the three-year period
preceding the date hereof acquired or entered into any Contract
which involved or may involve it acquiring any undertaking or
part of one such that the Transfer of Undertakings (Protection of
Employment) Regulations 1981 (the "Regulations") applied or may
apply thereto.
8
(g) The Acquired Companies have maintained adequate and suitable
records regarding the service of their Employees.
(h) There are no amounts owing or agreed to be loaned or
advanced by any Acquired Company to any Employee.
(i) As of September 30, 1996 no Employee had given or received notice
to terminate his or her employment.
(j) As of September 30, 1996 there were no Employees who were on
secondment, maternity leave or absent on grounds of disability or
other leave of absence.
(k) The salaries and wages and other benefits of all Employees have
been paid or discharged in full in respect of the period up to
Completion.
(l) There are no unfair labor practice complaints,
discrimination charges or other employment related claims
(other than routine claims for benefits under employee
benefit plans) pending before any Governmental Authority or,
to the knowledge of Perstorp, any member of the Vendor Group
or the Acquired Companies threatened against any of the
Acquired Companies which, alone or with any series of
related or similar matters, seeks damages in any amount in
excess of $50,000, and there are no existing, and, so far as
Perstorp is aware, have been no past, patterns or practices
of discrimination upon which any such complaints, charges or
claims could be successfully asserted.
Employee Benefits
11.1 The Pension Schemes are the only arrangements, whether
established under trust or by Contract or applicable Laws or
Acquired Company policy, custom or practice, under which any
Acquired Company is or may become liable to pay, contribute to or
provide retirement, severance, deferred compensation, death,
disability, life insurance, medical benefits, or benefits in
respect of past service in respect of any of its past or present
officers, Employees or Former Employees and no Acquired Company
has participated in any such arrangements at any time other than
the Pension Schemes or arrangement which have been fully wound
up. There is no proposal to establish any other arrangements to
provide such benefits in respect of such individuals. No
contributions to, or other payments in respect of, any Pension
Scheme in relation to any Employee or Former Employee of any
Acquired Company has become due and remains outstanding. No
Employee or Former Employee has any right to any payment or other
benefit, whether under any Law, Contract or Pension Scheme, or by
reason of the Completion or any other transaction contemplated by
the Agreement.
11.2 Full details of the Pension Schemes have been supplied to the
Purchaser or its legal advisers and (without limitation to the
foregoing) complete up to date and accurate copies of the following
are annexed as Appendix 11 to the Disclosure Letter:
9
(a) all trusts, deeds, rules and other documents which have at any
time governed each Pension Scheme (including any which have now
been superseded or consolidated);
(b) any announcements to members of the Pension Schemes which are not
yet the subject of formal amendment to the documentation of the
Pension Schemes (including any individual or group announcements
made to or in respect of any Employee or Former Employee or past
or present officer of any Acquired Company);
(c) the current explanatory booklets and other explanatory
literature issued to Persons who are (or are entitled to
become) members of the Pension Schemes;
(d) the name and address of the actuary to each of the Pension
Schemes which is a funded scheme (by way of assets
(including insurance policies or contracts being held for
the purposes of the provision of benefits under the scheme))
("Funded Scheme") and the actuary's reports on the last two
actuarial valuations of each of the Pension Schemes,
together with the accounts and so far as reasonably
available accountants' reports dealing with accounting
provisions for the provision of benefits under any Pension
Scheme for the last two complete financial years;
(e) the audited accounts of each of the Pension Schemes (including
the auditors' report) for the last two scheme years and any draft
scheme accounts for the current scheme year received by any
Acquired Company or trustees or any principal employer of each of
the Pension Schemes for such of the Pension Schemes as are
required by applicable Laws to prepare audited accounts;
(f) a list of each Pension Scheme's active members, pensioners,
deferred pensioners and all other persons with an interest in
each Pension Scheme with full particulars of them relevant to
their membership therein or interest in any Pension Scheme and
necessary to establish their entitlements to benefits, including
full particulars of any benefit augmentations granted to them
under the Pension Schemes;
(g) the identity of any employers participating in each Pension
Scheme and full particulars of the terms of the participation
including copies of all deeds of adherence and deeds of
participation;
(h) a statement of the basis on which the participating companies and
the members of any Pension Scheme contribute thereto, and make
payments in respect of the expenses of administration, management
and trusteeship thereof and the rate and amount of such
contributions and payments made in the three years prior to the
date of this Agreement, and of the period for which the rate and
amount of such contributions have remained at their present
level;
(i) details of any discretionary benefits provided under, and
discretionary arrangements relating to, the Pension Schemes,
including any discretionary increases of deferred pensions or
pensions in payment;
10
(j) any regulatory or fiscal certificates, authorities,
registrations, filings or approvals in relation to any
Pension Scheme given by any regulatory or fiscal authority
or body and the latest confirmation such certificate
authority or approval is not affected or withdrawn or
invalidated, and any undertakings and indemnities given to
any regulatory or fiscal authority or body in relation to
any Pension Scheme;
(k) full particulars of the assets of each of the Pension Schemes
which are Funded Schemes where the whole of the Funded Scheme
will transfer to the Purchaser or remain with the relevant
Acquired Company;
(l) each Contract of current effect with any Person providing
services of any nature in connection with any of the Pension
Schemes, including without limitation investment management or
advisory services, administration and data processing services;
(m) each contract of insurance and any managed fund or other
investment contract with any insurance company relating to any
Pension Scheme which is of current effect and full particulars of
the premiums or other contributions payable under those
contracts.
