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EXHIBIT 2.15
ACQUISITION AGREEMENT
BY AND AMONG
THE
SHAREHOLDERS
OF
TAS GMBH NORD TELEMARKETING UND VERTRIEBSBERATUNG,
▇▇▇▇▇ ENTERPRISES, INCORPORATED,
AND
▇▇▇▇▇ ENTERPRISES GMBH
DATED NOVEMBER 23, 1998
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TABLE OF CONTENTS
RECITALS.........................................................................1
ARTICLE I
DEFINITIONS......................................................................1
Section 1.1. Definitions...........................................1
ARTICLE II
PURCHASE, SALE AND ASSIGNMENT OF SHARES..........................................6
Section 2.1. Purchase and Sale of Shares...............................6
Section 2.2. Assignment of Shares......................................6
ARTICLE III
DELIVERY OF PURCHASE PRICE SHARES................................................6
Section 3.1. Delivery of Purchase Price Shares.....................7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS (GARANTIEN)........................8
Section 4.1. Corporate Organization................................8
Section 4.2. Capitalization........................................8
Section 4.3. Authority; Binding Effect.............................8
Section 4.4. Ownership of Share Capital; Title.....................9
Section 4.5. The Sellers' Consents and Approvals; No Violations....9
Section 4.6. Consents and Approvals; No Violations................10
Section 4.7. Financial Statements.................................10
Section 4.8. Undisclosed Liabilities..............................10
Section 4.9. Taxes................................................11
Section 4.10. Title to Properties..................................11
Section 4.11. Absence of Changes...................................12
Section 4.12. Intellectual Property................................14
Section 4.13. Leases...............................................15
Section 4.14. Bank Accounts; Investments; Powers of Attorney.......15
Section 4.15. Material Contracts and Customers.....................16
Section 4.16. Related Transactions.................................18
Section 4.17. Insurance............................................19
Section 4.18. Labor Matters........................................19
Section 4.19. Employee Benefit Plans...............................20
Section 4.20. Litigation...........................................20
Section 4.21. Compliance with Laws.................................20
Section 4.22. Books and Records....................................21
Section 4.23. Copies of Documents..................................21
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Section 4.24. Adequacy of Assets...................................21
Section 4.25. Grants...............................................21
Section 4.26. Accounts Receivable..................................21
Section 4.27. Brokers and Finders..................................22
Section 4.28. Investment Intent; Information Disclosures...........22
Section 4.29 Pooling of Interests.................................24
Section 4.30 Restrictive Covenants................................24
Section 4.31 Product Liabilities and Warranties...................24
Section 4.32 Real Estate..........................................25
Section 4.33 Environmental Matters................................25
Section 4.34 Disclosure...........................................25
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SYKES AND BUYER (GARANTIEN)...................26
Section 5.1. Corporate Organization...............................26
Section 5.2. Capitalization of Sykes..............................26
Section 5.3. Authority............................................26
Section 5.4. Sykes' Consents and Approvals; No Violations.........26
Section 5.5. Litigation...........................................27
Section 5.6. Brokers and Finders..................................27
Section 5.7. Sykes Information....................................27
Section 5.8 No Material Adverse Change...........................27
Section 5.9. Undisclosed Liabilities..............................27
Section 5.10. Compliance with Laws.................................27
ARTICLE VI
FURTHER COVENANTS AND AGREEMENTS................................................28
Section 6.1. Covenants of the Sellers Pending the Closing.........28
Section 6.2. Covenants of Buyer and Sykes Pending the Closing.....29
Section 6.3. Filings..............................................30
Section 6.4. Effective Time of Closing and Transfer...............30
Section 6.5. Announcements........................................30
Section 6.6. Costs and Expenses...................................30
Section 6.7. Further Assurances...................................31
Section 6.8. Certain Agreements...................................31
Section 6.9. Non-Disclosure; Covenant Not to Compete..............31
Section 6.10. Pooling of Interests.................................33
Section 6.11. Exclusive Dealing....................................33
Section 6.12 Repayment of Shareholder Loan, etc...................33
Section 6.13 Payment of Dividends.................................33
ARTICLE VII
TERMINATION.....................................................................33
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Section 7.1. Termination..........................................33
Section 7.2. Procedure and Effect of Termination..................34
ARTICLE VIII
CONDITIONS TO BUYER'S AND SYKES' OBLIGATIONS....................................35
Section 8.1 The Sellers' Closing Deliveries......................35
Section 8.2. Representations and Warranties True..................36
Section 8.3. Performance..........................................36
Section 8.4. Governmental Consents and Approvals..................36
Section 8.5. No Injunction or Proceeding..........................36
ARTICLE IX
CONDITIONS TO THE SELLERS' OBLIGATIONS..........................................36
Section 9.1. Delivery of Purchase Price Shares....................36
Section 9.2. Buyer's and Sykes' Closing Deliveries................36
Section 9.3. Representations and Warranties True..................37
Section 9.4. Performance..........................................37
Section 9.6. Governmental Consents and Approvals..................37
Section 9.7. No Injunction or Proceeding..........................37
ARTICLE X
INDEMNIFICATION.................................................................38
Section 10.1. Indemnification by the Sellers.......................38
Section 10.2. Indemnification by Buyer and Sykes...................38
Section 10.3. Survival of Representations..........................39
Section 10.4. Indemnification Claims Procedures....................39
Section 10.5. Right of Set-Off.....................................40
Section 10.6. Limitation of Liability..............................40
ARTICLE XI
MISCELLANEOUS...................................................................41
Section 11.1. Governing Law........................................41
Section 11.2. Entire Understanding, Waiver, Etc....................41
Section 11.3. Severability; Gaps...................................42
Section 11.4. Captions.............................................42
Section 11.5. Notices..............................................42
Section 11.6. Successors and Assigns...............................43
Section 11.7. Parties in Interest..................................43
Section 11.8. Counterparts.........................................44
Section 11.9. Construction of Terms................................44
Section 11.10. Sykes Guarantee......................................44
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EXHIBITS
Exhibit A Form of Pledge and Escrow Agreement
Exhibit B Form of Registration Rights Agreement
Exhibit C1 Form of Employment Agreement for ▇▇. ▇▇▇▇▇▇▇▇▇
Exhibit C2 Form of Employment Agreement for ▇▇. ▇▇▇▇▇▇
Exhibit D TAS Real Property Transfer and Lease Terms
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT is made and entered into as of November 23,
1998, by and among the undersigned persons (collectively, the "Sellers"), being
the holders of all the outstanding capital interests of TAS GMBH NORD
TELEMARKETING UND VERTRIEBSBERATUNG , a limited liability company organized
under the laws of the Federal Republic of Germany with offices in Hannover and
Hamburg (the "Company"), each such Seller being an individual residing in, and
a citizen of, the Federal Republic of Germany, ▇▇▇▇▇ ENTERPRISES GMBH , a
limited liability company organized and existing under the laws of the Federal
Republic of Germany ("Buyer"), and ▇▇▇▇▇ ENTERPRISES, INCORPORATED, a
corporation organized and existing under the laws of Florida ("Sykes").
RECITALS
WHEREAS, the Sellers own all of the issued capital interests of the
Company (the "Quotas");
WHEREAS, Sykes owns all of the issued capital interests of Buyer;
WHEREAS, the Sellers desire to sell the Quotas in exchange for shares
of Sykes' common stock, and Sykes is willing to cause the Buyer to purchase the
Quotas from the Sellers in exchange for shares of Sykes' common stock, on the
terms and subject to the conditions hereinafter set forth; and
WHEREAS, Sykes intends to treat the acquisition by the Buyer of the
Quotas as a "pooling of interests" for financial accounting purposes.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements hereinafter set forth and
for other good and valuable considerations, the receipt and sufficiency of
which are hereby expressly acknowledged by the Sellers, the Buyer and Sykes,
and intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. The terms defined in this Article shall have
the following respective meanings for all purposes of this Agreement:
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"Affiliate" means, with respect to any Person, an officer,
director or beneficial owner of five percent (5%) or more of the issued and
outstanding shares of any class of capital stock or other equity of such
Person, a family member of such Person, if an individual, and any other Person
controlling, controlled by or under common control with such Person.
"Alternative Transaction" means any merger, consolidation,
sale of substantial assets, sale of capital interests or securities or similar
transaction involving the Company, other than the transactions contemplated by
this Agreement.
"Business" means the business conducted as of the date of
this Agreement or as of the Closing Date, as the context permits or implies, by
the Company, which consists of providing the following services on a "for
hire" basis:
(i) call center services;
(ii) telemarketing and teleselling services;
(iii) fulfillment services for telemarketing and call center
customers;
(iv) database development services for telemarketing and call
center customers; and
(v) consulting and training services related to the above
service categories.
"Business Day" means any day on which banks are open for
business in New York, New York.
"Closing" means the consummation and effectuation of the
transactions contemplated herein pursuant to the terms and conditions of this
Agreement, which shall be held on the 27th day of November, 1998, at 10:00 AM
in the offices of Schon ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ in Hamburg, Federal Republic
of Germany, or on such other date or at such other time or place as is mutually
agreed by the parties hereto.
"Closing Date" means the date on which the Closing actually
occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Customers" shall have the meaning set forth in Section 4.15.
"Disclosure Schedule" means the disclosure schedule document
executed by Sellers as of the date hereof and previously delivered to the Buyer
and Sykes, without any amendment thereto subsequent to the date hereof.
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"Employee Benefit Plan" means any pension, retirement, profit
sharing, savings, thrift, stock bonus, stock option, stock purchase, restricted
stock purchase, stock ownership, stock appreciation right, phantom stock,
deferred compensation, supplemental retirement, deferred bonus, severance,
change of control, parachute, health, medical, dental, vision, prescription
drugs, fitness, dependent care, educational assistance, group legal services,
life insurance, accidental death, accidental dismemberment, sick pay,
short-term or long-term disability, supplemental unemployment income, training,
apprenticeship, scholarship, tuition reimbursement, employee assistance,
employee discount, subsidized cafeteria, fringe benefit, vacation, holiday,
employer-sponsored recreational facility, or other employee pension benefit or
welfare benefit plan, policy, contract, or arrangement, or other similar fringe
or employee benefit plan, program, policy, contract, or arrangement, written or
oral, qualified or nonqualified, funded or unfunded, foreign or domestic.
"Escrow Agent" means Firstar Trust Company of Milwaukee,
Wisconsin, or such other person as Sykes and the Sellers shall mutually agree
upon, in its capacity as escrow agent.
"Financial Statements" has the meaning set forth in Section
4.7.
"Form 10-Q Balance Sheet" means the unaudited balance sheet
dated September 30, 1998 (and any related notes thereto), found in the
quarterly report filed on Form 10-Q filed with the Securities and Exchange
Commission for the quarterly period ended September 30, 1998, a copy of which
is included as part of the Sykes Filings.
"GGAAP" means generally accepted accounting principles as in
effect in the Federal Republic of Germany on December 31, 1997.
"Grants" means governmental grants, subsidies, guarantees
and/or loans provided to or for the benefit of a Person.
"Intellectual Property" means all intellectual property and
intellectual property rights, whether arising under the laws of the Federal
Republic of Germany or any other jurisdiction including, without limitation,
(i) all patents, patent applications, continuations in part, divisions,
reissues and patent disclosures, (ii) all copyrights, whether registered or
unregistered, and pending applications to register the same, (iii) anything
recognizable as a trademark, service ▇▇▇▇ or trade dress at common law or under
the laws of any country, whether registered or not, which is used to identify
the source and quality of goods or services or to distinguish them from those
of others, and all registrations and applications for registration, including
intent-to-use registrations and applications for registration, (iv) all
licenses, sublicenses and rights to use any Intellectual Property of any other
Person, (v) all names used to identify a particular company, business,
subsidiary or division thereof, (vi) all confidential and proprietary ideas,
trade secrets, know how, concepts, methods, processes, formulae, reports, data,
customer lists, mailing lists, business plans or other proprietary information,
including, without limitation, with respect to any Person, any formulae,
pattern, device or compilation of information which is used in such
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Person's business and which derives independent commercial value from not being
generally known or readily ascertainable through independent development or
reverse engineering by other Persons who can obtain economic value from its
disclosure or use, and (vii) all other forms of proprietary information.
"Interim Balance Sheets" means the unaudited balance sheet of
the Company dated as of the Interim Balance Sheet Date (and any related notes
thereto), a copy of which is included as part of the Financial Statements.
"Interim Balance Sheet Date" means September 30,1998.
"Leased Real Property" means all real property and premises
currently leased to the Company.
"Material Adverse Effect" means, with respect to any Person,
a material adverse effect on the financial condition, results of operations or
business prospects of such Person.
"NASDAQ" means The Nasdaq National Stock Market, Inc.'s
National Market.
"Person" means an individual, partnership, limited liability
company, corporation, trust, unincorporated organization, association or joint
venture or a government, agency, political subdivision or instrumentality
thereof.
