<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly Period ended March 31, 1995
Commission file Number 0-6955
WALBRO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of incorporation)
38-1358966
(I.R.S. Employer ID No.)
6242 Garfield Street, Cass City, MI 48726
(Address of principal executive offices) (Zip Code)
(517)872-2131
Registrant's telephone number, including area code
Indicate by check mark whether the registrant has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and has been subject to such
filing requirements for the past 90 days.
Yes X No ___
Indicated the number of shares outstanding of each of the issuer's
classes of common stock, as of May 10, 1995
Common Stock (one class): 8,564,576
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTION TO THE CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated financial statements of Walbro Corporation and
subsidiaries (the "Company") have been prepared by the Company without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. The Company believes that the disclosures are adequate to make
the information presented not misleading when read in conjunction with the
financial statements and the notes thereto included in the Company's Form 10-K
as filed with the Securities and Exchange Commission for the year ended
December 31, 1994.
The financial information presented reflects all adjustments (consisting
only of normal recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of the results for interim periods presented.
The results for the interim periods are not necessarily indicative of the
results to be expected for the year.
1
<PAGE> 3
WALBRO CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
3/31/95 12/31/94
------- --------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
CASH $ 3,188 $ 4,540
ACCOUNTS RECEIVABLE (NET) 71,591 66,333
INVENTORIES 34,180 31,439
OTHER CURRENT ASSETS 8,523 7,664
--------- ---------
TOTAL CURRENT ASSETS 117,482 109,976
PROPERTY, PLANT & EQUIPMENT:
LAND, BUILDINGS & IMPROVEMENTS 46,699 45,902
MACHINERY & EQUIPMENT 108,983 93,127
--------- ---------
SUBTOTAL 155,682 139,029
LESS: ACCUMULATED DEPRECIATION (54,197) (50,737)
--------- ---------
NET PROPERTY, PLANT & EQUIPMENT 101,485 88,292
OTHER ASSETS:
GOODWILL (NET) 19,134 16,905
JOINT VENTURES, INVESTMENTS &
OTHER 43,079 42,193
--------- ---------
TOTAL OTHER ASSETS 62,213 59,098
--------- ---------
TOTAL ASSETS $ 281,180 $ 257,366
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
2
<PAGE> 4
WALBRO CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
3/31/95 12/31/94
------- --------
LIABILITIES (Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
CURRENT PORTION LONG-TERM DEBT $ 9,589 $ 8,442
NOTES PAYABLE-BANKS 6,384 6,970
ACCOUNTS PAYABLE 30,991 23,252
ACCRUED LIABILITIES 13,487 12,934
--------- ---------
TOTAL CURRENT LIABILITIES 60,451 51,598
LONG-TERM DEBT, NET OF CURRENT 74,352 66,136
OTHER LONG-TERM LIABILITIES 12,932 11,717
--------- ---------
TOTAL LONG-TERM LIABILITIES 87,284 77,853
STOCKHOLDERS' EQUITY
COMMON STOCK, $.50 PAR VALUE; 4,282 4,282
AUTHORIZED 15,000,000;
OUTSTANDING 8,564,576 IN 1995 AND 1994
PAID-IN CAPITAL 64,221 64,221
RETAINED EARNINGS 60,087 55,855
OTHER STOCKHOLDERS' EQUITY 4,855 3,557
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 133,445 127,915
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 281,180 $ 257,366
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
3
<PAGE> 5
WALBRO CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
3/31/95 3/31/94
------- -------
(Unaudited)
<S> <C> <C>
NET SALES $ 98,257 $ 82,205
COST OF SALES & EXPENSES:
COST OF SALES 77,550 64,973
SELLING AND ADMINISTRATIVE EXPENSES 9,622 7,015
RESEARCH & DEVELOPMENT EXPENSES 3,360 2,810
INTEREST EXPENSE, NET 1,089 622
----------- ----------
TOTAL 91,621 75,420
INCOME BEFORE INCOME TAXES AND
JOINT VENTURES 6,636 6,785
PROVISION FOR INCOME TAXES 2,554 2,519
EQUITY IN (INCOME) OF JOINT VENTURES (1,006) (233)
----------- ----------
NET INCOME $ 5,088 $ 4,499
=========== ==========
NET INCOME PER SHARE $0.59 $0.52
AVERAGE SHARES OUTSTANDING 8,597,265 8,612,683
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
4
<PAGE> 6
WALBRO CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(In thousands) THREE MONTHS ENDED
3/31/95 3/31/94
------- -------
(Unaudited)
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 5,088 $ 4,499
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION & AMORTIZATION 3,965 3,427
(GAIN) LOSS ON DISPOSITION OF ASSETS 89 0
(INCOME) OF JOINT VENTURES (1,006) (233)
CHANGES IN ASSETS AND LIABILITIES:
DEFERRED INCOME TAXES 1,309 0
DEFERRED PENSION & OTHER 1,371 1,236
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 4,484 3,474
ACCOUNTS RECEIVABLE, NET (2,642) (9,562)
INVENTORIES (1,925) (1,527)
PREPAID EXPENSES AND OTHER (615) 2,170
-------- -------
TOTAL ADJUSTMENTS 5,030 (1,015)
-------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 10,118 3,484
CASH FLOWS FROM INVESTING ACTIVITIES:
PURCHASE OF FIXED ASSETS (12,524) (5,396)
ACQUISITIONS, NET OF CASH 105 0
INCREASE OF OTHER ASSETS (3,767) (422)
INVESTMENT IN JOINT VENTURES & OTHER 184 (1,446)
PROCEEDS FROM DISPOSAL OF ASSETS 98 117
-------- -------
NET CASH USED IN INVESTING ACTIVITIES (15,904) (7,147)
CASH FLOWS FROM FINANCING ACTIVITIES:
NET BORROWINGS UNDER LINE-OF-CREDIT
AGREEMENTS 6,560 574
DEBT REPAYMENTS (148) 0
PROCEEDS FROM ISSUANCE OF COMMON STOCK & OPTIONS 0 184
CASH DIVIDENDS PAID (856) (855)
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 5,556 (97)
EFFECT OF EXCHANGE RATE CHANGES ON CASH (1,122) (818)
-------- -------
NET DECREASE IN CASH (1,352) (4,578)
CASH BEGINNING BALANCE 4,540 4,605
-------- -------
CASH ENDING BALANCE $ 3,188 $ 27
======== =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
<PAGE> 7
WALBRO CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUBSEQUENT EVENT
In April 1995, the Company signed a definitive agreement to acquire the
plastic fuel tank business of Dyno Industrier AS, (Dyno) Oslo, Norway. The
plastic fuel tank division of Dyno supplies plastic fuel tank systems to most
European vehicle manufacturers through its operations in France, Spain, Norway,
Great Britain, Germany, and Belgium. Dyno Fuel Systems Business sales
approximated US$175 million in 1994. The price of the acquisition of Dyno's Fuel
Systems Business will be approximately US$124 million, subject to certain
adjustments. The transaction is expected to close in the summer of 1995. The
Company plans to finance the acquisition through a combination of secured bank
financing and institutionally placed unsecured senior debt. The acquisition is
subject to several conditions, including government approvals.
6
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
THREE MONTHS ENDED MARCH 31, 1995 vs. THREE MONTHS ENDED MARCH 31, 1994
Net sales in the first quarter of 1995 increased 19.5% to $98.3
million compared to $82.2 million for the same period in 1994. Sales of
automotive products increased 26.3% to $58.9 million for the first quarter of
1995 compared to $46.6 million. Increased shipments of original equipment fuel
systems products to the Company's customers accounted for 18.3 percentage
points of the increased automotive sales. Sales of fuel modules in particular
increased because modules have been applied to more platforms, especially
light trucks, which had strong sales during the quarter. Sales of component
parts to Marwal joint ventures in France and Brazil represented the remaining
8.0 percentage points of increased automotive sales or $3.8 million for the
1995 quarter.
Sales of small engine products increased 8.6% to $31.6 million for the
first quarter of 1995 compared to $29.1 million for the same period of 1994.
During the 1995 first quarter, sales of float feed carburetors increased 4.9%
and sales of diaphragm carburetors increased 3.8%. A significant portion of
the small engine products sales increase during the first quarter came from
ignition products, up 26.0%, and sales of carburetors for two-wheeled vehicles
in China, up 459%. The Company expects sales in China to show continued growth
during the rest of 1995, but not at the rate of increase achieved during the
first quarter.
Sales to the aftermarket increased 7.7% to $7.0 million for the first
quarter of 1995 compared to $6.5 million for the same period of 1994. Both
automotive fuel system products and small engine products reported sales
increases for the quarter at 7.1% and 10.7%, respectively.
Cost of sales for the first quarter of 1995 increased 19.4% to $77.6
million compared to $65.0 million for the same period of 1994, while cost of
sales as a percent of net sales declined slightly to 78.9% compared to 79.0%
for the same 1994 period. The slightly improved gross margin was the result of
improved operations in automotive at the Company's Meriden, Connecticut plant,
which manufactures fuel modules, and the Company's Ossian, Indiana plant, which
manufactures plastic fuel tanks. The gross margin gains in automotive were
mostly offset by some deterioration of gross margins in the small engine
business as float feed carburetor margins were down because of a switch to
lower margin products by several customers. The weak U.S. Dollar also caused
reduced margins at the Company's Singapore plant.
Selling and administrative expenses ("S & A") for the first quarter of
1995 increased 37.2% to $9.6 million compared to $7.0 million. S & A increased
for the quarter because of the following factors: 1) higher automotive
expenses to support the expanded fuel storage and delivery systems capability
on a worldwide basis, 2) increased accrual for incentive compensation at the
small engine business because of increased profitability and 3) higher expenses
in Japan and Singapore because of the weak U.S. Dollar. S & A as a percentage
of sales increased from 8.5% in the first quarter of 1994 to 9.8% in the same
period in 1995. Research and development expenses increased by 19.6% for the
quarter as the Company accelerated its efforts to develop new products to meet
U.S. Environmental Protection Agency regulations affecting both automotive and
small engine products. Interest expense increased for the quarter because of
higher interest rates and increased borrowings to finance capital expenditures,
primarily related to research and development expansion at the Company's Auburn
Hills, MI and Caro, MI facilities and production capacity expansion at the
Company's Ossian, IN facility.
The provision for income taxes increased 1.4% for the first quarter of
1995 compared to the first quarter of 1994. The higher effective tax rate for
1995 of 38.5% compared to 37.1% for 1994 caused the higher provision for income
taxes. The equity in income from joint ventures in the first quarter of 1995
was $1.0 million versus the income of $0.2 million in 1994, primarily
7
<PAGE> 9
because of improved profitability at Marwal Systems (France) and Marwal do
Brasil, two of the Company's joint ventures. Income at Marwal Systems more than
doubled as sales grew by 26.7% while prior year losses at Marwal do Brasil
turned to profits for the first quarter of 1995 as sales increased by 350%.
Marwal do Brasil was in the start-up phase of operations during 1993 and the
first half of 1994.
Net income for the first quarter of 1995 was $5.1 million, an increase
of 13.1% compared to $4.5 million for the same period in 1994, as a result of
the factors described above. Net income per share for the first quarter of
1995 was $.59 compared with $.52 for the 1994 period.
Foreign Currency Transactions
Approximately 24% of the Company's sales are derived from international
manufacturing operations in Japan, China, Singapore and Mexico. The financial
position and the results of operations of the Company's subsidiaries in Japan,
Walbro Japan, Inc. and Walbro Automotive Japan, Inc., (7% of sales) and in
China, Fujian Hualong Carburetor Co., Ltd., (1% of sales) are measured in local
currency of the countries in which they operate and are translated into U.S.
dollars. The effects of foreign currency fluctuations in Japan and China are
somewhat mitigated by the fact that expenses are generally incurred in the
same currencies in which sales are generated and the reported income of these
subsidiaries will be higher or lower depending on a weakening or strengthening
of the U.S. dollar.
For the Company's subsidiary in Singapore, Walbro Singapore Pte. Ltd.,
(6% of sales), the expenses are generally incurred in the local currency but
sales are generated in U.S. dollars; therefore, results of operations are more
directly influenced by a weakening or strengthening of the local currency. The
Company's subsidiary in Mexico, Walbro de Mexico, S.A. DE C.V., (10% of sales)
operates as a Maquiladora, or contract manufacturer, where direct manufacturing
expenses are incurred in the local currency and sales are generated in U.S.
dollars. Thus, results of operations of the Company's subsidiary in Mexico are
also directly influenced by a weakening or strengthening of the local currency.
Approximately 13% of the Company's net assets are based in its foreign
operations and are translated into U.S. dollars at foreign currency exchange
rates in effect as of the end of each period. Accordingly, the Company's
consolidated shareholders' equity will fluctuate depending upon the weakening
or strengthening of the U.S. dollar. In addition, the Company has equity
investments in unconsolidated joint ventures in France, Brazil, Japan and
Korea. The Company's reported income from these joint ventures will be higher
or lower depending upon a weakening or strengthening of the U.S. dollar.
The Company's strategy for management of currency risk relies primarily
upon the use of forward currency exchange contracts to manage its exposure to
foreign currency fluctuations related to its operations in foreign countries,
its firm transaction commitments in foreign currencies and to hedge its equity
investment in certain foreign joint ventures.
Liquidity and Capital Resources
Long-term debt increased to $74.4 million at March 31, 1995 from $53.7
million at March 31, 1994 primarily because of additional financing for the
Company's capital expenditures and additional investment in joint ventures.
Net working capital at March 31, 1995 was $57.0 million, a decrease of $0.8
million compared to $57.8 million at March 31, 1994. The decreased working
capital was the result of increased current liabilities from higher trade
accounts payable and notes payable to banks.
Cash generated from operations covered about 64% of the Company's net
investment in fixed and other assets for the 1995 first quarter. The remaining
36% net investment was provided by existing borrowing facilities. During the
same period in 1994, 100% of the investment needs were met with previously
existing cash balances and cash from operations. Capital expenditures for the
remainder of 1995 are expected to be funded with cash from operations
supplemented, to the extent required, by borrowing under the Company's existing
and future credit facilities.
In April 1995, the Company signed a definitive agreement to acquire
the plastic fuel tank business of Dyno Industrier AS, Oslo, Norway. Dyno
Industrier currently supplies plastic fuel tank systems to many European
vehicle manufacturers. The price of the acquisition is expected to be
approximately $124 million, subject to certain adjustments. The transaction is
expected to close in the summer of 1995. The Company plans to finance the
acquisition through a combination of new secured bank borrowing agreements and
institutionally placed unsecured senior debt. The acquisition is subject to
several conditions, including government approvals.
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibit is filed with this report:
Exhibit No.
2.1 Purchase and Sale Agreement between the Company and Dyno Industrier
AS dated April 7, 1995. (Certain Exhibits omitted. The Registrant
agrees to furnish a copy of any Exhibit to the Commission upon
request).
27.1 Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter.
8
<PAGE> 10
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 thereunto duly authorized.
WALBRO CORPORATION
(Registrant)
Dated: April 28, 1995 /s/ L. E. Althaver
L. E. Althaver, Chairman, President
and Chief Executive Officer
Dated: April 28, 1995 /s/ Michael A. Shope
Michael A. Shope
Chief Financial Officer and Treasurer
9
<PAGE> 11
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
2.1 Purchase and Sale Agreement between the Company and Dyno
Industrier AS dated April 7, 1995. (Certain Exhibits omitted.
The Registrant agrees to furnish a copy of any Exhibit to the
Commission upon request).
27.1 Financial Data Schedule
10
<PAGE> 1
EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
by and between
DYNO INDUSTRIER AS
and
WALBRO CORPORATION
DATED AS OF APRIL 7, 1995
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
<S> <C>
GLOSSARY OF DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
SCHEDULE LIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii
EXHIBIT LIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
ARTICLE I.
PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Assets to be Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II.
