SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 31, 1995
------------------
AIRSENSORS, INC.
------------------
(Exact name of registrant as specified in its charter)
Delaware
------------------------
(State of Incorporation)
0-16115 91-1039211
------------------------ -----------------------
(Commission File Number) (IRS Employer I.D. No.)
16804 Gridley Place, Cerritos, CA 90703
-------------------------------------- ----------
Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code: (310) 860-6666
<PAGE>
ITEM 2. ACQUISITION OF ASSETS
The registrant, through its wholly owned subsidiary IMPCO Technologies, Inc.
(IMPCO) acquired 51% of the outstanding stock of Technisch Bureau Media B.V.
(Media), a private company in the Netherlands, from Centradas B.V., a private
company in the Netherlands, on October 31, 1995. Media has distributed IMPCO's
gaseous fuel carburetion systems and related devices for use in internal
combustion engines since 1972. Media services the European marketplace from
its headquarters in the Netherlands and through its subsidiaries and facilities
in Germany and France. Along with IMPCO's line of products, MEDIA also is an
exclusive distributor of Engelhard catalytic convertors for the European off-
highway industrial market.
Media's consolidated revenues from product sales in its fiscal year ended
December 31, 1994 and 1993 were approximately US$7,397,800 and US$6,515,100,
respectively, and its net income was approximately US$527,000 and US$569,500,
respectively. Media's assets primarily consist of accounts receivable,
inventory, and equipment.
IMPCO acquired its 51% ownership of Media for cash in the amount of 3,187,500
NLG or US$2,023,425. The amount of the consideration was determined through
negotiations between Centradas B.V. and its parent company Depa Holding B.V.,
and IMPCO. The purchase price was financed through a term loan provided by
Bank of America NT&SA which will be repaid over a five-year period with
interest at market rates. The registrant also guaranteed 51% of a 4,250,000
NLG term loan (US$2,697,900 at October 31, 1995) made to Media by Depa Holding
B.V., which will be repaid by Media over a ten-year period with interest at
market rates.
IMPCO and Centradas B.V. also entered into a Shareholders Agreement pursuant to
which IMPCO has the right to name two of three members of the Board of
Supervisory Directors, and the right to purchase the remaining interest of 49%
from Centradas B.V. after November 1, 1998. Centradas B.V. has the right of
first refusal if IMPCO decides to relinquish its interest in Media. Media will
continue its current business of manufacturing, marketing, and distributing
gaseous fuel carburetion systems and related devices as an IMPCO distributor in
Europe and may engage in other related businesses in the future. The
registrant has no prior relationship with Depa Holding B.V. or Centradas B.V.
ITEM 5. OTHER EVENTS
Effective November 3, 1995, the registrant extended the exercise period of its
outstanding Common Stock Purchase Warrants from March 9, 1996 to March 7, 1997
at 5:00 p.m. (California time)
Page 2
<PAGE>
ITEM 7 Financial Statements and Exhibits
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED Page
----------------------------------------- ----
1. Audited consolidated/combined financial statements
for Technisch Bureau Media B.V.
Report of independent public accountants 7
Consolidated/combined balance sheets at
December 31, 1994 and December 31, 1993 8
Consolidated/combined income statements
for the years ended December 31, 1994 and 1993 10
Consolidated/combined statements of cash flows
for the years ended December 31, 1994 and 1993 11
Consolidated/combined statements of stockholders' equity
for the years ended December 31, 1994 and 1993 12
Notes to consolidated/combined financial statements 13
2. Unaudited interim condensed consolidated/combined
financial statements for Technisch Bureau Media B.V.
Condensed consolidated/combined balance sheet
at July 31, 1995 17
Condensed consolidated/combined income statements
for three months ended July 31, 1995 and 1994 19
Condensed consolidated/combined statements of cash
flows for three months ended July 31, 1995 and 1994 20
Note to condensed consolidated/combined financial
statements 21
(b) PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
-------------------------------------------
Pro forma condensed combined balance sheet of AirSensors,
Inc. and subsidiaries and Technisch Bureau Media B.V. and
subsidiaries as of July 31, 1995 23
Pro forma condensed combined income statements of AirSensors,
Inc. and subsidiaries and Technisch Bureau Media B.V. and
subsidiaries for the fiscal year ended April 30, 1995 25
Page 3
<PAGE>
ITEM 7 Financial Statements and Exhibits (continued)
(b) PRO FORMA FINANCIAL INFORMATION (UNAUDITED) (continued)
-------------------------------------------
Pro forma condensed combined income statements of AirSensors,
Inc. and subsidiaries and Technisch Bureau Media B.V. and
subsidiaries for the three months ended July 31, 1995 26
Notes to the pro forma condensed combined financial statements 27
(c) EXHIBITS
--------
2.1 Agreement of Purchase and Sale of Stock by and among IMPCO
Technologies, Inc., as buyer, and Centradas B.V., as
Shareholder, dated as of October 31, 1995
2.2 Shareholders Agreement for Technisch Bureau Media B.V. by
and among IMPCO Technologies, Inc., and Centradas B.V.,
dated as of October 31, 1995
2.3 Loan Agreement for Technisch Bureau Media B.V., Technisch
Bureau Media GmbH, Technique Media S.A.R.L. as borrowers and
Depa Holding B.V., as lendor, dated as of October 31, 1995
2.4 Guarantee by and among, Depa Holding B.V., as lendor, IMPCO
Technologies, Inc., as Shareholder and AirSensors, Inc., as
Guarantor, dated as of October 31, 1995
23.1 Consent of Deloitte & Touche dated November 13, 1995.
SIGNATURES
Pursuant to the requirement 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.
AirSensors, Inc.
Date: November 15, 1995 By /s/ Thomas M. Costales
-----------------------------
Thomas M. Costales
Chief Financial Officer
and Treasurer
Page 4
<PAGE>
DELOITTE &
TOUCHE
- ---------- ---------------------------------------------------
REGISTERACCOUNTANTS Van Alkemadelaan 700
Telephone (0)70-326 4701 2597 AW The Hague
Telefax (0)70-324 4482 P.O. Box 90721
2509 LS The Hague
The Netherlands
1/11
REPORT
issued to
the management of
Technisch Bureau "Media" B.V.
at Rijswijk
re
consolidated/combined 1994 financial statements
The Hague, September 27, 1995
Page 5
<PAGE>
DELOITTE &
TOUCHE
- ---------- ---------------------------------------------------
REGISTERACCOUNTANTS September 27, 1995
Page 2/11
3296300.01/017
Technisch Bureau "Media" B.V. at Rijswijk
CONTENTS
- --------
Page
INDEPENDENT AUDITOR'S REPORT 3
CONSOLIDATED/COMBINED FINANCIAL STATEMENTS
Consolidated/combined balance sheets as
at December 31, 1994 and December 31, 1993 4
Consolidated/combined income statements
for the years ended December 31, 1994 and 1993 5
Consolidated/combined statements of cash flows
for the years ended December 31, 1994 and 1993 6
Consolidated/combined statements of stockholders' equity
for the years ended December 31, 1994 and 1993 7
Notes to consolidated/combined financial statements
December 31, 1994 and 1993 8
Page 6
<PAGE>
DELOITTE &
TOUCHE
- ---------- ---------------------------------------------------
REGISTERACCOUNTANTS Van Alkemadelaan 700
Telephone (0)70-326 4701 2597 AW The Hague
Telefax (0)70-324 4482 P.O. Box 90721
2509 LS The Hague
The Netherlands
3/11
Date From Our reference
September 27, 1995 H.L.A. Habraken 3296300.01/017
Subject Your reference
INDEPENDENT AUDITOR'S REPORT
- ----------------------------
We have audited the accompanying consolidated/combined balance sheet of
Technisch Bureau "Media" B.V. as of December 31, 1994 and 1993 and the related
consolidated/combined income statements, stockholders' equity and cash flows
for each of the two years in the period ended December 31, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audit in accordance with generally accepted auditing standards
in the Netherlands and the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated/combined financial statements referred to
above present fairly, in all material respects, the consolidated/combined
financial position of Technisch Bureau "Media" B.V. at December 31, 1994 and
1993 and the consolidated/combined results of its operations and its cash flows
for the two years in the period ended December 31, 1994 in conformity with
generally accepted accounting principles in the United States of America.
The Hague, September 27, 1995
Deloitte & Touche
Registeraccountants
H.L.A. Habraken
Page 7
<PAGE>
September 27, 1995
Page 4/11
3296300.01/017
Technisch Bureau "Media" B.V. at Rijswijk
<TABLE>
<CAPTION>
CONSOLIDATED/COMBINED BALANCE SHEETS AS AT DECEMBER 31, 1994 AND
DECEMBER 31, 1993
ASSETS 1994 1993
------------------------- -------------------------
<S> <C> <C> <C> <C>
US$ US$
CURRENT ASSETS
Cash and cash equivalents $ 150,298 $ 297,053
Accounts receivable: 1,238,893 952,251
Less: allowance for doubtful accounts 94,343 84,973
----------- -----------
Net accounts receivable 1,144,550 867,278
Inventories:
Work-in-process 102,686 19,449
Finished goods 1,341,749 1,349,942
----------- -----------
Total inventories 1,444,435 1,369,391
Receivable from IMPCO 338,203 119,391
Receivable from other group companies - 41,132
Other current assets 53,885 28,470
----------- -----------
Total current assets 3,131,371 2,722,715
EQUIPMENT:
Machinery and equipment 657,369 502,448
Office furnishings and equipment 164,155 81,402
----------- -----------
821,524 583,850
Less: accumulated depreciation 453,697 283,079
----------- -----------
Net equipment 367,827 300,771
----------- -----------
TOTAL ASSETS $3,499,198 $3,023,486
=========== ===========
</TABLE>
Page 8
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND
STOCKHOLDERS' EQUITY 1994 1993
------------------------- -------------------------
<S> <C> <C> <C> <C>
US$ US$
CURRENT LIABILITIES:
Accounts payable $ 261,697 $ 313,693
Payable to group company 2,557,732 2,088,951
Accrued payroll obligations 61,585 46,928
Other accrued expenses 382,684 380,436
----------- -----------
Total current liabilities 3,263,698 2,830,008
PROVISIONS:
Pension plans 96,211 72,682
STOCKHOLDERS' EQUITY:
Common stock, Dfls 500 par value,
authorized 2,000 shares; 500 issued and
outstanding at December 31, 1994 and 1993 144,051 128,932
Frfrs 100 par value, authorized 500
shares; 500 issued and outstanding at
December 31, 1994 9,351 -
Accumulated (loss) profit (14,010) 15,123
Accumulated translation adjustment (103) (23,259)
----------- -----------
Total stockholders' equity 139,289 120,796
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,499,198 $3,023,486
=========== ===========
</TABLE>
Page 9
<PAGE>
September 27, 1995
Page 5/11
Technisch Bureau "Media" B.V. at Rijswijk 3296300.01/017
<TABLE>
<CAPTION>
CONSOLIDATED/COMBINED INCOME STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1994 AND 1993
1994 1993
------------ ------------
<S> <C> <C>
US$ US$
REVENUE:
Product sales $ 7,397,800 $ 6,515,092
COSTS AND EXPENSES:
Cost of goods sold 4,332,501 3,703,889
Research and development expenses 55,200 -
Selling, general and administrative expenses 2,100,938 1,749,872
------------ ------------
Total costs and expenses 6,488,639 5,453,761
INCOME FROM OPERATIONS 909,161 1,061,331
OTHER INCOME (EXPENSE)
Interest income 18,669 45,725
Interest expense 124,393 200,208
------------ ------------
105,724 154,483
------------ ------------
INCOME BEFORE INCOME TAXES 803,437 906,848
Income taxes 276,051 337,391
------------ ------------
NET INCOME $ 527,386 $ 569,457
============ ============
</TABLE>
See accompanying notes to consolidated/combined financial statements
December 31, 1994 and 1993
Page 10
<PAGE>
September 27, 1995
Page 6/11
Technisch Bureau "Media" B.V. at Rijswijk 3296300.01/017
<TABLE>
<CAPTION>
CONSOLIDATED/COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
1994 1993
---------- ----------
<S> <C> <C>
US$ US$
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 527,386 $ 569,457
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
(Decrease) increase provision for
inventory obsolescence (35,545) 19,691
Depreciation and amortization 131,645 93,291
(Increase) decrease in accounts receivable (346,969) 509,355
Decrease in inventories 117,475 138,235
Decrease in accounts payable (85,045) (7,213)
Increase (decrease) in accrued expenses 5,920 (20,204)
Increase (decrease) in other payables 185,899 (644,654)
Other, net 10,634 (24,588)
---------- ----------
Net cash provided by operating activities 511,400 633,370
========== ==========
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (162,096) (170,256)
Disposal of equipment - 10,811
---------- ----------
Net cash used in investing activities (162,096) (159,445)
========== ==========
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock Media Sarl 8,924 -
Dividends paid on common stock (532,179) (569,457)
---------- ----------
Net cash used in financing activities (523,255) (569,457)
========== ==========
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (173,951) (95,532)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
AT BEGINNING YEAR RATE 297,053 413,822
Translation adjustments to average year rate 27,196 (21,237)
CASH AND CASH EQUIVALENTS, END OF YEAR AT
YEAR END RATE $ 150,298 $ 297,053
========== ==========
</TABLE>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid during, the years ended December 31, 1994 and 1993 were
US$ 124,393 and US$ 200,208 respectively. Income tax paid during the years
ended December 31, 1994 and 1993 were US$ 323,610 and US$ 957,550 respectively.
See accompanying notes to consolidated/combined financial statements
December 31, 1994 and 1993.