"Prepayment Amount" means all amounts payable by the Company
in respect of the termination of the Silent Partnership, other than amounts in
respect of principal and accrued interest thereon until the earlier of
termination or November 30, 1998 at the rate of nine percent per annum.
"Purchase Price Shares" means the shares of Sykes Stock to be
issued to the Seller in consideration of the transfer and assignment of the
Quotas pursuant to this Agreement, the number of which will equal 590,000 less
the Share Adjustment.
"Related Agreements" means the agreements described in
Section 6.8.
"SEC" means the United States Securities and Exchange
Commission.
"Share Adjustment" means a number of shares of Sykes Stock
equal to the result of the following formula:
P x.60 , where P equals the Prepayment Amount (in DM).
------
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"Silent Partnership"means the silent partnership between the
Company and Hannover Fonds Innovationsfinanzierungs-Gesellschaft mbH & Co
Beteiligungs KG.
"Sykes Filings" means the following filings made by Sykes
with the SEC: the annual report on Form 10-K for the annual period ending
December 31, 1997, the quarterly reports on Form 10-Q for the quarterly periods
ending March 31, 1998, June 30, 1998, and September 30, 1998, and the Annual
Report to Stockholders and related proxy statement filed on Schedule 14A with
respect to an annual meeting of Sykes' shareholders held on [date of 1998
meeting].
"Sykes Stock" means Sykes' common stock, $.01 par value per
share.
"Sykes Stock Closing Price" means the average of the closing
prices for Sykes Stock as reported on NASDAQ (as published in the Wall Street
Journal or, if not reported therein, in another mutually agreed upon
authoritative source) for the five (5) consecutive full trading days in which
such shares are traded on NASDAQ, ending on the last such trading day prior to
the date of determination.
"Seller's Shares" means, with respect to any Seller, a number
of shares of Sykes Stock equal to the Purchase Price Shares multiplied by such
Seller's percentage ownership (expressed as a decimal) in the Company as shown
in Section 2.1.
"Taxes" means all taxes, assessments, and charges imposed by
any national, federal, state, provincial, local, or foreign taxing authority,
including social security, insurance and other state-sponsored pension funds
and all interest, penalties and additions thereto.
"Transfer Agent" means Firstar Trust Company of Milwaukee,
Wisconsin, in its capacity as transfer agent for Sykes Stock.
"USGAAP" means generally accepted accounting principles as in
effect in the United States on December 31, 1997.
ARTICLE II
PURCHASE, SALE AND ASSIGNMENT OF SHARES ARTICLE
SECTION 2.1. PURCHASE AND SALE OF SHARES Upon the terms and subject to
the conditions hereof, each of the Sellers hereby sells to Buyer and Buyer
hereby buys from each of the Sellers, all of such Seller's right, title and
interest in and to the Quotas set forth below opposite the name of such Seller,
in each case together with the right to receive dividends with respect to such
Quotas as of October 1, 1997, and the applicable capital reserve, in each case
in consideration for the delivery of the Purchase Price Shares as provided in
Article III below.
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Name Share Capital Percentage Interest
---- ------------- -------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ DM37,500
DM7,500 90%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ DM5,000 10%
Total DM50,000 100%
======== ====
SECTION 2.2. ASSIGNMENT OF SHARES Each of the Sellers hereby assigns
and transfers such Seller's Quotas as specified in Section 2.1, together with
the right to receive dividends on the such Quotas as of October 1, 1997, to
Buyer at the Closing and Buyer hereby accepts such assignments. All such
assignments are subject to:
(a) the delivery of the Purchase Price Shares in accordance
with Article III hereof;
(b) the non-occurrence of a termination of this Agreement in
accordance with Section 7.1 prior to the Closing; and
(c) the fulfillment or waiver of all of the conditions
precedent specified in Article VIII and Article IX.
Each of the Sellers hereby consents to the sales and transfers
effected herein and waives any preemptive rights or rights of first refusal he
may have under the Articles of Association of the Company.
ARTICLE III
DELIVERY OF PURCHASE PRICE SHARES
SECTION 3.1. DELIVERY OF PURCHASE PRICE SHARES Upon the terms
and subject to the conditions hereof, Sykes shall issue, and Buyer shall
deliver, the Purchase Price Shares as follows:
(a) to the Escrow Agent promptly following the
Closing, a certificate or certificates issued in the name of each Seller, each
such certificate bearing the legend provided for in Section 4.28(g) and
evidencing a number of shares equal to ten percent (10%) of the applicable
Seller's Shares, rounded down to the nearest whole share, to be held in
accordance with a Pledge and Escrow Agreement dated as of the Closing Date by
and among Sykes, Buyer, the Sellers and the Escrow Agent substantially in the
form of EXHIBIT A (the "Pledge and Escrow Agreement"); and
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(b) to each of the Sellers at the Closing, a
certificate or certificates or, at Sykes' option, an original or a facsimile
copy of an irrevocable letter of instructions (accompanied by an original or a
facsimile of a letter from the Transfer Agent acknowledging receipt of such
letter of instructions) to the Transfer Agent for the issue and delivery of a
certificate or certificates, issued in such Seller's name, each such
certificate bearing or to bear the legend provided for in Section 4.28(g) and
evidencing or to evidence a number of shares equal to the applicable Seller's
Shares remaining after delivery of Seller's Shares for the account of such
Seller in accordance with Section 3.1(a) above.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS (GARANTIEN)
The Sellers hereby represent and warrant to Sykes and Buyer as
follows, the representations and warranties in Sections 4.2 through 4.5
relating to individual Sellers and their respective Quotas being made severally
by each such Seller, and all other representations and warranties in this
Article IV being made by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ only:
SECTION 4.1. CORPORATE ORGANIZATION. The Company is a
limited liability company duly organized and validly existing under the laws of
the Federal Republic of Germany and has the full right, power and authority to
own, lease and operate all of its properties and assets and to carry out the
Business as it is presently conducted by the Company. The Company is duly
licensed or qualified to do business and is in good standing in each
jurisdiction in which the ownership of property or the conduct of its Business
requires such qualification or license. Except as set forth in Section 4.1 of
the Disclosure Schedule, there are no corporations, joint ventures,
partnerships or other entities or arrangements in which the Company, directly
or indirectly, owns any capital stock or any equity interest. All such
interests set forth in Section 4.1 of the Disclosure Schedule have been duly
authorized and validly issued, are fully paid and non-assessable and were
issued without violation of any preemptive rights. The Company is the record
and beneficial owner of such interests, and holds such interests free and clear
of all liens, pledges or encumbrances of any kind.
SECTION 4.2. CAPITALIZATION. The aggregate stated share
capital of the Company consists of DM50,000. The Quotas, which represent all
issued share capital of the Company, have been duly authorized and validly
issued, are fully paid and nonassessable, were issued without violation of any
preemptive rights, and can be transferred to Buyer as provided herein free of
any preemptive rights. The Company has not repaid any stated share capital to
any of the Sellers, or to any prior holder of the Company's share capital, or
paid out any other equity capital in a manner which would adversely affect the
Company's ability to pay dividends in a situation in which the Company would
otherwise be permitted to pay dividends according to German law. Except for
this Agreement and as set forth in Section 4.2 of the Disclosure Schedule,
there are
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no options, warrants or other rights, nor any agreements, commitments or
arrangements of any kind, relating to the subscription for or the issuance,
voting, acquisition, sale, repurchase, transfer or disposition of (i) any share
capital of the Company or securities convertible into or exchangeable for share
capital of the Company, or (ii) any options, warrants or subscription rights
relating to any such share capital or other securities of the Company.
SECTION 4.3. AUTHORITY; BINDING EFFECT. Each of the Sellers
has all requisite right, power and authority to execute, deliver and perform
this Agreement and the Related Agreements to which such Seller is a party. This
Agreement and the Related Agreements to which the Sellers are parties have been
duly and validly executed and delivered by the Sellers and constitute the
legal, valid and binding obligations of each of the Sellers, enforceable
against each of the Sellers in accordance with their respective terms.
SECTION 4.4. OWNERSHIP OF SHARE CAPITAL; TITLE. Except as
disclosed in Section 4.4 of the Disclosure Schedule, each of the Sellers owns
of record and beneficially the Quotas set forth beside such Seller's name in
Section 2.1. All issued share capital of the Company has been owned of record
and beneficially at all times exclusively by individual citizens of, or other
Persons organized and existing under the laws of, the Federal Republic of
Germany. Each of the Sellers has and will have, on the Closing Date, good,
marketable and valid title to the Quotas to be sold by such Seller hereunder,
free and clear of all liens, pledges, encumbrances, claims, security interests,
charges, voting trusts, voting agreements, other agreements, rights, options,
warrants or other restrictions of any kind, nature or description, other than
those referenced in Section 4.4 of the Disclosure Schedule. The execution,
delivery, notarization and performance of this Agreement will convey to Buyer
at the Closing good title to the Quotas free and clear of all claims, liens,
encumbrances, security interests, charges or restrictions on transfer of any
nature whatsoever, other than those contained in the Company's Articles of
Association. No Seller is involved in any proceedings by or against such Seller
under any bankruptcy laws or under any other insolvency or debtor's relief act.
SECTION 4.5. THE SELLERS' CONSENTS AND APPROVALS; NO
VIOLATION. Except as set forth in Section 4.5 of the Disclosure Schedule, the
execution, delivery and performance by each of the Sellers of this Agreement
and the Related Agreements to which he is a party will not (with or without the
giving of notice or the passage of time, or both) (a) violate any applicable
provision of law or any rule or regulation of any national, federal, state,
provincial or local administrative agency or governmental authority applicable
to the Sellers, or any order, writ, injunction, judgment or decree of any
court, administrative agency or governmental authority applicable to the
Sellers, (b) violate or require any consent, waiver or approval under (except
for the matters referenced in Section 4.5 of the Disclosure Schedule), result
in a breach, modification or termination of any provisions of, constitute a
default under, affect the rights under or enforceability of, or result in the
imposition of any pledge, security interest or other encumbrance upon any of
the Quotas pursuant to, any agreement, indenture, mortgage, deed of trust,
lease, license, or other instrument to which any Seller is a party or by which
any of them is bound, or any license, permit or certificate held by any of them
including, without limitation, those listed
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on the Disclosure Schedule, or (c) based upon the information provided to the
Sellers with respect to Buyer, require any consent or approval by, notice to or
registration with any governmental authority or other Person which is
applicable to any Seller.
SECTION 4.6. CONSENTS AND APPROVALS; NO VIOLATIONS. Except as
set forth in Section 4.6 of the Disclosure Schedule, the execution, delivery
and performance by each of the Sellers of this Agreement and the Related
Agreements to which he is a party will not (with or without the giving of
notice or the passage of time, or both) (a) violate any provision of law or any
rule or regulation of any national, federal, state, provincial or local
administrative agency or governmental authority applicable to the Company or
any order, writ, injunction, judgment or decree of any court, administrative
agency or governmental authority applicable to the Company, (b) violate the
organizational documents of the Company, (c) violate or require any consent,
waiver or approval under, result in a breach, modification or termination of
any provisions of, constitute a default under, affect the rights under or
enforceability of, result in the imposition of any pledge, security interest or
other encumbrance pursuant to, or give any Person the right to terminate,
modify or renegotiate any provision of, any agreement, indenture, mortgage,
deed of trust, lease, license, or other instrument to which the Company is a
party or by which the Company is bound, or any license, permit or certificate
held by the Company including, without limitation, those listed on the
Disclosure Schedule, (d) based upon the information provided to the Sellers
with respect to Buyer, require any consent or approval by, notice to or
registration with any governmental authority or other Person which is
applicable to the Company, or (e) result in the creation of any lien, claim,
encumbrance or charge upon any property or assets of the Company.
SECTION 4.7. FINANCIAL STATEMENTS.
(a) Section 4.7(a) of the Disclosure Schedule
contains the audited balance sheet and the related audited income statement
(including any related notes thereto) of the Company as of and for the fiscal
years ended September 30, 1996, September 30, 1997 and (ii) the Interim Balance
Sheet and the related unaudited income statements of the Company as of and for
the twelve-month period ending as of the Interim Balance Sheet Date (including
any related notes thereto) (collectively, the "Financial Statements").
(b) Except as set forth on Section 4.7(b) of the
Disclosure Schedule, the Financial Statements (i) are true, correct and
complete in all material respects; (ii) are in accordance with the books and
records of the Company; (iii) have been prepared in accordance with principles
of orderly bookkeeping and GGAAP applied on a consistent basis throughout the
periods involved, respecting principles of prudence and continuity; (iv) fairly
present, in the case of each year-end balance sheet and the Interim Balance
Sheet, the financial position of the Company as of the respective dates thereof
and, in the case of the related income statements, the results of operations
and earnings of the Company for the respective periods indicated; and (v) in
the case of the Interim Balance Sheet, were prepared in accordance with
principles applicable to
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a year-end balance sheet and present information comparable to other balance
sheets included in the Financial Statements.
