UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
JULY 24, 1998
----------------------------
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
WEIDER NUTRITION INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 333-12929 87-0563574
(State or other Commission File Number (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
2002 South 5070 West, Salt Lake City, Utah 84104-4726
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(Address of Principal Executive Offices) (Zip Code)
(801) 975-5000
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name or former address, if changed since last report.)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 10, 1998, Weider Nutrition International, Inc., a Delaware
corporation (the "Company"), announced that its wholly owned subsidiary, Weider
Nutrition Group, Inc., entered into a stock purchase agreement (the "Stock
Purchase Agreement") with Wolfgang Brandt and Eberhardt Schluter to acquire all
of the outstanding shares of capital stock of Haleko Hanseatisches
Lebensmittelkontor GmbH ("Haleko"), a private limited company organized under
the laws of Germany. The acquisition closed on July 24, 1998. The purchase price
was comprised of $25.0 million in cash, 200,000 shares of the Company's Class A
Common Stock and an $8.0 million contingent earnout agreement tied to the future
financial performance of Haleko. In addition, the Company assumed approximately
$16.0 million in long-term debt. The Company will use amounts available under
its credit agreement with General Electric Capital Corporation to finance the
cash portion of the purchase price.
Haleko is a [manufacturer] and distributor of nutritional powders,
capsules and tablets and nutrition bars. Haleko's products include Multipower,
Multaben and Champ. In addition, Haleko sells a range of sportwear apparel
throughout Europe under the brand name Venice Beach.
A copy of the Company's July 10, 1998 press release has been filed
as an exhibit to this report and is incorporated herein by reference.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) and (b) Financial statements and PRO FORMA financial information will be
filed within 60 days in accordance with the requirements of Item
7(a)(4).
(c) The following documents are furnished as Exhibits to this Current
Report on Form 8-K pursuant to Item 601 of Regulation S-K:
2.1 Stock Purchase Agreement, dated July 9, 1998, by and among
Weider Nutrition Group, Inc. and Wolfgang Brandt and Eberhardt
Schluter.
2.2 Amendment Deed to Stock Purchase Agreement, dated July 24, 1998.
2.3 Share Transfer Deed, dated July 24, 1998.
99.1 Press release dated July 10, 1998 of Weider Nutrition
International, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WEIDER NUTRITION INTERNATIONAL, INC.
Date: August 10, 1998
By: /s/ ROBERT K. REYNOLDS
Name: Robert K. Reynolds
Title: Executive Vice President
& Chief Operating Officer
<PAGE>
EXHIBIT INDEX
DOC. NO. DOCUMENT DESCRIPTION
2.1 Stock Purchase Agreement, dated July 9, 1998, by and among Weider
Nutrition Group, Inc. and Wolfgang Brandt and Eberhardt Schluter.
2.2 Amendment Deed to Stock Purchase Agreement, dated July 24, 1998.
2.3 Share Transfer Deed, dated July 24, 1998.
99.1 Press Release dated July 10, 1998 of Weider Nutrition International,
Inc.
EXHIBIT 2.1
CERTIFIED COPY
DOCUMENT NO. 978/1998
Recorded
in this Free and Hanseatic City of Hamburg
on 9 July 1998.
Before me,
in Hamburg notary public Dr. jur. Ascan Pinckemelle
whose office is at Loogestrasse 22, 20249 Hamburg,
today appeared
at Warburgstrasse 50, 20354 Hamburg,
where I had proceeded upon request:
1. Mr. Wolfgang Brandt, businessman, born 30 January 1944, residing at
Ansorgestrasse 24, 22605 Hamburg, Germany, identified by
Bundespersonalausweis No. 1306865379D.
2. Mr. Eberhardt Schluter, businessman, born 1 May 1946, residing at Bohmersweg
9, 20148 Hamburg, Germany, identified by Bundespersonalausweis No.
1303699133D.
3. Mr. Robert K. Reynolds, businessman, born 29 September 1956, residing at
2002 South 5070 West, Salt Lake City, UT 84104-4726, USA, identified by
United States of America passport no. 054684199, acting on behalf of Weider
Nutrition Group, Inc., 1960 South 4250 West, Salt Lake City, UT 84104-4836,
USA, pursuant to a power of attorney dated 26 June 1998, a notarized copy of
which was presented to the acting notary and a certified copy of which is
attached to this record.
The persons appearing deposed and declared as follows:
I.
At our request this record is being executed in the English language. Each of us
is sufficiently familiar with that language.
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I, the acting notary, have satisfied myself of the truthfulness of
this statement.
I, too, am sufficiently familiar with the English language.
II.
We wish to execute a Stock Purchase Agreement, the contents of which are annexed
to this deed. The Stock Purchase Agreement refers to a number of Schedules and
Exhibits which are set out in a separate deed recorded by the acting notary on 8
July 1998 (document no. 977/1998) (the "Reference Deed"). In respect of the
said Schedules and Exhibits reference is hereby made to the contents of the
Reference Deed, a certified copy of which was available. The persons appearing
waived the right to have the Reference Deed read out to them. A certified copy
of the Reference Deed is attached as an integral part of the present record.
III.
We hereby grant power of attorney to
Mr. Michael Leue, Abteistrasse 57, 20149 Hamburg
and
Dr. Holger Iversen LLM., Warburgstrasse 50, 20354 Hamburg
who shall be authorised to act jointly on behalf of each of us and the parties
represented by us and for this purpose shall be exempted from the restrictions
of Section 181 of the German Civil Code, to execute any amendments to this deed
as may be agreed by the parties thereto. The attorneys shall be authorised to
delegate their powers hereunder to another person who shall have the same
authority as granted to the attorney hereby.
We instruct the attorneys to use the powers granted to them hereunder only in
compliance with written instructions (including instructions communicated by
telefax) from each of the parties to the Stock Purchase Agreement.
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IV.
The effectiveness of the Stock Purchase Agreement is subject to the conditions
precedent (AUFSCHIEBENDE BEDINGUNGEN) specified in Section 3 of the Stock
Purchase Agreement. Such conditions precedent shall be deemed to be fulfilled if
Buyer (as defined in the Stock Purchase Agreement) informs the acting notary in
writing that the conditions precedent have been fulfilled. Upon receipt of such
confirmation the acting notary is hereby instructed to inform the Sellers
thereof immediately in writing.
***
The deed, including the Stock Purchase Agreement annexed thereto, was read to
the persons appearing, approved by them and signed in their own hand as follows:
/s/ Robert K. Reynolds COO
/s/ Eberhardt Schluter
[SEAL] /s/ Wolfgang Brandt
/s/ Dr. jur. Ascan Pinckemelle
notary public
<PAGE>
Document NRM 978/2998
[SEAL] /s/ Dr. jur Ascan Pinckemelle
POWER OF ATTORNEY
We, the undersigned Weider Nutrition Group, Inc.,
1960 South 4250 West, Salt Lake City, UT 84104-4728, USA,
hereby grant power of attorney to:
Robert K. Reynolds
Business address: 2002 South 5070 West,
Salt Lake City, UT 84104-4726, USA
to represent us at the conclusion of sale and transfer agreements for shares in
Haleko Hanseatisches Lebensmittel Kontor GmbH, registered in the commercial
register of the local court in Hamburg under HRB 20277, with Mr. Wolfgang Brandt
and Mr. Eberhart Schluter.
The attorney shall be authorised to make all statements towards German notaries,
courts, administrative authorities and other third parties which may be
necessary or useful for the completion of the sale and purchase of the above
shares. Moreover he shall be authorised to assign the agreements to be concluded
as well as all rights and liabilities thereunder to a third party and to make
all statements necessary for such assignment.
The attorney shall be exempted from the restrictions of Section 181 of the
German Civil Code, shall be entitled to delegate his power of attorney and to
exempt the delegate or delegates from the restrictions of Section 181 of the
German Civil Code.
Date: June 26, 1998
E. WEIDER
Chairman of the Board
for and on behalf of
Weider Nutrition Group, Inc.
<PAGE>
[SEAL]
APOSTILLE
(Convention de La Haye du 5 Octobre 1961)
1. Country: UNITED STATES OF AMERICA
2. This public document has been signed by RICHARD BIZZARO
3. acting in the capacity of PRESIDENT & CHIEF EXECUTIVE OFFICER, WEIDER
NUTRITION GROUP, INC.
4. bears the seal/stamp of LINDA N. SPENCER, NOTARY PUBLIC, STATE OF UTAH
CERTIFIED
5. at SALT LAKE CITY, UTAH, U.S.A.
6. the 29th day of June, 1998
7. by OLENE S. WALKER, Lt. Governor, State of Utah, U.S.A.
8. Number: 19263
9. Seal/Stamp:
10. Signature: OLENE S. WALKER
Olene S. Walker
Lieutenant Governor
[SEAL]
<PAGE>
THE UTAH DIVISION OF CORPORATIONS AND COMMERCIAL CODE HEREBY CERTIFIES THAT
WEIDER NUTRITION GROUP, INC.