Page 11
<PAGE>
September 27, 1995
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<TABLE>
<CAPTION>
CONSOLIDATED/COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
common common retained accumulated total
stock stock earnings translation stockholders'
Media B.V. Media Sarl adjustment equity
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
US$ US$ US$ US$ US$
Balance December 31, 1992 137,272 - (8,137) - 129,135
Result for the year - - 569,457 - 569,457
Dividend distribution - - (569,457) - (569,457)
Foreign currency
translation adjustment (8,340) - 23,260 (23,259) (8,339)
------------- ------------- ------------- ------------- -------------
Balance December 31, 1993 128,932 - 15,123 (23,259) 120,796
Issuance of common stock
Media Sarl - 8,924 - - 8,924
Result for the year - - 527,386 - 527,386
Dividend distribution - - (532,179) - (532,179)
Foreign currency
translation adjustment 15,119 427 (24,340) 23,156 14,362
------------- ------------- ------------- ------------- -------------
Balance December 31, 1994 144,051 9,351 (14,010) (103) 139,289
============= ============= ============= ============= =============
</TABLE>
Page 12
<PAGE>
September 27, 1995
Page 8/11
Technisch Bureau "Media" B.V. at Rijswijk 3296300.01/017
NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND SUMMARY
The accompanying consolidated/combined financial statements have been prepared
for the purpose of the intended majority participation of Impco Technologies
Inc., a wholly-owned subsidiary of AirSensors Inc. based in Cerritos USA,. in
Technisch Bureau "Media" B.V. and its affiliated company Media Sarl. These
consolidated/combined financial statements, which have been prepared in US-
dollars, include the accounts of Technisch Bureau "Media" B.V. and its wholly-
owned subsidiary Technisch Bureau Media GmbH and the affiliated company Media
Sarl. All significant intercompany accounts and transactions have been
eliminated in consolidation/combination. The companies market gaseous fuel
delivery systems and related devices.
FOREIGN CURRENCY TRANSLATION
All assets and liabilities in foreign currencies are converted into US-dollars
at year end exchange rates. The income statements and cash flow statements are
translated at average exchange rates for the year. The net translation gains
and losses are adjusted directly to the accumulated translation adjustments
component of stockholder's equity. Foreign currency transactions are recorded
at the exchange rate prevailing at the transaction date.
INVENTORIES
Inventories are stated at the lower of weighted average cost or market.
EQUIPMENT
Equipment is stated on the basis of historical cost less accumulated
depreciation. Depreciation of equipment is provided using the straight-line
method over the assets' estimated useful lives, ranging from 3 to 10 years.
PROVISION FOR PENSION PLANS
The company has a pension benefit plan for its employees. which has been
reinsured with the life-insurance company "Aegon".
Page 13
<PAGE>
September 27, 1995
Page 9/11
Technisch Bureau "Media" B.V. at Rijswijk 3296300.01/017
NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993 (cont'd)
The projected benefit obligation (PBO) is the actuarial present value of all
benefits attributed by the plan's benefits familiar to employee services
rendered prior to the balance sheet date.
The PBO has been calculated using an interest rate of 7% and a projected annual
salary increase of 3.5%.
The total pension cost for the year, regarding this plan, amounted to
US$ 154,915 (1993 : US$ 149,106).
WARRANTY PROVISION
To cover future warranty obligations the company has estimated an amount needed
based on current year's sales and its warranty experience.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs are charged to expense as incurred. The company
has at times received certain funds for the companies research efforts which in
turn were offset against research and developments costs.
INCOME TAXES
Income taxes are calculated using the applicable tax rate and on the basis of
the reported results taking into account permanent differences between the
reported results and taxable income. For a timing difference resulting from
the accounting for pension obligations a deferred tax asset is included
calculated at the current tax rate of 35%. As per December 31, 1994 the
balance of this deferred tax asset, which is included under other current
assets, amounts to US$ 5,384 (December 31, 1993 : US$ 4,381). The components
of income tax relating to continuing operations are as follows:
1994
----------
US$
Current taxcharge 277,054
Deferred taxcharge (1,003)
----------
276,051
==========
Page 14
<PAGE>
September 27, 1995
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Technisch Bureau "Media" B.V. at Rijswijk 3296300.01/017
NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993 (cont'd)
The company's income tax expense differed from the statutory taxrate of 35.6%
as follows:
1994
------
%
Statutory rate applied to earnings before income taxes 35.6
Unrecognized net operating loss 0.2
Benefit of net operating loss carry forward (1.4)
------
Effective tax rate 34.4
======
The company forms part of a fiscal unity with its parent company. Therefore
the income tax charge for the year is shown as a payable towards the parent
company.
2 COMMITMENTS AND CONTINGENCIES
LEASES
The company's future minimum lease payments are as follows:
Fiscal years ending December 31, --------
US$
1995 133,379
All obligations relate to operating leases. Expenses under operating leases
for the years ended December 31, 1994 and 1993 amounted to US$ 128,056 and US$
124,745 respectively.
CONTINGENCIES
The company forms part of a fiscal unity for income taxes with its parent
company and other affiliated companies. As such the company is severally
liable for income taxes due by the fiscal unity.
The company entered into a joint account with Bank MeesPierson N.V. together
with its parent company and other affiliated companies. The company is
severally liable for all debts of the group towards MeesPierson N.V. resulting
from this joint account.
Page 15
<PAGE>
September 27, 1995
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Technisch Bureau "Media" B.V. at Rijswijk 3296300.01/017
NOTES TO CONSOLIDATED/COMBINED FINANCIAL STATEMENTS
DECEMBER 31,1994 AND 1993 (cont'd)
3 RELATED PARTY TRANSACTIONS
Accounts receivable from related parties amounted to US$ 41,132 at December 31,
1993. Current liabilities include payables to related parties of
US$ 2,548,989 and US$ 2,117,855 at December 31, 1994 and 1993 respectively.
Selling, general and administrative expenses are presented after deduction of a
charge of US$ 463,683 (1993 : US$ 498,768) to related parties. Interest income
and expenses almost entirely relate to balances due from and due to related
parties.
4 MAJOR CUSTOMERS
For the year ended December 31, 1994 sales to one customer exceeded 10% of net
sales and totaled approximately US$ 900,000. At December 31, 1994 a receivable
of US$ 149,785 was due from this customer.
5 SUBSEQUENT EVENT
Currently, Impco Technologies Inc. a wholly-owned subsidiary of Air Sensors,
Inc. based in Cerritos, California USA is involved in the purchase of 51% of
the outstanding shares of both Technisch Bureau "Media" B.V. and Media Sarl.
Page 16
<PAGE>
<TABLE>
<CAPTION>
TECHNISCH BUREAU MEDIA B.V.
CONDENSED CONSOLIDATED/COMBINED BALANCE SHEETS (UNAUDITED)
AS OF JULY 31, 1995
July 31,
1995
ASSETS -----------
<S> <C>
US$
CURRENT ASSETS:
Cash and cash equivalents $ 227,397
Accounts receivable 1,471,106
Less: allowance for doubtful accounts (120,379)
------------
Net accounts receivable 1,350,727
Inventory 2,789,264
Other current assets 193,989
------------
Total current assets 4,561,377
EQUIPMENT:
Machinery and equipment 775,197
Office furnishings and equipment 189,304
Less: accumulated depreciation (598,226)
------------
Net equipment 366,275
------------
TOTAL ASSETS $ 4,927,652
============
</TABLE>
(See accompanying note)
Page 17
<PAGE>
<TABLE>
<CAPTION>
TECHNISCH BUREAU MEDIA B.V.
CONDENSED CONSOLIDATED/COMBINED BALANCE SHEETS (UNAUDITED)
AS OF JULY 31, 1995 (CONTINUED)
July 31,
1995
LIABILITIES AND STOCKHOLDERS' EQUITY -----------
<S> <C>
US$
CURRENT LIABILITIES:
Accounts payable $ 389,038
Payable to group company 2,473,423
Accrued payroll obligations 401,303
Other accrued expenses 758,062
------------
Total current liabilities 4,021,826
PROVISIONS:
Pension plans 132,268
STOCKHOLDERS' EQUITY:
Common stock, Dfls 500 par value,
authorized 2,000 shares; 500 issued and
outstanding at July 31, 1995 and 1994 161,561
Frfrs 100 par value, authorized 500
shares; 500 issued and outstanding at
July 31, 1995 10,487
Accumulated profits 587,960
Accumulated translation adjustment 13,550
------------
Total stockholders' equity 773,558
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,927,652
============
</TABLE>
(See accompanying note)
Page 18
<PAGE>
<TABLE>
<CAPTION>
TECHNISCH BUREAU MEDIA B.V.
CONDENSED CONSOLIDATED/COMBINED INCOME STATEMENTS (UNAUDITED)
SEVEN MONTHS ENDED JULY 31, 1995 AND 1994
July 31, July 31,
1995 1994
------------ ------------
<S> <C> <C>
US$ US$
REVENUE:
Product sales $ 5,841,364 $ 3,936,554
COSTS AND EXPENSES:
Cost of goods sold 3,182,715 2,240,591
Research and development expense 10,932 17,298
Selling, general and administrative expense 1,637,428 1,180,740
------------ ------------
Total costs and expenses 4,831,075 3,438,629
------------ ------------
INCOME FROM OPERATIONS 1,010,289 497,925
OTHER INCOME (EXPENSE)
Interest income 3,020 7,481
Interest expense 75,046 54,526
------------ ------------
Total other income (expense) 72,026 47,045
------------ ------------
INCOME BEFORE INCOME TAXES 938,263 450,880
Income taxes 334,640 193,269
------------ ------------
NET INCOME $ 603,623 $ 257,611
============ ============
</TABLE>
(See accompanying note)
Page 19
<PAGE>
<TABLE>
<CAPTION>
TECHNISCH BUREAU MEDIA B.V.
CONDENSED CONSOLIDATED/COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED)
SEVEN MONTHS ENDED JULY 31, 1995 AND 1994
July 31, July 31,
1995 1994
------------ ------------
<S> <C> <C>
US$ US$
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 99,680 (114,774)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (42,158) (123,933)
------------ ------------
Net cash (used in) investing activities (42,158) (123,933)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock Media SARL - 8,712
------------ ------------
Net cash provided by financing activities - 8,712
NET CHANGE IN CASH AND CASH EQUIVALENTS 57,522 (229,995)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 150,298 297,053
Translation adjustments to average period rate 19,577 16,778
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD
AT PERIOD END RATE $ 227,397 $ 83,836
============ ============
</TABLE>
(See accompanying note)
Page 20
<PAGE>
Technisch Bureau Media B.V.
Note to Interim Condensed Consolidated/Combined Financial Statements
July 31, 1995 and 1994
(UNAUDITED)
------------------------
(1) The accompanying unaudited condensed consolidated/combined financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
8-K and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary
for fair presentation have been included. Operating results for the seven
months ended July 31, 1995 and 1994, are not necessarily indicative of the
results that may be expected for a twelve month period. For further
information, refer to the consolidated financial statements and footnotes
described in Item 7 of AirSensors, Inc. Report on Form 8-K on page 3 of this
filing.
Page 21
<PAGE>
AIRSENSORS, INC. AND SUBSIDIARIES
AND
TECHNISCH BUREAU MEDIA B.V. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)
The registrant, through its wholly owned subsidiary IMPCO Technologies, Inc.
(IMPCO) acquired 51% of the outstanding stock of Technisch Bureau Media B.V.
(Media), a private company in the Netherlands, from Centradas B.V., a private
company in the Netherlands, on October 31, 1995. IMPCO acquired its 51%
ownership of Media for cash in the amount of 3,187,500 NLG or US$ 2,023,425.
The purchase price was financed through a term loan provided by Bank of America
NT&SA which will be repaid over a five-year term with interest at market rates.
The registrant also guaranteed 51% of a 4,250,000 NLG term loan (US$ 2,697,900
at October 31, 1995) from the Seller's parent company, Depa Holding B.V. to
Media, which will be repaid by Media over a ten-year term with interest at
market rates.
The following pro forma statements have been prepared to illustrate the effect
of the Acquisition, which is being accounted for as a purchase. The unaudited
pro forma condensed balance sheets combine the balance sheets of AirSensors,
Inc. and its subsidiaries and Media and its subsidiaries as of April 30, 1995
and July 31, 1995, as though the Acquisition had occurred on May 1, 1994 and
July 31, 1995, respectively. The unaudited pro forma condensed income
statements combine the income statements of AirSensors Inc. and its
subsidiaries and Media and its subsidiaries for the year ended April 30, 1995
and three months ended July 31, 1995, as though the Acquisition had occurred on
May 1, 1994 and May 1, 1995, respectively. The pro forma information is based
upon the historical financial statements of the respective companies while the
pro forma adjustments on which they are based are described in the accompanying
Notes.
The AirSensors, Inc. unaudited pro forma condensed combined financial
statements are presented for illustrative purposes only and are not necessarily
indicative of the consolidated financial position or consolidated results of
operations of AirSensors, Inc. that would have been reported had the
Acquisition occurred on the dates indicated, nor do they represent a forecast
of the consolidated financial position of AirSensors, Inc. at any future date
or the consolidated results of operations of AirSensors, Inc. at any future
period. Amounts allocated to the Media assets and liabilities are based on
estimated fair values derived from information currently available.
The unaudited pro forma combined financial statements should be read in
conjunction with the related notes thereto and the historical consolidated
AirSensors, Inc. and consolidated/combined Technisch Bureau Media B.V.
financial statements.
