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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): March 28, 1997
HUNT MANUFACTURING CO.
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(Exact name of registrant as specified in its charter)
Pennsylvania 1-8044 21-0481254
- ---------------------------- ----------- -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One Commerce Square
2005 Market Street
Philadelphia, Pennsylvania 19103-7085
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(Address of principal executive offices) (Zip Code)
(215) 656-0300
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(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets
On March 28, 1997, Hunt Manufacturing Co. (the "Company") acquired, through its
wholly-owned subsidiary, Seal Products Subsidiary, Inc., all of the outstanding
stock of Sallmetall B. V. ("Sallmetall"), a Dutch company, for approximately $14
million and the assumption of debt of approximately $7 million. The
consideration for the acquisition was determined in arms-length negotiations
between the parties based upon the Company's evaluation of the assets, business
and prospects of Sallmetall. The Company utilized available cash resources to
fund the transaction. Prior to the transaction, Sallmetall was owned by several
investor groups and certain members of Sallmetall management. To the best
knowledge of the Company, neither the Company, nor any of its affiliates, its
directors and officers, or any associate of any such director or officer, had
any material relationship with Sallmetall or its investors, officers or
directors.
Sallmetall's business, with headquarters in Raalte, Holland, essentially
includes operations involved in the design and assembly of laminating equipment
and related adhesive film coating manufacturing. The Company presently intends
to utilize the assets of Sallmetall in a consistent fashion. Sallmetall had
consolidated revenues of approximately $21 million for the year ended December
31, 1996.
The Company's press release issued April 1, 1997 is hereby incorporated by
reference and included as Exhibit 99 of this report on Form 8-K.
Item 7. Financial Statements and Exhibits
(a) Financial Statements. In reliance upon SEC Release Nos.
33-7355; 34-37802, the Company will not file any financial
statements of the business acquired or any pro forma financial
information relating thereto.
(b) Exhibits.
(2) Share Purchase Agreement dated as of March 28, 1997
by and among Seal Products Subsidiary, Inc. and the
various shareholders of Sallmetall B.V.
(99) Press Release, dated April 1, 1997, issued by Hunt
Manufacturing Co.
2
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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 of the
undersigned thereunto duly authorized.
Date: April 4, 1997
HUNT MANUFACTURING CO.
By: /s/ William E. Chandler
--------------------------------
William E. Chandler
Senior Vice President, Finance
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EXHIBIT INDEX
Exhibit No. Title
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(2) Share Purchase Agreement dated as of March 28, 1997 by and
among Seal Products Subsidiary, Inc. and the various
shareholders of Sallmetall B.V.
(99) Press Release, dated April 1, 1997, issued by Hunt
Manufacturing Co.
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EXHIBIT (2)
SHARE PURCHASE AGREEMENT
The undersigned:
1. the corporation Seal Products Subsidiary, Inc., established under the
laws of the State of Delaware, with its statutory seat at 103 Springer
Building, 3411 Silverside Road, Wilmington, County of New Castle,
Delaware 19810, and having its business address at One Commerce Square,
2005 Market Street, Philadelphia PA, duly represented by David A.
Weatherly (hereinafter: "Hunt");
2. Mr. J.A.M. Reinders, residing at Warnsveld, Oude Warkenseweg 1
(hereinafter: "Reinders");
3. the limited liability company Sallcoll B.V., with its statutory seat at
Raalte, duly represented by Mr. J.A.M. Reinders (hereinafter:
"Sallcoll");
4. the limited liability company MGS Beleggingen B.V., with its statutory
seat at Lernmer, duly represented by Mr. J. de Boer and Mr. G.A. Pol
jointly (hereinafter: "MGS");
5. the partnership Residentie Participaties III C.V., with its statutory
seat at Apeldoorn, duly represented by Mr. J.T. Ruinemans
(hereinafter: "Residentie");
and
6. the limited liability company Pevaal B.V., with its statutory seat at
Veenendaal, duly represented by Mr J. de Boer (hereinafter: "Pevaal").
Reinders, Sallcoll, MGS, Residentie and Pevaal hereinafter together to be
referred to as: the "Sellers".
Whereas:
d that the Sellers own all the issued and outstanding shares in the
capital of Sallmetall B.V., a limited liability company established at
Kanaaldijk O.Z. 3, Raalte (hereinafter: "Sallmetall");
b that Sallmetall in its turn is 100% shareholder of Sallmetall Inc., a
company incorporated under the laws of the State of Michigan
(hereinafter: "Sallmetall
March 28, 1997
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Inc."), pursuant to the acquisition by Sallmetall of the remaining 50%
of the shares in the capital of Sallmetall Inc. from Messrs. Sawtelle
and McCord in accordance with a settlement agreement and mutual
general release, dated February 11, 1997, a copy of which is attached
hereto as Exhibit B;
c that Sallmetall in addition to its subsidiary Sallmetall Inc. also owns
100% of the shares in the capital of Peak B.V., Sallmetall Coating
B.V. and Sherpa B.V. (hereinafter together: the "Subsidiaries") as well
as 99.6% of the shares in the capital of Sallmetall France S.A.,
whereas the remaining 0.4% is owned by Mr. Van der Kroft, residing at
The Hague;
d that on the date hereof immediately prior to the signing and execution
of this agreement, the partnership Crest Engineering among Sherpa B.V.,
WDKA Beheer B.V. and B. Smid Management B.V. (hereinafter: "Crest
Engineering"), has been dissolved and divided pursuant to an agreement
dated March 28, 1997 (hereinafter: the "Crest Agreement") between these
partners and Hunt Manufacturing Co., a copy of which will be attached
hereto as Exhibit C;
e that pursuant to the Crest Agreement the business of Crest Engineering
has been split up, whereby the current OEM business (as defined in the
Crest Agreement) has been transferred to and will be continued by WDKA
Beheer B.V. and B. Smid Management B.V., whilst all other business has
been transferred to and will be continued by Peak B.V., a subsidiary of
Sallmetall;
f that the Sellers desire to sell to Hunt and Hunt desires to purchase
from the Sellers all issued and outstanding shares in the capital of
Sallmetall, upon the terms and subject to the conditions hereinafter
set forth;
g that Sallmetall and Crest have, to the extent necessary, complied with
the Resolution of the Social and Economic Council on Rules relating to
Mergers 1975 ("SER Fusiegedragsregels 1975") and with the requirements
of the Dutch Works Council Act, and have informed the representative
advisory body (Sallmetall) and Works Council (Crest) concerning the
intended decision to enter into the sale referred to above.