11.3 Appendix 11 to the Disclosure Letter accurately lists all Pension
Schemes applicable to Employees or Former Employees. Except as set
forth in Appendix 11 to the Disclosure Letter, each Pension Scheme
covering any United States Employees or Former Employees of Components
North America, Components Plymouth or Components Springfield (a "U.S.
Pension Scheme") complies and has been operated and administered in
all material respects in accordance with the Employment Retirement
Income Security Act of 1974, as amended ("ERISA"), to the extent that
ERISA is applicable, and all other applicable Laws, and no "reportable
event", "prohibited transaction" (as such terms are defined in ERISA
and the United States Internal Revenue Code (the "Code"), as
applicable) or termination has occurred with respect to any U.S.
Pension Scheme. No amendment has been made reducing the rate of future
benefit accruals under any plan subject to Section 204(h) of ERISA,
except after all notices required by that provision have been given.
The Pension Schemes covering solely Employees and former Employees of
Components Canada are exempt from coverage under ERISA pursuant to
Section 4(b)(4) of ERISA. Except as set forth on Appendix 11 to the
Disclosure Letter, neither any Employee or Former Employee of
Components North America, Components Plymouth, Components Springfield
or Components Canada nor any beneficiary or dependent of any such
Employee or Former Employee is or may become entitled to post-
employment benefits of any kind by reason of their employment with any
Acquired Company including without limitation death or medical
benefits (whether or not insured), other than (i) coverage mandated by
section 4980B of the Code or (ii) deferred compensation fully accrued
as a Liability on the Completion Date Balance Sheet. No Employee or
Former Employee of Components North America, Components Plymouth,
Components Springfield or Components Canada will have rights to any
severance payment or any other benefits by reason of the execution or
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
11
11.4 No Acquired Company has made or proposed any voluntary or ex
gratia payments to any person in respect of any benefit (as described
in Paragraph 11.1 above).
11.5 No undertaking or assurance (whether legally binding or not) has
been given by any Acquired Company to any person as to the
continuance, introduction, increase or improvement of any such benefit
or arrangement as is referred to in Paragraph 11.1 (including, for the
avoidance of doubt, the Pension Schemes).
11.6 Each Acquired Company has fulfilled in all material respects all
of its obligations under the Pension Schemes. Since the date of the
last actuarial valuation, no increase or decrease in the rate of
contributions to any Pension Scheme which is a Funded Scheme has
occurred or been recommended and so far as Perstorp is aware none will
foreseeably be required.
11.7 All death benefits which may be payable under the Pension Schemes
(other than a refund of members' contributions with interest where
appropriate) are fully insured with an insurance company. All policies
and contracts under which such benefits are insured are enforceable
and there is no ground on which the insurance company concerned might
avoid liability under any such policy or contract.
11.8 The Pension Schemes have at all times been administered in all
material respects in accordance with the trust powers and provisions
of their governing documentation and have been administered in all
material respects in accordance with and comply with all applicable
Laws.
11.9 No claim has been made or threatened against any Acquired Company
or against any other company participating in any Pension Scheme,
insofar as Perstorp is aware, against the trustees or administrator of
any Pension Scheme or any person whom any Acquired Company is or may
be liable to indemnify or compensate (including any complaint to any
tribunal or ombudsman) in respect of any act event omission or other
matter arising out of or in connection with any Pension Scheme (other
than routine claims for benefits) and so far as Perstorp is aware
there are no circumstances which may give rise to any such claim. No
Acquired Company has given any indemnity to any person in connection
with any Pension Scheme.
11.10 Since the date of the last actuarial valuation of any Pension
Scheme which is a Funded Scheme no power or discretion has been
exercised to augment or improve any benefit under that Pension Scheme
nor any promise or announcement made to do so.
11.11 The liability of each Acquired Company to contribute to each of
the Pension Schemes may be terminated by that Acquired Company without
notice, without the consent of any person and without further payment
(except in respect of contributions due up to the date of termination,
or as required by law).
11.12 Every Person who is entitled to membership in any Pension Scheme
has been invited to join as of the date on which he became so
entitled.
12
11.13 No Acquired Company has any contractual liability to make any
contributions to any personal pension scheme or arrangement or any
retirement annuity contract of any Employee or officer or to make any
payment or remuneration specifically referable to contributions
payable by any Employee or officer of any Acquired Company under such
scheme or contact.
11.14 In addition to lump sum death in service benefits, the schemes
listed as Money Purchase Schemes in Appendix 11 of the Disclosure
Letter provide only benefits the rate or amount of which is calculated
by reference to a payment or payments made by a member or by any other
person in respect of the member and no promise or assurance (oral or
written) has been given to any beneficiary that his or her benefits
under those schemes (other than lump sum death in service benefits)
will be calculated by reference to any person's remuneration or equate
(approximately or exactly) to any particular amount.