Page 22
<PAGE>
<TABLE>
<CAPTION>
AIRSENSORS, INC. AND SUBSIDIARIES
AND
TECHNISCH BUREAU MEDIA B.V. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED BALANCE SHEETS (UNAUDITED)
AS OF JULY 31, 1995
(Dollars in thousands)
Historical Pro Forma Adjustments
---------------------- -------------------------- Pro Forma
ASSETS AirSensors Media DR CR Combined
---------- ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 50 $ 227 $ 48(e) $ 325
Net accounts receivable 5,864 1,351 295(e) 6,920
Total inventories 7,125 2,789 534(e) 9,380
Other current assets 597 194 791
---------- ---------- ------------ ------------ ----------
Total current assets 13,636 4,561 48 829 17,416
Net equipment and leasehold improvements 4,556 367 257(b) 5,180
Investment in Media - - 2,059(b) 2,059(b) -
Intangibles arising from acquisitions 3,193 - 2,463(b) 5,656
Other assets 881 - 881
---------- ---------- ------------ ------------ ----------
Total assets $ 22,266 $ 4,928 $ 4,827 $ 2,888 $ 29,133
========== ========== ============ ============ ==========
</TABLE>
(See accompanying notes)
Page 23
<PAGE>
<TABLE>
<CAPTION>
AIRSENSORS, INC. AND SUBSIDIARIES
AND
TECHNISCH BUREAU MEDIA B.V. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED BALANCE SHEETS (UNAUDITED)
AS OF JULY 31, 1995
(Dollars in thousands)
Historical Pro Forma Adjustments
---------------------- -------------------------- Pro Forma
LIABILITIES AND STOCKHOLDERS' EQUITY AirSensors Media DR CR Combined
---------- ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Current liabilities:
Notes payable 213 - 213
Accounts payable 2,118 389 247(e) 210(b) 2,470
Accrued payroll obligations 1,300 401 1,701
Payable to group company - 2,474 2,474(c) - -
Other accrued expenses 1,221 758 1,979
Current portion of long-term loans - - 721(a)(b)(c) 721
---------- ---------- ------------ ------------ ---------
Total current liabilities 4,852 4,022 2,720 931 7,084
Line of credit 900 - 900
Long term capital lease obligations 779 - 779
Other long-term liabilities - 132 132
Term loan - Bank of America NT&SA - - 1,647(b) 1,647
Term loan - Depa Holding B.V. - - 2,777(a)(c) 2,777
Commitments and contingencies - - -
Minority interest in subsidiary - - 79(h) 79
Stockholders' equity:
1993 Series 1 preferred stock, $.01 par
value, 5,950 shares authorized, issued
and outstanding, $5,950,000 liquidation
value 5,650 - 5,650
Common stock, $.001 par value, authorized
25,000,000 shares; 5,642,620 issued and
outstanding at July 31, 1995 6 6
Common stock, dfls 500 par value,
authorized 2,000 shares; 500 issued and
outstanding at July 31, 1995 - 162 162(h) -
Common stock, Frfrs 100 par value,
500 shares authorized, issued and
outstanding at July 31, 1995 - 10 10(a) -
Additional paid-in capital relating to
common stock 28,669 - 28,669
Retained earnings(deficit) (18,590) 588 588(a) (18,590)
Accumulated translation adjustment - 14 14(a) -
---------- ---------- ------------ ------------ ---------
Total stockholders' equity 15,735 774 774 - 15,735
Total liabilities and
stockholders' equity $ 22,266 $ 4,928 $ 409 $ 2,348 $ 29,133
========== ========== ============ ============ =========
</TABLE>
(See accompanying notes)
Page 24
<PAGE>
<TABLE>
<CAPTION>
AIRSENSORS, INC. AND SUBSIDIARIES
AND
TECHNISCH BUREAU MEDIA B.V. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED INCOME STATEMENTS (UNAUDITED)
FISCAL YEAR ENDED APRIL 30, 1995
(In thousands, except net income per share amounts)
Historical Pro Forma Adjustments
---------------------- -------------------------- Pro Forma
AirSensors Media DR CR Combined
---------- ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Net revenues $ 45,231 $ 8,665 $ 3,068(e) $ 50,828
Costs and expenses:
Cost of sales 29,125 5,072 115(e) 3,364(e) 30,948
Research & development expense 6,197 52 6,249
Selling, general & administrative 6,369 2,347 128(d) 8,844
---------- ---------- ------------ ------------ ----------
Total costs and expenses 41,691 7,471 243 3,364 46,041
---------- ---------- ------------ ------------ ----------
Operating income 3,540 1,194 3,311 3,364 4,787
Financing charges:
Interest on debt obligations 179 121 128(f) 428
Amortization of deferred debt
issuance costs 113 - 113
---------- ---------- ------------ ------------ ----------
Total financing charges 292 121 128 541
---------- ---------- ------------ ------------ ----------
Income before taxes 3,248 1,073 3,439 3,364 4,246
Provision for income taxes 280 346 11(g) 615
---------- ---------- ------------ ------------ ----------
Net income 2,968 727 3,439 3,375 3,631
Dividends on preferred stock 548 - 548
Minority interest in earnings - - 356(h) 356
---------- ---------- ------------ ------------ ----------
Net income applicable to common stock $ 2,420 $ 727 $ 3,795 $ 3,375 $ 2,727
========== ========== ============ ============ ==========
Net income per share $ .40 $ .44
======= =======
Shares used in per share calculation 6,566 6,566
======= =======
</TABLE>
(See accompanying notes)
Page 25
<PAGE>
<TABLE>
<CAPTION>
AIRSENSORS, INC. AND SUBSIDIARIES
AND
TECHNISCH BUREAU MEDIA B.V. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED INCOME STATEMENTS (UNAUDITED)
THREE-MONTH PERIOD ENDED JULY 31, 1995
(In thousands, except net income per share amounts)
Historical Pro Forma Adjustments
---------------------- -------------------------- Pro Forma
AirSensors Media DR CR Combined
---------- ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Net revenues $ 12,137 $ 2,279 $ 1,589(e) $ 12,827
Costs and expenses:
Cost of sales 7,611 1,138 192(e) 1,789(e) 7,152
Research & development 1,780 1 1,781
Selling, general & administrative 1,832 727 39(d) 2,598
---------- ---------- ------------ ------------ ----------
Total costs and expenses 11,223 1,866 231 1,789 11,531
---------- ---------- ------------ ------------ ----------
Operating income 914 413 1,820 1,789 1,296
Financing charges:
Interest on debt obligations 50 29 39(f) 118
Amortization of deferred debt
issuance costs 26 - 26
---------- ---------- ------------ ------------ ----------
Total financing charges 76 29 39 144
---------- ---------- ------------ ------------ ----------
Income before taxes 838 384 1,859 1,789 1,152
Provision for income taxes 99 142 3(g) 238
---------- ---------- ------------ ------------ ----------
Net income 739 242 1,859 1,792 914
Dividends on preferred stock 156 - 156
Minority interest in earnings - - 119(h) 119
---------- ---------- ------------ ------------ ----------
Net income applicable to common stock $ 583 $ 242 $ 1,978 $ 1,792 $ 639
========== ========== ============ ============ ==========
Net income per share $ .10 $ .11
======= =======
Shares used in per share calculation 6,643 6,643
======= =======
</TABLE>
(See accompanying notes)
Page 26
<PAGE>
AIRSENSORS, INC. AND SUBSIDIARIES
AND
TECHNISCH BUREAU MEDIA B.V. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
---------------------
The accompanying pro forma condensed combined financial statements
present the combined financial position and results of operations of
AirSensors, Inc. and Technisch Bureau Media B.V. The acquisition
is accounted for as a purchase and, accordingly, the purchase
price will be allocated to the assets and liabilities of Technisch
Bureau Media B.V. based on their fair values at the date of
acquisition.
2. Pro forma adjustments
---------------------
The pro forma condensed combined financial statements give effect to
the following adjustments:
a. To record the following pre-closing transactions: (1) the
declaration of dividends for Media and (2) the transfer of 99%
of Bureau Technique Media S.A.R.L. common stock from Centradas
B.V. to Technisch Bureau Media B.V. (98%) and Technisch Bureau
Media GmbH (1%).
b. To reflect the acquisition of Technisch Bureau Media B.V. and
related acquisition costs completed on October 31, 1995 as
described in Item 2 of AirSensors, Inc. Report on Form 8-K
filed herewith.
c. To record the conversion of the debt payable to group company
to a Term Loan.
d. To reflect AirSensors, Inc. amortization of acquisition
related costs over twenty years, amortization of the excess
cost over net assets of businesses acquired over twenty years,
and depreciation of assets over five years.
e. To record the elimination of intercompany sales, accounts
payable, accounts receivable, and other intercompany
adjustments.
f. To reflect increased interest due to the acquisition.
g. To record the effect of pro forma adjustments on the
provision for taxes based on income.
h. To recognize minority interest in earnings and minority
interest related to the consolidation and to record the
elimination of equity.
Page 27
<PAGE>
AGREEMENT OF PURCHASE AND SALE OF STOCK
INDEX
ARTICLE I. PURCHASE AND SALE OF STOCK
1.1 Sale and Transfer of Shares
1.2 Consideration
ARTICLE II. SELLERS' REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Sellers
2.2 Organization, Standing and Qualification of Company(ies)
2.3 Capital Structure.
2.4 Centradas' Title to Shares.
2.5 Subsidiaries.
2.6 Financial Statements.
2.7 Absence of Material Financial Changes.
2.8 Absence of Undisclosed Liabilities.
2.9 Tax Returns and Audits.
2.10 Inventory.
2.11 Other Tangible Personal Property.
2.12 Accounts Receivable.
2.13 Title to Assets.
2.14 Customers and Sales.
2.15 Suppliers and Purchases.
2.16 Insurance Policies.
2.17 Litigation.
2.18 Default.
2.19 Authority and Consents.
2.20 Corporate Documents.
2.21 Employment Contracts and Benefits.
2.22 Bank Accounts.
2.23 Labor Matters.
2.24 Environmental Matters.
2.25 Compliance.
2.26 Intercompany Liabilities
2.27 Disclosure.
ARTICLE III. IMPCO'S REPRESENTATIONS AND WARRANTIES
3.1 Organization, Good Standing, Approval.
3.2 Approval.
ARTICLE IV. SELLERS' AND MEDIA'S OBLIGATIONS PRIOR TO CLOSING DATE
4.1 IMPCO's Access to Premises and Information.
4.2 Conduct of Business in Normal Course.
4.3 Preservation of Business and Relationships.
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<PAGE>
4.4 Corporate Matters.
4.5 Maintenance of Insurance.
4.6 Employees and Compensation.
4.7 New Transactions.
4.8 Dividends, Distributions and Acquisitions of Stock.
4.9 Payment of Liabilities and Waiver of Claims.
4.10 Existing Agreements.
ARTICLE V. IMPCO'S OBLIGATIONS PRIOR TO CLOSING DATE
5.1 Information to be held in Confidence.
ARTICLE VI. COVENANTS AND AGREEMENTS BETWEEN THE PARTIES
6.1 Lease of Real Property.
6.2 Insurance Services.
6.3 Loan Agreement.
6.4 Distribution Agreement.
6.5 Shareholders Agreement.
6.6 Ancillary Agreements.
6.7 MEDIA's Articles of Association
6.8 Interim Dividend
6.9 Sharing Arrangements
6.10 Management Services
ARTICLE VII. THE CLOSING
7.1
ARTICLE VIII. PARTIES OBLIGATIONS AFTER CLOSING...............
8.1 Sellers' Indemnity..............................
8.2 The Sellers Tax Obligations.....................
8.3 IMPCO's Indemnity...............................
8.4 Limitation of Indemnities.......................
8.5 Change Articles.................................
ARTICLE IX. REMEDIES........................................
9.1 Waiver of Rescission Rights.....................
9.2 Recovery of Litigation Costs....................
ARTICLE X. NATURE AND SURVIVAL OF INDEMNITIES, REPRESENTATIONS
AND OBLIGATIONS.................................
10.1
ARTICLE XI. PUBLICITY.......................................
11.1.....................................................
Page 2
<PAGE>
ARTICLE XII. MISCELLANEOUS...................................
12.1 Fees............................................
12.2 Expenses........................................
12.3 Effect of Headings..............................
12.4 Parties in Interest.............................
12.5 Assignment......................................
12.6 Counterparts....................................
12.7 Notices.........................................
12.8 Governing Law; Jurisdiction.....................
12.9 Severability....................................
12.10 Failure to Enforce..............................
12.11 Force Majeure...................................
12.12 Definitions.....................................
Page 3
<PAGE>
LIST OF SCHEDULES
Schedule 2.2.....List of Power of Attorneys
Schedule 2.6.....Financial Statements
Schedule 2.7.....Material Financial Changes
Schedule 2.9.....Tax Disclosure
Schedule 2.14a...List of current customers of MEDIA
Schedule 2.14b...List of restictive trade agreements and other agreements
Schedule 2.15....List of current suppliers of MEDIA
Schedule 2.16....Description of insurance policies held by Centradas, on
behalf of MEDIA
Schedule 2.17....Litigation wherein MEDIA is presently engaged
Schedule 2.21....List of all employment contracts and other agreements of
MEDIA
Schedule 2.22....List of MEDIA's bank accounts
Schedule 6.1.....The Lease Agreements
Schedule 6.3.....The Loan Agreement
Schedule 6.4.....The Distribution Agreement
Schedule 6.5.....The Shareholders Agreement
Schedule 6.7a....draft Articles of Association Media-HOLLAND
Schedule 6.7b....draft Articles of Association Media-GERMANY
Schedule 6.7c....draft Articles of Association Media-FRANCE
Schedule 6.8.....Shareholders Resolution Centradas interim-dividend
Schedule 6.9.....Personnel and facilities Sharing Arrangements
Schedule 6.10....Agreement on management services Mr. Frings
Schedule 7.2f....draft notarial deed of transfer of Shares
Schedule 7.2k....draft shareholders resolution appointment of Supervisory
directors
Schedule 7.2l I..draft shareholders resolution amendment Articles of
Association Media-HOLLAND
Schedule 7.2l II.draft Articles of Association Media-HOLLAND
Schedule 8.5a....draft shareholders resolutions amendment of Articles of
Association Media-FRANCE and Media-GERMANY
Page 4
<PAGE>
AGREEMENT OF PURCHASE AND SALE OF STOCK
This Agreement is made as of the 31st day of October 1995 by and between:
1. IMPCO Technologies, Inc., a corporation organized under the law of the
State of Delaware, U.S.A. having its principal place of business at
16804 Gridley Place, Cerritos, California 90703-1741 (hereinafter
referred to as "IMPCO").
2. Depa Holding B.V., a private company organized under the laws of the
Netherlands, having its principal place of business at Koningsweg 7,
6816 TA Arnhem, The Netherlands (hereinafter referred to as the
"Holding Co.")