March 28, 1997 2
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Have agreed as follows:
Article I - Definitions
Unless explicitly stated otherwise, the following terms shall have the
following meaning:
a Annual Accounts:
the annual accounts of Sallmetall and its Subsidiaries, consisting of a
balance sheet as per December 31, 1996 and a profit and loss account
with explanatory notes, and supplemented by a registered accountant's
unqualified opinion, provided however that the annual accounts of
Sallmetall Inc. are accompanied by an accountant's compilation
statement but not audited prior to Closing;
b Closing Date:
the date of transfer of Shares being March 28, 1997 or such other later
date as the parties may agree upon;
c Crest:
the partnership among B. Smid Management B.V., WDKA Beheer B.V. and
Sherpa B.V., dissolved and divided in accordance with the Crest
Agreement;
d Crest Agreement:
the agreement between Hunt Manufacturing Co., Sherpa B.V., Peak B.V.,
Sallmetall B.V., B. Smid Management B.V. and WDKA Beheer B.V., pursuant
whereto the partnership Crest Engineering is dissolved and the business
of Crest Engineering is split up and transferred to the various
parties, as further specified therein and a copy of which will be
attached hereto as Appendix C;
e Completion Accounts:
the accounts of Sallmetall and Subsidiaries over the period since
January 1, 1997 until March 28, 1997 or such other later date (Closing
date or close thereto) as the parties may agree upon, with explanatory
notes, supplemented by a registered accountant's unqualified opinion;
f Completion Accounts Escrow amount: an amount of USD 150,000 to be kept
in accordance with Article 3.2 (ii) and 4 hereof,
g Execution Date:
the date of signing of this agreement, being March 28, 1997 or such
other later date as the parties may agree upon;
March 28, 1997 3
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h Hunt:
Seal Products Subsidiary, Inc., a company established under the laws of
Delaware with its registered office at Wilmington (DE, USA) and its
business address at Philadelphia (PA, USA), being a subsidiary of Hunt
Manufacturing, Co.;
i Investors' Loans:
the loan provided by WDKA Beheer B.V. to Crest - under the conditions
as further described in the loan agreements dated August 18, 1995 and
November, 1995 - of which loans the amount outstanding as per the
Closing Date is NLG 890,000;
j Letter of Intent:
the Letter of Intent executed between Hunt Manufacturing Co.,
Sallmetall, Reinders, MGS, Reinders Holding, Sallcoll and Residentie
on February 10/11,1997;
k Purchase Price:
the consideration to be paid for the Shares, as further specified in
Article 3. hereof;
l Representation and Warranty Escrow Amount:
an amount of USD 1,500,000 to be kept in escrow in accordance with
Article 3.2 (iii) hereof;
m Sallmetall:
Sallmetall B.V., a Dutch limited liability company with its registered
office at Raalte;
n Sellers:
Reinders, Sallcoll, MGS, Residentie and Pevaal;
o Shares:
all of the issued and outstanding shares with a nominal value of NLG
500 each in the capital of Sallmetall, which pursuant to Article 2 of
this Agreement are sold by the Sellers to Hunt;
P Shareholders' Loans:
the loans provided by MGS and Residentie to Sallmetall -under the
conditions as further described in the loan agreement(s) dated May 29,
1990 and December 21, 1995 and attached hereto in Exhibit D (i) and
(ii) - of which loans the amounts outstanding as per the Closing Date
are NLG 804,000 to MGS and
March 28, 1997 4
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NLG 2,500,000 to Residentle;
q Subsidiaries:
Sallmetall Coating B.V., Sallmetall Inc., Peak B.V. and Sherpa B.V.
March 28, 1997 5
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Article 2 - Sale, transfer and payment of Shares
2.1 The Sellers hereby sell to Hunt and Hunt hereby purchases from the
Sellers, the Shares, as further described hereunder:
Reinders:
18 Shares, numbers 9 up to and including 22 and 94 up to and including
97;
Sallcoll:
49 Shares, numbers 45 up to and including 93;
MGS:
53 Shares, numbers 1 up to and including 8, 23 up to and including 44
and 98 up to and including 120;
Residentie:
26 Shares, numbers 121 up to and including 146;
Pevaal:
13 Shares, numbers 147 up to and including 159;
2.2 On Closing Date, the Sellers will transfer the Shares to Hunt or to one
or more persons or legal entities designated by Hunt by means of one or
more notarial deeds of transfer the fonn of which has been attached to
this Agreement as Exhibit E, which will be passed before the civil law
notary Mr A.J.M. Terhorst at Raalte.
2.3 On Closing Date, Hunt pays to the Sellers the Purchase Price as defined
hereinafter, by depositing such Purchase Price under notary Terhorst
and only to be released after certain conditions have been met.
2.4 On the date hereof, the Sellers will cause Sallmetall to acknowledge
the transfer of the Shares.
March 28, 1997 6
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Article 3 - Purchase Price; repayment of loans; assumption of bank account
obligation
3.1 The purchase price for the Shares is US Dollar 10,400,000 (in words:
ten million four hundred thousand United States Dollars) plus NLG
1,000,000 minus NLG 3,000,000 (hereinafter: the "Purchase Price").
The Purchase Price (thus defined) does not include the amount of USD
900,000 as referred to in article 1 of the Letter of Intent lent to and
used by Sallmetall for purpose ot acquiring the outstanding 50% of the
shares of Sallmetall, Inc. and repayment of loans. It is understood
that this loan will not be taken into account when calculating the net
equity value in accordance with Article 4, shall not be included in
the loan amount referred to in Article 3.5 and that the Sellers cannot
he held liable for the repayment of such loan.
3.2 On the Closing Date, Hunt shall make the following payments:
i) The Purchase Price minus the Completion Accounts Escrow
Amount and minus the Representation and Warranty Escrow Amount plus
the Shareholders' Loans, in total resulting in USD 8,750,000 and NLG
1,304,000;
ii) USD 150,000 (in words: one hundred fifty thousand
US Dollars) (hereinafter: the "Completion Accounts Escrow Amount")
after net worth guarantee on the basis of the Completion Accounts,
has been verified and agreed as set out further in Article 4 hereof
in accordance with the provisions of the Escrow Agreement, a copy
of which is attached as Exhibit F;
iii) An amount of USD 1,500,000 (in words: one million
five hundred thousand US Dollars) (hereinafter: the "Representation
and Warranty Escrow Amount") shall be paid on a third party interest
earning escrow account of the civil law notary Mr A.J.M. Terhorst at
Raalte with clear instructions to pay this amount to the Seller
on a date twelve (12) months after the Closing Date, provided however
that Hunt asserts no claim under the representations and warranties,
in accordance with the provisions of the Escrow Agreement, a copy
of which is attached as Exhibit F;
iv) The Shareholders' Loans amount to the maximum of NLG 3.304
million:
(i) to MGS : NLG 804,000
(ii) to Residentie : NLG 2,500,000
March 28, 1997 7
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Any outstanding amount in excess of the agreed maximum of NLG 3.304
million is herewith explicitly discharged and Sallmetall is insofar
explicitly relieved from any obligation in this respect;
v) if Hunt asserts (a) claim(s) under the representations and
warranties, the arnount(s) involved will primarily and without
prejudice to any other or larger claimright be subtracted from the
Representation and Warranty Escrow Amount and be kept in escrow until
it has been established by virtue of a judgement that is not longer
subject to appeal rendered against the Seller, or any of them, by a
competent court of law or by virtue of a valid arbitration award or an
amicable settlement between the parties, in accordance with the Escrow
Agreement attached hereto in Exhibit F.
3.3 On the Closing Date, Hunt will lend to Sallmetall an amount of NLG
3,000,000 for the purpose of enabling Sallmetall and/or its
Subsidiaries to execute its obligations under the Crest Agreement. This
loan amount will not be taken into account in the calculation of the
net worth as referred to in Article 4.1, nor will it be taken into
account in the calculation of the NLG 11.2 million as referred to in
Article 3.5
3.4 The Investors' Loan has been repaid pursuant to the Crest Agreement
subject to the maximum amount payable of NLG 0.89 million. The second
sentence of Article 3.3 is also applicable.
3.5 The aggregate liability of Sallmetall and its Subsidiaries as per
Closing Date vis-a-vis the ING Bank and its related companies (the
"Bank") by virtue of all short, medium and long-term loans, overdraft
facilities (credit facility in current account), leases, factoring
arrangements (NMB-Heller) and other is specified in Exhibit G hereto
and is subject to the agreed maximum of NLG 11.2 million inclusive of
shareholders' guarantees as set out in article 1 of the Letter of
Intent. Any outstanding amount in excess of the maximum of NLG 11.2
million will be deducted from the amount payable on Closing Date as
referred to in Article 3.2 (i) hereof. The banks shall give up and
release any security on any of Sallmetall's, its subsidiaries' and/or
Crest's assets, granted for this credit facility (including but not
limited to, any pledge of shares), and shall release Reinders and MGS
and Residentie from their respective obligations. Exhibit H hereto
evidences the confirmation of the ING Bank in respect of the foregoing.
