EXHIBIT 2.1
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SHARE PURCHASE AND TRANSFER OF ASSETS AND LIABILITIES
AGREEMENT
dated as of December 22, 2003
by and between
SOFIDIV SAS, a company duly incorporated under French law with its registered
office at ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, duly represented
for the purpose of this Agreement by ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇,
acting both in its own name and for its own account as well as on behalf and for
the account of Seller's Affiliates (as defined below),
(hereinafter referred to as "SELLER")
on the one hand,
and
CONCORD WATCH COMPANY SA, a company duly incorporated under Swiss law with its
registered office at 35, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, duly represented
for the purpose of this Agreement by ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇,
acting both in its own name and for its own account as well as on behalf and for
the account of Purchaser's Affiliates (as defined below),
(hereinafter referred to as "PURCHASER")
on the other hand,
(hereinafter referred to collectively as the "PARTIES" and individually as a
"PARTY")
PREAMBLE
WHEREAS, Seller holds, inter alia, the entire share-capital of ▇▇▇▇ ▇▇, a Swiss
company duly registered in La Chaux-de-Fonds, Switzerland (the "COMPANY")
engaged in the development, the manufacturing, the marketing and the sale of
watches and other products under the brand name EBEL (the "BRAND");
WHEREAS, the Company holds, among others, (i) minority participations in the
companies indicated in Schedule 0.2/1 (the "PARTICIPATIONS") and (ii) the entire
share capital of certain legal entities listed in Schedule 0.2/2 (THE
"SUBSIDIARIES");
WHEREAS, Seller intends to sell and transfer and Purchaser intends to purchase
and acquire the Shares (as defined below), subject to the terms set forth
hereinafter;
WHEREAS, legal entities owned directly or indirectly by, or under common control
of or with, Seller as listed in Schedule 0.4 ("SELLER'S AFFILIATES") carry out
all marketing, selling and after sale activities and all ancillary activities
thereto relating to the Brand in the USA, the United Kingdom, Spain, France,
Germany, Singapore, Japan, Hong Kong, Malaysia, Taiwan (such activities being
referred to as the "BUSINESS"), it being specified that Seller's Affiliates also
conduct activities relating to other brands and businesses which are not covered
by this Agreement;
WHEREAS, Seller's Affiliates own inventories and fixed assets, hold trade
receivables and assume trade payables and other liabilities directly connected
to the Business;
WHEREAS, in addition and together with the sale and transfer of the Shares,
Seller intends to cause Seller's Affiliates to sell and transfer, and Purchaser
intends to purchase and assume, and cause Purchaser's Affiliates to assume,
certain inventories, fixed assets, trade receivables and trade payables and
other liabilities directly relating to the Business on a going-concern basis,
subject to the terms set forth hereinafter;
WHEREAS, all other assets and liabilities, inventories, fixed assets, trade
receivables and trade payables of Seller's Affiliates not exclusively relating
to the Business, are not intended to be transferred and shall not be transferred
to Purchaser nor to Purchaser's Affiliates hereunder;
WHEREAS, in connection with such sale and transfer, Purchaser and/or, as the
case may be, Purchaser's Affiliates will either by operation of law or on a
voluntary basis hire certain employees previously involved in the Business;
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NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1
DEFINITIONS
The terms defined in this Article shall have the following meaning for all
purposes of this Agreement:
"ACCOUNTING POLICIES" shall have the meaning set forth in the definition of
Accounting Principles;
"ACCOUNTING PRINCIPLES" shall mean French GAAP and the accounting policies and
methods, in all material respects in accordance with French GAAP, currently and
from and after the year ended December 31, 2002 consistently applied on an
ongoing concern basis for the preparation of the consolidated accounts of the
Company and of the accounts of Seller's Affiliates, such accounting policies and
methods being attached as Schedule 1.3 hereto (the "ACCOUNTING POLICIES"); for
the purposes of this Agreement, in case of discrepancies, the Accounting
Policies shall prevail over French GAAP and both shall prevail over consistency;
"ADEQUATELY DISCLOSED", "ADEQUATE DISCLOSURE" shall, in the given context, mean
that all relevant information and/or, as the case may be, all relevant documents
disclosed by the Seller sufficiently set forth the relevant facts in a way that
a diligent and knowledgeable third party, acting in good faith and reading the
information and/or document in the same context and for the same purpose as the
Purchaser, would be able to discern and understand the essential facts;
"ADDITIONAL PERIOD" shall have the meaning set forth in Article 14.2 (III);
"ADJUSTMENT" shall have the meaning set forth in Article 4.1;
"AFFILIATE" shall mean with respect to any Person any other Person, directly or
indirectly controlling, controlled by, or under common control with, such
Person;
"AGREEMENT" shall mean this Share Purchase and Transfer of Assets and
Liabilities Agreement with all its Schedules;
"AUDITED STATUTORY ACCOUNTS" shall mean the audited balance sheets and the
profit and loss statements of each of the Group Companies as of December 31,
2002 as attached in Schedule 1.9 hereto;
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"BRAND" shall have the meaning set forth in the Preamble;
"BRAND SPECIFIC FIXED ASSETS" shall mean the transferable fixed assets relating
exclusively to, and used exclusively in, the Business;
"BUSINESS" shall have the meaning set forth in the Preamble;
"BUSINESS ASSETS" shall have the meaning set forth in Article 3.1 provided,
however, that as for the Business Assets situated in Spain and Malaysia this
term shall include only Business Inventory;
"BUSINESS CONTRACTS" shall mean all agreements, options, contracts, distributor
agreements, sale representative agreements, leases, instruments, purchase
orders, sale orders and commitments (including outstanding bids) relating
exclusively to, and used exclusively in, the Business provided, however, that as
for the Business in Spain and Malaysia, this term shall not include any Business
Contracts;
"BUSINESS DAY" shall mean any day on which banks are open for business in
Geneva, Switzerland, in New York, USA and in Paris, France;
"BUSINESS LIABILITIES" shall have the meaning set forth under Article 3.2
provided, however, that as for the Business in Spain and Malaysia, this term
shall not include any Business Liabilities;
"BUSINESS INVENTORY" shall mean all of the watches, semi-finished watches,
components for watches, packaging, advertising and promotion materials and all
other products relating to the sale of watches, including without limitation,
gold and precious stones, relating exclusively to, and used exclusively in, or
for, the Business and all Ebel watches and component parts for Ebel watches in
the possession of any retail store owned or operated by any Seller's Affiliate;
"BUSINESS OTHER OPERATING ASSETS" shall mean all of the transferable operating
assets relating exclusively to, and used exclusively in, or for, the Business
provided, however, that as for the Business in Spain and Malaysia, this term
shall not include any Business Other Operating Assets;
"BUSINESS OTHER OPERATING LIABILITIES" shall mean all of the transferable
operating liabilities relating exclusively to the Business, excluding any third
party debt for borrowed money provided, however, that as for the Business in
Spain and Malaysia, this term shall not include any Business Other Operating
Liabilities;
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"BUSINESS TRADE RECEIVABLES" shall mean all rights and claims vis-a-vis any
debtor relating exclusively to, and used exclusively in or for, the Business
provided, however, that as for the Business in Spain and Malaysia, this term
shall not include any Business Trade Receivables;
"CAP" shall have the meaning set forth in Article 14.8 (II);
"CAPTION" shall mean any accounting line contained in Schedule 1.68;
"CARVED OUT ENTITIES" shall have the meaning set forth in Article 6.1;
"CLOSING" shall mean the consummation of the transactions described in Articles
2 and 3 below in accordance with Article 7 below;
"CLOSING DATE" shall mean March 1, 2004 or any other date as may be agreed upon
between the Parties;
"CLOSING TRANSFERRED BUSINESS ACCOUNT" shall mean the document showing the
Transferred Business Net Assets of the Transferred Business as at February 29,
2004 midnight, as agreed upon by the Parties or, as the case may be, as
determined by the Referee according to the terms and conditions set forth in
Article 9;
"COMPANIES TRADE INVENTORY" shall mean all of the watches, semi-finished
watches, components for watches, packaging, advertising and promotion materials
and all other products relating to the sale of watches, including without
limitation, gold and precious stones owned by any of the Group Companies;
"COMPANIES TRADE RECEIVABLES" shall mean all rights to receive trade payments
from any debtor, including, but not limited to, credits, accounts receivable,
claims in relation to principal, accrued and unpaid interest (including default
interest, if any) and related guarantees as well as any other amount due by any
debtor to any of the Group Companies;
"COMPANY" shall have the meaning set forth in the Preamble;
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in Article 18.1;
"CONTROLLING", "CONTROLLED" and under "COMMON CONTROL" means the ownership,
directly or indirectly, of more than 50 % (fifty percent) of the voting shares
of such entity or the power to direct the management or policies of such entity,
whether by operation of law, by contract or otherwise;
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"DEDICATED EMPLOYEES" shall have the meaning set forth in Article 16.1;
"DISCLOSED DOCUMENTS" shall mean all the documents Adequately Disclosed to
Purchaser in the context of the due diligence carried on by Purchaser prior to
the date of this Agreement as listed in Schedule 1.29;
"EXPIRATION DATE" shall have the meaning set forth in Article 14.1;
"FINAL PURCHASE PRICE" shall have the meaning set forth in Article 10.3 below;
"GERMAN BUSINESS" shall mean that part of the Business situated in Germany and
to be spun off to German Newco;
"GERMAN CLOSING" shall mean a closing to take place at the earliest possible,
but not later than on March 31, 2004 or, if not practicable, such other date as
may be agreed to by the Parties, with respect to the German Newco in accordance
with a closing memorandum to be agreed upon by the Parties;
"GERMAN NEWCO" shall mean a company (i) to be established or alternatively to be
purchased as an off the shelf company (Vorratsgesellschaft) by Seller into which
the German Business will be transferred by way of restructuring under the German
Act on the Transformation of Companies, and (ii) to be sold to Purchaser at the
German Closing;
"GLOBAL BUSINESS" shall mean the entirety of (i) the Group Companies, and (ii)
the Carved Out Entities, and (iii) the Business;
"GLOBAL FIXED ASSETS" shall mean the net book value determined according to the
Accounting Principles of (i) all assets referred to under the Accounting
Principles as properties, plants and equipments of all the Group Companies, plus
(ii) the Brand Specific Fixed Assets;
"GROUP COMPANIES" shall mean the Company and the Subsidiaries and "GROUP
COMPANY" shall mean any one of them individually;
"INFORMATION TECHNOLOGY" shall mean technology that is used in carrying out
information activities, covering any form of information, either by the Group
Companies or by the Business inasmuch as it relates exclusively to it. It
includes, but is not limited to, software, firmware and applications;
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"INTELLECTUAL PROPERTY RIGHTS" shall mean all trade or service marks, trade or
service ▇▇▇▇ registrations and applications, trade names, logos, domain names,
designs and design applications, patents and patent applications, utility models
and utility model applications copyrights, copyright registrations, rights in
databases, licenses, know-how, trade secrets, product formulae, product
formulations, manufacturing processes and procedures, products, records of
inventions, test information, drawings, diagrams, research and development files
and operating manuals, provided that this term shall not include any Information
Technology;
"LA PAIX" shall mean SA de l'Immeuble rue de la Paix ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇-▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇;
"LIEN" shall mean any lien, charge, encumbrance, claim or other security
interest and any adverse claim whatsoever, including but not limited to
interests arising through options, mortgages, indentures, pledges, security
agreements or other agreements or obligations, whether written or oral;
"LOSS" shall mean all damages, losses, liabilities, costs and expenses
(including reasonable attorney fees) which a Party may suffer or incur in
connection with any of the representations and warranties set forth in Articles
12 and 13;
"LVMH" shall mean LVMH Moet ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Vuitton, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇;
"LVMH SINGAPORE" shall mean LVMH Watch and Jewellery Singapore PTE LTD;
"MAIFOS SA" shall mean Maifos, ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, a French
societe anonyme registered with the Paris Registry of Commerce and Companies
under number B348638933;
"MORTGAGE" shall mean any and all of the mortgages on the property Hardhof,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇, owned by the Company;
"MUROS HOLDING" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇;
"PARTICIPATIONS" shall have the meaning set forth in the Preamble;
"PERSON" shall mean any individual, corporation, partnership, limited liability
company, joint venture, trust or unincorporated organization;
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"PROFORMA CLOSING TRANSFERRED BUSINESS ACCOUNT" shall mean the Proposed Closing
Transferred Business Account, for illustration purposes calculated as of
December 31, 2003;
"PROPOSED CLOSING TRANSFERRED BUSINESS ACCOUNT" shall mean the document showing
the Transferred Business Net Assets as at February 29, 2004 to be prepared by
Seller and submitted to Purchaser in compliance with the provisions of Article
9;
"PURCHASE PRICE" shall have the meaning set forth in Article 4.1;
"PURCHASER'S AFFILIATES" shall mean those Affiliates of Purchaser listed in
Schedule 1.56 and any other Affiliate of Purchaser formed prior to Closing for
the purpose of acquiring any part or all of the Business;
"PURCHASER'S KNOWLEDGE" shall mean actual knowledge by any of Messrs. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇;
"REFEREE" shall have the meaning set forth in Article 9.6 (C);
"SCHEDULES" shall be the schedules attached to this Agreement;
"SELLER'S AFFILIATES" shall have the meaning set forth in the Preamble;
"SELLER'S KNOWLEDGE" shall mean actual knowledge by any of Messrs. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Michel Mousselon or Nicolas Calemard or knowledge that Persons acting in
the same capacities as these individuals should reasonably have under the same
circumstances;
"SHARES" shall mean the 20,000 (twenty thousand) registered shares with a face
value of CHF 1,000 (one thousand Swiss francs) each, it being the entire
share-capital of the Company;
"SI RUE DU PARC" shall mean Societe Immobiliere rue du Parc 153-155 SA, La
Chaux-de-Fonds, Switzerland;
"SUBSIDIARIES" shall have the meaning set forth in the Preamble and "SUBSIDIARY"
shall mean each and any of these subsidiaries individually;
"SWISSWAVE" shall mean ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇, ▇▇▇▇▇▇;
"TAIWAN BUSINESS" shall have the meaning set forth in Article 17.5.