IS A UTAH CORPORATION AND IS QUALIFIED TO TRANSACT BUSINESS IN THE STATE OF
UTAH. A CERTIFICATE OF INCORPORATION WAS ISSUED FROM THIS OFFICE ON 06-01-1989
AND SAID CORPORATION IS IN GOOD STANDING, AS APPEARS OF RECORD IN THE OFFICES OF
THE DIVISION.
FILE # 137260 DATED THIS 24TH DAY
OF JUNE 1998
THIS CERTIFICATION IS NOT VALID
UNLESS PRINTED ON PAPER DISPLAYING
THE STATE SEAL IN BLUE, THE REMOTE ACCESS CERTIFICATION #143096
DIVISION SEAL IN GOLD, AND THE
DIVISION DIRECTOR'S SIGNATURE.
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LORENA P. RIFFO
Lorena P. Riffo
[SEAL] Division Director of
Corporations and Commercial Code
<PAGE>
STOCK PURCHASE AGREEMENT
regarding all shares in
HALEKO HANSEATISCHES LEBENSMITTEL KONTOR GmbH
of
9 JULY 1998
among
WEIDER NUTRITION GROUP
and
MR. WOLFGANG BRANDT
and
MR. EBERHARDT SCHLUTER
<PAGE>
STOCK PURCHASE AGREEMENT
INDEX
PAGE
----
BACKGROUND.................................... 1
1. SALE AND PURCHASE.................... 2
1.1 Sale and Purchase of the
Shares......................... 2
1.2 Shares owned by Schulte......... 2
2. PRICE AND TERMS...................... 2
2.1 Initial Cash Payment............ 2
2.2 Stock........................... 3
2.3 Deferred Cash Payment........... 3
2.4 Determination of Deferred
Consideration.................. 4
2.5 Adjustment of Deferred
Consideration.................. 6
3. CONDITIONS PRECEDENT................. 7
3.1 Conditions to Completion........ 7
3.2 Obligations of the Parties...... 8
3.3 Cut-Off Date.................... 8
4. COMPLETION........................... 8
4.1 Closing Date.................... 8
4.2 Escrow Arrangements............. 9
4.3 Actions by the Buyer at
Closing........................ 9
4.4 Actions by Brand and Schluter at
Closing........................ 9
4.5 Interest........................ 10
5. GENERAL REPRESENTATIONS AND
WARRANTIES OF THE SELLERS............ 10
5.1 Organization................... 10
5.2 Capitalization................. 11
5.3 No Violation................... 12
5.4 Financial Statements........... 12
5.5 Records........................ 12
5.6 Absence of Certain Changes..... 13
5.7 Title to and Condition of the
Assets........................ 13
5.8 Tangible Personal Property..... 13
5.9 Customers and Supplies......... 14
5.10 Employees...................... 14
5.11 Litigation..................... 15
5.12 Contracts...................... 15
5.13 Taxation....................... 15
5.14 Environmental Liability........ 16
5.15 Governmental Approvals......... 16
5.16 Compliance with Laws and
Permits; Illegal Payments..... 16
5.17 Compliance with Zoning,
Planning and Safety
Regulations................... 17
5.18 Receivables.................... 17
5.19 Inventory and Supplies......... 17
5.20 Intellectual Property.......... 17
5.21 Insurance...................... 18
5.22 Full Disclosure................ 18
6. REPRESENTATION AND WARRANTIES OF THE
SELLERS IN CONNECTION
<PAGE>
WITH THE ACQUISITION OF THE STOCK.... 19
6.1 Registration of Stock........... 19
6.2 Citizenship..................... 19
7. CONSEQUENCES OF INCORRECT
REPRESENTATIONS AND WARRANTIES....... 19
7.1 Sellers' Undertaking............ 19
7.2 Other Remedies.................. 20
7.3 Periods for Asserting
Remedies....................... 20
7.4 DE MINIMIS Provision............ 20
7.5 Facts Accepted by Buyer......... 20
8. AGREEMENT NOT TO COMPETE............. 20
9. UNDERTAKINGS OF BUYER AND SELLERS.... 21
9.1 Guarantees...................... 21
9.2 Haleko France................... 21
9.3 Conduct of Business until
Closing........................ 21
9.4 Anti-Trust Regulations.......... 21
9.5 FFG Put Option.................. 21
10. ASSIGNMENT........................... 21
11. COSTS................................ 22
12. GOVERNING LAW AND LANGUAGE,
DISPUTES............................. 22
12.1 German Law..................... 22
12.2 English Language............... 22
12.3 Arbitration.................... 22
13. MISCELLANEOUS........................ 23
13.1 Entire Agreement............... 23
13.2 Severability................... 23
13.3 Amendment...................... 23
13.4 Headings....................... 23
13.5 Gender, Number................. 23
13.6 Notices........................ 23
13.7 Key Man Life Insurance......... 24
(Ito e/haleko/IndexStockPurchaseAgreement)
<PAGE>
This STOCK PURCHASE AGREEMENT (the "Agreement") is made on 9 July 1998 by
1. Weider Nutrition Group, Inc., a corporation organised under the laws of
Utah, United States of America, with headquarters at 2002 South 5070 West,
Salt Lake City, UT 84 104-4726, USA (the "Buyer");
2. Wolfgang Brandt of Ansorgestrasse 24, 22605 Hamburg ("Brandt"); and
3. Eberhardt Schluter of Bohmersweg 9, 20148 Hamburg ("Schluter") (Brandt and
Schluter collectively the "Sellers").
BACKGROUND
A. Haleko Hanseatisches Lebensmittel Kontor GmbH (the "Company") is a private
limited company organized under the laws of Germany, registered in the
commercial register at the local court in Hamburg under registration no.
HRB 20227 and with headquarters at Holsteinischer Kamp 1, 22081 Hamburg,
Germany.
B. Brandt, Schluter and Carsten Schulte of Elbchaussee 245, 22605 Hamburg
("Schulte") own the following shares of the Company (the "Shares") which
represent all of the outstanding shares in the capital of the Company:
Brandt: one share of DM 4,000.00
one share of DM 21,000.00
one share of DM 25,000.00
one share of DM 100,000.00
one share of DM 100,000.00
one share of DM 250,000.00
Schluter: one share of DM 16,000.00
one share of DM 9,000.00
one share of DM 25,000.00
one share of DM 100,000.00
one share of DM 100,000.00
one share of DM 250,000.00
Schulte: one share of DM 250,000.00
one share of DM 250,000.00
---------------
DM 1,500,000.00
===============
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C. On 14 May 1998 the Buyer's parent company Weider Nutrition International,
Inc. ("WNI") and the Sellers concluded a Letter of Intent on the purchase
of the Shares which is - except for certain provisions - not legally
binding and subject to the execution of a sale and purchase agreement.
Following their intention as stated in the Letter of Intent the Buyer
desires now to purchase the Shares pursuant to the terms of this Agreement
and to enter into a long-term cooperation with Brandt and Schluter for the
further development and expansion of the Company's business.
THEREFORE, the parties agree as follows:
1. SALE AND PURCHASE
1.1 SALE AND PURCHASE OF THE SHARES
Pursuant to the terms and conditions set forth in this Agreement,
Brandt and Schluter agree to sell and the Buyer agrees to purchase
the Shares, free and clear of all encumbrances, together with the
right to receive all undistributed dividends in respect of previous
business years and the current business year.
1.2 SHARES OWNED BY SCHULTE
Prior to completion of the sale and purchase as aforesaid Brandt
and/or Schluter shall enter into an agreement (the "Schulte
Agreement") for the acquisition of those of the Shares owned by
Schulte as set out in paragraph B of the preamble to this Agreement
("Schulte's Shares") free and clear of all encumbrances, together
with the right to receive all undistributed dividends in respect of
previous business years and the current business year, substantially
in the form attached hereto as Exhibit A.
2. PRICE AND TERMS
The Buyer shall purchase the Shares for the following consideration:
2.1 INITIAL CASH PAYMENT
DM 44,850,000 (Deutsche Mark forty four million eight hundred fifty
thousand) (the "Initial Cash Payment") which shall be paid to the
Sellers and Schulte in accordance with Section 4.3 (a).
<PAGE>
-3-
2.2 STOCK
200,000 (two hundred thousand) shares of unregistered Class A common
stock in WNI (the "Stock"), one half of which is to be issued to
each Brandt and Schluter as further consideration for those of the
Shares owned by them at the date hereof as set out in paragraph B of
the preamble to this Agreement. The Stock shall be subject to a
24-month lock-up period pursuant to the Lock-Up Agreements as
defined in Section 4.4 (a) to secure their respective obligations
under this Agreement and the Service Agreements as defined in
Section 4.4 (b).