11.15 All taxation of any nature for which the trustees or
administrators of the Pension Schemes are liable or liable to
account has been duly paid.
11.16 The records of the Pension Schemes, including without prejudice
to the generality of the foregoing all books of account and trustees'
minutes, have in all material respects been properly and accurately
maintained and all such records are in the possession of or under the
control of the trustees or administrators of the Pension Schemes.
11.17 There are no material omissions from or inaccuracies in the data
supplied to the relevant Acquired Company's actuary for the purpose of
the last actuarial valuation of each of the Pension Schemes which is a
Funded Scheme.
11.18 The trustees of each Pension Scheme which is established under
trust have legal title to all the assets of that Pension Scheme. There
are no encumbrances or charges over any of the assets of the Pension
Schemes.
11.19 All Pension Schemes which are required to or for which it is
advantageous to obtain any regulatory or fiscal certificates,
authorities, registrations, filings and/or approvals have obtained
such certificates, authorities, registrations, filings and/or
approvals with effect from their dates of commencement and Perstorp
knows of no reason why such certificates, authorities, registrations,
filings or approvals might be withdrawn or cease to apply.
11.20 No event has occurred (nor will Completion be such an event)
which would or could result in or entitle any Person (without the
consent of the relevant Acquired Company) to wind up, terminate or
close any of the Pension Schemes to new members, in whole or in part,
or which would otherwise trigger any liabilities relating to any
Pension Scheme, whether immediate or prospective, on any Acquired
Company, and which would not have arisen had the event not occurred.
13
UK Specific Warranties
11.21 A contracting-out certificate under the Xxxxxxx Xxxxxxx Xxx 0000
is in force covering the employments of all employees or officers of
all participating members of the Perstorp Components Pension Scheme
and the Perstorp Group Pension Plan (the "UK Schemes") and Perstorp
knows of no circumstance which might cause such certificate to be
withdrawn or cease to apply.
11.22 No payment has been or is proposed to be made from any
of the UK Schemes to any participating company.
11.23 None of the assets of the UK Schemes constitute
"employer-related investments" for the purposes of Section 112 of
the Xxxxxxx Xxxxxxx Xxx 0000.
11.24 For each UK Scheme which is established under trust, all assets
of that UK Scheme are held either directly by the trustees of that UK
Scheme or by investment managers (or their nominees) properly
appointed by such trustees and are not subject to any stock lending
arrangements.
Properties
12. Appendix 12 to the Disclosure Letter accurately sets forth, or
provides accurate references to, (a) legal descriptions of each of the
real properties owned by each Acquired Company and to the real estate
subject to leases held by any Acquired Company and (b) legal
descriptions of all real estate used, held, owned or leased by any of
the Acquired Companies that is used or held for use in the Business.
The Acquired Companies have good and marketable title to the Assets
constituting real property, free and clear of all Security Interests
other than (a) Permitted Security Interests, (b) easements, covenants,
rights-of-way and other encumbrances or restrictions of record or
referred to in an applicable lease, (c) restrictions arising as a
matter of Law, and (d) unrecorded easements, covenants, rights-of-way
or other encumbrances or restrictions, which (in the case of (b), (c)
or (d)) do not materially impair the continued use of the property
subject thereto in the Business as presently conducted or materially
impair the value of the property subject thereto if used for purposes
similar to those for which it is presently used. The structures
located on the Assets constituting owned real property or on any other
real property described in Appendix 12 to the Disclosure Letter and
the machinery and equipment situated therein are in all material
respects having regard to their age and usage, in good condition,
normal wear and tear excepted, are regularly maintained in good order,
are capable of being used for their intended purpose for the duration
of their expected life and comply with all safety requirements imposed
under applicable Law in all material respects and otherwise have been
maintained in all material respects in accordance with the Acquired
Companies' policies related thereto.
14
Recitals
13. The Recitals to this Agreement are true and accurate.
Taxation
14. 14.1 In Paragraphs 14.2 to 14.15:
(a) the terms "Event", "Tax", "Tax Return" and "Tax Authority"
will have the same meanings as they have for the purposes of
the Tax Covenant, and
(b) notwithstanding anything to the contrary contained herein,
the statements will be treated as unqualified except as
provided in the Disclosure Letter as to Taxes (the parties
acknowledging that any reference to any matter that does not
refer to the specific Tax effect or aspect thereof will not
limit any Warranty in Paragraph 14.1 to 14.15, inclusive,
hereof).
14.2 Each Acquired Company has duly and fully paid in a timely manner
all Taxes that have become due on or prior to Completion, made or
filed all Tax Returns that are required to be filed on or before
Completion, and given all notices and supplied all other material
information required by law to be supplied to all relevant Tax
Authorities on or prior to Completion. All such information, Tax
Returns and notices were and remain accurate and complete in all
material respects. All Taxes relating to the Acquired Companies, the
Business or the Assets not due on or before Completion but properly
accruable on or before Completion or allocable to a period ending on
or before Completion or to a portion of a period beginning before and
ending after Completion have been properly reserved for in the
aggregate on the books of the Acquired Companies.