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"TAXES" shall mean any net income, gross income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, property transfer, property
transfer gain, value added or windfall profit tax, custom duty or other tax of
any kind whatsoever, together with any interest and any penalty, addition to tax
or additional amount imposed by any taxing authority (domestic or foreign);
"THRESHOLD" shall have the meaning set forth in Article 14.8;
"TRANSFERRED BUSINESS" shall mean the entirety of the Group Companies and the
Business;
"TRANSFERRED BUSINESS NET ASSETS" shall mean, net of provisions, the amount
determined in applying the Accounting Principles and reflecting the adjustments
set forth in this Agreement, corresponding to the sum of the following:
(i) FOR THE BUSINESS:
o the amount of the Brand Specific Fixed Assets,
PLUS
o the amount of the Business Trade Receivables,
PLUS
o the amount of the Business Other Operating Assets,
PLUS
o the amount of the Business Inventory,
MINUS
o the amount of the payables due by Seller's Affiliates to any
of the Group Companies,
MINUS
o the amount of Business Other Operating Liabilities,
(ii) FOR THE GROUP COMPANIES, based on the consolidated accounts of the
Company as prepared for the reporting to Seller, showing the same
accounting lines as the consolidated accounts attached hereto in
Schedule 1.68:
o the amount of the total assets,
MINUS
o the amount of the intangible assets,
MINUS
o the amount of the current and long term liabilities.
In calculating the above (i) and (ii), the following shall apply:
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o the calculation shall properly take into account the
elimination entries required to reflect the Transferred
Business Net Assets on a consolidated basis; and
o the calculation shall reflect only those assets and
liabilities relating and transferable to the Group Companies
and the Business, and all other assets and liabilities,
including non transferable assets and liabilities, shall
remain with the Seller;
all as illustrated in Schedule 1.68 hereto calculated as at September 30, 2003;
"TRANSFERRED EMPLOYEES" shall have the meaning set forth in Article 16.1;
"2003 GLOBAL ACCOUNT" shall mean the document showing the consolidated balance
sheet of the Global Business as per December 31, 2003.
ARTICLE 2
SALE AND PURCHASE OF THE SHARES - ASSUMPTION OF LIABILITIES
2.1 Subject to the terms set forth in this Agreement, Seller shall sell and
transfer to Purchaser, and Purchaser shall purchase and acquire from
Seller, all of the Shares with effect as of the Closing Date.
2.2 Seller shall sell the Shares free and clear of any Lien and together
with all rights attaching thereto.
2.3 Property and risks in the Shares shall be vested in the Purchaser as of
the Closing Date.
2.4 It is expressly agreed that Seller shall assume any and all liabilities
of, or relating to (i) the Carved Out Entities, whether past, present
or future, known or unknown, absolute, accrued, contingent or otherwise
and whether due or to become due, and (ii) payments made or to be made
by any of the Group Companies to Muros Holding in connection with
Maifos SA, whether past, present or future, known or unknown, absolute,
accrued, contingent or otherwise and whether due or to become due.
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ARTICLE 3
SALE AND PURCHASE OF THE ASSETS - ASSUMPTION OF LIABILITIES
3.1 With effect as at the Closing Date, in the manner provided for herein
and subject to the terms and conditions set forth in this Agreement,
Seller shall cause each of Seller's Affiliates to, and each of Seller's
Affiliates shall, sell, transfer, convey, assign and deliver to each of
the relevant Purchaser's Affiliates, and each of the relevant
Purchaser's Affiliates shall purchase and accept from each of the
relevant Seller's Affiliates, all rights, title, and interest of the
relevant Seller's Affiliates in, and to, the following rights and
properties, as they may exist as at the Closing Date (collectively the
"BUSINESS ASSETS"):
(i) the Business Inventory;
(ii) the Brand Specific Fixed Assets;
(iii) the Business Trade Receivables;
(iv) the Business Other Operating Assets;
(v) all sales order files, purchase order files, customer lists,
manufacturing records, advertising and promotional materials
and business files, including books of account, general,
financial and accounting records and other data owned by
Seller or Seller's Affiliates relating exclusively to, and
used exclusively in, or for, the Business, provided, however,
that Seller and Seller's Affiliates shall be permitted to
retain copies thereof and provided further that only copies
will be delivered in the event that Seller and/or Seller's
Affiliates are required by law to keep originals;
(vi) to the extent that the requisite consents have been obtained
and the necessary notices given with respect thereto, the
Business Contracts;
(vii) the Intellectual Property Rights relating to, and used in, or
for, the Business provided, however, that if an Intellectual
Property Right (other than a trademark, design, design patent
or copyright pertaining to the design of the products) is
presently or has been recently jointly used together with, or
will be used for products under development at the date of
this Agreement for, another brand of any of the Affiliates of
Seller not being a Group Company, only a non-exclusive
worldwide royalty free license will be granted to Purchaser or
the relevant Purchaser's Affiliate, as the case may be, to use
such Intellectual Property Right for as long as Pur-
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chaser, or Purchaser's Affiliate determines is reasonably
necessary to conduct the Business.
3.2 As from the Closing Date, Purchaser's Affiliates shall assume all the
liabilities of Seller's Affiliates (except as otherwise provided for in
this Agreement) relating exclusively to, or arising exclusively out of,
the operation of the Business existing at, or arising before, on or
after, the Closing Date, whether known or unknown, absolute, accrued,
contingent or otherwise and whether due or to become due (collectively
the "BUSINESS LIABILITIES").
3.3 If any property, right or contract included in the Business Assets is
not assignable or transferable under applicable law without the prior
consent of one or more third Persons, Seller shall use commercially
reasonable efforts to obtain such consent after the execution of this
Agreement, but prior to the Closing Date, and Purchaser shall use
commercially reasonable efforts to assist in that endeavor.
If and to the extent any such consent cannot be obtained prior to the
Closing Date and the Closing occurs, such property, right or contract
shall, except as otherwise expressly provided in this Agreement,
continue to be held and performed by Seller or Seller's Affiliate in
accordance with the provisions of Article 17.1 below.
3.4 Property and risks in the Business Assets shall be vested in Purchaser
and Purchaser's Affiliates as the case may be as from the Closing Date.
3.5 For the sake of clarity, the Parties acknowledge that the Transferred
Business does not include any activities of LVMH Watch & Jewellery
Australia Pty Ltd relating to the Brand. Accordingly, save for the
inventories of watches, semi-finished watches, components for watches,
packaging, advertising and promotion materials and all other products
relating to the sale of watches, including without limitation gold and
precious stones, relating exclusively to the Brand owned by any LVMH
Watch & Jewellery Australia Pty Ltd, which shall be transferred to the
Company prior to Closing, no assets and no liability relating to such
activities will be transferred to Purchaser hereunder.
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ARTICLE 4
PURCHASE PRICE
4.1 The price to be paid by Purchaser (acting, for the purpose of paying
the Purchase Price, both in its own name and for its own account as
well as for the account and on behalf of all the relevant Purchaser's
Affiliates) to Seller (acting, for the purpose of receiving the
Purchase Price, both in its own name and for its own account as well as
for the account and on behalf of all the relevant Seller's Affiliates),
in consideration for the purchase of the Shares, the shares of German
Newco and the Business Assets and for the transfer of the Business
Liabilities, shall be of CHF 61,500,000 (sixty-one million five hundred
thousand Swiss francs) (the "PURCHASE PRICE") subject to adjustment
after Closing as provided for in Article 10 (the "ADJUSTMENT"). The
Purchase Price and, as the case may be, the Adjustment shall be
exclusive of any amounts due in respect of value added tax ("VAT") or
other similar Taxes.
4.2 Seller shall add the appropriate amount of VAT to that portion of the
Purchase Price and, as the case may be, to the Adjustment, that
reflects the Business Assets transferred by the relevant Seller's
Affiliates to the relevant Purchaser's Affiliates, and the relevant
Seller's Affiliates shall provide the relevant Purchaser's Affiliates
with an invoice reflecting such VAT amounts.
4.3 Seller and Purchaser shall bear in equal share any and all costs and
expenses and Taxes deriving from or connected with the transfer of the
Shares, the shares of German Newco and the Business Assets except for
(i) VAT which shall be borne exclusively by Purchaser and/or
Purchaser's Affiliates and (ii) capital gains taxes, if any, on the
sale or deemed sale of real estate properties which shall be borne
exclusively by Seller and/or Seller's Affiliates to the extent they can
not be offset against the Company's net operating loss carry forward
remaining at the time such taxes are due.
ARTICLE 5
PRE-CLOSING COVENANTS OF SELLER AND PURCHASER
5.1 The Parties undertake to negotiate, on an arm's length basis, within 30
(thirty) days after determination of the Final Purchase Price, a
mutually acceptable allocation of the Final Purchase Price among Seller
and Seller's Affiliates, on one side, and Purchaser and Purchaser's
Affiliates, on the other side, with regard to the Shares, the shares of
German Newco, the Business Assets and the Business
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Liabilities. In case of disagreement between the Parties, the net asset
value of the relevant items to be transferred shall be the governing
and deciding factor.
5.2 Purchaser shall, and shall cause each of Purchaser's Affiliates, and
Seller shall, and shall cause each of Seller's Affiliates, to execute
all such documents, and do all such acts and things (in particular all
necessary notifications) and take all necessary corporate actions as
required to fulfill their respective obligations under this Agreement.
Unless otherwise provided in this Agreement, each Party will bear its
own costs and expenses.
5.3 Seller and Purchaser shall cooperate to identify, and enter into (or
cause Seller's Affiliates as far as Seller is concerned and Purchaser's
Affiliates as far as Purchaser is concerned to enter into), such
additional ancillary agreements as may be necessary or appropriate
under the local laws of the jurisdictions where the Business is
conducted to cause the transfer of the Business Assets and of the
Business Liabilities, from the relevant Seller's Affiliate to the
relevant Purchaser's Affiliate in accordance with local laws and
regulations and in a manner convenient to both Parties. Such agreements
will be entered into only on terms parallel to those set forth herein
(and without representations or indemnities, which shall remain
herein).
5.4 Seller and Purchaser shall use commercially reasonable efforts to
obtain all necessary consents and approvals to the performance of their
respective obligations under this Agreement. Seller and Purchaser shall
promptly make all filings, applications, statements and reports to all
governmental entities, which are required to be made prior to the
Closing Date pursuant to any applicable statute, rule or regulation in
connection with this Agreement.
5.5 Seller shall provide Purchaser as soon as possible but in any event no
later than January 23, 2004 with the worldwide consolidated turnover of
the Transferred Business together with the determination of the
specific turnover for the main countries.
