EXHIBIT 10.23
STOCK AND ASSET PURCHASE AGREEMENT
between
DIMON Incorporated,
FLORIMEX Worldwide GmbH
and
U.S.A. Floral Products, Inc.
August 12, 1998
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...........................................1
Section 1.01. Definitions.................................1
ARTICLE II PURCHASE AND SALE AND CLOSING........................7
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Section 2.01. Purchase and Sale of Stock and Assets.......7
Section 2.02. Purchase Price..............................7
Section 2.03. Closing.....................................7
Section 2.04. Sellers' Deliveries at Closing..............8
Section 2.05. Buyers' Deliveries at Closing...............8
Section 2.06. Mutual Deliveries at Closing................8
ARTICLE III ADJUSTMENT OF PURCHASE PRICE........................9
----------------------------
Section 3.01. Delivery of Florimex Financial Statement....9
Section 3.02. Final Florimex Financial Statement and
Dispute Resolution..........................8
Section 3.03. Final Florimex Financial Statement
Resulting From Dispute Resolution..........10
Section 3.04. Post Closing Adjustment....................10
ARTICLE IV [intentionally omitted]..............................9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER.............10
----------------------------------------
Section 5.01. Corporate Existence of Sellers.............10
Section 5.02. Authorization; Enforceability..............11
Section 5.03. No Violation or Conflict by the Sellers....11
Section 5.04. Title to Stock.............................10
Section 5.05. Organization of Companies..................11
Section 5.06. Capitalization of Companies................11
Section 5.07. No Violation or Conflict by Companies......12
Section 5.08. Interim Florimex Financial Statement/No
Material Changes...........................11
Section 5.09. Taxes......................................12
Section 5.10. Personal Property..........................12
Section 5.11. Real Property..............................13
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Section 5.12. Material Contracts.........................14
Section 5.13. Insurance..................................13
Section 5.14. Intellectual Property......................14
Section 5.15. Employment Relations.......................16
Section 5.16. No Litigation..............................14
Section 5.17. Books and Records..........................15
Section 5.18. No Broker..................................15
Section 5.19. Software...................................15
Section 5.20. Environmental Compliance, Cleanup,
Permits and Licenses.......................16
Section 5.21. Companies in Liquidation...................16
Section 5.22. Assets; Condition..........................16
Section 5.23. Employee Matters...........................16
Section 5.24. No Other Representations...................17
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER.............17
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Section 6.01. Corporate Existence of Buyers..............17
Section 6.02. Authorization; Enforceability..............17
Section 6.03. No Violation or Conflict...................20
Section 6.04. No Broker..................................18
Section 6.05. Purchase for Investment....................18
Section 6.06. Investigation by Buyers....................18
Section 6.07. No Litigation..............................19
Section 6.08. International Operations...................19
Section 6.09. No Other Representations...................19
ARTICLE VII COVENANTS OF SELLERS...............................19
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Section 7.01. Conduct of Business of the Companies.......19
Section 7.02. Compliance with Law........................21
Section 7.03. Regulatory and Other Approvals.............21
Section 7.04. Investigation by Buyers....................21
Section 7.05. Resignations...............................22
ARTICLE VIII COVENANTS OF BUYERS...............................22
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Section 8.01. Compliance with Law........................22
Section 8.02. Regulatory and Other Approvals.............22
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ARTICLE IX OTHER COVENANTS AND AGREEMENTS OF BUYERS AND
--------------------------------------------
SELLERS...................................................22
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Section 9.01. Release of Guarantees......................22
Section 9.02. Employment Employee Benefit Plan and
Other Matters..............................23
Section 9.03. Settlement of Inter-Company Accounts.......23
Section 9.04. Fulfillment of Conditions..................23
Section 9.05. Profit and Loss Allocation.................23
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYERS........24
---------------------------------------------
Section 10.01. Performance...............................24
Section 10.02. Proceedings and Examinations..............24
Section 10.03. No Actions................................24
Section 10.04. Representations and Warranties............24
Section 10.05. Deliveries................................24
Section 10.06. Regulatory Consents and Approvals.........24
Section 10.07. Third Party Consents......................25
Section 10.08. Additional Certificates...................25
ARTICLE XI CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS......25
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Section 11.01. Performance...............................25
Section 11.02. Proceedings and Examinations..............25
Section 11.03. No Actions................................25
Section 11.04. Representations and Warranties............25
Section 11.05. Deliveries................................26
Section 11.06. Regulatory Consents and Approvals.........26
Section 11.07. Third Party Consents......................26
Section 11.08. Other Agreements..........................26
Section 11.09. Additional Certificates...................26
ARTICLE XII INDEMNITIES AND ADDITIONAL COVENANTS...............26
------------------------------------
Section 12.01. Sellers' Indemnity........................26
Section 12.02. Buyers' Obligation in Respect of
Companies in Liquidation.............................27
Section 12.03. Indemnity Amounts to be Computed on
After-Tax Basis...........................27
ARTICLE XIII MISCELLANEOUS.....................................28
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Section 13.01. Governing Law and Jurisdiction............28
Section 13.02. Notices...................................28
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Section 13.03. Entire Agreement..........................29
Section 13.04. Expenses..................................29
Section 13.05. Public Announcements......................29
Section 13.06. Confidentiality...........................29
Section 13.07. Further Assurances; Post-Closing
Cooperation...............................30
Section 13.08. Waiver....................................30
Section 13.09. Amendment.................................31
Section 13.10. No Third Party Beneficiary................31
Section 13.11. No Assignment; Binding Effect.............31
Section 13.12. Headings..................................31
Section 13.13. Invalid Provisions........................31
Section 13.14. Counterparts..............................31
Section 13.15. Waiver of Jury Trial......................31
Section 13.16. Specific Performance......................31
Section 13.17. Termination...............................32
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LIST OF ANNEXES AND SCHEDULES
-----------------------------
ANNEXES
Annex I : List of USA Floral and its subsidiaries, setting
forth the portion of the Stock of each Company to
be purchased by each Buyer and the respective
portion of the Purchase Price to be allocated to
that portion of the Stock.
Annex II : List of Wholly Owned Companies.
Annex III : List of Companies in Liquidation.
Annex IV : List of Non-Wholly Owned Companies, showing
ownership percentages held by DIMON or Florimex
Germany.
Annex V : List setting forth the portion of the Purchase
Price to be issued by the Buyers to each Seller
respectively.
SCHEDULES
Schedule 1.01(a) : Adjustments to EBITDA
Schedule 1.01(b) : Expenses, charges or provisions associated
with the restructuring of Florimex Germany and
the Companies.
Schedule 2.04(c)(i) : ▇▇▇▇ of Sale and Assignment and
Assumption Agreement relating to Assets and
Liabilities of DIMON.
Schedule 2.04(c)(ii): ▇▇▇▇ of Sale and Assignment and
Assumption Agreement relating to Assets and
Liabilities of Florimex Germany.
Schedule 2.06 : Tax Cooperation Agreement
Schedule 5.03 : Exceptions to Sellers' "No Violation or
Conflict" - representation.
Schedule 5.06 : Exceptions to Sellers' "Capitalization of
Companies" - representation.
Schedule 5.07 : Exceptions to Sellers' "No Violation or
Conflict by Companies" - representation.
Schedule 5.08 : Interim Florimex Financial Statement.
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Schedule 5.09 : Exceptions to Sellers' Taxes representation.
Schedule 5.10 : Exceptions to Sellers' "Personal Property" -
representation.
Schedule 5.11 : List of real property, including any Liens in
respect thereof, the Sellers' or Companies'
indebtedness secured by a Lien on real
property, and setting forth any pending or
threatened condemnation proceedings which
would impair the use of the buildings,
structures or appurtenances situated on the
real property.
Schedule 5.12 : Exceptions to Sellers' "Material Contracts"
- representation.
Schedule 5.13 : List of material insurance policies of the
Companies.
Schedule 5.14(a) : List of the Material Intellectual Property,
including listing of any registrations or
filings and restrictions in ownership, and
pending or threatened proceedings, litigation
or other adverse claims in respect of the
Material Intellectual Property.
Schedule 5.14(b) : List of material license agreements.
Schedule 5.16 : Exceptions to Sellers' "No Litigation" -
representation.
Schedule 5.17 : Exceptions to Sellers' "Books and Records" -
representation.
Schedule 5.18 : Exceptions to Sellers' "No Broker" -
representation.
Schedule 5.19(a) : The Software.
Schedule 5.19(b) : Exceptions to Sellers' "Year 2000" -
representation.
Schedule 5.19(c) : Exceptions to Sellers' "Software Title" -
representation.
Schedule 5.20 : Exceptions to "Environmental" -
representation.
Schedule 5.23(a) : The Employees.
Schedule 5.23(c) : Exceptions to Sellers "Financial Obligations
to Employee" -representation.
Schedule 5.23(d) : The Key Employees.
Schedule 5.23(e) : Exceptions to Sellers' "Financial
Obligations to Key Employees" -
representation.
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Schedule 6.03 : Exceptions to Buyers' "No Violation or
Conflict" - representation.
Schedule 6.04 : Exceptions to Buyers' "No Broker"-
representation.
Schedule 6.07 : Exceptions to USA Floral's "No Litigation" -
representation.
Schedule 7.01(d) : Budgetary projections as referred to in
Section 7.01(d).
Schedule 9.01 : Details of guarantees provided by DIMON and
Florimex Germany to Companies.
Schedule 9.02 : Handling of certain employment and Employee
Benefit Plan matters.
Schedule 9.03 : Post Closing Settlement of Inter Company
Accounts
Schedule 10.04 : Sellers' Closing Certificate.
Schedule 10.07 : Buyers' list of third party consents to be
obtained.
Schedule 11.04 : Buyers' Closing Certificate.
Schedule 11.07 : Sellers' list of third party consents to be
obtained.
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STOCK AND ASSET PURCHASE AGREEMENT
THIS STOCK AND ASSET PURCHASE AGREEMENT, dated as of August 12, 1998,
is made and entered into by and between DIMON Incorporated, a corporation
organized under the Laws of Virginia, and Florimex Worldwide GmbH, a company
organized under the Laws of Germany (jointly, the "Sellers"), and U.S.A.
Floral Products, Inc., a corporation organized under the Laws of Delaware,
(jointly with its designated German subsidiary, the "Buyers"). Capitalized
terms not otherwise defined herein shall have the meanings set forth in
Article I.
WHEREAS, the Sellers own the Stock and desire to sell the Stock to the
Buyers, and the Buyers desire to purchase the Stock from the Sellers, all
upon the terms and subject to the conditions hereinafter set forth; and
WHEREAS, the Sellers own the Assets and are subject to the Liabilities
and desire to sell the Assets and transfer the Liabilities to the Buyers,
and the Buyers desire to purchase the Assets and assume the Liabilities from
the Sellers, all upon the terms and subject to the conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
-----------
Section 1.01. Definitions. When used in this Agreement, the
following terms shall have the meanings indicated below:
"Accountants" means PricewaterhouseCoopers LLP, as the Sellers'
independent public accountants, or such other firm of independent
public accountants conducting the audit of the Florimex Financial
Statement on behalf of the Sellers in accordance with applicable Laws
and GAAP.