March 28, 1997 8
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Article 4 - Adjustment of the purchase price - net worth value - Completion
Accounts
4.1 The Purchase Price is based on an aggregate minimum net shareholders
equity requirement as per Closing Date of Sallmetall and its
Subsidiaries according to their accounts as well as an assumed 100%
interest in Crest, of NLG 7,8 million (say: seven million and eight
hundred thousand Dutch guilders) as specified in Appendix I.
4.2 To determine whether this requirement shall be met, the audited
Completion Accounts (as defined in article 1 under e) as well as
(similar) audited Completion Accounts (as defined in the Crest
Agreement) of Crest and the compiled Completion Accounts of Sallmetall,
Inc., shall be issued and submitted to Hunt no later than 45 calendar
days after Closing Date by Sallmetall. Hunt and its own auditors of
Coopers & Lybrand N.V. shall examine such Completion Accounts and
inform Sellers no later than 30 calendar days after submission to Hunt
whether they agree with the contents thereof If not, the involved
accountants of Price Watcrhouse on Sellers'side and of Coopers &
Lybrand N.V. on Hunt's side, shall do their utmost to reach agreement
hereon no later than July 31, 1997 and the parties hereto accept such
agreement as binding to them. If the accountants cannot reach
agreement, the parties shall try to reach a settlement within 10
working days by way of discussions to take place between an authorised
representative of Hunt and an authorised representative of the Sellers.
If such settlement cannot be reached, the Completion Accounts shall be
established by means of a binding advice by a third, independent
first-class accountancy firm, on terms and conditions to be further
agreed upon.
4.3 The parties hereto reached agreement on how the following subjects
shall be incorporated in the Completion Accounts:
(i) all costs and expenses on the Sellers' side in relation with
the transactions contemplated herein (including, but not limited to the
costs and fees (to be) charged by Price Waterhouse for preparing and
auditing the Completion Accounts md legal fees and costs) will be borne
by the Sellers solely and not paid by nor booked in the accounts and
records of Sallmetall and its Subsidiaries;
ii) as regards the valuation of the real estate, a revaluation
upwards shall take place in the amount of NLG 350,000;
iii) the Completion Accounts will be prepared in accordance with
Dutch generally accepted accounting principles and Sallmetall's and
Subsidiaries'
March 28, 1997 9
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accounting policies, as consistently applied in the Annual Accounts
1996 on a "going concern" basis;
iv) The exchange rate to be applied for the valuation of
Sallmetall Inc. shall be 1.83 Dutch guilders for each US Dollar.
4.4 In the event that the aggregate net shareholders' equity as referred to
in Article 4 has been established to be less than NLG 7,800,000, the
following arrangement applies:
a the first NLG 900,000 deficiency (thus the net shareholders' equity
being lower than NLG 7,800,000 but no less than NLG 6,900,000) will
lead to a reduction of the Purchase Price on the basis of 1 guilder
shortfall will lead to 25 Dutch cents reduction;
b any further deficiency beyond NLG 900,000 (thus the net shareholders
equity being lower than NLG 6,900,000) will lead to a decrease of the
Purchase Price of 1 guilder for each guilder that the net shareholders
equity is less than NLG 6,900,000.
4.5 The principal amount of the adjustment as a result of the preceding
paragraphs will be interest-bearing up to an amount of NLG 274,500 (USD
150,000 against an exchange rate of 1.83) at the same rate as the
accrued interest on the Completion Account Escrow Amount and set off
against the Completion Account Escrow Amount as referred to in
Article 3.2. (ii) and the accrued interest thereon, in accordance with
the provisions of the Escrow Agreement, a copy of which is attached as
Exhibit F. Any adjustment in excess of NLG 274,500 will not be
interest-bearing. Any adjustment in excess of Completion Account Escrow
Amount shall be paid by the Sellers to Hunt within 10 days upon Hunt's
first request thereto. Any remaining amount of the Completion Account
Escrow Amount shall be released to the Sellers in accordance with the
Completion Account Escrow Amount Agreement. For the purpose of this
Article 4.4, a fixed exchange rate of 1.83 Dutch guilders for each US
Dollar will apply.
March 28, 1997 10
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Article 5 - Due diligence by Hunt; liability
Hunt hereby confirms that it has been allowed access by Sallmetall to its
premises and to such information and documents relating to Sallmetall which Hunt
deemed relevant to review and determine the contemplated acquisition of
Sallmetall in so far as this information and documents have been made available
to Hunt upon its request thereto. The Sellers have drawn up a listing of the
documents provided to Hunt during this period (the "Disclosure Listing"). This
Disclosure Listing has been attached to this agreement as Appendix 1. The
parties refer in this respect explicitly to the representation given by the
Sellers in Article 6.1.1.a and the provision of Article 6.3 of this Agreement.
The Sellers cannot be held liable, in respect of any claim under the
representations and warranties to the extent that:
i) such breach has been stated to be disclosed or excepted in the
representations and warranties themselves and the appendices thereto; and/or
ii) Hunt was aware or should have been aware of such breach upon the face
of the documents provided according to the Disclosure listing.
March 28, 1997 11
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Article 6 - Representations and Warranties of the Sellers
6.1 The Sellers guarantee to Hunt that the representations and warranties
referred to herein below are true, complete and correct at the Closing
Date.
General
6.1.0 Wherever in these representations is referred to the best of Seller's
knowledge, this includes the management's knowledge up to Closing Date, being
the knowledge of Messrs Ten Have, Reinders, Kiffen;
Full disclosure
6.1.1.a To the best of Seller's knowledge, all information related to the
condition (whether financial, legal or otherwise), business and affairs of
Sallmetall and its subsidiaries material for disclosure to an intending
purchaser have been disclosed to Hunt;
Regarding Sallmetall and the Subsidiaries:
6.1.1.b Sallmetall and the Subsidiaries (except Sallmetall, Inc.) are duly
incorporated by the notarial deeds attached hereto as Appendices 2 (i), (ii),
(iii), (iv) and (v) and are validly existing limited liability companies
("besloten vennootschappen met beperkte aansprakelijkheid") under the laws of
the Netherlands with all requisite power to carry on their businesses as
presently conducted;
6.1.1.c Sallmetall, Inc. is a duly incorporated and validly existing company
under the laws of the state of Michigan (USA) with all requisite power to carry
on its business as presently conducted;
6.1.1.d The present Supervisory Board of Sallmetall consists of Messrs F.C.