3. Centradas B.V., a private company organized under the laws of The
Netherlands, having its principal place of business at Van Gijnstraat
10, 2288 GA Rijswijk Z.H., The Netherlands, hereinafter referred to as
"Centradas",
the parties referred to under 2 and 3 hereinafter collectively also referred to
as "Sellers", and
4. Technisch Bureau Media B.V., a private company organized under the
laws of The Netherlands, having its principal place of business at Van
Gijnstraat 8/10, 2288 GA Rijswijk Z.H., The Netherlands, hereinafter
referred to as "Media-HOLLAND".
WITNESSETH
WHEREAS, Holding Co. through its wholly owned subsidiary Centradas, owns
100% of the issued and outstanding shares Media-HOLLAND. Media-HOLLAND owns
100% of the issued and outstanding shares of Technisch Bureau Media GmbH,
hereinafter referred to as "Media-GERMANY". Media-HOLLAND also owns 99% of the
issued and outstanding shares of Bureau Technique Media S.A.R.L. hereinafter
referred to as "Media-FRANCE." Media-GERMANY owns 1% of the issued and
outstanding shares of Media-FRANCE. Media-HOLLAND, Media-GERMANY and Media-
FRANCE are hereinafter collectively referred to as "MEDIA." Media-FRANCE and
Media-GERMANY collectively also referred to as the "Subsidiaries";
Page 5
<PAGE>
WHEREAS, Holding Co. has agreed to make available to Media-HOLLAND on the
basis of certain terms and conditions an amount of 4,250,000 Dutch guilders by
way of loan; and
WHEREAS, IMPCO desires to purchase from Centradas and it desires to sell to
IMPCO 51% of MEDIA's equity for the consideration and upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained in this Agreement, the parties agree
as follows:
ARTICLE I. PURCHASE AND SALE OF STOCK
- --------------------------------------
1.1 SALE AND TRANSFER OF SHARES. Subject to the terms and conditions set
forth in this Agreement, on the Closing Date Centradas will sell and convey to
IMPCO 51% of the outstanding stock of MEDIA consisting of 255 shares with a
nominal value of NLG 500 each in Media-HOLLAND (the "Shares") and IMPCO will
purchase the Shares from Centradas. At the Closing, a notarial deed of transfer
of the Shares will be executed in accordance with Section 7.1 herein.
Simultaneously with and after the transfer of the Shares, the Sellers will
execute and do, or cause to be executed and done all such further acts and
things which may be requisite under the applicable laws in order to effect the
transfer of the Shares or for giving effect to this Agreement and take all
additional steps as may be required to put IMPCO in possession and operating
control of the assets, properties and business of MEDIA, subject to the terms
and conditions here-of.
1.2 CONSIDERATION. As full payment for the transfer of the Shares, to IMPCO,
IMPCO shall pay an aggregate sum of Three million, one-hundred, eighty-seven
thousand, five hundred Dutch guilders (NLG 3.187.500) payable by delivery to
Centradas at the Closing in accordance with Section 7.1 herein.
ARTICLE II. SELLERS' REPRESENTATIONS AND WARRANTIES
- ---------------------------------------------------
2.1 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. The Sellers represent and
warrant that the matters set forth in this Article II are true, accurate,
complete and not misleading as per the date of this Agreement and as per the
Closing Date.
2.2 ORGANIZATION, STANDING AND QUALIFICATION OF COMPANY(IES). Media-HOLLAND
is a company duly organized and validly existing under the laws of the country
of the Netherlands and has all necessary corporate powers and authority to own
its properties and carry on its business as owned and operated by it. Media-
GERMANY is a company duly organized and validly
Page 6
<PAGE>
existing under the laws of Germany and has all necessary corporate powers and
authority to own its properties and carry on its business as owned and
operated by it. Media-FRANCE is a company duly organized and validly existing
under the laws of France and has all necessary corporate powers and authority
to own its properties and carry on its business as owned and operated by it.
MEDIA sells its products directly to its customers from its facilities, in the
Netherlands, Germany and France or indirectly through distributors and
representatives. MEDIA has no material property nor offices in any country
except the Netherlands, Germany and France, and MEDIA has no claim of any
material nature that it desires to pursue against a party in any foreign
jurisdiction. Neither the nature of the business of MEDIA nor the ownership of
its properties requires MEDIA to be qualified in any jurisdiction, other than
those stated above, in which failure to so qualify would have a material
adverse effect on MEDIA. MEDIA is not insolvent, has not been dissolved
("ontbonden"), declared bankrupt ("failliet verklaard"), and no action or
request is pending to declare MEDIA bankrupt and MEDIA has neither filed a
request for, nor has been granted, a moratorium or a suspension of payment
("surseance van betaling"). No person holds a power of attorney or is
authorised to dispose of any funds of MEDIA or to commit in any way except as
set forth in Schedule 2.2.
2.3 CAPITAL STRUCTURE. The authorized capital stock of Media-HOLLAND
consists of 2.000 shares of common stock of NLG 500 nominal value each, of
which 500 are validly issued and outstanding. The authorized capital stock of
Media-GERMANY consists of DM 50,000. The authorized capital stock of Media-
FRANCE consists of 500 shares of common stock, of which 500 are validly issued
and outstanding. All of the outstanding shares have been validly issued and
are fully paid and nonassessable. There are no outstanding subscriptions,
options, rights, warrants, convertible securities, or other agreements or
commitments obligating MEDIA to issue or to transfer any additional shares of
its capital stock of any class.
2.4 CENTRADAS' TITLE TO SHARES. Centradas is a company duly organized and
validly existing, under the laws of the Netherlands. Centradas is the owner,
beneficially and of record, of the Shares free and clear of all liens,
encumbrances, security agreements, equities, options, claims, charges, and
restrictions other than those restrictions imposed on the transfer of the
Shares by the laws of the Netherlands. Centradas has full power and is
authorized to transfer the Shares to IMPCO without obtaining the consent or
approval of any other person, entity, or governmental authority.
Page 7
<PAGE>
2.5 SUBSIDIARIES. Media-HOLLAND does not own, directly or indirectly, any
interest or investment (whether equity or debt) in any corporation,
partnership, business, trust, or other entity, except for the Subsidiaries. All
the issued and outstanding shares of the Subsidiaries are directly or
indirectly owned by Media-HOLLAND, and are free and clear of all liens,
encumbrances, and security agreements, equities, options and claims. The
Articles of Association and all other legally required corporate records of the
Subsidiaries have been made available or furnished to IMPCO.
2.6 FINANCIAL STATEMENTS. Schedule 2.6 to this Agreement sets forth an
unaudited consolidated/ "combined" balance sheet of MEDIA as of July 31, 1995,
and an unaudited consolidated/"combined" income statement of MEDIA for the
seven-months ended July 31, 1995, herein after collectively referred to as
"Financial Statements". The Financial Statements of Schedule 2.6 are true,
complete and correct in all material respects and give a true and fair view of
the consolidated/"combined" financial position and results of operations of
MEDIA as of July 31, 1995. The Financial Statements comply with generally
accepted accounting principles in the Netherlands on bases and accounting
principles which have been consistently applied by MEDIA in the preparation of
its statutory accounts for the preceding five financial years. The Financial
Statements are not affected by any extraordinary or non-recurring items and
disclose in all material respects the assets and liabilities (including
unquantified or disputed liabilities) of MEDIA as at July 31, 1995. The books
of account for MEDIA from which the Financial Statements were prepared
accurately reflect in all material respects, all of MEDIA's items of income
and expense, all of its assets and liabilities and all of its accruals and
reserves.
2.7 ABSENCE OF MATERIAL FINANCIAL CHANGES. Except as set forth in
Schedule 2.7, since July 31, 1995, MEDIA has not:
(a) incurred any material obligation or liability, whether absolute
or contingent, except obligations and liabilities incurred in the
ordinary course of their respective businesses;
(b) discharged or satisfied any material lien or encumbrance, or paid
any material obligation or liability, whether absolute or
contingent, other than current liabilities having become due and
payable since that date in the ordinary course of business of
MEDIA and/or obligations and liabilities under contracts referred
to in any Schedule annexed hereto;
(c) made or agreed to make or materially change any wage, salary, or
employee benefit increases;
(d) sold or transferred any of their material intangible or tangible
assets or cancelled any material debts or claims, except in each
case in the ordinary course of business;
Page 8
<PAGE>
(e) sold, assigned, or transferred any patent, tradename, trademark
or copyright;
(f) suffered any extraordinary losses or waived any rights of
substantial value;
(g) suffered any loss, damage, or destruction to any of their
properties due to fire or other casualty, whether or not insured,
which loss, damage or destruction materially and adversely
affects their businesses, properties or operations;
(h) issued or sold or agreed to issue or sell any shares of capital
stock or any option, warrant or right in respect to such capital
stock, or any promissory notes, evidences of indebtedness or any
other securities, or reclassified or agreed to reclassify its
capital stock;
(i) mortgaged, pledged or subjected to lien, charge or any other
encumbrance any of their tangible or intangible assets;
(j) made or agreed to make capital expenditures in any one case or
in the aggregate of more than 25,000 Dutch guilders;
(k) declared or paid any dividends or other distributions of any kind
whether out of profits or capital and no right to dividends in
connection with or on the Shares have been assigned novated or
transferred to any other person, except for the interim dividend
to Centradas, as referred to in Section 6.9 of this Agreement;
(l) paid, distributed, advanced or loaned any money or agreed to pay,
distribute, advance or loan money, to any of their directors,
officers or employees or any other person or legal entity ,
except in the ordinary course of business;
(m) amended their Articles of Association except with the consent of
IMPCO;
(n) conducted their business otherwise than in its ordinary and usual
manner; or
(o) paid or agreed to pay any fees or costs, including professional
fees, incurred in connection with this Agreement or the
transactions contemplated hereby, except for expenses paid or
accrued for in the Closing Statements.
2.8 ABSENCE OF UNDISCLOSED LIABILITIES. MEDIA does not have any material
debt or liability of any nature, whether accrued, absolute, contingent, or
otherwise, and whether due or to become due, that is not fully and correctly
reflected or reserved against in the Financial Statements, except for those
that may have been incurred in the ordinary course of business after July 31,
1995. Except as set forth in Schedule 2.7 to this Agreement, such debts,
liabilities, and obligations incurred after such date are usual and normal in
amount both individually and in the aggregate.
Page 9
<PAGE>
2.9 TAX RETURNS AND AUDITS. When used in this Agreement, "Tax" means all
local (municipal) State provincial, national or foreign taxes and other
impositions and social security contributions, whether direct or indirect, due
or payable to or to be raised on previous periods, or claimed or disposed by,
the Dutch or any other government or any subdivision thereof, whether by
withholding or otherwise, including any impost, duty, levy, excise, charge,
premium, tax or social security contribution and any interest or penalty
relating thereto. MEDIA has duly and timely filed or caused to be filed all Tax
and other returns required by law and/or regulations and has duly and timely
paid, withheld, or made provision for the payment of all Tax. No objection
("bezwaar") or appeal ("beroep" or "cassatie") is presently pending or to the
best of Sellers' knowledge will be filed or may have to be filed with the Tax
authorities or the competent Court or Courts. MEDIA has sufficient records and
accounts as required by the tax and social security laws of the Netherlands and
of any other relevant jurisdictions. The competent Tax authorities have never
rejected any records and accounts of MEDIA as the basis for the computation of
any Tax liability. Proper and accurate amounts have been withheld by MEDIA from
its employees for all periods in complete compliance with the Tax laws, and
MEDIA has withheld such amounts as required and such withholdings have been
timely paid by MEDIA to the respective governmental agencies. There are no
known present disputes as to the Tax position of MEDIA or any of its
properties, assets or income or regarding any Tax returns filed by MEDIA nor
are there any audits or investigations by any Tax authorities presently being
made or except as disclosed in Schedule 2.9 expected, nor are there requests
for exchange of information pending regarding any Taxes relative to MEDIA or
any of its business relations. No collection procedure have been initiated
against MEDIA or any of its properties, assets or income for the account of any
Tax. MEDIA has not received any reminders ("aanmaningen") or warrants
("dwangbevelen"). To the best of Sellers knowledge MEDIA nor any of its
managing directors in their capacity of managing directors have at any time
been the subject of a criminal investigation relating to or involving Tax. The
Sellers and MEDIA have not concluded any agreement, ruling or compromise with
any Tax authority which may affect MEDIA's Tax position, nor is Media subject
to any special Tax regime. The Financial Statements reflect in all material
respects the amount of Tax payable by MEDIA. In the Financial Statements
adequate reserves have been provided for any contingent or deferred Tax
("latente belastingen"). As of the Closing Date, the Sellers shall release
MEDIA from any liability under any Tax sharing agreement among the Sellers and
MEDIA.
Except as otherwise provided below, the Sellers shall have the right to direct
the handling of all matters relating to Tax attributable to periods ending on
or before the Closing Date for which the Sellers are liable for under Section
10.2 hereof, including the right to prosecute all administrative and judicial
remedies, to settle all issues and to enter into closing agreements; provided
that (i) the Sellers shall only after the prior
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written consent of IMPCO enter into any settlement or other agreement that may
materially increase Tax liabilities of MEDIA for taxable years ending after the
Closing Date; (ii) the Sellers shall inform MEDIA, and MEDIA shall inform the
Sellers and IMPCO, upon receipt of any notices, assessments, or the like, that
will materially affect the Tax liability of MEDIA; (iii) in filing any Tax
return involving MEDIA, the Sellers shall not, except as may be required by law
or any governmental Taxing or other agency, materially deviate form the manner
in which any item was reported in prior years without the written consent of
IMPCO, which shall not be unreasonably withheld.
2.10 INVENTORY. The inventories of MEDIA, including without limitation, raw
materials, work in process, finished goods and literature (collectively called
"Inventory") reflected in MEDIA's balance sheet as of July 31, 1995, included
in the Financial Statements, consist of items that are of good and merchantable
quality and are usable and saleable in the ordinary course of business by
MEDIA, except for an amount represented by the inventory reservation set forth
in such balance sheet.