CONSIDERATION AND MANNER OF PAYMENT . . . . . . . . . . . . . . . . . . . 3
2.1 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1.1 Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1.2 Additional Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2.1 Amount Paid to Seller at Closing . . . . . . . . . . . . . . . . . . . . . 4
2.2.2 Amount Paid into Escrow . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Adjustment to the Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3.1 Net Working Capital of the Business . . . . . . . . . . . . . . . . . . . 4
2.3.2 Employee Pension Plans Funding . . . . . . . . . . . . . . . . . . . . . . 5
2.3.3 Certain Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3.4 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3.5 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3.6 Belgium and UK Real Property Credits . . . . . . . . . . . . . . . . . . . 5
2.3.7 December 31, 1994 Business Cash . . . . . . . . . . . . . . . . . . . . . 5
2.3.8 Flexopack . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3.9 Nedcar Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3.10 Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3.11 Adjustments Conversion to USD . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Closing Expenses and Related Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III.
SELLER'S AND PURCHASER'S REPRESENTATIONS AND
WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Seller's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . 6
3.1.1 Corporate Power and Authority; Effect of Agreement . . . . . . . . . . . . 6
3.1.2 Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1.3 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1.4 Charter Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1.5 Assets Used in the Business . . . . . . . . . . . . . . . . . . . . . . . 7
3.1.6 Ownership of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C> <C>
3.1.7 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1.8 Purchaser's Title on Consummation . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1.9 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1.10 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1.11 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1.12 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1.13 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.1.14 Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.1.15 Trademarks, Service Marks, Trade Names and Copyrights . . . . . . . . . . . . . . 13
3.1.16 Patents and Other Intellectual Property . . . . . . . . . . . . . . . . . . . . . 13
3.1.17 Transaction Not a Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.1.18 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.1.19 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1.20 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1.21 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1.22 Tangible Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1.23 Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.1.24 Interest of Seller or Affiliates in Customers, Etc. . . . . . . . . . . . . . . . 16
3.1.25 Health, Safety and Environment . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.1.26 Key Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.1.27 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.1.28 Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.1.29 Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.1.30 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.1.31 Banks, Brokers and Proxies. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.1.32 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.1.33 Deferred Capital Investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.1.34 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.2 Purchaser's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.2.1 Corporate Power and Authority; Effect of Agreement . . . . . . . . . . . . . . . . 19
3.2.2 Transaction Not a Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.2.3 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.2.4 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV.
CERTAIN COVENANTS AND OTHER TERMS . . . . . . . . . . . . . . . . . . . . . . . . 20
4.1 Regulatory Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.2 Investigation and Due Diligence by Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.3 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.4 Non-Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.5 Re-Registering and Registering Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.6 Employee Transfer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.7 Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
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4.8 Utilities, Personnel, Equipment Sharing, Service Sharing and Other Agreements . . . . . . . . 23
4.9 License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.10 Real Property in Belgium and Great Britain . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.11 Real Property in Norway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.12 Audited Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.12.1 Audited Financial Statements -- Norwegian GAAP . . . . . . . . . . . . . . . . . . 23
4.12.2 Financial Statements -- U.S. GAAP . . . . . . . . . . . . . . . . . . . . . . . . 23
4.13 Assumption of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.14 Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.15 Inducement Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.16 Resignation of Existing Directors in Belgium, France and Spain . . . . . . . . . . . . . . . . 24
4.17 Guarantee of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.18 Accounting for the Period December 31, 1994 to Closing . . . . . . . . . . . . . . . . . . . . 25
4.19 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.20 Further Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.21 Closing Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.22 Required Consents and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.23 German Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.24 Finland Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.25 Moss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.26 Journee Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.27 Dyno Stock Options and Employee Perks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.28 Renault Recall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.29 Kongsvinger Food Container Design Option . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.30 Spanish Bank Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.31 Replacement Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE V.
CONDITIONS PRECEDENT TO THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . 28
5.1 Conditions Precedent to Obligations of Purchaser . . . . . . . . . . . . . . . . . . . . . . . 28
5.1.1 Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . 28
5.1.2 Consents and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.1.3 Opinion of Counsel to Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.1.4 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.1.5 Delivery of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.2 Conditions Precedent to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . 30
5.2.1 Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . 30
5.2.2 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.2.3 Opinion of Counsel to Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.2.4 Delivery of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
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ARTICLE VI.
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.1 Time and Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.2 Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.2.1 Seller Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.2.2 Purchaser Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VII.
SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII.
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.1 Obligation of Seller to Indemnify . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.2 Obligation of Purchaser to Indemnify . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.3 Notice and Opportunity to Defend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.3.1 Notice of Asserted Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.3.2 Opportunity To Defend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.3.3 Disputes with Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.4 Limitations on Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE IX.
ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE X.
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.3 No Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE XI.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.1 Notices, Consents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.3 Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.8 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.9 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.11 Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.12 Interpretative Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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11.13 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.14 Translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.15 Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies . . . . . . . . . . 40
11.16 Negotiation Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
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<PAGE> 7
GLOSSARY OF DEFINED TERMS
<TABLE>
<S> <C>
Additional Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1.2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 11.9
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Asserted Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3.1
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Assignment and Assumption Agreement . . . . . . . . . . . . . . . . . . . . . . Section 6.2.1(12)
Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1.1
Balance Sheet(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1(1)
Basket Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.4(1)
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Cap Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.4(2)
Charter Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.1
Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.13
Claims Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3.1
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.1
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.1
Conveyance Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
DM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1
Employee Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.23
Environmental and Safety Requirements . . . . . . . . . . . . . . . . . . . . . . Section 3.1.25.1
Escrow Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.2.2
Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.2.2
Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.9
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.9.1
General Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.1A
Governmental Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.1.2
Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.1.2
Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.25.2
Hired Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.7.1
Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.12
Indemnifying Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3.1
Indemnitee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3.1
Inducement Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.1.5
Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.19
Intellectual Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.16
Key Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.26
Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 11.9
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.12
Law(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.14
Leased Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.3.5
LIBOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1.2
License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.9
</TABLE>
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<TABLE>
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Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.1
Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.11
Moss Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.25
Net Working Capital of Business . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.3.1.
NOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1.3
Other Purchaser Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.2.1
Other Seller Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.1
Owned Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.12
Partial Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.1
Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.14
Permitted Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.19.1
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 11.9
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1
Purchased Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1(19)
Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Purchaser Employee Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.7.2
Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.12
Required Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.1.2
Retained Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1.1
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Social Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.6
Special Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.1B
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Tangible Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.22
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.1.15
U.K. Non-Business Owned Property . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1.3
U.K. Non-Business Real Property Amount . . . . . . . . . . . . . . . . . . . . . . . Section 2.1.3
USD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1
Withheld Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.1
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SCHEDULE LIST
Schedule 1 The Products
Schedule 1.1 List of Conveyance Documents
Schedule 1.2 Excluded Assets
Schedule 2.3.1 Net Working Capital of the Business
Schedule 2.3.1-1 Exchange Rates
Schedule 2.3.3 Certain Liabilities
Schedule 2.5 Allocation of Purchase Price
Schedule 3.1.1 Other Seller Agreements
Schedule 3.1.3.1 Capitalization of Purchased Subsidiaries
Schedule 3.1.3.2 Subsidiaries
Schedule 3.1.6 Ownership of Assets
Schedule 3.1.7 Consents and Approvals
Schedule 3.1.9.2 Liabilities not on Financial Statements
Schedule 3.1.11 Material Contracts
Schedule 3.1.12 Real Property
Schedule 3.1.13 Pending Litigation
Schedule 3.1.13.2 Prior Litigation
Schedule 3.1.14-1 Compliance with Applicable Laws
Schedule 3.1.14-2 Permits
Schedule 3.1.14-3 Citations
Schedule 3.1.14-4 Recalls
Schedule 3.1.15 Trademarks, Service Marks, Trade Names and
Copyrights
Schedule 3.1.16 Patents and Other Intellectual Property
Schedule 3.1.17 Permit Violations
Schedule 3.1.18 Conduct of Business
Schedule 3.1.19-1 Insurance Policies
Schedule 3.1.19-2 History of Insurance Claim
Schedule 3.1.19-3 Notices re: Insurance
Schedule 3.1.22 Condition of Tangible Property
Schedule 3.1.23 Employee Plans
Schedule 3.1.24 Interest of Seller in Customers, Etc.
Schedule 3.1.25.1 Environmental and Safety Compliance
Schedule 3.1.25.2 Notices of Environmental and Safety Issues
Schedule 3.1.25.3 Continued Compliance
Schedule 3.1.27 Labor Matters
Schedule 3.1.28 Suppliers
Schedule 3.1.29 Customers
Schedule 3.1.31 Banks, Brokers and Proxies
Schedule 3.2.1 Other Purchaser Agreements
Schedule 4.18.2 Deemed Tax Charge
Schedule 4.19.1 Permitted Exceptions
Schedule 5.1.4 Key Employee List
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EXHIBIT LIST
Exhibit 2.2.2 Escrow Agreement
Exhibit 3.1.9 Financial Statements
Exhibit 4.8 Utilities, Personnel, Equipment Sharing,
Service Sharing and
Other Agreements
Exhibit 4.9 License Agreement
Exhibit 4.10 Leases for Great Britain and Belgium
Exhibit 4.15 Inducement Agreement
Exhibit 5.1.3 Opinion of Counsel to Seller
Exhibit 5.2.3 Opinion of Counsel to Purchaser
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of this 7th
day of April, 1995, by and between Dyno Industrier AS, a Norwegian corporation
("Seller") and Walbro Corporation, a Delaware corporation.
WHEREAS, Seller has its principal place of business in Oslo, Norway and is
engaged in the business (the "Business") of developing, manufacturing,
distributing and selling plastic fuel tank systems and other blow-molded
technical parts supplied to the automotive industry and certain other
nonautomotive blow-molded products (the sales of which have been included in
the Financial Statements of the Business, but not including the terminated
packaging business in Dynoplast S.A. France) as identified on SCHEDULE 1 and
any other blow-molded fuel tank systems and blow-molded technical parts
supplied to the automotive industry by Seller which have not been described in
SCHEDULE 1, other than products produced by Dynoplast OY or at the Moss plants
referred to in SECTIONS 4.24 and 4.25 (collectively, the "Products") at
production facilities in Norway, Great Britain, Germany, France, Belgium and
Spain;
WHEREAS, Seller owns the following wholly-owned subsidiaries or divisions
which are participating in this transaction at the direction of Seller (and
will share in the consideration to be paid by Purchaser, in such amounts as
equitably determined by Seller): (1) Dynoplast Elbatainer GmbH (Germany), (2)
Dynoplast Ltd. (UK), (3) Dynoplast N.V. Scorplast (Belgium), (4) Dynoplast S.A.
(Spain), and (5) Dynoplast S.A. (France), (collectively, the "Subsidiaries");
and
WHEREAS, Seller desires to sell, or to cause the sale of, and Walbro
Corporation and/or its subsidiaries (jointly and severally, "Purchaser") desire
to purchase, all of the Assets related to the Business.
NOW, THEREFORE, in consideration of the mutual covenants of the parties
set forth in this Agreement, Purchaser and Seller agree as follows:
ARTICLE I.
PURCHASE AND SALE OF ASSETS
1.1 ASSETS TO BE SOLD. Except as otherwise provided in this SECTION 1.1
or in SECTION 1.2, at the Closing provided for in ARTICLE VI, Seller shall
sell, assign, transfer and deliver (or shall cause such sale, assignment,
transfer and delivery) to Purchaser (either directly or as part of the
Purchased Subsidiaries) all of the assets, properties, rights and business of
Seller and the Subsidiaries relating to the Business of every type,
description, kind and nature, absolute, contingent or otherwise, real, personal
and mixed, tangible and intangible, wherever located and whether or not
reflected on the books and records of Seller and the Subsidiaries (all of such
assets, properties, rights and business being hereinafter sometimes
collectively called the "Assets"), including, without limitation:
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(1) those assets, properties and rights reflected on the balance
sheet(s) of the Business which are part of the Financial
Statement(s) referred to in SECTION 3.1.9 ("Balance Sheet(s)"),
subject to any changes therein through the Closing which occur
in the ordinary course of business without violation of the
provisions of SECTIONS 3.1.18 and 4.3;
(2) INTENTIONALLY OMITTED;
(3) all leasehold interests in Leased Property and all other rights
under leases;
(4) all inventory;
(5) all Tangible Property, including all furnishings, fixtures,
machinery, equipment, furniture, manufacturing supplies, parts,
office supplies, vehicles and other tangible property used in
connection with the Business (with the exception of all
customer tools and molds which are in Seller's or any of the
Subsidiaries' possession, but including Seller's possessory
rights thereto);
(6) all accounts receivable;
(7) all Trademarks and Intellectual Properties;
(8) the right to use the name "Dyno" pursuant to the License
Agreement;
(9) all Insurance Policies and proceeds received or receivable
thereunder;
(10) all business records and files related to the Business;
(11) all cash and cash equivalents;
(12) all transferable Permits;
(13) all research and development related to the Business;
(14) all claims against third parties in respect of unliquidated
rights under warranties, guarantees or similar obligations
relating to items included in the Assets;
(15) all rights under those commitments, customer orders, contracts
and other agreements being assumed by Purchaser pursuant to
SECTION 6.2.2(2);
(16) all prepaid expenses, claims and other receivables;
(17) all of the goodwill of the Business;
(18) all assets of each Employee Plan (and related books and
records) referred to in SECTION 3.1.23 in respect of Hired
Employees, and all related rights or interests therein; and
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(19) all of the outstanding capital stock of the Subsidiaries
carrying on the Business in France and Spain and all of the
outstanding capital stock of a newly-created subsidiary of
Seller in Belgium established to receive the Business which is
part of Seller's Belgium Subsidiary (the "Purchased
Subsidiaries").
In confirmation of the foregoing sale, assignment and transfer, Seller
shall deliver to Purchaser at the Closing the conveyance documents listed on
SCHEDULE 1.1 hereto and all other conveyance and other documents necessary to
convey the Assets (and the U.K. Non-Business Owned Property) to Purchaser (the
"Conveyance Documents").
1.2 EXCLUDED ASSETS. Anything in SECTION 1.1 to the contrary
notwithstanding, there shall be excluded from the assets, properties, rights
and business to be transferred to Purchaser hereunder (the "Excluded Assets"):
(1) rights against third parties relating to Retained Liabilities;
and
(2) all assets, properties and rights which are reflected in
SCHEDULE 1.2.
ARTICLE II.
CONSIDERATION AND MANNER OF PAYMENT
2.1 PURCHASE PRICE. The aggregate purchase price of the Assets is
United States' Dollars ("USD") 40,333,333, plus Norwegian Kroner ("NOK")
274,226,333, plus Deutsche Mark ("DM") 62,850,985, plus the Additional Purchase
Price, plus or minus the adjustments provided for in SECTION 2.3 ("Purchase
Price"). In addition, Purchaser will assume and agrees to be liable and
responsible for the Assumed Liabilities.
2.1.1 ASSUMED LIABILITIES. "Assumed Liabilities" means:
(1) those liabilities of the Business specifically
listed on SCHEDULE 2.3.1, adjusted by changes to
such liabilities occurring in the ordinary course of
the Business from December 31, 1994 to the Closing
(except Assumed Liabilities will not include (x)
liabilities in respect of the Renault Twingo recall
or the Gifavi matter) and (y) liabilities in excess
of the reserved amounts: (a) DM 200,000 for claims
products, product improvements in respect of the
German portion of the Business; (b) DM 21,000 for
auditors invoice 1993 in respect of the German
portion of the Business; (c) DM 100,000 for bad
debts in respect of the German portion of the
Business; (d) DM 150,000 for ground pollution in
respect of the German portion of the Business; and
(e) GBP 58,000 for lost tooling in respect of the UK
portion of the Business;
(2) obligations (other than payment obligations) of the
Business to perform under contracts and other
agreements to which Seller or any of the
Subsidiaries is a party and which have been entered
into on or before
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December 31, 1994 in the ordinary course of the
Business or are listed in SCHEDULE 3.1.11;
(3) any obligation relating to the conduct of Business
after December 31, 1994 which is not in breach of
SECTION 3.1.18 AND 4.3; and
(4) any liability described in SECTION 2.3.3.