deLeeuw (as chairman) and J.H.P.L. van der Sanden solely, who will resign in
accordance with Article 7 hereof. Mr J. de Boer is not, nor has he ever been, a
member of such board. The nomination of members of the Supervisory Board was not
registered with the Chamber of Commerce. Neither Sallmetall nor its
Subsidiaries will suffer any damage or other negative financial impact that
might result from the non-filing;
6.1.2.a The complete text of the articles of association and by-laws of
Sallmetall and the Subsidiaries is in conformity with Appendices 3 (i), (ii),
(iii), (iv) and (v). attached hereto;
March 28, 1997 12
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6.1.2.b No ultra vires action whatsoever has been or will be taken or filed or
announced or is threatening, either by Sallmetall itself or a Subsidiary, based
on facts, occurrences and legal acts prior to Closing Date;
6.1.3 Sallmetall and its Subsidiaries (with the exception of Sallmetall,
Inc.) are registered With the Trade Register held by the Chamber of Commerce
of Twente and Salland and the registrations which appears from Appendices 4 (i),
(ii), (iii), (iv) and (v), attached hereto are correct and complete. All
documents required to be filed with the Commercial Registry with respect to
Sallmetall and the Subsidiaries (including, but not limited to, annual
accounts) have been properly and timely filed in accordance with all legal
requirements without prejudice to Article 6.1.1.d. However, it is noted that
the 1995 Annual Accounts of Sherpa have not been filed timely. This has,
however, been done prior to Closing and the Sellers will indemnify and hold Hunt
and Sallmetall and its Subsidiaries harmless for any negative financial
consequence thereof;
6.1.4. Sallmetall and/or the Subsidiaries have not been dissolved, no
resolution to dissolve Sallmetall and/or the Subsidiaries has been adopted and
there is no action or request pending to accomplish such a dissolution;
6.1.5.a Sallmetall and the Subsidiaries have not been declared bankrupt, no
action or request is pending to declare Sallmetall or the Subsidiaries bankrupt
and Sallmetall or the Subsidiaries have neither filed nor been granted an
official moratorium of payment;
6.1.5.b Since January 1, 1997 there have been no transactions between Sellers
or their affiliates, Sallmetall and its Subsidiaries and the Management except
those as listed in Appendix 5 hereto and except those in the normal course of
the business;
6.1.5.c The winding-up and/or sale of Sallmetall France will have no negative
financial or other impact on Sallmetall or its Subsidiaries;
Regarding the Shares:
6.1.6. The Shares have been validly issued and placed, the Sellers have and
will transfer and assign to Hunt full and unencumbered legal and beneficial
title to the Shares, and in particular the Shares are free and clear of
usufructs or pledges or any other encumbrance end no share certificates of
the Shares are in existence;
6.1.7.a Sallmetall has full legal and beneficial title to all of the shares in
the capital of its Subsidiaries and in particular these shares are free and
clear of usufructs or pledges or any other encumbrance and no share
certificates of these shares are in existence;
March 28, 19917 13
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6.1.7.b All of the issued shares of Sallmetall and each of the Subsidiaries
have been issued and fully paid-up in accordance with all requirements of law
and by-laws;
6.1.7.c Any purchase of own shares by Sallmetall or its Subsidiaries has been
effected in accordance with all legal provisions relating thereto in all respect
and any treasury stock is held legally validly and will not give rise to any
action whatsoever;
6.1.8. There are no outstanding options or conversion or other rights under
which the Sellers or any other party (including any grant or of loans) could
demand sale, transfer, issuance, pledge or other encumbrance of any shares of
Sallmetall or its Subsidiaries. Neither Sallmetall nor any Subsidiary is under
the obligation, whether conditional or other, to issue additional shares and
no decisions to that effect have been made;
6.1.9. A copy of the shareholders registers of Sallmetall and its Subsidiaries
has been attached hereto as Appendices 6 (i), (ii), (iii), (w) and (v), and the
shareholders registers are correct and up-to-date;
6.1.10. The Sellers have acquired title to the Shares either by deeds of
issuance or by deeds of transfer, in which it is stated that the purchase price
has been paid, validly signed by the parties and recognised by Sallmetall, and
neither the transfer nor the title underlying the transfer can be dissolved,
annulled or declared null and void;
6.1.11. No dividends or other distributions in respect of the Shares have been
declared or made;
6.1.12. Sellers have no obligation to transfer the Shares to a third party
(with the exception of the obligations of the Sellers to Hunt arising out of
this agreement), or to create any mortgage, pledge, lien, claim, charge or
encumbrances in respect of the Shares;
6.1.13. The Shares have not been seized or attached;
6.1.14. The Sellers have full right, power and authority to sell, transfer and
deliver the Shares without the co-operation, approval or authorisation of
others including any judicial authority;
Regarding the financial position, assets and liabilities, conduct of business of
Sallmetall and its Subsidiaries:
6.1.15. The Annual Accounts are attached hereto as Appendix 7 and the Annual
Accounts give a correct, complete and accurate statement of the magnitude and
March 28, 1997 14
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the composition of the assets and liabilities of Sallmetall at the end of the
year 1996 and of the results of such year;
6.1.16. The Annual Accounts have been prepared in accordance with Dutch
generally accepted accounting principles and have been drawn up in accordance
with the Annual Accounts Specimen Decree ("Besluit Modellen Jaarrekening"),
certified without qualification in the case of Sallmetall by Price Waterhouse
(Deventer);
6.1.17.a Sallmetall and its Subsidiaries own all of the properties which have
been accounted for as its assets in the Annual Accounts and the Completion
Accounts, free and clear of attachments and any charges and they are not subject
to any retention of title (other than the usual retention of ownership subject
to suppliers' standard terms and conditions) or other encumbrance except the
usual securities granted to ING Bank N.V., NMB-Heller N.V. and Westland/
Utrecht Hypotheekbank N.V. in the framework of the creditfacilities and loans as
listed in Appendix 8. The plant and equipment of Sallmetall and its Subsidiaries
are sufficient for continued conduct of the current business after Closing Date
subject to normal wear and tear;
6.1.17.b The inventories of raw material, work in progress and finished goods
(including, but not limited to, all laminating and other machines, coating film
and foil) of Sallmetall and each Subsidiary shown in the Annual and Completion
Accounts consist of items which are nor damaged and/or defective unless such
damage or defects are provided for in the Annual and Completion Accounts;
6.1.17.c Real estate/freehold, leasehold and long-lease and conditions thereof;
purchase option; maintenance;
(i) the purchase option vis-a-vis Korbeld Horeca B.V. with respect to the
premises at Kaagstraat 17-19 can be exercised for the agreed sum of NLG 1.4
million in accordance with Appendix 9a hereto;
(ii) notice of termination has been given with respect to the present
showroom facility at Kanaaldijk O.Z. 13 by letter attached hereto as Appendix
9b;
(iii) all conditions with respect to the long-lease of the land from the
municipality of Raalte have been met according to a draft letter submitted to
the municipality of Raalte on March 24, 1997 and their reply thereto that are
attached hereto as Appendix 9c;
March 28, 1997 15
<PAGE>
6.1.17.d Regarding the accounts receivable and other receivables as per Closing
Date as shown in the Completion Accounts the following applies:
6 months after agreement has been reached on the Completion Accounts as referred
to in Article 4.2 hereof (so no later than January 31, 1998) a test will be done
on all outstanding accounts receivable and other receivables as per Closing Date
that are still outstanding at that moment, whereby the following arrangement
applies:
a) with respect to each of these outstanding amounts it will be
established bindingly to the parties by an indepedent first-class accounting
firm, whether or not the fact that it is sti11 outstanding is caused by any of
the following circumstances:
- any aiction taken by Hunt and/or Sallmetall which is inconsistent
with the actions previously taken by management on behalf of Sellers
after Closing Date and/or the change of ownership of Sallmetall.
b) for each individual outstanding amount that the question under a) above
is answered positively, such amount will be fully for the account of Hunt and/or
Sallmetall, without any action towards the Sellers in this respect;
c) for each individual outstanding amount that the question under a) above
is answered negatively, such amount for the account of Sellers and they will
take over such receivable from Sallmetall against payment of the book value in
the Completion Accounts of the receivables, unless and insofar such amount is
lower than the amount that has been collected on any of the receivables up to
the provision that was made thereon in the completion accounts;
d) any outstanding amount below NLG 2,500 will not be taken into account
in the framework of the foregoing at all, whereas the aggregate amount of all
outstanding amounts exceeding this NLG 2,500 each individually with respect to
which the question under a) above is answered negatively, must exceed a
threshold of NLG 75,000 before the provision under c) will apply, but in this
case the amount of NLG 75,000 shall not be subtracted from the aggregate
amount that is, in accordance with the provision under c) for the account of the
Sellers;
e) the provision as referred to above under c) will apply if and insofar
after Closing Date a credit note has been granted on any outstanding invoices
as per Closing Date which was not provided for in the Completion Accounts.