Except for sales made in the ordinary course of business since July 31, 1995,
all material Inventory is the absolute property of MEDIA. No items of Inventory
are subject to security interests to the effect that it would substantially
affect the business interests of MEDIA. The value of Inventory as reflected in
the Financial Statements is determined on the basis of a weighted-average cost
consistent with prior years.
2.11 OTHER TANGIBLE PERSONAL PROPERTY. The books and records of MEDIA,
contain a reasonable description of all trucks, automobiles, and material items
of machinery and equipment. No material tangible property used by MEDIA in
connection with its business is held under any lease, security agreement,
conditional sales contract, or other title retention or security arrangement
and is located other than in the possession and under the control of MEDIA. The
tangible property owned or possessed by MEDIA constitutes all such tangible
personal property necessary for the conduct by MEDIA of its business as now
conducted.
2.12 ACCOUNTS RECEIVABLE. All trade accounts receivable of MEDIA reflected
in the balance sheet of MEDIA as of July 31, 1995, included in the Financial
Statements, arose from valid sales in the ordinary course of business and will
be fully recoverable in the ordinary course of business and in any event within
150 days after they have become due and payable. Such balance sheet reflects
adequate reserves for doubtful accounts and trade discounts, on a basis
consistent with that of prior years.
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Receivables not collected after 150 days after they become due and payable will
be assigned to Centradas against payment of the bookvalue of such receivables
as per July 31, 1995 (the nominal amount less possible provisions for such
receivable), under deduction of payments on such receivable received by MEDIA.
2.13 TITLE TO ASSETS. MEDIA has good and marketable title to all their
material assets, whether real, personal, mixed, tangible, and intangible. Such
assets constitute all the assets that are used in the business of MEDIA and are
free and clear of mortgages and pledges, and to the best of Sellers' knowledge
after due and diligent enquiry of liens, charges, or encumbrances. The
equipment and other tangible assets of MEDIA are in good operating condition
and repair and are adequate for the uses to which they are being put and none
of such property is in need or maintenance or repairs except for ordinary,
routine maintenance and normal wear and tear.
2.14 CUSTOMERS AND SALES. Schedule 2.14a to this Agreement is a list of
current customers of MEDIA which on an individual basis have made purchases
exceeding 100,000 Dutch guilders during the 12 months ended December 31, 1994.
To the best knowledge of the Sellers, there are no facts or circumstances,
indicating that any of these customers intend to cease doing business with
MEDIA or to materially alter the amount of business they are presently doing
with MEDIA. Except as disclosed in Schedule 2.14b, MEDIA has not been and is
not a party to any agency, distributorship, marketing, purchasing,
manufacturing or licensing agreement or arrangement or any restrictive trading
or other agreement or arrangement which in any way has restricted its freedom
to carry on the whole or any part of its business or to use or exploit its
assets in any part of the world in such manner as it thought or may think fit.
To the best of Sellers' knowledge MEDIA has not manufactured or sold products
or provided services which or are or will become in any material respect faulty
or defective.
Except in the ordinary course of business MEDIA has not accepted any liability
or obligation to service, repair, maintain, take back or otherwise do or not do
anything in respect of any goods or products that would apply after the goods
or products have been delivered by it.
2.15 SUPPLIERS AND PURCHASES. Schedule 2.15 to this Agreement is a list of
current suppliers of MEDIA which on an individual basis have sold inventory or
services exceeding 100,000 Dutch guilders during the 12 months ended December
31, 1994. To the best knowledge and belief of the Sellers, there are no facts
or circumstances, indicating that any of these suppliers intend to cease doing
business with MEDIA or to materially alter the amount of business they are
presently doing with MEDIA.
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2.16 INSURANCE POLICIES. Schedule 2.16 to this Agreement is a description of
all insurance policies presently in effect and held by Centradas or other third
parties, on behalf of MEDIA, concerning its businesses and properties and
liability policies held by MEDIA and related agreements in the possession of
MEDIA have been furnished or made available to IMPCO. MEDIA, or the Sellers on
behalf of MEDIA, have maintained and now maintain (1) property insurance on all
of MEDIA's material assets and business of a type customarily insured, covering
property damage and loss of income by fire or other casualty, and (2) liability
insurance protection against liabilities, claims and risks against which it is
customary to insure, including consequential damages and economic loss and all
forms of legal liability ("wettelijke aansprakelijkheid"). No such policy is in
default for failure to pay premiums nor is any claim pending under such policy
and to the best of Sellers' knowledge there is nothing that would give rise to
a claim under such policies or which would cause any of them to be or become
void or voidable.
2.17 LITIGATION. Except as disclosed in Schedule 2.17, MEDIA is not engaged
in any litigation or arbitration proceeding as plaintiff or defendant except
for debt collection of sums not exceeding 25,000 Dutch guilders and Sellers are
not aware of any pending, or threatened suit, action, arbitration, or legal,
administrative or other proceeding, or governmental investigation against or
affecting MEDIA, assets and financial condition. To the best knowledge and
belief of the Sellers, no party has been physically injured and no property has
been damaged by MEDIA, or by any of its employees or officers, which would give
rise to any material claim against MEDIA nor is presently engaged in any legal
action to recover damages sustained by any of them or to recover any moneys of
a material amount due to any of them.
2.18 DEFAULT. Neither the execution nor the performance of any obligations
under this Agreement will result in a breach or violation of any term or
provision of or constitute a material default under any agreement or instrument
to which MEDIA is a party or under which MEDIA has any rights or obligations
and which such default or violation would have a materially adverse effect on
the business, properties, or financial condition of MEDIA.
2.19 AUTHORITY AND CONSENTS. The Sellers and MEDIA have the right, power,
legal capacity, and authority to enter into, and perform its respective
obligations under, this Agreement including the Ancillary Agreements. The
execution and delivery of this Agreement, and documents contemplated herein, by
the Sellers and MEDIA have been duly authorized by all necessary corporate
actions.
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2.20 CORPORATE DOCUMENTS. The Sellers and MEDIA have furnished or made
available to IMPCO for its examination (i) true, correct and complete copies of
the Articles of Association of MEDIA; (ii) the minute books of MEDIA and other
legally required corporate documents; and (iii) the shareholders register of
MEDIA setting forth all transfers of any shares.
2.21 EMPLOYMENT CONTRACTS AND BENEFITS. Schedule 2.21 to this Agreement
constitutes a list of all MEDIA's employment contracts or oral agreements,
pension, bonus, social benefit plans, guaranteed vacations, sick pay,
termination pay, leave of absence or other material written agreements, or
other material oral agreements, providing for employee (either active or
retired) remuneration or benefits. MEDIA is not in default under any of these
agreements, nor has MEDIA incurred liabilities under these agreements or
arrangements in excess of 25,000 Dutch guilders, except as otherwise disclosed
herein. Copies of all such agreements or arrangements have been provided or
made available to IMPCO. Other than disclosed in Schedule 2.21 or reserved for
in the Financial Statements, MEDIA is not a party to or makes or is required to
make employer contributions to any pension, profit sharing, retirement
compensation, bonus, severance, medical or life insurance or other employee (or
ex-employee) welfare or benefit plans, agreements or arrangements maintained
for the benefit of any of the employees or any payment of "back-service"
contributions now or upon retirement, death or disability of any of its
employees.
2.22 BANK ACCOUNTS. Schedule 2.22 to this Agreement constitutes a list of
all MEDIA's accounts with banks or other financial institutions, including
account names, addresses, and account numbers, in which MEDIA has an account,
deposit, or safe deposit box, with the names of the person authorized to draw
on these accounts or deposits or to have access to these boxes.
2.23 LABOR MATTERS. There are no works council, whether voluntarily or
involuntary, strikes, slowdowns, organizational efforts, discrimination
charges, or other labor disputes pending or threatened against MEDIA.
2.24 ENVIRONMENTAL MATTERS. To the best knowledge and belief of the Sellers
no hazardous substance has been generated, manufactured, released, refined
transferred, stored, treated, handled, managed, discharged, used or disposed of
onto, upon, over, beneath or from the real properties leased or used by MEDIA.
There are no claims outstanding from any employees in relation to any disease
or illness contracted as a result of environmental matters in the course of
their employment by MEDIA.
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2.25 COMPLIANCE. MEDIA has complied with all material laws, regulations and
orders of a national or supranational nature applicable to it or its business
and has obtained all requisite permits, licences, authorizations, consent or
other approval in order to conduct its business as it is presently conducted
and has at all the times complied with the material terms and conditions of
such permits, licences, authorizations and consents including but not limited
to environments licences. MEDIA has not received any notice or other
communication from which is appears that it may be or is alleged to be in
violation of any applicative laws or licences or that any such licence may be
subject to modification, suspension or revocation and to the best of Sellers'
knowledge there are no circumstances likely to give rise to any such violation
or modification, suspension or revocation MEDIA is not (nor has been) a party
to any arrangement, agreement, concerted practice or course of conduct which
contravenes or infringes Articles 85 or 86 of the Treaty establishing the
European Community or any other anti-trust or similar legislation in any
jurisdiction in which MEDIA carries on business or has assets or sales.
2.26 INTERCOMPANY LIABILITIES. MEDIA has been released from any and all
liabilities relating to or in connection with the liabilities of companies
belonging to the group of companies to which the Sellers belong.
2.27 DISCLOSURE. All material facts and circumstances have been disclosed by
the Sellers to IMPCO or IMPCO's advisors which may reasonably be required to
enable IMPCO to verify and judge the desirability and appropriateness of
entering into this Agreement.
ARTICLE III. IMPCO'S REPRESENTATIONS AND WARRANTIES
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IMPCO represents and warrants the accuracy and completeness of the matters
set forth in this Article III are true, accurate, complete and not misleading
as per the date of this Agreement and as per the Closing Date.
3.1 ORGANIZATION, GOOD STANDING, APPROVAL. IMPCO is a corporation duly
organized, validly existing, and in good standing under the laws of the state
of Delaware and has all necessary corporate powers and authority to own its
properties and carry on its business as owned and operated by it. The
execution and delivery of this Agreement, including the Ancillary Agreements,
and the consummation of the transaction contemplated by this Agreement by IMPCO
have been duly authorized, will not result in any breach of or violate or
constitute a default under their respective Articles of Incorporation or By-
Laws, and no further corporate authorization, including any necessary
shareholder approval, is necessary on the part of IMPCO.
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3.2 APPROVAL. No consent, approval, or authorization of, or declaration,
filing, or registration with, any United States federal or state governmental
or regulatory authority is required to be made or obtained by IMPCO in
connection with the execution, delivery, and performance of this Agreement,
including the Ancillary Agreements and the consummation of the transactions
contemplated by this Agreement, except for compliance with the filing
requirements of the U.S. Securities and Exchange Commission.
ARTICLE IV. SELLERS' AND MEDIA'S OBLIGATIONS BETWEEN THE DATE HEREOF AND
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THE CLOSING DATE
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4.1 IMPCO'S ACCESS TO PREMISES AND INFORMATION. IMPCO and its counsel,
accountants, and other representatives shall, subject to the confidentiality
covenant in the Letter of Intent between the parties dated August 14, 1995,
have full access during normal business hours to all properties, books,
accounts records, contracts, and documents of or relating to MEDIA. The Sellers
and MEDIA shall furnish or cause to be furnished to IMPCO and its
representatives all data and information concerning the business, finances, and
properties of MEDIA that may be reasonably be requested.
4.2 CONDUCT OF BUSINESS IN NORMAL COURSE. The Sellers and MEDIA agree that
MEDIA will carry on its business and activities diligently and in substantially
the same manner as previously has been carried out and shall not make or
institute any unusual or novel methods of manufacture, purchase, sale, lease,
management, accounting, or operation that may vary materially from those
methods used by MEDIA as of the date of this Agreement.
4.3 PRESERVATION OF BUSINESS AND RELATIONSHIPS. The Sellers and MEDIA agree
that MEDIA shall use its commercially reasonable efforts to preserve its
business organizations intact, to keep available to MEDIA its present
employees, directors, and key employees and to preserve its present relations
with suppliers, customers, and others having business relationships with it.
4.4 CORPORATE MATTERS. The Sellers agree that MEDIA will not (i) amend its
Articles of Association except to the extent approved by IMPCO; (ii) issue any
shares of its capital stock; (iii) issue or create any warrants, obligations,
subscriptions, options, convertible securities, or other commitments under
which any additional shares of its capital stock of any class might be directly
or indirectly authorized, issued, or transferred from treasury; or (iv) agree
to do any of the acts listed above.
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4.5 MAINTENANCE OF INSURANCE. The Sellers agree to use commercially
reasonable efforts to continue to carry their existing insurance, on behalf of
MEDIA, on the same basis as presently carried.
4.6 EMPLOYEES AND COMPENSATION. The Sellers and MEDIA agree that MEDIA will
not do, or agree to do any of the following acts without the written consent of
IMPCO, which consent shall not unreasonably be withheld: (i) make any material
change in compensation payable or to become payable by either of them, to any
officer, employee, sales agent or representatives except in the ordinary course
of business; or (ii) make any material change in benefits payable to any
Managing Director, employee, sales agent, or representative under any bonus or
pension plan or other contract or commitment.
4.7 NEW TRANSACTIONS. The Sellers and MEDIA agree that MEDIA will not do or
agree to do, without IMPCO's written consent, which shall not be unreasonably
be withheld, any of the following acts:
(1) Enter into any contract commitment, or transaction not in the
usual and ordinary course of business provided however, that no
such contracts, commitment or transaction in excess of 100,000
Dutch guilders shall be considered to be in the ordinary course
of business; or
(2) Make any capital expenditures in excess of 50,000 Dutch guilders,
or enter into any lease of equipment or property under which the
annual lease charge is in excess of 50,000 Dutch guilders; or
(3) Sell or dispose of any capital assets with a net book value
exceeding 25,000 Dutch guilders, individually or in the
aggregate.