SECTION 4.8. UNDISCLOSED LIABILITIES. Except as set forth on
Section 4.8 of the Disclosure Schedule, the Company has no liabilities
(absolute, accrued, contingent or otherwise) which are required to be reflected
in a balance sheet or in the notes thereto under GGAAP, except (a) liabilities
reflected or reserved against in the Interim Balance Sheet, and (b) liabilities
incurred since the Interim Balance Sheet Date in the ordinary course of
business, or which, in the aggregate, do not exceed DM10,000 with respect to
the Company.
SECTION 4.9. TAXES. Except as set forth in Section 4.9 of the
Disclosure Schedule, the Company has timely filed all returns, declarations,
reports, information returns and statements required to be filed by it (the
"Returns") in respect of any Taxes and has paid all Taxes currently due and
payable by it. Except as set forth in Section 4.9 of the Disclosure Schedule,
the Returns accurately and completely reflect the facts regarding the income,
properties, operations and status of any entity required to be shown thereon,
and no notice of any proposed deficiency, assessment or levy in respect of
Taxes has been received by the Company. Except as set forth in Section 4.9 of
the Disclosure Schedule, the Company is not currently nor, during the past
three years, has been the subject of an audit or in receipt of a notice that it
is being or will be audited by a relevant Taxing authority, or has agreed to
any extension of time of any applicable statute of limitations period, and the
Company has duly withheld from each payment from which such withholding is
required by law, the amount of all Taxes required to be withheld therefrom and
has paid the same (to the extent due) together with the employer's share of the
same, if any, to the proper Tax receiving officers. Except as set forth in
Section 4.9 of the Disclosure Schedule, the charges, accruals, and reserves for
Taxes due, or accrued but not yet due, relating to the income, properties or
operations of the Company for any period prior to or including the Closing Date
as reflected on the books of the Company are adequate in all material respects
to cover such Taxes, all Tax deficiencies which have been proposed or asserted
against the Company have been fully paid or finally settled, and no issue has
been raised in any examination which, by application of similar principles, can
be expected to result in the proposal or assertion of a Tax deficiency for any
other year not so examined, the Company has not received any Tax incentive,
abatement or other credit with respect to its assets, the Business, its
employees or otherwise which contains provisions for the repayment of any Tax
benefit, and the Company has incurred liabilities for Taxes only in the
ordinary course of the Business. The Company has never conducted business in
the United States, has never had any assets, employees or shareholders located
or resident in the United States, and has never made any election with the
United States Internal Revenue Service regarding Taxes in the United States.
SECTION 4.10. TITLE TO PROPERTIES.
(a) Section 4.10(a) of the Disclosure Schedule sets
forth a complete and accurate list of all fixed assets owned by the Company and
used in the Business as of the Interim Balance Sheet Date.
16
(b) Except for the normal reservation of title of suppliers
to the extent not paid and as set forth in Section 4.10(b) of the Disclosure
Schedule, the Company has good and marketable title to all the personal
property and assets (tangible and intangible) reflected as owned by it on the
Interim Balance Sheet or acquired since the Interim Balance Sheet Date (except
for properties and assets disposed of since such date in the ordinary course of
business and consistent with past practice), free and clear of all liens,
charges, security interests or other encumbrances of any nature whatsoever.
(c) Except as set forth on Section 4.10(c) of the Disclosure
Schedule, all such assets (i) are now in the possession of the Company, (ii)
are not subject to claims by any other Person with a right to possession of all
or any part of such assets, (iii) are in good operating condition (ordinary
wear and tear excepted), (iv) are not, individually or in the aggregate, in
need of any repairs which individually or in the aggregate could cost in excess
of DM10,000, and (v) are located on the Real Property referenced in Section
4.32 or on the Leased Real Property.
SECTION 4.11. ABSENCE OF CHANGES. Except as set forth in Section 4.11
of the Disclosure Schedule, since September 30, 1997, the Company has operated
only in the ordinary course of the Business in all material respects and there
has not been with respect to the Company:
(a) any change or changes in the Business, financial
condition, properties, results of operations or assets or liabilities, or any
development or event involving a prospective change, other than changes in the
ordinary course of the Business and other than changes which singularly or in
the aggregate, have not had and will not have a Material Adverse Effect;
(b) any material damage or destruction, loss or
other casualty, however arising and whether or not covered by insurance;
(c) any labor dispute or any other similar event or
condition of any character involving employees of the Company;
(d) any indebtedness incurred for borrowed money
(except by endorsement for collection or for deposit of negotiable instruments
received in the ordinary course of the Business);
(e) any change in the accounting methods, procedures
or practices or any change in depreciation or amortization policies or rates
theretofore adopted;
(f) any amendment or termination of any contract,
agreement, lease, franchise or license;
(g) any amendment of its organizational documents;
17
(h) any mortgage, pledge or other encumbering of any
property or assets;
(i) any material liability or obligation incurred,
except current liabilities incurred in the ordinary course of the Business, or
any cancellation or compromise of any material debt or claim, or any waiver or
release of any right of substantial value to the Business;
(j) any sale, transfer, lease, abandonment
or other disposal of any machinery, equipment or real property with a fair
market value in excess of DM10,000 or, except in the ordinary course of the
Business, any sale, transfer, lease, abandonment or other disposal of any
portion of any other properties or assets (real, personal or mixed, tangible or
intangible);
(k) any transfer, disposal or grant of any
rights under any Intellectual Property owned by the Company, or any disposal of
or disclosure to any other Person other than representatives of Buyer or ▇▇▇▇▇
of any material trade secret, formula, process or know-how not theretofore a
matter of public knowledge; except, in each case, in the ordinary course of the
Business;
(l) any bonus or other increase in the compensation
of its officers, employees or directors, or any agreement entered into with any
officer, employee or director, except, in each case, in the ordinary course of
the Business and consistent with past practice;
(m) any single capital expenditure made, or any
commitment to make any capital expenditure, in excess of DM10,000 for any
tangible or intangible capital assets, additions or improvements, except in the
ordinary course of the Business;
(n) any declaration, payment or reservation for
payment of any dividend or other distribution in respect of the Quotas or any
other securities, or any redemption, purchase or other acquisition, directly or
indirectly, of any Quotas or other securities of the Company;
(o) any grant or extension of any power-of-attorney
or guaranty in respect of the obligation of any other Person;
(p) any forward purchase commitments involving
more than DM10,000 in the aggregate or any other purchase commitments that are
not in the ordinary course of the Business;
(q)the adoption of any ruling, law, ordinance,
statute, rule, regulation, code, or other requirement of any governmental
authority which adversely affects the Company or the Business; or
18
(r) any entry into any binding agreement, whether in
writing or otherwise, to take any action described in this Section 4.11.
SECTION 4.12. INTELLECTUAL PROPERTY.
(a) Section 4.12(a) of the Disclosure Schedule contains a
list and description (including information with respect to registration) of
all Intellectual Property owned or used by the Company, subdivided by type of
Intellectual Property. The Company owns or has the right to use all
Intellectual Property used by it in the conduct of the Business as presently
conducted by it. Except for the rights and licenses granted to the Company
under software contracts, the Company owns all right, title and interest in the
Intellectual Property required to be identified on Section 4.12(a) of the
Disclosure Schedule, free and clear of any encumbrance. The Company has not
granted, transferred, or assigned any right or interest in its Intellectual
Property to any other Person.
(b) Except as disclosed in Section 4.12(b) of the Disclosure
Schedule, no fees or royalties are payable or will be payable under any
software contracts listed in Section 4.12(a) of the Disclosure Schedule as a
result of the continued use of licensed software by the Company in the ordinary
course of the Business, other than fees or royalties due for upgrades and fees
or royalties that do not exceed DM20,000 per year in the aggregate.
(c) Except as disclosed in Section 4.12(c) of the Disclosure
Schedule, (i) all registrations for Intellectual Property required to be
identified in Section 4.12(a) of the Disclosure Schedule as being owned by the
Company are valid and in force and applications to register any unregistered
Intellectual Property so identified are pending and in good standing, all
without challenge of any kind and to the best knowledge of the Sellers, there
is no basis for any such challenge; and (ii) the Company has the exclusive
right to bring actions for infringement or unauthorized use of the Intellectual
Property identified as being owned by the Company, and there is, to the best
knowledge of the Sellers, no basis for any such action.
(d) Except as disclosed in Section 4.12(d) of the Disclosure
Schedule, all trade secrets of the Company (i) have at all times been
maintained in confidence, and (ii) have not been disclosed to employees,
consultants or other third parties except on a ,,need to know" basis in
connection with their respective performance of duties to the Company.
(e) Except as disclosed in Section 4.12(e) of the Disclosure
Schedule, no claims have been asserted by any Person against the Company
claiming ownership of or right to use any of the Intellectual Property required
to be disclosed on Section 4.12(a) of the Disclosure Schedule (other than
ownership of Intellectual Property licensed to the Company under the software
contracts listed on Section 4.12(a) of the Disclosure Schedule) nor, to the
best knowledge of the Sellers, is there any basis for any such claim. The use
of the Intellectual Property by the Company has not infringed on the rights of
any Person and, except as disclosed
19
in Section 4.12(e) of the Disclosure Schedule, no claim of infringement or any
misuse or misappropriation of any the Intellectual Property of any other Person
has been made or asserted against the Company in respect of the Business, nor
is there, to the best knowledge of the Sellers, any basis for any such claim.
(f) Except as provided for in Section 4.12 (f) of
the Disclosure Schedule, the Company has confirmed, through appropriate testing
or written certifications from publishers, that all computer software used in
or material to the Business and which is either (i) owned or licensed by the
Company or (ii) owned or licensed by DTM (as defined in Section 4.15 (b)) (the
"Software") will record, store, process and present calendar dates falling on
or after January 1, 2000 in the same manner and with the same functionality as
the Software records, processes and stores calendar dates falling on or before
December 31, 1999.
SECTION 4.13. LEASES. Section 4.13 of the Disclosure Schedule
contains an accurate and complete list of all leases pursuant to which the
Company leases real or personal property. Except as set forth in Section 4.13
of the Disclosure Schedule, all such leases are in full force and effect and
are valid, binding and enforceable in accordance with their terms; there are no
existing defaults or events which, with the giving of notice or the lapse of
time or both, would constitute a default thereunder by the Company or any other
parties thereto. Except as set forth in Section 4.13 of the Disclosure
Schedule, all leased items of personality are in good operating condition, are
in a state of good maintenance and repair and are adequate and suitable for the
purpose for which they are presently being used. Each such lease contains terms
and conditions obtained from independent third parties and negotiated in good
faith at arms-length. None of the rights of the Company under each such lease
is subject to termination or modification as a result of the transactions
contemplated hereby.
SECTION 4.14. BANK ACCOUNTS; INVESTMENTS; POWERS OF ATTORNEY.
(a) Section 4.14(a) of the Disclosure Schedule sets
forth the names and locations of all banks, trust companies, savings and loan
associations and other financial institutions at which the Company maintains
safe deposit boxes or accounts of any nature and the names (and limits, if any)
of all persons authorized to draw thereon, make withdrawals therefrom or have
access thereto.
(b) Section 4.14(b) of the Disclosure Schedule sets
forth a list and description (including interest rates and other significant
terms) of all funds, securities and other instruments in which excess cash of
the Company was invested as of the Interim Balance Sheet Date (the
"Investments"). All such Investments are investment grade and can be liquidated
within one business day without being discounted.
(c) Except as set forth in Section 4.14(c) of the
Disclosure Schedule, neither the Company nor any of its Affiliates beneficially
or of record owns any shares of ▇▇▇▇▇ Stock.
20
(d) The Company has not granted or extended to any
Person, nor is the Company otherwise subject to or bound by, any power of
attorney which remains in effect, except for the authorizations set forth in
Section 4.14(a) of the Disclosure Schedule.
SECTION 4.15. MATERIAL CONTRACTS AND CUSTOMERS.