Except as specifically provided in this SECTION 2.1.1,
Purchaser will not assume, or in any way be liable or responsible
for, and Seller agrees to be liable and responsible for, any and all
liabilities, obligations, responsibilities, contracts, commitments
or agreements of Seller and/or Subsidiaries, of any type,
description, kind and nature, known or unknown, fixed, contingent,
direct or indirect, unliquidated or otherwise ("Retained
Liabilities").
2.1.2 ADDITIONAL PURCHASE PRICE. "Additional Purchase
Price" means an amount payable in USD equal to USD 121,000,000 (as
adjusted by SECTION 2.3) times the one month LIBOR rate, plus 1%,
times a fraction the numerator of which is the number of days in
1995 from January 1, 1995 until the Closing and the denominator of
which is 360, compounded monthly. When LIBOR is used in this
Agreement, it means the one month lending rate for USD quoted by
Barclays Bank on the Reuters screen on page LIBO at approximately
11:00 A.M. London time two business days prior to the start of the
month to which such rate will apply under this Agreement.
2.2 PAYMENT OF PURCHASE PRICE.
2.2.1 AMOUNT PAID TO SELLER AT CLOSING. The Purchase
Price, less USD 6,000,000, will be payable to Seller or its
Affiliates at Closing by wire transfer to an account or accounts of
Seller at a bank or banks specified by Seller in writing at least
five business days prior to the Closing Date.
2.2.2 AMOUNT PAID INTO ESCROW. The balance of the
Purchase Price will be payable at Closing by wire transfer to the
escrow account (the "Escrow Account") established under the escrow
agreement (the "Escrow Agreement") in the form of EXHIBIT 2.2.2.
2.3 ADJUSTMENT TO THE PURCHASE PRICE. The Purchase
Price will be subject to the following adjustments:
2.3.1 NET WORKING CAPITAL OF THE BUSINESS. The Purchase
Price will be adjusted upwards or downwards to the extent that the
Net Working Capital of the Business as of December 31, 1994
converted to NOK, at the rates set forth in the last column of
SCHEDULE 2.3.1-1, is greater than or less than NOK 148,100,000. For
purposes hereof, "Net Working Capital of the Business" shall mean
the results of the computation set forth in SCHEDULE 2.3.1, which
schedule shall be verified and corrected, if necessary, by Deloitte
& Touche as part of their work in respect of the audit of the
Financial Statements provided for in SECTION 4.12.1.
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2.3.2 EMPLOYEE PENSION PLANS FUNDING. The Purchase Price
will be decreased or increased by an amount equal to the net
underfunding or overfunding of the amounts transferred from the
Employee Plans which are pension plans to Purchaser Employee Plan,
pursuant to SECTION 4.7.2. The amount of the net underfunding or
overfunding shall be calculated by the actuaries customarily used by
Seller for such plans as of December 31, 1994, based upon (a) the
requirements stipulated in the accounting standard required to be
implemented for pension plans for fiscal year 1994 for Norwegian
companies listed on the Oslo Stock Exchange and (b) other reasonable
standards for pension plans, and in each case the assumptions shall
be confirmed as to reasonableness by Wyatt & Co. (Detroit).
2.3.3 CERTAIN LIABILITIES. The Purchase Price will be
reduced by an amount equal to the principal balance as of the
Closing Date, plus interest from December 31, 1994 to the Closing
Date, of the liabilities listed on SCHEDULE 2.3.3.
2.3.4 INTENTIONALLY OMITTED.
2.3.5 INTENTIONALLY OMITTED.
2.3.6 BELGIUM AND UK REAL PROPERTY CREDITS. The Purchase
Price will be decreased by GBP 1,775,000 and BEF 56,500,000.
2.3.7 DECEMBER 31, 1994 BUSINESS CASH. The Purchase Price
will be increased by FRF 14,721,000, NOK 788,300, ESB 28,660,000, DM
7,245,000, which represent the cash balances (including short-term
interest bearing receivables) in the Business as at December 31,
1994, which amounts shall be verified and corrected, if necessary,
by Deloitte & Touche as part of their work in respect of the audit
of the Financial Statements provided for in SECTION 4.12.1.
2.3.8 FLEXOPACK. The Purchase Price will be increased by
FRF 7,000,000, which represents an amount equivalent to the cash to
be paid into the Business prior to the Closing Date (to Dynoplast
S.A. (France)) by the Seller for the purchase of 95.1% of the shares
in Flexopack S.A.R.L.
2.3.9 NEDCAR ADJUSTMENT. The Purchase Price will be
increased by BEF 20,335,409, which represents the amount paid by the
Seller prior to January 1, 1995 in excess of 10% of the cost of the
Nedcar I program, to be verified by Deloitte & Touche as part of
their work in respect of the Financial Statements provided for in
SECTION 4.12.1.
2.3.10 RESERVES. The Purchase Price will be increased by
DM 543,000, FRF 700,000 and BEF 5,135,443.
2.3.11 ADJUSTMENTS CONVERSION TO USD. The Purchase Price
adjustments required by SECTION 2.3.1 through 2.3.10 shall be
converted from local currencies into USD at the Norwegian Central
Bank's "middelkurs" rates as quoted by Den norske Bank
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for the second business day prior to the Closing Date and then added
to or subtracted from the USD portion of the Purchase Price set
forth in SECTION 2.1.
2.4 CLOSING EXPENSES AND RELATED TAXES. Seller and Purchaser will
share equally (1) all transfer or transaction taxes of any kind or nature
imposed by Law on the direct or indirect transfer of the Assets by Seller
and/or Subsidiaries to Purchaser (not including income or similar taxes),
(2) all premiums and other costs for title registration pertaining to each
of the Assets, (3) fees and costs for appraisals of the Owned Property in
Great Britain and Belgium, (4) all fees for tax and judgment lien searches
and other lien searches, and (5) all governmental fees and charges in
respect of Governmental Consents. The parties agree to equally share the
cost of any Value Added Tax ("VAT") imposed on the transfer of the Assets
in an amount equal to Purchaser's cost for funding such VAT during the
period from the date on which such VAT was paid by Purchaser until
Purchaser has recovered in the relevant jurisdiction(s) an equal
offsetting amount of VAT from its customers or otherwise received it from
the respective government. The outstanding VAT amount, and thereby the
computation of Purchaser's funding cost, will accordingly be reduced as
incoming VAT is received. Purchaser's funding cost, for the purpose of
such calculation, shall be deemed to be equal to LIBOR plus 1%.
2.5 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated as provided in SCHEDULE 2.5.
ARTICLE III.
SELLER'S AND PURCHASER'S
REPRESENTATIONS AND WARRANTIES
3.1 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to Purchaser as follows:
3.1.1 CORPORATE POWER AND AUTHORITY; EFFECT OF AGREEMENT.
Seller and/or each Subsidiary are duly organized and validly
existing under the Laws and have all requisite power and authority
to own, lease and operate the Assets and to (1) carry on the
Business as now being conducted, (2) execute this Agreement and, on
or prior to Closing, the other documents listed on SCHEDULE 3.1.1
(the "Other Seller Agreements"), and (3) consummate the transactions
contemplated hereby. The execution and performance of this
Agreement has been duly authorized, in accordance with applicable
Laws and all relevant governing corporate documents ("Charter
Documents") of Seller, and this Agreement has been duly executed and
delivered and is a valid and binding obligation of the Seller,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, but the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the body resolving such matter. Except as reflected
on SCHEDULE 3.1.1, the minute books of the Purchased Subsidiaries
contain complete copies of (1) the minutes of each meeting, and (2)
all resolutions of the board of directors and stockholders of the
Purchased Subsidiaries.
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3.1.2 QUALIFICATION. Seller and each Subsidiary are duly
qualified or otherwise authorized as a corporation to transact
business in each jurisdiction in which the nature of the Business or
location of the Assets requires such qualification and in which the
failure to obtain such qualification or authorization could
adversely affect the condition of the Business.
3.1.3 SUBSIDIARIES.
3.1.3.1 The entire authorized and issued capital
stock of each Purchased Subsidiary (other than the
Purchased Subsidiary in Belgium which is yet to be
created) is listed on SCHEDULE 3.1.3.1 and is issued only
to the holders reflected on such Schedule.
3.1.3.2 The name and jurisdiction of formation of
each of the Subsidiaries is set forth in SCHEDULE 3.1.3.2.
3.1.4 CHARTER DOCUMENTS. True and complete copies of the
Purchased Subsidiaries' Charter Documents (other than the Purchased
Subsidiary in Belgium which is yet to be created) have been
delivered to Purchaser.
3.1.5 ASSETS USED IN THE BUSINESS. The Assets constitute
all of the assets, rights and business of Seller and the
Subsidiaries relating to the Business. Upon the transfer of the
Assets to Purchaser at the Closing, Purchaser will own (or, in
respect of any existing leases or licensing agreements relating to
the Assets, continue to have rights as a lessee, licensee or under
the agreements entered into pursuant to SECTIONS 4.8 or 4.22(b)) all
of the assets, rights and business necessary for it to conduct the
Business consistent with the manner in which Seller and the
Subsidiaries are presently conducting the Business and which will
permit the Business to be operated on a reasonable stand-alone
basis.
3.1.6 OWNERSHIP OF ASSETS. Except as reflected on
SCHEDULES 3.1.6 and 3.1.12, Seller (or one of the Subsidiaries) is
the owner of the Assets, and has good and marketable title thereto,
including those Assets acquired after December 31, 1994 (other than
inventory sold or receivables collected in the ordinary course of
business subsequent to said date), and by Closing the Assets will be
free and clear of any lien, claim, charge, encumbrance or other
restriction (other than liens related to the Assumed Liabilities).
Except as provided in SCHEDULES 3.1.6 and 3.1.12, neither Seller nor
any Subsidiary holds or uses any of the Assets pursuant to any
lease, conditional sales contract, franchise or license.
3.1.7 CONSENTS AND APPROVALS. Except as disclosed on
SCHEDULE 3.1.7, the execution and delivery by Seller of this
Agreement and the Other Seller Agreements and the performance and
the consummation of the transactions contemplated hereby do not
require Seller or any Subsidiary to obtain any consent, approval,
waiver of any acceleration, termination or other right or remedy or
action of or by, or make any filing with or give any notice to, any
other person relating to any Material Contract.
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3.1.8 PURCHASER'S TITLE ON CONSUMMATION. Immediately
after the Closing, Purchaser will be vested with good and marketable
title to the Assets (or, in respect of any existing leases or
licensing agreements relating to the Assets, have rights as a
lessee, licensee or under the agreements referred to in SECTION 4.8
or 4.22(b)), free and clear of any lien, claim, charge, encumbrance
or other restriction (other than liens related to the Assumed
Liabilities).
3.1.9 FINANCIAL STATEMENTS. With respect to the financial
statements related to the Business for the fiscal year ending on
December 31, 1994, attached hereto as EXHIBIT 3.1.9 (the "Financial
Statements"):
3.1.9.1 The Financial Statements are accurate and
complete in all material respects, are consistent with the
books and records and fairly present the Business'
financial condition, assets and liabilities and the
results of operations and cash flows for the period then
ended in accordance with generally accepted accounting
principles ("GAAP") as consistently applied in Norway
(Purchaser approves the rate of depreciation of
customer-tools used in the Financial Statements for the
Business operation in France). Notwithstanding the
foregoing, Seller shall not be in breach of this SECTION
3.1.9.1 by reason of an overstatement in 1994 operating
profit in the Financial Statements, so long as the amount
of operating profit reflected on the audited financial
statements delivered pursuant to SECTION 4.12.1 is not
less than NOK 31,000,000.
3.1.9.2 Except as listed on SCHEDULE 3.1.9.2, as
of the date hereof, to Seller's knowledge, there are no
material debts, liabilities or obligations of any type,
description, kind and nature related to the Business
(fixed, contingent, direct or indirect, unliquidated or
otherwise), except to the extent clearly reflected in the
Financial Statements or which have arisen after December
31, 1994 in the ordinary course of the Business (none of
which is a liability resulting from breach of contract,
breach of warranty, tort, infringement claim or lawsuit).
3.1.10 TAX MATTERS. The Purchased Subsidiaries have timely
filed all income tax, sales tax, use tax, value added tax, franchise
tax, employment and payroll related tax, property tax, and all other
tax returns which they are required to file and have paid, accrued
or otherwise provided for all taxes, deficiencies or other
assessments of tax, interest or penalties owed. Each of such tax
returns heretofore filed by or with respect to the Purchased
Subsidiaries as to which the applicable statute of limitations has
not expired, correctly and accurately reflects the amount of their
tax liability thereunder (other than such liability arising as a
result of adjustments not material in the aggregate and which
liability is adequately reserved for by the Purchased Subsidiaries).
3.1.11 MATERIAL CONTRACTS. Seller and/or Subsidiaries are
not parties to any material written or oral leases, agreements or
other contracts or legally binding obligations relating to or in any
way affecting the operation or ownership of the Business, except for
those listed on SCHEDULE 3.1.11 ("Material Contracts"). The
Material Contracts listed on SCHEDULE 3.1.11 include each and every
lease, agreement or other contract described below:
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(1) any existing or proposed collective bargaining or similar
arrangement with any labor union;
(2) any contract for capital expenditures or the acquisition or
construction of fixed assets (except any contract made in the
ordinary course of the Business which requires future payments
of less than an amount equal to USD 100,000; but all such
contracts do not require future payments in the aggregate
greater than an amount equal to USD 2,000,000);
(3) any contract for the purchase or the sale of materials,
supplies, merchandise or services except any contract made in
the ordinary course of business;
(4) any contract relating to environmental matters;
(5) any contract granting to any person a first-refusal,
first-offer or similar preferential right to purchase any of
the Assets having a value greater than USD 5,000;
(6) any contract with any manufacturer's representative or other
sales agent or distributor, or advertising or marketing entity
which is not terminable by Seller or Subsidiaries without
penalty on 180 calendar days' or less notice;
(7) any lease of real property to which Seller or Subsidiaries are
parties;
(8) any license or sublicense which Seller or Subsidiaries have
granted or received;
(9) any contract providing for the indemnification of any officer,
director, employee or other person;
(10) any contract prohibiting Seller or Subsidiaries from, or
restricting any of them in, conducting the Business anywhere in
the world;
(11) any joint venture or partnership contract;
(12) any tax sharing agreements with a Purchased Subsidiary;
(13) any contract with representatives, distributors, customers, or
agents of any such person for the sharing of fees, the rebating
of charges or similar arrangements;
(14) any contract containing covenants not to compete;
(15) any contract relating to the acquisition of any business;
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(16) any contract relating to the borrowing of money;
(17) any consulting contract requiring a payment of greater than USD
50,000;
(18) any employment contract having an express term of greater than 1
year; and
(19) any contract not made in the ordinary course of the Business.
Seller and Subsidiaries have either provided or made available to
Purchaser a complete copy of each written Material Contract (other than
customer contracts), including all amendments or other modifications
thereto (any Material Contract which has not been provided as of the date
hereof will be provided prior to the Closing; however, material terms of
customer contracts, other than price, are described on SCHEDULE 3.1.11).
Except as set forth on SCHEDULE 3.1.11, each Material Contract is a valid
and binding obligation of Seller or Subsidiaries, enforceable in
accordance with its terms, and is in full force and effect, subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, but
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the body resolving such matter and that termination rights
may be subject to mandatory statutory time limitations which vary from
the contractual provisions. Except as set forth on SCHEDULE 3.1.11,
Seller and Subsidiaries have performed all obligations required to be
performed by them under each Material Contract, and neither Seller nor
any Subsidiary nor, to Seller's knowledge, any other party to any
Material Contract is (with or without the lapse of time or the giving of
notice, or both) in breach or default in any material respect thereunder;
and to Seller's knowledge there exists no condition which would
constitute breach or default thereunder. Except as reflected on SCHEDULE
3.1.11, neither Seller nor any Subsidiary has been notified that any
party to any Material Contract intends to cancel, terminate, not or
exercise an option under any Material Contract, whether in connection
with the transactions contemplated by this Agreement or otherwise.