4.8 DIVIDENDS, DISTRIBUTIONS AND ACQUISITIONS OF STOCK. The Sellers and
MEDIA agree that MEDIA will not:
(1) Declare, set aside, or make any distribution in respect of its
capital stock, except for the Interim Dividend as referred to in
Section 6.8;
(2) Directly or indirectly purchase, redeem, or otherwise acquire any
shares of its capital stock;
(3) Directly or indirectly pay, distribute or advance any money to
either MEDIA's or Sellers' Managing Directors, Supervisory
Boards, except any payments in the ordinary course of business;
(4) enter into any agreement obligating it to do any of the
foregoing prohibited acts.
4.9 PAYMENT OF LIABILITIES AND WAIVER OF CLAIMS. Except in the ordinary
course of business, the Sellers and MEDIA agree that MEDIA will not, or agree
not to do, any of the following acts: (i) pay any obligation or liability,
fixed or contingent, other than current liabilities; (ii) waive or compromise
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any right or claim; or (iii) cancel, without full payment, any note, loan, or
other obligation owing to MEDIA.
4.10 EXISTING AGREEMENTS. Except in the ordinary course of business, the
Sellers and MEDIA agree that MEDIA will not modify, amend, terminate any of its
existing contracts or agreements, or agree to do any of those acts, which will
have a material adverse affect on the respective businesses of MEDIA.
ARTICLE V. IMPCO'S OBLIGATIONS PRIOR TO CLOSING DATE
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5.1 INFORMATION TO BE HELD IN CONFIDENCE. IMPCO agrees that, unless and
until the Closing has been consummated, IMPCO and their officers, directors,
and other representatives strictly adhere to the confidentiality covenant as
set out in the Letter of Intent between the parties dated August 14, 1995.
ARTICLE VI. COVENANTS AND AGREEMENTS BETWEEN THE PARTIES
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6.1 LEASE OF REAL PROPERTY. Effective upon the Closing Date, the Sellers
undertake to cause Beheba B.V., a private company organized in the country of
Netherlands, having its principal place of business at Koningsweg 7, 6816 TA
Arnhem, Netherlands, (hereinafter referred to as the "Lessor") with the same
principals as the Holding Co. to enter into lease agreements with respect to
the business properties presently in use by MEDIA, located at the Van
Gijnstraat 8-10, 2288 GA Rijswijk and at Frijdastraat 18, 2288 EX Rijswijk.
MEDIA shall lease the above specified two premises at an annual rental of
200,000 Dutch guilders for a period of five years, with an option to renew for
five subsequent years, all under terms and conditions as set out in the Lease
Agreements, substantially in the form as attached hereto as Schedule 6.1 (the
"Lease Agreements").
6.2 INSURANCE SERVICES. Centradas has obtained and paid for certain
insurance policies for the benefit and on behalf of MEDIA, including those set
forth in Schedule 2.16 of this Agreement. Effective upon the Closing Date,
Centradas shall continue to carry MEDIA's existing insurance, on behalf of
MEDIA, on the same basis as presently carried and MEDIA shall be charged for
the premiums at the current market rates with current market brokerage
commission equal to the rates charged to other clients of Centradas.
6.3 LOAN AGREEMENT. Effective upon the Closing Date Holding Co. shall make
available to Media-HOLLAND a loan in the amount of 4.250,000 (four million, two
hundred and fifty thousand) Dutch guilders on the terms and conditions as set
out in a loan agreement, in the form attached hereto as Schedule 6.3 (the "Loan
Agreement").
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6.4 DISTRIBUTION AGREEMENT. Effective upon the Closing Date IMPCO and MEDIA
shall enter into a distribution agreement setting out the terms and conditions
between the parties, in the form as attached hereto as Schedule 6.4 (the
"Distribution Agreement").
6.5 SHAREHOLDERS AGREEMENT. Effective upon the Closing Date IMPCO and the
Sellers shall enter into a shareholders agreement setting out the terms,
conditions and understandings between the parties as shareholders of MEDIA
(hereinafter to be referred to as the "Shareholders Agreement"), in the form as
attached hereto as Schedule 6.5.
6.6 ANCILLARY AGREEMENTS. The Lease Agreements referred to in Section 6.1,
the Loan Agreement referred to in Section 6.3, the Distribution Agreement
referred to in Section 6.4 and the Shareholders Agreement referred to in
Section 6.5 are collectively referred to herein as "Ancillary Agreements".
6.7 MEDIA'S ARTICLES OF ASSOCIATION. Parties agree that the Articles of
Association of Media-HOLLAND and the Subsidiaries shall be amended in order to
read as per the drafts attached hereto as Schedule 6.7a, 6.7b and 6.7c.
Preceding implementation of the amended Articles of Association and effective
the Closing Date, parties shall observe the provisions of amended Articles of
Association as per Schedule 6.8a, 6.8b and 6.8c as if the amendment had already
been effectuated and shall do all such acts and things to have the amendments
processed at the shortest possible notice.
6.8 INTERIM DIVIDEND. Centradas is entitled to the profits of MEDIA up to
October 31, 1995 as reflected in the Closing Statements certified by Deloitte &
Touche, accountants, which profits minus a 35%-reserve for corporate income tax
and minus an amount of NLG 172.442 for backservice pension liabilities will be
made available to Centradas by way of interim dividend and in connection
therewith Centradas shall adopt the shareholders resolution attached hereto as
Schedule 6.8. Upon first written request of Centradas IMPCO will cause MEDIA to
distribute such interim dividend in accordance with the instructions of
Centradas within 90 days from the Closing Date.
6.9 SHARING ARRANGEMENTS. It is understood between the parties that there
are with respect to personnel and facilities existing arrangements between
MEDIA and companies belonging to the group of companies to which Sellers
belong. Such presently existing arrangements are set out in Schedule 6.9, which
Schedule also specifies the basis on which charges for the sharing arrangements
are calculated and imposed.
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Parties agree that the sharing arrangements shall be continued after the
Closing Date as per the specifications of Schedule 6.9, subject however to
review from time to time, whereby the actual requirements of MEDIA for such
services and the current market rate for such services shall be the basis.
6.10 MANAGEMENT SERVICES. With respect to the services of Mr. Frings as
Managing Director of Media the parties have agreed as per the agreement
attached hereto as Schedule 6.10.
ARTICLE VI. THE CLOSING
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7.1 TIME AND PLACE. The transfer of the Shares by the Holding Co. to IMPCO
(the "Closing") shall take place at the offices of Van Schoonhoven In 't Veld
in Amsterdam, The Netherlands at 14:00 p.m. local time on October 31, 1995, or
such other time and place as the parties may agree to in writing (the "Closing
Date"). On the Closing Date, the following actions shall be taken:
(a) Centradas shall adopt the shareholders resolution referred to in
Section 6.8 on the basis of which the interim dividend shall be
distributed.
(b) Sellers shall produce certified resolutions of Sellers's and
MEDIA's shareholders resolutions and MEDIA's Supervisory Board
resolutions, in form and substance satisfactory to counsel of
IMPCO, authorizing the execution and performance of this
Agreement and all actions to be taken by the Sellers and MEDIA
under this Agreement;
(c) MEDIA shall submit to IMPCO a certified copy of the updated
shareholders register of Media-FRANCE;
(d) The Sellers shall produce the written resignations of all of
the members of MEDIA's Supervisory Board;
(e) IMPCO shall submit certified Resolutions of IMPCO's Board of
Directors, in form and substance satisfactory to the Sellers'
counsel, authorizing the execution and performance of this
Agreement and all actions to be taken by IMPCO under this
Agreement;
(f) A notarial deed shall be executed, in accordance with the draft
attached hereto as Schedule 7.1f on the basis of which the Shares
are transferred to IMPCO;
(g) Sellers shall submit to IMPCO a copy of the updated shareholders
register of Media-HOLLAND in which the transfer of the Shares tot
IMPCO has been registered;
(h) IMPCO shall cause a sum of 3,187,500 Dutch guilders to be wire
transferred to the bank account of the Holding Co. as follows:
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account number: 25.71.98.520
bank: MeesPierson The Hague
in the name of: DEPA Holding B.V.
(i) IMPCO and Centradas, as shareholders of Media-HOLLAND, shall
adopt a shareholders resolution, substantially in the form as
attached hereto as Schedule 7.1i, in which Messrs. R.M. Stemmler,
T.A. Schock and N. Coe are appointed as Supervisory Directors of
Media-HOLLAND;
(j) IMPCO and Centradas, as shareholders of Media-HOLLAND, shall
adopt a shareholders resolution substantially in the form as
attached hereto as Schedule 7.1j a, in which it is resolved to
amend the Articles of Association of Media-HOLLAND as per the
draft attached hereto as Schedule 7.1j b;
(k) The Lease Agreements shall be executed by parties thereto;
(l) The Loan Agreement shall be executed by the parties thereto;
(m) The Distribution Agreement shall be executed by the parties
thereto;
(n) The Shareholders Agreement shall be executed by the parties
thereto.
(o) The Agreement on Management Services of Mr. Frings shall be
executed by the parties thereto.
ARTICLE VIII. PARTIES OBLIGATIONS AFTER CLOSING
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8.1 SELLERS' INDEMNITY.
(a) Subject to all of the provisions of this Section 8.1 and
Section 2.1 if this transaction closes, the Sellers shall
indemnify and hold harmless IMPCO from and against:
(i) any and all liabilities, obligations, damages, deficiencies
and expenses resulting from any breach of obligation
incurred hereunder, or non-fulfilment of, any agreement on
the part of the Sellers and/or MEDIA under the terms of this
Agreement or because any representation or warranty herein
or in any certificate furnished or required to be furnished
pursuant to this Agreement by the Sellers, MEDIA, or any of
it directors, employees or representatives to IMPCO shall be
false or misleading in any material respect, except as
permitted herein, as of the Closing Date; and
(ii) all actions, suits, proceedings, demands, assessments,
judgments, costs, and expenses, including reasonable
attorney's fees, incident to the foregoing.
(b) In computing the amount to be paid by the Sellers under its
indemnity obligations, there shall be deducted an amount equal
to any tax benefits received by IMPCO through MEDIA, taking into
account the income tax treatment of the receipt of these
payments.
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(c) IMPCO shall promptly notify the Sellers of the existence of any
claim, demand, or other matter to which the Sellers'
indemnification obligations would apply and shall give them a
reasonable opportunity to defend the same at their own expense
and with counsel of their own selection, provided that IMPCO
shall at all times also have the right to fully participate in
the defense at its own expense. If the Sellers fail to defend,
within a reasonable amount of time, then IMPCO shall have the
right, but not the obligation, to undertake the defense of, and
to compromise or settle (exercising reasonable judgment), the
claim or other matter on behalf, for the account, and at the risk
of the Sellers. If the claim is one that cannot by its nature be
defended solely by the Sellers (including without limitation, any
federal, state, local or other tax proceedings), then IMPCO shall
make available,as required, all information and assistance that
the Sellers may reasonably request.
(d) It is specifically understood that the Sellers' indemnities under
this Agreement shall not apply to any provisions, obligations, or
agreements set forth in the Ancillary Agreements which shall be
self governing.
(e) IMPCO's rights under this Section 8.1 shall be its exclusive
right to recovery of damages from the Sellers by reason of, or
failure by the Sellers or MEDIA to perform any of its
representations warranties, covenants, obligations, liabilities
or agreements in this Agreement.
8.2.1 THE SELLERS TAX OBLIGATIONS. The Sellers agree to pay when due, or
reimburse within a reasonable time, all Tax of MEDIA with respect to any
period of time prior to and through the Closing Date, including any Tax
incurred in connection with the transfer of the shares of Media-FRANCE
to Media-HOLLAND and Media-GERMANY respectively (also in the event that
such transfers would take place after the Closing Date) and the transfer
of the Shares to IMPCO hereunder and and any other Tax payable by MEDIA
arising from taxable events prior to the Closing Date.
8.2.2 MEDIA shall reimburse and indemnify Sellers for any additional
corporate income tax including reasonable costs, which Sellers may claim
as a result of a fiscal revaluation of MEDIA's assets in connection with
the termination of the fiscal unity between MEDIA and Sellers, provided
that such reimbursement and indemnification shall only be payable if,
when and to the extent that MEDIA will have any tax benefits as a result
of such fiscal revaluation of its assets.
8.3 IMPCO'S INDEMNITY.
(a) Subject to all of the provisions of this Section 8.3, IMPCO shall
indemnify and hold harmless the Sellers from and against:
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(i) any and all liabilities, obligations, damages, deficiencies
and expenses resulting from any breach of obligation
incurred hereunder, or non-fulfilment of, any agreement on
the part of IMPCO under the terms of this Agreement or
because any representation or warranty herein or in any
certificate furnished or required to be furnished pursuant
to this Agreement by IMPCO or any of it directors, employees
or representatives shall be false or misleading in any
material respect, except as permitted herein, as of the
Closing Date and
(ii) all actions, suits, proceedings, demands, assessments,
judgments, costs, and expenses, including reasonable
attorney's fees, incident to the foregoing.
(b) In computing the amount to be paid by IMPCO under its indemnity
obligations, there shall be deducted an amount equal to any tax
benefits received by the Sellers through MEDIA, taking into
account the income tax treatment of the receipt of these
payments.
(c) The Sellers shall promptly notify IMPCO of the existence of any
claim, demand, or other matter to which IMPCO's indemnification
obligations would apply and shall give it a reasonable
opportunity to defend the same at its own expense and with
counsel of its own selection; provided that the Sellers shall at
all times also have the right to fully participate in the defense
at its own expense. If IMPCO fails to defend, within a
reasonable amount of time, then the Sellers and MEDIA shall have
the right, but not the obligation, to undertake the defense of,
and to compromise or settle (exercising reasonable judgment), the
claim or other matter on behalf, for the account, and at the risk
of the IMPCO. If the claim is one that cannot by its nature be
defended solely by IMPCO (including without limitation, any
federal, state, local or other tax proceedings), then the Sellers
and MEDIA shall make available, as required, all information and
assistance that IMPCO may reasonably request.