"Affiliate" means any Person that directly, or indirectly through
one or more intermediaries, controls or is controlled by or is under
common control with the Person specified. For purposes of this
definition, control of a Person means the power, direct or indirect,
to direct or cause the direction of the management and policies of
such Person whether by Contract or otherwise and, in any event and
without limitation of the previous sentence, any Person owning more
than fifty (50%) of the voting securities of a second Person shall
be deemed to control that second Person.
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"Agreement" means this Stock Purchase Agreement, together with the
Annexes and Schedules attached hereto, as the same may be amended from
time to time in accordance with the terms hereof.
"Assets" means all of the assets listed on the schedules attached
to Schedules 2.04(c)(i) and (ii) hereto.
"Buyers" means USA Floral and the subsidiaries of USA Floral
listed on Annex I to this Agreement, each with respect to the portion
of the Stock or Assets of the Companies or Company and the portion of
the Purchase Price as set forth on Annex I.
"Closing" means the closing of the transactions contemplated by
Article II.
"Closing Date" means September 30, 1998, or such later date as the
Parties may agree in writing.
"Companies" means the Wholly Owned Companies, the Non-Wholly Owned
Companies and the Companies in Liquidation.
"Companies in Liquidation" means the companies listed on Annex III
hereto.
"Confidentiality Agreement" means the Confidentiality Agreement
dated October 21, 1997 between the Buyers and the Sellers.
"Contract" means any contract, agreement, lease, evidence of
indebtedness, mortgage, indenture, security agreement or other contract.
"Corporate Documents" mean, with respect to a company organized
under the Laws of Germany, the Deed of Incorporation and the Articles
of Association thereof and, with respect to any other entity, such
documents as are equivalent to the Deed of Incorporation and the
Articles of Association.
"DIMON" means DIMON Incorporated, a corporation organized under
the Laws of the Commonwealth of Virginia.
"EBITDA" means earnings before interest expense, interest income
from third-party financial institutions, taxes based on income,
depreciation and amortization. For purposes of this Agreement: (i)
EBITDA shall be computed in accordance with GAAP applied (to the
extent not inconsistent with GAAP) in a manner consistent with the
Interim Florimex Financial Statement; (ii) EBITDA shall be adjusted
to exclude amounts in respect to non-recurring income, but only in
respect of those items of non-recurring income set forth on Schedule
1.01(a), as reflected in the Final Florimex Financial Statement;
and (iii) EBITDA shall be adjusted to exclude (by adding back)
amounts in respect of non-recurring expense, but only in respect of
those items of non-recurring expenses set forth on Schedule 1.01(a),
as reflected in the Final Florimex Financial Statement.
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"Employee Benefit Plan" means any plan, program, policy or
arrangement to, or on behalf of, one, or more than one, current
or former employee or director or any of their dependents.
"Environmental Laws" mean any federal, state, local or other
law and any regulations promulgated thereunder, relating to the
environment.
"Estimated Net Debt" means the Sellers' estimate of the
Net Debt as shown on the Interim Florimex Financial Statement.
"Estimated Purchase Price" means US$ 90,000,000, minus the
Estimated Net Debt as set forth in Sellers' estimate thereof
delivered to Buyers as of five business days prior to Closing,
payable at the Closing and pursuant to Section 2.02 hereof, and
subject to the Post Closing Adjustment.
"Final Net Debt" means the Net Debt as reflected on the Final
Florimex Financial Statement, reduced by payments made by the
Sellers from the date hereof to the Closing Date to pay down
indebtedness incurred under the loan agreements listed on Schedule
5.03 in connection with any lenders' refusal to consent to the
assumption of such loan to the Buyers; provided that any such
reduction shall not exceed the balance disclosed for such
indebtedness on the Final Florimex Financial Statement.
"Final Purchase Price" means the amount equal to six times
the amount of EBITDA as determined on the basis of the Final
Florimex Financial Statement, up to a maximum of US$ 90,000,000,
minus the Final Net Debt.
"Final Florimex Financial Statement" means the Florimex
Financial Statement prepared in accordance with Article III hereof
and accepted by the Sellers and the Buyers as the Final Florimex
Financial Statement, or, as the case may be, as revised by the
Accountants in accordance with the final and binding opinion of an
office of Deloitte & Touche pursuant to Section 3.02 hereof, and
as certified by the Accountants.
"Florimex Canada" means Florimex Canada Inc., a company
organized under the Laws of Canada.
"Florimex Financial Statement" means the audited consolidated
financial statements (consisting of a consolidated balance sheet
as of June 30, 1998, a consolidated statement of operations and
a consolidated statement of cash flows for the twelve months ended
June 30, 1998, and notes thereto) incorporating Florimex Germany,
Florimex USA and Florimex Canada, prepared in accordance with
Section 3.01.
"Florimex Germany" means Florimex Worldwide GmbH, a company
formed under the Laws of Germany.
"Florimex USA" means Florimex USA, Inc., a company organized under the
Laws of the Commonwealth of Virginia.
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"GAAP" means generally accepted accounting principles in the United
States of America consistently applied throughout the specified period,
and in the immediately prior comparable period.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other
instrumentality of any country, state, province, county, city or other
political subdivision.
"Interim Florimex Financial Statement" means the consolidated,
unaudited interim financial statement (consisting of a consolidated
balance sheet as of June 30, 1998, and a consolidated statement of
operations for the twelve months ended June 30, 1998) incorporating
Florimex Germany, Florimex USA and Florimex Canada delivered to the
Buyers pursuant to Section 5.08 hereof.
"Knowledge of the Buyers" means the actual knowledge of any of
the following individuals: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇.
"Knowledge of the Sellers" means the actual knowledge of any
of the following individuals: ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇.
"Law or Laws" means any federal, state, local or other law
or governmental requirement of any kind, and the rules, regulations
and orders promulgated thereunder.
"Liabilities" mean the liabilities listed on the schedules to
Schedules 2.04(c)(i) and (ii) hereto.
"Liens" means any mortgage, deed of trust, pledge, assessment,
security interest, lease, lien, adverse claim, levy, charge or
other encumbrance except (a) Liens shown on the Interim Florimex
Financial Statement, (b) minor imperfections in title, if any, none
of which individually or together with other minor imperfections to
title materially impairs the value or use of the property subject
hereto, (c) Liens for current taxes not yet due, and (d) those
Liens that, individually or together, do not have any materially
adverse effect on the Companies."
"Losses" has the meaning ascribed to it in Section 12.01.
"Material Companies" mean Florimex Worldwide B.V., Florimex
Grundstucksverwal-tungsgesellschaft mbH, Kenya Flowers GmbH,
Florimex GmbH and Florimex Nuremberg GmbH.
"Material Contract" means any of the Contracts set forth
on Schedule 5.12.
"Material Intellectual Property" has the meaning ascribed
to it in Section 5.14(a).
"Net Debt" means all interest bearing debt of the Companies or Florimex
Germany, including obligations under capital leases, drawings in accordance
with mortgages and notes payable to banks or financial institutions, less cash
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and cash equivalents as computed pursuant to GAAP, further reduced by
balances due to the Companies in connection with the settlement of
inter-company accounts pursuant to Section 9.03 hereof.
"Non-Material Companies" mean all of the Companies other than the
Material Companies.
"Non-Wholly Owned Companies" means the companies set forth in
Annex IV, the capital stock of which is held by DIMON or Florimex
Germany in the percentages as indicated in Annex IV and which are
not in liquidation.
"Party" means the Sellers or the Buyers.
"Person" means any natural person, partnership, joint venture,
corporation, limited liability company, proprietorship, or other business
organization, or trust, unincorporated organization or other entity or
Governmental or Regulatory Authority.
"Personal Property" means each item of personal property of the
Companies having a net book value in excess of $50,000, including the
material machinery and equipment in the warehouses and offices used by
the Companies including those reflected in the Florimex Financial
Statement and all properties acquired by the Companies since the date of
the Florimex Financial Statement; excluding property sold or otherwise
disposed of in the ordinary course of business.
"Post Closing Adjustment" means an adjustment, up or down, to the
Estimated Purchase Price made after the Closing Date in accordance with
Section 3.04 hereof, to reflect any variation in the Final Purchase Price
below or above the Estimated Purchase Price, which adjustment, in the
event that the Final Purchase Price is less than the Estimated
Purchase Price, shall consist of a reimbursement by the Sellers of a
portion of the Estimated Purchase Price, equal to such lesser amount,
to the Buyers, or, in the event that the Final Purchase Price is
greater than the Estimated Purchase Price, shall consist of a payment
by the Buyers of an amount equal to such greater amount, to the Sellers.
"Purchase Price" means the Estimated Purchase Price as long
as the Final Purchase Price has not been established, and the Final
Purchase Price once the Final Purchase Price has been established in
accordance with Article III.
"Representatives" has the meaning ascribed to it in Section 7.04.
"Sellers" mean DIMON and Florimex Germany, each with respect to the
Stock and Assets of the Companies or Company as set forth on Annex II,
Annex III and Annex IV.
"Software" means the computer software that was developed by and
is currently owned by the Companies and is material to the business or
operation of the Companies, taken as a whole, together with all
know-how and processes used in connection therewith, as listed on
Schedule 5.19(a).
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"Stock" means the shares of the issued and outstanding common
equity of the Companies, directly or indirectly owned, of record
and beneficially, by the Sellers, in the percentages as set forth
in Annex II attached hereto.
"USA Floral" means U.S.A. Floral Products, Inc., a corporation
organized under the Laws of Delaware.
"Wholly Owned Companies" means the companies listed on Annex II
attached hereto, which are 100% directly or indirectly owned
subsidiaries of Sellers and which are not in liquidation.
"Working Days" mean days between Monday and Friday, inclusive,
each ending at 12:00 midnight prevailing time in Richmond, Virginia,
on which banks in the State of New York are permitted by law to be
open for the transaction of business.
Section 1.02. Certain Words and Phrases. Unless the context of
this Agreement otherwise requires, (a) words of any gender include each
other gender; (b) words, including terms defined in Section 1.01 hereof,
using the singular or plural number also include the plural or singular
number, respectively; (c) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this Agreement; (d) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement; and (e) the phrase "ordinary course of business" refers to
the business of the Companies when conducted in the ordinary and usual
manner consistent with the past practices of each respective Company.
All accounting terms used herein and not expressly defined herein shall
have the meanings given to them under GAAP. Any representation or
warranty contained herein as to the enforceability of a Contract or
other agreement as to a third party shall be subject to the effect of any
bankruptcy, insolvency, reorganization, moratorium or other similar law
affecting the enforcement of creditors' rights generally and to general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
ARTICLE II
PURCHASE AND SALE AND CLOSING
-----------------------------
Section 2.01. Purchase and Sale of Stock and Assets.