2.3 DEFERRED CASH PAYMENT
Up to DM 15,150,000 (Deutsche Mark fifteen million one hundred fifty
thousand) (the "Deferred Consideration"), one half of which is to be
paid to each Brandt and Schluter as further consideration for those
of the Shares owned by them at the date hereof as set out in
paragraph B of the preamble to this Agreement, in accordance with
the following conditions and subject to adjustment pursuant to
Section 2.5.
(a) Provided the Company's pre-tax profits (as defined in Section
2.4 (d)) for the period between 1 June 1998 and 30 April 1999,
divided by 11 and multiplied by 12, are not less than DM
7,000,000, an amount of DM 3,000,000 shall be paid, increasing
by DM 3,000,000 to DM 6,000,000 if the Company's pre-tax
profits for the said period, divided by 11 and multiplied by
12, are DM 8,500,000 or more and by a proportional part of DM
3,000,000 if the said profits, divided by 11 and multiplied by
12, are between DM 7,000,000 and DM 8,500,000 ;
(b) Provided the Company's pre-tax profits for the period between
1 May 1999 and 30 April 2000 are not less than DM 7,900,000, a
further amount of DM 3,000,000 shall be paid, increasing by DM
3,000,000 to DM 6,000,000 if the Company's pre-tax profits for
the said period are DM 9,800,000 or more and by a proportional
part of DM 3,000,000 if the said profits are between DM
7,900,000 and DM 9,800,000;
<PAGE>
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(c) Provided the Company's pre-tax profits for the period between
1 May 2000 and 30 April 2001 are not less than DM 9,000,000, a
further amount of DM 1,500,000 shall be paid, increasing by DM
1,5000,000 to DM 3,000,000 if the Company's pre-tax profits
for the said period are DM 11,300,000 or more and by a
proportional part of DM 1,500,000 if the said profits are
between DM 9,000,000 and DM 11,300,000.
(d) Provided the maximum amounts of Deferred Compensation as per
sub-sections (a) to (c) have been achieved, a further amount
of DM 150,000 shall be paid together with the amount as per
(c).
Any amount to be paid as aforesaid shall become due ten days after
its determination has become final and binding in accordance with
Section 2.4 (c).
2.4 DETERMINATION OF DEFERRED CONSIDERATION
(a) The amounts of Deferred Consideration payable to Brandt and
Schluter shall be determined by Mr. Bernd Rohrberg
("Rohrberg"), unless he states or the Buyer, Brandt and
Schluter (or, if only one of them is entitled to Deferred
Compensation for the respective period, that person) agree
that he is unavailable or unable to determine the Deferred
Consideration, in which case it shall be determined by the
Company's auditor for the period relevant to the calculation
of such amount (the "Company's Auditor"). The same shall apply
if Rohrberg should fail to determine the Deferred Compensation
within one month from unconditional approval of the Company's
accounts for the respective period by the Company's Auditor.
The determination of the Deferred Consideration shall be
finalised within six months after the end of the respective
period, failing which the Buyer shall pay 6% p.a. interest on
the Deferred Consideration - if any - starting six months
after the end of the respective period.
(b) Provided Brandt and Schluter are still executive directors
(GESCHAFTSFUHRER) of the Company or of a company acting as
general partner of a limited partnership into which the
Company has been converted ("Executive Directors") at the
relevant time they shall be
<PAGE>
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responsible to prepare the accounts of the Company for the
periods for which Deferred Consideration is possibly payable;
such accounts have to be audited and unconditionally approved
by the Company's Auditor. If the Company's Auditor shall not
be identical to its auditor for the 1997 financial year,
Brandt and Schluter shall have the right jointly - or if only
one of them is still an Executive Director at the relevant
time, that person alone - to appoint an auditor of their (or
his, as the case may be) choice in order to verify the audit
results of the Company's Auditor for the respective period.
(c) The determination of the amount of the Deferred Consideration
by Rohrberg or, as the case may be, the Company's Auditor
shall become final and binding on all parties one month after
its having been communicated to the Buyer, Brandt and Schluter
(or, if only one of them is entitled to Deferred Compensation
for the respective period, that person) unless one of them has
notified the others of an objection to such determination
within the said period. In the latter case either party may
apply to KPMG Deutsche Treuhand-Gesellschaft AG of Kurze
Muhren 1, 20095 Hamburg, for a determination which shall be
final and binding on all parties for the purpose of Section
2.3 but without prejudice to either party's rights to assert
that it contains, or is based on, manifest error.
(d) For the purpose of calculating the pre-tax profits of the
Company as referred to in Section 2.3:
(i) Pre-tax profits shall mean the Company's profits as per
its accounts for the relevant period, prepared, audited
and approved in accordance with Section 2.4 (b), before
income and trade tax (KORPERSCHAFTSTEUER and
GEWERBESTEUER) calculated in accordance with the general
accepted accounting principles applied in previous
years, plus that part of the profits (or losses) of the
currently existing unconsolidated subsidiaries of the
Company attributable to it;
(ii) The Company shall be deemed to have continued to exist
with two executive directors and with its present
structure so
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that the effects of the appointment of any additional
executive directors by the Buyer beyond the aforesaid
number and of any legal or other structural changes
initiated by the Buyer (including the divestment of the
shares in Fun & Fit Holding GmbH ("FFG"), Hanover, as
per Section 3.1 (e) but not the measures described in
Section 3.1 (b)) shall be disregarded;
(iii) The profits of the Company earned after 1 June 1998
shall be deemed to have been accumulated and not
distributed;
(iv) The effects of any measure implemented by the Company's
management at the written request of the Buyer shall be
disregarded if such measure is in the view of Brandt or
Schluter likely to have a negative effect on the
Company's profitability and Brandt or Schluter notified
the Buyer thereof in writing of the expected negative
effects prior to implementation unless the request is
withdrawn by the Buyer following such notification. The
effects of other measures shall only be disregarded if
the Buyer and Brandt and Schluter so agree in writing
prior to implementation.
2.5 ADJUSTMENT OF DEFERRED CONSIDERATION
In the event that a Service Agreement is terminated prior to expiry
of its fixed term or Brandt or Schluter resigns as Executive
Director prior to such expiration, the Deferred Consideration shall
be adjusted as follows:
(a) If termination is effected by the Company for cause (AUS
WICHTIGEM GRUND) or by Brandt or Schluter other than for
cause, or Brandt or Schluter resigns other than for cause, any
portion of the Deferred Consideration outstanding at the time
notice of termination or resignation is given shall be
cancelled;
(b) If termination is effected by the Company other than for cause
or by Brandt or Schluter for cause, or Brandt or Schluter
resigns for cause, any portion of the Deferred Consideration
outstanding at the time notice of termination or resignation
is given shall be calculated at the maximum rate pursuant to
Section 2.3 regardless of the actual pre-tax profits achieved
by the Company for the respective periods;
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(c) If Brandt or Schluter becomes unable to discharge his duties
as Executive Director due to death or permanent disability or
force majeure, any portion of the Deferred Consideration
outstanding at the time such inability first manifests itself
shall be reduced to 50% of the amount otherwise payable
pursuant to Section 2.3;
always provided that (i) for the purpose of this Section Brandt and
Schluter shall be treated separately so that an event - such as
termination of a Service Agreement or resignation as Executive
Director - affecting only one of them shall not have any effect on
the amount of Deferred Consideration due to the other; and (ii)
"cause" in terms of this Section shall include only such events for
which the party to whom notice is given or a resignation is
addressed "for cause" is responsible ("DER PARTEI ZUZURECHNEN IST").
3. CONDITIONS PRECEDENT
3.1 CONDITIONS TO COMPLETION
The parties shall not be obliged to proceed to completion of this
Agreement until the following conditions (the "Conditions
Precedent") have been fulfilled:
(a) the board of directors of the Buyer and the Buyer's primary
lender have resolved to approve this Agreement;
(b) any connections between the Company and Haleko France
S.A.R.L. and its subsidiaries (collectively "Haleko France")
have been severed so that (i) neither the Company nor any of
the Subsidiaries (as defined in Section 5.1 (c)) hold any
shares in Haleko France; (ii) all references to or
similarities with the word "Haleko" or any other word used in
the names of any of the Subsidiaries have been deleted from
the names of Haleko France; and (iii) the Buyer has received a
legal opinion, in a form satisfactory to it, from Sellers'
French counsel certifying that conditions (i) and (ii) have
been fulfilled;
(c) the Schulte Agreement has become unconditional except for
payment of the purchase price agreed therein;
(d) the Company has obtained from Mr. Bernd Seidel a validly
notarised unconditional call option, substantially in the form
attached hereto as
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Exhibit B, regarding all of his shares in ELBA Lebensmittel
GmbH, Bleckede ("Elba") for a purchase price not exceeding DM
150,000 which can be exercised until the end of 1998;
(e) the Company has caused the divestment of all the shares in FFG
pursuant to a deed substantially in the form attached hereto
as Exhibit C;
(f) the Buyer has received a legal opinion, in a form satisfactory
to it, from the law firm of Buse, Koch, Gorsler, Nesselhauf,
Moerchen or another law firm acceptable to it, certifying that
the Shares are fully paid;
(g) the Buyer has given written notice to each of the Sellers that
the results of the audit of the Company's interim balance
sheet as at 31 May 1998 (the "May 1998 Balance Sheet") by an
auditor appointed by the Buyer have been accepted as
satisfactory by the Buyer; and
(h) the period during which the transactions contemplated hereby
may be prohibited by the BUNDESKARTELLAMT has expired or the
BUNDESKARTELLAMT has notified the Buyer in writing that the
said transactions do not fulfil the criteria for such
prohibition.