6.1.17.e To the best of Sellers' knowledge, late/overdue payments to creditors
of Sallmetall and its Subsidiaries prior to Closing, have not jeopardised the
relationship with these parties nor have they led to price increases or other
adverse financial consequences for Sallmetall and its Subsidiaries;
6.1.17.f Neither Sallmetall nor any Subsidiary has assumed any liability for any
of the present or future debts of any person or company nor has any of them
given any guarantee or indemnification in respect of the discharge of the
liabilities or the performance of any of the obligations of any other person
or company;
March 28, 1997 16
<PAGE>
6.1.18. Sallmetall or any Subsidiary does not have any material liabilities
whether actual or contingent, conditional or unconditional, other than those
included in the Annual Accounts;
Regarding tax matters/social security charges and subsidies
6.1.19.a Sallmetall and its Subsidiaries have complied with all tax and social
security laws and regulations with respect to the filing of returns, the payment
of taxes etc. All taxes, whether direct or indirect, and all social security
charges and pension premiums, penalties and further assessments with respect
thereto for which Sallmetall or any Subsidiary has been or may be assessed,
have been withheld as legally required and either paid in full or adequate
provision therefor has been made in the Annual and Completion Accounts. Neither
Sallmetall nor any Subsidiary is or based on present legislation and events
occurred or occurring until Closing Date, will in the future be liable to repay
any investment premium or subsidies granted prior to Closing Date as a result of
the transaction contemplated in this Agreement;
6.1.19.b There are no notices of tax or social security charge deficiencies and
no litigation or dispute with the relevant authorities with respect hereto;
6.1.19.c All reports, surveys and overviews to be filed or submitted by
Sallmetall and its Subsidiaries in respect to taxes or social security charges
have been timely and properly filed and all information supplied to the relevant
authorities is correct and to the best of Sellers' knowledge complete;
6.6.19.d The execution and performance of this Agreement will not give rise to
any adverse tax or local security consequences for Sallmetall or any subsidiary
except possible negative tax effects as a result of the winding-up of Crest
pursuant to the Crest Agreement;
Labour/employment law
6.1.20. Sallmetall complies and has complied with all applicable labour laws and
regulations (including, but not limited to, the Collective Labour Agreement for
the Metal Industry (("Metaalnijverheid") that applied on Sallmetall until
1994/1995 as attached in Appendix 10), and the pension fund scheme
"Bedrijfspensioenfonds Metaalnijverheid" which Sallmetall entered into
voluntarily and a copy of which is attached as Appendix 10);
March 28, 1997 17
<PAGE>
6.1.21.a There are no employment agreements entered into by Sallmetall and
Subsidiaries with other employees than as listed in Appendix 10 hereto and the
Collective Labour Agreement for the Metal Industry ("Metaalnijverheid") is not
applicable nor is any other collective labour agreement. However, in each
individual employment agreement it is stated that the primary conditions of
employment according to the collective labour agreement apply on the individual
agreements;
6.1.21.b This Appendix 10 (i) includes all management and employees of
Sallmetall and its Subsidiaries, including non-active employees, whether or not
receiving sickness and/or disablillity benefits, along with, for each, his or
her function, date of birth, and number of years of employment with the relevant
company, salary and all other particulars of and commitments, present or future,
with respect to his or her employment or sickness or 1iability benefits;
6.1.21.c The bases of remuneration of and other terms of employment applicable
to the management and employees of Sallmetall and its Subsidiaries, are the same
as those in force on December 31, 1996, except insofar as otherwise disclosed in
Appendix 10a;
6.1.21.d No present or former manager or employee has any claim against
Sallmetall or any Subsidiary arising out of notice of termination of employment
prior to the Closing Date;
6.1.21.e Sallmetall and the Subsidiaries have at all time complied with all
material laws, regulations, agreements, collective labour agreements, orders and
awards affecting the employment of their employees and have maintained current
and adequate records regarding the employment of managers and employees. Neither
Sallmetall, nor any Subsidiary is involved in any labour dispute;
6.1.21.f Neither Sallmetall nor any Subsidiary maintains or contributes to any
employees benefit, stock option, bonus or profit sharing plan other than the
commission arrangements with sales people as listed in Appendix 11 (i) and (ii)
hereto, relating to any of its employees or managers and there are no retirement
benefits or pension arrangements (other than those with Messrs Ten Have and
Kiffen listed as Appendix 11 (iii) maintained or participated in by Sallmetall
or any Subsidiary, or in which any of them is required to participate;
6.1.21.g Licences have been obtained from the Regional Director of the Labour
Supply in respect of every employee whose employment has been terminated by
Sallmetall or any Subsidiary prior to Closing Date where such licence is
required or such
March 28, 1997 18
<PAGE>
agreement has been dissolved by the Cantonal Judge. There are no outstanding
applications before any Regional Director for the Labour Supply or Cantonal
Judge;
6.1.21.h Neither Sallmetall nor any Subsidiary has experienced any work
stoppage, strike or other material labour difficulty during the last five years;
6.1.21.i There are no consultancy or management services agreements with
Sallmetall or any Subsidiary other than the one between Sallmetall and Sallcoll
(J.A.M. Reiders) terminated in accordance with article 7 hereof;
6.1.21.j No employee has accrued any right to vacation time which has not either
been taken or fully paid-out or provided for in the Completion Accounts;
Regarding Litigation:
6.1.22. Other than as disclosed in Appendix 12 hereto, Sallmetall and its
Subsidiaries are not engaged in any civil, criminal, or administrative
litigation (including arbitration proceedings) and no facts are known which make
such litigation to be expected;
Regarding Bank accounts, Signing authority, Power of attorney
6.1.23.a Appendix 13 hereto lists all accounts with and safety deposit boxes
held by or in the name of Sallmetall or any Subsidiary in any bank or other
financial institution as well as the names of all persons who have any power,
whether individually or jointly, to sign an order on behalf of Sallmetall or any
Subsidiary to withdraw or transfer money or other property from any bank or
other account, or who are authorised to borrow money or sign notes or checks on
behalf of Sallmetall or any Subsidiary;
Regarding insurance:
6.1.23.b The insurance policies which Sallmetall and its Subsidiaries have
concluded are listed in Appendix 14 hereto;
6.1.23.c Sallmetall and its Subsidiaries have insurance for realistic values on
usual terms and conditions against fire, accident, product liability, third
party liability and all other risks normally insured against in the same or
similar type of business as carried otit by each of them and to the full extent
required by law. Neither Sallmetall nor any Subsidiary has failed to disclose
any information or suffered to be done anything which has rendered or might
render any such insurance void or voidable, non-renewable on normal terms, or
limit coverage;
March 28, 1991 19
<PAGE>
6.1.23.d There are no pending claims with the insurance companies and there are
no present circumstances giving rise to any further claim under any policy of
insurance;
6.1.23.e The continuation of insurance coverage as referred to in Article 4.8 of
the Crest agreement is correct and does not leave any gap as a result of the
winding-up of Crest and/or "claims made-system" or otherwise;
Regarding Intellectual Property Rights, Technology and Know-How
6.1.24.a Sallmetall has full and unlimited title to the patents ("octrooien"),
patent applications, trademarks and other industrial and intellectual property
rights including licences granted by Reinders or other parties ("The
Intellectual Property Rights") as disclosed in Appendix 15 hereto and to the
best of Sellers' knowledge, neither Sallmetall nor any Subsidiary is infringing
any patent nor other industrial and intellectual property rights of others in
regard thereto;
6.1.24.b The Intellectual Property Rights are registered in the name of, are
legally and beneficially vested in and are the property of Sallmetall or
Subsidiary except the Taiwanese patent number 85112393 (case 11) that will be
transferred and assigned by Reinders to Sallmetall by virtue of Article 9 of
this Agreement. Further, the Intellectual Property Rights are valid and
continuing, have been properly maintained and (where necessary) renewed, are
not being infringed and will not be altered or impaired by the consummation of
the transactions contemplated by this Agreement;
6.1.24.c All applications for Intellectual Property Rights initiated with
respect by Sallmetall or any Subsidiary have been properly pursued and all costs
and fees due so far have been paid fully;
6.1.24.d To the best of Sellers' knowledge, no tradename, trademark and/or
servicemark registered or applied for in the name of Sallmetall or any
subsidiary is being used by any person in the same or similar business as that
of Sallmetall or any Subsidiary;
6.1.24.e To the best of Sellers' knowledge, no further Intellectual Property
Right or licences are required by Sallmetall or any Subsidiary to conduct their
businesses as now conducted or as planned without conflicting with or infringing
upon the rights of others and no such conflict or infringement currently exists;
6.1.24.f No claim has been asserted and Sellers are not aware of any fact that
give rise to claim, challenging either the ownership or the use by Sallmetall or
any
March 28, 1997 20
<PAGE>
Subsidiary of any Intellectual Property Right, Technology, Know-How or Process,
or the validity of any licence therefor;