3.1.12 REAL PROPERTY. SCHEDULE 3.1.12 contains a true and
correct description of all real property relating to the Business (a)
owned by Seller or any Subsidiary (the "Owned Property"), and (b) leased
by Seller or any Subsidiary (the "Leased Property"; and, together with
Owned Property, the "Real Property"), in each case identifying the
particular owner or lessee of each parcel of Real Property. Except as
set forth in SCHEDULE 3.1.12:
3.1.12.1 Neither the Real Property nor Seller or any
Subsidiary as owner or lessee of the Real Property enjoys
any right, easement or privilege, the continued existence
of which is doubtful or uncertain or the withdrawal or
cessation of which would affect the use or continued use
of the Real Property for the purposes of the Business or
the value of the Real Property.
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3.1.12.2 There is no actual, or to Seller's knowledge
threatened, settlement, earth movement, insect
infestation, or damage affecting the Real Property, or any
defects in the mechanical, electrical, plumbing, sewer,
heating, air conditioning and sprinkler systems of any
improvements constituting a portion of the Real Property
(the "Improvements"), all of which are in good operating
condition and repair, subject only to ordinary wear, tear
and maintenance. There are no structural defects in the
Real Property or the Improvements and the roof, basement,
foundation and walls of each are free of flooding, leakage
and subsidence. To Seller's knowledge, no materials
prohibited by the relevant codes of practice have been
used in the Real Property, the construction of the
Improvements or any alterations thereto or are now present
in the Real Property.
3.1.12.3 No proceedings are presently pending with
respect to Owned Property or to Seller's knowledge
threatened for the taking by exercise of the power of
eminent domain, condemnation, or in any other manner, for
a public or quasi-public purpose, of the Owned Property.
To Seller's knowledge, there is no plan or study by any
governmental authority or agency which if implemented
would in any way adversely affect the present use or
zoning of the Real Property.
3.1.12.4 There is no pending, or to Seller's knowledge
threatened, curtailment or reduction of any utility
service to the Real Property, and neither Seller nor any
of the Subsidiary has received any written notice of any
such pending or threatened curtailment or reduction. All
utilities and public or quasi-public improvements located
upon, under, at or adjacent to the Real Property, required
by law, ordinance, rule, code, or necessary for the normal
operation of the Real Property are installed, are
connected under valid permits, are in working order and
are adequate to service the Real Property and are fully
paid for. All utilities have been completed to the lot
lines of the land constituting a portion of the Real
Property (the "Land") and are connected to the
Improvements. No "tap-in" (charges or impositions to
attach to or otherwise acquire water, gas, electricity or
other utility service) or other similar fees will be
required to be paid on or after Closing. No off-site
easements, utility, parking or other facilities are by law
or contract needed for the use and operation of the Real
Property. The water supply and water purity, the sewer
and waste disposal systems and all of the other utility
systems necessary and appropriate for the use and
occupancy of the Land and Improvements are sufficient for
the operation thereof. The Land and Improvements have
access to public roadways. All school and park donations
or payments required in connection with the development,
construction, use and occupancy of the Owned Property have
been paid in full.
3.1.12.5 No taxing authority has asserted any tax
deficiency or lien against the Real Property, which has
not been paid by the Seller; and, since December 31, 1994,
no notice of any increase in the assessed valuation of any
of the Real Property and no notice of any contemplated
special assessment has been received by Seller or any of
the Subsidiaries. All real estate taxes and assessments
on the Real Property payable by the Seller have been paid
or reserved for in the
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Financial Statements through December 31, 1994. To
Seller's knowledge, none of the Owned Property is subject
to a threatened special assessment.
3.1.12.6 There are no leases, subleases, licenses,
concessions or other agreements, written or oral, granting
to any party or parties the right of use or occupancy of
any portion of the Real Property, and there are no parties
other than Seller and Subsidiaries in possession of the
Real Property.
3.1.12.7 No Real Property is in an area for which flood
risk insurance is necessary or is in any flood way, flood
zone or mud-slide hazard area.
3.1.12.8 No mining, drilling, oil extraction, tunnelling
or pipe line operations have taken place or are
contemplated on or under the Owned Property.
3.1.12.9 No notice, action, or proceeding affecting the
Real Property has been served or commenced by or against
the Seller and there are no disputes where Seller is a
party concerning the Real Property with any person, and to
Seller's knowledge there are no circumstances now existing
which are likely to result in any such notice, action or
proceeding being served or commenced or any such dispute
arising.
3.1.13 LITIGATION. Except as set forth in SCHEDULE 3.1.13
(which shall disclose the parties to, nature of and relief sought
for each matter to be disclosed on SCHEDULE 3.1.13):
3.1.13.1 There is no judgment, order or decree from
any court or Governmental Authority, suit, action,
proceeding, investigation, claim or order pending or to
Seller's knowledge threatened against Seller nor any
Subsidiary or any Employee Plan or any fiduciary, plan
administrator or other person dealing with any such plan
(or pending or to Seller's knowledge threatened against
any of the officers, directors or employees of Seller or
any Subsidiary with respect to the Business), or to which
Seller or any Subsidiary is otherwise a party, or which
may adversely affect the Assets or the Business, before
any court, or before any Governmental Authority
(collectively, "Claims"); nor to Seller's knowledge is
there any basis for any such Claims.
3.1.13.2 SCHEDULE 3.1.13.2 sets forth all closed
material litigation matters with respect to the Business
to which Seller or any Subsidiary was a party during the
five years preceding the date hereof, the date such
litigation was commenced and concluded, and the nature of
the resolution thereof (including amounts paid in
settlement or judgment).
3.1.14 COMPLIANCE WITH APPLICABLE LAWS. Except as set
forth on SCHEDULE 3.1.14-1, Seller and Subsidiaries have complied
and are currently in material compliance with all laws, rules,
ordinances, statutes, regulations, writs, injunctions, judgments,
decrees, orders or other decisions applicable to them or to the
operation of the Business (each individually a "Law," and
collectively, "Laws") and have not received
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any notice of any alleged claim or threatened claim, violation of or
liability or potential responsibility under any such Law which have
not heretofore been cured and for which there is no remaining
liability. Seller and the Subsidiaries have all licenses, permits,
orders or approvals of, and have made all required registrations
with, any governmental or regulatory body that are material to the
conduct of the Business (collectively, "Permits"). All Permits are
listed on SCHEDULE 3.1.14-2 and are in full force and effect. No
material violations exist in respect of any Permit; and no
proceeding is pending or threatened to revoke or limit any Permit.
Except as set forth on SCHEDULE 3.1.14-3 there are no statements,
citations or decision by any governmental or regulatory body stating
that any product currently sold by the Business is defective or
unsafe or fails to meet any regulations or the like promulgated by
any such governmental or regulatory body or any supra-national
regulatory bodies (such as the European Union and United Nations)
nor that any product currently sold by the Business has been
designed or manufactured in a defective manner. Except as set forth
on SCHEDULE 3.1.14-4, there have been no recalls, whether ordered by
a Governmental Authority or otherwise, within the preceding five
years with respect to any product sold by the Business.
3.1.15 TRADEMARKS, SERVICE MARKS, TRADE NAMES AND
COPYRIGHTS. Other than the trade name "Dynoplast", all trademarks,
service marks, trade names and copyrights (including computer
software and data) ("Trademarks") used by Seller or any Subsidiary
in the conduct of the Business are described in SCHEDULE 3.1.15,
along with information as to Seller's and Subsidiaries' ownership
thereof or licenses, rights or immunities therein and registration
thereof. All of such trademarks, service marks, trade names and
copyrights are owned by Seller and Subsidiaries, except for such as
are licensed to Seller or any Subsidiary under licenses referred to
in SCHEDULE 3.1.15. All of the Trademarks are valid, free of any
encumbrances and are not being challenged. Neither Seller nor any
Subsidiary has infringed any Trademark. There is no claim pending
or threatened against Seller or any Subsidiary with respect to
alleged infringement of any Trademark nor, to the knowledge of
Seller, does the operation of any aspect of the Business, in the
manner in which it has heretofore been operated or is presently
operated, give rise to any such infringement.
3.1.16 PATENTS AND OTHER INTELLECTUAL PROPERTY. All
patents and other intellectual property material to the operation of
the Business ("Intellectual Properties"), including all inventions,
designs, models, processes, and applications for patents owned or
used in the Business, are described in SCHEDULE 3.1.16, along with
information as to Seller's or any Subsidiary's ownership thereof or
licenses, rights or immunities therein and registrations thereof.
Neither Seller nor any Subsidiary has infringed on any Intellectual
Property belonging to any person. Neither Seller nor any Subsidiary
is a party to any license agreement or arrangement, whether as
licensee, licensor or otherwise, with respect to any patent,
application for patent, invention, design, model, process, trade
secret or formula not set forth in SCHEDULE 3.1.16. Seller and
Subsidiaries have the right and authority to use all patents,
applications for patents, inventions, trade secrets, processes,
models, designs, formulas and other intellectual property rights as
are necessary to enable them to conduct and to continue to conduct
all phases of the Business in the manner presently conducted and, to
the knowledge of Seller, such use does not and will not infringe on
any patent or other rights of any person.
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3.1.17 TRANSACTION NOT A BREACH. The execution, delivery
and performance of this Agreement and the Other Seller Agreements by
Seller and the Subsidiaries and the consummation of the transactions
by Seller will not (1) violate, conflict with or result in a breach
of any provision of the Charter Documents; (2) subject to obtaining
the Required Consents, violate or result in a breach of any of the
terms of, result in a material modification of, or otherwise give
any other contracting party the right to terminate, or declare (or
with notice or lapse of time or both declare) a default under, any
Material Contract by or to which it or any of the Assets may be
bound or subject; (3) violate any order, writ, judgment, injunction,
award or decree of any court, arbitrator or governmental or
regulatory body against, or binding upon, Seller or any Subsidiary
or upon the Assets; (4) to Seller's knowledge and subject to
obtaining the Governmental Consents, violate any Law, which
violation could have an adverse effect on the condition of the
Business; or (5) except as set forth on SCHEDULE 3.1.17, violate or
result in the revocation, invalidity or suspension of any Permit.
3.1.18 CONDUCT OF BUSINESS. Since December 31, 1994,
Seller and Subsidiaries have conducted the Business only in the
ordinary course consistent with past practices. Except as set forth
on SCHEDULE 3.1.18 or otherwise consented to in writing by Purchaser
prior to the date hereof, since December 31, 1994 with respect to
the Business there has not been any:
(1) material adverse change to the Business (a general
increase in the cost of raw materials shall not be deemed
a material adverse change);
(2) sale, transfer or other disposition by Seller or any
Subsidiary of any Assets having a replacement cost or fair
market value greater than an amount equal to USD 100,000;
(3) strike, picketing, boycott, work stoppage, union
organizational activity, allegation, charge or complaint
of employment discrimination or other labor dispute or
similar occurrence;
(4) notice (formal or otherwise) of any liability or potential
liability relating to environmental matters;
(5) declaration, setting aside, or payment of any dividend or
other distribution in respect of any Purchased
Subsidiary's capital stock or any direct or indirect
redemption, purchase, or other acquisition of such stock;
(6) amendment, termination of, or waiver of any right under,
any Material Contract;
(7) approvals for unbudgeted capital expenditures by Seller or
any of the Subsidiaries which require payments in excess
of an amount equal to DM 50,000;
(8) charitable contributions or pledges by Seller or any of
the Subsidiaries;
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(9) forgiveness of intercompany accounts;
(10) other than in the ordinary course of the Business,
creation of indebtedness to third parties for borrowed
money;
(11) changes in the accounting methods or practices of the
Business;
(12) changes in the material policies of the Business;
(13) other than in the ordinary course, wage, bonus or salary
increase, or any increase in any other direct or indirect
compensation, or in any payment or commitment to pay any
severance or termination pay or any amendment or
termination of any Employee Plan or establishment of any
new Employee Plan;
(14) other than in the ordinary course (such as travel
advances), loan or advance to any person; or
(15) other than in the ordinary course, assumption or incurring
of material debt, obligation or liability.
3.1.19 INSURANCE POLICIES. SCHEDULE 3.1.19-1 is a complete
list and description of all insurance policies (excluding directors
and officers liability insurance and fidelity insurance and employee
bonding) currently maintained by Seller and Subsidiaries (the
"Insurance Policies") with respect to the Business. The Insurance
Policies are in full force and effect, and Seller and Subsidiaries
are not in default under any of them and no material claim for
coverage thereunder has been denied under any such current policies
with respect to any matter. Neither Seller nor any Subsidiary has
received any notice of cancellation or non-renewal. SCHEDULE
3.1.19-2 is a complete list and description of all material past and
all current insurance claims filed in connection with the Business
within the past two years. Except as set forth on SCHEDULE
3.1.19-3, neither Seller nor any Subsidiary have received any notice
from any of its insurance carriers that any of its premiums will be
materially increased in the future, or that any insurance coverage
will not be available on substantially the same terms as are now in
effect.
3.1.20 ACCOUNTS RECEIVABLE. All of the accounts receivable
have arisen in the ordinary course of the Business. Seller has
given Purchaser access to an aged listing of accounts receivable
reflected on the Balance Sheet(s).
3.1.21 INVENTORY. Unless reserved for in the Balance
Sheet(s), all raw materials and work-in-progress will be usable in
the normal manufacturing process and, in the case of finished goods,
are fit for the purpose for which they were made and are saleable in
the ordinary course of the Business.
3.1.22 TANGIBLE PROPERTY. Except as set forth on SCHEDULE
3.1.22, substantially all of the facilities, machinery, equipment,
furniture, fixtures, vehicles, structures, any related capitalized
items and other tangible property included in the Assets and
material
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to the Business (the "Tangible Property") are in good operating
condition and repair (ordinary wear, tear and maintenance excepted),
and neither Seller nor any Subsidiary has received any notice that
it is in violation of any existing law or any building, zoning,
environmental, health, safety or other ordinance, code or regulation
which violation could have an adverse effect on the Business.
Seller has given Purchaser a complete schedule of all Tangible
Property reflected on the Balance Sheet(s).
3.1.23 BENEFIT PLANS. SCHEDULE 3.1.23 contains a complete
list and description of all pension plans and all other benefit
plans (including schemes, programs, policies, arrangements or
agreements) for the Hired Employees or their dependents or
beneficiaries (any such plan, scheme, program, policy, arrangement
or agreement being referred to herein as an "Employee Plan"). As of
December 31, 1994, unless otherwise set forth in SCHEDULE 3.1.23,
liabilities with respect to Employee Plans which are not pension
plans are fully accrued on the Financial Statements in accordance
with Norwegian GAAP or are fully funded pursuant to a trust (or
other funding arrangement) that is separate from the assets of the
Seller, any Subsidiary or any affiliate thereof.
3.1.24 INTEREST OF SELLER OR AFFILIATES IN CUSTOMERS, ETC.
Except as set forth on SCHEDULE 3.1.24, neither Seller, nor any
member of senior management or Affiliate of Seller, no spouse or
child of any such member of senior management or Affiliate or any
entity controlled by one or more of the foregoing:
(1) owns, directly or indirectly, any interest in (except for
less than one percent stock holdings for investment
purposes in securities of publicly held and traded
companies), or is a member of senior management or
director of, any person which is, or is engaged in
business as, a competitor, supplier or customer of the
Business;
(2) other than Seller and the Subsidiaries, owns, directly or
indirectly, in whole or in part, any tangible or
intangible property used in the conduct the Business; or
(3) has any cause of action or other claim whatsoever against,
or owes any amount to, Seller or any Subsidiary, with
respect to the Business, except for intercompany debt or
claims in the ordinary course of business such as for
accrued vacation pay and similar matters.