5.6 Seller will permit, and will cause each of Seller's Affiliates to
permit representatives of Purchaser from and after the date hereof up
to the Closing Date, to have access at all reasonable times to the
books, accounts, records, customer lists, properties, operations and
facilities of every kind pertaining to, and to employees of,
Transferred Business, and will furnish Purchaser with such financial
and operating data concerning the Transferred Business as Purchaser may
from time to time reasonably request, subject to any confidentiality
agreements to which Seller or the relevant Seller's Affiliate or any
Group Company may be a party
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provided, however, that the foregoing shall be on reasonably advance
notice to Seller and shall not disrupt the operations of Seller, the
Group Companies and Seller's Affiliates.
5.7 Seller has permitted representatives of Purchaser to attend the
physical counting of the Business Inventory and the Companies Trade
Inventory, which has taken place (i) for the Company on December 19,
2003 and which will take place (ii) for the respective Seller's
Affiliates and Subsidiaries at the dates and places set forth in
Schedule 5.7.
5.8 Any and all agreements between Seller or any of its Affiliates and any
of the Group Companies and, inasmuch as it relates to the Business, any
of Seller's Affiliates, with respect to hedging operations, cash
pooling, service, marketing, management arrangements and the like as
listed in Schedule 5.8, shall be terminated at or prior to the Closing
Date and with regard to the hedging operations of the Company, the
losses and profits, as the case may be, resulting from the termination
thereof shall be for the account of the Company and the corresponding
amounts shall be either added to, or subtracted from, the amount of the
intercompany loans referred to in Article 6.3 and provided further that
no effect, positive or negative, resulting from the termination of the
hedging operations shall be taken into consideration for the purpose of
the establishment of the Proposed Closing Transferred Business Account
and of the Closing Transferred Business Account.
5.9 Seller shall cause the Company to renew the trademarks registrations
listed in Schedule 5.9.
5.10 As from the Closing Date, subject to Article 11.3, Purchaser shall, and
shall cause each of Purchaser's Affiliates to take over full and
exclusive responsibility for operating the Business and the Group
Companies.
5.11 As from the Closing Date, Purchaser shall be exclusively responsible
for establishing all necessary insurance coverage for operating the
Transferred Business. All such insurance coverage provided for by
Seller or its parent company shall terminate on the Closing Date or,
with respect to the German Business, at the German Closing unless
Purchaser has requested Seller to terminate a particular insurance
coverage before the German Closing as set forth in Article 11.3 below,
it being specified that Seller shall, and shall cause the appropriate
Seller's Affiliate to notify in a timely manner before Closing its and
their respective insurers of any and all insurable claims relating to
the Transferred Business of which any of Seller or Seller's Affiliates
have knowledge or received notice
15 / 54
prior to the Closing Date. Seller shall, and shall cause each of
Seller's Affiliates, to assign to Purchaser all insurance benefits paid
or payable by any such insurer in respect of any and all such claims.
5.12 Seller shall make its best efforts to assign to the Company on the
Closing Date a fully executed contract between LVMH Singapore and ▇▇▇
▇▇▇ or to directly conclude such an agreement between ▇▇▇ ▇▇▇ and the
Company on terms identical with and replacing the agreement between ▇▇▇
▇▇▇ and LVMH Singapore, it being specified that if it is not possible
to transfer such contract or to conclude a new agreement on identical
terms, such contract shall be excluded from the Transferred Business
and shall not continue to be performed by LVMH Singapore for the
account of Purchaser or Purchaser's Affiliates.
5.13 Seller shall make its best efforts to fully reimburse the loan relating
to the Mortgage. In case Seller should not be able to reimburse the
amounts outstanding relating to the Mortgage, such outstanding amounts
shall be deducted from the Purchase Price provided that for the purpose
of establishing the Closing Transferred Business Accounts all such
outstanding amounts shall be ignored.
ARTICLE 6
CARVE OUT OBLIGATIONS OF SELLER PRIOR TO CLOSING
Between the date of this Agreement and Closing, Seller shall, and shall cause
Seller's Affiliates and the Company to, undertake all of the following acts:
6.1 transfer to Seller or Affiliates of Seller other than the Group
Companies, at no cost or liability to the Company, all the companies
owned by the Company other than the Subsidiaries and all participations
owned by the Company other than the Participations (the transferred
companies and the transferred participations are hereinafter
collectively referred to as the "CARVED OUT ENTITIES"); and
6.2 transfer to the Company valid and exclusive title to all Intellectual
Property Rights exclusively used for the conduct of the Business and
not already owned exclusively by the Company, free and clear of any
Lien; in case of any Intellectual Property Right (other than a
trademark, design, design patent or copyright pertaining to the design
of the products) which (i) is presently or has been recently jointly
used together with, or (ii) will be used for products under development
at the date of this Agreement for, another brand of any of the
Affiliates of Seller not being a Group Company, grant to the Company a
non-exclusive
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worldwide royalty free license to use such Intellectual Property Right
for as long as the Company determines is reasonably necessary to
conduct the Business; and
6.3 after application of the provisions of Article 5.8 relating to hedging
operations, eliminate the net amount of the intercompany credit/debit
positions of any Group Company vis-a-vis Seller or any of its
Affiliates except Seller's Affiliates; and
6.4 sell the Business Inventory located in Malaysia to Seller's Affiliate
located in Singapore; and
6.5 sell the inventories referred to under Article 3.5 owned by LVMH Watch
& Jewellery Australia Pty Ltd to the Company; and
6.6 sell the Business Inventory located in Spain to the Company or
Swisswave.
ARTICLE 7
CLOSING
7.1 Purchaser's obligations hereto to effect the transactions and to cause
Purchaser's Affiliates to effect the transactions contemplated by this
Agreement shall be subject to satisfaction or waiver by the Purchaser,
on or prior the Closing Date, of the following conditions:
(i) Seller, Seller's Affiliates and/or the Company having fully
complied with the carve out obligations set forth in Article 6
above; and
(ii) Receipt of any necessary prior consents and/or approvals in
accordance with Article 5.4 above; and
(iii) Seller, Seller's Affiliates and/or the Group Companies having
fully complied with their obligations under Article 11.2
below.
7.2 Subject to the satisfaction of the conditions set forth in Article 7.1
above, the transactions contemplated in Articles 2 and 3 above shall be
consummated at the offices of TAVERNIER ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, on the Closing Date.
7.3 On the Closing Date,
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(i) each Party shall restate and confirm those of its
representations and warranties made under Articles 12 and 13
at the date of this Agreement which, pursuant to such Articles
12 and 13, have to be restated and confirmed at Closing;
(ii) Seller shall:
(a) transfer to Purchaser all the Shares duly endorsed in
a manner legally sufficient to transfer to Purchaser
the full ownership of, and title to, the Shares;
(b) cause each of the relevant Seller's Affiliates to
transfer or to convey any and all Business Assets and
any and all Business Liabilities, other than those
relating to the German Business, to the relevant
Purchaser's Affiliate and cause each of the relevant
Seller's Affiliates to deliver to the relevant
Purchaser's Affiliate (as Purchaser shall inform)
sufficient instruments of transfer, as shall be
necessary under the applicable laws to vest in the
relevant Purchaser's Affiliate title to any and all
the Business Assets other than the German Business
and to assume all the Business Liabilities;
(c) deliver to Purchaser the resolution of the Company's
board of directors confirming that (i) Purchaser has
been approved as sole shareholder of the Company with
sole voting rights, and that (ii) Purchaser is
registered as a shareholder with voting rights in the
Company's share register;
(d) deliver to Purchaser the share register showing
Purchaser as sole shareholder of the Company with
sole voting rights;
(e) deliver to Purchaser the resignation letter submitted
by each of the members of the Company's board of
directors and by each of the members of the board of
directors of each of the Subsidiaries, as well as
resignation letters provided by the auditors of the
Company and of any of the Subsidiaries, each such
resignation to be effective as at Closing;
(f) convene shareholders meeting for each of the Group
Companies (except for German Newco) to be held on the
Closing Date for the purpose of appointing new
directors and auditors as the case may be;
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(g) deliver all of the mortgage certificates listed in
Schedule 7.3 (II) (G)/1 together with excerpts from
the land registries for all of the real estate
parcels listed in Schedule 7.3 (II) (G)/2 obtained
not more than 5 (five) Business Days prior to
Closing;
(iii) Purchaser shall pay to Seller CHF 54,500,000 (fifty-four
million five hundred thousand Swiss francs) in full and
unconditionally and, notwithstanding the provisions of Article
17.10 below, without right of set off, by means of wire
transfer of immediately available funds to the bank account,
which shall be communicated to Purchaser to that effect at
least 5 (five) Business Days before the Closing Date; the
remainder of the Purchase Price being CHF 7,000,000 (seven
million Swiss francs) shall be paid at the German Closing.
ARTICLE 8
2003 GLOBAL ACCOUNT
8.1 Seller shall deliver to Purchaser on or before January 23, 2004 a draft
of the 2003 Global Account prepared in accordance with the Accounting
Principles.
8.2 On or before January 30, 2004, Seller shall deliver to Purchaser the
Proforma Closing Transferred Business Account prepared in accordance
with the Accounting Principles and with the provisions of this
Agreement.
8.3 The 2003 Global Account shall be prepared by Seller and audited by
Seller's independent accountants, both applying the Accounting
Principles. Seller shall deliver to Purchaser the 2003 Global Account
no later than on February 3, 2004.
ARTICLE 9
CLOSING TRANSFERRED BUSINESS ACCOUNT
9.1 The Parties agree that the Closing Transferred Business Account shall
only be prepared and used for the purpose of calculating and adjusting
the Purchase Price as per Article 10 below, without restricting
Purchaser in any manner whatsoever from claiming under Seller's
representations and warranties and indemnities as set forth herein
except to the extent that:
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(i) Purchaser's claim is that the Closing Transferred Business
Account does not contain or accurately REFLECT the amounts set
forth in Article 9.5.1,
(ii) Purchaser's claim relates to the physical counting as set
forth in Article 9.5.3.
9.2 For the purpose of this Article 9, the Parties agree that the Proposed
Closing Transferred Business Account and the Closing Transferred
Business Account shall be prepared so that there be no impact in the
relevant accounts for events which materially and negatively impact the
Transferred Business and which result from the announcement or
execution of this Agreement.
9.3 No later than March 16, 2004, Purchaser shall deliver to Seller the
Company's consolidated balance sheet as per February 29, 2004,
reflecting the physical counting as per Article 9.5.3 and prepared
applying the Accounting Principles, so as to enable Seller to prepare
the Proposed Closing Transferred Business Account. No later than March
16, 2004, Seller shall prepare a consolidated balance sheet as per
February 29, 2004, for the Business applying the Accounting Principles.
9.4 No later than April 5, 2004, Seller shall deliver to Purchaser the
Proposed Closing Transferred Business Account prepared in accordance
with the terms and conditions set forth below. Seller's independent
auditors shall provide a special purpose opinion on the Proposed
Closing Transferred Business Account substantially in the format
attached as Schedule 9.4 hereto by April 30, 2004, at the latest.