3.2 OBLIGATIONS OF THE PARTIES
The parties undertake to use all reasonable endeavours to ensure
that the Conditions Precedent are fulfilled as soon as possible.
3.3 CUT-OFF DATE
If the Conditions Precedent shall not have been fulfilled by 31
August 1998 each party shall have the right to cancel this Agreement
with immediate effect by giving notice to each of the other parties
and without any claim for indemnification except as based on a
failure to comply with the obligations set out in Section 3.2.
4. COMPLETION
4.1 CLOSING DATE
On the date being the seventh Business Day (as defined below)
following the date on which all of the Conditions Precedent have
been fulfilled (the "Closing Date"), the parties shall concurrently
enter into a share transfer
<PAGE>
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deed substantially in the form attached hereto as Exhibit D and
execute the measures set out in Sections 4.3 and 4.4 below.
"Business Day" shall be a day on which commercial banks are open for
business in New York and Hamburg.
4.2 ESCROW ARRANGEMENTS
Prior to the Closing Date the Buyer shall transfer an amount of DM
29,850,000.00 (Deutsche Mark twenty nine million eight hundred fifty
thousand) to an escrow account held by Rohrberg at Hamburger
Sparkasse, account no. 1280/136977, sort code 200 505 50 (the
"Escrow Account I") subject to the terms of an escrow agreement
substantially in the form attached hereto as Exhibit E 1. The
remaining amount of DM 15,000,000.00 (Deutsche Mark fifteen million)
shall be transferred on the same date to an escrow account held by
Hasche Eschenlohr Peltzer Riesenkampff Fischotter ("Hasche") at
Deutsche Bank AG, Hamburg, account no. 4805818, sort code 200 700 00
(the "Escrow Account II") subject to the terms of an escrow
agreement substantially in the form attached hereto as Exhibit E 2.
4.3 ACTIONS BY THE BUYER AT CLOSING
On the Closing Date the Buyer shall
(a) pay to the Sellers and Schulte the Initial Cash Payment by
(i) instructing Rohrberg to release from the Escrow Account
I DM14,925,000 to an account specified by Brandt and
DM14,925,000 to an account specified by Schluter.
(ii) instructing Hasche to release from the Escrow Account II
DM 15,000,000.00 to an account specified by Schulte; and
(b) deliver the Stock to Brandt and Schluter pursuant to Section
2.2.
4.4 ACTIONS BY BRANDT AND SCHLUTER AT CLOSING
On the Closing Date Brandt and Schluter shall each
(a) sign a lock-up agreement substantially in the form attached
hereto as Exhibit F (the "Lock-up Agreement");
(b) sign a service agreement substantially in the form attached
hereto as Exhibit G (the "Service Agreement");
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(c) sign an agreement to terminate their employment agreement with
Elba and waive all further claims they may have against Elba
substantially in the form attached hereto as Exhibit H; and
(d) provide the Buyer with a validly notarised unconditional call
option in favour of the Company or a party nominated by it,
substantially in the form attached hereto as Exhibit I,
regarding all of their shares in FFG which can be exercised
during a 12 months period commencing on 1 December 1999.
4.5 INTEREST
Any portion of the Initial Cash Payment not paid on the Closing Date
shall bear interest at 6% p.a. from the day following one week after
the Closing Date.
5. GENERAL REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The following representations and warranties are given jointly, severally
and individually by the Sellers to the Buyer, as of the date hereof and
the Closing Date; as far as the Italian and English subsidiaries of the
Company as identified in Schedule 5.1 (b) (the "Italian and English
Subsidiaries") are concerned, the Sellers give representations and
warranties only to the best of their knowledge except for Section 5.2.
5.1 ORGANISATION
(a) The Company is a private limited company (GESELLSCHAFT MIT
BESCHRANKTER HAFTUNG) duly organized and validly existing
under the laws of Germany, registered in the commercial
register at the local court in Hamburg under registration no.
HRB 20227.
(b) The Company has no direct or indirect subsidiaries or
affiliates and owns no security or similar interest in any
other company or entity save as disclosed in Schedule 5.1 (b)
except for, at the date hereof, Haleko France. The certificate
referred to in Section 3.1 (b) (iii), when issued, will be
complete and correct.
(c) The Company has delivered to the Buyer complete and correct
copies of its charter (GESELLSCHAFTSVERTRAG) and the charters
of the entities listed in Schedule 5.1 (b) (the "Subsidiaries"
which term, for
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the avoidance of doubt, includes FFG and its subsidiaries)
except for the Italian and English Subsidiaries and of an
extract from the commercial register reflecting the Company's
registration therein, and nothing has occurred in relation to
the Company since the date of such extract which would be
capable of registration in the commercial register.
(d) The Company and the Subsidiaries have all governmental and
other authorisations, licences or permits necessary to carry
on their respective business as now conducted in each and
every jurisdiction in which such business is being conducted.
The Sellers further represent and warrant that to the best of
their knowledge all products produced and/or distributed by
the Company and the Subsidiaries are in compliance with all
current applicable laws in each and every jurisdiction in
which such products are distributed and except as disclosed in
Schedule 5.1 (a) no problems with the products are expected.
(e) As regards Sporting Nutrition S.A.R.L. the Sellers expressly
warrant and represent that this company is a dormant company,
does not have any liabilities and did not pursue any business
in the last three years.
5.2 CAPITALISATION
The statements contained in paragraph B of the preamble to this
Agreement are correct and complete. All outstanding shares in the
capital of the Company and the Subsidiaries have been validly
issued, are free of all encumbrances and are fully paid, and no
event has occurred which could be regarded as a repayment of share
capital or could otherwise give rise to an obligation to inject
capital contributions into the Company or any of the Subsidiaries.
No shares in the Company or any of the Subsidiaries are subject to
or have been issued in violation of pre-emptive or similar rights.
No options or other rights to acquire shares in the Company or any
of the Subsidiaries have been granted except that on the Closing
Date Brandt and/or Schluter will have been granted the right to
acquire Schulte's Shares pursuant to the Schulte Agreement. None of
the Shares and none
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of the shares in any of the Subsidiaries are subject to any voting
or trust agreements or arrangements.
5.3 NO VIOLATION
The execution and completion of this Agreement and the transactions
contemplated hereby will not conflict with or give rise to any right
of termination or acceleration under the terms of any contract,
licence or other instrument to which the Company or any of the
Subsidiaries is a party or by which any of their respective assets
are bound or any judgement or decree of any court or administrative
agency, domestic or foreign.
5.4 FINANCIAL STATEMENTS
Except as disclosed in Schedule 5.4 the Company's and each
Subsidiary's audited balance sheets for the years ended 31 December
1997, 1996 and 1995 (the "Balance Sheets") and the May 1998 Balance
Sheet provide a fair and accurate representation of the Company's
and each Subsidiary's financial condition as of the respective dates
thereof. The Balance Sheets were prepared in accordance with
generally accepted German (or other locally applicable) accounting
standards and in the manner customarily used by the Company or the
respective Subsidiary in preparing its financial statements and
balance sheets. Neither the Company nor any of its Subsidiaries has
incurred any liabilities, including contingent liabilities, except
as reflected in the Balance Sheets and the May 1998 Balance Sheet or
incurred since 31 May 1998 (in the case of the Company) or 31
December 1997 (in the case of the Subsidiaries) in the ordinary
course of business.
5.5 RECORDS
All accounts, books, financial and other records of whatsoever kind
(the "Records") of the Company and the Subsidiaries have been fully,
properly and accurately maintained, to a standard appropriate for
such Records, are in the possession of the Company and the
Subsidiaries at their respective business premises, do not contain
or reflect any material inaccuracy or discrepancies and provide a
fair and accurate representation of the Company's and each
Subsidiary's business.
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5.6 ABSENCE OF CERTAIN CHANGES
Since 31 December 1997
(a) the shareholders of the Company have not resolved to
distribute any dividends and no such distribution has taken
place;
(b) except as disclosed in Schedule 5.6 (b) no increase in the
compensation payable or to become payable by the Company or
any Subsidiary to any of its executive directors or senior
employees (PROKURISTEN) has been agreed or promised;
(c) no transaction has taken place or has been initiated relating
to the Company, any of the Subsidiaries or any of their
respective assets other than in the ordinary course of
business; and
(d) nothing has occurred which could cause a materially adverse
change to the Company's or any Subsidiary's financial
condition, assets or business prospects.