(a) Section 4.15(a) of the Disclosure Schedule
contains a true and correct list of all material contracts, agreements or other
understandings or arrangements, written or oral, or commitments therefor,
relating to the Company, the Business, or the assets or liabilities of Company
(collectively, the "Contracts"). Except as set forth in Section 4.15(a) of the
Disclosure Schedule, the Company is not a party to, or otherwise bound by, any
written or oral, formal or informal:
(i)purchase orders and other
contracts, in each case for the sale of goods or services, in excess of
DM40,000 (net of value added taxes) individually or, for any group of related
purchase orders and contracts, in the aggregate;
(ii)contracts, agreements or commitments
for the purchase of materials or services which are not required by the Company
in the current operation of the Business in the ordinary course, or any
agreements or commitments for the sale of goods or services which are
inadequate to recover current costs of the Company;
(iii)contracts involving the expenditure
for the purchase of material, supplies, equipment or services of more than
DM40,000 per contract;
(iv)contracts not otherwise referenced
involving the expenditure of more than DM40,000 (per contract) which are not
cancelable within thirty (30) days without penalty;
(v)contracts relating to the leasing (as
lessor or lessee) or the conditional purchase or sale by the Company of any
property, whether real, personal or mixed;
(vi)contracts to which the Company is a
party or by which any of its assets are bound and that require consent by any
other Person in connection with the transaction contemplated hereby, either to
prevent a breach or continue the effectiveness thereof;
(vii)contracts or arrangements with any
governmental body, agency or authority;
(viii)indentures, mortgages, promissory
notes, loan agreements, capital leases, security agreements or other agreements
or commitments for the borrowing of
21
money, or the deferred purchase price of assets, or which create a lien or
encumbrance on any assets of the Company;
(ix)guarantees of the obligations of
third parties or agreements to indemnify third parties (other than
indemnification provisions provided in the ordinary course to or for the
benefit of the customers of the Company);
(x)agreements which restrict the Company
from doing business in any geographic location;
(xi)policies of insurance in force and
effect with respect to the Company, the Business or its assets;
(xii)contracts or agreements not otherwise
referenced with any of the Sellers or their Affiliates;
(xiii)license agreements (as licensee or
licensor) with third parties;
(xiv)employment or consulting agreements
which vary materially from the model employment agreements referenced in
Section 4.18(b) or which involve the payment of DM50,000 or more during any
twelve month period;
(xv)distributor, dealer, sales,
advertising, agency, manufacturer's representative, franchise or similar
contracts or any contract relating to the payment of a commission;
(xvi)collective bargaining or other
agreements with labor unions;
(xvii)contracts or agreements for
charitable contributions by the Company;
(xviii)any contract or agreement which
could reasonably be expected to have a Material Adverse Effect on the Company;
or
(xix)other contracts outside the ordinary
course of the Business which are not otherwise described in this Subsection.
(b) True and complete copies of each of the
Contracts have been made available to Buyer and ▇▇▇▇▇ by the Sellers. Each of
the Contracts is in full force and effect and there exists no default or event
which, with the giving of notice or lapse of time or both, would constitute a
default thereunder by the Company or, to the knowledge of the Sellers, by any
other party thereto. Except as referenced in Section 4.6 of the Disclosure
Schedule, none of the rights
22
of the Company under any of the Contracts is subject to termination or
modification as a result of the transactions contemplated hereby. With respect
to the item referenced in Section 4.6 of the Disclosure Schedule, the Sellers
have no reason to believe that the relationship of the Company with DeTeMobil
Deutsche Telekom MobilNet GmbH ("DTM") will be discontinued as a result of the
transactions contemplated hereby. Without limiting the preceding sentence, ▇▇.
▇▇▇▇▇▇▇▇, the DTM official with whom the Sellers have discussed the pending
transaction, is the DTM official responsible for its customer care group and
has the authority to make a binding commitment in this regard. No notice of
termination or nonrenewal has been given under any Contract. All Contracts
contain terms and conditions not less favorable to the Company than those that
would be obtained from independent third parties and have been negotiated in
good faith at arms-length. None of the Contracts with suppliers of goods or
services to the Company requires the payment of any commission, royalty, fee,
brokerage fee or other similar charge. For the purposes of Section 4.15(a),
"material" contracts means contracts described in Section 4.15(a)(i) through
(xix). The amounts set forth in this Section 4.15 with respect to the Contracts
shall not be deemed to represent any standard of "materiality" with respect to
the Contracts or otherwise for any other purpose and shall have no application
to any other Section of this Agreement.
(c) Section 4.15(c) of the Disclosure Schedule
contains a list of the name and location of the five (5) largest customers (the
"Customers") and the five (5) largest suppliers, in each case measured by
revenues generated or amounts paid, of the Business as of the Interim Balance
Sheet Date. The relationships of the Company with each of the Customers is
good, and no Seller is aware of any intention of any such Customers or
suppliers to terminate or modify any of such relationships. The Company is not
generally required to provide bonding or any other security arrangements in
connection with any transactions with its customers or suppliers.
SECTION 4.16. RELATED TRANSACTIONS.
(a) Except as set forth in Section 4.16 of the
Disclosure Schedule, the Company has no contractual relationship with, or any
obligation or liability owed to, any of its Affiliates, any Affiliate of the
Sellers, or any entity of which one or more Sellers is an Affiliate. All such
contractual relationships are on terms that are no less favorable to the
Company than would be the case with a non-affiliated party.
(b) Except as set forth in Section 4.16 of the
Disclosure Schedule, neither the Sellers nor any director or officer of the
Company, nor any Affiliate of any of them has any interest, direct or indirect,
in any Person which (i) is a competitor, customer, subcontractor of supplier of
the Company, or (ii) has an existing relationship with, or an interest in, the
Company including but not limited to lessors of real or personal property and
Persons against which rights or options are exercisable by the Company.
SECTION 4.17. INSURANCE. Section 4.17(a) of the Disclosure
Schedule contains an accurate and complete list of all policies of insurance
presently maintained with respect to the
23
Company including, without limitation, "key man" insurance with respect to any
employee. Such list includes a description of coverage, the amount of coverage
and the name of the insurer or an indication that the Company has self-insured
any particular aspect of the Business. All such policies are in full force and
effect and no notice of cancellation or termination has been received with
respect to any such policy and there is, and has been, no default by the
Company with respect to its obligations under any such policy. Except as set
forth in Section 4.17(b) of the Disclosure Schedule, the Sellers and the
Company have not received during the past two (2) years any written notice or
other written communication from any insurance company declining to write
insurance with respect to the Business, or canceling or amending any of the
Company's insurance policies or proposing to do so. Section 4.17(c) of the
Disclosure Schedule sets forth a summary of information pertaining to property
damage, personal injury and products liability claims filed by the Company
during the past five (5) years which exceed DM2,000 in any instance, all of
which have been paid or are being defended by the Company's insurance carriers
and involve no exposure to the Company. Section 4.17(d) of the Disclosure
Schedule sets forth a complete list of any claims that the Company has under
any of its insurance policies which have not been fully paid to the Company.
SECTION 4.18. LABOR MATTERS.
(a) Except to the extent set forth in Section
4.18(a) of the Disclosure Schedule, (i) the Company is in compliance with all
rulings, laws, ordinances, statutes, rules, regulations, codes, and other
requirements of any governmental authority with respect to employment and
employment practices, (ii) there is no unfair labor practice charge or
complaint against the Company pending before or, to the best knowledge of the
Sellers, threatened to be brought before any labor grievance board, authority
or tribunal, nor has any such charge or complaint been, to the best knowledge
of the Sellers, threatened against the Company; (iii) there is no labor strike,
dispute, slowdown, or stoppage pending against or affecting the Company; (iv)
the Company is not a party to any collective bargaining agreement or contract
with any labor union and no works council exists with respect to employees of
the Company; (v) the Company has not experienced any labor difficulty during
the last three (3) years; and (vi) there are no other controversies pending
between the Company and any of its employees including, without limitation,
claims arising under any labor laws. There has not been any adverse change in
relations with employees of the Company as a result of any announcement or
other disclosure of the transactions contemplated by this Agreement.
(b) Section 4.18(b) of the Disclosure Schedule sets
forth a list of the names of all employees, consultants, officers and directors
of the Company as of the date hereof, including length of employment and date
of birth. Except as indicated on Section 4.18(b) of the Disclosure Schedule,
all employees have executed one of the Company's model employment agreements.
The Sellers have delivered to ▇▇▇▇▇ (i) copies of the Company's model
employment agreements, (ii) copies of all written employment agreements to
which the Company is a party with any of its employees identified in Section
4.18(b) of the Disclosure Schedule as having agreements which vary materially
from the model employment agreements, (iii) written summaries
24
of the terms of all oral employment agreements that are other than at-will and
which vary materially from the applicable model employment agreements, and (iv)
a schedule of compensation for all employees.
SECTION 4.19. EMPLOYEE BENEFIT PLANS.
(a) Set forth in Section 4.19 of the Disclosure
Schedule is an accurate and complete list of each Employee Benefit Plan (other
than Employee Benefit Plans provided by statute) maintained or contributed to
by the Company.
(b) Except as set forth in Section 4.19 of the
Disclosure Schedule, all amounts that the Company is required to have
contributed to any Employee Benefit Plan have been contributed within the time
prescribed by applicable law and all benefits, expenses, and other amounts due
and payable and all transfers or payments required to be made with respect to
any Employee Benefit Plan have been paid within the time prescribed by the
applicable documents and governing law.
(c) Except as set forth in Section 4.19 of the
Disclosure Schedule, there are no claims (other than routine claims for
benefits) or lawsuits pending with respect to any Employee Benefit Plan.
(d) Except as set forth in Section 4.19 of the
Disclosure Schedule, the Sellers have previously delivered or made available to
Buyer and ▇▇▇▇▇ true and complete copies of the plan documents for each
Employee Benefit Plan identified in Section 4.19 of the Disclosure Schedule.
SECTION 4.20. LITIGATION. Except as set forth in Section 4.20
of the Disclosure Schedule, there are no claims, actions, suits, or proceedings
pending or, to the best knowledge of the Sellers, threatened against the
Company relating to this Agreement or the transactions contemplated hereby or
to the Business or the properties of the Company at law or in equity or before
or by any national, federal, state, provincial, local, or foreign court or
other governmental department, commission, board, agency, instrumentality or
authority, nor any arbitration proceeding, in each case including, without
limitation, any claims relating to environmental matters. The Company is not
subject to any adverse judgment, order, writ, injunction or decree of any court
or governmental body.
SECTION 4.21. COMPLIANCE WITH LAWS. Except as set forth in
Section 4.21 of the Disclosure Schedule, the Company has conducted the Business
so as to comply with in all material respects, and is not in material violation
of, nor has it received any written notice claiming it is in material violation
of any order, law, ordinance, statute, rule or regulation applicable to it, or
to the Business or any of the property or assets of it including, without
limitation, any environmental or worker safety and protection laws and
regulations. The Company has all
25
material licenses, permits, certificates of occupancy and authorizations
necessary to conduct the Business.
SECTION 4.22. BOOKS AND RECORDS. The books, accounts and
records of the Company (a) are located at its headquarters at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Germany, (b) are correct and complete in
all material respects, (c) have been maintained in accordance with law and good
business practice, and (d) constitute all the books, accounts and records
necessary to carry on the Business in the manner in which it is currently being
conducted and has over the preceding twelve (12) months been carried on. The
copies of the organizational documents and of the minutes of all Quota holder
and director meetings of the Company hereto delivered by the Sellers to Buyer
and ▇▇▇▇▇ are complete and correct.
SECTION 4.23. COPIES OF DOCUMENTS SECTION 4.23. COPIES OF
DOCUMENTS. Each of the Sellers and the Company has delivered or specifically
made available to Buyer, ▇▇▇▇▇ and their advisors true, complete and correct
copies of all documents referred to in this Agreement or in any Section of the
Disclosure Schedule with the understanding and intention that Buyer and ▇▇▇▇▇
may and will rely upon the completeness and accuracy thereof.
SECTION 4.24. ADEQUACY OF ASSETS. Except as set forth in
Section 4.24 of the Disclosure Schedule, the assets of the Company and the
facilities, assets and services to which the Company has a contractual right of
use include all rights, properties, assets, facilities and services necessary
or appropriate for the carrying on of the Business in the manner in which it is
currently being and has over the immediately preceding twelve (12) months been
carried on, and the Company does not depend in any respect upon the use of
assets owned by, or facilities or services provided by, any of the Sellers or
any Affiliate of any of them.
SECTION 4.25. GRANTS. The Company has never received any
Grants.
SECTION 4.26. ACCOUNTS RECEIVABLE. Section 4.26 of the
Disclosure Schedule sets forth a true and correct list and aging of all unpaid
accounts receivable owing to the Company as of the Interim Balance Sheet Date.
The accounts receivable of the Company including, without limitation, those
reflected in Section 4.26 of the Disclosure Schedule, constitute or will
constitute as of the respective dates thereof, legal, valid, binding and
enforceable claims arising from bona fide transactions in the ordinary course
of the Business and, except to the extent reserved against on the Interim
Balance Sheet, are or will be as of the respective dates thereof collectible in
the ordinary course of the Business and are not subject to any known
counterclaims or set-offs. The reserves for doubtful accounts and allowances
with respect to the accounts receivables generated after the Interim Balance
Sheet Date and prior to the Closing will be established on the basis of
evaluation of specific accounts and age classifications in accordance with
GGAAP.