14.3 No Acquired Company is involved in any current audit or dispute
with any Tax Authority. No Acquired Company has executed or filed with
any Tax Authority any agreement extending the period for filing any
Tax Return which is currently in force. No Acquired Company is a party
to any pending action, proceeding or investigation by any Tax
Authority or other Governmental Authority for the assessment or
collection of Taxes nor does any Acquired Company know of any reason
for any such action, proceeding or investigation. No notice of any
claim has ever been made by a Tax Authority or Governmental Authority
in a jurisdiction where any Acquired Company does not currently file
Tax Returns that such Acquired Company is or may currently be subject
to taxation by that jurisdiction, nor is any Acquired Company aware
that any such assertion of jurisdiction is threatened. No waivers of
statutes of limitation in respect of any Tax Returns have been given
or requested by any Acquired Company nor has any Acquired Company
agreed to any extension of time with respect to a Tax assessment or
deficiency which is currently outstanding. To the best knowledge of
Perstorp, the Vendors and the Acquired Companies, no security
interests have been imposed upon or asserted against any assets of any
Acquired Company as a result of or in connection with any failure or
alleged failure, to pay any Tax. No Acquired Company has entered into
any agreement, oral or written, which is or will at Completion remain
in force
15
providing for the payment of Tax Liabilities or entitlement to refunds
and related matters with any other party.
14.4 No transaction in respect of which any consent or clearance was
required or sought from any Tax Authority has been entered into or
carried out by any Acquired Company without such consent or clearance
having first been properly obtained.
14.5 No Tax Authority has made or agreed to make any special
arrangement (being an arrangement which is not based on relevant
legislation or any published practice) in relation to any Acquired
Company's affairs which is currently in force.
14.6 No claim has been made for the depreciation of any asset of a
Acquired Company for Tax purposes in circumstances in which the claim
is likely to be disallowed. No Acquired Company has since the Last
Accounts Date been involved in any transaction which has given or may
give rise to a Tax Liability other than Tax Liabilities in respect of
normal trading income or receipts arising from transactions entered
into in the ordinary course of business. No Acquired Company is or may
be liable to pay Tax in respect of any hidden distributions of profit
in any jurisdiction.
14.7 All documents in the enforcement of which any Acquired Company is
interested have been duly stamped and all related duties, interest and
penalties have been duly paid.
14.8 No event, transaction, act or omission has occurred (including
without limitation the execution or implementation of this Agreement)
which has resulted or could result in any Acquired Company becoming
liable to pay or to bear any Tax which is primarily or directly
chargeable against or attributable to any person other than a Acquired
Company. No Acquired Company is party to or bound by, nor to the best
knowledge of Perstorp, the Vendors and the Acquired Companies, will
any Acquired Company become a party to or bound by, any Tax indemnity,
Tax sharing or Tax allocation agreement in respect of which claims
would not be time barred.
14.9 All transactions entered into by any Acquired Company have been
entered into on an arm's-length basis and the consideration (if any)
charged or received or paid by any Acquired Company on all
transactions entered into by it has been equal to the consideration
which might have been expected to be charged, received or paid (as
appropriate) between independent persons dealing at arm's-length. No
Acquired Company has disposed of or acquired any assets in
circumstances such that the consideration deemed to be given on such
disposal or acquisition for purposes of computing the Tax Liability of
the Acquired Company with respect to such disposition or acquisition,
might be adjusted by any Tax Authority. The book value of any asset of
a Acquired Company as shown in or adopted for the purposes of the
Accounts is such that if an asset were disposed of at Completion at
its book value (or if acquired after the Accounts Date at cost) no Tax
Liability would be incurred nor would any Tax previously deferred be
taken into account, except to the extent such Tax Liability is
attributable to accelerated depreciation for Tax purposes in
accordance with applicable Laws.
16
14.10 No Acquired Company has entered into or been a party to nor
otherwise been involved in any plan or arrangement designed wholly or
mainly for the purpose of avoiding or deferring Tax.
14.11 To the best knowledge of Perstorp, the Vendors and the Acquired
Companies, no Acquired Company is an agent of another company for the
purposes of assessing the latter to Tax in the country of residence of
the first Acquired Company.
14.12 Each Acquired Company:
(a) is registered for the purposes of value added tax
legislation (or the equivalent Tax legislation in each
jurisdiction in which it carries on business) ("VAT
Legislation"); and
(b) is neither an agent nor a fiscal representative of any other
Person (other than an Acquired Company) for the purposes of
the VAT Legislation.
Separate Provisions
Paragraphs 14.13 through 14.15 will apply to the separate transactions
to Transfer the Shares at Completion in accordance with the Agreement.
In the event of any conflict or inconsistency between such Paragraphs
and either the balance of Paragraph 14 or the Agreement, the
provisions of Paragraphs 14.13 through 14.15 will be the governing
provisions.