The Sellers have disclosed to the Buyer all other events or
conditions of any character that have or might have a materially
adverse effect on the Company's or any Subsidiary's financial
condition, assets or business prospects.
5.7 TITLE TO AND CONDITION OF THE ASSETS
Except as disclosed in Schedule 5.7 the Company and each Subsidiary
(a) has good and marketable title to all of its assets (tangible
and intangible), free and clear of all encumbrances or title
retention agreements of any kind;
(b) has maintained all of its machinery and equipment in proper
working condition; and
(c) does not have any existing or contingent liabilities in
respect of any properties previously owned or occupied by it.
5.8 TANGIBLE PERSONAL PROPERTY
Schedule 5.8 sets out all items of machinery, equipment and other
property owned or leased by the Company and the Subsidiaries (except
for the Italian and English Subsidiaries) or held for use in
connection with the operation of their respective business (except
for items having a value of DM 800.00 or less) and is complete and
correct.
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5.9 CUSTOMERS AND SUPPLIERS
Schedule 5.9 sets out the Company's and each Subsidiary's (except
for the Italian and English Subsidiaries) 10 largest suppliers and
customers for 1996 and 1997 and is complete and correct, and except
as disclosed on Schedule 5.9 no customer or supplier has given the
Company or a Subsidiary any indication of its desire to cancel,
otherwise terminate or materially alter its relationship with the
Company or a Subsidiary.
5.10 EMPLOYEES
(a) Schedule 5.10 (a) sets out the names, dates of commencement of
service and current annual remuneration of all of the
Company's and each Subsidiary's current employees and
individuals providing services who are not employees (fREIE
MITARBEITER), and is complete and correct. Except as indicated
on Schedule 5.10 (a) no employee or other individual providing
services has given notice or other indication of the desire or
intent to terminate his or her employment or other
relationship with the Company or a Subsidiary, nor has such
notice or other indication been given by the Company or a
Subsidiary to such employee or other individual.
(b) Schedule 5.10 (b) sets out all current collective agreements
with the Company's and each Subsidiary's works council
(BETRIEBS-VEREINBARUNGEN) and with trade unions applicable to
employees of the Company or a Subsidiary (TARIFVERTRAGE) and
is complete and correct, and copies of the said agreements
have been furnished to the Buyer. There is no labour dispute
actually pending or threatened against or involving the
Company or any Subsidiary, nor has the Company or any
Subsidiary experienced any labour dispute since inception.
(c) Except as listed on Schedule 5.10 (c), neither the Company nor
any Subsidiary has adopted any pension or other employee
benefit plan covering all or any of its employees or executive
directors. All liabilities, contingent or otherwise, of the
Company or any Subsidiary under such plan have been fully
reserved against in the Company's and each Subsidiary's
balance sheet as at 31 December 1997 (the
<PAGE>
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"1997 Balance Sheets") or, to the extent they arose after 31
December 1997, in the May 1998 Balance Sheet.
5.11 LITIGATION
Except as set out on Schedule 5.11 there is no
(a) action, claim or proceeding pending of which the Company or a
Subsidiary has received notice or which the Sellers believe
may be asserted, threatened against or affecting the Company,
a Subsidiary or any of their respective assets before any
court, arbitral tribunal, governmental department or
administrative agency, domestic or foreign; or
(b) governmental investigation or inquiry;
pending or threatened against or affecting the Company or any
Subsidiary, and there is no basis for any of the foregoing. Except
as indicated on Schedule 5.11 each of the actions, claims or
proceedings pending has been reported to the proper insurance
carrier in accordance with the applicable insurance policy, if any,
and has been accepted for coverage by the applicable insurer.
5.12 CONTRACTS
Schedule 5.12 sets out every material contract, commitment,
arrangement or understanding including every loan agreement (the
"Contracts") to which the Company or any of the Subsidiaries are a
party or by which the Company or any of the Subsidiaries or any of
their respective assets are bound, and is complete and correct. No
event has occurred that would give rise to a breach or default under
any of the Contracts. There is no outstanding notice of default,
breach or termination in connection with any of the Contracts, and
no other party has asserted any claims arising out of or in
connection with the Contracts.
5.13 TAXATION
(a) The Company and each Subsidiary has filed all tax returns,
each of which is accurate, required to be filed by it with all
taxing authorities to which it is subject, and, except as
disclosed in Schedule 5.13 (a), has paid or provided for all
taxes payable in respect of periods prior to, or including,
the date hereof. There is no deficiency or additional
<PAGE>
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tax or charge proposed to be assessed against the Company, any
of the Subsidiaries or any of their respective assets. No
action is pending or contemplated by any taxing authority to
collect any outstanding taxes from the Company or any
Subsidiary.
(b) All transactions between the Company and any of the
Subsidiaries, and all transactions between the Company or any
of the Subsidiaries and any of their respective present or
former shareholders or persons closely related to such
shareholders have been conducted entirely on an arm's-length
basis, and no event has occurred which could be regarded as
the payment of a constructive dividend (VERDECKTE
GEWINNAUSSCHUTTUNG).
5.14 ENVIRONMENTAL LIABILITY
Neither the Company nor any Subsidiary uses or stores, or has
responsibility for the use, storage, discharge or clean-up of any
hazardous or environmentally regulated substances and no other
responsibility or liability whether actual or contingent, under any
applicable environmental protection statute or regulation.
5.15 GOVERNMENTAL APPROVALS
No consent, approval, authorisation, filing or registration with any
governmental entity is required by the Sellers, the Company or any
Subsidiary in connection with the execution or completion of this
Agreement or the transactions contemplated hereby.
5.16 COMPLIANCE WITH LAWS AND PERMITS; ILLEGAL PAYMENTS
(a) The Company and the Subsidiaries have at all times complied
with all relevant laws and regulations governing their
respective business and with the terms of all permits
necessary for the conduct of such business.
(b) Neither the Company nor any of its Subsidiaries or any
employee or agent of the Company or any of its Subsidiaries
has, directly or indirectly, paid any sum of money or
delivered any item or property, however characterised, to any
person in any country, in any manner related to the business
or operations of the Company or any of its Subsidiaries, which
was illegal under applicable law.
<PAGE>
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5.17 COMPLIANCE WITH ZONING, PLANNING AND SAFETY REGULATIONS
The use of all of the properties in which the Company or any of the
Subsidiaries conducts its business and all machinery and equipment
therein and the conduct of any business therein complies in all
respects with all applicable zoning, planning and safety
regulations.
5.18 RECEIVABLES
Except as reflected or reserved against in the 1997 Balance Sheets
or the May 1998 Balance Sheet all accounts and notes receivable
reflected therein have arisen in the ordinary course of business,
represent valid obligations to the Company or the respective
Subsidiary and have been collected or are presently collectable in
the aggregate recorded amounts thereof, in accordance with their
terms. Neither the Company nor any Subsidiary has received any
notice or threat that any items previously shipped by or on behalf
of it are to be returned for any reason, other than returns made in
the ordinary course of business or reserved against in the 1997
Balance Sheets (in the case of the Subsidiaries) or the May 1998
Balance Sheet (in the case of the Company), and neither the Company
nor any Subsidiary has reason to believe that unusual returns of any
such items will occur subsequent to the date hereof. There are no
unresolved warranty or other claims by the Company's or any
Subsidiary's customers or by consumers of products supplied by the
Company or any Subsidiary based on a defect in or failure of such
products.
5.19 INVENTORY AND SUPPLIES
The Company's and each Subsidiary's inventory and supplies are in
usable or saleable condition in the ordinary course of business,
subject only to reserves for obsolescence reflected in the Company's
or the respective Subsidiary's books and records, and have been
maintained at their customary levels.
5.20 INTELLECTUAL PROPERTY
Except as set out on Schedule 5.20, the Company and the Subsidiaries
have no patents, patent applications, marks, trade names,
copyrights, unpatented discoveries, processes or inventions or
similar rights, or licenses of such rights as licensee (collectively
the "Intellectual Property"), nor require
<PAGE>
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any such rights in order to conduct their respective business.
Unless otherwise indicated on Schedule 5.20, the Company or the
respective Subsidiary owns the entire right, title and interest in
and to the Intellectual Property, and each part thereof, to the
extent indicated on Schedule 5.20, has been duly registered with
such patent office or other domestic or foreign agency as are
indicated on Schedule 5.20, and such registrations remain in full
force and effect. Except as stated on Schedule 5.20, there are no
pending or threatened proceedings or litigation or other adverse
claims affecting or relating to the Intellectual Property, and no
such proceedings, litigation or claims were threatened or instituted
against the Company or any Subsidiary since inception. Neither the
Company nor any Subsidiary is infringing or otherwise acting
adversely to the right of any person under any patent, mark, trade
name, copyright or similar intangible right or any license in
respect of such right. Furthermore there is no Intellectual
Property, in particular any mark, which can be cancelled
(LOSCHUNGSREIF) because it has not been used, except as stated on
Schedule 5.20.