9.5 Seller shall prepare the Proposed Closing Transferred Business Account
and Seller's independent auditors shall provide a special purpose
opinion thereon, applying the Accounting Principles and the provisions
of this Agreement, it being specified that for the purpose of the
Proposed Closing Transferred Business Account,
9.5.1 the following shall apply:
(i) the amount of the allowance for doubtful accounts
receivables shall be equal to (x) the amount shown in
the 2003 Global Account after deduction of the
allowance for doubtful accounts pertaining to (a) the
receivables that shall not be transferred as mutually
agreed between Seller and Purchaser and (a) the
receivables of the Carved Out Entities plus, (y) as
the case may be, any addi-
20 / 54
tional provision as necessary to fully cover the
failure to pay on the part of a customer who has
filed a petition in bankruptcy, has been declared
bankrupt or has applied for a debt moratorium or
against whom has been filed or who has filed any
similar proceedings between December 31, 2003 and
February 29, 2004, and
(ii) the amount of the inventory reserve shall be equal to
the higher of (a) the amount of the inventory reserve
shown in the 2003 Global Account after deduction of
the inventory reserve of the Carved Out Entities,
plus as the case may be any additional provision as
necessary to fully cover the value of watches
(finished products and watch-heads) in active product
lines, defective or to be refurbished, existing as at
February 29, 2004, over and above the value of such
watches as at December 31, 2003, to the extent that,
and only to that extent, the value of such watches as
at February 29, 2004 exceeds the amount of the
reserve for excess finished goods inventory for
active product lines as at February 29, 2004 and (b)
CHF 60,700,000 (sixty million seven hundred thousand
Swiss francs); an illustration of this mechanism is
set forth in Schedule 9.5.1 (II), and
(iii) the amount of the warranty reserve shall be equal to
CHF 2,550,000 (two million five hundred and fifty
thousand Swiss francs), and
(iv) the amount of the loyalty bonus reserve shall be
equal to CHF 350,000 (three hundred and fifty
thousand Swiss francs);
and
9.5.2 the amount of the Global Fixed Assets shall:
(i) not be taken into account for more than the lower of
(i) the Global Fixed Assets as at February 29, 2004
and (ii) CHF 14,500,000 (fourteen million five
hundred thousand Swiss francs), should the Proposed
Closing Transferred Business Account, before
adjusting Global Fixed Assets as per this Article
9.5.2, show a value of CHF 76,500,000 (seventy six
million five hundred thousand Swiss francs) or less,
and
21 / 54
(ii) not be taken into account for more than the lower of
(i) the Global Fixed Assets as at February 29, 2004
and (ii) CHF 14,000,000 (fourteen million Swiss
francs), should the Proposed Closing Transferred
Business Account, before adjusting Global Fixed
Assets as per this Article 9.5.2, show a value of
more than CHF 76,500,000 (seventy six million five
hundred thousand Swiss francs);
and
9.5.3 any physical counting of the Business Inventory and of the
Companies Trade Inventory as necessary for the preparation by
Seller of the Proposed Closing Transferred Business Account
shall be made jointly by representatives of both Parties and
shall take place at the times and places set forth in Schedule
9.5.3;
9.6 In the event Purchaser has any disagreement with regard to the Proposed
Closing Transferred Business Account or with regard to any item
included therein, and provided that:
(i) such disagreement may not concern any of the counting of the
Business Inventory or the Companies Trade Inventory, and
(ii) Purchaser shall only be authorized to dispute the Proposed
Closing Transferred Business Account if it has not been
prepared in applying the Accounting Principles and the
provisions of this Agreement,
then such disagreement shall be resolved in the following manner:
(a) within 20 (twenty) Business Days from the date of receipt of
the Proposed Closing Transferred Business Account, Purchaser
shall notify Seller in writing of its disagreement, which
notice shall specify in reasonable details the nature and the
amount of the disagreement, provided that any notification by
the Purchaser of any disagreement will have to be the subject
of a prior consultation with its auditors;
(b) during a 10-Business Day period following Seller's receipt of
such notice, Seller and Purchaser shall attempt to resolve
such disagreement;
(c) if Seller and Purchaser fail to reach a written agreement
resolving such disagreement, Purchaser shall, within, and no
later than, 20 (twenty)
22 / 54
Business Days after the end of the 10-Business Day period
referred to in Article 9.6 (B) above, have the right to give
notice in writing of the disagreement to Seller and to KPMG
Switzerland (the "REFEREE") acting in accordance with the
provisions set forth below in Article 9.6 (E), giving
reasonable details on the nature and the amount of the
disagreement;
(d) if Purchaser does not give notice to Seller and to the Referee
within the 20-Business Days referred to in Article 9.6 (C)
above, Purchaser shall be deemed to have accepted the Proposed
Closing Transferred Business Account which shall then be
deemed the Closing Transferred Business Account;
(e) the Referee shall be asked to review the Proposed Closing
Transferred Business Account as promptly as possible but in
any event within, and no later than, 30 (thirty) Business Days
and to determine whether the amounts shown in the Proposed
Closing Transferred Business Account disputed by Purchaser are
to be adjusted for the Proposed Closing Transferred Business
Account to be in compliance with the Accounting Principles and
with the provisions of this Agreement, it being specified that
the Referee shall, among other things, not take into account
any amount of the Global Fixed Assets in excess of the
thresholds set forth above in Article 9.5.2 (I) and (II);
(f) the costs for the activities carried out by the Referee shall
be equally shared by Seller and Purchaser;
(g) for the purpose of determining the Final Purchase Price, and
solely for such purpose, the Referee's determination shall be
final and binding on the Parties.
9.7 The Proposed Closing Transferred Business Account, if not disputed by
Purchaser, or as modified by any adjustment determined to be
appropriate by mutual agreement or by the Referee as set forth above in
Article 9.6 (E), shall then be the "CLOSING TRANSFERRED BUSINESS
ACCOUNT".
9.8 For the purpose of this Article 9, the Parties agree that they shall,
and shall cause the Referee to, compute the Proposed Closing
Transferred Business Account or the Closing Transferred Business
Account, as the case may be, applying the Accounting Principles and the
provisions of this Agreement.
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ARTICLE 10
POST CLOSING PURCHASE PRICE ADJUSTMENT
10.1 Once the Closing Transferred Business Account has been determined as
set forth above in Article 9, the amount of the Purchase Price shall be
adjusted as follows:
(i) the Purchase Price shall be increased by an amount equal to
(a) the total value of Transferred Business Net Assets shown
on the Closing Transferred Business Account minus (b) CHF
78,000,000 (seventy-eight million Swiss francs), should this
amount be positive (the "POSITIVE Difference"), and
(ii) the Purchase Price shall be decreased by an amount equal to
(a) the total value of Transferred Business Net Assets shown
on the Closing Transferred Business Account minus (b) CHF
76,500,000 (seventy six million five hundred thousand Swiss
francs), should this amount be negative (the "NEGATIVE
DIFFERENCE"),
it being specified that no adjustment to the Purchase Price will be
made should the Closing Transferred Business Account show a total value
of at least CHF 76,500,000 (seventy-six million five hundred thousand
Swiss francs) and of no more than CHF 78,000,000 (seventy-eight million
Swiss francs).
For purposes of the Adjustment, the Positive Difference or the Negative
Difference, as the case may be, shall be taken into account Swiss franc
for Swiss franc and shall be paid from Purchaser to Seller or from
Seller to Purchaser, as the case may be, within 5 (five) Business Days
after the adjustment has been determined.
10.2 The Parties agree that no adjustment whatsoever shall be made to the
Purchase Price for any Negative Difference, or portion thereof, or
Positive Difference, or portion thereof, except as provided for in
Article 10.1 and that nothing occurring after the Closing Date shall be
taken into account for the purposes of the Adjustment.
10.3 The Purchase Price as adjusted, as the case may be, in accordance with
the provisions of this Article 10 shall be referred to as the "FINAL
PURCHASE PRICE".
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ARTICLE 11
CONDUCT OF BUSINESS BETWEEN THE DATE OF THIS AGREEMENT AND THE CLOSING
11.1 Subject to the provisions set forth below, at all times from the date
of this Agreement through the Closing Date, the Transferred Business
shall continue to be operated as a going concern, in the ordinary and
usual course of business and consistent with prior practice, including
without limitation, in accordance with the policy with regard to
merchandise returns, and substantially in compliance with the
investment policies of the R2-estimate for the business year 2003
attached to this Agreement in Schedule 11.1. If an event would occur as
a result of the announcement or execution of the transactions
contemplated herein which could negatively and materially impact the
Transferred Business, then Seller shall have to consult with Purchaser
prior to taking action in respect of such event.
11.2 Except as otherwise provided for in this Agreement, Seller shall
procure that, as from the date of this Agreement through the Closing
Date, none of the Group Companies shall, and, as the case may be, with
respect to the Business only, none of Seller's Affiliates shall, and
Seller shall not, with respect to the provisions of paragraphs (VII),
(IX) and (XI) below, do any of the following without the prior written
consent of Purchaser:
(i) sell or otherwise transfer any of the Intellectual Property
Rights owned by any of the Group Companies or, with respect to
the Business, any of Seller's Affiliates;
(ii) execute, amend or terminate any contract or enter into any
negotiations with any third Person in a manner that would
materially inhibit or impair the consummation of the
transactions contemplated by this Agreement;
(iii) make any change in the terms of employment of any director,
officer or employee of any of the Group Companies or any
director, officer or employee dedicated to the Business other
than in accordance with existing agreements or collective
bargaining arrangements;
(iv) form, enter into, vary or withdraw from any significant
partnership, consortium, joint venture or other association;
(v) alter or amend in any manner the articles of incorporation or
organizational rules of any of the Group Companies;
25 / 54
(vi) issue, or create any obligation to issue, any share or
equity-linked security in or reduce the share capital of any
of the Group Companies;
(vii) transfer any share in any of the Group Companies to a third
Person;
(viii) distribute any dividend;
(ix) grant, create or allow to be created any Lien over any of the
shares of the Group Companies other than charges arising by
operation of law in the ordinary course of business;
(x) grant, create or allow to be created any Lien over any of the
assets of any Group Company other than charges arising by
operation of law in the ordinary course of business;
(xi) incorporate any Group Company (other than German Newco) or
liquidate any Group Company or effect any reorganization with
respect to such Group Companies;
(xii) make, increase or extend any loan or advance, or grant any
credit other than in the ordinary course of business to any
Person;
(xiii) grant, create or allow to be created any Lien over any of the
Business Assets other than charges arising by operation of law
in the ordinary course of business;
(xiv) initiate, discontinue or settle any litigation or arbitration
proceedings involving an amount in excess of CHF 100,000 (one
hundred thousand Swiss francs);
(xv) sell or otherwise transfer any of the assets included in the
Global Fixed Assets, except for assets having an aggregate
total net asset value not exceeding CHF 200,000 (two hundred
thousand Swiss francs) and only in the ordinary course of
business.
(xvi) sell (a) Ebel watches to any Person who was not a customer of
the Company or of any Seller's Affiliate as of the date
hereof, except where such sales to such Person do not exceed
CHF 100,000 (one hundred thousand Swiss francs) in the period
from the date hereof to the Closing, or (b) such watches to
any Person on terms that are substantially less favorable to
any of the Group Companies or any of Seller's Affiliates than
the
26 / 54
terms generally offered by such Group Company or Seller's
Affiliate to their regular retail accounts during 2003 or (c)
substantially more Ebel watches to any single customer from
the date hereof through the Closing Date than the quantity
sold to such customer in the ordinary course of business. In
addition, none of Seller's Affiliates will make any sales of
Ebel watches from any outlet store owned or operated by such
Seller's Affiliate after December 31, 2003.
11.3 With respect to the German Business and the German Newco, this Article
11 shall apply between the date of this Agreement and the German
Closing. Further, the Parties agree that between Closing and German
Closing, Seller shall, and shall cause the relevant Seller's Affiliate
to, manage the German Business and the German Newco on behalf and for
the account (and at the costs, risks and benefits) of Purchaser or of
the relevant Purchaser's Affiliate in accordance with Purchaser's or
the relevant Purchaser's Affiliate's instructions and shall obtain such
instructions where necessary at their own initiative. Seller and the
relevant Seller's Affiliate shall manage the German Business and the
German Newco on a fiduciary basis and shall in this connection follow
the instructions of Purchaser or of the relevant Purchaser's Affiliate.
Purchaser shall and shall cause the relevant Purchaser's Affiliate to
indemnify and hold harmless Seller, the Affiliate of Seller which
operates the German Business before it has been spun off to German
Newco and German Newco in respect of all claims and liabilities arising
from the correct performance by Seller, the above-referred Affiliate of
Seller and German Newco of such management within 10 (ten) Business
Days after having received Seller's request to do so.
11.4 The Parties acknowledge that nothing herein shall prevent the Company
from acquiring the inventories owned by the Affiliate of Seller in
Australia as mentioned in Article 3.5 above.
ARTICLE 12
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser at the date of this Agreement each
and all of the following representations and warranties, except for the
representations and warranties set forth in Articles 12.8 (2003 GLOBAL ACCOUNT),
12.9 (CLOSING TRANSFERRED BUSINESS ACCOUNTS), 12.20 (RECEIVABLES) and 12.23 (iv)
(IP Registration), which shall be valid only on the Closing Date.