14.13 Perstorp Railite
(a) Components Spain is and has been eligible for the benefits
stated by Art. 14 of the Local Law 18/1993, of July 5, of
the Historic Land of Alava (Xxxxx Xxxxx 18/1993, de 0 xx
xxxxx, xxx Xxxxxxxxxx Xxxx(xxxx)xxxx xx Xxxxx de medidas
fiscales urgentes de apoyo a la inversi(cent)n e impulso de
la actividad econ(cent)mica ("Local Law 18/1993")).
Components Spain has duly obtained the exemption from
Corporate Tax stated by Art. 14 of the Local Law 18/1993
(the "Exemption"), has fulfilled at all times the
requirements set forth in order to be entitled to such
Exemption and is fulfilling such requirements at Completion.
Specifically, Components Spain has not obtained any other
tax benefit which is not compatible with the Exemption.
(b) Components Spain has duly obtained a grant
("Subvencion") from the Basque Government for the
amount of 432 million pesetas. Components Spain has
fulfilled and is fulfilling all the requirements, terms and
conditions set forth by the Basque Government in order to
obtain 289 million pesetas pursuant to such Subvencion
and Components Spain has delivered to the Basque Government
the necessary documentation to entitle Components Spain to
obtain such payment of such Subvencion. The
Subvencion is duly recorded in the books of Components
Spain in accordance with Local GAAP.
17
(c) Paragraph 14.12(a) will be applied by including, in
addition to VAT Legislation, the following:
corporation tax legislation ("Corporation Tax
Legislation") and income tax on individuals legislation
("Income Tax on Individuals Legislation"), and
Paragraph 14.12(b) will be applied by including, in
addition to VAT Legislation, the following:
Corporation Tax Legislation and Income Tax on
Individuals Legislation.
14.14 Perstorp UK
(a) The Disclosure Letter contains details of all arrangements
relating to the surrender of tax refunds under Section 102
Finance Xxx 0000 to which Components
UK is or has been a party and:
(i) all notices given by Components UK for any such
surrender were when made and are now valid, and
Perstorp knows of no reason why such notices should not
be allowed; and
(ii) Components UK is not liable to make any payment which
is not provided for in the Accounts or in the
Completion Date Balance Sheet and has received all
payments due to it under any arrangement or agreement
for the surrender of a tax refund and no such payment
exceeds or could exceed the amount permitted by Section
102(7) Finance Xxx 0000.
(b) The Disclosure Letter contains details of all arrangements
relating to group relief under Sections 402-413 Taxes Act
1988 to which Components UK is or has been a party and:
(i) all claims by Components UK for group relief were when
made and are now valid and either have been allowed by
way of relief from corporation tax or Perstorp knows of
no reason why such claims shall not be allowed;
(ii) Components UK has not made nor is liable to make any
payment for group relief otherwise than in
consideration for the surrender of group relief
allowable to Components UK by way of relief from
corporation tax;
(iii) no such payment exceeds or could exceed the
amount permitted by Section 402(6) Taxes Xxx
0000; and
(v) there exist or existed for any period of account
in respect of which a surrender has been made or
purports to have been made to Components UK no
arrangements such as are specified in Section
410(1)-(6) Taxes Xxx 0000.
18
(c) The Disclosure Letter contains details of all arrangements
for the surrender under Xxxxxxx 000 Xxxxx Xxx 0000 of any
amount of advance corporation tax and in respect of receipts
and surrenders disclosed:
(i) Components UK has not paid nor is liable to pay
for the benefit of any advance corporation tax
which is or may become incapable of set off
against its liability to corporation tax otherwise
than by reason of anything done by Components UK
or the Purchaser after Completion or any
insufficiency of profits liable to corporation tax
after Completion.
(ii) no such payment exceeds or could exceed the amount
permitted by Section 240(8) Xxxxx Xxx 0000; and
(iii) there exist or existed for any period in
respect of which a claim under Xxxxxxx 000
Xxxxx Xxx 0000 for surrender of advance
corporation tax to Components UK has been or
is to be made no arrangements such as are
specified in sub-section (11) of that section
whereby any person could obtain control of
Components UK.
(d) All dividends paid by Components UK have been paid under a
group income election pursuant to Xxxxxxx 000 Xxxxx Xxx
0000, such election was valid when made and when such
dividends were paid and Components UK is not required to
account for advance corporation tax in respect of any such
dividends.
14.15 Perstorp North America
(a) No Acquired Company incorporated in a State of the United
States of America has been a United States real property
holding corporation within the meaning of Section 897(c)(2)
of the Code, during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code.
Litigation and Regulatory Matters
15.
(a) No Acquired Company is engaged in nor, so far as Perstorp is
aware, has any Vendor or any Acquired Company been threatened
with, any litigation, arbitration, claims or
administrative or other proceedings, which (i) alone or with any
series of related or similar matters, seeks damages in an amount
in excess of $50,000 or (ii) seeks to make any Acquired Company
subject to any order, writ, injunction or decree of any
Governmental Authority or other restriction on the conduct of its
business. No Acquired Company is subject to any order, writ,
injunction or decree or any unsatisfied award or judgment.
19
(b) The Acquired Companies conduct and have conducted their Business
and corporate affairs in accordance with all applicable Laws in
all material respects.