--------------------------------------
(a) At the Closing, and upon all of the terms and subject to
the fulfillment or waiver by the Party benefiting therefrom of all of
the conditions of this Agreement:
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(i) the Sellers shall sell, transfer, assign, convey
and deliver to the Buyers, and the Buyers shall purchase and
accept from the Sellers, all of the right, title and interest of
the Sellers in and to the Stock, free and clear of any and all
Liens, each Buyer as to the Stock of the Company as shown for
that Buyer on Annex I, and each Buyer for the amount of the
Purchase Price as set forth in Annex I and paid to each Seller
in the portions as set forth on Annex V;
(ii) The Sellers shall sell, assign, transfer, convey
and deliver to the applicable Buyer as set forth on Annex I,
free and clear of any and all Liens, and the applicable Buyer
shall purchase and accept from the Sellers at the Closing, the
Assets and all right, title, interest and obligation of the
Sellers therein; and
(iii) The Sellers shall assign, transfer and
deliver to the applicable Buyer as set forth on Annex I and
the applicable Buyer shall accept and assume from the Sellers
at the Closing, the Liabilities.
(b) Notwithstanding anything to the contrary contained
in this Agreement, the transfer of title to the Stock and the
Assets and the assumption of the Liabilities shall become
effective only upon receipt by the Sellers of the Purchase Price.
Section 2.02. Purchase Price. On the Closing, as consideration
for the Stock and Assets, the Buyers shall pay to the Sellers the
Purchase Price as follows:
The Buyers shall pay the Estimated Purchase Price by wire
transfer(s) of immediately available funds in accordance with
instructions to be provided by the Sellers to the Buyers not less
than two Working Days prior to the Closing Date.
Section 2.03. Closing. The Closing will take place at the
offices of Hunton & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ or at such other places as the Parties mutually agree, at
10:00 A.M. prevailing time in Richmond, Virginia, on the Closing Date.
Section 2.04. Sellers' Deliveries at Closing. At the Closing,
the Sellers shall deliver, or cause to be delivered, to the Buyers:
(a) stock certificates, representing the Stock held by
DIMON, duly endorsed for transfer, in a form acceptable to the Parties;
(b) the legal opinion of Sellers' counsel in the form
customarily given in a transaction similar to the one contemplated
herein;
(c) validly executed ▇▇▇▇ of Sale and Assignment and
Assumption Agreements in the forms of Schedule 2.04(c)(i) and (ii)
evidencing transfer of the Assets and Liabilities to the applicable
Buyer set forth on Annex I;
(d) a validly executed evidence of assignment or
termination of the profit and loss transfer agreements and domination
agreements between Florimex Germany on the one hand and the German
Companies on the other hand in accordance with Section 9.05;
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(e) evidence of waiver of certain rights of first
refusal held by minority shareholders of certain Non-Wholly Owned
Companies; and
(f) any other documents and certificates to be delivered
under Article X hereof.
Section 2.05. Buyers' Deliveries at Closing. At the
Closing, the Buyers shall deliver, or cause to be delivered, to the
Sellers:
(a) the Purchase Price by wire transfer as described
in Section 2.02(a);
(b) the legal opinion of Buyers' counsel in the form
customarily given in a transaction similar to the one contemplated
herein;
(c) any other documents and certificates to be
delivered under Article XI hereof.
Section 2.06. Mutual Deliveries at Closing. At the Closing,
the Buyers and Sellers shall sign, execute and deliver (a) deeds
or other appropriate documents of transfer, validly executed,
evidencing the transfer of the Stock to the Buyers and in a form
acceptable to the Parties and (b) the Tax Cooperation Agreement in
form of Schedule 2.06 hereto.
ARTICLE III
ADJUSTMENT OF PURCHASE PRICE
----------------------------
Section 3.01. Delivery of Florimex Financial Statement.
Within sixty (60) days of the Closing Date, Accountants shall,
at the expense of the Sellers, audit and deliver to the Buyer
and Buyers' accountants the Florimex Financial Statement and a
schedule thereto illustrating the computation of EBITDA under
the terms of this Agreement (the "EBITDA Schedule"), both of
which shall be prepared in accordance with GAAP and, to the extent
not inconsistent with GAAP, in a manner consistent with the
Interim Florimex Financial Statement and in accordance with
the past practices of the Companies as reflected in the financial
statements of the Companies for the immediately preceding
comparable period. At the time of delivery of the Florimex
Financial Statement, the Sellers shall cause to be made
available to the Buyers' accountants the workpapers of the
Accountants and shall allow the Buyers reasonable access to
▇▇▇▇▇▇▇ ▇▇▇▇ in connection with the Buyers' review of the
Florimex Financial Statement. For the purposes of this Agreement,
the Florimex Financial Statement shall not be deemed to have been
delivered until such time as the EBITDA Schedule and the workpapers
are delivered in accordance with this Section 3.01.
Section 3.02. Final Florimex Financial Statement and
Dispute Resolution. Unless the Buyers object, in writing to
the Sellers within twenty (20) working days after delivery of
the Florimex Financial Statement by the Sellers, to the
computation of EBITDA or the determination of the Net
8
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Debt as provided in the Florimex Financial Statement, the Florimex
Financial Statement shall constitute the Final Florimex Financial
Statement. The computation of EBITDA and the determination of Net
Debt from the Final Florimex Financial Statement shall provide the
basis for determining the Final Purchase Price. If the Buyers
have any objections to the computation of EBITDA or the
determination of Net Debt as provided in the Florimex Financial
Statement, they shall deliver a detailed statement describing
their objections to Accountants and the Sellers within twenty
(20) working days after receiving the Florimex Financial
Statement. The Buyers and the Sellers, after consultation
with the Accountants, will use their reasonable best efforts
to resolve any such objections. The Buyers and the Sellers will
select an office of Deloitte & Touche mutually agreeable to the
Parties to review the computation of EBITDA and the determination
of Net Debt. Deloitte & Touche shall review the computation of
EBITDA and the determination of Net Debt for mathematical
accuracy and confirm whether such items have been computed and
determined consistent with GAAP and, to the extent not
inconsistent with GAAP, in a manner consistent with the Florimex
Financial Statement. The Accountants shall either confirm such
computation and determination or make such adjustments thereto
as are necessary to correct any mathematical errors or conform
such computation and determination to GAAP and, to the extent
not inconsistent with GAAP, to the Florimex Financial Statement.
Such confirmation or adjustment, as the case may be, by Deloitte
& Touche and Accountants shall be completed within thirty (30)
days after the an office of Deloitte & Touche is selected by the
Parties and shall be final and binding absent manifest
mathematical error reasonably recognizable by the
Parties in respect of the computation of EBITDA and the
determination of Net Debt as provided in the Florimex
Financial Statement.
Section 3.03. Final Florimex Financial Statement Resulting
From Dispute Resolution. Accountants will revise EBITDA and
Net Debt as provided in the Florimex Financial Statement as
appropriate to reflect the resolution of the Buyers' objection
(as agreed by the Buyers, the Sellers and the Accountants or
as determined by such elected office of Deloitte & Touche
in accordance with Section 3.02 above) and deliver the revised
Florimex Financial Statement to the Buyers and the Sellers within
ten (10) days after the resolution of such objections. Such
revised Florimex Financial Statement shall be certified by
the Accountants and shall constitute the Final Florimex
Financial Statement.
Section 3.04. Post Closing Adjustment. On the basis of
EBITDA and Final Net Debt as provided in the Final Florimex
Financial Statement, the Final Purchase Price shall be computed.
In the event such computation shows that the Final Purchase Price
of the Companies is greater or lesser than the Estimated Purchase
Price, a Post Closing Adjustment will be made to the Estimated
Purchase Price. Any payments that are due to the Sellers or the
Buyers respectively, shall be made within ten (10) days from
delivery of the Final Florimex Financial Statement.
ARTICLE IV
[intentionally omitted]
9
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
The Sellers, jointly and severally, hereby represent and
warrant to the Buyers that the following is true and correct at
the date hereof, except that none of the Sections of this Article
shall apply to the Companies in Liquidation, except for
Section 5.21:
Section 5.01. Corporate Existence of Sellers. Sellers
are companies duly organized, validly existing and in good
standing under the Laws of their respective jurisdictions and,
except where failure to be so qualified would not have a material
adverse effect on the business or operations of the Companies,
taken as a whole, are qualified to do business under the Laws of
each jurisdiction of operation.
Section 5.02. Authorization; Enforceability. The Sellers
each have full corporate power and authority to enter into this
Agreement, to perform their respective obligations hereunder and
to consummate the transactions contemplated hereby. The
execution and delivery by the Sellers of this Agreement, and the
performance by the Sellers of their respective obligations hereunder,
have been duly and validly authorized by the Boards of Directors
or the equivalent thereof in the relevant jurisdiction or the sole
shareholder of the Sellers, no other corporate action on the part
of the Sellers or their respective stockholders being necessary.
This Agreement is, and the other documents and instruments
required hereby will be, when executed and delivered by the
parties hereto, the valid and binding obligations of the Sellers,
enforceable against the Sellers in accordance with their respective
terms.
Section 5.03. No Violation or Conflict by the Sellers. The
execution, delivery and performance of this Agreement by the
Sellers do not and will not (a) conflict with or result in a
violation of the Corporate Documents of the Sellers; (b) conflict
with or violate any Law, judgment, order or decree binding on the
Sellers or any material Contract to which any Seller is a party or
by which it is bound and which relates to the business of the
Companies, the breach of which, individually or in the aggregate
with other such breaches, could have a material adverse effect on
any Seller's ability to consummate any of the transactions
contemplated hereby, and (c) except as set forth on Schedule 5.03,
require the consent or approval of any other Person or give any
Person to any such material Contract any right of termination,
cancellation, acceleration or modification thereunder. Except
as set forth on Schedule 5.03, no notice to, filing or registration
with, or authorization, consent or approval of, any Governmental
or Regulatory Authority is necessary or is required to be made or
obtained by any Seller in connection with the execution and delivery
of this Agreement by the Sellers or the consummation by the Sellers
of the transactions contemplated hereby.
Section 5.04. Title to Stock. The Sellers directly or
indirectly own, beneficially and of record, the Stock, free and
clear of all Liens. Upon delivery of the Stock to the Buyers at
the Closing and upon the Buyers' payment of the Purchase Price
therefor, good and valid title to the Stock, free and clear of
all Liens, will pass to the Buyers.
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Section 5.05. Organization of Companies. Each of the
Companies (i) is duly organized, validly existing and in good
standing under the Laws of their respective jurisdictions of
organization; (ii) has all requisite power to own its property
and to carry on its business as now being conducted; and (iii)
is permitted or qualified to do business in the jurisdiction in
which it operates, except where failure to be permitted or qualified
would not have a material adverse effect on the business or
operations of the Companies, taken as a whole.