SECTION 4.27. BROKERS AND FINDERS. No agent, broker,
investment banker, person or firm acting on behalf of the Company, the Sellers
or any Affiliate of any of them is or will be
26
entitled to any brokers' or finders' fee or any other commission or similar fee
directly or indirectly from any of the parties hereto in connection with the
transactions contemplated hereby.
SECTION 4.28. INVESTMENT INTENT; INFORMATION DISCLOSURES.
(a) Each of the Sellers acknowledges that the ▇▇▇▇▇
Stock to be received by such Seller will be acquired for such Seller's own
account and without any view to the distribution of any part thereof without
registration under applicable federal and state securities laws, or the
delivery to ▇▇▇▇▇ of an opinion of counsel that registration is not required in
accordance with Section 4.28(e) hereof. Each Seller represents that such Seller
does not have any agreements or arrangements to sell, transfer or grant a
participation with respect to the Purchase Price Shares.
(b) Each Seller understands that the shares of ▇▇▇▇▇
Stock constituting the Purchase Price Shares are not registered under the
United States federal or state securities laws in part on the grounds that the
transactions contemplated hereby are exempt from registration under the
Securities Act of 1933 (the "1933 Act") pursuant to Section 4(2) thereof, and
that Buyer's and ▇▇▇▇▇' reliance on such exemption is predicated on each
Seller's representations set forth herein.
(c) Each Seller represents that such Seller has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment in the Purchase Price Shares,
and has the ability to bear the economic risks of such investment. Each Seller
further represents that such Seller has had (i) access, prior to the Closing
Date, to the ▇▇▇▇▇ Filings (ii) the opportunity to ask questions of, and
receive answers from, ▇▇▇▇▇ concerning ▇▇▇▇▇ and the Purchase Price Shares, and
(iii) the opportunity to obtain additional information (to the extent ▇▇▇▇▇
possessed such information or could acquire it without unreasonable expense)
necessary to verify the accuracy of any information received or to which such
Seller had access.
(d) Each Seller understands and agrees that the
Purchase Price Shares may not be sold, transferred or otherwise disposed of
without registration under the 1933 Act and applicable state laws, unless
exemptions from registration requirements are available, and that in the
absence of an effective registration statement covering the Purchase Price
Shares or an available exemption from applicable registration requirements, the
Purchase Price Shares must be held indefinitely. In particular, the Purchase
Price Shares may not be sold pursuant to Rule 144 promulgated under the 1933
Act unless all of the conditions of such rule are met.
(e) Each Seller agrees that such Seller will not
offer, sell, mortgage, pledge or otherwise dispose of any of the Purchase Price
Shares (other than pursuant to an effective registration statement under the
▇▇▇▇ ▇▇▇) unless and until such Seller delivers an opinion of counsel
satisfactory to ▇▇▇▇▇, or ▇▇▇▇▇ delivers to the Sellers an opinion of counsel,
that registration under applicable federal or state securities laws is not
required.
27
(f) In addition, each Seller agrees that such Seller
shall not sell, assign, pledge, encumber or otherwise transfer any of the
Purchase Price Shares (or any interest therein) unless:
(i)such transfer occurs after financial
results reflecting at least thirty days of post-Closing combined operations of
the Company and ▇▇▇▇▇ have been prepared and published within the meaning of
Section 201.01 of the SEC's Codification of Financial Reporting Policies; and
(ii)either (A) such transfer occurs after
the first anniversary of the Closing, or (B) after giving effect to the
transfer, such Seller will continue to own at least fifty percent (50%) of the
Purchase Price Shares issued to him at the Closing (adjusted to account for any
additional shares issued in respect of such shares by way of stock splits,
stock dividends or otherwise).
(g) Each Seller agrees that all certificates for Purchase
Price Shares shall bear a legend in substantially the following form:
The securities represented by this certificate have not been
registered, qualified, recommended, approved or disapproved
under United States federal securities law or state
securities laws. The shares represented by this certificate
may not be sold, transferred or otherwise disposed of by an
investor without (i) registration under federal and state
securities laws, or (ii) delivery of an opinion of counsel
satisfactory to the corporation that neither the sale nor the
proposed transfer constitutes a violation of any United
States federal or state securities law.
The securities represented by this certificate are subject to
certain transfer restrictions set forth in an Acquisition
Agreement dated as of November 23, 1998 (a copy of which may
be obtained from the Company at its principal executive
office), and may not be sold, assigned, pledged, encumbered
or otherwise transferred except in compliance with the terms
and conditions of such agreement.
SECTION 4.29 POOLING OF INTERESTS. The Sellers acknowledge that ▇▇▇▇▇
intends to account for the acquisition of the Quotas as a pooling of interests,
and that qualifying for such accounting treatment is dependent in part upon
actions taken, or not taken, by the Company and the Sellers both before and
after the date hereof. In this regard, and with the understanding that ▇▇▇▇▇ is
relying thereon in making its commitment to enter into this transaction, the
Sellers warrant that the Sellers, the Company and their respective Affiliates
have not, directly or indirectly, taken any
28
of the following actions, which Sellers acknowledge could prevent ▇▇▇▇▇ from
obtaining such pooling accounting treatment:
(a) acquired or sold, assigned, transferred or otherwise
disposed of, or reduced any risk relative to, any Quotas or ▇▇▇▇▇ Stock in
contemplation of the transactions provided for herein;
(b) paid or received any dividends or other distributions
with respect to the capital interests of the Company, other than distributions
in the ordinary course of the Company's Business and not in contemplation of
the transactions provided for herein;
(c) altered the relative ownership interests of the Sellers
in the Company in contemplation of the transactions provided for herein;
(d) disposed of any part of the assets of the Company within
the nine months preceding the date hereof or in contemplation of the
transactions provided for herein;
(e) become a party to any contract, document, instrument or
any written or oral agreement regarding the sale, assignment or transfer of, or
allowed to be created any rights or obligations for the sale, assignment or
transfer of, or explicitly or impliedly agreed to sell, assign or transfer any
of the Quotas held by any of the Sellers to any other Seller or any Affiliate
of any other Seller; or
(f) entered into any agreement to do any of the foregoing,
including without limitation, any agreement to distribute or dispose of any
part of the assets of the Company upon the consummation of the transactions
provided for herein.
SECTION 4.30 RESTRICTIVE COVENANTS. Except as disclosed in Section
4.30 of the Disclosure Schedule, the Company is not subject to, or a party to,
any mortgage, lien, lease, license, permit, agreement, contract, instrument,
law, rule, ordinance, regulation, order, judgment or decree, or any other
restriction of any kind or character, which materially adversely affects its
Business practices, operations or condition or any of its assets or properties,
which restricts its ability to acquire any property or conduct its Business in
any area or which would prevent consummation of the transactions contemplated
by this Agreement, compliance by it with the terms, conditions and provisions
hereof or the operation of its Business by it after the date hereof on
substantially the same basis as heretofore operated by it.
SECTION 4.31 PRODUCT LIABILITIES AND WARRANTIES. There are no express
or implied warranties applicable to products or services sold or provided by
the Company except as provided by statute or disclosed on Section 4.31 of the
Disclosure Schedule. Except as set forth in Section 4.31 of the Disclosure
Schedule, there is no action, suit, proceeding or claim pending or, to the best
knowledge of the Sellers, threatened against the Company under any warranty,
express or implied, and there is no basis upon which any claim could be made.
Section 4.31 of the
29
Disclosure Schedule also summarizes all product liability claims that have been
asserted against the Company during the five (5) years preceding the date of
this Agreement.
SECTION 4.32 REAL ESTATE. Section 4.32 of the Disclosure Schedule sets
forth a complete and accurate list of all real property owned by the Company
(the "Real Property"). Except as set forth in Section 4.32 of the Disclosure
Schedule, the Company owns the Real Property in fee simple free and clear of
all easements, covenants, mortgages, liens, leases or encumbrances. Except as
set forth in Section 4.32 of the Disclosure Schedule, all buildings, structures
and appurtenances located on the Real Property are in good operating condition
and in a state of good repair, are adequate and suitable for the purposes for
which they are presently being used, do not contain any asbestos or
asbestos-containing materials, and, with respect to each, the Company has
adequate rights of ingress and egress for the operation of the Business in the
ordinary course. Except as set forth in Section 4.32 of the Disclosure
Schedule, (i) none of such buildings, structures or appurtenances (or any
equipment therein), including the operation and maintenance thereof, violates
any restrictive covenant or any provision of any national, federal, state,
provincial or local law, ordinance, rule or regulation including, without
limitation, zoning ordinances but excluding environmental laws regulating
Hazardous Materials which are addressed in Section 4.33; and (ii) none of such
buildings, structures or improvements encroaches in any respect upon any
property owned by others. No condemnation proceeding is pending or threatened
which would preclude or impair the use of any of the Real Property, or any
building, structure, appurtenances thereon, in connection with the operation of
the Business.
SECTION 4.33 ENVIRONMENTAL MATTERS.
(a) Except as set forth in Section 4.33, to the Sellers'
knowledge there are no Hazardous Materials in, on or under (including, without
limitation, the soil or groundwater thereunder) the Real Property or any real
property leased by the Company.
(b) For purposes of this Agreement, "Hazardous Materials"
means any hazardous substances, oils, pollutants or contaminants, as those
terms are defined under any environmental law to the extent that the presence
of any such substance is at a level in excess of that permitted by any
environmental law.
SECTION 4.34 DISCLOSURE. None of the representations or warranties by
the Sellers herein, no statement contained in any certificate, list or other
writing furnished to Buyer or ▇▇▇▇▇ pursuant hereto and no statement contained
in any Section of the Disclosure Schedule, taken as a whole, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein or therein, in light of the
circumstances in which they were made, not misleading. There is no fact known
to the Sellers which materially and adversely affects the Business, the
Company, or the prospects or financial condition of the Company, which has not
been set forth in this Agreement or in a Section of the Disclosure Schedule.
30
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF ▇▇▇▇▇ AND BUYER (GARANTIEN)
▇▇▇▇▇ and Buyer, jointly and severally, hereby represent and warrant
to the Sellers as follows:
SECTION 5.1. CORPORATE ORGANIZATION. Each of Buyer and ▇▇▇▇▇
is a corporation or limited liability company, as the case may be, duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has the full right, power and authority to
own, lease and operate all of its properties and assets and to carry out its
business as it is presently conducted.
SECTION 5.2. CAPITALIZATION OF ▇▇▇▇▇. All issued and
outstanding shares of ▇▇▇▇▇ Stock have been, and upon issuance the Purchase
Price Shares will be, duly authorized and validly issued, fully paid and
nonassessable. The issuance of the Purchase Price Shares is not subject to any
preemptive right or right of first refusal that has not or will not be
satisfied or waived.
SECTION 5.3. AUTHORITY. Each of Buyer and ▇▇▇▇▇ has all
requisite right, power and authority to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement and the
Related Agreements by Buyer and ▇▇▇▇▇ have been duly and validly authorized and
approved by all necessary corporate action. This Agreement has been duly and
validly executed and delivered by Buyer and ▇▇▇▇▇ and, assuming this Agreement
has been duly authorized, executed and delivered by the Sellers, constitutes
the legal, valid and binding obligation of Buyer and ▇▇▇▇▇, enforceable against
each of them in accordance with its terms.
SECTION 5.4. ▇▇▇▇▇' CONSENTS AND APPROVALS; NO VIOLATIONS.
The execution, delivery and performance of this Agreement by Buyer and ▇▇▇▇▇
will not (with or without the giving of notice or the passage of time, or
both), (a) violate in any material respect any applicable provision of law or
any rule or regulation of any administrative agency or governmental authority
applicable to Buyer or ▇▇▇▇▇, or any order, writ, injunction, judgment or
decree of any court, administrative agency or governmental authority applicable
to Buyer or ▇▇▇▇▇, (b) violate the organizational documents of Buyer or the
Articles of Incorporation or Bylaws of ▇▇▇▇▇, (c) violate or require any
consent, waiver or approval under, result in a breach, modification or
termination of any of any provisions of, constitute a default under, affect the
rights under or enforceability of, result in the imposition of any pledge,
security interest or other encumbrance pursuant to, give any Person the right
to terminate, modify or renegotiate any provision of, any material agreement,
indenture, mortgage, deed of trust, lease, license, or other instrument to
which Buyer or ▇▇▇▇▇ is a party or by which Buyer or ▇▇▇▇▇ is bound, or any
material license, permit or certificate held by Buyer or ▇▇▇▇▇ (other than any
consents which will have been obtained on or prior to the
31
Closing Date), or (d) based upon the information provided to the Buyer with
respect to the Sellers, require any material consent or approval by, notice to,
or registration with any governmental authority.