(c) The Acquired Companies have obtained all Permits which are
required for and are material to the carrying on of their
Business in the places and the manner in which such Business is
now carried on.
Insurance
16. Appendix 16 to the Disclosure Letter lists all material insurance
policies providing coverage for the Acquired Companies or the Business
or the businesses previously carried on by the Acquired Companies (the
"Insurances"). Perstorp is not aware of any material outstanding
claims under, or in respect of the validity of, the Insurances and the
Insurances are in full force and effect in accordance with the terms
and conditions and all premiums thereunder have been paid when due.
Except as set forth in Appendix 16, no claim is currently reserved or,
to the knowledge of Perstorp or any of the Acquired Companies, or any
other member of the Vendor Group, should be reserved under the
Insurances involving an amount in excess of $50,000.
Ability to Enter Agreement
17. Perstorp has necessary power and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have, where
required, been duly and validly authorized and no other proceedings or
action on the part of Perstorp is, or on behalf of any Relevant
Vendor, will be, necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement has been
duly executed and delivered by Perstorp and constitutes a valid and
binding agreement of Perstorp, enforceable against Perstorp in
accordance with its terms. Perstorp has taken, or caused to be taken,
each of Perstorp's Pre-Completion Actions.
18. The execution and delivery of this Agreement by Perstorp does not,
and the performance by each of Perstorp and each Relevant Vendor of
the transactions contemplated hereby and thereby to be performed by
each of them will not, in any material
respect, conflict with, or result in any material violation of, or
constitute a material default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any material obligation or the loss of
a material benefit under, any provision of the certificate of
incorporation or by-laws (or similar constituent instruments) of
Perstorp or each such Relevant Vendor, any Contract listed or
described or required to be listed or described on Appendix 6 to the
Disclosure Letter (except to the extent disclosed on Appendix 6 to the
Disclosure Letter), or any Law or Permit necessary for the continued
conduct of the Business after Completion in all material respects in
the same manner as it is being conducted as of the date of this
Agreement or as of the Completion or results or will result in the
imposition of a Security Interest with respect to any of the Shares or
the Assets. No consent, approval, order or authorization of, or
registration, declaration or filing with, any
20
Governmental Authority is required to be obtained or made by or with
respect to Perstorp or any Vendor under any Law in connection with the
execution and delivery of this Agreement by Perstorp or the
performance by Perstorp of the transactions contemplated hereby to be
performed by it, except (i) for such of the foregoing as are listed or
described on Schedule 6.1.18, and (ii) for such Permits, which if not
obtained or made, (A) will not impair the ability of any Acquired
Company to continue to operate its respective business as operated
immediately prior to Completion and (B) will not subject any Acquired
Company to any criminal prosecution or penalty.
Environmental Matters
19. The Acquired Companies are in all material respects in full
compliance with all Environmental Laws which are or previously have
been applicable to any Acquired Company, the ownership, use,
operation, maintenance or management of the Properties, or properties
previously owned, operated or leased by the Acquired Companies or
their predecessors, or the Business and all Permits that are required
to be issued by a Governmental Authority under any Environmental Laws
in respect of any Acquired Company, the Properties or the Business
are, subject to the conditions and limitations contained therein,
being complied with in all material respects, are valid and are in
full force and effect, and Perstorp is not aware of circumstances
which are reasonably likely to result in a breach of Environmental
Laws or, so far as Perstorp is aware, future Environmental Laws now
under consideration that would affect any Acquired Company directly.
20. Neither the Properties, the Acquired Companies nor properties
previously owned, operated or leased by the Acquired Companies or
their predecessors are involved in any civil, criminal or other
proceedings or governmental or other quasi-governmental claim or
investigation pursuant to any Environmental Laws and Perstorp has no
knowledge of the intended commencement of any such proceedings, claims
or investigation or facts (including without limitation those
concerning adjacent properties), that could support any such
proceedings, claims or investigations.
20.1 The Acquired Companies have not and, to the knowledge of
Perstorp, no other Person has caused a Release or threatened Release
of any Hazardous Material at, in, on, under, about or from the
Properties or properties previously owned, operated or leased by an
Acquired Company or any predecessor. There are no underground storage
tanks or asbestos which, in either case, is reasonably likely to be
dangerous to human life or is in breach of any Environmental Law at
the Properties and, to the knowledge of Perstorp, at properties
previously owned, operated or leased by the Acquired Companies or any
predecessors.
Intellectual Property
21.1 Appendix 21 to the Disclosure Letter lists and sets forth a
summary description of all Perstorp marks, all Registered Rights
and all licenses of intellectual property of third parties owned,
held or used by any Acquired Company. All Registered Rights
owned or used by any Acquired Company in, or in connection with,
its business are subsisting and not subject to any
21
notice of opposition or application for cancellation or amendment, and
are owned by an Acquired Company or licensed from a third party that
is not a member of the Vendor Group. All steps have been taken to
maintain the Registered Rights used in the conduct of the Business,
including paying any renewal or other fees where appropriate. None of
the Acquired Companies has transferred any Registered Rights, by
assignment or license, which are relevant to the Business, to any
member of the Vendor Group or any third party within the last two
years and no member of the Vendor Group owns or has any other rights
to any Intellectual Property that is necessary for the manufacture or
sale of any Designated Product that is not assigned or licensed
pursuant to the Intellectual Property Agreement or the Computer
Software Agreement without infringement on the Intellectual Property
rights of others.