Section 5.06. Capitalization of Companies. The Stock has
been duly and validly issued and is fully paid and non-assessable.
It constitutes all of the issued and outstanding capital stock of
the Companies, except with respect to the Non-Wholly Owned
Companies. Except as disclosed on Schedule 5.06, there are no
options, warrants or other rights to subscribe for or purchase
any capital stock of the Companies or securities convertible into
or exchangeable for, or that otherwise confer on the holder any
right to acquire, any capital stock of the Companies, nor are
there any Contracts, commitments, agreements, understandings,
obligations, arrangements or restrictions, contingent or
otherwise, to which the Companies are party or by which the
Companies are bound relating to any shares of the capital stock
or other equity securities of the Companies, whether or not
outstanding. As of the Closing Date, each preference or other
right to acquire equity of any Company shall have been validly
and irrevocably waived in writing.
Section 5.07. No Violation or Conflict by Companies. The
execution, delivery and performance of this Agreement by the
Sellers do not and will not (a) conflict with or result in a
violation of the Corporate Documents of any Company; (b) conflict
with or violate any Law, judgment, order or decree binding on any
Company, or any Material Contract to which any Company is a party
or by which it is bound, the breach of which would have a material
adverse effect on the business, financial condition or results of
operation of any Company following the Closing Date or (c) except
as set forth in Schedule 5.07, require the consent or approval of
any other Person or give any other party to any Material Contract
to which any Company is a party any right of termination,
cancellation, acceleration or modification thereunder. Except as
set forth in Schedule 5.07, no notice to, filing or registration
with, or authorization, consent or approval of, any Governmental
or Regulatory Authority is necessary or is required to be made or
obtained by any Company in connection with the execution and
delivery of this Agreement by the Sellers or the consummation by
the Sellers of the transactions contemplated hereby.
Section 5.08. Interim Florimex Financial Statement/No
Material Changes. The Sellers have delivered to the Buyers the
consolidated, unaudited interim financial statement incorporating
Florimex Germany, Florimex USA and Florimex Canada, as a whole,
and the related statement of income for the period July 1, 1997
up to and including June 30, 1998, which is attached hereto as
Schedule 5.08 (the "Interim Florimex Financial Statement"). The
Interim Florimex Financial Statement fairly presents, in all
material respects, the financial position and results of
operations of Florimex Germany, Florimex USA and Florimex Canada
as of the date thereof and for the period then ended. The Interim
Florimex Financial Statement, has been prepared in accordance
with GAAP (excluding footnote disclosure). To the Knowledge of
the Sellers, there has been no material adverse change in the
condition, financial or otherwise, or in the results of operations,
of Florimex Germany, Florimex USA or Florimex Canada since the
date of the Florimex Financial Statement, whether as a result of
any legislative or regulatory change, revocation of any license
11
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or rights to do business, fire, explosion, accident, casualty,
labor trouble, flood, drought, riot, storm, condemnation or other
public force or act of God or otherwise.
Section 5.09. Taxes.
------
(a) Each Company and, as applicable, a Seller on behalf
of a Company, has filed or caused to be filed, within the times
prescribed by law, all federal, state, local and foreign tax returns
and tax reports, which it was required to have filed prior to the date
of this Agreement and the non-filing of which could reasonably be
deemed to be materially adverse to the Companies in the aggregate.
(b) Each Company and, as applicable, a Seller on behalf
of a Company, has paid, or there is an appropriate accrual in the
Interim Florimex Financial Statement with respect to the Companies
in the aggregate for, all income, profits, sales, real estate and
excise taxes (including additions to tax, penalties and interest)
which have become due and payable before the date hereof under any
of its or their tax returns or reports or pursuant to any assessment
with respect thereto.
(c) The amount of the Companies' aggregate liability for
unpaid taxes as of the date hereof and as of the Closing Date does
not and will not exceed the accrual therefor in the Interim Florimex
Financial Statement.
(d) Except as set forth on Schedule 5.09 hereto, no
taxing authority has notified any of the Material Companies of
any examination of any return or is currently examining any tax
return of any of the Material Companies, nor are there any
outstanding agreements or waivers extending the statutory period
of limitation applicable to any tax return of any of the Material
Companies. To the Knowledge of the Sellers and except as set
forth in Schedule 5.09 hereto, no taxing authority is currently
examining any tax return of any of the Non-Material Companies,
nor are there any outstanding agreements or waivers extending the
statutory period of limitation applicable to any tax return of
any of the Non-Material Companies.
(e) Except as set forth on Schedule 5.09 hereto, to
the Knowledge of the Sellers, no such notice or examination by
any taxing authority with respect to any of the Companies is
threatened. Except as disclosed on Schedule 5.09 and except
as provided for in the Interim Florimex Financial Statement,
no taxes with respect to the Material Companies have become
due and payable from the period of July 1, 1998 to the date
of this Agreement.
(f) No Company is a "real property holding
company" under Section 897(c)(2) of the U.S. Internal Revenue
Code of 1986, as amended.
Section 5.10. Personal Property. Except as set forth
in Schedule 5.10, each of the Companies has good, valid and
marketable title to its Personal Property. Except as set
forth in Schedule 5.10, the Personal Property is not subject
to any Lien. To the Knowledge of the Sellers, the Personal
Property is in good operating condition and repair, subject
to normal wear and tear, and is suitable for the purposes
for which it is presently used.
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Section 5.11. Real Property. Schedule 5.11 constitutes
an accurate and complete list of all real property owned, in
whole or in part, by the Companies and includes the name of
the record title holder thereof and a list of all of the
Sellers' or Companies' indebtedness secured by a Lien on
the real property. Except as set forth in Schedule 5.11,
each Company has good and marketable title to all the real
property specified as owned by it in Schedule 5.11, free and
clear of any Lien. To the Knowledge of the Sellers, all of
the material buildings, structures and appurtenances situated
on the land listed in Schedule 5.11 are in good operating condition,
taking into consideration normal wear and tear, and in a state
of good maintenance and repair, are adequate and suitable for
the purposes for which they are presently being used and, with
respect to each, the respective Company has rights of ingress
and egress for operation of its business in the ordinary course
as conducted as of the date hereof. None of such buildings,
structures or appurtenances, nor the operation or maintenance
thereof, which are owned or operated by the Material Companies,
and to the Knowledge of the Sellers, which are owned or operated
by the Non-Material Companies, violates any restrictive covenant
or any provision of any federal, state or local law, ordinance,
rule or regulation, or materially encroaches on any real
property owned by others, except such violations or encroachments
as do not individually or in the aggregate have a material
adverse effect upon the Companies' respective business or their
use or operation of such properties. Except as set forth in
Schedule 5.11, no condemnation proceeding is pending or, to the
Knowledge of Sellers, threatened which would preclude or impair
the use of any such real property by the Companies for the
purposes for which it is currently used.
Section 5.12. Material Contracts. Except as set forth in
Schedule 5.12, none of the Companies is bound by (a) any
material agreement, indenture or other instrument which
contains restrictions with respect to payment of dividends or
any other distribution in respect of capital stock, (b) any loan
or advance to the making of any such loan, in excess of US
$100,000, (c) any guarantee, other than in the ordinary course
of business, in respect of loans in excess of US$ 100,000 of any
other legal person other than another Company, (d) any service,
consulting or any other similar type contract requiring payment
exceeding US$ 100,000 per year, (e) any agreement entered into
outside the ordinary course of business which materially limits
the freedom of any of the Companies to engage in their respective
line of business or to compete with any other Person, (f) any
agreement not entered into in the ordinary course of business
which requires payments exceeding US$ 100,000 and has a
termination notice period of 90 days or more or (g) any agreement
which requires payments exceeding more than US$ 100,000 per year
and is expected to have a material adverse impact on the business
or operations of any of the Companies. Each agreement set
forth in Schedule 5.12 is in full force and effect and none of
the Companies violated any of the terms or conditions of such
agreement in any material respect and, to the Knowledge of
Sellers, all of the covenants that are required to be performed
by any other party thereto as of the date hereof have been performed.
Section 5.13. Insurance. Set forth in Schedule 5.13 hereof
is a complete list of material insurance policies which the
Companies have concluded and maintained in full force and effect.
All premiums on these insurance policies, which have become due
and payable on or before the date hereof, have been paid or
accrued for. No notifications have been received with regard
to the non-renewal of any policy.
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Section 5.14. Intellectual Property.
---------------------
(a) Schedule 5.14(a) contains an accurate and complete
list of all material patents, trade names, trademarks and service
marks, that are currently owned and used by the Companies
(collectively, the "Material Intellectual Property"). Unless
otherwise indicated in Schedule 5.14(a), each item constituting part
of the Material Intellectual Property has been duly registered
with, filed in or issued by, as the case may be, the United States
Patent and Trademark office or such other government agencies,
domestic or foreign as set forth on Schedule 5.14(a). Except as
stated in Schedule 5.14(a), there are no pending (or, to the
Knowledge of the Sellers, threatened) proceedings or litigation
or other adverse claims with respect to the Material Intellectual
Property, an adverse result in which would have a material adverse
effect on the business or operations of the Companies, taken as a
whole.
(b) Except as disclosed on Schedule 5.19(c), the Companies
have been granted licenses in respect of all items of intellectual
property not owned by any Company pursuant to the license agreements
listed in Schedule 5.14(b) hereto, which are valid and enforceable in
accordance with the terms and conditions hereof.
Section 5.15. Employment Relations.
--------------------
(a) Each Company is in compliance in all material
respects with all federal, state or other applicable labor laws,
domestic or foreign, and with the terms and conditions of employment
and wages and hours, and has not and is not engaged in any unlawful
labor practice.
(b) No unlawful labor practice complaint against any
Company is pending before the National Labor Relations Board or any
corresponding or similar governmental agency or entity in any foreign
jurisdiction.
(c) There is no labor strike or stoppage actually pending
or, to the Knowledge of Sellers, threatened against any Company.
(d) No grievance on the part of any of the Companies'
employees that might have a material adverse effect upon any of the
Companies or the conduct of their respective businesses has been
filed, and no arbitration proceeding arising out of or under any
collective bargaining agreement is pending, nor to the Knowledge of
the Sellers has any claim therefor been asserted.
(e) Except for negotiations regarding a proposed collective
bargaining agreement that would be applicable to employees in the
Dutch flower business, no collective bargaining agreement is currently
being negotiated by any of the Companies and none of the Companies has
experienced any material strikes during the last three years. There
will not be any material violation of any employment agreements with
employees of the Material Companies or, to the Knowledge of the Sellers,
employees of any Non-Material Company, as a result of an announcement
of the transactions contemplated by this Agreement.
Section 5.16. No Litigation. Except as set forth on
Schedule 5.16 hereto, there is no material litigation or governmental
investigation pending or, to the Knowledge of the Sellers, proposed
14
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or threatened against any Company. With respect to each item of
litigation set forth on Schedule 5.16, the Companies have made adequate
provision in the Interim Florimex Financial Statement and accrued all
contingent liabilities therefor in conformance with F.A.S. 5 and
with GAAP generally and the aggregate accruals therefor reflected
on Schedule 5.16 are adequate.