27 / 54
Seller shall restate and confirm these representations and warranties on the
Closing Date except for the representations and warranties set forth in Articles
12.5 (b) (SHARES OF GERMAN NEWCO) which shall be restated and confirmed on
German Closing only, and except for the representations and warranties set forth
in Articles 12.3 (b) (CARRYING OUT OF THE BUSINESS), 12.12 (EMPLOYEES), 12.13
(SOCIAL SECURITY AND PENSION), 12.15 (COMPLIANCE WITH APPLICABLE LAW), 12.16
(COMPLIANCE WITH HEALTH AND SAFETY LAWS), 12.17 (LITIGATION), 12.18 (UNDISCLOSED
LIABILITIES), 12.22 (MAJOR CONTRACTS), 12.23 (iv) (IP RIGHTS ONLY USED), 12.23
(v) (IP THIRD PARTY'S RIGHT), 12.24 (i) and (ii) (INFORMATION TECHNOLOGY) and
12.25 (EMPLOYEES DATA) which shall be given as at the date of this Agreement
only.
12.1 GENERAL CORPORATE REPRESENTATION. Each of Seller and Seller's
Affiliates are duly organized and validly existing under applicable law
and has full right and authority to enter into this Agreement and the
documents and instruments to be executed pursuant to the terms hereof
and thereof, and to carry out the transactions contemplated hereby and
thereby. The execution and performance of this Agreement has been duly
authorized by all necessary corporate action on the part of Seller and
Seller's Affiliates. Neither the execution of this Agreement, nor the
consummation of the transactions contemplated hereby, will violate any
provision of the By-Laws or other organizational documents of Seller or
any of Seller's Affiliates or any applicable order, injunction, decree
or law of any governmental entity.
12.2 CONSENTS. Except as shown on Schedule 12.2 above, no notice to, filing
with, authorization of, exemption by, or consent of, any Person or
governmental entity is required for Seller and Seller's Affiliates to
consummate the transactions contemplated hereby.
12.3 ORGANIZATION OF EACH GROUP COMPANY.
(a) Each Group Company is (or in the case of the German Newco at
the time of the German Closing will be) duly organized and
validly existing under the laws of the country where it is
incorporated. Schedule 12.3 (A) contains the By-Laws and any
other organizational documents of each Group Company (except
German Newco) as of the date of this Agreement.
(b) At the date of this Agreement, each Group Company has (or in
the case of German Newco, at the German Closing will have)
full right and authority to own and operate its properties and
to carry on the business in which it is now engaged.
28 / 54
12.4 CAPITAL STRUCTURE OF THE COMPANY. The Company has a share-capital of
CHF 20,000,000 (twenty million Swiss francs) divided into 20,000
(twenty thousand) registered shares with a face value of CHF 1,000 (one
thousand Swiss francs) each, entirely paid.
12.5 OWNERSHIP OF THE SHARES AND OF THE SHARES OF GERMAN NEWCO.
(a) Seller has full right and capacity to transfer and sell
complete title to the Shares sold pursuant to Article 2 above.
Upon the delivery of the Shares provided for in Article 7.3
(II) (A) above, Purchaser will receive good and valid title to
the Shares, free and clear of any Lien.
(b) Seller will have, as at the German Closing, full right and
capacity to transfer and sell complete title to the shares of
German Newco. Upon the delivery of the shares of German Newco
at the German Closing, Purchaser (or Purchaser's Affiliate as
the case may be) will receive good and valid title to the
shares of German Newco, free and clear of any Lien.
12.6 PARTICIPATIONS OF THE COMPANY. The Company holds no other participation
than the Participations and at Closing will hold no participation other
than the Participations.
12.7 FINANCIAL STATEMENTS OF THE GROUP COMPANIES. The Audited Statutory
Accounts have been prepared in accordance with the accounting
principles and methods applicable in the place of incorporation of the
respective Group Companies (except German Newco) and were accurate in
all material respects as of December 31, 2002.
12.8 2003 GLOBAL ACCOUNT. The 2003 Global Account has been prepared in
accordance with the Accounting Principles, and is true, fair and
accurate in all material respects as of December 31, 2003.
12.9 CLOSING TRANSFERRED BUSINESS ACCOUNT. The Closing Transferred Business
Account will be prepared in accordance with this Agreement and the
Accounting Principles and will be true, fair and accurate in all
material respects except for the consequences, if any, resulting from
the application of this Agreement.
12.10 MANAGEMENT ACCOUNTS. The September 30, 2003 management accounts of the
Global Business attached hereto in Schedule 12.10 have been prepared in
accordance with the Accounting Principles and were true, fair and
accurate in all material respects as of September 30, 2003.
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12.11 ACCOUNTING POLICIES. The Accounting Policies are in all material
respects in full compliance with French GAAP.
12.12 EMPLOYEES. Except as listed in Schedule 12.12, no employee of the Group
Companies and no Dedicated Employee has an annual gross salary in
excess of CHF 300,000 (three hundred thousand Swiss francs) (without
social security) or is contractually entitled to receive a severance
package exceeding what is provided by applicable laws and applicable
collective bargaining agreements in the event of the termination of
his/her employment agreement.
12.13 SOCIAL SECURITY AND PENSIONS. All social security, pension fund or
similar payments due by the Group Companies in favor of their employees
and due by Seller's Affiliates in favor of Dedicated Employees under
law or under any benefit plans have been fully paid, or provisioned
for, in the relevant financial statements. All pension funds of the
Group Companies have been fully funded. All contributions required to
be made under the terms of any social security, pension fund or similar
payments due under law or under any benefit plans have been timely made
or have been reflected in the relevant financial statements of the
Group Companies.
Schedule 12.13 sets forth a list of any plan, program, arrangement or
agreement providing for any pension, profit-sharing, savings,
retirement, employment, consulting, severance pay, termination,
executive compensation, incentive compensation, sales commissions,
overtime pay, deferred compensation, bonus, change-in-control,
retention, salary continuation, vacation, sick leave, disability, death
benefit, group insurance, hospitalization, medical, dental, life
insurance, employee loan, educational assistance or other employee
benefits, whether written or oral, under which any Transferred Employee
has any present or future right to benefits (collectively the "BENEFIT
PLANS"), other than options, phantom stock or other equity-based
compensation plans or agreements ("EQUITY PLANS").
12.14 REAL ESTATE. The Group Companies have good and valid title to all
facilities listed in Schedule 12.14/1 and such facilities are free and
clear of any mortgages or rental agreements or Lien other than Liens
arising by operation of law in the ordinary course of business, except
as listed in Schedule 12.14/2.
12.15 COMPLIANCE WITH APPLICABLE LAW. Except as set forth in Schedule 12.15,
to Seller's Knowledge, the Group Companies and, with respect to the
Business, Seller's Affiliates have complied with any applicable law
(other than health and safety laws), ordinance, rule, order and
regulation of any governmental entity,
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including, but not limited to, EU competition law, except where the
failure to comply would not have a material effect on the Transferred
Business.
12.16 COMPLIANCE WITH HEALTH AND SAFETY LAWS.
To Seller's Knowledge, the Group Companies and, with respect to the
Business, Seller's Affiliates have:
(a) complied with all health and safety laws applicable in the
countries where they run their business, and no action, suit
or proceeding by any third Person or governmental entity is
pending or threatened against such company alleging any
failure to comply with any, health or safety laws, except
where the failure to comply would not have a material effect
on the Transferred Business, and
(b) obtained and been in compliance with all of the terms and
conditions of all permits, licenses and authorizations
required under any health and safety laws, except where the
failure to obtain or comply would not have a material effect
on the Transferred Business.
12.17 LITIGATION. Except as disclosed in Schedule 12.17, there are no
actions, suits or proceedings pending or, to Seller's Knowledge,
threatened against the Group Companies or relating to the Business
anyone of which involves an amount in excess of CHF 40,000 (forty
thousand Swiss francs) either in court or before any administrative
board, agency or commission.
12.18 UNDISCLOSED LIABILITIES. There is no undisclosed liability against any
Group Company or the Business, the origin of which is anterior to the
date of this Agreement, provided that this representation shall not
cover any liability of Seller, or of any of the Group Companies or of
Seller's Affiliates for possible defects, or deficiencies in the
products designed, manufactured, commercialized, or sold by any of them
up to the date of this Agreement, such potential liability being taken
over by Purchaser and Purchaser's Affiliates.
12.19 TAXES. All Tax returns required to be filed prior to Closing with
respect to Taxes payable by or reimbursable to each Group Company have
been or will be timely filed. All Tax returns required to be filed
prior to Closing with respect to Taxes triggered by the transfer of the
Business payable by or reimbursable to each of the Seller's Affiliates
have been or will be timely filed. All such Tax returns have been or
will be prepared in the manner required by applicable law, and, at the
time of their filing were or will be true, correct and complete in all
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material respects. All Taxes to be paid on such Tax returns on or prior
to Closing will have been timely paid on or prior such date.
12.20 RECEIVABLES. All Business Trade Receivables and Companies Trade
Receivables shown in the Closing Transferred Business Account will be
valid claims referring to trade transactions, it being specified that
Seller gives no guarantee as to their collectability and collection
whatsoever.
12.21 TITLE.
(i) Each of the Group Companies and Seller's Affiliates, with
respect to Business Assets only, has good and valid title to
its assets in all material respects, free and clear of any
Lien, except as set forth in Schedule 12.21 (I) and other than
Liens arising by operation of law in the ordinary course of
business.
(ii) Upon delivery to Purchaser's Affiliates of the Business
Assets, deeds, agreements and other instruments contemplated
by Article 7.3 (II) (B) above, such Purchaser's Affiliate will
receive good and valid title to the Business Assets, in all
material respects, free and clear of any Lien other than Liens
arising by operation of law in the ordinary course of
business.
12.22 MAJOR CONTRACTS. Except for those listed in Schedule 12.22, none of the
Group Companies and, with respect to the Business, none of Seller's
Affiliates is a party to any contract the value of which exceeds,
individually, CHF 500,000 (five hundred thousand Swiss francs) or, if
continuing by nature, having a residual term of more than 5 (five)
years and implying an annual commitment of at least CHF 100,000
(hundred thousand Swiss francs), VAT excluded.
12.23 INTELLECTUAL PROPERTY RIGHTS.
(i) SUFFICIENT RIGHTS. The Group Companies own, or have acquired
licenses (which, except as set forth in Schedule 12.23 (I),
are royalty free) to use all the Intellectual Property Rights,
without which the Group Companies' ability to continue to
conduct their business and Seller's Affiliates' ability to
continue to conduct the Business as it has been conducted
prior to Closing would be significantly and adversely
affected.
(ii) TITLE. The Intellectual Property Rights owned by the Group
Companies are free and clear of all Liens, rights of
employees, authors and
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inventors, security interests and other third party rights of
any nature except as set forth in Schedule 12.23 (II). Except
as set forth in Schedule 12.23 (II), no third party claims are
pending or, to Seller's Knowledge, are threatened that would
challenge the validity, or the right of the Group Companies to
use, any such Intellectual Property Rights.
(iii) REGISTRATIONS. All registrations for the Intellectual Property
Rights listed in Schedule 12.23 (III) are in force, with due
and payable renewal fees paid up to the Closing Date.
(iv) To Seller's Knowledge, all registrations for the Intellectual
Property Rights used but not owned by the Group Companies are
in force, with due and payable renewal fees paid up to the
date of this Agreement.
(v) THIRD PARTY'S RIGHTS. To Seller's Knowledge, the Group
Companies and, with respect to the Business, Seller's
Affiliates do not violate any Intellectual Property Rights of
any third party. The Group Companies and, with respect to the
Business, Seller's Affiliates have taken appropriate measures
in terms of data protection, employee guidelines and
confidentiality agreements with third parties in accordance
with best watch industry practice to protect the
confidentiality of any unpatented know-how and trade secrets
relating to the Business.
12.24 INFORMATION TECHNOLOGY.
(i) SUFFICIENT RIGHTS. As at the date of this Agreement, the Group
Companies and, with respect to the Business, Seller's
Affiliates own or possess, or have acquired licenses or have
concluded other agreements, so as to be able to make adequate
and sufficient use of all the Information Technology which is
necessary for the conduct of the Business as it is presently
conducted, Purchaser being aware that as from Closing, the
Company will have no right on any license regarding
Information Technology granted not exclusively to any of the
Group Companies, and in particular, on the SAP license.
(ii) To Seller's Knowledge as at the date of this Agreement, the
Group Companies and, with respect to the Business, Seller's
Affiliates do
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not violate any right of third party in respect of Information
Technology.