SECTION 5.5. LITIGATION. There are no claims, actions, suits,
or proceedings pending or, to the best knowledge of Buyer and ▇▇▇▇▇,
threatened, against Buyer or ▇▇▇▇▇ relating to this Agreement or the
transactions contemplated hereby or to the business or property of Buyer or
▇▇▇▇▇, at law or in equity or before or by any national, federal, state,
provincial, local, or foreign court or other governmental department,
commission, board, agency, instrumentality or authority, or any arbitration
proceeding, in each case which are likely to have a Material Adverse Effect.
Neither Buyer nor ▇▇▇▇▇ is subject to any judgment, order, writ, injunction or
decree of any court or governmental body.
SECTION 5.6. BROKERS AND FINDERS. No agent, broker,
investment banker, Person or firm acting on behalf of Buyer, ▇▇▇▇▇ or any
Affiliate of either of them is or will be entitled to any brokers' or finders'
fee or any other commission or similar fee directly or indirectly from any of
the parties hereto in connection with the transactions contemplated hereby,
other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, whose fee will be paid by the Buyer or an Affiliate
of the Buyer.
SECTION 5.7. ▇▇▇▇▇ INFORMATION. ▇▇▇▇▇ has delivered to the
Sellers true and complete copies of the ▇▇▇▇▇ Filings. At the date hereof, the
▇▇▇▇▇ Filings, taken as a whole, do not contain any untrue statement of a
material fact or omit any material fact necessary to make the statements
contained herein, in light of the circumstances in which they were made, not
misleading.
SECTION 5.8 NO MATERIAL ADVERSE CHANGE. Since September 30,
1998, ▇▇▇▇▇ has not suffered any Material Adverse Effect.
SECTION 5.9. UNDISCLOSED LIABILITIES. ▇▇▇▇▇ has no
liabilities (absolute, accrued, contingent or otherwise) required by USGAAP to
be reflected or reserved against in the consolidated statement of assets and
liabilities of ▇▇▇▇▇ except (a) liabilities reflected or reserved against in
the Form 10-Q Balance Sheet, and (b) liabilities incurred since September 30,
1998 in the ordinary course of business, and which, in the aggregate, do not
have a Material Adverse Effect.
SECTION 5.10. COMPLIANCE WITH LAWS. COMPLIANCE WITH LAWS.
Each of Buyer and ▇▇▇▇▇ has conducted its business so as to comply with, and is
not in violation of, nor has it received any written notice claiming it is in
violation of, any order, law, ordinance, statute, rule or regulation applicable
to it, or to its business or any of its property or assets including, without
limitation, any environmental or worker safety and protection laws and
regulations, except to the extent that such non-compliance would not have a
Material Adverse Effect. Each of Buyer and ▇▇▇▇▇ has all material licenses,
permits, certificates of occupancy and authorizations necessary to conduct its
business.
32
ARTICLE VI
FURTHER COVENANTS AND AGREEMENTS
SECTION 6.1. COVENANTS OF THE SELLERS PENDING THE CLOSING.
The Sellers covenant and agree that, pending the Closing and prior to the
termination of this Agreement, and except as otherwise agreed to in writing by
Buyer and ▇▇▇▇▇, the Sellers shall or, as appropriate shall cause the Company
to:
(a) conduct the Business solely in the ordinary
course and consistent with the past practices of the Company;
(b) not take or intentionally omit to take any
action which would result in a breach of any of the Sellers' representations
and warranties hereunder in any material respect;
(c) continue to maintain and service the physical
assets used by the Company in the conduct of the Business consistent with past
practices;
(d) use its reasonable efforts to preserve the
Business and organization of the Company, to keep available the services of the
Company's present employees and agents and to maintain the relations and
goodwill with the suppliers, customers (including the Customers), distributors
and any others having business relations with the Company in connection with
the Business;
(e) use its and their reasonable efforts to cause
all of the conditions to the obligations of Buyer and ▇▇▇▇▇ under this
Agreement to be satisfied on or prior to the Closing Date and to obtain, prior
to the Closing, all consents of all third parties and governmental authorities
necessary for the consummation by the Sellers and the Company of the
transactions contemplated hereby. All such consents will be in writing and
executed counterparts will be delivered to Buyer and ▇▇▇▇▇ at or prior to the
Closing.
(f) cooperate with Buyer and ▇▇▇▇▇ in making
arrangements to obtain licenses, permits and certificates required to conduct
the Business or own the Quotas at Closing;
(g) provide Buyer's and ▇▇▇▇▇' officers, employees,
counsel, accountants and other representatives with full access to, during
normal business hours, all of the books and records of the Company, make
available to representatives of Buyer and ▇▇▇▇▇, knowledgeable employees of the
Company for reasonable periods of time to answer inquiries of such
representatives with respect to Buyer's and ▇▇▇▇▇' investigation of the Company
and permit such representatives of Buyer and ▇▇▇▇▇ to consult with the
officers, employees, accountants and
33
counsel of the Sellers; provided, that no such activities unreasonably
interfere with the operation of the Business;
(h) not grant to any Person a power of attorney or
similar authority to act for the Company;
(i) not enter into any guarantee of the obligations
of any Person to the extent such guarantee shall survive the Closing;
(j) not amend the charter, Articles of Association
or other organizational documents of the Company;
(k) make no change in the amount of issued share
capital of the Company or issue or create any option, warrant or any other
security of the Company;
(l) not increase the compensation payable or to
become payable to any officer, employee or agent of the Company other than in
the ordinary course of the Business, nor make any bonus payment or arrangement
to or with any Seller or any other officer, employee or agent of the Company
other than (in the case of such other officers, employees or agents) in the
ordinary course of the Business;
(m) not make any dividends or other distributions in
respect of the Quotas;
(n) not sell, transfer, lease, abandon or otherwise
dispose of (or commit to do so) any fixed assets of the Company; and
(o) not enter into any contract or commitment
calling for payment to or by the Company of an aggregate amount of more than
DM10,000, which is not terminable by the Company on less than thirty (30) days'
notice without penalty.
SECTION 6.2. COVENANTS OF BUYER AND ▇▇▇▇▇ PENDING THE
CLOSING. Buyer and ▇▇▇▇▇ covenant and agree that, pending the Closing and prior
to the termination of this Agreement, and except as otherwise agreed to in
writing by the Sellers, each of Buyer and ▇▇▇▇▇:
(a) shall not take or intentionally omit to take any
action which would result in a breach of any of its representations and
warranties hereunder in any material respect.
(b) shall use its reasonable efforts to cause all of
the conditions to the obligations of the Sellers under this Agreement to be
satisfied on or prior to the Closing Date and to obtain prior to the Closing,
all consents of all third parties and governmental authorities necessary for
the consummation by it of the transactions contemplated hereby. All such
consents
34
will be in writing and executed counterparts thereof will be delivered to the
Sellers at or prior to the Closing.
(c) shall promptly disclose to the Sellers any
information relating to its representations and warranties hereunder which,
because of an event occurring after the date hereof, is incomplete or is no
longer correct in any material respect.
SECTION 6.3. FILINGS. Promptly after the execution of this
Agreement, each of the parties hereto shall prepare and make or cause to be
made any required filings, submissions and notifications under the laws of any
domestic or foreign jurisdictions to the extent that such filings are necessary
to consummate the transactions contemplated hereby and will use its reasonable
efforts to take all other actions necessary to consummate the transactions
contemplated hereby in a manner consistent with applicable law. Each of the
parties hereto will furnish to the other party such necessary information and
reasonable assistance as such other party may reasonably request in connection
with the foregoing.
SECTION 6.4. EFFECTIVE TIME OF CLOSING AND TRANSFER. The
Closing shall be effective for all purposes as of the close of business on the
Closing Date.
SECTION 6.5. ANNOUNCEMENTS. Except as expressly contemplated
by this Agreement, the parties will mutually agree as to the time, form and
content before issuing any press releases or otherwise making any public
statements or statements to third parties with respect to transactions
contemplated hereby and shall not issue any press release or, except as
necessary to perform their respective obligations hereunder, discuss the
transactions contemplated hereby with any third party prior to reaching mutual
agreement with respect thereto, except as may be required by law.
Notwithstanding the foregoing, in the event prior to the Closing any party
hereto is required by law or the rules of any stock exchange on which such
party's securities are traded to make a statement with respect to the
transactions contemplated herein, such party shall notify in writing the other
party hereto as to the time, form and content of such statement.
SECTION 6.6. COSTS AND EXPENSES. Whether or not the
transactions contemplated by this Agreement are consummated, each party hereto
shall pay its own costs and expenses (including legal fees and expenses)
incurred in connection with due diligence reviews, the preparation, negotiation
and execution of this Agreement and all other agreements, certificates,
instruments and documents delivered hereunder, and all other matters relating
to the transactions contemplated hereby. All German transfer and intangible
Taxes, if any, arising in connection with the sale and assignment of the Quotas
hereunder shall be paid by the Sellers. All transfer and intangible Taxes, if
any, in connection with the sale and delivery of the Purchase Price Shares
hereunder shall be paid by ▇▇▇▇▇. All fees and charges arising from notary
requirements applicable to the sale and assignment of the Quotas shall be paid
by the Buyer.
35
SECTION 6.7. FURTHER ASSURANCES.
(a) Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
If at any time after the Closing Date any further action is necessary or
desirable to carry out the purposes of this Agreement, the parties hereto shall
take or cause to be taken all necessary action including, without limitation,
the execution and delivery of such further instruments and documents as may be
reasonably requested by the other party for such purposes or otherwise to
consummate and give effect to the transactions contemplated hereby. If any
consent or approval required for the consummation of the transactions
contemplated hereby is waived by the parties prior to Closing, at the request
of the Buyer the Sellers shall cooperate with ▇▇▇▇▇, and attempt in good faith,
to obtain such consent or approval during the one year period immediately
following the Closing.
(b) From and after the Closing Date, the Buyer
and/or ▇▇▇▇▇ agree to promptly inform the Sellers of any Tax audit of the
Company by a Tax authority and to give the Sellers the opportunity to
participate in such a Tax audit. Furthermore, the Sellers shall be entitled to
request the Buyer, ▇▇▇▇▇ and/or the Company to duly and timely file the
appropriate recourse against any Tax assessment resulting in a higher Tax
burden for any period prior to the Closing Date. If such request is not
honored, the Buyer shall cause the Company, upon request by one or more of the
Sellers, to file such recourse nonetheless, provided that in this case the
Sellers who have made such request shall be liable to reimburse the Company for
all fees and expense incurred in the recourse proceedings to the extent such
fees and expenses are not borne by third parties.
SECTION 6.8. CERTAIN AGREEMENTS. On or before the Closing
Date, Buyer, ▇▇▇▇▇, and the Sellers will execute the Pledge and Escrow
Agreement in the form of EXHIBIT A, the Sellers and ▇▇▇▇▇ will execute the
Registration Rights Agreement in the form of EXHIBIT B, and the Sellers will
execute, or cause to be executed, an employment agreement between the Company
and each of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in the form of EXHIBIT C 1
and EXHIBIT C 2, and a commercial lease agreement with terms set forth in
EXHIBIT D between the Company and the partnership composed of Messrs.
Stockmann, Schoss and Grasserbauer, in each case to be effective upon the
Closing Date.
SECTION 6.9. NON-DISCLOSURE; COVENANT NOT TO COMPETE.
(a) The parties hereto acknowledge that (i) the covenants
contained in this Section 6.9 are a material inducement to the consummation by
Buyer and ▇▇▇▇▇ of the transactions contemplated by this Agreement and (ii)
Buyer and ▇▇▇▇▇ would not have entered into or performed this Agreement but for
the covenants herein contained.
36
(b) Each of the Sellers agrees that, unless acting with the
prior consent of Buyer and ▇▇▇▇▇, it will not, either alone or in conjunction
with any other Person, or directly or indirectly through any entity that it now
or in the future controls, for a period of three years from the Closing Date:
(i) employ or solicit the employment of any Person who within the month
preceding the Closing Date had been an employee of the Company; (ii) directly
or indirectly engage or participate, whether as officer, employee, director,
agent, consultant, shareholder, partner, or otherwise, in the ownership,
management, marketing or operation of any enterprise which is engaged in any
part of the Business within Europe (other than solely through the ownership of
equity securities or equivalent interests of any entity at a level which does
not create the ability to influence or control management of the entity); or
(iii) conduct any part of the Business with any Person that is a Customer of
the Company as of the Closing Date.
(c) It is stipulated and agreed that the Sellers have become
acquainted with confidential and privileged information of the Company relating
to customer files, customer lists, special customer matters, sales methods and
techniques, merchandising concepts and plans, new site locations, business
plans, sources of supply and vendors, special business relationships with
vendors, agents and brokers, promotional materials and information, financial
matters, mergers, acquisitions, selective personnel matters and confidential
processes, designs, formulas, ideas, plans, devices or materials and other
similar matters which are confidential (any and all such information being
referred to herein as the "Confidential Information"); and that the use of the
Confidential Information against the Company would seriously damage the
Business. As a consequence of the above, each of the Sellers agrees that,
unless acting with the prior written consent of Buyer, such Seller shall,
whether acting alone, in conjunction with any other Person, or directly or
indirectly through any entity that such Seller now or in the future controls:
not use, divulge, publish or otherwise reveal or allow to be revealed any
aspect of the Confidential Information to any Person; refrain from any action
or conduct which might reasonably or foreseeably be expected to compromise the
confidentiality or proprietary nature of the Confidential Information; and
shall have no right to apply for or to obtain any patent, copyright, or other
form of Intellectual Property protection with regard to the Confidential
Information.