6.1.24.g In Appendix 16 hereto is listed, and thereto are attached copies of all
written agreements relating to technology know-how and processes (including, but
not limited to) any arrangement or agreement with AssiDoman and/or PWA-K and/or
Reinders. The execution and completion of the transactions contemplated in this
agreement will not have any adverse effect on any of these contracts or the
relationship agreement with the parties, thereto. Representation 6.1.24.e is
similarly applicable hereon;
6.1.25. Sallmetall has neither entered into any sort of agreement giving third
parties a right to Sallmetall's trade name(s) and trademark(s) and intellectual
and industrial property rights nor has any such information been divulged to any
third party;
Regarding Agreements:
6.1.26.a Sallmetall and its Subsidiaries are not a party to any other supply,
distribution and/or license and/or agency agreements than are disclosed in
Appendix 17. None of these agreements contains a change of control clause nor
will the execution and completion of the transactions contemplated in this
Agreement have any adverse effect on any of these contracts or the relationship
with the parties thereto;
6.1.26.b To the best of Sellers' knowledge neither Sallmetall nor any Subsidiary
is bound by any agreements other than disclosed in Appendix 18 or other than
agreements of employment, having a duration in excess of 90 days, which are
unusual or would have material adverse Financial effect, including but not
limited to:
(i) any agreement which Sallmetall or Subsidiary is incapable of
performing;
(ii) any agreement for the purchase or sale of property or the supply of
goods or services at the price different from that reasonably obtainable at an
arm's length basis. This representation excludes the deliveries by Crest to
Sallmetall;
6.1.26.c There are no agreements in force restricting the freedom of Sallmetall
or any Subsidiary to manufacture, process, purchase, supply or sell its
materials, services and products other than the Crest Agreement;
6.1.26.d To the best of Sellers' knowledge, neither Sallmetall nor any
Subsidiary is in breach of any agreement to which it is a party and as far as
Sellers are aware, neither the signing nor the performance of this Agreement
will accelerate any obligations of
March 28, 1997 21
<PAGE>
Sallmetall or any Subsidiaxy or result in such a breach or cause termination of
any such agreement;
6.1.26.e To the best of Sellers' knowledge no party to any agreement with
Sallmetall or any Subsidiary is in breach of such agreement nor does any event
or condition exist which after notice or lapse of time or both would constitute
such breach and to the best of Sellers' knowledge no approval or consent of any
person is needed to continue any agreement to which Sallmetall or any Subsidiary
is a party in full force and affect following the transactions contemplated
hereby;
Regarding environmental conditions:
6.1.27.a At Closing Date and based on the report of Heidemij, none of the soil
or groundwater underlying any of the past or present business locations of
Sallmetall and its Subsidiaries is polluted in a way that measures have to be
taken to clean up the contaminations;
6.1.27.b No Municipal, Provincial or Governmental authority has given any
directive or order to Sallmetall in connection with any (possible) pollution of
the soil (including the subsoil and groundwater) at the location Kanaaldijk O.Z.
3 and Kaagstraat 17-19, Raalte;
6.1.28. Sallmetall and its Subsidiaries do not own and/or use real estate
and/or has not owned and/or used any real estate in the past, other than as
listed in Appendix 19;
6.1.29.a Attached hereto in Appendix 20 are disclosed;
Location Sallmetall B.V., Kanaaldijk OZ 3, Raalte
(i) a letter dated 17 September 1992 of TAUW Infra Consult B.V. which
enclosed the results of the analysis of the quality of the ground and
groundwater on the location of Sallmetall B.V. (projectnr. 3240983). The
conclusion of the analysis is that ground and groundwater are slightly
contaminated (exceeding target values), but that they cannot cause increased
risks for public health and environment;
(ii) a report dated March, 20 1997 of Heidemij Advies B.V. (projectnr.
634/OA97/2311/45580) reporting about three new water samples from existing
pipes, placed by Tauw in 1992 (see i). The conclusion of the report is, inter
alia, that on the grounds of the only slightly increased concentrations
encountered in the groundwater, the site is non-suspect;
March 28, 1997 22
<PAGE>
Location Crest Engineering, Kaggstraal 17 - 19, Raalte
(iii) an environmental report ("Verkennend Bodemonderzoek") as prepared by
Tauw Milieu Consultants and dated January 1995 in which it is established -
according to the summary, conclusions and recommendations - that as regards the
soil, none of the established parameters exceed the target values. As regards
the groundwater, it is established that the concentrations of chrome and tolueen
exceed the target values. The concentrations established are so minimally
increased that no risks for the public health or environment are to be expected,
taking into account the present use and lay-out of the terrain;
(iv) a report dated March 20, 1997 of Heidemij Advies B.V. (projectnr.
643/OA97/2311/45580) reporting about the supplementary investigation of the
ground and groundwater. The conclusions of this report are, inter alia, that on
the grounds of the only slightly increased concentrations encountered in the
soil and groundwater the site is non-suspect;
(v) correspondence from the Municipality of Raalte in regard to the
amendment of the Environmental Permit of Sallmetall B.V. (inter alia)
- - dated February 13, 1997
- - dated March 6, 1997 (translation attached)
(vi) correspondence from the Municipality of Raalte in regard to the
Environmental Permit of Crest Engineering dated February 25, 1997;
Miscellaneous:
6.1.30. Sallmetall and its Subsidiaries possess all permits, permissions,
licences and similar authorisations and exemptions including, but not limited
to, any environmental permits and licences, which are all valid and in effect
and maintained and renewed whenever necessary, required to exercise their
business and they do not contravene and have not contravened the conditions of
such permits, permissions and exemptions other than the requirement to make the
floor in the Crest building liquid proof which will be undertaken by the Sellers
at their expenses within 30 days, after Closing Date to the required standard of
the applicable permits; a list of all permits required to exercise Sallmetall's
and its Subsidiaries businesses is included in Appendix 21 and Sallmetall and
its Subsidiaries applied for all other required permits, permissions and
exemptions and no facts and/or circumstances are known to exist which might
cause the competent authority not to grant, renew or extend such required
permits, permissions and exemptions, whether as a result of this Agreement or
for any other reason. Any
March 28, 1997 23
<PAGE>
applications for renewal or extension has been filed timely and pursued properly
and all costs, levies and charges due so far have been paid;
6.1.31. The Sellers have complied with the requirements of the Dutch Work's
Council Act and the Resolution of the Social and Economic Council relating to
Mergers 1975 ("SER-Fusiegedragsregels 1975") in connection with the transaction
contemplated hereby;
6.2 The Sellers shall be liable to Hunt for all costs, losses and damages
resulting from incompleteness or incorrectness of one or more of the
representations and warranties contained in Article 6.1, without
limiting or precluding any other rights or remedies that Hunt,
Sallmetall or its Subsidiaries may have with respect to breach of the
representations and warranties, the liability of each Seller to be in
proportion to its shareholding of Sallmetall as it was immediately
prior to the issuance of the 26 latest issued shares, namely: Reinders
for 18/133, Sallcoll for 49/133, MGS for 53/133 and Residentie for
13/133 (which therefore excludes Pevaal from any liability hereunder),
with the understanding that:
(i) the aggregate liability of the Sellers in respect of losses and
damages shall not exceed USD 11,3 million (in words: eleven million
three hundred thousand US Dollars;
(ii) no claims for damages shall be instituted by Hunt and/or
Sallmetall or its subsidiaries unless the aggregate of all claims
exceeds NLG 75,000, whereby, in case this threshold is exceeded, the
amount of NLG 75,000 shall not be subtracted from said claims and the
Sellers shall be liable for the entire amount;
(iii) each of the Sellers can only be held liable by Hunt for the
actual damages (including all losses, costs, expenses, claims, damages,
obligations, deficiencies on liabilities including interest, penalties,
fines and legal and other professional services costs) suffered by
Hunt, Sallmetall and/or its subsidiaries as a result of the breach of
the representations and warranties;
(iv) no liability shall attach to the Sellers to the extent that a
provision or reserve in respect of the matter giving rise to the
claim shall have been made in the Completion Accounts or to the extent
that the matter giving rise to the claim, shall have been provided for
in the Annual Accounts and/or Completion Accounts, and
(v) no liability shall attach to the Sellers to the extent that the
loss or damage giving rise to the claim is recoverable by Hunt and/or
Sallmetall under any policy of insurance (provided, however, that the
Sellers shall indemnify
March 28, 1997 24
<PAGE>
Hunt, Sallmetall or its Subsidiaries for any increase of premiums or
damages resulting from termination of any policy as a result of
claiming insurance coverence) or from a third party or would have been
so recoverable but for any change in the terms of insurance since the
date of this Agreement;
(vi) Hunt and/or Sallmetall will not (directly or through its
Subsidiaries and/or its employees and/or advisers) solicit third
parties to lodge any claim under the representations and warranties;
(vii) No liability shall attach to the Sellers to the extent the loss
or damage giving rise to the claim has already been recovered by Hunt
as a reduction of the Purchase Price in accordance with Article 4
hereof or would have been recovered but for the 25%/75% threshold
referred to in Article 4.4 (a) hereof.