21.2 No Intellectual Property (including without limitation any
computer software) is required for carrying on the business of any
Acquired Company in the places and manner in which such business is
carried on at the date hereof, other than Intellectual Property
beneficially owned by one or more Acquired Companies or members of the
Vendor Group or any Intellectual Property owned by any third party
which is the subject of licenses to an Acquired Company. The
Intellectual Property and Registered Rights which are owned or used by
any Acquired Company in, or in connection with, the Business are not
subject to any Security Interest other than a Permitted Security
Interest. All Intellectual Property which is relevant to the
manufacture or sale of Designated Products by any Acquired Company is
owned by an Acquired Company, is licensed from a third party that is
not a member of the Vendor Group or is the subject of the Intellectual
Property Agreement.
21.3 So far as Perstorp is aware:
(a) no Intellectual Property which is material to any Acquired
Company is the subject of any claim or opposition from any person
as to title, validity, enforceability or otherwise; and
(b) the operations of the Business, including without limitation the
activities, processes and methods employed or used (including
without limitation any Intellectual Property described in Section
21.2), and the products and services manufactured and supplied,
by the Acquired Companies, do not conflict with or infringe upon
any Intellectual Property of any third party.
21.4 All software necessary to enable each Acquired Company to
continue to use the computerized records and tools used in the
business of that Acquired Company for programs awarded to such
Acquired Company is either listed on the schedule to the Computer
Software Agreement or is licensed to such Acquired Company on
substantially the same terms and conditions on which such software has
have been used during the two-year period prior to the date of this
Agreement and so far as Perstorp is aware the transactions
contemplated by this Agreement will not result in the termination of,
or any change in the terms and conditions of, any such software
license.
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21.5 In the 12 months prior to the date hereof, the Acquired Companies
have not suffered and, so far as Perstorp is aware, no other Person
has suffered any failures or bugs in or breakdowns of any computer
hardware or software used in connection with the Business which has
caused any substantial disruption or interruption in or to its use,
and the Vendor does not know nor is it aware of any fact or matter
which may so disrupt or interrupt or affect the use of such equipment
following the acquisition by the Purchaser of the Business pursuant to
this Agreement on the same basis as it is presently used.
21.6 The Computer Software Agreement will not violate the terms of any
license or other Contract to which any member of the Vendor Group is a
party.
Product Liability
22. Since September 1, 1993, no claim has been asserted against an
Acquired Company or any predecessor of any of them for death, personal
injury, other injury to persons or property damage relating to,
resulting from or arising out of, directly or indirectly, use or
exposure to any products (or any part or component thereof)
manufactured, sold or used or serviced by an
Acquired Company or any predecessor of any of them. Appendix 22 to the
Disclosure Letter lists all Designated Products.
23. With respect to each of the Designated Products, there is no and
has not been any (i) material defect in any manufacturing process used
in connection with the manufacture thereof, (ii) failure by any of the
Acquired Companies to comply in any material respect with any
applicable Law relating to product specifications, including without
limitation flammability specifications, which defect or failure
described in the foregoing clauses (i) and (ii) has not been rectified
or cured, as the case may be, and no such defect or failure to comply
resulted in any legal or contractual requirement to notify any
customer thereof or to recall any products sold, (iii) product
specifications or quality standards provided to or requested or
required by any customer of the Business that has not been complied
with, except for any such noncompliance with customer specifications
or standards which is not reasonably likely to result in a material
amount of product returns, or (iv) material breach by any of the
Acquired Companies or Vendors or any predecessor of express or implied
warranties of merchantability or fitness for any purpose or use or any
other express warranties of the Acquired Companies or Vendors in
respect of which a third party would be entitled to make a claim
against any Acquired Company or any member of the Vendor Group.
Customers and Suppliers
24. To the knowledge of Perstorp, the Acquired Companies are able to
continue to supply Designated Products to customers which to a degree
reasonably satisfactory to such customers meet all product
specifications and quality standards applicable to any current program
in which any Acquired Company participates or to any Contract without
any additional capital expenditure. Except as set forth in the capital
expenditure plan attached as Appendix 24 to the Disclosure Letter, to
the knowledge of Perstorp, no capital expenditures or software
expenditures aggregating in excess of $50,000 are required for the
Acquired Companies to
23
continue to conduct the Business as presently conducted and forecast
(in Perstorp's current business plan for the Acquired Companies
attached at Appendix 24 to the Disclosure Letter) to be conducted
during the periods covered by such attached capital expenditure plan.
25. Except as described on Appendix 25 to the Disclosure Letter, since
September 1, 1993 (a) there has not been any adverse change in the
business relationship of any of the Acquired Companies with any of the
5 largest customers of the Business or suppliers of the Business and
(b) there has not been any loss or, to the knowledge of Perstorp,
threatened loss of any model or program or Contract set forth on
Appendix 25. Notwithstanding any other provision of this Agreement,
the Disclosure Letter or any other document, no disclosure whatsoever
by Perstorp shall be deemed to qualify this paragraph unless such
disclosure is specifically set forth in Appendix 25.