(d) It is specifically understood that IMPCO's indemnities under this
Agreement shall not apply to any provisions, obligations, or
agreements set forth in the Ancillary Agreements which shall be
self governing.
(e) The Sellers' rights under this Section 8.3 shall be their exclusive
right to recovery of damages from IMPCO by reason of, or failure by
IMPCO to perform any of its representations, warranties, covenants,
or agreements in this Agreement.
8.4a LIMITATION OF INDEMNITIES. IMPCO's rights under Section 8.1 and 8.2 and
Sellers's rights under Section 8.3 shall only result in an obligation of the
other party to indemnify and hold harmless pursuant to this Article 8 (i) if
the losses and damages resulting from an incorrectness of each individual
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statement, representation or warranty exceed 25,000 (twenty five thousand)
Dutch guilders and (ii) the amount payable shall exceed 100,000 (hundred
thousand) Dutch guilders in the aggregate, it being understood that if the
amounts payable under (i) and (ii) exceed such limits such amounts shall be
reimbursed in full, and it being understood that neither party shall be under
liability pursuant to this Article 8 to the extent the aggregate liability in
respect of all claims inclusive of interest, cost and expenses would exceed
3,187,000 (three million onehundred eightyseven thousand) Dutch guilders.
8.4b Furthermore, neither party shall be liable pursuant to this Article 8
unless the party has served on the other party a written notice giving details
of the claim in question (i) before the expiration of a period of two years
after Closing in case of indemnity obligations as per article 8.1 sub (a) and
8.3 sub (a) respectively other than the indemnity obligations relating to Tax;
(ii) with respect to the representations and warranties and further obligations
relating to Tax, before the expiration of three months after the expiration of
the statutory term in which Tax authorities can issue (additional) assesments.
8.5 CHANGE ARTICLES. IMPCO and the Sellers shall procure that MEDIA shall
adopt shareholders resolutions substantially in the form as attached hereto as
Schedule 8.5a in order to change the Articles of Association of Media-FRANCE
and Media-GERMANY to read as per the drafts attached hereto as Schedules 6.7b
and 6.7c.
ARTICLE IX. REMEDIES
- --------------------
9.1 WAIVER OF RESCISSION RIGHTS. Notwithstanding any breach or default by
any of the parties of any of their respective representations, warranties,
covenants, or agreements, under this Agreement, if the purchase and sale
contemplated by it shall be consummated at the Closing, each of the parties
waives any rights that it or they may have to rescind or annul this Agreement,
provided however, that this waiver shall not affect any other rights or
remedies available to the parties under this Agreement or under the law.
9.2 RECOVERY OF LITIGATION COSTS. If any legal action or any arbitration or
other proceeding is brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, default, or misrepresentation in connection with
any of the provisions of this Agreement, the successful or prevailing party or
parties, shall be entitled, to recover reasonable attorney's fees and other
costs incurred in that action or proceeding, in addition to any other relief to
which they may be entitled.
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ARTICLE X. NATURE AND SURVIVAL OF INDEMNITIES, REPRESENTATIONS AND
- -------------------------------------------------------------------
OBLIGATIONS
- -----------
10.1 No representations or warranties whatever are made by any party, except
as specifically set forth in this Agreement, or in an instrument, certificate,
or other writing provided for in this Agreement.
All statements contained in any of these instruments, certificates, or other
writings shall be deemed to be representations and warranties under this
Agreement. The representations, warranties and indemnities made by the Sellers
and IMPCO in this Agreement or in instruments, certificates, or other writings
provided for in the agreements to be performed or complied with by these
respective parties under it before the Closing Date, shall be deemed to be
continuing and shall subject to the provisions of article 8.4 sub b survive the
Closing. Nothing in this Section 10.1 shall affect the obligations and
indemnities of the parties with respect to covenants and agreements contained
in this Agreement that are permitted to be performed, in whole or in part,
after the Closing Date.
ARTICLE XI. PUBLICITY
- ---------------------
11.1 All notices to third parties other than required by law or any
regulatory authority and all other publicity concerning the transactions
contemplated by this Agreement shall be jointly planned and coordinated by and
between IMPCO and the Holding Co. No party shall act unilaterally in this
regard without the prior approval of the others, however this approval shall
not be unreasonably withheld.
ARTICLE XII. MISCELLANEOUS
- --------------------------
12.1 FEES. Each party represents and warrants that it has not dealt with a
broker or finder in connection with any transaction contemplated by this
Agreement, and as far as it knows, no broker or any other person is entitled to
any commission or finder's fee in connection with any of these transactions.
12.2 EXPENSES. Each party 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.
12.3 EFFECT OF HEADINGS. The subject headings of the Articles and sections
of this Agreement are included for convenience only and shall not affect the
construction or interpretation of any of its provisions.
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12.4 PARTIES IN INTEREST. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is any thing in this Agreement intended to relieve
or discharge the obligation or liability of any third person to any party to
this Agreement, nor shall any provision give any third persons any right of
subrogation or action against any party to this Agreement.
12.5 ASSIGNMENT. This Agreement shall be binding on, and inure to the
benefit of, the parties to it and their respective heirs, legal
representatives, successors, assigns, provided however, that IMPCO, the
Sellers and MEDIA may not transfer or assign any of their rights under this
Agreement, except with explicit prior written approval of the other parties.
12.6 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.
12.7 NOTICES. All notices, demands, requests, and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party to whom notice is to
be given, or on the second day after mailing if mailed to the party to whom the
notice is to be given, by First Class, (Air-Mail for international delivery),
postage prepaid and properly addressed as follows:
To the Holding Co. at:
Depa Holding B.V.
Koningsweg 7
6816 TA Arnhem, The Netherlands
Attn.: Mr. Neile Coe
To Centradas at:
Centradas B.V.
Van Gijnsstraat 10
2288 GA Rijswijk, The Netherlands
Attn.: Mr. Neile Coe
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To MEDIA at:
Technisch Bureau Media B.V.
Vam Gijnsstraat 8-10
2288 GA Rijswijk, The Netherlands
Attn.: Mr. R. Frings
With a copy to:
Mr. M.C.D. Wesseling
Houthoff
P.O. Box 1507
3000 BM Rotterdam, The Netherlands
To IMPCO at:
IMPCO Technologies, Inc.
16804 Gridley Place
Cerritos, CA, USA 90701
Attn.: Mr. Robert M. Stemmler
With a copy to:
Mrs. S.A. in 't Veld
Van Schoonhoven In 't Veld
P.O. Box 75999
1070 AZ Amsterdam, The Netherlands
Any party may change its address for purpose of this Section by giving the
other parties written notice of the new address in the manner set forth above.
12.8 GOVERNING LAW; JURISDICTION. This Agreement is subject to the laws of
the Netherlands. Notwithstanding the non-exclusive authority of the President
of the District Court of The Hague in summary proceedings any and all disputes
arising in connection with this Agreement or agreements resulting therefrom
shall be settled, subject to any appeal, in accordance with the Rules of the
Netherlands Arbitration Institute (Nederlands Arbitrage Instituut). Any appeal
from the arbitral award shall be governed by the same procedural rules as
applicable to the arbitral procedure in the first instance. The arbitral pannel
shall be composed of three arbiters. The place of arbitration shall be
Amsterdam. The arbitration shall be conducted in the English language.
12.9 SEVERABILITY. This Agreement and the Schedules attached or appended to
this Agreement, constitute the entire Agreement between the parties pertaining
to the subject matter contained in it and supersedes all prior and
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contemporaneous agreements, representations, and understandings of the
parties. No supplement, modification, or amendment of this Agreement shall
be binding unless executed in writing by all of the parties. No waiver of any
of the provision of this Agreement shall be deemed, or shall constitute, a
waiver of any provision, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding unless executed
in writing by the party making the waiver.
12.10 FAILURE TO ENFORCE. Failure of either party to enforce any of the
terms of this Agreement shall not be construed as a waiver of rights thereunder
preventing the subsequent enforcement of such provisions or recovery of damages
for breach thereof.
12.11 FORCE MAJEURE. Neither party shall be responsible for delays or
failures in performance from acts beyond the control of such party. Such acts
shall include but not be limited to acts of God, strikes, lockouts, riots, acts
of war, epidemics, governmental regulations superimposed after the fact, fire,
communication line failures, power failures, earthquakes or other disasters.
12.12 DEFINITIONS. The following terms are defined in this Agreement in the
Section indicated:
IMPCO...............................Preamble
Holding Co..........................Preamble
Centradas...........................Preamble
Sellers.............................Preamble
Media-HOLLAND.......................Preamble
Media-GERMANY.......................Preamble
Media-FRANCE........................Preamble
MEDIA...............................Preamble
Subsidiaries........................Preamble
Shares..............................1.1
Financial Statements................2.6
Tax.................................2.9
Inventory...........................2.10
Lessor..............................6.1
Lease Agreements....................6.1
Loan Agreement......................6.3
Distribution Agreement..............6.4
Shareholders Agreement..............6.5
Ancillary Agreements................6.6
Closing Statements..................6.8
Closing.............................7.1
Closing Date........................7.1
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IN WITNESS WHEREOF, the parties to this Agreement have duly executed it on this
31st day of October, 1995.
IMPCO TECHNOLOGIES, INC DEPA HOLDING B.V.
- ----------------------- -----------------
/s/ S.A. in `t Veld /s/ G.P. Kersten
- -------------------- --------------------
S.A. in 't Veld G.P. Kersten
Attorney by proxy Managing Director
TECHNISCH BUREAU MEDIA B.V. CENTRADAS B.V.
- --------------------------- --------------
/s/ R.M.H. Frings /s/ G.P. Kersten
- -------------------- --------------------
R.M.H. Frings Depa Holding B.V.
Managing Director By: G.P. Kersten
Managing Director
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SHAREHOLDERS AGREEMENT
This Agreement (the "Shareholders Agreement") is made on the 31st day of
October 1995 between:
1. IMPCO Technologies, Inc., a corporation organised under the state of
Delaware, U.S.A., having its principal place of business at 16804
Gridley Place, Cerritos, California 90703-1741 (hereinafter referred
to as "IMPCO");
2. Depa Holding B.V., a private company organized under the laws of the
Netherlands, having its principal place of business at Koningsweg
7, 6816 TA Arnhem, The Netherlands (hereinafter referred to as the
"Holding Co."); and
3. Centradas B.V., a private company incorporated in and operating
under the laws of the Netherlands, having its registered offices at
Van Gijnstraat 10, 2288 GA Rijswijk, The Netherlands, hereinafter
referred to as "Centradas";
the parties to this Agreement are hereinafter also collectively referred to as
the "Shareholders" and each of them as a "Shareholder";
WHEREAS
a) IMPCO holds 51% i.e. 255 of the issued and outstanding shares and
Holding Co., through its wholly-owned subsidiary Centradas holds 49%
i.e. 245 of the issued and outstanding shares of Technisch Bureau
Media B.V., a company incorporated in and operating under the laws
of the Netherlands, having its registered offices at Rijswijk, the
Netherlands, hereinafter referred to as "Media HOLLAND";
b) Media HOLLAND has an authorized capital of NLG 1.000.000 (one
million Dutch guilders) divided into 2,000 shares with a nominal
value of NLG 500 (five hundred Dutch guilders) each, of which five
hundred (500) shares have been issued and fully paid up. The
Articles of Association of Media HOLLAND as agreed between the
parties are attached hereto as Annex I (the "Articles of
Association");
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c) Media HOLLAND owns 100% of the issued and outstanding shares of
Technisch Bureau Media GmbH, hereinafter to be referred to as "Media
GERMANY" and 99% of the issued and outstanding shares of Bureau
Technique Media S.A.R.L., hereinafter referred to as "Media FRANCE".
Media GERMANY owns 1% of the issued and outstanding shares of Media
FRANCE.
Media HOLLAND, Media GERMANY and Media FRANCE are hereinafter
collectively referred to as the "Joint Company";
d) The Joint Company and IMPCO have entered into a Distribution
Agreement of even date, on the basis of which the Joint Company is
the European distributor of certain IMPCO Products (the
"Distribution Agreement");
e) The Shareholders wish to set forth (i) the objectives and purposes
of the Joint Company, (ii) the manner in which the Joint Company
will be managed; and (iii) their further understandings as
Shareholders of the Joint Company and parties to this Agreement;
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS, INTERPRETATION
1.1 Definitions
All capitalized terms when used in this Agreement shall have the
same meaning as these capitalized terms have in the Distribution
Agreement, unless explicitly indicated otherwise.
Articles of Association...........................Preamble
Distribution Agreement............................Preamble
Shareholders Agreement............................Preamble
IMPCO.............................................Preamble
Holding Co........................................Preamble
Centradas.........................................Preamble
Shareholders......................................Preamble
Shareholder.......................................Preamble
Media HOLLAND.....................................Preamble
Media GERMANY.....................................Preamble
Media FRANCE......................................Preamble
Joint Company.....................................Preamble
Business...............................................2.1
IMPCO Products.........................................2.2
Territory..............................................2.2
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Controlled Affiliates..................................2.2
Operating Plan.........................................3.3
1.2 Interpretation
(a) headings to sections are for convenience only and shall not
affect their interpretation;
(b) references to articles are to the articles of this Agreement.
2. BUSINESS ACTIVITIES OF THE JOINT COMPANY
2.1(a) The Joint Company has the following business objectives:
(1) Provide a quality product and services to its customer
through ISO 9002 and continuous improvement;
(2) Assemble complete turn-key systems solutions for industrial
engine applications;
(3) Distribute and supply gaseous fuel systems and exhaust
aftertreatment systems;
(4) Annual sales growth of 15% while improving MEDIA's
profitability; and
(5) Future expansion of IMPCO's product line and products
throughout the Territory as defined hereinafter,
hereinafter to be referred to as the "Business".
2.1(b) For the avoidance of doubt, it is expressly understood that any
existing or new manufacturing rights or manufacturing activities
and any licensing rights to manufacturing that IMPCO may have,
develop or acquire in the Territory as defined hereinafter are
not included in the Business.