3.1.25 HEALTH, SAFETY AND ENVIRONMENT. With respect to the
Business and the Assets:
3.1.25.1 Except as set forth in SCHEDULE 3.1.25.1,
(1) Seller and each Subsidiary is in material compliance
(any single, unrelated occurrence of non-compliance having
a cost, including remediation, fees and penalties, of more
than $10,000 is deemed "material") with all Environmental
and Safety Requirements, and (2) Seller and each
Subsidiary possesses all relevant environmental Permits
and has filed all notices or applications required
thereby. As used herein, "Environmental and Safety
Requirements" means all applicable
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Laws, rules, regulations, ordinances, requirements,
Permits and registrations relating to public health and
safety, worker health and safety and pollution and
protection of the environment, all as amended and in force
as of the date hereof.
3.1.25.2 Except as disclosed in SCHEDULE 3.1.25.2,
(1) within the last 5 years neither Seller nor any
Subsidiary has been subject to, or received any notice of,
any private, administrative or judicial action, or notice
of any intended private, administrative, or judicial
action relating to the presence or alleged presence of
Hazardous Materials in, under or upon any real property
currently or formerly owned, leased or used by (A) Seller,
any Subsidiary or any of their predecessors (for purposes
of this SECTION 3.1.25.2, "predecessor" shall mean any
legal entity which was a predecessor of Seller or any
Subsidiary (for example, by merger, de-merger,
consolidation, corporate acquisition or similar corporate
action), or (B) any person that has transported, treated
or disposed of Hazardous Materials on behalf of Seller,
any Subsidiary or any of their predecessors; (2) Seller
does not have knowledge of any basis for any such notice
or action; and (3) there are no pending or to Seller's
knowledge threatened actions or proceedings (or notices of
potential actions or proceedings) from any Governmental
Authority or any other entity regarding any matter
relating to health, safety or protection of the
environment. "Hazardous Materials" means any and all
materials and substances which are so classified by, or
are subject to regulation under, any Environmental and
Safety Requirements.
3.1.25.3 Except as identified in SCHEDULE 3.1.25.3,
there are and have been no past or present events,
conditions, circumstances, activities, practices,
incidents or actions which could reasonably be expected to
materially interfere with or prevent continued material
compliance with any Environmental and Safety Requirements
or give rise to any legal obligation or liability (any
single, unrelated occurrence of interference or
non-compliance having a cost, including remediation, fees
and penalties, of more than $10,000 is deemed material).
3.1.26 KEY EMPLOYEES. Seller has provided Purchaser
with the name and total compensation of each person who is an
employee, consultant, agent or other representative of the Business
whose annual rate of compensation (including bonuses and
commissions) exceeds an amount equal to USD 50,000 ("Key Employee").
Neither Seller nor any Subsidiary has made a commitment or agreement
to increase the compensation above the terms provided to Purchaser
or to modify the conditions or terms of employment of any such
person, other than in the ordinary course of the Business. To
Seller's knowledge, none of such persons currently holding such a
position has threatened to cancel or otherwise terminate such
person's relationship with the Business.
3.1.27 LABOR MATTERS. Except as set forth in SCHEDULE
3.1.27, with respect to the Business there is no, and within the
last five years neither Seller nor any Subsidiary has experienced,
any strike, picketing, boycott, work stoppage or slowdown or other
labor dispute, union organizational activity, allegation, charge or
complaint of unfair labor practice, employment discrimination or
other matters relating to the employment of labor pending or to
Seller's knowledge threatened against Seller or any
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Subsidiary or which might affect Seller or any Subsidiary; nor to
Seller's knowledge is there any basis for any such allegation,
charge, or complaint. Other than existing trade unions, there is no
request for representation pending and no question concerning
representation has been raised. There is no grievance pending which
might have an adverse effect on the Business, nor is there any
arbitration proceeding arising out of a union agreement. There are
no arbitration awards, court orders, or private settlement
agreements which in any way alter, amend, terminate or clarify any
union agreement or which restrict or otherwise impact Seller's or
any Subsidiary's ability to act with respect to the employees
covered by any union agreement in the future. To Seller's
knowledge, no Key Employee and no group of employees has any plans
to terminate employment with Seller or any Subsidiary or, after the
Closing, Purchaser. Seller and Subsidiaries have complied in all
material respects with all applicable laws and notice requirements
to unions and worker organizations relating to the employment of
labor, including provisions thereof relating to wages, hours, equal
opportunity, collective bargaining and the payment of taxes. Seller
and Subsidiaries are not liable for any arrears of wages or any
taxes or penalties for failure to comply with any such laws,
ordinances or regulations.
3.1.28 SUPPLIERS. SCHEDULE 3.1.28 is a list of
aggregate purchases made within the 12 months ending on December 31,
1994 from the 12 largest suppliers to each of the locations of the
Business of key materials, services and commodities utilized in the
Business, exclusive of utility services. Except as noted on
SCHEDULE 3.1.28, in the 12 months ending on the date of this
Agreement, no such supplier has cancelled or otherwise terminated,
or to Seller's knowledge, threatened to cancel or otherwise
terminate, its relationship with the Business. Neither Seller nor
any Subsidiary has received any notice, or is aware that any such
supplier intends to cancel or otherwise modify its relationship with
Seller or any Subsidiary.
3.1.29 CUSTOMERS. SCHEDULE 3.1.29 is a complete list
of sales made or services provided within the 36 months ending on
December 31, 1994 to the 20 largest customers of the Business.
Except as noted on SCHEDULE 3.1.29, in the 36 months ending on the
date of this Agreement, no such customer has canceled or otherwise
terminated, or threatened to cancel or otherwise terminate, its
relationship with the Business, or reduced, or to Seller's
knowledge, threatened to reduce, its business with the Business. No
such customer has indicated that it intends to terminate or modify
its relationship with the Business on account of the acquisition of
the Assets by Purchaser.
3.1.30 BROKERS. Neither Seller nor any Subsidiary has
engaged the services of any broker, finder or agent in connection
with the transactions contemplated by this Agreement.
3.1.31 BANKS, BROKERS AND PROXIES. SCHEDULE 3.1.31
sets forth (1) the name of each bank, trust company, securities or
other broker or other financial institution with which Seller or any
Subsidiary has an account, credit line or safe deposit box or vaults
for the Business; (2) the name of each person authorized by Seller
or any Subsidiary to draw thereon or to have access thereto; and (3)
the names of all persons
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authorized by proxies, powers of attorney or other instruments to
act on behalf of Seller or any Subsidiary in matters concerning the
business or affairs of the Business.
3.1.32 INTENTIONALLY OMITTED.
3.1.33 DEFERRED CAPITAL INVESTMENT. There are no
investments which were included in the 1994 forecast for the
Business, a copy of which has been delivered to Purchaser, in excess
of USD 1,000,000, in the aggregate, which have not been recorded on
the books of the Seller or any Subsidiary and reflected in the
Financial Statements.
3.1.34 FULL DISCLOSURE. All documents and other
papers delivered by or on behalf of Seller or any Subsidiary in
connection with this Agreement are complete and accurate, except for
information provided in connection with the letter of intent between
the parties, dated January 5, 1995, which was provided on a
reasonable efforts basis at that time. No representation or
warranty of Seller contained in this Agreement contains an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
made, in the context in which made, not false or misleading. There
is no fact that Seller has not disclosed to Purchaser in writing
that adversely affects the condition of the Business or the ability
of Seller and the Subsidiaries to perform this Agreement.
3.2 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser
represents and warrants to Seller as follows:
3.2.1 CORPORATE POWER AND AUTHORITY; EFFECT OF
AGREEMENT. Purchaser is duly organized, validly existing and in
good standing under the Law and has all requisite power and
authority to (1) execute this Agreement and the other documents
listed on SCHEDULE 3.2.1 (the "Other Purchaser Agreements"), and (2)
consummate the transactions contemplated hereby. The execution and
performance of this Agreement and the Other Purchaser Agreements has
been duly authorized, in accordance with applicable Law and all
relevant Charter Documents of Purchaser, and this Agreement has been
duly executed and delivered and is a valid and binding obligation of
Purchaser, enforceable in accordance with its terms.
3.2.2 TRANSACTION NOT A BREACH. The execution,
delivery and performance of this Agreement and the Other Purchaser
Agreements by Purchaser and the consummation of the transactions by
Purchaser will not (1) violate, conflict with or result in the
breach of any provision of the Charter Documents; (2) subject to
obtaining the Required Consents, violate or result in the breach of
any of the terms of, result in a material modification of, or
otherwise give any other contracting party the right to terminate,
or declare (or with notice or lapse of time or both declare) a
default under, any material contract or other agreement to which
Purchaser is a party; (3) violate any order, writ, judgment,
injunction, award or decree of any court, arbitrator or governmental
or regulatory body against, or binding upon, Purchaser; or (4)
violate any statute, law or regulation of any jurisdiction.
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3.2.3 BROKERS. Purchaser has not engaged the
services of any broker, finder or agent in connection with the
transactions contemplated by this Agreement.
3.2.4 FULL DISCLOSURE. All documents and other
papers delivered by or on behalf of Purchaser in connection with
this Agreement, including financial statements and existing loan and
indenture agreements relating to Purchaser, are true complete and
accurate. No representation or warranty of Purchaser contained in
this Agreement contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements made, in the context, in which
made, not false or misleading. There is no fact that Purchaser has
not disclosed to Seller in writing that adversely affects the
ability of Purchaser to perform this Agreement. As of the date of
this Agreement, Purchaser is not aware of any breach by Seller of
any of the representations and warranties set forth in SECTION 3.1.
ARTICLE IV.
CERTAIN COVENANTS AND OTHER TERMS
4.1 REGULATORY FILINGS. As soon as possible after the execution of
this Agreement, each party will make such filings as may be required by
any Governmental Authority; and thereafter, each party will file or cause
to be filed, as promptly as practicable, with any Governmental Authority,
any supplemental information which may be requested. The parties hereto
will make such filings and use their best efforts to obtain the Required
Consents; provided, however, "best efforts" shall not require Purchaser to
agree to dispose of any assets, lines of business or equity interests to
obtain the Required Consents.
4.2 INVESTIGATION AND DUE DILIGENCE BY PURCHASER. Prior to June
15, 1995, upon reasonable notice Seller will afford to the officers,
attorneys, accountants or other authorized representatives of Purchaser
reasonable access (in a manner not to unreasonably disrupt the Business)
during normal business hours to the offices, facilities, properties,
files, books and records of the Business to afford Purchaser the
opportunity to review, examine and investigate the Business. Purchaser
will be permitted to make extracts from and to make copies of such books
and records as may be reasonably necessary. Except to the extent that
Purchaser is aware as of the date hereof of circumstances which constitute
a breach by Seller of any of its representations and warranties set forth
in SECTION 3.1, no investigation by Purchaser or its representatives shall
offset or limit the scope of Seller's representations and warranties in
this Agreement or in the Other Seller Agreements or limit Seller's
liability for any breach thereof.
4.3 CONDUCT OF BUSINESS. From the date hereof through the Closing,
except as otherwise provided for in this Agreement, Seller covenants and
agrees:
4.3.1 Seller and Subsidiaries will operate the
Business in the ordinary and usual course in substantially the same
manner as it is presently operated. Seller will provide Purchaser
with its business plan for the Business.
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4.3.2 Without the prior written consent of Purchaser,
in a manner to be agreed upon by the parties within 30 days hereof,
neither Seller nor any Subsidiary shall undertake any of the actions
specified in SECTION 3.1.18 or enter into any new agreement relating
to the Business other than in the ordinary course of the Business.
4.3.3 Seller and Subsidiaries will use their best
efforts to keep the Permits in full force and effect and renew any
of the same which expire prior to the Closing.
4.3.4 Subject to the terms and conditions of this
Agreement, Seller and Subsidiaries will use their best efforts to
keep available the services of their present employees of the
Business, and preserve the goodwill, reputation and present
relationships of the Business with its suppliers, customers,
licensors and others having business relations with the Business.
4.3.5 Seller and Subsidiaries will (1) maintain all
of the Real Property and the Tangible Property in the same good
operating condition and repair as existed on December 31, 1994
(ordinary wear, tear and maintenance excepted), (2) maintain and
keep in full force existing Insurance Policies, (3) maintain the
records in the usual, regular and ordinary manner on a basis
consistent with past practices, and (4) perform and comply with its
obligations under all Material Contracts. Seller and Subsidiaries
will not make any material alterations to the Real Property or the
Tangible Property without the prior written consent of Purchaser.
4.3.6 Seller shall use its best efforts to conduct
the Business in such a manner so that the representations and
warranties contained in ARTICLE III shall continue to be true and
correct on and as of the Closing as if made on and as of the
Closing, and Seller shall give Purchaser prompt notice of (1) any
event, condition or circumstance known to Seller occurring from the
date hereof through the Closing that would constitute a material
violation or breach of any representation, warranty or covenant of
Seller, or the nonfulfillment of any condition, contained in this
Agreement, and (2) any event, occurrence, transaction or other item
known to Seller which would have been required to have been
disclosed on any Schedule, Exhibit or statement delivered hereunder,
had such event, occurrence, transaction or item existed on the date
hereof.
4.4 NON-NEGOTIATION. In consideration of the substantial time,
effort and expense undertaken by Purchaser in connection with its due
diligence review and the preparation and execution of this Agreement,
Seller agrees that neither it nor its representatives, agents or employees
will, after the execution of this Agreement until the earlier of the
termination of this Agreement or the Closing, directly or indirectly,
solicit, encourage, negotiate or discuss with any third party (including
by way of furnishing any information concerning Seller or any Subsidiary)
any acquisition proposal relating to or affecting the Assets or any part
of them (other than sales in the ordinary course of the Business), or any
direct or indirect interests in Seller or any Subsidiary which would
affect the Assets, whether by purchase of assets or stock, purchase of
interests, merger or other transaction, and that Seller will promptly
advise Purchaser of the terms of any communications Seller or any
Subsidiary may receive or become aware of relating to any bid for all or
any part of the Assets.
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4.5 RE-REGISTERING AND REGISTERING INTANGIBLES. Seller and each
Subsidiary shall provide to Purchaser all information and documentation
which Purchaser shall reasonably request in respect of Trademarks,
Intellectual Property, and any other rights and properties registered in
the name of, or to the benefit of, Seller or any Subsidiary under any
agreement or arrangement, necessary and appropriate for the valid
re-registration (or, with respect to Trademarks, Intellectual Properties,
rights and properties not registered in the name of, or to the benefit of,
Seller or any Subsidiary, the registration) of such Trademarks,
Intellectual Properties, rights and properties, free of any liens, claims,
charges, encumbrances or other restrictions, in the name, or to the
benefit, of Purchaser.
Seller and each Subsidiary shall, without compensation, assist
Purchaser in the preparation of such re-registration and registration, as
the case may be, of such Trademarks, Intellectual Properties, rights and
properties.
Purchaser and Seller shall equally share all costs, fees and
expenses in respect of such re-registration and registration, as the case
may be.
4.6 EMPLOYEE TRANSFER COSTS. To the extent there are costs and
expenses with respect to employees of the Business by reason of employment
agreements, collective agreements or Laws directly or indirectly resulting
from, growing out of or in any way related to the event of hiring,
transfer or termination of employees pursuant to this Agreement such costs
or expenses shall be borne by the Seller (provided, however, salary, wages
and other benefits accruing following a transfer of employment to
Purchaser pursuant to its obligation under SECTION 4.13 shall be the
responsibility of Purchaser).