Labor Relations
26. No Acquired Company is a party to or subject to any collective
bargaining Contract. Except as set forth on Appendix 26 to the
Disclosure Letter, there are, and since September 1, 1993 have been,
no organized labor walkouts, strikes or work stoppages or slowdowns
pending or, to the knowledge of Perstorp, threatened, against or
affecting the Business, and, to the knowledge of Perstorp, no event
has occurred which could reasonably be expected to give rise to any
such dispute. No union organizational campaign or effort to
collectively bargain is currently, or has been, pending with respect
to the Employees or Former Employees of the Business.
Brokers
27. Neither Perstorp nor any of its Affiliates has made any Contract
or taken any action as a result of which Purchaser or an Acquired
Company would become obligated to pay any Person a fee or commission
as a result of this Agreement or the transactions contemplated hereby
or thereby.
Intercompany Matters
28. Appendix 28 to the Disclosure Letter sets forth (a) a list of the
material support services provided to the Acquired Companies since
September 1, 1994 by Perstorp or any Affiliate of Perstorp (other than
an Acquired Company) ("Support Services"), (b) the amount charged for
each of the Support Services so provided for the fiscal year ended
August 31, 1995 and the eight-month period ended on the Last Accounts
Date, which charges were expended in the related Accounts, and (c) all
executory Contracts between or among, as the case may be, any Acquired
Company, on the one hand, and any member of the Vendor Group or any
Affiliate thereof, on the other hand and the terms under which
products or inventory have been sold or furnished to any Acquired
Company by any member of the Vendor Group other than an Acquired
Company since September 1, 1994. Appendix 28 (excluding the
attachments thereto) describes all changes in the terms under which
such products or inventory have been
24
so sold or furnished (where such change is adverse in any manner to
the relevant Acquired Company) that have occurred during the period
from September 1, 1994 to Completion.
Bank Accounts
29. Appendix 29 to the Disclosure Letter lists and describes all bank
and similar accounts maintained by or on behalf of any Acquired
Company and the authorized signatories in respect thereof.
Powers of Attorney
30. Appendix 30 of the Disclosure Letter lists and describes all
outstanding powers of attorney granted by or on behalf of any Acquired
Company to any Person.
Solvency
31. Neither Perstorp nor any of the Acquired Companies has commenced
any case, proceeding or other action under any Law relating to
bankruptcy, insolvency, reorganization or relief of debtors and no
proceedings have been commenced against Perstorp or any of the
Acquired Companies which seeks to adjudicate any of them as bankrupt
or insolvent or which seeks the appointment of any receiver,
liquidator or similar officer for any of them.
Competition and Trade Regulation
32.1 Without limiting the generality or effect of any other Warranty
or provision of the Agreement, so far as Perstorp is aware, neither
Perstorp (as relates to the Business) nor any Acquired Company is
party to any material agreement or arrangement which: (a) infringes
Article 85 or 86 of the Treaty establishing the European Economic
Community or any other antitrust or similar Law in any jurisdiction in
which Perstorp or any Acquired Company has assets or conducts business
or (b) is registrable, unenforceable or void or renders Perstorp or
any Acquired Company liable to civil, criminal or administrative
proceedings by virtue of any anti-trust or similar Law in any
jurisdiction in which Perstorp or any Acquired Company has assets or
conducts business.
32.2 None of the Acquired Companies is subject to any outstanding
order or decree of any Governmental Authority under any anti- dumping
or other trade regulation Law.
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EXHIBITS AND SCHEDULES
Exhibit A Computer Software Agreement
Exhibit B Development License Agreement
Exhibit C (Intentionally omitted)
Exhibit D Intellectual Property Agreement
Exhibit E Projections
Exhibit F Pre-Completion Items
Exhibit G Termination of Agreement
Schedule 1.1 List of Acquired Companies
Relevant Vendors; Shares; Vendors
Schedule 1.2 List of Relevant Perstorp Executives
Schedule 2.1 Share Transfer Procedures;
Settlement of Intercompany Balances;
Net Asset Value; Change in Net Assets;
Estimated Purchase Price; List of Purchasers;
Allocation of Purchase Price; Estimated
Retained Liabilities
Schedule 3.1 List of Closing Documents; Form of Letter of
Resignation
Schedule 3.2 Form of Legal Opinions
Schedule 3.4 Completion Date Balance Sheet Methodology
Schedule 6.1 Warranties
Schedule 6.1.1 Auditor's Reports
Schedule 6.1.18 Consents, Approvals, and Permits
Schedule 7.1(b) Certain Indemnities
Schedule 9.1 Pension Schemes
Schedule 9.2 Tax Covenant
Schedule 9.3 Insurances
The Registrant hereby undertakes to furnish supplementally a copy of any
schedule herefrom as permitted by Item 601(b)(2) of Regulation S-K to the
Commission upon request.