Section 5.17. Books and Records. The books of account and
other records of any Company related to the operation of that
Company are in all material respects complete and correct and have
been maintained in accordance with good business practices. To
the Knowledge of the Sellers and except as disclosed on
Schedule 5.17, the Material Companies and the Non-Material
Companies do not have any of their respective material records,
systems, controls, data or information recorded, stored, maintained
or operated by any means (including any electronic, mechanical or
photographic process, whether computerized or not) which is not
under the respective ownership and control of the Material
Companies, or except which may be under the ownership or control
of third parties in the ordinary course of business, the
Non-Material Companies.
Section 5.18. No Broker. Except as set forth on Schedule 5.18,
neither the Sellers nor the Companies, have had any dealings,
negotiations or communications with any broker or other intermediary
in connection with the transactions contemplated by this Agreement,
and neither is committed to any liability for any brokers' or
finders' fees or any similar fees in connection with the transactions
contemplated herein.
Section 5.19. Software.
--------
(a) Identification and Performance. The computer software
that was developed by and is currently owned by the Companies and is
material to the business or operation of the Companies, taken as a
whole, together with all know-how and processes used in connection
therewith (i) is listed on Schedule 5.19(a) hereto (the "Software"),
and (ii) reasonably functions as intended by the Sellers. The
Sellers are not aware of any material issues with respect to the
two material software programs, which are indicated on Schedule 5.19(b)
as currently being implemented by the Companies, that would cause such
programs to function, once their implementation is complete, in a
manner materially different from the function currently intended
by Sellers.
(b) Except as disclosed in Schedule 5.19(b), Sellers
believe that the change in the century as of January 1, 2000 will
not cause the Software to function in a manner materially different
to its current function.
(c) Title. Except as otherwise expressly disclosed in
Schedule 5.19(c), all right, title and interest in and to the
Software are owned by the Companies, free and clear of all Liens,
and to the Knowledge of the Sellers, the Companies' use of the
Software and the Third-Party Software does not infringe on the rights
of any third parties, excluding licenses to customers. Except as
disclosed in on Schedule 5.19(c) the Companies have proper licenses
for software that (i) is not currently owned by the Companies,
(ii) may have been developed by third parties, and (iii) is currently
deemed to be material to the business of the Companies, taken as a
whole, and the Companies are in compliance with all such licenses.
15
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Section 5.20. Environmental Compliance, Cleanup, Permits and
Licenses. Except as indicated on Schedule 5.20 hereto, the
Companies are in compliance with theEnvironmental Laws with respect
to their respective properties, facilities and businesses except
where such noncompliance would not have a material adverse effect
on the business or operations of the Companies, taken as a whole.
To the Knowledge of the Sellers, except as disclosed on
Schedule 5.20 hereto, the Companies have not received any notice
of noncompliance with the Environmental Laws, and have not caused
or permitted their businesses or the real estate owned by them or
under their control, on or after the date the Companies acquired
such ownership or control, to be used to generate, manufacture,
refine, transfer, produce or process hazardous substances, or
other toxic substances or solid waste, except in compliance with
the Environmental Laws. To the Knowledge of the Sellers, the
Companies have not received notice that the Companies are
potentially responsible for the environmental cleanup of any
site under any applicable Environmental Law or at the request
of any private citizen or business entity, except as disclosed
on Schedule 5.20 hereto. With respect to items of environmental
cleanup identified on Schedule 5.20, the Companies' aggregate
liability with respect to such items shall not materially exceed
the aggregate estimated cost therefor that is disclosed for such
items on Schedule 5.20.
Section 5.21. Companies in Liquidation. To the Knowledge of
the Sellers, there is no material claim pending or threatened
against the Companies in Liquidation.
Section 5.22. Assets; Condition. The personal property
of Florimex Germany constituting a portion of the Assets are
in good and usable condition taking into account regular
maintenance and usual wear and tear and have been regularly
maintained.
Section 5.23. Employee Matters.
----------------
(a) Schedule 5.23(a) contains a list, complete and
accurate in all material respects, of all non-seasonal and
non-temporary employees currently employed by each Company
(the "Employees") as of the date hereof, indicating name,
position, age, seniority and monthly salary.
(b) Other than the Employees, at Closing the Company
will not employ any non-seasonal and non-temporary individuals,
with the exception of employees hired after the date hereof
with the Buyers' prior consent.
(c) Except as disclosed on Schedule 5.23(c), the
Companies have no outstanding financial obligations to any
Employees or former non-seasonal or non-temporary employees for
any periods preceding the Closing Date (other than as accounted
for in the Interim Florimex Financial Statement.
(d) Schedule 5.23(d) contains a complete and accurate
list of all senior management personnel of the Companies
("Key Employees"), indicating in each case name, remuneration
(broken down to base salary and bonus) for the Companies'
fiscal year ended June 30, 1998 and date of the current
employment agreement, if any, for each Key Employee. The basis
for calculating the bonus, if applicable, is indicated with
16
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respect to each Key Employee. Concurrently with the execution
of this Agreement, the Sellers will provide to the Buyers, as
part of their due diligence, true, complete and correct copies
of all current employment agreements with the Key Employees.
(e) Except as disclosed on Schedule 5.23(e), the
Companies have no outstanding financial obligations to any Key
Employees or former senior management (other than as accounted
for in the Interim Florimex Financial Statement and accrued
vacation or salary for the current month, should the Closing
Date not occur on the first day of a month) for any periods
preceding the Closing Date (other than accrued vacation or
salary for the current month, should the Closing Date not occur
on the first day of a month). All bonus payments owed to any
of the Key Employees for the fiscal year ended June 30, 1998
have been made, and no bonus obligations for any periods
preceding July 1, 1998 are outstanding other than as accounted
for in the Interim Florimex Financial Statement.
(f) The Companies have taken certain actions in
furtherance of the restructuring of the workforce of the
Companies as outlined in Schedule 1.01(b) hereto, which actions
have been accounted for in the Interim Florimex Financial
Statement. Prior to Closing, the Companies will not take any
further action in connection with such restructuring of the
workforce that is not reflected on the Interim Florimex Financial
Statement or listed on Schedule 1.01(b) without prior consent of
the Buyers.
Section 5.24. No Other Representations. Notwithstanding
anything to the contrary contained in this Agreement, it is the
explicit intent of each Party that the Sellers are making no
representation or warranty whatsoever, express or implied, except
those representations and warranties contained in this Article V.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
The Buyers, jointly and severally, hereby represent and warrant
to the Sellers as follows:
Section 6.01. Corporate Existence of Buyers. The Buyers are
corporations duly organized, validly existing and in good standing
under the Laws of their respective jurisdictions. To the Knowledge
of the Buyers, each of the Buyers has all requisite power to own
its property and to carry on its business as now being conducted.
To the Knowledge of the Buyers, all Buyers are permitted to do
business in the respective jurisdictions in which they operate.
Section 6.02. Authorization; Enforceability. The Buyers have
full corporate power and authority to enter into this Agreement, to
perform their obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery by
17
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the Buyers of this Agreement, and the performance by the Buyers
of their obligations hereunder, have been duly and validly
authorized by the Boards of Directors (or the equivalent thereof
in the relevant jurisdictions of the Buyers), no other action on
the part of the Buyers or their respective stockholders being
necessary. This Agreement is, and the other documents and
instruments required hereby will be, when executed and delivered by
the parties hereto, the valid and binding obligations of the Buyers,
enforceable against the Buyers in accordance with their respective
terms.
Section 6.03. No Violation or Conflict. The execution,
delivery and performance of this Agreement by the Buyers do not
and will not (a) conflict with or result in a violation of the
Corporate Documents of any Buyer; (b) conflict with or violate any
Law, judgment, order or decree binding on any Buyer or any Contract
to which any Buyer is a party or by which it is bound, the breach
of which, individually or in the aggregate, could have a material
adverse effect on any Buyer's ability to consummate the transactions
contemplated hereby; and (c) except as set forth on Schedule 6.03,
require the consent or approval of any other Person or give any
Person to any Contract any right of termination, cancellation,
acceleration or modification thereunder. Except as set forth on
Schedule 6.03, no notice to, filing or registration with, or
authorization, consent or approval of, any Governmental or
Regulatory Authority is necessary or is required to be made or
obtained by any Buyer in connection with the execution and
delivery of this Agreement by the Buyers or the
consummation by the Buyers of the transactions contemplated
hereby.
Section 6.04. No Broker. Except as set forth on
Schedule 6.04, no Buyer has had any dealings, negotiations or
communications with any broker or other intermediary in
connection with the transactions contemplated by this
Agreement and is not committed to any liability for any
brokers' or finders' fees or any similar fees in connection with
the transactions contemplated herein.
Section 6.05. Purchase for Investment. The Buyers
acknowledge that the offer and sale of the Stock contemplated
herein have not been, and will not be, registered under the
Securities Act of 1933, as amended, or under any state securities
laws. Each Buyer represents that it is purchasing the Stock
for investment and not with a view to the distribution thereof,
except in accordance with applicable securities laws.
Section 6.06. Investigation by Buyers. Each Buyer has
conducted its own independent review and analysis of the
businesses, assets, condition, operations and prospects of
the Companies and acknowledges that it has been provided
reasonably sufficient information in respect of the properties,
premises and records of the Companies for this purpose and
has been afforded a reasonable opportunity, satisfactory in
light of the Parties' intentions with respect to the timing
of the signing of this Agreement and the Closing, to discuss
the foregoing with the management of Sellers and the Companies.
In entering into this Agreement, each Buyer has relied solely
upon its own investigation and analysis and the
representations and warranties contained herein, and each Buyer:
(a) has conducted, with the aid of counsel, an
independent analysis of all legal effect and consequence of
this Agreement and the consummation of transactions
contemplated herein under the Laws, including but not limited
to with respect to all matters of corporate, securities, tax,
intellectual property, employment, employee benefit and
labor law;
(b) except as otherwise set forth in this
Agreement, acknowledges that none of the Sellers, any Company,
or any of their respective directors, officers, employees,
18
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Affiliates, agents or representatives makes any representation
or warranty, either express or implied, as to the accuracy of
completeness of any of the information provided or made available
to any Buyer or its agents or representatives prior to the
execution of this Agreement; and
(c) understands that the Stock has not been, and will
not be, registered under the Securities Act of 1933, as amended;
and
(d) agrees, to the fullest extent permitted by law,
that none of the Sellers, any Company, or any of their respective
directors, officers, employees, Affiliates, agents or representatives
shall have any liability or responsibility whatsoever to any Buyer
on any basis (including, without limitation, in contract or tort,
under federal or state securities laws or otherwise) based upon
any information provided or made available, or statements made, to
the Buyers prior to the execution of this Agreement, except that
the foregoing limitations shall not apply (i) to the extent the
Sellers make the specific representations and warranties set
forth in this Agreement, but always subject to the limitations
and restrictions contained in this Agreement or (ii) in the
event of fraud.