4.7 PENSION PLANS.
4.7.1 Purchaser agrees that, within 30 days after the
Closing Date, it shall establish pension plans ("Purchaser Employee
Plans") for employees of Seller who are eligible to participate in
those Employee Plans which are pension plans and whose employment is
assumed by Purchaser ("Hired Employees"), and except as may be
prohibited by any applicable law, Purchaser agrees that the
provisions of each such plan shall be similar to those contained in
the respective Employee Plans which are pension plans. Purchaser
further agrees to obtain such governmental and other approvals, if
any, as are necessary or generally deemed appropriate to
substantiate any tax or other intended benefits arising out of such
plan.
4.7.2 Seller agrees to provide Purchaser with true
and complete copies of all Employee Plans documents and any other
material information as Purchaser shall reasonably request to
implement the establishment of each Purchaser Employee Plan. Seller
agrees to transfer from all sources (including existing Employee
Plans assets) to the Purchaser Employee Plans (or its related trust)
all Employee Plans' (which are pension plans) assets that are
attributable to the Hired Employees. For purposes of such transfer,
any determination of the amount of assets to be transferred (x)
shall include a pro rata portion of any surplus of assets over
liabilities and (y) shall be calculated by the actuaries customarily
used by Seller for such plans, with the assumptions and methodology
to be confirmed as to reasonableness by Wyatt & Company (Detroit).
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4.8 UTILITIES, PERSONNEL, EQUIPMENT SHARING, SERVICE SHARING AND
OTHER AGREEMENTS. Seller, each appropriate Subsidiary and Purchaser will
execute, on the Closing Date, utilities, personnel, equipment sharing,
service sharing, space sharing and other agreements in the form of EXHIBIT
4.8, regarding the co-existence after the Closing Date of operation of the
Business and the operation of other business of Seller in Real Property in
Germany, Norway, Great Britain and Belgium.
4.9 LICENSE AGREEMENT. On the Closing Date, Purchaser and Seller
will execute a license agreement for Purchaser's use of the name "Dyno"
(but not "Dynoplast") for a 2-year period after the Closing, in the form
of EXHIBIT 4.9 ("License Agreement").
4.10 REAL PROPERTY IN BELGIUM AND GREAT BRITAIN. Seller and
Purchaser will negotiate in good faith for the lease to Purchaser,
effective at the Closing Date, of that portion of the Real Property in
Belgium and Great Britain related to the Business, pursuant to leases
incorporating those terms listed on EXHIBIT 4.10.
4.11 REAL PROPERTY IN NORWAY. Purchaser and Seller will negotiate
with the owner of the real property in Norway to substitute the existing
lease agreement with separate lease agreements between such owner and each
of Purchaser and Seller for the relevant portions of such property related
to their respective production. If such an arrangement is not
accomplished by the Closing Date, then Seller or its Subsidiary will
provide the space to Purchaser required to operate the Business pursuant
to a sublease, or similar arrangement, upon terms and conditions
consistent with a division of the current lease, with such agreement to be
acceptable to Seller and Purchaser.
4.12 AUDITED FINANCIAL STATEMENTS.
4.12.1 AUDITED FINANCIAL STATEMENTS -- NORWEGIAN GAAP.
Seller will provide Purchaser, on or before April 30, 1995, with the
opinion of Deloitte and Touche that the Financial Statements
described in SECTION 3.1.9, on a consolidated basis and subject to
the last sentence of SECTION 3.1.9.1, are accurate and complete in
all material respects, consistent with the books and records, fairly
present the Business' financial condition, assets and liabilities
and the results of operations and cash flow and have been prepared
in accordance with GAAP as consistently applied in Norway.
4.12.2 FINANCIAL STATEMENTS -- U.S. GAAP.
4.12.2.1 Seller will provide Purchaser, 30 days
before the Closing Date, with consolidated balance sheets
as of December 31, 1992, December 31, 1993 and December
31, 1994 and consolidated income statements for the fiscal
years ending on December 31, 1992, 1993 and 1994, together
with the opinion of Deloitte and Touche that such
financial statements are accurate and complete in all
material respects, consistent with the books and records,
fairly present the Business' financial condition, assets
and liabilities and the results of operations and cash
flow and have been prepared in accordance with GAAP as
applied in the United States.
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4.12.2.2 Purchaser agrees to reimburse Seller for
all reasonable costs in respect of the Financial
Statements for the years ended December 31, 1992 and 1993
and the conversion of the Financial Statements to U.S.
GAAP.
4.13 ASSUMPTION OF EMPLOYMENT. Except as provided in EXHIBIT 4.8,
Purchaser agrees to assume the employment of each person who, as of the
Closing Date, in relation to the Business is on the active payroll of
Seller or any Subsidiary. Such assumption of employment shall be for the
same position and terms and conditions of employment as existed with
respect to that person in the Business as of the Closing Date, including
the Employee Plans.
4.14 INSURANCE COVERAGE. Effective as of the date hereof, Seller
will cause the issuer of each of the Insurance Policies (the "Transferred
Policies") to name Purchaser as an additional insured under such
Transferred Policies with respect to losses and claims relating to the
Business. Within 45 days after the date hereof, Seller shall deliver to
Purchaser certificates of coverage or other documentation reasonably
acceptable to Purchaser providing evidence that Purchaser has been named
as an additional insured under the Transferred Policies, and confirmation
from the issuers of Transferred Policies that the coverage provided by the
Transferred Policies will not be restricted or terminated other than in
accordance with their terms as a result of Purchaser's acquisition of the
Business. Effective as of the Closing Date, with respect to all
Transferred Policies on which Seller is the named insured, Seller shall
cause Purchaser to be designated as the named insured in lieu of Seller
and shall provide evidence reasonably acceptable to Purchaser of such
change. Seller shall maintain the Insurance Policies in full force and
effect through the Closing and shall not take any action or omit to take
any action which shall jeopardize or restrict the coverage available under
the Insurance Policies.
4.15 INDUCEMENT AGREEMENT. On the Closing Date, Seller and
Purchaser will execute an inducement agreement in the form attached as
EXHIBIT 4.15 (the "Inducement Agreement"), which will include provisions
covering non-competition, non-solicitation and confidentiality.
4.16 RESIGNATION OF EXISTING DIRECTORS IN BELGIUM, FRANCE AND SPAIN.
On the Closing Date, Seller will deliver written resignations from members
of the Board of Directors of the Purchased Subsidiaries.
4.17 GUARANTEE OF ACCOUNTS RECEIVABLE. Seller hereby
unconditionally guarantees that all accounts receivable of the Business
outstanding at Closing will be paid in full (including interest and
service charges) by the respective account debtors within 60 days after
their due date. If and to the extent any such accounts receivable have
not been paid at the end of such period, within five days following its
receipt of Purchaser's notice of the amount of any uncollected balances,
Seller will pay over to Purchaser, in the respective currency of the
account, the amount of such uncollected balances (with respect to any
uncollected balances in the German portion of the Business, the first DM
100,000 shall not be paid to Purchaser as that amount is an Assumed
Liability pursuant to SECTION 2.1.1(1)(C)). If Purchaser recovers payment
from the account debtors on said uncollected accounts after Seller has
paid over said amount to Purchaser, then Purchaser will pay over to
Seller, in cash, the amount recovered.
Unless directed otherwise by an account debtor, all receipts by
Purchaser shall be applied first against the oldest outstanding invoices;
provided, however, if Purchaser, in good faith,
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places any customer on a cash-on-delivery basis, subsequent payments by
such customer shall be applied to the most recent invoice first.
4.18 ACCOUNTING FOR THE PERIOD DECEMBER 31, 1994 TO CLOSING.
4.18.1 The Business has been and will be operated for the
benefit of the Purchaser from January 1, 1995 to the Closing, all as
provided under the terms and conditions of this Agreement. Seller
will prepare separate balance sheets for each operating unit of the
Business as of the commencement of business on January 1, 1995, from
the Balance Sheet included in the Financial Statements, as if the
Closing of the transaction contemplated herein had occurred on such
date. Such balance sheets will only contain the following items:
(1) the Assets and (2) Assumed Liabilities.
4.18.2 Within 45 days of the Closing, Seller and Purchaser
will prepare separate balance sheets for each operating unit of the
business as of the Closing Date, which shall account for the profits
(losses) of the Business during the period January 1, 1995 to the
Closing, based on the following principles:
(1) the opening balance sheets for such period shall be
the SECTION 4.18.1 balance sheets;
(2) all transactions for the period beginning January 1,
1995 and ending on the Closing Date shall be
accounted for in accordance with Norwegian GAAP
consistently applied, except that (a) there shall be
no charge for depreciation or amortization, and (b)
there shall be a charge for income taxes as computed
in accordance with the principles set forth on
SCHEDULE 4.18; and
(3) there shall be interest accrued or charged, as the
case may be, on all accounts receivable and accounts
payable between any operating unit of the Business
and the Seller or any of its Affiliates (excluding
for this purpose any operating unit of the
Business), computed monthly on the average
outstanding balances in such accounts during each
month at LIBOR plus 1%, compounded monthly.
4.18.3 With respect to the balance sheet prepared on the
Closing Date pursuant to SECTION 4.18.2, accounts receivable or
accounts payable between any operating unit of the Business and the
Seller or any of its Affiliates (excluding for this purpose any of
the operating unit of the Business) shall be settled within 10 days
following the preparation of the SECTION 4.18.2 balance sheets.
4.18.4 Any dispute under this SECTION 4.18 which cannot be
resolved by the parties shall be resolved by a "Big-Six" accounting
firm agreed to by the parties, other than Arthur Andersen LLP and
Deloitte and Touche.
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4.19 REAL PROPERTY.
4.19.1 Seller will furnish to Purchaser, at a cost to be
shared equally by Seller and Purchaser, as soon as reasonably
possible but no later than 30 days prior to the Closing Date, a
legal report (collectively, the "Title Report") with respect to the
Owned Property in Spain, prepared by Balana Eguia (the "Title
Counsel"), describing in detail the title to such property and any
and all documents, conditions and restrictions affecting such title.
The Title Counsel shall also opine on:
(a) contiguity of the Land described in the Title Report;
(b) access to public streets; and
(c) access to electricity, gas, water and telephone.
Seller shall cause the Title Counsel to deliver to Purchaser copies
of all documents affecting or relating to title to such Owned
Property. Purchaser shall review the Title Report, title documents
and surveys required to be delivered to Purchaser pursuant to
SECTION 4.19.2. At Closing, the Real Property located in Spain
shall be subject only to those matters which are listed on SCHEDULE
4.19.1 (such matters being referred to as "Permitted Exceptions").
4.19.2 Seller has furnished to Purchaser a survey with respect
to the Owned Property in Spain prepared by a surveyor licensed in
Spain, depicting the Land and Improvements and showing the location
of all the Improvements and easements upon the Land or appurtenant
thereto (identified by the applicable Document Number, if any), and
showing that there are no encroachments from or upon adjoining
property or upon any easements located on such Owned Property (or if
any such encroachments exist, identifying and locating same). The
legal description on such survey shall coincide exactly with the
legal description on the Title Report.
4.19.3 Seller will obtain and, on the Closing Date, furnish to
Purchaser "estoppel" and "consent to transfer" letters in respect of
each parcel of Real Property from all lessors and mortgage holders,
in form and substance reasonably satisfactory to Purchaser.
4.20 FURTHER ASSURANCE. Each of the parties shall execute such
documents and other papers and take such further actions as may be
reasonably required or desirable to carry out the provisions hereof and
the transactions contemplated hereby.
4.21 CLOSING CONDITIONS. Seller will use its best efforts between
the date hereof and the Closing to secure fulfillment of all of the
conditions precedent to Purchaser's obligations hereunder, and Purchaser
will use its best efforts between the date hereof and the Closing to
secure fulfillment of all of the conditions precedent to Seller's
obligations hereunder.
4.22 REQUIRED CONSENTS AND PERMITS. Seller and Purchaser will use
their best efforts to obtain all Required Consents and Permits, in order
to permit Purchaser to operate the Business after the Closing. If at
Closing or Partial Closing there are non-material Required
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Consents not yet obtained, Seller and Purchaser: (a) will continue to use
their best efforts to obtain such consents and permits, (b) will negotiate
agreements to transfer to Purchaser the beneficial rights and duties
relating to contracts for which consents to transfer are not yet obtained.
4.23 GERMAN ENVIRONMENTAL MATTERS. Prior to December 31, 1995,
Seller agrees to repair all cracks in the plant floor and to remove
certain hydrocarbon pollution in the soil at the location of the Business
in Germany, all as raised by the Landratsamt in its letters, dated January
29, 1992, February 26, 1992 and November 11, 1994, and also noted in the
report by TUV Energie and Umwelt GmbH, dated April 25, 1994 and in the
Dynoplast file note dated February 1, 1995, concerning its meeting with
the Landratsamt and the local Water Authority. Seller may utilize up to
150,000 DM and charge the Business therefor in respect of its obligations
under this SECTION 4.23; any amount required to be expended in excess of
such amount shall be borne out of Seller's assets.
4.24 FINLAND OPTION. Seller agrees that Purchaser shall have an
option to acquire the automotive and truck blow molding business of
Dynoplast OY in Finland. The current business includes the sale of (1)
coolant reservoirs to Volvo truck, (2) washer reservoirs to Scania and (3)
airducts to SAAB Auto. The option will be for all machines, tools and
contracts of the automotive and truck blow molding business in Dynoplast
OY and any of its affiliates wherever located. The price for such assets
will be the fair market value of only those assets (including all contract
rights) related to the operation of such business in Finland. If the
parties cannot agree upon the fair market value of such assets (including
all contract rights), they shall mutually select an appraiser
knowledgeable in the automotive industry, whose opinion shall be final and
binding. The option is exercisable at any time during and after the 37th
month through the 60th month following the Closing, with a consummation of
the transaction to occur 18 months following the date of the exercise of
the option. Purchaser and Seller agree to maintain in confidence the
terms and conditions of the agreements contained in this Section.
4.25 MOSS. Purchaser agrees to purchase, and Seller agrees to sell
to Purchaser, fuel pumps, modules and level sensors ("Moss Product") for
use in the Business' present "SAAB-Pump Contract." Purchaser shall have
the right to withdraw from this arrangement upon one year's prior written
notice served at any time after the first anniversary of this arrangement.
Upon Purchaser's termination of the arrangement, Seller shall no longer
produce the Moss Product and shall transfer the tools to Purchaser without
consideration. All purchases pursuant to this arrangement will be made
pursuant to a negotiated standard Norwegian long-term automotive purchase
order and supplier agreement. Purchaser and Seller agree to maintain in
confidence the terms and conditions of the agreements contained in this
Section.
4.26 JOURNEE OPTION. Promptly after the date hereof, Seller shall
serve a termination notice under the contract between Dynoplast S.A. and
Paul Journee, dated November 16, 1988, which shall effect a termination of
such contract.
4.27 DYNO STOCK OPTIONS AND EMPLOYEE PERKS. The stock options
granted by Seller to employees of the Business prior to the date hereof
shall be retained by such employees and may be exercised in accordance
with their terms notwithstanding that such employees become
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Hired Employees. Through December 31, 1996 the Norwegian employees of the
Business may continue to use Seller's resort in Lanzarote on the current
terms.
4.28 RENAULT RECALL. Respecting the disputes in France between
Seller and Fispa Ulma and Gifavi and Darrou regarding the Renault recall,
Purchaser agrees, for a period of time not to exceed 5 years, to continue
storage of defective fuel tanks and valves presently stored on the site in
France (following such 5 year period, Seller shall have the right, to be
exercised within 180 days, to remove such defective fuel tanks and valves)
and, during the course of the disputes, to give Seller access to all books
and records of the Purchased Subsidiary in France and, so long as it shall
be without cost to Purchaser, to reasonably cooperate with Seller in the
defense, compromise or settlement of such action.