6.3 The limitations of liability as set out in Article 6.2 shall not apply
in case of fraud committed knowingly and intentionally on the part of
the Sellers provided however that in such case the limitatation as set
out in Article 6.2 shall not apply on1y with regard to that fraudulent
Seller.
6.4 In assessing any liabilities, damages or other amounts recoverable by
Hunt as a result of any claim under the representations and warranties
there shall be taken into account any benefit accruing to Hunt and/or
Sallmetall including, without prejudice io the generality of the
foregoing, any amount of any relief from taxation obtained or
obtainable by Hunt and/or Sallmetall and any amount by which any
taxation for which Hunt and/or Sallmetall is or may be liable to be
assessed or accountable is reduced or extinguished, arising directly or
indirectly in consequence of the matter which gives rise to such
claim, it being understood, however, that any amount received on a
claim under the representations and warranties will be subject to
taxation.
6.5 No liability will arise and no claim may be made under any of the
representations and warranties to the extent that the matter giving
rise to such claim is remediable unless within the period of 60 days
following Hunt becoming aware of such matter Hunt shall have given
written notice thereof to the Seller and such matter shall not have
been remedied to the reasonable satisfaction of Hunt within the period
of 60 days following the date of service of such notice.
6.6 Hunt's, Sallmetall's and/or its Subsidiaries' right to claim
compensation for damages, as referred to in Article 6.2, lapses insofar
as these claims are based on tax warranties, 72 (seventy-two) months,
on environmental warranties
March 28, 1997 25
<PAGE>
42 (forty-two) months and otherwise 24 (twenty-four) months after the
Closing Date.
6.7 In the event of any claim from a third party for which Hunt, Sallmetall
or its Subsidiaries intend to take recourse on the Sellers, Hunt shall
give such details to the Sellers regarding the claim as may be
available at that time and the Sellers shall (on providing suitable
security for all costs and legal fees) be given the opportunity to
participate in the defence at Sellers' own costs against such third
party which forms the subject matter of the claim in respect of which
recourse is sought. Hunt, Sallmetall and/or its Subsidiaries shall make
no settlement of such claim without consulting with the Sellers, unless
this is under the given circumstances reasonably not possible due to
extreme urgency.
6.8 For the puipose of this Article 6 and the set off against the
Representation and Warranty Escrow Amount as referred to in Article 3.2
(iii), Dutch guilder claims will be converted into US Dollars at a
fixed exchange rate of 1.83 Dutch guilders for each US Dollar during a
period of 12 months after Closing Date. After this period, the then
current market rates will be applied.
March 28, 1997 26
<PAGE>
Article 7 - Resignation of Managing and Supervisory directors;
termination of any existing management agreements; waiver;
indemnification by Sellers
7.1 At the Closing Date, all members of the Board of Directors and of the
Board of Supervisory Directors of Sallmetall and its Subsidiaries shall
resign and be relieved of their positions in accordance with their
letters of resignation attached hereto as Exhibit J, according to a
resolution of the shareholders' meeting attached hereto as Exhibit K.
7.2 The resignations as referred to in article 7.1 also involve the
termination, dissolution etc. of any agreement, whether employment,
management or other, with such (Supervisory) Director, including, but
not limited to, any such agreernent with Sallcoll with immediate effect
as of Closing Date as well as waiver of any claim for (termination)
compensation, severance, salary, management fee or other.
7.3 The Sellers shall, each in proportion to its shareholding as set out in
Article 6.2, hold Hunt harmiless for any claims arising in connection
with such discontinuation of employment or service, referred to in
Article 7.2.
March 28, 1997 27
<PAGE>
Article 8 - Non-competition clause and confidentiality
8.1 Having regard to the goodwill-element contained in the Purchase Price
and the preservation thereof, none of the Sellers and none of the
present Directors (for this Purpose, each of them co-signs this
Agreement) shall, directly or indirectly, within six (6) years after
Closing Date (provided, however, that as regards Residentie and J.H.M.
ten Have a term of 2 years after Closing Date will apply), take,
wherever in the world, any of the following actions without the prior
written approval of Hunt:
a carry on any business activities which compete with or are comparable
to the present activities of Sallmetall and/or its Subsidiaries and/or
Crest, either for his own account, for the account of a third party or
as an employee;
b participate in, as shareholder, certificate holder, lender, partner or
in any other capacity (except as investor in a stock-exchange listed
fund up to a maximum of 5% of the issued capital thereof), be employed
by, provide services to or give advice to any person, company or
organisation which conducts business activities as described above
under a;
c cause or attempt to cause any employees, customers, suppliers or other
persons connected with Sallmetall, its Subsidiaries and/or Crest, to
break, in whole or in part, their contracts with Sallmetall or its
Subsidiaries.
8.2 Sellers shall not directly or indirectly use, publicise or otherwise
make available to third parties any information with respect to any
confidential or secret aspect of the business of Sallmetall, its
Subsidiaries and Crest, included, but not limited to, Intellectual
Property Rights, or with respect to customers, suppliers, or persons or
institutions which do business with these, regardless whether such
information is confidential or secret.
8.3 In the event of breach by any of the Sellers of his obligations
pursuant to this Article, the involved Seller shall forfeit to Hunt,
without any further notice or demand being required, an immediate
payable penalty in the amount of NLG 1,000,000 (say: one million Dutch
guilders) for each violation and for each day that such violation took
place or continues, without limiting or precluding Hunt's rights to
claim any damage which Hunt, Sallmetall and/or its Subsidiaries may
incur in excess of NLG 1,000,000. In such case, the already paid
penalty of NLG 1,000,000 will be subtracted from the aggregate damage
amount incurred.
March 28, 1997 28
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March 28, 1997 29
<PAGE>
Article 9 - Transfer of rights
9.1 Reinders herewith confirms his earlier transfer and assignment to
Sallmetall of the intellectual property rights evidenced by notarial
deed dated December 23, 1996.