(d) The parties hereto acknowledge and agree that any remedy
at law for any breach of the provisions of this Section 6.9 would be inadequate
and the Sellers hereby consent to the granting by any court of competent
jurisdiction of an injunction or other suitable relief and without the posting
of any bond or the necessity of actual monetary loss being proved, in order
that such breach may be effectively restrained.
SECTION 6.10. POOLING OF INTERESTS. The Sellers shall not, and shall
not permit the Company, to take, any of the following actions, each of which
could result in the transfer of the Quotas not qualifying to be accounted for
as a pooling of interests: (a) acquiring or transferring any capital interests
of the Company or any ▇▇▇▇▇ Stock during the thirty (30) days prior to the
Closing Date, and (b) selling, assigning or transferring, or agreeing or
allowing to be created any rights or obligation for the sale, assignment or
transfer of, any of the Purchase Price Shares or any other ▇▇▇▇▇ Stock in
violation of the restrictions set forth in Section 4.28(f)(i).
37
SECTION 6.11. EXCLUSIVE DEALING. During the period from the
date of this Agreement through and including the Closing Date, the Sellers
shall not, and shall not permit the Company or any of their respective
directors, officers, employees, representatives or agents to, directly or
indirectly, solicit, initiate or participate in any negotiations with any
Person other than ▇▇▇▇▇ and the Buyer and their respective representatives,
agents and Affiliates, concerning any Alternative Transaction. The Sellers
shall immediately notify ▇▇▇▇▇ and Buyer of any proposal or offer received by,
any information requested from, or any discussions or negotiations sought to be
initiated or continued with, the Sellers or the Company in respect of an
Alternative Transaction and shall, in any such notice to ▇▇▇▇▇ and Buyer,
indicate the terms and conditions of any proposals or offers or the nature of
any requests, discussions or negotiations.
SECTION 6.12 REPAYMENT OF SHAREHOLDER LOAN, ETC. On or prior to July
31, 1999, or, if earlier the date of any sale by any Seller of any of the
Purchase Price Shares, the Sellers will repay all outstanding loans from the
Company to any of the Sellers and will purchase from the Company, and the
Company will transfer to the Sellers, the Mercedes-Benz E280T automobile,
license plate number H-TH 658, for its current fair market value as reported by
the ▇▇▇▇▇▇▇▇-Liste.
SECTION 6.13 PAYMENT OF DIVIDEND. The Buyer acknowledges the
shareholders' resolution of the Sellers dated November 20, 1998.
ARTICLE VII
TERMINATION
SECTION 7.1. TERMINATION This Agreement may be terminated at
any time prior to the Closing:
(a) by mutual written agreement executed by the
Sellers, Buyer and ▇▇▇▇▇;
(b) by the Sellers, Buyer or ▇▇▇▇▇ at any time after
November 30, 1998 if, through no fault of the party seeking termination, the
Closing shall not have occurred;
(c) by the Sellers, Buyer or ▇▇▇▇▇, if any
governmental or regulatory authority, agency or commission, including courts of
competent jurisdiction, domestic or foreign, shall have issued an order,
decree, or ruling or taken other action, restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby and such order, decree, ruling
or other action shall have become final and nonappealable;
38
(d) by Buyer or ▇▇▇▇▇, if there has been a material
violation or breach by the Sellers of any agreement or any representation or
warranty contained in this Agreement which (i) is not curable, (ii) has
rendered the satisfaction of any condition to the obligations of Buyer and
▇▇▇▇▇ impossible, and (iii) has not been waived by Buyer and ▇▇▇▇▇; or
(e) by the Sellers, if there has been a material
violation or breach by Buyer or ▇▇▇▇▇ of any agreement, representation or
warranty contained in this Agreement which (i) is not curable, (ii) has
rendered the satisfaction of any condition to the obligations of the Sellers
impossible, and (iii) has not been waived by the Sellers.
SECTION 7.2. PROCEDURE AND EFFECT OF TERMINATION. In
the event of termination of this Agreement pursuant to Section 7.1 hereof,
written notice thereof shall forthwith be given to the other parties hereto and
this Agreement (other than Section 6.6 hereof and as provided in paragraph (b)
below) shall terminate and the transactions contemplated hereby shall be
abandoned without further action by the parties hereto. If this Agreement is
terminated as provided herein:
(a) all information with respect to the Business or
the Company received by and in the possession of Buyer, ▇▇▇▇▇ or any Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with Buyer or ▇▇▇▇▇ shall be returned
to the Sellers or destroyed by Buyer or ▇▇▇▇▇;
(b) any termination pursuant to subparagraph (b),
(c), (d), or (e) of Section 7.1 shall not be deemed a waiver of any rights or
remedies otherwise available under this Agreement, by operation of law or
otherwise; and
(c) all filings, applications and other submissions
made pursuant to Section 6.3 hereof or prior to the execution of this Agreement
in contemplation thereof shall, to the extent practicable, be withdrawn from
the agency or other Person to which made.
ARTICLE VIII
CONDITIONS TO BUYER'S AND ▇▇▇▇▇' OBLIGATIONS
Each and every obligation of Buyer and ▇▇▇▇▇ to consummate the
transactions described in this Agreement shall be subject to the fulfillment,
or the waiver by Buyer and ▇▇▇▇▇ on or before the Closing Date, of the
following conditions precedent:
SECTION 8.1 THE SELLERS' CLOSING DELIVERIES. The Sellers
shall have delivered, or caused to be delivered, to Buyer and ▇▇▇▇▇ at or prior
to the Closing, unless specifically waived by Buyer and ▇▇▇▇▇ in their sole
discretion, each of the following:
39
(a) the Registration Rights Agreement and the Pledge
and Escrow Agreement referenced in Section 6.8, in each case executed by the
Sellers and, in the case of the Pledge and Escrow Agreement, by the Escrow
Agent;
(b) the employment agreements referenced in Section
6.8 executed by the Company and each of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇;
(c) valid and binding consents of all Persons whose
consent or approval is required to be set forth in Sections 4.5 and 4.6 of the
Disclosure Schedule; in particular the DTM consent.
(d) with respect to each Seller, three separate
guaranteed stock powers duly endorsed in blank and a Certificate of Foreign
Status on Form W-8;
(e) the certificates referenced in Section 8.2 and
8.3;
(f) written modification of the Company's
Mortgage loans evidencing the lender's release of restrictions on dividend
payments; and
(e) evidence satisfactory to the Buyer that the
Silent Partnership has been terminated on a basis that does not involve the
incurrence or payment by the Company of any obligation or amount other than
payments of the principal amount thereof together with accrued interest thereon
until the earlier of termination or November 30, 1998 at the rate of nine
percent plus the Prepayment Amount, and that all such payments have been made.
(h) conclusion of a Real Estate Transfer Agreement
including a consent to transfer the title ("Auflassung"), between the
partnership composed of Messrs. Stockmann, Schoss and Grasserbauer and the
Company, the execution and delivery of a lease thereto, all as contemplated by
the term sheet attached hereto as Exhibit D, and release of the Company by
Stadtsparkasse Hannover of all of the obligations of two loans in the total
amount of DM 3 mio..
SECTION 8.2. REPRESENTATIONS AND WARRANTIES TRUE SECTION. The
representations and warranties of the Sellers contained in this Agreement, as
modified by the Disclosure Schedule, shall have been true on the date hereof in
all material respects, and shall be true on the Closing Date in all material
respects with the same effect as though such representations and warranties
were made on and as of such date and the Sellers shall have delivered to Buyer
and ▇▇▇▇▇ on the Closing Date a certificate, dated as of the Closing Date, to
such effect.
SECTION 8.3. PERFORMANCE. The Sellers shall have, in all
material respects, performed and complied with all covenants required by this
Agreement to be performed or complied with by them prior to or at the Closing
and the Sellers shall have delivered to Buyer and ▇▇▇▇▇ on the Closing Date a
certificate, dated as of the Closing Date, to such effect.
40
SECTION 8.4. GOVERNMENTAL CONSENTS AND APPROVALS. All
necessary and appropriate governmental consents, approvals and filings shall
have been obtained or made and all applicable waiting periods (including any
extensions thereof) relating thereto shall have expired or otherwise
terminated.
SECTION 8.5. NO INJUNCTION OR PROCEEDING. No governmental or
regulatory authority, agency or commission, including courts of competent
jurisdiction, domestic or foreign, shall have issued an order, decree, or
ruling or taken other action, restraining, enjoining or otherwise prohibiting
the transactions contemplated hereby, which order, decree, ruling or other
action remains in effect.
ARTICLE IX
CONDITIONS TO THE SELLERS' OBLIGATIONS
Each and every obligation of the Sellers to consummate the
transactions described in this Agreement shall be subject to the fulfillment,
or the waiver by the Sellers, on or before the Closing Date, of the following
conditions precedent:
SECTION 9.1. DELIVERY OF PURCHASE PRICE SHARES. Buyer and
▇▇▇▇▇ shall have delivered or caused to be delivered the Purchase Price Shares
in accordance with Article III hereof.
SECTION 9.2. BUYER'S AND ▇▇▇▇▇' CLOSING DELIVERIES. Buyer and
▇▇▇▇▇ shall deliver, or cause to be delivered, to the Sellers at the Closing,
unless specifically waived by the Sellers in their sole discretion, each of the
following:
(a) the Registration Rights Agreement and the Pledge
and Escrow Agreement referenced in Section 6.8, executed by ▇▇▇▇▇ and, in the
case of the Pledge and Escrow Agreement, the Buyer and the Escrow Agent;
(b) a certified copy of the resolutions of the Board
of Directors of ▇▇▇▇▇ authorizing the execution, delivery and performance of
this Agreement and the Related Agreements and the consummation of transactions
contemplated hereby and thereby; and
(c) the certificates referenced in Sections 9.3 and
9.4 hereof.
SECTION 9.3. REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties of Buyer and ▇▇▇▇▇ contained in this Agreement,
as modified by the Disclosure Schedule, shall have been true on the date hereof
in all material respects and shall be true on the Closing Date in all material
respects, with the same effect as though such representations and warranties
were made on and as of such date, and Buyer and ▇▇▇▇▇ shall have delivered to
the Sellers on the Closing Date a certificate, dated as of the Closing Date, to
such effect.
41
SECTION 9.4. PERFORMANCE. Buyer and ▇▇▇▇▇ shall have, in all
material respects, performed and complied with all covenants required by this
Agreement to be performed or complied with by them prior to or at the Closing
and Buyer and ▇▇▇▇▇ shall have delivered to the Sellers on the Closing Date a
certificate, dated as of the Closing Date, to such effect.
SECTION 9.5. GOVERNMENTAL CONSENTS AND APPROVALS. All
necessary and appropriate governmental consents, approvals and filings shall
have been obtained or made and all applicable waiting periods (including any
extensions thereof) relating thereto shall have expired or otherwise
terminated.
SECTION 9.6. NO INJUNCTION OR PROCEEDING. No governmental or
regulatory authority, agency or commission, including courts of competent
jurisdiction, domestic or foreign, shall have issued an order, decree, or
ruling or taken other action, restraining, enjoining or otherwise prohibiting
the transactions contemplated hereby, which order, decree, ruling or other
action remains in effect.
ARTICLE X
INDEMNIFICATION
SECTION 10.1. INDEMNIFICATION BY THE SELLERS.
(a) The Sellers jointly and severally agree (subject
to the provisions of Section 10.6), to reimburse, indemnify and hold ▇▇▇▇▇, the
Buyer, the Company, and their respective officers, directors, shareholders,
employees and agents harmless from and against any and all demands, claims,
actions, suits, liabilities, damages, losses, judgments, costs and expenses
(including, without limitation, reasonable attorneys' fees but excluding any
claims for punitive damages or consequential damages) relating to, resulting
from or arising out of:
(i) any breach or inaccuracy of the
representations or warranties made hereunder by any of the Sellers;
(ii) any breach or violation of any
covenant or agreement made hereunder by any of the Sellers, or
(iii) the Silent Partnership, excluding the
Prepayment Amount, the principal and accrued interest thereon until the earlier
of termination or November 30, 1998, at the rate of 9% per annum.
42
SECTION 10.2. INDEMNIFICATION BY BUYER AND ▇▇▇▇▇.