(iii) On Closing, the Group Companies will have the right to use the
BPCS and EBIN licenses used for components manufacturing
(bracelets, cases and Ebel chronograph movements) and after
sales services, respectively.
12.25 EMPLOYEES DATA. All data relating to the Group Companies' employees and
the Dedicated Employees as contained in Schedule 12.25 are fair and
accurate in all material respects with regard to their names, ages,
seniorities, functions and salaries.
12.26 LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.
Seller makes no representation whatsoever to Purchaser and gives no
warranty to Purchaser, except as otherwise expressly provided in this
Article. Seller, therefore, hereby disclaims any other representation
or warranty and, without limiting the generality of the foregoing,
makes no representation and gives no warranty whatsoever other than
expressly provided in this Article with respect to the Shares, the
shares of German Newco, the Group Companies, the financial or
commercial situation of any of the Group Companies or regarding any
aspect of their business or affairs or financial projections,
forecasts, budgets or management analyses nor to the future
profitability and financial performance of any of the Group Companies
nor in respect to the Business, nor with respect to the Business Assets
or Business Liabilities, nor to the continuity after the date of this
Agreement of relationships with customers, retailers or suppliers,
agents or distributors. It being understood that nothing in this
Article 12.26 shall in any way limit any of the indemnity obligations
of Seller contained in Article 15.
ARTICLE 13
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller at the date of this Agreement each
and all of the following representations and warranties. Purchaser shall restate
and confirm these representations and warranties on the Closing Date, except for
those set forth in Article 13.4.
13.1 GENERAL CORPORATE REPRESENTATION. Purchaser and Purchaser's Affiliates
are (or, with respect to Affiliates of the Purchaser formed after the
date of this Agree-
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ment, will on the Closing Date be) duly organized and validly existing
under applicable law and has full right and authority to enter into
this Agreement and the documents and instruments to be executed
pursuant to the terms hereof and thereof, and to carry out the
transactions contemplated hereby and thereby. The execution and
performance of this Agreement has been duly authorized by all necessary
corporate action on the part of Purchaser and/or Purchaser's
Affiliates. Neither the execution of this Agreement, nor the
consummation of the transactions contemplated hereby, will violate any
provision of the By-Laws of Purchaser or any of Purchaser's Affiliates
or any applicable order, injunction, decree or law of any governmental
entity.
13.2 CONSENTS. Except as shown on Schedule 13.2, no notice to, filing with,
authorization of, exemption by, or consent of, any Person or
governmental entity is required for Purchaser and/or Purchaser's
Affiliates to consummate the transactions contemplated hereby.
13.3 LITIGATION. There is no action, suit or proceedings pending or, to
Purchaser's Knowledge, threatened relating to, or affecting the ability
of Purchaser or any of Purchaser's Affiliates to purchase or operate
the Business, or assume the Business Liabilities.
13.4 MISREPRESENTATION AND BREACH OF WARRANTY. As at the date of this
Agreement, Purchaser, based on the Disclosed Documents, has no
knowledge of any misrepresentation or any breach of the representations
and warranties of Seller as set forth above in Article 12.
13.5 AVAILABILITY OF FUNDS. Purchaser has immediately available cash
sufficient to enable it to consummate the transactions contemplated by
this Agreement and in particular to pay the full amount of the Purchase
Price as provided for in this Agreement.
ARTICLE 14
REMEDIES FOR MISREPRESENTATION AND BREACH OF WARRANTIES
14.1 TERM OF REPRESENTATIONS AND WARRANTIES. Except for the representations
and warranties of Seller contained in Articles 12.13 (SOCIAL SECURITY
AND PENSIONS) and 12.19 (TAXES), which shall survive until 30 (thirty)
days after the expiration of the applicable statute of limitations
period, the representations and warranties as set forth in Article 12
shall survive until the last day of an 18 (eighteen) month period to be
computed from the Closing Date (the "EXPIRATION DATE").
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14.2 NOTICE OF BREACH.
(i) Within 60 (sixty) days after Purchaser having obtained
knowledge of a misrepresentation or breach of warranty, or
receipt by any of the Group Companies or, with respect to the
Business, by any Purchaser's Affiliate, of notice of any claim
made by any third Person which Purchaser believes is
reasonably likely to give rise to a claim for
misrepresentation or breach of warranty, Purchaser shall
deliver to Seller a notice in writing describing the facts or
the claim and its amount in reasonable details to the extent
then known.
(ii) Failure to give notice within the 60 (sixty) day period
above-mentioned shall not exclude Seller's liability except
and only to the extent that Seller can demonstrate that it has
incurred a loss, damage, cost, expense or other liability or
that any such loss, damage, cost, expense or other liability
has been aggravated, or that a defense or claim that Seller
otherwise could have asserted has been waived, or is otherwise
barred or prejudiced by reason of Purchaser's failure to give
timely notice.
(iii) Provided such a notice has been timely given, and in any event
before the Expiration Date, and with respect to the notified
claims only, Purchaser shall have an additional period of 6
(six) months to instigate proceedings (the "ADDITIONAL
PERIOD").
14.3 EXPIRATION DATE. After the Expiration Date and the Additional Period,
Seller shall have no liability and no obligation whatsoever vis-a-vis
Purchaser relating to the representations and warranties under this
Agreement except for claims notified by Purchaser to Seller in
accordance with the provisions set forth in this Article 14 prior to
the Expiration Date, provided that after the Expiration Date and the
Additional Period, Seller shall have the right to seek resolution of
any claim for misrepresentation or breach of warranty notified by
Purchaser in accordance with the provisions of this Article 14 prior to
the Expiration Date.
14.4 OPPORTUNITY FOR SELLER TO REMEDY. With respect to misrepresentation or
breach of warranty notified by Purchaser to Seller pursuant to this
Article 14, Seller shall have the right, within a reasonable period of
time not exceeding 60 (sixty) days after receipt of such notice of
breach, to bring about the position which would have existed had the
representation or warranty been correct.
14.5 OPPORTUNITY FOR SELLER TO DEFEND. In case of any claim brought by a
third Person against Purchaser, any of Purchaser's Affiliates or any of
the Group Companies,
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which has been notified by Purchaser in accordance with this Article
14, Seller shall use its commercially reasonable efforts in assisting
Purchaser or any of Purchaser's Affiliates or the relevant Group
Company in the defense of such claim. Purchaser shall procure that no
such claim is settled without the prior written consent of Seller,
which consent shall not be unreasonably withheld. Seller shall have the
right to compromise or defend, at its own expenses and by its own
counsel any such matter. If Seller is willing to compromise or defend
any asserted liability, it shall promptly notify Purchaser of its
intention to do so, and Purchaser shall cooperate with, and provide at
its own costs appropriate documentation and support as reasonably
requested by Seller or its counsel in connection with, the compromise
or defense of any such asserted liability. Purchaser or Purchaser's
Affiliates or the relevant Group Company, as the case may be, shall
have the right to participate, at its own expenses, in the defense of
any such asserted liability.
14.6 INDEMNITY BY SELLER. Subject to the provisions set forth below in
Articles 14.7 and 14.8, Seller shall indemnify and hold harmless
Purchaser against, and in respect of, the Losses which Seller, Seller's
Affiliates or the Group Companies, may suffer or incur in connection
with any misrepresentation or breach of warranty. The amount of the
indemnification will be agreed as between the Parties. If the Parties
cannot reach an Agreement, the amount of indemnification shall be
decided by the arbitral tribunal as provided for in Article 21.2. The
Parties agree to waive rescission as a remedy.
14.7 EXCLUSION OF SELLER'S LIABILITY. Seller shall not be liable in respect
of a claim by Purchaser for misrepresentation or breach of warranty:
(i) only to the extent, that a provision, reserve or expense for
the matter giving rise to the claim was reflected in the
Closing Transferred Business Account or to the extent that the
claimed amount can be offset against excess reserve or
provision within the same Caption;
(ii) if, and to the extent, that the matter giving rise to the
claim was Adequately Disclosed in the Disclosed Documents;
(iii) for any Loss to the extent such Loss is recoverable by
Purchaser, Purchaser's Affiliates or any of the Group
Companies from a third Person, including, but not limited to,
an insurance company under an insurance policy taken out by
Purchaser, any Purchaser's Affiliates or any of the Group
Companies, or, should that be the case, Seller;
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(iv) if, and to the extent that, any Loss has been caused by any
act or omission of Purchaser or any of Purchaser's Affiliates,
before or after the Closing, or by any of the Group Companies
after the Closing, or by the fact that Purchaser or any of
Purchaser's Affiliates with respect to that part of the
Transferred Business acquired by such Affiliate shall have
failed to take, or cause any of the Group Companies to take,
all reasonable steps to mitigate the Loss caused by a
misrepresentation or breach of warranty;
(v) with respect to Article 12.19, if and to the extent that such
claim can be offset by the Group Companies utilizing the net
operating loss carry forward up to the amount of such net loss
carry forward existing at the time Purchaser notifies Seller
of such claim.
14.8 LIMITATIONS ON LIABILITY. Claims for misrepresentation or breach of
warranty shall be limited as follows:
(i) Seller shall not be liable vis-a-vis Purchaser to the extent
that Losses for which Seller is liable are, in the aggregate,
equal or less than CHF 1,000,000 (one million Swiss francs)
(the "Threshold"), provided that in the event that the
aggregate amount of the claims exceed such amount, then the
claims shall be covered in their full amount;
(ii) Seller's aggregate liability shall in no event exceed an
amount of 50 % (fifty percent) of the Final Purchase Price
(the "CAP").
14.9 REDUCTION IN DAMAGES DUE. If facts and circumstances which would give
rise to a claim against Seller result in any financial benefits or
financial advantages for Purchaser, any of the Purchaser's Affiliates
or any of the Group Companies (including any future tax savings after
taking into account any tax costs), then Losses will be reduced by the
amount equal to any such benefits or advantages, and the amount which
can be claimed as Losses for a misrepresentation or breach of warranty
or otherwise shall be reduced accordingly.
14.10 In case of breach of a representation and warranty by Purchaser this
Article 14 shall apply mutatis mutandis.
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ARTICLE 15
INDEMNITIES OF SELLER
15.1 Notwithstanding the Cap, the Threshold, any other limitation or
exclusion of liability set forth in this Agreement, the contents of the
Disclosed Documents or any other aspect of this Agreement, Seller shall
indemnify fully, hold harmless and defend Purchaser, Purchaser's
Affiliates or any of the Group Companies, as the case may be, from and
against any and all damages incurred by the relevant entity, arising
out of, relating to, or based upon, any of the following:
- any non-compliance, whether full or partial, of Seller,
Seller's Affiliate and/or the Company, with the carve out
obligations set forth above in Article 6;
- any breach of representation and warranty contained above in
Articles 12.1 to 12.5 and 12.21;
- German Newco's liabilities not forming part of the German
Business;
For the avoidance of doubt it shall be understood that any payment made
by Seller to Purchaser under this Article 15.1 shall not count towards
either the Threshold or towards the Cap.
15.2 Notwithstanding any limitation or exclusion of liability set forth in
this Agreement other than the Cap and the Threshold, and
notwithstanding the contents of the Disclosed Documents or any other
aspect of this Agreement, Seller shall indemnify fully, hold harmless
and defend Purchaser, Purchaser's Affiliates or the Group Companies, as
the case may be, from and against any and all damages incurred by the
relevant entity, arising out of, relating to or based upon any of the
matters listed in Schedule 15.2 hereto, it being specified that, for
any such matters, the amount of Loss to be taken into consideration
shall be the amount of the Loss suffered by the Company, the relevant
Group Company, the Purchaser, or the relevant Purchaser's Affiliate as
the case may be after deduction of the amount of the provisions
existing in the Closing Transferred Business Account with respect to
such relevant matter.
15.3 Notwithstanding the Cap, the Threshold or any limitation or exclusion
of liability set forth in this Agreement, the contents of the Disclosed
Documents or any other aspect of this Agreement, Seller shall indemnify
fully, hold harmless and defend Purchaser, Purchaser's Affiliates or
the Group Companies as the case may be from and against any and all
damages incurred by the relevant entity arising out of, relating to, or
based upon, any environmental matters, including without limitations
items listed in Schedule 15.3, provided, however, that Pur-
39 / 54
chaser or the Group Companies, as the case may be, shall bear a total
deductible of CHF 2,000,000 (two million Swiss francs) prior to this
indemnity becoming applicable.