4.29 KONGSVINGER FOOD CONTAINER DESIGN OPTION. Seller shall have
the option to acquire the food container mold(s), design and any related
contract rights included as part of the Assets at a price equal to the
fair market value of such assets. Such option may be exercised at any
time prior to the fifth anniversary of the Closing Date. If Purchaser at
any time during the option period receives an offer from a third party
respecting the sale of such assets, which offer is acceptable to
Purchaser, Purchaser shall promptly deliver a copy of such offer to
Seller, and Seller shall have the right, exercisable within 30 days of
receipt of such offer, to purchase such assets on the same terms and
conditions set out in such offer (if Seller fails to exercise such right,
Purchaser may sell such assets free and clear of Seller's option provided
for in the first sentence of this section).
4.30 SPANISH BANK DEPOSIT. Seller has on deposit ESB 600,000,000
(the "Deposit") with Barclays Bank (Madrid) as security for
Dynoplast S.A.'s (Spain) bank borrowing. At the Closing, Seller will
sell, assign and convey the Deposit to Purchaser, and Purchaser will pay
Seller an amount in ESP equivalent to the Deposit.
4.31 REPLACEMENT GUARANTIES. Purchaser agrees to replace (a)
the bank guaranty in respect of the Business in Spain given by Barclay's
Bank to SEPES in the amount of ESB 53,780,240 and (b) Seller's guaranty to
Christiania Bank in respect of loans to Hired Employees in Norway in the
approximate amount of NOK 485,000.
ARTICLE V.
CONDITIONS PRECEDENT TO THE CLOSING
5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER. The
obligations of Purchaser under this Agreement to consummate the
transactions contemplated hereby is subject to, at or prior to the
Closing, the satisfaction of all of the following conditions, any of which
may be waived by Purchaser:
5.1.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of Seller contained in this Agreement
shall be true in all material respects on and as of the Closing Date
with the same force and effect as though made on and as of the
Closing Date (with respect to the representation and warranty
contained in subsection
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(1) of SECTION 3.1.18, a material adverse change between the date
hereof and Closing shall only have occurred if there is (a) a major
recall of product sold by the Business after December 31, 1994
(including any recall of the product sold after December 31, 1994,
to Mercedes, described in SCHEDULE 3.1.18, or (b) loss of material
business (other than a loss of Peugot business) not caused, directly
or indirectly, by Purchaser). Seller shall have performed and
complied in all material respects with all covenants and agreements
required by this Agreement to be performed or complied with by
Seller on or prior to Closing. If prior to Closing, Purchaser is of
the opinion that there has been a breach by the Seller of any of its
representations, warranties, covenants or agreements under this
Agreement, Purchaser agrees promptly to provide Seller with notice
thereof, in order to provide Seller with the opportunity to cure
such breach. Seller shall have delivered to Purchaser a
certificate, dated as of the Closing and signed by a duly authorized
officer, to the foregoing effect and to the effect that the
conditions set forth in SECTION 5.1.2 have been fulfilled.
5.1.2 CONSENTS AND PERMITS. SCHEDULE 5.1.2 lists all
approvals, consents or licenses of all Governmental Authorities, of
which Seller and Purchaser are aware, which are required to sell,
transfer and deliver the Assets to Purchaser or which are required
to permit Purchaser to purchase the Assets ("Governmental
Consents"). As used in this Agreement, "Governmental Authority"
shall mean all relevant governing authorities. All Governmental
Consents and the other consents, approvals or other rights of any
other person under Material Contracts are hereinafter called
"Required Consents." All material Required Consents and Permits
shall have been obtained and be in full force and effect, and
Purchaser shall have been furnished with appropriate evidence of the
granting of the material Required Consents and Permits (provided,
however, Purchaser shall have complied with its obligations under
the first sentence of SECTION 4.22). No suit, action or proceeding
by any person or Governmental Authority shall be pending or
threatened in writing, which if determined adverse to Purchaser's
interests, could have a material adverse effect upon the Business or
Purchaser or its Affiliates respecting the acquisition of the
Business. No injunction, restraining order or order of any nature
shall have been issued by or be pending before any court of
competent jurisdiction or any Governmental Authority challenging the
validity or legality of the transactions contemplated hereby or
restraining or prohibiting the consummation of such transactions or
compelling Purchaser to dispose of or discontinue or materially
restrict the operations of a significant portion of the Business or
of the business conducted by Purchaser as a result of the
consummation of the transactions contemplated hereby.
5.1.3 OPINION OF COUNSEL TO SELLER. Purchaser shall have
received the opinion of Thommessen Krefting Greve Lund, counsel to
Seller, dated as of the date of the Closing, addressed to Purchaser,
in the form of EXHIBIT 5.1.3.
5.1.4 EMPLOYMENT AGREEMENTS. Simultaneously with the
Closing, the persons listed on SCHEDULE 5.1.4 shall continue
employment with the Business pursuant to employment agreements
substantially on the same terms and conditions as now exist.
(Purchaser agrees to use its best efforts to negotiate and conclude
such agreements promptly after the signing of this Agreement.)
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(With respect to the first five persons listed on SCHEDULE
5.1.4, Seller agrees that such persons will be entitled to return to
the employ of Seller at any time after the first anniversary of the
Closing Date until the third anniversary of the Closing Date on the
following conditions:
(i) Dyno shall not solicit such persons to return to Seller;
(ii) Such re-employment shall be on the same terms and
conditions existing between Seller and such person as of
the Closing Date, except that salary shall be adjusted in
accordance with the Norwegian consumer price index;
(iii) The duration of such person's employment with Purchaser
shall be counted towards his seniority with Seller; and
(iv) Pension assets under the Purchaser employee plan
respecting such person equal to the amount required to be
funded under the standard for public companies listed on
the Oslo Stock Exchange shall be transferred to Seller's
plan.
Seller shall not re-employ any of such persons prior to the first
anniversary of the Closing Date without the prior written consent of
Purchaser.)
5.1.5 DELIVERY OF DOCUMENTS. Purchaser shall have
received all documents and other items to be delivered by Seller
under SECTION 6.2.1 in form and substance reasonably satisfactory to
Purchaser.
5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The obligations
of Seller and Subsidiaries under this Agreement to consummate the
transactions contemplated hereby is subject to, at or prior to the
Closing, the satisfaction of all the following conditions, any one or more
of which may be waived by Seller:
5.2.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of Purchaser contained in this
Agreement shall be true in all material respects on and as of the
Closing Date with the same force and effect as though made on and as
of the Closing Date. Purchaser shall have performed and complied in
all material respects with all covenants and agreements required by
this Agreement to be performed or complied with by Purchaser on or
prior to Closing. Purchaser shall have delivered to Seller a
certificate, dated as of the Closing Date and signed by a duly
authorized officer, to the foregoing effect and to the effect that
the conditions set forth in SECTION 5.2.2 have been fulfilled.
5.2.2 CONSENTS AND APPROVALS. All material Governmental
Consents shall have been obtained and no suit, action or proceeding
by any person or Governmental Authority shall be pending or
threatened in writing, which if determined adverse to Seller's
interests, could have a material adverse effect upon the Business or
Seller or its Affiliates. No injunction, restraining order or order
of any nature shall have been issued by or be pending before any
court of competent jurisdiction or any Governmental
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Authority challenging the validity or legality of the transactions
contemplated hereby or restraining or prohibiting the consummation
of such transactions.
5.2.3 OPINION OF COUNSEL TO PURCHASER. Seller shall have
received the opinion of Katten Muchin & Zavis, counsel to Purchaser,
dated as of the Closing, addressed to Seller, in the form of EXHIBIT
5.2.3.
5.2.4 DELIVERY OF DOCUMENTS. Seller shall have received
all documents and other items to be delivered by Purchaser under
SECTION 6.2.2, in form and substance reasonably satisfactory to
Seller.
ARTICLE VI.
CLOSING
6.1 TIME AND PLACE. The transaction will be closed (the "Closing")
at the offices of Wikborg, Rein & Co., Purchaser's co-counsel,
Kronprinsesse Marthas Plass 1, Oslo, Norway, at 10:00 a.m. on July 31,
1995, provided all conditions to Purchaser's and Seller's obligations set
forth in ARTICLE V, have been satisfied or waived (the "Closing Date");
provided, however, the transaction may close earlier by mutual agreement.
Seller and Purchaser agree that, if the conditions to closing are not
fulfilled by July 31, 1995, they will continue to use their best efforts
to fulfill such conditions and to delay the Closing; provided, however,
the Closing shall occur not later than December 31, 1995 ("Drop Dead
Date").
However, if by July 31, 1995, or at any time thereafter prior to the
Drop Dead Date, Purchaser's and Seller's conditions set forth in ARTICLE V
have been fulfilled in respect of Assets representing in value more than
75% of the Purchase Price, as allocated and set forth on SCHEDULE 2.5,
then at either party's election, Seller and Purchaser shall partially
close (the "Partial Closing"; the term "Closing" shall also include
Partial Closing(s)) the transaction contemplated herein, with Purchaser
paying an amount equal to 80% of the Purchase Price attributable to such
Assets to Seller, and Seller shall simultaneously transfer such Assets to
Purchaser (with Seller and Purchaser entering into a fair and equitable
modification to this Agreement, providing for a deferred Closing on the
balance of the Assets, to the extent practical, a transfer as of the
Partial Closing of the economic benefit of the balance of the Assets, and
a modification to ARTICLE VII to reflect the Partial Closing). Of the
remaining 15% relating to such Assets, 5% shall be held under the Escrow
Agreement, and 10% shall be paid into and held in escrow (the "Withheld
Amount") in accordance with a separate escrow agreement, to be signed at
the Partial Closing, until the Closing. If a Partial Closing shall have
occurred, the Closing shall be as provided in the first paragraph hereof,
except that the outside date shall be 540 days after the date of this
Agreement, (and such date shall become the "Closing Date"; the term
"Closing Date" shall also include the date of Partial Closing(s)); if the
Closing has not occurred within 540 days after the date of this Agreement,
the Withheld Amount shall be returned to Purchaser. If by agreement
between Seller and Purchaser the Closing occurs after the expiration of
such 540-day period, Purchaser shall then pay the Withheld Amount to
Seller.
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6.2 DELIVERIES. At the Closing:
6.2.1 SELLER DELIVERIES. Seller will execute and deliver
or cause to be executed and delivered to Purchaser:
(1) all Conveyance Documents;
(2) A Company Certificate issued by the "Registration
Authorities" with respect to the Seller and the
Purchased Subsidiaries, all dated not more than five
days prior to the Closing;
(3) INTENTIONALLY OMITTED;
(4) INTENTIONALLY OMITTED;
(5) an opinion of Thommessen Krefting Greve Lund
substantially in the form of EXHIBIT 5.1.3;
(6) certified copies of the Charter Documents of the
Purchased Subsidiaries, each as in effect at the
Closing;
(7) the sharing agreements referred to in SECTION 4.8;
(8) the leases referred to in SECTION 4.10 AND 4.11;
(9) the Inducement Agreement;
(10) the written resignations of the members of the Board
of Directors of the Purchased Subsidiaries required
by SECTION 4.16;
(11) the certificate required by SECTION 5.1.1;
(12) INTENTIONALLY OMITTED;
(13) the License Agreement; and
(14) such other documents and instruments as are required
by any other provision contained in this Agreement
and as Purchaser or its counsel reasonably shall
deem necessary to consummate the transactions
contemplated hereby.
6.2.2 PURCHASER DELIVERIES. Purchaser will execute and
deliver or cause to be executed and delivered to Seller:
(1) bank wire transfers as provided in SECTIONS 2.2.1
AND 2.2.2, or as provided in the second paragraph of
SECTION 6.1;
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<PAGE> 43
(2) INTENTIONALLY OMITTED;
(3) an opinion of Katten Muchin & Zavis substantially in
form of EXHIBIT 5.2.3;
(4) INTENTIONALLY OMITTED;
(5) the sharing agreements referred to in SECTION 4.8;
(6) the leases referred to in SECTIONS 4.10 AND 4.11;
(7) the certificate required by SECTION 5.2.1;
(8) the License Agreement;
(9) the Inducement Agreement; and
(10) such other documents and instruments as are required
by any other provision contained in this Agreement
and as Seller or its counsel reasonably shall deem
necessary to consummate the transactions
contemplated hereby.
ARTICLE VII.
SURVIVAL
SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF
SELLER. Notwithstanding any right of Purchaser fully to investigate the
affairs of the Business and notwithstanding any knowledge of facts
determined or determinable by Purchaser pursuant to such investigation or
right of investigation (except to the extent that Purchaser is aware as of
the date hereof of circumstances which constitute a breach by Seller of
any of its representations and warranties set forth in SECTION 3.1),
Purchaser has the right to rely fully upon the representations,
warranties, covenants and agreements of Seller contained in this
Agreement, in the Other Seller Agreements or in any certificate delivered
pursuant to any of the foregoing. All such representations, warranties,
covenants and agreements shall survive the execution and delivery of this
Agreement and the Closing (x) but terminating (1) on the second
anniversary of the Closing Date with respect to any General Claim as to
which Purchaser shall not have given notice on or prior to such date, and
(2) on the second anniversary with respect to Special Claims asserted
under SECTION B(2) below (but expiring thereafter but concurrent with the
expiration of the Seller's obligations in accordance with the time period
of the covenants set forth in SECTIONS 4.24, 4.25 and the second paragraph
of 5.1.4), on the third anniversary of the Closing Date with respect to
Special Claims for breach of the representations and warranties under
SECTIONS 3.1.6 and 3.1.8, and on the expiration of the applicable statute
of limitations with respect to Special Claims for breach of the
representations and warranties under SECTION 3.1.10, in each case as to
which Purchaser shall not have given notice on or prior to the respective
expiration date, but (y) surviving indefinitely with respect to Special
Claims under B(3) and B(4)
33
<PAGE> 44
of this Article VII. As used in this Agreement, the following terms have
the following meanings:
A. "GENERAL CLAIM" means any claim for indemnification
hereunder, other than a Special Claim, based upon, arising out of or
otherwise in respect of any inaccuracy in or any breach of any
representation or warranty of Seller or any breach of any covenant
or agreement.
B. "SPECIAL CLAIM" means any claim for indemnification
hereunder based upon, arising out of or otherwise in respect of (1)
any inaccuracy in or any breach of any representation or warranty of
Seller contained in SECTIONS 3.1.6, 3.1.8 AND 3.1.10 of this
Agreement, (2) any breach of any covenant or agreement of Seller
contained in SECTIONS 2.4, 4.5, 4.6, 4.7, 4.17, 4.23, 4.24, 4.25,
4.26, 4.27 and the second paragraph of 5.1.4, (3) any Retained
Liability, or (4) any willful breach of any representation or
warranty of Seller contained in this Agreement, the Other Seller
Agreements or in any document, certificate or other papers delivered
pursuant to this Agreement.
ARTICLE VIII.
INDEMNIFICATION
8.1 OBLIGATION OF SELLER TO INDEMNIFY. Subject to the limitations
contained in ARTICLE VII AND SECTION 8.4, Seller agrees to indemnify,
defend and hold harmless Purchaser (and its Affiliates and successors)
from and against all direct and indirect losses, liabilities, damages,
deficiencies, costs or expenses (including interest, penalties and
reasonable attorneys' fees and disbursements) (singularly, "Loss";
collectively, "Losses") caused by (1) any breach of any representation,
warranty, covenant or agreement of Seller contained in this Agreement, in
the Other Seller Agreements or in any document, certificate or other
papers delivered to Purchaser pursuant to this Agreement, and (2) each and
every Retained Liability. Nothing contained in this SECTION 8.1 shall
relieve Purchaser from its obligation to mitigate damages or from its
contributory negligence.