(a) Buyer and ▇▇▇▇▇ jointly and severally agree to
reimburse, indemnify and hold each of the Sellers harmless from and against any
and all demands, claims, actions, suits, liabilities, damages, losses,
judgments, costs and expenses (including, without limitation, reasonable
attorneys' fees but excluding any claims for punitive damages or consequential
damages) relating to, resulting from or arising out of:
(i) any breach or inaccuracy of the
representations or warranties made hereunder by Buyer and ▇▇▇▇▇; or
(ii) any breach or violation of any
covenant or agreement made hereunder by Buyer and ▇▇▇▇▇.
SECTION 10.3. SURVIVAL OF REPRESENTATIONS. Except for the
representations and warranties contained in Sections 4.1, 4.2, 4.4, 4.9 and
4.25, the representations and warranties made pursuant to this Agreement
including, without limitation, all representations and warranties made in any
exhibit or schedule or certificate delivered thereunder, shall survive until
and through the second anniversary of the Closing Date at which time such
representations and warranties shall expire. The representations and warranties
set forth in Sections 4.1 and 4.2 of this Agreement shall survive until and
through the tenth anniversary of the Closing Date. The representations and
warranties set forth in Section 4.4 of this Agreement shall survive
indefinitely. The representations and warranties set forth in Sections 4.9 and
4.25 of this Agreement shall survive until and through six months after all
amounts for Taxes applicable to the Company, their respective employees and the
transactions contemplated by this Agreement, in the case of Section 4.9, and
all amounts for Grants from the government in the case of Section 4.25, become
final and non-appealable for all periods through or including the Closing Date,
at which time such representations and warranties shall expire.
SECTION 10.4. INDEMNIFICATION CLAIMS PROCEDURES. All claims
for indemnification by any party seeking indemnification (the "Indemnified
Party") from another party (the "Indemnifying Party") under Sections 10.1 and
10.2 shall be asserted and resolved as follows:
(a) In the event that any claim or demand for which
the Indemnifying Party would be liable to any Indemnified Party hereunder is
asserted against or sought to be collected from any Indemnified Party by a
third party, the Indemnified Party shall promptly notify the Indemnifying Party
(and any known pertinent insurance carrier) in reasonable detail of such claim
or demand and the amount or the estimated amount thereof to the extent then
feasible (which estimate shall not be conclusive of the final amount of such
claim and demand) (the "Claim Notice"). The Indemnifying Party shall have
thirty (30) days from the personal delivery or mailing of the Claim Notice (the
"Notice Period") to notify the Indemnified Party whether or not the
Indemnifying Party desires to defend the Indemnified Party against such claim
or demand.
43
All costs and expenses incurred by the Indemnifying Party in
defending such claim or demand shall be a liability of, and shall be paid by,
the Indemnifying Party. In the event that the Indemnifying Party notifies the
Indemnified Party within the Notice Period that it desires to defend the
Indemnified Party against such claim or demand and except as hereinafter
provided, the Indemnifying Party shall have the right to defend the Indemnified
Party by counsel of the Indemnifying Party's own choosing, either in the
Indemnifying Party's name, or the Indemnified Party's name by appropriate
proceedings. If any Indemnified Party desires to participate in, but not
control, any such defense or settlement it may do so at its sole cost and
expense and, in any event, the Indemnified Party shall cooperate with the
Indemnifying Party and such counsel. To the extent the Indemnifying Party shall
control or participate in the defense or settlement of any third party claim or
demand, the Indemnified Party shall give to the Indemnifying Party and its
counsel access to, during normal business hours, the relevant business records
and other documents, and shall permit them to consult with the employees and
counsel of the Indemnified Party to the extent consistent with the application
of relevant evidentiary privileges. The Indemnifying Party shall keep the
Indemnified Party reasonably apprised of the course of any negotiations or
proceedings and the Indemnifying Party shall not settle any claim or demand
without the consent of the affected Indemnified Party, which consent shall not
be unreasonably withheld or unduly delayed. As soon as reasonably practicable
after the Indemnifying Party has reached a final decision as to whether or not
all or any portion of the obligations related to such claim or demand are
obligations for which the Indemnifying Party is required to indemnify such
Indemnified Party hereunder and, in any event, prior to entering into any such
settlement or other final resolution of any claim or demand, the Indemnifying
Party shall notify the Indemnified Party in writing of its position as to
whether or not all or any portion of the obligations related to such claim or
demand are obligations for which the Indemnifying Party is required to
indemnify such Indemnified Party in accordance with this Article X.
(b) If the Indemnifying Party elects or is deemed to
have elected not to take over the defense of any such claim or demand, the
Indemnified Party shall have the right to defend, compromise and settle such
claim or demand on such terms as the Indemnified Party in his, her or its
discretion may determine, subject to the prior consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or unduly delayed, and
the Indemnifying Party shall continue to be bound to indemnify the Indemnified
Party in accordance with and to the extent provided under the terms of this
Article X. The Indemnified Party shall or shall direct in writing its counsel
to deliver to the Indemnifying Party copies of all correspondence and other
matters relating to such claim or demand. Notwithstanding the foregoing, to the
extent that the claim or demand involves or could result in claims against, or
potential liability of, the Indemnifying Party the extent or nature of which
were not known by the Indemnifying Party as of the date the Indemnifying Party
elects or is deemed to have elected not to take over the defense of such claim
or demand, the Indemnifying Party shall, by written notice to the Indemnified
Party, be entitled to take over the defense of such claim or demand.
(c) In the event an Indemnified Party should have a
claim against the Indemnifying Party hereunder which does not involve a claim
or demand being asserted against
44
or sought to be collected from it by a third party, the Indemnified Party shall
promptly send a Claim Notice with respect to such claim to the Indemnifying
Party.
(d) The Indemnified Party's failure to give
reasonably prompt notice to the Indemnifying Party of any actual, threatened or
possible claim or demand which may give rise to a right of indemnification
hereunder shall not relieve the Indemnifying Party of any liability which it
may have to an Indemnified Party except to the extent the failure to give such
notice prejudiced the Indemnifying Party.
SECTION 10.5. RIGHT OF SET-OFF. In addition to any other
remedy available in equity or at law, the Indemnified Party shall be entitled
to set off the amount of any obligation for which it is entitled to be
indemnified under this Article X against any amounts payable to the
Indemnifying Party hereunder or under any other agreement contemplated hereby.
SECTION 10.6. LIMITATION OF LIABILITY.
(a) Notwithstanding any other provision of this
Agreement, neither the aggregate liability hereunder of the Buyer and ▇▇▇▇▇ on
the one hand, nor the aggregate liability hereunder of the Sellers on the other
hand, shall exceed DM19,824,000.
(b) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇'▇ liability for any indemnity
claim shall be limited to the sum, determined as of the date of such claim, of
(i) any proceeds from the sale of her Seller's Shares and (ii) the value of
Seller's Shares still held by her, based upon the ▇▇▇▇▇ Stock Closing Price as
of the date of determination.
(c) The Sellers` aggregate liability hereunder for
any breach of the representation and warranty in Section 4.12 (f) shall be
limited to DM 1,982,400.
(d) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇'▇ liability for an indemnity
claim shall be limited only as provided in Section 10.6(a) and Section 10.6
(c).
(e) The Sellers shall be liable to indemnify the
Buyer for claims on account of Taxes only to the extent additional Taxes
resulting from field audits are not compensated by lowered Tax burdens in
following years resulting from such additional Taxes. To the extent additional
capitalization of items originally treated as expenses entail additional
depreciations in future years, the liability of the Sellers on account of
additional Taxes shall be reduced by the discounted cash value of the
additional depreciation, discounted at a rate of 5% per year.
45
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. GOVERNING LAW. This Agreement and
the rights and obligations of the parties hereunder shall be governed by and
construed in accordance with the laws of the Federal Republic of Germany. Any
disputes arising under this Agreement shall be resolved in accordance with the
provisions of the separate Arbitration Agreement which has been executed by the
parties as of the date hereof.
SECTION 11.2. ENTIRE UNDERSTANDING, WAIVER, ETC. This
Agreement sets forth the entire understanding of the parties and supersedes any
and all prior or contemporaneous agreements, arrangements and understandings
relating to the subject matter hereof, and the provisions hereof may not be
changed, modified, waived or altered except by an agreement in writing signed
by the party entitled to the benefit of the provision(s) to be waived hereto. A
waiver by any party of any of the terms or conditions of this Agreement, or of
any breach thereof, shall not be deemed a waiver of such term or condition for
the future, or of any other term or condition hereof, or of any subsequent
breach thereof.
SECTION 11.3. SEVERABILITY; GAPS. If any provision of this
Agreement or the application of such provision shall be held by a court of
competent jurisdiction to be unenforceable, or otherwise be or become invalid
or unenforceable, the remaining provisions of this Agreement shall remain in
full force and effect. In addition, any gap or omission in the terms of this
Agreement shall not prejudice its validity, and the remaining provisions of
this Agreement shall remain in full force and effect. Any gap in the terms of
this Agreement, whether caused by the invalidity or unenforceability of any
provision, or by an omission or otherwise, shall be filled by a provision which
legally and economically most closely matches the intent of the parties hereto
with respect to the gap. The parties hereto undertake to enter from time to
time into such amendments as are necessary or appropriate to document the
provisions filling such gaps.
SECTION 11.4. CAPTIONS. The captions herein are for
convenience only and shall not be considered a part of this Agreement for any
purpose, including, without limitation, the constructions or interpretation of
any provision hereof.
SECTION 11.5. NOTICES. All notices, requests, demands and
other communications (collectively, "Notices") that are required or may be
given under this Agreement shall be in writing. All Notices shall be deemed to
have been duly given or made: if by hand, immediately upon delivery; if by
telecopier or similar device, immediately upon sending, provided notice is sent
on a Business Day during the hours of 9:00 a.m. and 6:00 p.m. at the location
of the party receiving the Notice, but if not, then immediately upon the
beginning of the first Business Day after being sent; if by FedEx, Express Mail
or any other reputable overnight delivery service, three Business Days after
being placed in the exclusive custody and control of said courier; and if
mailed by certified mail, return receipt requested, ten Business Days after
mailing.
46
Notwithstanding the foregoing, with respect to any Notice given or made by
telecopier or similar device, such Notice shall not be effective unless and
until (i) the telecopier or similar advice being used prints a written
confirmation of the successful completion of such communication by the party
sending the Notice, and (ii) a copy of such Notice is deposited in first class
mail to the appropriate address for the party to whom the Notice is sent. In
addition, notwithstanding the foregoing, a Notice of a change of address by a
party hereto shall not be effective until received by the party to whom such
Notice of a change of address is sent. All Notices are to be given or made to
the parties at the following addresses (or to such other address as either
party may designate by Notice in accordance with the provisions of this
Section):
(a) If to the Sellers:
Mr. and ▇▇▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Germany
Telephone: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
(b) If to Sykes:
▇▇▇▇▇ Enterprises, Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Senior Vice President-Finance
Telephone: ▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: ▇▇▇ (▇▇▇) ▇▇▇ ▇▇▇▇
(c) If to Buyer:
▇▇▇▇▇ Enterprises GmbH
c/o Sykes Enterprises, Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Senior Vice Director
Telephone: ▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: ▇▇▇ (▇▇▇) ▇▇▇ ▇▇▇▇
SECTION 11.6. SUCCESSORS AND ASSIGNS. Neither this Agreement
nor any of the rights or obligations arising hereunder shall be assignable by
any party without the prior written consent of the other parties hereto;
provided, however, that notwithstanding the foregoing Sykes
47
may assign its rights and obligations under this Agreement to any wholly owned
subsidiary of Sykes which agrees in writing to be bound by and to perform fully
all of Sykes' obligations hereunder and, provided that in the event of any such
assignment by Sykes, Sykes shall remain liable hereunder for the performance of
Sykes' obligations hereunder notwithstanding such assignment.
SECTION 11.7. PARTIES IN INTEREST. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Nothing in this Agreement, express
or implied, shall confer upon any Person, other than the parties hereto, and
their successors and permitted assigns, any rights or remedies under or by
reason of this Agreement.
SECTION 11.8. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which, together, shall constitute one and the same instrument.
SECTION 11.9. CONSTRUCTION OF TERMS. Any reference herein
to the masculine or neuter shall include the masculine, the feminine and
the neuter, and any reference herein to the singular or plural shall include
the opposite thereof. The parties to this Agreement acknowledge that each party
and counsel to each party has participated in the drafting of this Agreement
and agree that this Agreement shall not be interpreted against one party or the
other based upon who drafted it.
SECTION 11.10. SYKES GUARANTEE. Sykes hereby guarantees for
the benefit of the Sellers the full and prompt performance by the Buyer of all
of its obligations toward the Sellers under this Agreement.
48
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first above written.
SELLERS:
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇:
▇▇▇▇▇ ENTERPRISES, INCORPORATED
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President - Finance
BUYER:
▇▇▇▇▇ ENTERPRISES GMBH
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director