For the avoidance of doubt it shall be understood that any payment made
by Seller to Purchaser under this Article 15.3 shall not count towards
either the Cap or towards the Threshold.
15.4 Notwithstanding the Cap, the Threshold, any limitation or exclusion of
liability set forth in this Agreement, the contents of the Disclosed
Documents or any other aspect of this Agreement, Seller shall
indemnify, hold harmless and defend Purchaser, Purchaser's Affiliates
or the Company, as the case may be, from and against all damages
incurred by the relevant entity arising out of, relating to, or based
upon,
(i) the failure of Ebel Belgium, promptly after the termination or
expiration of its distributorship agreement with the Company,
and/or Ebel Canada, promptly after Closing, to cease all use
of the name Ebel or any name confusingly similar thereto, as a
corporate name, or, in connection with the sale of watches and
jewelry, as a trade name or domain name, or
(ii) the purported assignment, license or grant by either Ebel
Belgium or Ebel Canada of any rights in the name Ebel to any
other Person,
provided, however, that Seller's liability in respect of such damages
shall in no event exceed, in aggregate, the amounts set forth in
Schedule 15.4:
Purchaser shall have the exclusive right to negotiate with or claim
against Ebel Belgium and Ebel Canada in respect of the subject matter
hereof, provided that such subject matters shall not be settled by
Purchaser without Seller's consent, which consent shall not be
unreasonably withheld.
ARTICLE 16
EMPLOYEES
16.1 As to the employees employed by Seller's Affiliates, but clearly and
exclusively dedicated to the Business ("DEDICATED EMPLOYEES"), the
following shall apply:
(i) in the Asian countries other than Japan, in the United Kingdom
and in Spain there are no Dedicated Employees; the Parties
shall further col-
40 / 54
laborate between the date of this Agreement and Closing to
establish which employees shall receive an offer from
Purchaser or Purchaser's Affiliate to continue employment with
Purchaser or Purchaser's Affiliate after Closing;
(ii) with respect to Japan and the U.S.A., the Parties have decided
that the Dedicated Employees listed in Schedule 16.1 (II)
shall receive an offer from Purchaser or the relevant
Purchaser's Affiliate to continue employment with Purchaser or
Purchaser's Affiliate after Closing;
(iii) in France, the French Dedicated Employees will transfer as a
matter of law;
(iv) in Germany, Seller will set up German Newco; the German
Dedicated Employees will transfer to German Newco as a matter
of law, but have a right to object to such transfer.
All Dedicated Employees automatically transferred, accepting the offer
of Purchaser or of any Purchaser's Affiliate or not objecting to the
transfer, as the case may be, are called the "TRANSFERRED EMPLOYEES" in
this Agreement.
Where Dedicated Employees transfer as a matter of law, but refuse such
transfer, the Parties shall collaborate to ensure a smooth transition
in accordance with the provisions of Article 17.1 below in respect of
the part of the Business negatively impacted by the lack of such
transfers.
Seller will not make any offer of employment to any of the Dedicated
Employees before the sooner of (i) notification by Purchaser that such
Dedicated Employees have not become Transferred Employees and (ii) 30
(thirty) business Days after Closing.
16.2 As of the Closing Date and thereafter, Purchaser or Purchaser's
Affiliates, as the case may be, shall be solely responsible for all
employment and occupational matters concerning the Transferred
Employees and shall assume any and all liabilities and obligations
relating to the Transferred Employees with respect to such liabilities
and obligations which arose prior to the Closing Date, but only to the
extent that such liabilities and obligations (i) relate to compensation
of the type referred to in Article 12.12 or (ii) arise out of any
Benefit Plans referred to in Schedule 12.13 (other than any Equity
Plans), or (iii) were disclosed in the Disclosed Documents or in
Schedule 12.25, or (iv) in the aggregate are not significant. Subject
to the foregoing, Purchaser or Purchaser's Affiliate shall pay
41 / 54
all wages, social insurances, pension funds, occupational claims or
indemnity due for whatever reasons to the Transferred Employees.
Purchaser shall hold Seller and Seller's Affiliates harmless from, and
against, any claim which any Transferred Employee or any Person may
have against Seller or Seller's Affiliates in connection with the
transfer of any of the Transferred Employees' employment agreements to
Purchaser or Purchaser's Affiliate, or with the transfer of the
Business except in respect of any liabilities or obligations which, as
provided in this Article 16.2, are not assumed by Purchaser.
16.3 The Parties agree that they shall divide pension funds, pension fund
entitlements and similar benefits to which employees of the Group
Companies and Transferred Employees are entitled in a just and
equitable manner and in compliance with applicable laws.
16.4 Seller shall provide reasonable administrative assistance (but without
incurring any liability) to Purchaser with respect to the transfer of
the Transferred Employees.
ARTICLE 17
POST-CLOSING COVENANTS
17.1 The Parties will reasonably cooperate to effect a smooth transition of
the Business from Seller and Seller's Affiliates to Purchaser and, as
appropriate, Purchaser's Affiliates. As from the Closing Date, Seller
and Seller's Affiliates shall continue to render those services
relating to the Business as may be reasonably requested from time to
time by Purchaser and, as appropriate, by Purchaser's Affiliates for a
period to be agreed between the Parties between the date of this
Agreement and Closing or, if no agreement can be reached, for up to 6
(six) months following the Closing, provided that Purchaser is not able
to obtain similar services from other Persons at reasonable cost and on
no less favorable terms. The services so rendered by Seller or Seller's
Affiliates as the case may be, shall be billed to Purchaser or
Purchaser's Affiliate at Seller's or Seller's Affiliates (as the case
may be) costs plus 5 % (five percent).
17.2 As from the Closing Date, Purchaser shall continue to provide after
sale services for Christian Dior watches out of Swisswave Europe for
the French market for a period to be agreed between the Parties between
the date of this Agreement and Closing or, if no agreement can be
reached for up to 6 (six) months following the Closing or earlier at
Seller's (acting upon request of Christian Dior) election.
42 / 54
The services so rendered by Swisswave shall be billed to Christian Dior
at Swisswave's costs plus 5 % (five percent).
17.3 As from the Closing Date, Purchaser shall or shall cause Purchaser's
Affiliates to grant to any Affiliates of Seller a non-exclusive
worldwide royalty free license to use any Intellectual Property Right
(other than trademarks, design, design patents and copyrights
pertaining to the design of the products), belonging to any of the
Group Companies or any of Purchaser's Affiliate which such Intellectual
Property Right was used by such Affiliates of Seller for its own
business prior to Closing.
17.4 As soon as possible after the Closing, Seller shall undertake whatever
steps as will be necessary to amend the Company name of each of
Seller's Affiliates which contain the word "Ebel" or any similar name
which could give rise to confusion with "Ebel" to a corporate name not
containing the word "Ebel" and not giving rise to confusion with the
name "Ebel".
17.5 With respect to that part of the Business being located in Taiwan (the
"TAIWAN BUSINESS"), the following shall apply:
(i) the Business Inventory and the Business Other Operating Assets
shall remain in the possession of Seller's Affiliate in Taiwan
being held in trust for the Purchaser until receipt of further
instructions from Purchaser, which instructions shall be
carried out at first request;
(ii) the Business Receivables shall be collected by Seller's
Affiliate in Taiwan on behalf and for the account of the
Purchaser; Seller's Affiliate in Taiwan shall transfer
proceeds arising out of such collection, within 5 (five)
Business Days of receipt, to a bank account of Purchaser to be
designated by Purchaser prior to Closing;
(iii) Business Liabilities and Business Other Operating Liabilities
shall be paid on behalf and for the account of the Purchaser;
Purchaser shall reimburse Seller's Affiliate in Taiwan within
5 (five) Business Days of receipt of evidence that Seller's
Affiliate in Taiwan has effected such payment.
17.6 Seller and, as appropriate, Seller's Affiliates shall retain and make
available to Purchaser, as reasonably requested by Seller all
information, records or documents relating to the Business or the
Transferred Employees for all periods prior
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to the Closing and shall preserve all such information, records and
documents until the later of:
(i) 10 (ten) years after the Closing Date, or
(ii) the expiration of all statutes of limitations for Taxes
relating to periods prior to the Closing for Tax information,
records or documents. Prior to destroying any records relating
to the Transferred Business or to the Transferred Employees
for the period prior to the Closing Date, Seller and, as
appropriate, Seller's Affiliates shall notify Purchaser, 60
(sixty) days in advance of any such proposed destruction, of
its intent to destroy such records, and Seller and, as
appropriate, Seller's Affiliates will permit Purchaser to
retain any such records.
17.7 As from and after the Closing Date, each of Seller's Affiliates shall
promptly transmit to Purchaser or to such of Purchaser's Affiliates as
appropriate any invoice or request for payment received by it (if any)
with respect to any of the Business Liabilities. In the event that, for
any reason, Seller's Affiliate has paid any such invoice, Purchaser
shall reimburse such Seller's Affiliates any such amounts without delay
upon submission to Purchaser of appropriate evidence of such payment.
17.8 As from and after the Closing Date, Seller shall cause Seller's
Affiliates to forward promptly to Purchaser or to such of Purchaser's
Affiliates as appropriate any cash, check, wire transfer or other
instrument received by Seller's Affiliates in respect of Business Trade
Receivables for periods before the Closing Date.
17.9 Each of Purchaser and Purchaser's Affiliate hereby waives compliance by
Seller and Seller's Affiliates with the provisions of any law of any
jurisdiction, which provides that Seller or Seller's Affiliates shall
continue to be liable for any of the Business Liabilities after the
Closing Date. Purchaser shall indemnify and hold harmless Seller or
Seller's Affiliates from, and against, any and all liabilities that may
be asserted by third Persons against Seller or Seller's Affiliates or
paid by Seller or Seller's Affiliates to third Persons in this respect.
Seller hereby waives compliance by Purchaser with the provisions of any
law of any jurisdiction, which provides that Purchaser shall be liable
for any liability of Seller or Seller's Affiliates other than the
Business Liabilities. Seller shall indemnify and hold harmless
Purchaser, Purchaser's Affiliates or any of the Group Companies from,
and against, any and all liabilities that may be asserted by third
Persons against Purchaser or any of Purchaser's Affiliates or the Group
Companies or paid by
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Purchaser or any of Purchaser's Affiliates or the Group Companies to
third Persons in this respect.
17.10 Any Party shall have the right to set off any payment to be made
pursuant to this Agreement against any amount, which the other Party
will owe to it under this Agreement only if and to the extent the Party
wishing to set off has obtained a final and enforceable judgment with
respect to the amount which the other Party owes to it.
17.11 For a period of 2 (two) years from the Closing Date, Seller agrees not
to, and to cause Seller's Affiliates not to, induce any employee of any
of the Group Companies and any Transferred Employee to leave the employ
of the Group Companies or any Purchaser's Affiliate, as the case may
be.
17.12 With respect to VAT the Parties agree to structure transfers of assets
occurring in connection with this transaction in a manner beneficial to
both Parties and, if possible, in the form of notification procedures.
17.13 Seller hereby undertakes not to make any recourse claim against any of
the Group Companies or any of their respective directors or officers or
employees if Seller is being sued by Purchaser for breach of any
contractual undertaking pursuant to this Agreement, provided, however,
that this covenant shall not apply if any of the Group Companies, or
the relevant director or officer or employee, has acted by willful
intent.
17.14 As and from the Closing Date, upon the request of Purchaser, Seller
shall, and shall cause any Affiliate of Seller to, use reasonable
efforts so that Purchaser and its Affiliates shall have the right to
continue to use in connection with the Business for the period agreed
to in Article 17.1, or, if no such period is agreed to then, for up to
6 (six) months after the Closing Date, any software licenses previously
used in connection with the Business and that are not being transferred
to Purchaser or to Purchaser's Affiliates, hereunder, it being
specified that all costs in connection therewith, if any, shall be the
sole responsibility of Purchaser.
ARTICLE 18
CONFIDENTIALITY
18.1 From the date hereof to the Closing Date, the Parties and all of their
Affiliates shall hold in confidence and shall not disclose to any third
Person except to
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those of their directors, officers, employees and advisors on a need to
know basis (i) this Agreement, (ii) any of the information contained in
this Agreement, (iii) any other information concerning directly or
indirectly the contemplated transactions, nor (iv) any information
obtained in the course of due diligence or in negotiations and
discussions (the "CONFIDENTIAL INFORMATION"), unless a Party or any of
its Affiliates is required to disclose such Confidential Information by
law or other legal or regulatory requirement, including without
limitation, any rule or regulation of the United States Securities and
Exchange Commission or the New York Stock Exchange or any decision of a
competent court or governmental entity under compulsory law, or unless
such information is already in the public domain by reason other than a
breach of this confidentiality undertaking.