Section 6.07. No Litigation. Except as set forth on
Schedule 6.07 hereto, there is no material litigation or governmental
investigation pending or proposed or threatened against USA Floral.
Section 6.08. International Operations. While subsidiaries
of the Buyers sell products to customers outside North America
(including an immaterial amount of sales to customers in Europe),
neither the Buyers nor their subsidiaries currently maintain any office
or installation in Europe.
Section 6.09. No Other Representations.
------------------------
Notwithstanding anything to the contrary contained in
this Agreement, it is the explicit intent of each Party that
the Buyers are making no representation or warranty
whatsoever, express or implied, except those representations and
warranties contained in this Article VI.
ARTICLE VII
COVENANTS OF SELLERS
--------------------
The Sellers, jointly and severally, covenant and agree with
the Buyers that, at all times from and after the date hereof until
the Closing Date, the Sellers will comply, and, to the extent applicable,
will cause each Company to comply, with the following covenants and
provisions, except to the extent the Buyers may otherwise consent
in writing and excluding the Companies in Liquidation.
Section 7.01. Conduct of Business of the Companies. Except as
otherwise expressly provided in this Agreement, during the period
from the date of this Agreement until the Closing Date, the Sellers
19
-127-
will cause the Companies to conduct their respective operations
according to their ordinary course of business and consistent with
past practice. Without limiting the generality of the foregoing,
and except as otherwise expressly provided in this Agreement, prior
to the Closing Date, the Sellers will not allow any Company to:
(a) amend its Corporate Documents in any material respect;
(b) authorize for issuance or issue, sell or deliver
(whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any
stock of any class or any other securities;
(c) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in
respect of its capital stock, or redeem or otherwise acquire any of
its securities;
(d) other than in the ordinary course of business, (i)
incur or assume any material long-term debt not currently outstanding,
(ii) assume, guarantee, endorse or otherwise become liable or
responsible for the obligations of any Person, other than another
Company, (iii) make any material loans, advances or capital
contributions to, or investments in, any other Person, (iv) enter
into any material contract or agreement other than in connection with
the transactions contemplated by this Agreement or (v) authorize any
capital expenditures other than capital expenditures up to 100% of
aggregate budgetary projections as set forth in Schedule 7.01(d);
(e) adopt or amend (except as may be required by Laws
or as provided in Schedule 9.02 of this Agreement) any material
bonus, profit sharing, compensation, severance, termination, stock
option, stock appreciation right, restricted stock, pension,
retirement, deferred compensation, employment, severance or other
material employee benefit agreements, trusts, plans, funds or other
material arrangements for the benefit or welfare of any present or
former director, officer or employee or the dependent or
beneficiary of any present or former director, officer or employee,
or (except for normal increases in the ordinary course of business
that are consistent with past practices and that, in the aggregate,
do not result in a material increase in benefits or compensation
expense to any Company) increase in any material respects the
compensation or fringe benefits of any director, officer or
employee or pay any benefit not required by any existing plan and
arrangement (including, without limitation, the granting of stock
options, stock appreciation rights, shares of restricted stock or
performance units) or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing, except that
the Companies may (i) enter into any agreement with ▇▇▇▇▇▇▇▇ ▇▇▇▇
or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or (ii) amend any current agreements with
▇▇▇▇▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, if the Buyers have consented
hereto;
(f) acquire, sell, lease, pledge, hypothecate, encumber,
mortgage or dispose of any material assets;
(g) pay fees incurred by the Sellers to Hunton & ▇▇▇▇▇▇▇▇
in connection with the transaction contemplated by this Agreement,
20
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or pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued or unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction of liabilities
reflected or reserved against in the Interim Florimex Financial
Statement, or incurred in the ordinary course of business; or
(h) cancel any material insurance policies set forth
on Schedule 5.13;
(i) materially and adversely amend any of the
agreements as listed on Schedule 5.12, involving an amount in
excess of US$ 100,000 per year, without prior notification thereof
to the Buyers.
(j) agree in writing or otherwise to take any of the
foregoing actions.
Section 7.02. Compliance with Law. The Sellers shall
cause each Company to comply in all material respects with all
applicable Laws.
Section 7.03. Regulatory and Other Approvals. The Sellers
will (a) use reasonable best efforts and proceed diligently and
in good faith as promptly as practicable to obtain all consents,
approvals or actions of, to make all filings with and to give
all notices to Governmental or Regulatory Authorities or any
other Person required of the Sellers, or any Company to
consummate the transactions contemplated hereby, including
without limitation those described in Schedule 5.03, (b) provide
such other information and communications to such Governmental or
Regulatory Authorities or other Persons as such Governmental or
Regulatory Authorities or other Persons may reasonably request
and (c) use reasonable best efforts to cooperate with the Buyers
in obtaining all consents, approvals or actions of, making all
filings with and giving all notices to Governmental or Regulatory
Authorities or other Persons required of Buyers to consummate the
transactions contemplated hereby. The Sellers will provide
prompt notification to the Buyers when any such consent,
approval, action, filing or notice referred to in clause (a) above
is obtained, taken, made or given, or when notice or indication of
any delay or denial is first obtained, as applicable, and will
advise Buyers of any communications (and, unless precluded by
Law, provide copies of any such communications that are in writing)
with any Governmental or Regulatory Authority or other Person
regarding any of the transactions contemplated by this Agreement.
Section 7.04. Investigation by Buyers. The Sellers will
(a) provide each Buyer, its officers, employees, counsel,
accountants, financial advisors, consultants and other representatives
(together, "Representatives") with reasonable access, upon not less
than 24 hours' prior notice and during normal business hours, to
all officers, employees, agents and accountants of the Companies, and
their respective assets, properties, books and records as Buyers or
any such Representative may reasonably request, but only to the
extent that such access does not unreasonably interfere with the
business and operations of the Companies, and (b) furnish each
Buyer and such other Persons with all such information and data
concerning the business and operations of the Companies, as such
Buyer reasonably may request in connection with such investigation,
but only to the extent that furnishing any such information or data
would not violate any Law, order, Contract or license applicable to
any Company, or by which any Company's respective assets and
properties is bound.
21
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Section 7.05. Resignations. The Sellers shall cause any of
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ or any other person who is not an employee
of a Company and is serving as the representative of DIMON on the
board of directors of each Company to execute resignation
letters dated as of the Closing Date and such directors shall be
relieved by the Sellers and the Companies of all liabilities and
indemnified by the Sellers and the Companies for any claims
arising out of or resulting from their service as directors.
ARTICLE VIII
COVENANTS OF BUYERS
-------------------
The Buyers, jointly and severally, covenant and agree with
Sellers that, at all times from and after the date hereof until
the Closing Date, the Buyers will comply with all covenants and
provisions of this Article VIII applicable to the Buyers, except
to the extent the Sellers may otherwise consent in writing.
Section 8.01. Compliance with Law. The Buyers shall comply
in all material respects with all applicable Laws.
Section 8.02. Regulatory and Other Approvals. The Buyers
will (a) use reasonable best efforts and proceed diligently and
in good faith as promptly as practicable to obtain all consents,
approvals or actions of, to make all filings with and to give
all notices to Governmental or Regulatory Authorities or any
other Person required of the Buyers to consummate the
transactions contemplated hereby, including without limitation
those described in Schedule 6.03, (b) provide such other
information and communications to such Governmental or Regulatory
Authorities or other Persons as such Governmental or Regulatory
Authorities or other Persons may reasonably request and (c) use
reasonable best efforts to cooperate with Sellers in obtaining all
consents, approvals or actions of, making all filings with and
giving all notices to Governmental or Regulatory Authorities or
other Persons required of Sellers to consummate the transactions
contemplated hereby. The Buyers will provide prompt notification
to Sellers when any such consent, approval, action, filing or
notice referred to in clause (a) above is obtained, taken,
made or given, or when notice or indication of any delay or
denial is first obtained, as applicable, and will advise Sellers
of any communications (and, unless precluded by Law, provide
copies of any such communications that are in writing) with any
Governmental or Regulatory Authority or other Person regarding
any of the transactions contemplated by this Agreement.
ARTICLE IX
OTHER COVENANTS AND AGREEMENTS OF BUYERS AND SELLERS
----------------------------------------------------
Section 9.01. Release of Guarantees. Each Buyer
acknowledges that DIMON and Florimex Germany have provided
guarantees with respect to certain indebtedness of the
Companies, the details of which are described on Schedule 9.01
attached hereto. Prior to or at the Closing, such guarantees
22
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shall be terminated and released. Each Buyer shall take all
commercially reasonable actions to assist DIMON and Florimex
Germany in obtaining the release of such guarantees,
including but not limited to substituting the guarantees of
the Buyers for those guarantees of DIMON or Florimex Germany
that are listed on Schedule 9.01 in the respective amounts
of such guarantees not to exceed those indicated on
Schedule 9.01. Each Buyer shall indemnify and hold DIMON
and Florimex Germany harmless against any payment that
DIMON or Florimex Germany is required to make from and
after the Closing in respect of such guarantees in the
respective amounts of such guarantees not to exceed those
indicated on such Schedule 9.01.
Section 9.02. Employment, Employee Benefit Plan and
Other Matters. Sellers and Buyers acknowledge that certain
employees of the Companies receive benefits under Employee
Benefit Plans of DIMON as disclosed on Schedule 9.02 hereto.
The Sellers and Buyers will agree as to the terms and timing
of the transfer to the Buyers of the obligation to provide
such benefits. Concurrently with the execution of this
Agreement, the Sellers will provide to the Buyers true,
complete and correct copies of all Employee Benefit Plans
of DIMON under which benefits are provided to the individuals
identified on Schedule 9.02. The Parties acknowledge that
the relocation of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to Washington, D.C.,
including the reimbursement of his expenses, will be arranged
by DIMON in accordance with DIMON's existing relocation policy.
Section 9.03. Settlement of Inter-Company Accounts. Other
than as set forth on Schedule 9.03, which shall be updated as
of the Closing Date (provided that no such post-execution
update shall reflect any material adverse effect upon the
financial position of the Companies taken as a whole), all
of the inter-company accounts between DIMON, on the one hand,
and Florimex Germany or any of the Companies, on the other hand,
will be finally settled and extinguished on or before the
Closing Date, which settlement shall not have had a material
adverse effect upon the financial position of the Companies
taken as a whole. The items listed on Schedule 9.03 shall be
settled after the Closing in a manner consistent with past
practices of DIMON, Florimex Germany and the Companies,
provided that the Buyers shall not be required to make any
such post-closing settlement of the inter-company accounts
to the extent that such settlement could reasonably be expected
to have a material adverse effect on the financial position of
the Companies taken as a whole.