In addition to the transfer and assignment referred to in the
preceding paragraphs. Reinders also transfers and assigns to
Sallmetall the Taiwanese patent (application) (registered under number
85112393, case 11 (Arnold & Siedsma).
9.2 Reinders shall grant all co-operation in order to register the rights
and applications thereto as referred to in Article 9.1 in the name of
Sallmetall.
March 28, 1997 30
<PAGE>
Article 10 - Public Announcement
The Sellers and Hunt will consult and agree in advance with each other on the
timing and tenor of any public announcement of this agreement and will not
divulge the financial terms to any third party except as required by law
(including disclosures required by applicable New York Stock Exchange rules) or
with the consent of all parties hereto.
Article 11 - Outstanding Debts between the Sellers and Sallmetall
Sallcoll, Reinders and Sallmetall ensure that prior to the Closing Date, all
outstanding receivables and payables between Sallmetall and its Subsidiaries on
the one hand and Sallcoll and/or Reinders and/or affiliated companies on the
other hand (current accounts and other), as further specified in Appendix 22
attached hereto, shall be settled.
Article 12 - Binding Effect; Assignment
12.1 All the terms, provisions, representations, warranties, covenants and
conditions of this agreement shall only be binding upon and inure to
the benefit of and be enforceable by the parties hereto after this
agreement has been signed by all parties.
12.2 This agreement and any rights and obligations of the parties hereto may
not be assigned or delegated by any party hereto to a third party
without the prior written consent of the other parties, it being
understood, however, that consent cannot unreasonably be withheld for
any intra-party transfer.
Article 13 - Partial Invalidity
In the event that one or more clauses of this agreement or of the Exhibits would
appear to be non-binding, the other clauses of this agreement and of the
Exhibits will continue to be effective. The parties are obliged to replace the
non-binding clauses with other clauses that are binding, in such a way that the
new clauses differ as little as possible from the non-binding clauses, taking
into account the object and the purpose of this agreement.
Article 14 - Entire agreement
March 28, 1997 31
<PAGE>
This agreement including the Exhibits and Appendices hereto contain all
arrangements which the parties have made on the subject. It shall take the place
of all other (previous) arrangements and agreements which the parties have made
or have entered into on the subject.
Article 15 - Expenses
15.1 Each of the parties hereto shall pay its own expenses incurred or to be
incurred including legal and accounting fees and costs of other
professional services connection with this agreement. It is expressly
agreed that none of these costs and fees on Seller's side will be borne
by Sallmetall or its Subsidiaries and that these will solely be paid by
the Sellers themselves.
15.2 The costs of notary Terhorst for transfer of the Shares will be borne
by Hunt.
Article 16 - Dissolution
Each of the parties hereby waives the right to bring an action to dissolve this
agreement based on breach of contract and without prejudice to any compensation
right as from the moment that the transfer of title to the Shares has
occurred. None of any other legal remedy, such as annulment based on miscarriage
("dwaling") but not limited thereto, is excluded.
Article 17 - Statement from Hunt
Hunt represents and warrants that it has full right, power and authority to
enter into the contemplated transaction and that all necessary (corporate)
approval or authorisation of others, such as the board of directors and the
shareholder(s) have been obtained.
Article 18 - Applicable law and Jurisdiction
18.1 This agreement shall be governed exclusively by Netherlands law.
18.2 Except as otherwise expressly provided in this Agreement, all disputes
arising out of or in connection with this agreement, or the Exhibits,
or further agreements resulting thereof shall be submitted to
arbitration in accordance with the rules of the Netherlands Arbitration
Institute (N.A.I.). Arbitration shall be
March 28, 1997 32
<PAGE>
held in Amsterdam and be conducted in the English language.
Article 19 - Notices
19.1 All announcements or notices to Hunt will be done in writing or by
telecopier (but in the case of a telecopy immediately confirmed in
writing) to the following address:
Name: Seal Products Subsidiary, Inc.
C/o: Hunt Manufacturing Co.
Attn: W. Ernest Precious and/or Dennis S. Pizzica and/or
William J. Kane
Address: One Commerce Square, 2005 Market Street
Place of residence: PHILADELPHIA, PA
Country: USA
Telecopiernumber: + 1 215 656 3711
with copies to,
---------------
Hunt Europe, Ltd.
Attn. David Weatherly and/or Derek Wotton
Chester Hall Lane
Basildon
Essex SS14 3BG
UK
Telecopiernumber: + 44 1268 534 281
Coopers & Lybrand N.V.
Legal Services
Attn.: Ole Jan van Leeuwen
P.O. Box 94917
1090 GX Amsterdam
The Netherlands
Telecopiernumber: +31 20 568 7005
Drinker Biddle & Reath
Attn: John C. Bennett, Jr.
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107 - 3496
March 28, 1997 33
<PAGE>
USA
Telecopiernumber: + 1 215 988 2757
as long, as Hunt does not give notice to the other parties of any other
address.
19.2 All announcements or notices to the Sellers shall be done in writing,
or by telecopier (but in the case of a telecopy immediately confirmed
in writing) to the following addresses:
Name: Mr J.A.M. Reinders
Address: Oude Warkenseweg 1
Place of residence: Warnsveld
Country: NL
Telecopiernumber: +31.(0)57 - 5542294
Name: MGS Beleggingen B.V.
Address: Breezand 10
Placc of residence: Lemmer
Country: NL
Telecopiernumber:
Nane: Residentie Participaties III C.V.
Address: Wilhelmina Druckerstraat 413-417
Place of residence: 7301 BN Apeldoorn
Country: NL
Telecopiernumber: +31.(0)57 - 5542294
Name: Sallcoll B.V.
Address: Oude Warkenseweg 1
Place of residence: Warnsveld
Country: NL
Telecopiernumber: +31.(0)57 - 5542294
March 28, 1997 34
<PAGE>
This agreement is executed in six copies in Raalte on 20.02.97 by
- ------------------------------------ ---------------------------------
Seal Products Subsidiary, Inc. Pevaal B.V.
represented by: David A. Weatherly represented by:
- ------------------------------------ ---------------------------------
Mr. J.A.M. Reinders Sallcall B.V.
(also for purpose of acceptance of Article 8 represented by:
and Article 9)
- ------------------------------------ ---------------------------------
MGS Beleggingen B.V. Residentie Participaties III C,V.
represented by: represented by:
- ------------------------------------ ---------------------------------
For acceptance of Article 8 hereof:
J.H.M. ten Have
March 28. 1997 35
<PAGE>
EXHIBITS
March 28,1997 36
<PAGE>
APPENDICES
March 28, 1997 37
<PAGE>
EXHIBIT (99)
Contact: William E. Chandler
Senior Vice President Finance
and Chief Financial Officer
215-841-2300
www.huntmfg.com
HUNT ACQUIRES SALLMETALL B.V.
PHILADELPHIA, PA, April 1, 1997 - Hunt Manufacturing Co. (NYSE Symbol HUN) has
completed its previously announced acquisition of all of the stock of Sallmetall
B.V., a Dutch company. Sallmetall's operations, with headquarters in Raalte,
Holland, essentially involves the design and assembly of laminating equipment
and related adhesive film coating manufacturing. Sallmetall had sales of
approximately $21 million for their fiscal year ended December 31, 1996.
Sallmetall adds manufacturing capacity and market penetration to Hunt's already
strong distribution capability and includes operations in Europe and the United
States.
Hunt believes that the proposed acquisition of Sallmetall's business further
strengthens Hunt's position as a leading global supplier of print finishing
systems and expands Hunt's activities in the growing market for wide format
short-run digital imaging.
Hunt is a leading manufacturer and distributor of office, art/craft, and
presentation and display products for the business, education and consumer
markets.
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