The Parties shall accordingly (i) advise their respective directors,
officers, employees and advisors to whom any Confidential Information
is disclosed on a need to know basis as provided in this Article 18.1
of the confidentiality obligations hereunder and (ii) cause Persons to
whom Confidential Information is disclosed to comply with the
obligations hereunder.
18.2 Notwithstanding Article 18.1, each Party shall have the right to (i)
issue an initial press release relating to this Agreement at the time
of signing of this Agreement, provided however, that each Party shall
consult with the other Party with respect to any such initial press
release to be issued by it and will take reasonable efforts to take
into account the observations of such other Party and (ii) to make
subsequent disclosure to third Persons, including without limitation,
customers, employees, analysts and investors, provided that such
disclosure is consistent with the disclosure contained in the initial
press release.
18.3 Notwithstanding anything herein to the contrary, any Party (and each
employee, representative, or other agent of any Party) may disclose to
any and all persons, without limitation of any kind, the US Federal
income tax treatment and US Federal income tax structure of the
transactions contemplated by this Agreement, and all materials of any
kind (including opinions or other tax analyses) related to such US
Federal income tax treatment and US Federal income tax structure;
provided that this Article 18.3 shall not permit any person to disclose
the name of, or other information that would identify, any party to
such transactions or to disclose confidential commercial information
regarding such transactions.
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ARTICLE 19
NOTIFICATIONS
19.1 Notices or other communications required or permitted hereunder shall
be delivered by registered mail, addressed as follows:
For Seller:
Sofidiv SAS
attn. ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
c/o LVMH Moet ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Vuitton
22, avenue Montaigne
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
with copy to:
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇
LVMH Moet ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Vuitton
22, avenue Montaigne
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
For Purchaser:
Concord Watch Company S.A.
attn ▇▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇
with copy to
Homburger
Attn. ▇▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇/▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇
and
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Movado Group, Inc.
attn. Mr. ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
with copy to
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Att. ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
1285 Avenue of the Americas
USA - 10018-6064 New York, NY
19.2 Such addresses may be changed, from time to time, by means of a notice
given in the manner provided in Article 19.1 above.
ARTICLE 20
MISCELLANEOUS
20.1 EXPENSES. Except as provided for differently in this Agreement, each
Party shall pay its own costs and expenses (including, but not limited
to, all legal, accounting and advisory and other fees), as well as any
Taxes or other charges which might become due in connection with this
Agreement, any agreement provided for the performance of this Agreement
or any agreement provided for herein, the negotiations leading up to,
and the transactions contemplated by, this Agreement.
20.2 US GAAP ACCOUNTS. Inasmuch as Purchaser needs to prepare and to have
audited within 65 (sixty-five) days after the Closing Date, financial
statements of the Transferred Business, prepared in accordance with US
generally accepted accounting principles and the applicable
requirements of the United States Securities and Exchange Commission
(the "SEC"), as of and for each of the years ending December 31, 2003,
2002 and 2001 (and unaudited financial statements as of and for any
interim periods prior to the Closing), for purposes of filings that
Purchaser's Affiliate, Movado Group, Inc. ("MGI"), is required to make
under the federal securities laws of the United States and/or the rules
or regulations of the SEC (including, without limitation, any required
income statements, balance sheets and cash flow statements and footnote
disclosure), Purchaser shall cause and Seller shall authorize Ernst &
▇▇▇▇▇ ▇▇, Switzerland (the "INDEPENDENT AUDITORS") to audit such
financial statements of the Transferred Business. Seller shall provide,
and shall cause its employees and its Affiliates' employees to provide,
such assistance to, and shall cooperate with, (i) Purchaser to enable
it to
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complete the preparation of such financial statements and (ii) the
Independent Auditors to the extent necessary for the Independent
Auditors to complete their audit within the required time period
referred to above.
If, notwithstanding the fact that the financial statements of the
Transferred Business referred to above will be or will have been
prepared by and under the responsibility of Purchaser as provided
herein, the Independent Auditors require from Seller or any Affiliate
of Seller a representation letter ("REPRESENTATION LETTER") for the
purpose of their audit of the financial statements of the Transferred
Business as described above, then Seller will cause a Representation
Letter covering the period prior to the Closing to be negotiated with
and delivered to the Independent Auditors, it being specified that in
any event the Representation Letter will be so delivered, which
Representation Letter shall provide that it is being delivered by
Seller for the sole and exclusive benefit of the Independent Auditors.
If such Representation Letter is required from Seller or any Affiliate
of Seller, Purchaser agrees that (i) Seller shall have no liability to
Purchaser in respect of the contents of the Representation Letter and
(ii) if Seller or such Affiliate of Seller is or becomes a party, or is
threatened to be made a party or other participant in, a threatened,
pending or completed action, suit or proceeding (whether civil,
criminal, administrative, formal or informal, investigative or other)
("CLAIM") by reason of, or arising out of, any event or occurrence
relating to, or directly or indirectly arising out of, such
Representation Letter and its execution and delivery by Seller or any
Affiliate of Seller, then Purchaser shall indemnify and hold harmless
Seller or such Affiliate of Seller to the fullest extent permitted by
law, against any Losses from such Claim, whether or not such Claim
proceeds to judgment or is settled or otherwise is brought to a
disposition; provided, however, that Purchaser shall have no liability
to Seller or any Affiliate of Seller under the indemnification referred
to above if, and to the extent that, any Claim arises out of, is
related to or results from any willful misrepresentation by Seller or
such Affiliate of Seller in connection with the Representation Letter.
Notwithstanding clauses (i) or (ii) above and except as provided in
such clauses, Purchaser hereby preserves all of its rights under this
Agreement, including, without limitation, any rights against Seller in
connection with a breach of Seller's representations and warranties or
any failure of Seller to meet any and all of Seller's obligations
hereunder.
20.3 WRITTEN FORM; AMENDMENT. This Agreement shall be subject to the written
form and may be amended or modified only by a written instrument duly
executed by each Party.
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20.4 ENTIRE AGREEMENT. This Agreement and the various agreements referred to
in this Agreement contain the entire agreement between the Parties
relating to the subject matter of this Agreement and supersedes all
prior agreements, negotiations, correspondence, undertakings and
communications of or among the Parties, their agents, counsels,
advisors, whether oral or written, with respect to such subject matter
and such prior agreements, negotiations, correspondences, undertakings
are expressly declared null and void and of no effect whatsoever as of
the date hereof.
20.5 SEVERABILITY. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided,
if possible, in order to achieve the intent of the Parties to this
Agreement to the fullest extent possible. In any event, all other
provisions of this Agreement shall remain valid and enforceable to the
fullest extent possible.
20.6 NO WAIVER. The failure of any of the Parties to enforce any of the
provisions of this Agreement or any rights with respect thereto shall
in no way be considered as a waiver of such provisions or rights or in
any way affect the validity of this Agreement. The waiver of any breach
of this Agreement by any Party shall not operate to be construed as a
waiver of any other prior or subsequent breach.
20.7 BINDING ON SUCCESSORS. All of the terms, provisions and conditions of
this Agreement shall be binding upon and for the benefit of the Parties
hereto and their respective successors, permitted assigns and legal
representatives.
20.8 NON-ASSIGNABILITY. Neither Party may assign or transfer, in whole or in
part, or delegate all or any portion of its rights or obligations under
this Agreement without the prior written consent of the other Party.
Any assignment, transfer or delegation made without such consent shall
be null and void, provided, however, that Purchaser shall have the
right to execute such assignments to its Affiliates subject to such
Affiliate being bound by this Agreement.
20.9 NO THIRD PERSON BENEFICIARIES. This Agreement does not create, and
shall not be construed as creating, any right enforceable by any Person
who is not a Party to this Agreement.
20.10 FURTHER ACTIONS. At any time, and from time to time, each Party agrees,
at its expense, to take such actions and to execute and deliver such
documents as may be reasonably necessary to fully perform this
Agreement.
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ARTICLE 21
APPLICABLE LAW AND ARBITRATION
21.1 This Agreement shall be governed, interpreted and construed by, under
and exclusively pursuant to the LAWS OF SWITZERLAND without regard to
the conflicts of law provisions or principles thereof. The Parties
expressly rule out the applicability of the Convention on contracts for
the International Sale of Goods.
21.2 Any dispute, controversy or claim arising out of or in relation to this
Agreement, including the validity, invalidity, breach or termination
thereof, shall be resolved by arbitration in accordance with the Swiss
Rules of International Arbitration of the Swiss ▇▇▇▇▇▇▇▇ of Commerce in
force on the date when the Notice of Arbitration is submitted in
accordance with these rules. The number of arbitrators shall be three
and the seat of the arbitral tribunal shall be in GENEVA. The arbitral
proceedings shall be conducted in English and all awards shall be
rendered in English.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in two
originals on the date first above written.
SOFIDIV SAS CONCORD WATCH COMPANY SA
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------- -----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇▇▇▇▇
51 / 54
LIST OF SCHEDULES
-----------------
0.2/1 Participations
0.2/2 Subsidiaries
0.4 Seller's Affiliates
1.3 Accounting Policies
1.9 Audited Statutory Accounts
1.29 Disclosed Documents
1.56 Purchaser's Affiliates
1.68 Consolidated Accounts as of September 30, 2003
5.7 Dates and Places of Business Inventories at Seller's
Affiliates
5.8 List of Intercompany Agreements
5.9 Trademarks to be Renewed from January 1 to June 30,
2004
7.3 (II) (G)/1 List of Mortgage Certificates
7.3 (II) (G)/2 Excerpts from Land Registries
9.4 Special Purpose Opinion
9.5.1 (II) Illustration of the Mechanism set forth in Article
9.5.1 (ii)
9.5.3 Dates and Places of Inventories for the Proposed
Closing Transferred Business Account
11.1 R2-Estimate
12.2 Consents
12.3 (A) By-Laws of Each Group Company
12.10 Management Accounts as of September 30, 2003
12.12 Employees with an Annual Gross Salary in Excess of
CHF 300,000 or with special severance package
12.13 Liabilities and Obligations relating to the
Transferred Employees
12.14/1 Facilities
12.14/2 Mortgages or Rental Agreements
12.15 Compliance with Law
12.17 Litigation
12.21 (I) Liens (Business Assets)
12.22 Major Contracts
12.23 (I) Licenses to use IP Rights of Third Parties
52 / 54
12.23 (II) Third Party Rights, Claims, Liens on Intellectual
Property Rights
12.23 (III) Registrations (Intellectual Property Rights)
12.25 Group Companies' and Dedicated Employees Data
13.2 Consents
15.2 Matters to be indemnified under Article 15.2
15.3 Environmental Matters
15.4 Liability's Limits Concerning Ebel Belgium and Ebel
Canada
16.1 (II) Certain Dedicated Employees in the USA and Japan
53 / 54
INDEX
Article 1: Definitions..................................................3
Article 2: Sale and Purchase of the Shares - Assumption of Liabilities.10
Article 3: Sale and Purchase of the Assets - Assumption of Liabilities.11
Article 4: Purchase Price..............................................13
Article 5: Pre-Closing Covenants of Seller and Purchaser...............13
Article 6: Carve Out Obligations of Seller Prior to Closing............16
Article 7: Closing.....................................................17
Article 8: 2003 Global Account.........................................19
Article 9: Closing Transferred Business Account........................19
Article 10: Post Closing Purchase Price Adjustment......................24
Article 11: Conduct of Business between the Date of this Agreement
and the Closing.............................................25
Article 12: Representations and Warranties of Seller....................27
Article 13: Representations and Warranties of Purchaser.................34
Article 14: Remedies for Misrepresentation and Breach of Warranties.....35
Article 15: Indemnities of Seller.......................................39
Article 16: Employees...................................................40
Article 17: Post-Closing Covenants......................................42
Article 18: Confidentiality.............................................45
Article 19: Notifications...............................................47
Article 20: Miscellaneous...............................................48
Article 21: Applicable Law and Arbitration..............................51
List of Schedules.............................................................52
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