Section 9.04. Fulfillment of Conditions. The Sellers
and the Buyers shall use their reasonable best efforts and
proceed diligently and in good faith, prior to the Closing
Date, (i) to satisfy each condition to the obligations of
the Sellers or Buyers, as the case may be, contained in
this Agreement, and (ii) to effect the transfer of the Stock
as contemplated in this Agreement, and will not take or fail
to take any action that would reasonably be expected to
result in the nonfulfillment of such condition prior to
the Closing Date.
Section 9.05. Profit and Loss Allocation. The Sellers
and the Buyers agree that the profit and loss of Florimex
Germany and its subsidiaries that are participants in the
Organschaft and taxes with respect thereto for the fiscal
year ended June 30, 1998, and for the interim period from
July 1, 1998 until and including the Closing Date shall be
allocated to and shall inure to the benefit of the Sellers,
and that the profit and loss of Florimex Germany and its
subsidiaries that are participants in the Organschaft and
taxes with respect thereto after the Closing Date shall be
23
-131-
allocated to and inure to the benefit of the Buyers. The
Sellers covenant and agree that, at or before Closing, they
will, in a manner reasonably acceptable to Buyers, assign
or terminate all existing profit and loss transfer
agreements and/or domination agreements and all agreements
of like import, with respect to Florimex Germany and its
subsidiaries that are participants in the Organschaft so
as to effectuate the purpose and intent of the immediately
preceding sentence, and shall cooperate with the Buyers to
execute all such documents and do all such other acts and
things as may be reasonably necessary in order to give
effect to this Section 9.05.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYERS
---------------------------------------------
Each and every obligation of the Buyers to be performed
on the Closing Date shall be subject to the satisfaction
before or at the Closing of the express conditions precedent
set forth below (unless expressly waived in writing by the
Buyers at any time at or before the Closing), and the
Sellers shall use reasonable best efforts to cause each of
such conditions to be satisfied.
Section 10.01. Performance. The Sellers shall have
performed and complied in all material respects with all of
their covenants and agreements under this Agreement that are
to be performed or complied with by it before or on the
Closing Date, and the Buyers shall have received at the
Closing a certificate, dated the Closing Date, signed by
the Sellers, to such effect.
Section 10.02. Proceedings and Examinations. All
proceedings, corporate or other, to be taken by the Sellers
in connection with the transactions contemplated by this
Agreement, and all documents incident thereto, shall be
reasonably satisfactory in form and substance to the
Buyers, and the Sellers shall have made available to the
Buyers for examination the originals or true and correct
copies of all documents that the Buyers may reasonably
request in connection with the transactions contemplated by
this Agreement.
Section 10.03. No Actions. There shall not be in effect
any Law, and no investigation, suit, action or other proceeding
shall be threatened or pending before any court or governmental
agency that seeks restraint, prohibition, damages or other
relief in connection with this Agreement or the consummation
of the transactions contemplated hereby.
Section 10.04. Representations and Warranties. The
representations and warranties made by the Sellers in this
Agreement shall be true and correct in all material
respects at the Closing Date with the same force and effect as
though such representations and warranties had been made on
the Closing Date, and the Buyers shall have received at the
Closing a certificate in the form attached hereto as
Schedule 10.04, dated the Closing Date, signed by the Sellers,
to such effect.
Section 10.05. Deliveries. The Sellers shall have
delivered to the Buyers the items referred to in Section 2.04,
executed and in proper form.
Section 10.06. Regulatory Consents and Approvals. All
consents, approvals and actions of, filings with and notices
to any Governmental or Regulatory Authority necessary to
permit the parties hereto to perform their obligations under
this Agreement and to consummate the transactions contemplated
24
-132-
hereby shall have been duly obtained, made or given and shall
be in full force and effect, and all terminations or
expirations of waiting periods imposed by any Governmental
or Regulatory Authority necessary for the consummation of the
transactions contemplated by this Agreement shall have occurred.
Section 10.07. Third Party Consents. The consents (or in
lieu thereof waivers) listed in Schedule 10.07 hereto shall have
been obtained and shall be in full force and effect.
Section 10.08. Additional Certificates. Buyers shall
have received such other certificates of officers of the Sellers
and the Companies as it may reasonably request.
ARTICLE XI
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
----------------------------------------------
Each and every obligation of the Sellers to be performed on
the Closing Date shall be subject to the satisfaction before or at
the Closing of the express conditions precedent set forth below
(unless expressly waived in writing by the Sellers at any time at
or before the Closing), and the Buyers shall use reasonable best
efforts to cause each of such conditions to be satisfied.
Section 11.01. Performance. The Buyers shall have performed
and complied in all material respects with all of its covenants and
agreements under this Agreement that are to be performed or complied
with by it before or on the Closing Date, and the Sellers shall have
received at the Closing a certificate, dated the Closing Date,
signed by the Buyers, to such effect.
Section 11.02. Proceedings and Examinations. All
proceedings, corporate or other, to be taken by the Buyers in
connection with the transactions contemplated by this Agreement,
and all documents incident thereto, shall be reasonably
satisfactory in form and substance to the Sellers, and the
Buyers shall have made available to the Sellers for examination
the originals or true and correct copies of all documents that
the Sellers may reasonably request in connection with the
transactions contemplated by this Agreement.
Section 11.03. No Actions. There shall not be in effect any
Law, and no investigation, suit, action or other proceeding shall
be threatened or pending before any court or governmental agency
that seeks restraint, prohibition, damages or other relief in
connection with this Agreement or the consummation of the
transactions contemplated hereby.
Section 11.04. Representations and Warranties. The
representations and warranties made by the Buyers in this
Agreement shall be true and correct in all material respects
at the Closing Date with the same force and effect as though
such representations and warranties had been made on the
Closing Date (except to the extent that such representations
and warranties expressly speak as of a different date), and
the Sellers shall have received at the Closing a certificate
in the form attached hereto as Schedule 11.04, dated the
Closing Date, signed by the Buyers, to such effect.
25
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Section 11.05. Deliveries. The Buyers shall have
delivered to the Sellers the items referred to in Section 2.05,
executed and in proper form.
Section 11.06. Regulatory Consents and Approvals. All
consent, approvals and actions of, filings with and notices
to any Governmental or Regulatory Authority necessary to
permit the parties hereto to perform their obligations under
this Agreement and to consummate the transactions contemplated
hereby shall have been duly obtained, made or given and shall
be in full force and effect, and all terminations or expirations
of waiting periods imposed by any Governmental or Regulatory
Authority necessary for the consummation of the transactions
contemplated by this Agreement shall have occurred.
Section 11.07. Third Party Consents. The consents (or
in lieu thereof waivers) listed in Schedule 11.07 hereto shall
have been obtained and shall be in full force and effect.
Section 11.08. Other Agreements. The transaction
contemplated by Section 9.01 shall have been completed to the
reasonable satisfaction of Sellers.
Section 11.09. Additional Certificates. Sellers shall
have received such other certificates of officers of the Buyers
as it may reasonably request.
ARTICLE XII
INDEMNITIES AND ADDITIONAL COVENANTS
------------------------------------
Section 12.01. Sellers' Indemnity.
------------------
(a) Generally. The Sellers, jointly and severally,
hereby agree to indemnify and hold each of the Buyers harmless
from and against, and agree to defend promptly the Buyers from
and to reimburse the Buyers for, any and all losses, damages,
costs, expenses, liabilities, obligations and claims of any kind,
including, without limitation, reasonable attorneys' fees and
other legal costs and expenses (hereinafter referred to
collectively as "Losses"), that the Buyers may at any time
suffer or incur, or become subject to, as a result of or in
connection with: (i) any breach or inaccuracy of any of the
representations and warranties made by the Sellers, in or
pursuant to this Agreement; (ii) any liability for additional
taxes (including penalties and interest, if any, with respect
thereto) assessed as a result of any examination disclosed on
Schedule 5.09 in response to the representations and
warranties in Section 5.09; (iii) any liability resulting from
the litigation disclosed on Schedule 5.16 in excess of the
aggregate of the amounts disclosed on Schedule 5.16 in response
to the representation and warranties in Section 5.16; (iv) any
liability resulting from the environmental matters disclosed on
Schedule 5.20 in excess of the aggregate of the amounts disclosed
in Schedule 5.20; and (v) any failure by the Sellers to perform
any of their covenants, agreements, obligations or undertakings
set forth in this Agreement or in any document or instrument
delivered pursuant hereto; provided, however, the Buyers
shall have the right to indemnification under Section 12.01(a)
only if such right is asserted (whether or not such Losses have
actually been incurred) on or before the date one year after the
Closing Date, except that (x) the representations and
warranties set forth in Sections 5.04, 5.05, 5.06 and 5.09 and
the indemnification in clause (i) above with respect thereto
shall continue to be in full force and effect for a period equal
26
-134-
to the applicable statutory time limits under the applicable Laws
and (y) the representations and warranties set forth in
Section 5.20 and the indemnification in clause (i) above with
respect thereto shall continue to be in full force and effect
for a period equal to three years from the Closing Date.
(b) Limitations. None of the Sellers shall be required
to indemnify the Buyers under Section 12.01(a) unless and until
the amount of all Losses for which indemnification is sought
with respect thereto exceeds US$ 1,000,000, at which point the
Sellers will be required to indemnify the Buyers for all such
Losses in excess of US$ 1,000,000; provided however that the
limitation contained in this sentence shall not apply with respect
to (i) any breach of the representations and warranties set forth
in Sections 5.04, 5.05 or 5.06; (ii) any tax liability
resulting from a breach of the representation and warranty in
Section 5.09(b) in excess of the aggregate of the amounts accrued
for tax liabilities on the Final Florimex Financial Statement,
(iii) any liability resulting from a breach of the representation
and warranty in Section 5.16 with respect to the litigation
disclosed on Schedule 5.16 in excess of the aggregate amounts
disclosed for such litigation on Schedule 5.16; (iii) any
liability resulting from a breach of the representation
and warranty in Section 5.20 with respect to the environmental
matters disclosed on Schedule 5.20 in excess of the aggregate
amounts disclosed for such matters on Schedule 5.20. The maximum
amount of Losses for which the Sellers shall, jointly and
severally, be liable shall be an amount equal to seventy-five
percent (75%) of the sum of the Final Purchase Price and the Final
Net Debt.
(c) Procedures. In the event that the Buyers have a
claim that is covered by the indemnity provisions of Section
12.01(a), notice shall be promptly given by the Buyers to the
Sellers. Provided that the Sellers admit in writing to the Buyers
that such claim is covered by the indemnity provisions of
Section 12.01(a), the Sellers shall have the right to contest
and defend by all appropriate legal proceedings relating to such
claim and to control all settlements (unless the Buyers agree
to assume the cost of settlement and to forgo such indemnity)
and to select lead counsel to defend any and all such claims at
the sole cost and expense of the Sellers; provided, however,
that the Sellers may not effect any settlement that could result
in any cost, expense, liability or harm to the business or
reputation of the Buyers unless the Buyers consent in writing
to such settlement and the Sellers agree to indemnify the Buyers
therefor. The Buyers may select counsel to participate in any
defense at its own cost and expense. In connection with any
such claim, action or proceeding, the parties shall cooperate
with each other and provide each other with access to relevant
books and records in their possession.