5.21 INSURANCE
The Company's and each Subsidiary's properties and business are and
continuously have been insured in accordance with prudent business
practice. Schedule 5.21 sets out all its and the Subsidiaries'
insurance policies and the amounts and terms of coverage and is
complete and correct. There are no pending claims under any such
policies.
5.22 FULL DISCLOSURE
The Sellers have provided the Buyer with full access to all books,
records and documents of or relating to the Company, the
Subsidiaries and their respective business. No representation or
warranty of the Sellers contained in this Agreement contains any
untrue statement of a material fact or omits any material fact.
There is no fact known to the Sellers that materially or adversely
affects or in the future may materially or adversely affect the
business or operations of the Company or any of the Subsidiaries
that has not been set forth in this Agreement.
<PAGE>
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6. REPRESENTATIONS AND WARRANTIES OF THE SELLERS IN CONNECTION WITH THE
ACQUISITION OF THE STOCK
Brandt and Schluter, jointly, severally and individually represent and
warrant to the Buyer as follows:
6.1 REGISTRATION OF STOCK
Brandt and Schluter understand that the offer of the Stock to them
has not been registered under the U.S. securities laws or any state
securities laws or regulations in reliance upon the exemption
provided under Regulation S of the Securities Act of 1933, as
amended. Brandt and Schluter understand that they may not sell the
Stock unless it is registered or exempt from registration under the
U.S. securities laws.
6.2 CITIZENSHIP
Brandt and Schluter are citizens of Germany and are both residents
of Germany. They are not acquiring the Stock for the account or
benefit of any U.S. person as such term is defined under the U.S.
securities laws, nor with the intent to offer or sell such Stock in
the U.S. or to a U.S. person as long as the Stocks are restricted or
unregistered.
7. CONSEQUENCES OF INCORRECT REPRESENTATIONS AND WARRANTIES
7.1 SELLERS' UNDERTAKING
The Sellers jointly and severally undertake to the Buyer that if any
of the representations and warranties set out in Sections 5 and 6
(the "Representations and Warranties") is untrue, incomplete or
misleading in any respect, they shall forthwith pay to the Company
or the Subsidiary concerned such sum as may be sufficient to place
the Company or the Subsidiary concerned in the position it would
have been in if the Representations and Warranties had been true,
complete and not misleading in every respect, and shall indemnify
the Buyer against any claims, losses, liabilities, judgments,
settlements, penalties and costs (including reasonable attorneys`
fees and expenses) of any nature whatsoever asserted against or
incurred by the Buyer resulting from any of the Representations and
Warranties being untrue, incomplete or misleading in any respect.
<PAGE>
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7.2 OTHER REMEDIES
The rights set out in Section 7.1 shall be without prejudice to any
other remedies available to the Buyer under general principles of
law except for the right of rescission (WANDELUNG) which shall be
excluded.
7.3 PERIODS FOR ASSERTING REMEDIES
The rights set out in Section 7.1 and any other remedies may be
asserted by the Buyer during a period of three years from the
Closing Date; if Brandt and Schluter cease to be Executive Directors
the period shall be two years from the Closing Date. For claims
arising from the Representations and Warranties contained in Section
5.13 the said period shall expire six months after the day on which
the tax assessment giving rise to a claim became final. A right or
remedy shall be validly asserted if written notice thereof has been
given by the Buyer to either of the Sellers before expiry of the
respective period as aforesaid. The Buyer shall be obliged to
institute arbitration proceedings within one year after the above
notice has been given; otherwise such claims shall be time-barred.
7.4 DE MINIMIS PROVISION
There shall be no remedy for individual claims (ANSPRUCH IM
EINZELFALL) below DM 20,000 (Deutsche Mark twenty thousand).
Furthermore, no payment shall be made until the amount of all claims
exceeds in the aggregate DM 300,000 (Deutsche Mark three hundred
thousand).
7.5 FACTS ACCEPTED BY BUYER
No fact shall constitute a breach of any of the Representations and
Warranties if that fact has been accepted in writing by the Buyer.
8. AGREEMENT NOT TO COMPETE
Each of the Sellers undertakes to the Buyer to refrain from any activity,
paid or unpaid, in support of a business competing with the Company's or
any Subsidiary's business as conducted on the date hereof, whether
directly or indirectly, as principal, agent, director, employee,
consultant, investor or otherwise for a period of five years from the
Closing Date but not exceeding two years from the termination of their
respective Service Agreement.
<PAGE>
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9. UNDERTAKINGS OF BUYER AND SELLERS
9.1 GUARANTEES
The Buyer undertakes to ensure that the Sellers are released by the
Company from the guarantees listed in Schedule 9.1.
9.2 HALEKO FRANCE
The Sellers undertake to hold the Company free and harmless of all
and any claims by Haleko France and/or third parties, including
Societe Generale, which have any connection or are related to Haleko
France or any of its business activities in the past or in the
future, including any costs in connection with the liquidation of
Haleko France or any claims by employees or executives of Haleko
France which are in excess of the reserves (RUCKSTELLUNGEN and
EINZELWERTBERICHTIGUNGEN) created by the Company for such events
plus DM 300,000.
9.3 CONDUCT OF BUSINESS UNTIL CLOSING
The Sellers undertake to conduct the business of the Company and the
Subsidiaries, during the period from the date hereof to the Closing
Date, in the ordinary course except with the prior written approval
of the Buyer.
9.4 ANTI-TRUST REGULATIONS
The Buyer undertakes to notify the BUNDESKARTELLAMT of the
transactions contemplated hereby as soon as possible after the date
hereof. The Sellers undertake to cause the Company and the
Subsidiaries to cooperate fully and promptly in the preparation of
such notification.
9.5 FFG PUT OPTION
The Buyer undertakes to procure that as soon as reasonably practical
after the Closing Date the Company shall provide the Sellers with a
validly notarised unconditional put option, substantially in the
form attached hereto as Exhibit J, regarding all of their shares in
FFG which can be exercised during a 12 months period commencing on 1
December 1999.
10. ASSIGNMENT
The Buyer shall have the right to assign this Agreement and all its rights
and obligations hereunder to another company (the "Assignee") without any
further consent or approval by the Sellers being required, provided that
the Assignee is
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majority-owned, directly or indirectly, by WNI. In case of such assignment
the Buyer shall, however, remain liable for payment of the consideration
pursuant to Section 2.
11. COSTS
Each party shall bear the cost of its own legal and other advisors
incurred in connection with the negotiation, execution and completion of
this Agreement and the transactions contemplated hereby as well as any
personal taxes arising therefrom. All transfer taxes, notary's and court
charges in connection with the execution and completion of this Agreement
shall be borne by the Buyer, provided that if one or more of the
Conditions Precedent specified in Section 3.1 lit. (b) to (f) should not
have been fulfilled by 31 August 1998 such charges shall be jointly and
severally borne by the Sellers.
12. GOVERNING LAW AND LANGUAGE, DISPUTES
12.1 GERMAN LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Federal Republic of Germany.
12.2 ENGLISH LANGUAGE
The authentic text of this Agreement shall be the English text,
except that in case of any conflict between any English term herein
and the German translation thereof placed immediately following it
in parenthesis, the German translation shall be binding.
12.3 ARBITRATION
Any dispute arising out of or in connection with this Agreement or
the breach, termination or invalidity thereof shall be settled by
arbitration in accordance with the UNCITRAL Arbitration Rules in
effect on the date hereof. The appointing authority shall be the
President of the Law Society of England and Wales. The number of
arbitrators shall be three. The place of arbitration shall be
London. The language to be used in the arbitral proceedings shall be
English.
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13. MISCELLANEOUS
13.1 ENTIRE AGREEMENT
This Agreement sets forth the entire agreement and understanding of
the parties with respect to the subject matter hereof and supersedes
all negotiations and previous agreements - whether oral or in
writing - with respect to such subject matter.
13.2 SEVERABILITY
If any of the provisions of this Agreement other than those
contained in Section 3 shall be or become invalid, this shall not
affect the validity of the remaining provisions. The parties
undertake to replace any invalid provisions by such provisions as
shall come as close as possible to their commercial intentions in a
legally valid manner. The same shall apply if this Agreement should
contain an unintentional gap.
13.3 AMENDMENT
No amendment to this Agreement shall be of any effect unless it is
in writing and signed for or on behalf of the parties hereto. This
shall also apply to any amendment of the present Section 13.3.
13.4 HEADINGS
The headings in this Agreement are inserted for convenience only and
shall not affect the interpretation thereof.