8.2 OBLIGATION OF PURCHASER TO INDEMNIFY. Purchaser agrees to
indemnify, defend and hold harmless Seller (and its Affiliates and
successors) indefinitely from and against any Losses caused by (1) any
breach of any representation, warranty, covenant or agreement of Purchaser
contained in this Agreement, in the Other Purchaser Agreements or in any
document, certificate or other papers delivered to Seller pursuant to this
Agreement, and (2) each and every Assumed Liability. Nothing contained in
this SECTION 8.2 shall relieve Seller from its obligation to mitigate
damages or from its contributory negligence.
8.3 NOTICE AND OPPORTUNITY TO DEFEND.
8.3.1 NOTICE OF ASSERTED LIABILITY. Promptly after
receipt by any party hereto (the "Indemnitee") of notice of any
demand, claim or circumstances which, with the lapse of time, would
or might give rise to a claim or the commencement (or threatened
commencement) of any action, proceeding or investigation (an
"Asserted Liability") that
34
<PAGE> 45
may result in a Loss, the Indemnitee shall give notice thereof (the
"Claims Notice") to the party obligated to provide indemnification
pursuant to SECTIONS 8.1 OR 8.2 (the "Indemnifying Party"). The
Claims Notice shall describe the Asserted Liability in reasonable
detail, and shall indicate the amount (estimated, if necessary and
to the extent feasible) of the Loss that has been or may be suffered
by the Indemnitee.
8.3.2 OPPORTUNITY TO DEFEND. The Indemnifying Party may
elect to compromise or defend, at its own expense and by its own
counsel, any Asserted Liability and to prosecute by way of
counterclaim or third party complaint any claim arising out of or
relating to any Asserted Liability. If the Indemnifying Party
elects to compromise or defend such Asserted Liability, it shall
within 30 days (or sooner, if the nature of the Asserted Liability
so requires) notify the Indemnitee of its intent to do so, and the
Indemnitee shall cooperate, at the expense of the Indemnifying
Party, in the compromise of, or defense against, such Asserted
Liability. If the Indemnifying Party elects not to compromise or
defend the Asserted Liability or fails to notify the Indemnitee of
its election as herein provided, the Indemnitee may pay, compromise
or defend such Asserted Liability. If the Indemnifying Party elects
to defend an Asserted Liability but contests its obligation to
indemnify against such Asserted Liability, the Indemnifying Party
shall carry on such defense in good faith. Notwithstanding the
foregoing, neither the Indemnifying Party nor the Indemnitee may
settle or compromise any claim over the objection of the other;
provided, however, consent to settlement or compromise shall not be
unreasonably withheld; provided, further, if the Indemnifying Party
contests its obligation to indemnify against an Asserted Liability,
consent to settlement or compromise may be withheld in the absolute
discretion of the Indemnitee. In any event, the Indemnitee and the
Indemnifying Party may participate, at their own expense, in the
defense of such Asserted Liability. If the Indemnifying Party
chooses to defend any claim, the Indemnitee shall make available to
the Indemnifying Party any books, records or other documents within
its control that are necessary or appropriate for such defense.
8.3.3 DISPUTES WITH CUSTOMERS. Anything in SECTION 8.3.2
to the contrary notwithstanding, in the case of any Asserted
Liability by any customer of the Business with respect to the period
prior to the Closing in connection with which Purchaser may make a
claim against Seller for indemnification pursuant to SECTION 8.1,
Purchaser shall give a Claims Notice with respect thereto but,
unless Purchaser otherwise agrees, Purchaser shall have the
exclusive right at its option to defend, at its own expense, any
such matter (and to prosecute by way of counterclaim or third party
complaint any claim against such third party arising out of or
relating to such matters), and such matter may be reasonably
compromised or settled by Purchaser without the prior consent of the
Indemnifying Party. All amounts required to be paid in connection
with any such Asserted Liability pursuant to the determination of
any court, governmental or regulatory body or arbitrator, and all
reasonable amounts (reasonability shall be determined with
consideration to Dyno's interests and Walbro's interests, including
customer relations; a reasonable amount for Products (or parts)
provided to customers in connection with any Asserted Liability,
shall be Purchaser's cost plus 5%), required to be paid in
connection with any such compromise or settlement, shall be borne
and paid by the Indemnifying Party (the parties agree that any
amount paid or payable in respect of any such compromise or
settlement in excess of a reasonable amount shall not be deemed a
35
<PAGE> 46
Retained Liability and shall be for the account of Purchaser). The
parties agree to cooperate fully and consult with one another in the
defense, compromise or settlement of any such Asserted Liability.
8.3.4 LIMITATIONS ON INDEMNIFICATION. The indemnification
provided for in SECTION 8.1 shall be subject to the following limitations:
(1) Seller shall not be obligated to pay any amounts for
indemnification of General Claims under this ARTICLE VIII until
Purchaser has incurred Losses on account of General Claims of
an amount equal to 1% of the Purchase Price (the "Basket
Amount"), whereupon Seller shall be obligated to pay all
amounts for indemnification of General Claims in excess of the
Basket Amount, except as limited by SECTION 8.4(2);
(2) Seller shall not be obligated to pay any amounts for
indemnification of General Claims under this ARTICLE VIII in
excess of aggregate indemnification payments of an amount equal
to USD 20,000,000 (the "Cap Amount");
(3) Seller shall be obligated to pay Special Claims without regard
to whether the aggregate of all other indemnification payments
shall have exceeded, in the aggregate, the Basket Amount or the
Cap Amount;
(4) payments on account of Special Claims are not to be counted
toward the Cap Amount; and
(5) Seller shall not be obligated to pay any amounts for
indemnification of Special Claims for breach of the
representations and warranties under SECTIONS 3.1.6, 3.1.8 and
3.1.10 in excess of aggregate indemnification payments of an
amount equal to USD 65,000,000.
ARTICLE IX.
ARBITRATION
Any dispute, controversy or claim arising out of, in connection with
or relating to this Agreement (including any document, certificate,
instrument or agreement executed and delivered pursuant hereto) or the
breach, termination or invalidity thereof, shall, where possible, be
settled amicably by good faith negotiations between Purchaser and Seller.
If Purchaser and Seller fail to amicably resolve the dispute, controversy
or claim within thirty (30) days from the day either of the Parties has
requested such negotiations, then either Party may submit the dispute,
controversy or claim to arbitration in Stockholm under the UNCITRAL
Arbitration Rules, then in force.
(1) The Appointing Authority shall be the President of the Swedish
Bar Association.
36
<PAGE> 47
(2) The number of arbitrators shall be three (3). The time periods
referred to in Article 7 of the UNCITRAL Arbitration Rules
shall be twenty (20) days rather than thirty (30) days.
(3) The place of arbitration shall be Stockholm, Sweden.
(4) The language to be used in all arbitration proceedings, and all
related documents, shall be English.
(5) The parties agree that they will make their best endeavors to
provide for prompt, economic and fair resolution of any dispute
submitted to arbitration.
(6) The arbitrators shall make their award as promptly as
practicable after conclusion of the hearing.
(7) The arbitration agreement set forth herein shall not limit a
court from granting a temporary restraining order or
preliminary injunction in order to preserve the status quo of
the parties' pending arbitration.
The award rendered by the arbitrators shall be final and binding on the
parties, and judgement upon it may be entered in any court having
jurisdiction.
ARTICLE X.
TERMINATION
10.1 TERMINATION. This Agreement may be terminated prior to the
Closing as follows:
(1) at the election of Seller, if any one or more of the
conditions to its obligations to close has not been
fulfilled as of the Drop Dead Date;
(2) at the election of Purchaser, if any one or more of the
conditions to its obligation to close has not been
fulfilled as of the Drop Dead Date; or
(3) at any time on or prior to the Drop Dead Date, by mutual
written consent of Seller and Purchaser.
10.2 EFFECT OF TERMINATION. Each party's right of termination under
SECTION 10.1 is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination will
not be an election of remedies. If this Agreement is terminated pursuant
to SECTION 10.1, all further obligations of the parties under this
Agreement will terminate, except that if this Agreement is terminated by a
party because of a breach of the Agreement by the other party or because
one or more of the conditions to the terminating party's obligations under
this Agreement is not satisfied as a result of the other party's failure
to comply with its obligations under this Agreement, the parties'
obligations under SECTIONS 2.4 and 4.12.2.2 and the terminating party's
right to pursue all legal remedies will survive such
37
<PAGE> 48
termination unimpaired. In the event this Agreement is terminated, all
documentation and all copies thereof related to the Business and the
transactions contemplated hereby received by Purchaser or its agents or
advisors from the Seller, Subsidiaries or its agents or advisors shall be
promptly returned to the Seller.
10.3 NO RESCISSION. This Agreement may not be terminated
(rescinded) by either party after Closing, except by reason of
fraud.
ARTICLE XI.
MISCELLANEOUS
11.1 NOTICES, CONSENTS, ETC. Any notices, consents or other
communication required to be sent or given hereunder by any of the parties
shall in every case be in writing and shall be deemed properly served if
(1) delivered personally, or (2) delivered by a recognized overnight
courier service, to the parties at the addresses as set forth below or at
such other addresses as may be furnished in writing.
11.1.1 IF TO SELLER:
Dyno Industrier AS
Tollbugaten 22
P.O. Box 779 Sentrum
N-0106 Oslo 1, NORWAY
Attention: Mr. Dag Mejdell
WITH A COPY TO:
Thommessen Krefting Greve Lund
Tollbodgaten 27
Postboks 413 Sentrum
0103 Oslo, NORWAY
Attention: Terrance W. Conley, Esq.
Hans Cappelen Arnesen, Esq.
11.1.2 IF TO PURCHASER:
c/o Walbro Automotive Corporation
1127 Centre Road
P.O. Box 215257
Auburn Hills, Michigan, USA 48326
Attention: Mr. Gary L. Vollmar
38
<PAGE> 49
WITH A COPY TO:
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois, USA 60661-3693
Attention: Arnold S. Harrison, Esq.
Stephen M. Neumer, Esq.
Wikborg, Rein & Co.
Advokatfirma M.N.A.
Kronprinsesse Marthas Plass 1
Postboks 1513 Vika
N-0117 Oslo
NORWAY
Attention: Thomas G. Michelet, Esq.
Arne Didrik Kjornaes, Esq.
Date of service and receipt of such notice shall be the date such
notice is personally delivered, or three business days after date of delivery
to the overnight courier if sent by overnight courier.
11.2 SEVERABILITY. The unenforceability or invalidity of any provision
of this Agreement shall not affect the enforceability or validity of any other
provision.
11.3 DOCUMENTS. Each party will execute all documents and take such
other actions as the other party may reasonably request in order to consummate
the transactions provided for herein and to accomplish the purposes of this
Agreement.
11.4 COUNTERPARTS. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
11.5 EXPENSES. Except as otherwise specifically provided herein, each
of the parties shall pay all costs and expenses incurred or to be incurred by
it in negotiating and preparing this Agreement and in Closing and carrying out
the transactions contemplated by this Agreement. Seller shall not pay, or
obligate Purchaser to pay, any of such costs and expenses from the Assets or
the Business, other than salaries and travel expenses for employees of the
Business.
11.6 GOVERNING LAW. This Agreement shall be construed and governed in
accordance with the substantive laws of Norway.
11.7 HEADINGS. The subject headings of Articles and Sections of this
Agreement are included for purposes of convenience only and shall not affect
the construction or interpretation of any of its provisions.
39
<PAGE> 50
11.8 ASSIGNMENT. This Agreement will be binding upon and inure to
the benefit of the parties hereto and their respective successors and
permitted assigns, but will not be assignable or delegable by any party
without the prior written consent of the other party except for
Purchaser's assignment to one or more of Purchaser's Affiliates, provided,
however, that Walbro shall remain primarily liable under this Agreement.
11.9 DEFINITIONS. As used in this Agreement, (a) the term "person"
means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated association, corporation, entity or government
including, without limitation, any instrumentality, division, agency or
department thereof), (b) the term "Affiliate" means all persons, directly
or indirectly, controlled by, or controlling, another person, where
control is the ability to influence the actions or omissions of a person,
(c) the term "to Seller's knowledge" means the actual knowledge of any of
the management or directors of Seller or any Subsidiary or knowledge which
would have been acquired by any of said persons given reasonable inquiry,
and (d) the terms "lien, claim, charge, encumbrance or other restriction"
mean any lien, pledge, mortgage, security interest, claim, lease, charge,
option, right of first refusal, easement, servitude, transfer restriction
under any shareholder or similar agreement, encumbrance or any other
restriction whatsoever.
11.10 ENTIRE AGREEMENT. This Agreement, the Other Seller
Agreements, the Other Purchaser Agreements and all the Schedules and
Exhibits attached to this Agreement (which shall be deemed incorporated in
the Agreement and made a part hereof) set forth the entire understanding
of the parties and supersedes all prior agreements, written or oral, with
respect thereto, except that the confidentiality provision of the letter
of intent between the parties hereto, dated January 5, 1995, shall
continue to the Closing.
11.11 THIRD PARTIES. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person or
entity, other than the parties to this Agreement, any rights or remedies
under or by reason of this Agreement.
11.12 INTERPRETATIVE MATTERS. Unless the context otherwise
requires, (1) all references to Articles, Sections, Schedules or Exhibits
are to Articles, Sections, Schedules or Exhibits in this Agreement, (2)
each accounting term not otherwise defined in this Agreement has the
meaning assigned to it in accordance with GAAP as applied in Norway, and
(3) words in the singular or plural include the singular and plural and
pronouns stated in either the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter.
11.13 INTENTIONALLY OMITTED.
11.14 TRANSLATION. This Agreement may be translated. However,
the English version shall be the controlling version for all purposes.
11.15 WAIVERS AND AMENDMENTS; NON-CONTRACTUAL REMEDIES;
PRESERVATION OF REMEDIES. This Agreement may be amended, superseded,
cancelled, renewed or extended, and the terms hereof may be waived, only
by a written instrument signed by Purchaser and Seller or, in the case of
a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof. Nor shall any waiver on the part of any party of any
such right, power or privilege, nor any single
40
<PAGE> 51
or partial exercise of any such right, power or privilege, preclude any
further exercise thereof or the exercise of any other such right, power or
privilege. The rights and remedies herein provided are cumulative and are
not exclusive of any other rights or remedies that any party may otherwise
have under law, unless otherwise specifically limited in this Agreement.
The rights and remedies of any party based upon, arising out of or
otherwise in respect of any breach of any representation, warranty,
covenant or agreement contained in this Agreement shall in no way be
limited by the fact that the act, omission, occurrence or other state of
facts upon which any claim of any such breach is based may also be the
subject matter of any other representation, warranty, covenant or
agreement contained in this Agreement (or in any other agreement between
the parties) as to which there is no breach.
11.16 NEGOTIATION ASSISTANCE. The parties acknowledge that they
have a duty to negotiate in good faith certain portions of the schedules
to EXHIBIT 4.8 and the agreements described in SECTION 4.10. The parties
agree that, if they have not reached an accord on the terms and conditions
of such agreements by June 1, 1995, they will ask the President of the
Swedish Bar Association to appoint a lawyer to assist the parties in such
negotiation.
41
<PAGE> 52
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SELLER:
DYNO INDUSTRIER AS
By: Dag Mejdell
---------------------------------
a duly authorized signatory
DAG MEJDELL
Executive VP & CFO
PURCHASER:
WALBRO CORPORATION
By: Michael A. Shope
---------------------------------
a duly authorized signatory
MICHAEL A. SHOPE
Treasurer & CFO
42
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<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 3,188
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<RECEIVABLES> 71,591
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<DEPRECIATION> 54,197
<TOTAL-ASSETS> 281,180
<CURRENT-LIABILITIES> 60,451
<BONDS> 74,352
<COMMON> 4,282
0
0
<OTHER-SE> 129,163
<TOTAL-LIABILITY-AND-EQUITY> 281,180
<SALES> 98,257
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<INTEREST-EXPENSE> 1,089
<INCOME-PRETAX> 6,636
<INCOME-TAX> 2,554
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