Section 12.02. Buyers' Obligation in Respect of Companies
in Liquidation. After the Closing Date, the Buyers shall
proceed diligently and complete as soon as possible the
liquidation of the Companies in Liquidation.
Section 12.03. Indemnity Amounts to be Computed on
After-Tax Basis. The amount of any indemnification payable
under any of the provisions of this Article XII shall be (i)
net of any income tax benefit realized or the then-present
value (based on a discount rate of 5%) of any such income tax
benefit to be realized by any indemnified party (or, where
any Buyer is an indemnified party, any of the Companies) by
reason of the facts and circumstances giving rise to the
27
-135-
indemnification, and (ii) increased by the amount of any income
tax required to be paid by the indemnified party on the accrual
or receipt of the indemnification payment (including any amount
payable pursuant to this clause (ii)). For purposes of the
preceding sentence, the amount of any state, provincial, or
local income tax benefit or cost shall take into account any
federal or national income tax effect of such benefit or cost.
ARTICLE XIII
MISCELLANEOUS
-------------
Section 13.01. Governing Law and Jurisdiction. This
Agreement and any agreement resulting herefrom shall be
construed and interpreted according to the laws of the
Commonwealth of Virginia without regard to the conflicts of law
rules thereof. Each party to this Agreement: (a) agrees that
any legal action or proceeding under this Agreement shall be
brought in the courts of the Commonwealth of Virginia or in
the United States District Court sitting in Richmond, Virginia;
(b) irrevocably submits to the jurisdiction of such courts;
(c) agrees not to assert any claim or defense that it is not
personally subject to the jurisdiction of such courts, that
any such forum is not convenient or the venue thereof is
improper, or that this Agreement or the subject matter hereof
may not be enforced in such courts; and (d) agrees to accept
service of process on it by certified or registered mail or
by any other method authorized by law.
Section 13.02. Notices. All communications, notices
and disclosures required or permitted by this Agreement shall
be in writing and shall be deemed to have been given when
delivered personally or by messenger or by overnight
delivery service, or when mailed by registered or certified
mail, postage prepaid, return receipt requested, or when
received via telecopy, telex or other electronic transmission,
in all cases addressed to the Person for whom it is intended
at his address set forth below or to such other address as a
party shall have designated by fifteen (15) days notice in
writing to the other party in the manner provided by this Section:
If to Sellers: DIMON Incorporated
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 0681
Facsimile No.: 804/791-0377
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
With a copy to: Hunton & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: 804/788-8218
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
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If to Buyers: U.S.A. Floral Products Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: 202/333-0803
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: 412/560-3399
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Section 13.03. Entire Agreement. This Agreement supersedes
all prior discussions and agreements between the parties with
respect to the subject matter hereof and contains the sole and
entire agreement between the parties hereto with respect to
the subject matter hereof; provided, however, that nothing
herein shall affect (i) the validity of the Confidentiality
Agreement and (ii) any other written agreements or understandings
entered into by the parties or their Affiliates contemporaneously
with the execution and delivery of this Agreement, all of which
shall remain in full force and effect.
Section 13.04. Expenses. Except as otherwise expressly
provided in this Agreement, whether or not the transactions
contemplated hereby are consummated, each party will pay its
own costs and expenses incurred in connection with the
negotiation, execution and closing of this Agreement and
the transactions contemplated hereby (except that DIMON
shall be responsible for the costs and expenses of
Florimex Germany incurred in connection with the
transactions contemplated by this Agreement).
Section 13.05. Public Announcements. At all times at
or before the Closing, neither party to this Agreement will
issue or make any reports, statements or releases to the
public or generally to the employees, customers, suppliers
or other Persons with respect to this Agreement or the
transactions contemplated hereby, except to the extent
necessary to comply, or on the advice of counsel,
desirable to avoid the appearance of noncompliance with,
all legal and other formalities necessary to effect the
transactions contemplated by this Agreement, without the
consent of the other Party, which consent shall not be
unreasonably withheld. Each Party will also obtain each other
Party's prior approval of any press release to be issued
immediately following the Closing announcing the consummation
of the transactions contemplated by this Agreement.
If either Party is unable to obtain the approval of its
public report, statement or release from the other Party
and such report, statement or release is, upon the advice
of legal counsel to such Party, required by Law in order to
discharge such Party's legal or contractual disclosure
obligations, then such Party may make or issue the required
report, statement or release and promptly furnish the other
Party with a copy thereof.
Section 13.06. Confidentiality. Each party hereto will
hold, and will use all commercially reasonable efforts to
cause its Affiliates, and their respective Representatives,
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to hold, in strict confidence from any Person (other than
any such Affiliate or Representative), all documents and
information concerning the other Party or any of its Affiliates
furnished to it by the other Party or such other Party's
Representatives in connection with this Agreement or the
transactions contemplated hereby in accordance with the
terms of the Confidentiality Agreement.
Section 13.07. Further Assurances; Post-Closing Cooperation.
--------------------------------------------
(a) Subject to the terms and conditions of this
Agreement, after the Closing, each of the Parties hereto shall,
at such Party's own expense, execute and deliver such other
documents and instruments, provide such materials and
information and take such other actions as may reasonably
be necessary, proper or advisable, to the extent permitted
by Law, to fulfill its obligations under this Agreement.
(b) Following the Closing, each Party will, at such
Party's own expense, afford every other Party, its counsel and
its accountants, during normal business hours, reasonable
access to the books, records and other data relating to the
business or condition of the Companies in its possession with
respect to periods prior to the Closing and the right to make
copies and extracts therefrom, to the extent that such access
may be reasonably required by the requesting party in connection
with (i) the preparation of tax returns, (ii) the determination
or enforcement of rights and obligations under this Agreement,
(iii) compliance with the requirements of any Governmental or
Regulatory Authority, (iv) the determination or enforcement
of the rights and obligations of any indemnified party
hereunder or (v) in connection with any actual or threatened
action or proceeding. Further, each Party agrees for a
period extending six (6) years after the Closing Date not
to destroy or otherwise dispose of any such books, records
and other data unless such Party shall first offer in
writing to surrender such books, records and other data
to the other Party and such other Party shall not agree
in writing to take possession thereof during the ten (10)
day period after such offer is made.
(c) If, in order properly to prepare its tax returns,
other documents or reports required to be filed with
Governmental or Regulatory Authorities or its financial
statements or to fulfill its obligations hereunder, it is
necessary that a Party be furnished with additional information,
documents or records relating to the business or condition of
the Companies not referred to in paragraph (b) above, and such
information, documents or records are in the possession or
control of the other Party, such other Party agrees to use
all commercially reasonable efforts to furnish or make
available such information, documents or records (or copies
thereof) at the recipient's request, cost and expense. Any
information obtained by any party in accordance with this
paragraph shall be held confidential by such party in accordance
with Section 13.06.
Section 13.08. Waiver. Any term or condition of this
Agreement may be waived at any time by the party that is
entitled to the benefit thereof, but no waiver shall be
effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or
condition. No waiver by any party of any term or condition of
this Agreement, in any one or more instances, shall be deemed
to be or construed as a waiver of the same or any other term
or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by Law or otherwise
afforded, will be cumulative and not alternative.
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Section 13.09. Amendment. This Agreement may be amended,
supplemented or modified only by a written instrument duly
executed by or on behalf of each party hereto.
Section 13.10. No Third Party Beneficiary. The terms
and provisions of this Agreement are intended solely for the
benefit of each party hereto and their respective successors
or permitted assigns, and it is not the intention of the parties
to confer third-party beneficiary rights upon any other Person.
No third party is entitled to rely on any of the
representations, warranties or agreements contained in this
Agreement. None of the Sellers or the Buyers shall have any
liability to any third party because of any such reliance.
Section 13.11. No Assignment; Binding Effect. Neither
this Agreement nor any right, interest or obligation hereunder
may be assigned by any Party hereto without the prior written
consent of each other Party hereto and any attempt to do so
will be void, except for assignments and transfers by operation
of Law. Subject to the preceding sentence, this Agreement is
binding upon, inures to the benefit of and is enforceable by
the parties hereto and their respective successors and assigns.
Section 13.12. Headings. The headings used in this
Agreement have been inserted for convenience of reference only
and do not define or limit the provisions hereof.
Section 13.13. Invalid Provisions. If any provision of
this Agreement is held to be illegal, invalid or unenforceable
under any present or future Law, and if the rights or
obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such
provision will be fully severable, (b) this Agreement will
be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain
in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance
herefrom and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically
as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.
Section 13.14. Counterparts. This Agreement may be
executed in any number of counterparts, each of which will
be deemed an original, but all of which together will
constitute one and the same instrument.
Section 13.15. Waiver of Jury Trial. Each party hereto
irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon any contract,
tort or otherwise) arising out of or relating to this agreement,
the transactions contemplated hereby or in the negotiation,
administration, performance or enforcement thereof.
Section 13.16. Specific Performance. The parties hereto
agree that irreparable damage would occur in the event any of
the provisions of this Agreement were not performed in accordance
with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any
other remedy at law or equity for the breach of any
representation, warranty or covenant contained herein.
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Section 13.17. Termination. Time is of essence of this
Agreement. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned as follows:
(a) at any time prior to the Closing Date by mutual written
agreement of Sellers and Buyers; or (b) by Buyers at any time
prior to the Closing Date within 20 business days following
Buyers' becoming aware of any uncured material breach of
Articles VII or IX hereof or on the Closing Date if any of
the conditions set forth in Article X of this Agreement
shall not have been fulfilled by the Closing Date; or
(c) by Sellers at any time prior to the Closing Date within
20 business days following the Sellers' becoming aware of
any uncured material breach of Articles VIII or IX hereof or
on the Closing Date if any of the conditions set forth in
Article XI of this Agreement shall not have been fulfilled
by the Closing Date; or (d) by Sellers on or after the
Closing Date, if by that date, despite substantial
adherence to the terms of this Agreement by Buyers, all
conditions to Closing provided herein other than the
third-party consents listed on Schedules 10.07 and
11.07 hereto, have not been obtained; or (e) by Sellers
or Buyers on or after December 31, 1998 if Closing
has not occurred on or before December 31, 1998.
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IN WITNESS WHEREOF, the parties have caused this Stock
Purchase Agreement to be duly executed and delivered by the
duly authorized officer of each party hereto as of the date
first above written.
U.S.A. FLORAL PRODUCTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of U.S.A.
Floral Products, Inc.
DIMON INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Chairman and Chief
Executive Officer
FLORIMEX WORLDWIDE GMBH
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Chairman and Chief
Executive Officer
33
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