13.5 GENDER, NUMBER
Throughout this Agreement, where such meaning would be appropriate,
the masculine gender shall be deemed to include the feminine and the
neuter, and the singular shall be deemed to include the plural and
vice versa.
13.6 NOTICES
Any notices provided or required under the terms of this Agreement
shall be effective immediately when provided by facsimile
transmission or personal delivery, or five days after being sent by
internationally recognised courier, and addressed as follows:
(a) If to Brandt:
Ansorgestrasse 24
22605 Hamburg
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(b) If to Schluter:
Bohmersweg 9
20148 Hamburg
(c) If to the Buyer:
2002 South 5070 West
Salt Lake City
UT 84 104-4726, USA
13.7 KEY MAN LIFE INSURANCE
The Buyer shall be entitled to take out key man insurance on the
lives of Brandt and/or Schluter and/or to cause the Company to do
so.
IN WITNESS WHEREOF the parties have executed this Agreement on the date first
above written.
/s/WOLFGANG BRANDT
Wolfgang Brandt
/s/EBERHARDT SCHLUTER
Eberhardt Schluter
Weider Nutrition Group, Inc.
by: /s/ROBERT K. REYNOLDS
Robert K. Reynolds
EXHIBIT 2.2
DOCUMENT NO. 1068 /1998
R e c o r d e d
in this Free and Hanseatic City of Hamburg
on 24 July 1998.
Before me,
the Hamburg notary public Dr. jur. Ascan Pinckernelle
whose office is at Loogestrasse 22, 20249 Hamburg,
today appeared
at Warburgstrasse 50, 20354 Hamburg,
where I had proceeded upon request:
1. The lawyer Michael Leue, Abteistrasse 57, 20149 Hamburg, Germany,
and
2. the lawyer Dr. Holger Iversen, Warburgstrasse 50, 20354 Hamburg, Germany,
both personally known to me, acting not for themselves but on behalf of
a) Mr. Wolfgang Brandt, Ansorgestrasse 24, 22605 Hamburg,
b) Mr. Eberhardt Schluter, Bohmersweg 9, 20148 Hamburg,
c) Weider Nutrition Group, Inc. 1960 South 4250 West, Salt Lake
City, UT 84104-4836, USA,
pursuant to a power of attorney granted to them in the stock purchase agreement
of 9 July 1998 (the "Agreement") regarding all of the shares in Haleko
Hanseatisches Lebensmittel Kontor GmbH which was recorded by the acting Notary
(document no. 978/1998).
<PAGE>
The persons appearing deposed and declared for my record as follows:
I.
At our request this record is being executed in the English language. Each of us
is sufficiently familiar with that language.
- - I, the acting notary, have satisfied myself of the truthfulness
of this statement. I, too, am sufficiently familiar with the
English language -
II.
Capitalised terms used herein without definition are so used as defined in the
Agreement; references to Sections are references to sections of the Agreement.
III.
Pursuant to a written assignment of 21/24 July 1998 the Buyer has assigned the
Agreement and all its rights and obligations thereunder to Weider Nutrition GmbH
("Weider GmbH") and Zweiundachtzigste Verwaltungsgesellschaft Dammtor mbH
("Dammtor") thereby, however, reserving the right to negotiate and execute any
amendments to the Agreement ("Assignment"); a certified copy of the said
assignment is attached to this deed as Annex..
IV.
The Agreement is subject to certain Conditions Precedent specified in Section
3.1. According to Section 4 completion was supposed to take place on the seventh
Business Day following the date on which the last of the Conditions Precedent
had been fulfilled. Following the written instructions from each of the parties
to the Agreement the Conditions Precedent and completion procedure are amended
as follows:
<PAGE>
1. All parties to the Agreement waive the fulfillment of the Condition
Precedent in Section 3.1 (h).
2. Although the last of the remaining Conditions Precedent has only been
fulfilled on the date hereof the parties hereby jointly agree to execute
the actions in Section 4.1, 4.3 (b) and 4.4 today. For this purpose the
parties agree to amend the Agreement as follows:
a) Following the execution of this deed
- the parties shall enter into a share transfer deed
substantially in the form attached hereto as Exhibit 1
according to which the Sellers will transfer all the shares in
the Company to Weider GmbH except for one share in the amount
of DM 4,000 which shall be transferred to Dammtor. The
respective share transfer deed shall be unconditional except
for the payment of the purchase price;
- Brandt and Schluter shall each sign and execute the
agreements listed in Section 4.4;
- Buyer shall deliver the Stock pursuant to Section 2.2 to the
lawyer Mr. Michael Leue of Abteistrasse 57, 20149 Hamburg
("Leue") subject to the terms of an escrow agreement
substantially in the form attached hereto as Exhibit 2;
b) Within the next seven Business Days following the date
hereof, Buyer shall transfer
- an amount of DM 14,925,000.00 (Deutsche Mark fourteen million
nine hundred twenty five thousand) to the following account
held by Schluter:
<PAGE>
Bank: Hamburger Sparkasse
Account No.: 1240/497006
Sort Code: 200 505 50
- an amount of DM 14,925,000.00 (Deutsche Mark fourteen million
nine hundred twenty five thousand) to the following account
held by Brandt:
Bank: Deutsche Bank AG, Hamburg
Account No.: 3522406
Sort Code: 200 700 00
- an amount of DM 15,000,000.00 (Deutsche Mark fifteen
million) to the following account held by Schulte;
Bank: Deutsche Bank AG, Hamburg
Account No.: 5422779
Sort Code: 200 700 00.
All other provisions of the Agreement shall remain unchanged.
* * *
This deed was read out to the persons appearing, approved by them and signed in
their own hands as follows:
/s/ MICHAEL LEUE
Michael Leue
/s/ HOLGER IVERSEN
Holger Iversen
/s/ DR. ASCAN PINCKERNELLE
Dr. Ascan Pinckernelle
[Notary Public]
EXHIBIT 2.3
DOCUMENT NO. 1069 /1998
Recorded
in this Free and Hanseatic City of Hamburg
on 24 July 1998.
Before me,
the Hamburg notary public Dr. jur. Ascan Pinckernelle
whose office is at Loogestrasse 22, 20249 Hamburg,
today appeared
at Warburgstrasse 50, 20354 Hamburg,
where I had proceeded upon request:
today appeared
1. Mr. Steven L. Zink, Sceptre House, 169-173 Regent Street, London
W1R 7FB, acting not on behalf of himself but
a) in his capacity as executive director (GESCHAFTSFUHRER) with the
sole power of representation and exempted from the restrictions of
Section 181 of the German Civil Code for Weider Nutrition GmbH of
Warburgstrasse 50, 20354 Hamburg, registered in the commercial
register of the local court in Hamburg under HRB 68089;
- hereinafter referred to as "Weider GmbH" -
b) in his capacity as executive director with the sole power of
representation and exempted from the restrictions of Section
181 of the German Civil Code for Zweiundachtzigste
Verwaltungsgesellschaft Dammtor mbH of Warburgstrasse 50,
20354 Hamburg, registered in the commercial register of the
local court in Hamburg under HRB 67421; his appointment as
executive director of this company was notarised by me, the
acting notary, of even date herewith;
- hereinafter referred to as "Dammtor" -;
2. Mr. Wolfgang Brandt of Ansorgestrasse 24, 22605 Hamburg; and
3. Mr. Eberhardt Schluter of Bohmersweg 9, 20148 Hamburg;
- - all persons appearing are personally known to me -
and stated for my record:
<PAGE>
I.
At our request this record is being executed in the English language; parts
thereof are translated into German. Each of us is sufficiently familiar with the
English language.
- - I, the acting notary, have satisfied myself of the truthfulness of
this statement. I, too, am sufficiently familiar with the English
language -
II.
On 9 July 1998 Weider Nutrition Group, Inc. and the persons appearing as per 2
and 3 concluded a stock purchase agreement (the "Stock Purchase Agreement")
regarding all of the shares in Haleko Hanseatisches Lebensmittel Kontor GmbH
(the "Company") (deed no. 978/1998 of the notary Dr. jur. Ascan Pinckernelle);
with legal effect of today Weider Nutrition Group, Inc. assigned the Stock
Purchase Agreement and all its rights and obligations thereunder to the
companies represented by the person appearing as per 1, pursuant to Section 10
of the Stock Purchase Agreement; a certified copy of the said assignment is
attached to this deed as Annex. Capitalised and other defined terms in this
agreement shall have the same meaning as in the said Stock Purchase Agreement
unless otherwise defined herein.
On 24 July 1998 the parties of the Stock Purchase Agreement waived the
fulfillment of the Condition Precedent Section 3.1 (h) and amended the Stock
Purchase Agreement regarding certain provisions on the completion (deed no.
1068/1998 of the acting notary) ("Amendment"). Following the terms and
conditions specified in the Stock Purchase Agreement and in the Amendment the
parties confirm that the Conditions Precedent have meanwhile been fulfilled. In
this context Sellers expressly confirm and guarantee that the Condition
Precedent in Section 3.1 (b) has been fulfilled, i.e. that all necessary actions
have been taken to sever all connections between the Company and Haleko France
and that the name of Haleko France has been changed. The parties now wish to
proceed to the completion of the Stock Purchase Agreement pursuant to the terms
and conditions of the Amendment:
<PAGE>
1. Therefore the person appearing as per 2 hereby transfers, free and clear
of all encumbrances, together with the right to receive undistributed
dividends in respect of previous business years and the current business
year, the following shares in the Company:
one share of DM 21,000.00
one share of DM 25,000.00
one share of DM 100,000.00
one share of DM 100,000.00
one share of DM 250,000.00
to Weider GmbH represented
by the person appearing as
per 1, and
one share of DM 4,000.00
to Dammtor represented by
the person as per 1,
2. The person appearing as per 3 hereby transfers, free and clear of all
encumbrances, together with the right to receive undistributed dividends
in respect of previous business years an the current business year, the
following shares in the Company: one share of DM 16,000.00 one share of DM
9,000.00 one share of DM 25,000.00 one share of DM 100,000.00 one share of
DM 100,000.00 one share of DM 250,000.00 one share of DM 250,000.00 one
share of DM 250,000.00
to Weider GmbH represented
by the person appearing as
per 1.
1. Der Erschienene zu 2 tritt hiermit mit allen Rechten und Pflichten,
einschlie(beta)lich der Gewinnbezugsrechte fur das laufende und die
vorangegangenen Geschaftsjahre
einen Geschaftsanteil von DM 21.000.00
einen Geschaftsanteil von DM 25.000.00
einen Geschaftsanteil von DM 100.000.00
einen Geschaftsanteil von DM 100.000.00
einen Geschaftsanteil von DM 250.000.00
an die Weider GmbH, vertreten
durch den Erschienenen zu 1 ab,
sowie
einen Geschaftsanteil von DM 4.000
an Dammtor vertreten durch den
Erschienenen zu 1 ab. Die
abgetretenen Geschaftsanteile sind
frei von jedweden Belastungen.
2. Der Erschienene zu 3 tritt hiermit mit allen Rechten und Pflichten,
einschlie(beta)lich der Gewinnbezugsrechte fur das laufende und die
vorangegangenen Geschaftsjahre
einen Geschaftsanteil von DM 16.000.00
einen Geschaftsanteil von DM 9.000.00
einen Geschaftsanteil von DM 25.000.00
einen Geschaftsanteil von DM 100.000.00
einen Geschaftsanteil von DM 100.000.00
einen Geschaftsanteil von DM 250.000.00
einen Geschaftsanteil von DM 250.000.00
einen Geschaftsanteil von DM 250.000.00
an die Weider GmbH, vertreten durch
den Erschienenen zu 1 ab. Die
<PAGE>
3. Weider GmbH and Dammtor abgetretenen Geschaftsanteile sind hereby accept
the frei von jedweden Belastungen. transfer of the shares.
3. Weider GmbH und Dammtor nehmen hiermit die Abtretung der Geschaftsanteile
an.
4. The transfer of the above shares shall be subject to the condition
precedent of the payment of the Initial Cash Payment to the accounts
specified in the Amendment. This condition shall be deemed to be fulfilled
if the lawyers Schon Nolte Finkelnburg & Clemm, Warburgstra(beta)e 50,
notify the acting notary in writing that the amounts were transferred to
the respective accounts. The acting notary is hereby instructed to attach
a certified copy of this notification to this deed and to send a certified
copy thereof to the Sellers and to Mr. Michael Leue of Abteistra(beta)e
57, 20149 Hamburg.
4. Die Abtretung der obigen Geschaftsanteile steht unter der aufschiebenden
Bedingung, da(beta)der vereinbarte Kaufpreis (Initial Cash Payment) auf
die in der Kaufvertraganderungsurkunde aufgefuhrten Konten uberwiesen
wird. Diese Bedingung gilt als erfullt, wenn die Rechtsanwalte Schon Nolte
Finkelnburg & Clemm, Warburgstra(beta)e 50, dem amtierenden Notar
schriftlich mitteilen, da(beta) die Betrage auf die entsprechenden Konten
uberwiesen wurden. Der Notar wird hiermit beauftragt, eine beglaubigte
Ablichtung dieser Mitteilung dieser Urkunde als Anlage beizufugen und an
die Verkaufer, und an Herrn Michael Leue, geschaftsansa(beta)ig:
Abteistra(beta)e 57, 20149 Hamburg, weiterzuleiten.
<PAGE>
This Agreement is made in the English and partially the German language. Where
German terms, added in parenthesis, or the German translation exists, the German
meaning shall prevail.
All costs in connection with this deed and its implementation shall be borne in
accordance with Section 11 of the Stock Purchase Agreement.
This record was read to the persons appearing, approved by them and signed in
their own hands as follows:
/s/ STEVEN L. ZINK
Steven L. Zink
/s/ WOLFGANG BRANDT
Wolfgang Brandt
/s/ EBERHARDT SCHLUTER
Eberhardt Schluter
/s/ DR. ASCAN PINCKERNELLE
Dr. Ascan Pinckernelle
[Notary Public]
<PAGE>
(lto entwurf/haleko/Exhibit D - Weiderk3c)
COMPANY CONTACT AGENCY CONTACT
JOSEPH W. BATY, SENIOR VP, FINANCE KEITH LIPPERT/ADAM ARON
(801) 975-5000 LIPPERT/HEILSHORN & ASSOCIATES
E-MAIL:[email protected] (212) 838-3777/(415) 433-3777
EMAIL:[email protected]
WEIDER NUTRITION INTERNATIONAL, INC. TO ACQUIRE
HALEKO
HALEKO IS THE LARGEST SPORTS NUTRITION COMPANY IN EUROPE -
Salt Lake City, UT, July 10, 1998 -- Weider Nutrition International, Inc.
(NYSE: WNI) today announced it has signed a definitive agreement to acquire and
then combine Haleko with its European subsidiary, Weider Nutrition Group Ltd., a
United Kingdom corporation. Based in Hamburg, Germany, Haleko, with revenues
exceeding $65 million for the twelve months ending May 31, 1998, is the largest
sports nutrition company in Europe, and its products are distributed in all
major European markets. The purchase price is comprised of $25 million in cash,
200,000 shares of WNI stock, and an $8 million contingent earnout agreement tied
to future financial performance. In addition, $16 million in long-term debt will
be assumed and $5 million in acquisition-related capital costs are expected. The
acquisition is expected to close within 45 days, subject to customary closing
conditions and approvals.
Haleko has powder and capsule and tablet manufacturing capability and
currently sells product in over 20,000 retail outlets, including health clubs
and gyms, health food stores, and mass volume retailers. Haleko's branded
products include Multipower, Multaben, and Champ. Haleko's business also
includes a range of active sportswear that is sold in health clubs throughout
Europe under the brand name Venice Beach.
Richard Bizzaro, chief executive officer of Weider Nutrition, stated, "The
core of our long-term strategy is to be a leading worldwide marketer and
manufacturer of nutritional supplements. The European population of 350 million
has similar demographics to the United States and an increasing health
consciousness. We expect the acquisition of Haleko to position Weider as the
leading nutritional supplements company in Europe."
Robert Reynolds, chief operating officer of Weider Nutrition, added, "The
nutritional supplements industry in Europe presents unique challenges. Haleko,
with its leading brands, has a 20-year history of delivering quality nutritional
products throughout the European continent. We are delighted that Haleko's
proven management team will continue to lead the business. In combination with
Weider's existing resources, Haleko's manufacturing expertise, broad
distribution, multiple brands, and experienced management will allow us to
pursue the same successful strategy in Europe that we have implemented in the
United States."
Weider Nutrition International, Inc. is a leading manufacturer of branded
and private label nutritional supplements and is a leading marketer of multiple
brands of nutritional supplements through multiple distribution channels. The
Company manufactures a broad range of capsules and tablets, powdered drink
mixes, bottled beverages, and nutritional bars.
<PAGE>
Except for historical information contained herein, the matters discussed
in the press release contain forward-looking statements within the meaning of
Section 27A of Securities Act of 1993, as amended and Section 21E of the
Securities Exchange Act of 1934, that are based on management's beliefs and
assumptions, current expectations, estimates and projections. Many of the
factors that will determine the Company's future results are beyond the ability
of the Company to control or predict. These statements are subject to risks and
uncertainties and, therefore, actual results may differ materially. The Company
disclaims any obligation to update any forward-looking statements whether as a
result of new information, future events or otherwise.
Important factors that may affect future results include, but are not
limited to: the impact of competitive products and pricing, product development,
changes in laws and regulations, customer demand, litigation, availability of
future financing, uncertainty of market acceptance of new products, and other
risks detailed from time to time in the Company's SEC reports, copies of which
are available upon request from the Company's investor relations department.