2.2 The parties agree that any and all existing and future products
of IMPCO as described in Annex II attached hereto (the "IMPCO
Products") will in the territory as specified in Annex III
hereto (the "Territory"), be sold and distributed through the
Joint Company on the basis of continuation of the favourable
pricing policy as described in Annex IV. This obligation will
continue to be in full force and effect as long as the parties
or any of their controlled affiliates, daughter companies,
controlled holding companies or principals, hereinafter referred
to as the "Controlled Affiliates" are a party to this
Shareholders Agreement. In the event one of the shareholders or
their Controlled Affiliates transfers its shares to a third
party, the Distribution Agreement will be renegotiated. However,
should Centradas or any of its Controlled Affiliates acquire
100% of the shares in the Joint Company, the term of the
Distribution Agreement shall be extended for a period of 5 years
after such transfer and will terminate the last day of the 5
year period subject to 6 (six) months prior written notice.
2.3 In order to implement the Business the Joint Company has entered
into the Distribution Agreement and on the basis thereof may
engage in any and all activities related or incidental to acting
as the European distributor of IMPCO Products.
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2.4 The principal place of business of the Joint Company shall be
located at Rijswijk, the Netherlands, with its German and French
subsidiaries located at Langgons, Germany and Decines, Cedex,
France.
3. MANAGEMENT
3.1 The Joint Company shall have a Board of Supervisory Directors,
comprised of three members, two of which will be appointed by
IMPCO and one will be appointed by Centradas. In the event a
member of the Board of Supervisory Directors resigns, dies or
is otherwise removed, the Board of Supervisory Directors may
take no actions, until such Supervisory Director is replaced by
the respective Shareholder. The initial members of the Board of
Supervisory Directors shall be Mr. T. Schock, Mr. R.M. Stemmler
and Mr. N. Coe. The chairman of the Board of Supervisory
Directors shall be a Supervisory Director appointed by IMPCO.
The initial chairman shall be Mr. R.M. Stemmler.
3.2 The daily management of the Joint Company shall be entrusted to
a Managing Director. The initial Managing Director is Mr.
R. Frings. The Managing Director shall render his services
pursuant to a management agreement between the Joint Company
and Holding Co. on the basis of which Holding Co. will make
available the services of Mr. Frings to the Joint Company on
certain terms and conditions to be agreed upon.
3.3 The Managing Director shall have full authority to operate the
Business on a day-to-day basis to meet the Business objectives
set out in 2.1 and in this section. The Managing Director shall
be responsible for developing the market in the Territory and
for accomplishing and negotiating sales, subject to limitations
imposed by the Board of Supervisory Directors. Furthermore, he
shall be responsible for the profitable operations of the Joint
Company and for the Joint Company's overall results, within the
Joint Company's business plan, hereinafter referred to as the
Joint Company's "Operating Plan". The Operating Plan, under
which the Joint Company will operate, will be approved by the
Board of Supervisory Directors whereby the Operating Plan shall
govern the business and operational activities of the Joint
Company. The Operating Plan shall consist of the following:
(a) MARKETING PLANS. Establishing and implementing an annual
marketing plan for the sale of industrial products or making any
material change to such a plan previously approved by the Board
of Supervisory Directors. Such strategic plans shall include,
but are not limited to, terms and conditions of sale, product
support, warranty commitments, training, and price discounts
and plans.
(b) FINANCIAL BUDGETS. Establishment of, or any revisions
to, and adhering to, an annual operating budget and business
forecast. Such detailed financial budgets shall include income
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statements, balance sheets, detailed sales projections,
headcount plans, capital equipment plans and related
assumptions.
3.4 The Managing Director shall be responsible for keeping the Board
of Supervisory Directors fully informed of the status and
progress of the Operating Plan and for bringing to the attention
of the Board of Supervisory Directors items requiring its
attention and action on a timely basis. The Managing Director
shall provide the Board of Supervisory Directors with all
information and documents as required to properly implement its
duties and responsibilities.
3.5 Notwithstanding the provisions in the Articles of Association of
the Joint Company to that effect, the following resolutions
and/or actions of the Managing Director shall require the prior
approval of the Board of Supervisory Directors:
(a) CHANGES IN TYPE OF BUSINESS. Make any substantial change
in the character of the Business or the establishment of
subsidiaries, branches or places of establishment of the Joint
Company;
(b) OUTSIDE INDEBTEDNESS. Create, incur, assume or permit to
exist any indebtedness for borrowed moneys in excess of
two hundred thousand Dutch guilders (NLG 200.000) other than in
the ordinary course of business, or as approved by the Operating
Plan;
(c) LIENS AND ENCUMBRANCES. Create, incur or assume any
mortgage, pledge, encumbrance, lien or charge of any kind upon
any property or other asset of the Joint Company;
(d) Loans, Investments, Secondary Liabilities. Make any loans
or advances to any person or other entity other than in the
ordinary and normal course of its business as conducted, or make
any investment in the security of any party or guarantee or
otherwise become liable upon the obligation of any person or
other entity, by endorsement of negotiable instruments for
deposit or collection in the ordinary and normal course of its
business;
(e) ACQUISITION OR SALE OF BUSINESS; MERGER OR CONSOLIDATION.
Purchase or otherwise acquire the assets or business of any
person or other entity; or liquidate, dissolve, merge or
consolidate, or commence any proceedings therefore; or sell any
assets except in the ordinary and normal course of the Business;
or sell, lease, assign or transfer any substantial part of its
business or fixed assets, or any property or other assets
necessary for the continuance of the Business including without
limitation the selling of any property or other asset accompanied
by the leasing back of the same;
(f) CAPITAL EXPENDITURES. Make or incur obligations for
capital expenditures in excess of the amount approved in the
Operating Plan;
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(g) LEASED LIABILITY. Incur rental liability under leases of
property of any kind for payment in any one fiscal year of rental
or other obligation in any aggregate amount in excess of NLG
50.000 provided that the liability under leases shall be
calculated without giving effect to tax escalation clauses,
except for those approved in the Operating Plan;
(h) EMPLOYMENT CONTRACTS. Make any appointment or removal of
officers or management employees, or establish or alter any of
their salaries or fringe benefits or enter into or assume any
employment or consulting contracts for officers or other
management employees, or amend or modify existing employment or
consulting contracts in any manner which will increase employee
benefits thereunder, except for those approved in the Operating
Plan;
(i) DISTRIBUTOR AGREEMENTS. Appoint or terminate any
distributor or dealer or materially revise any distributor's
or dealer's contract except for those approved in the Operating
Plan;
(j) MAJOR CONTRACTS. Enter into or amend any contract that
may have a material effect on the business or financial status
of the Joint Company;
(k) OTHER ACTIONS. Other actions requiring approval of the
Board of Supervisory Directors which a Shareholder may request
with the consent of the other Shareholder, which consent shall
not unreasonably be withheld.
3.6 The Shareholders shall take all appropriate action to cause the
Managing Director to observe and adhere to the stipulations set
out in this article 3.
4. LEVEL OF INVESTMENT
The Shareholders agree that in the event the Joint Company requires additional
working capital and provided that the Joint Company is not able to enter into
appropriate financing arrangements with third parties for such additional
working capital and further provided the additional working capital is required
in connections with operations included in the Operating Plan, each of the
Shareholders shall provide adequate capitalization in proportion to their
shareholding.
The Shareholders shall then provide the necessary funds to properly capitalize
the Joint Company by (a) infusing a new stream of cash; (b) guaranteeing the
obligations of the Joint Company towards a creditor; (c) providing a bank
guarantee or letter of credit from a reputable bank; or (d) convert outstanding
debt to equity.
5. DIVIDEND POLICY
Dividends shall be at the disposal of the Shareholders. Parties agree that the
payment thereof shall be subject to the approval of the Board of Supervisory
Directors.
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6. ADVISORS
(a) ACCOUNTANTS. The Joint Company shall designate and appoint a firm of
independent certified public accountants, acceptable to the Shareholders, with
experience and expertise in the accounting principles and practices of both the
United States of America and the Netherlands to audit the books of the Joint
Company at the end of each business year. Each of the Shareholders may have the
accounts of the Joint Company audited by independent accountants in addition to
the foresaid annual audit, in which case such Shareholder shall bear the costs
of any such additional audit.
(b) LEGAL COUNSEL. The Joint Company shall designate and appoint a firm
of lawyers (advocaten) and notaries to render legal services to the Joint
Company.
(c) TAX ADVISORS. The Joint Company shall designate and appoint a firm
of tax advisors to advise the Joint Company in tax matters.
7. ACCOUNTING
The Joint Company shall prepare and maintain such books of accounts and
accounting records as are required by law and generally accepted accounting
principles in the Netherlands and shall prepare in English, financial
statements, including without limitation a balance sheet and an income
statement (profit and loss statement) every month within 30 days of the close
of the month, copies of which shall be forwarded to the Shareholders without
delay. The income statement shall include unit and monetary sales of Product.
The Shareholders and their authorized representatives shall have the right to
inspect and make copies of the books of account and the accounting records of
the Joint Company at any time during regular business hours.
8. INSURANCE
8.1 The Joint Company shall arrange for and maintain such insurances
for the Joint Company and its Supervisory Directors and officers
and Holding Co. shall arrange for and maintain such insurances
for the Managing Director, as will adequately protect such
parties from claims that may arise out of the Joint Company's
operations, including any contractual indemnity obligations that
the Joint Company may incur.
9. TRANSFER RESTRICTIONS
9.1 The Shareholders agree and undertake to comply with the
procedural and the restrictive requirements applicable to the
transfer of any shares held in the Joint Company as provided
for in the Articles of Association.
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9.2 The Shareholders shall be allowed to hold the shares in the
Joint Company indirectly through an affiliated company in which
it directly or indirectly owns all of the issued shares and all
of the voting rights attached thereto, in which event such
affiliated company shall be bound by this Agreement and shall
comply with the provisions of this Agreement as if it were party
to this Agreement provided that also the transferring
shareholder will remain bound to any and all of its obligations
under this Agreement. The full, correct and punctual fulfilment
by such affiliated company of all its obligations under or
pursuant to this Agreement in accordance with the terms and
conditions set forth herein shall be irrevocably and
unconditionally guaranteed by the transferring Shareholder and,
in the case where Centradas is the transferring Shareholder,
also by the Holding Co., in order to procure that such
affiliated company shall comply with the provisions of this
Agreement.
9.3(a) In the event of an intended liquidation of the Joint Company
or in the event the Joint Company intends to sell the Business,
the Business including all rights attached thereto will first be
offered for sale to Centradas in accordance with the terms and
conditions hereof ("Centradas' Right of First Refusal"). The
Shareholders agree that they shall cause the Joint Company to
take all appropriate steps in connection with Centradas' Right
of First Refusal. Centradas' Right of First Refusal will also
apply in the event that the Joint Company wishes or intends to
sell the Business to an affiliated company.
9.3(b) In the event of an intended sale, the Joint Company will inform
Centradas in writing of the details of such intended sale
including the price which the third party is prepared to pay.
Within three months upon receipt of said information Centradas
will inform the Joint Company in writing whether or not it
wishes to buy the Business on the basis of Centradas' Right of
First Refusal. In said period the Joint Company will provide
Centradas with all additional information which Centradas may
reasonably require. In the event that Centradas does not
exercise its Right of First Refusal or that Centradas and the
Joint Company fail to reach agreement within two months from
Centradas' written notice that it wishes to exercise its Right
of First Refusal, the Joint Company will be free to proceed with
a sale of the Business to such third party, provided always at
at least the same price as the lowest price offered to Centradas
and under conditions which do not in any material respect depart
from the terms as offered to Centradas. In the event Centradas
has exercised its Right of First Refusal and the parties have
reached agreement, the transfer of the Business to Centradas
will be effected within 30 days after agreement has been
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reached. If the Joint Company should be prepared to sell at a
price which is lower than the price lastly offered to Centradas
or under conditions which in any material respect depart from
the terms as offered to Centradas, the Joint Company will have
to give Centradas' preference again at that lower price or at
such more favourable conditions in conformity with the
provisions of this article.
9.3(c) In the event of an intended liquidation of the Joint Company,
the Joint Company will inform Centradas in writing of such
intended liquidation. Within three months upon receipt by
Centradas of said notice, Centradas will inform the Joint
Company in writing whether or not it is prepared to buy the
Business of the Joint Company. In said period of three months
the Joint Company will provide Centradas with all additional
information which Centradas reasonably may require. In the event
Centradas exercises its Right of First Refusal, Centradas will
have the right to buy the Business of the Joint Company for a
price to be agreed upon by Centradas and the Joint Company
jointly within 30 days after Centradas' notice that it wishes to
buy the Business. If Centradas and the Joint Company fail to
reach agreement on the price within said term, the price for the
Business will finally be determined by three corporate finance
experts jointly. Each of Centradas and the Joint Company (or
their Controlled Affiliates as the case may be) will appoint a
corporate finance expert of a first class reputable accountants
firm, bank or merchant bank to that effect. The experts so
appointed shall jointly appoint within a reasonable period of
time a third-independent-expert also of a first class reputable
accountants firm, bank or merchant bank. Should the experts fail
to reach agreement on the third expert to be appointed, the
third expert will be appointed by the Chairman of the NIVRA at
the request of the party who has an interest in such decision.
The purchase price will be based at the market value of the
Business taking into account amongst other factors:
i. the earnings over the present year;
ii. the earnings over the two (2) preceding years;
iii. the expected earnings for the next two (2) years;
The transfer of the Business to Centradas will be effected
within 30 days after the determination of the price, unless
prior to the expiration of that period of 30 days Centradas
has informed the Joint Company in writing that it is no
longer interested in buying the Business.
9.4 A sale of IMPCO's manufacturing activities and/or licensing
rights to manufacturing to a Controlled Affiliate can only be
effectuated, provided such transferee shall be bound by the
provisions of article 10.1 and 2.2 hereof, including the
provisions of this article 9.4, subject to the terms and
conditions of this Agreement.
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10. FORMALITIES, UNDERTAKINGS
10.1 The Shareholders agree not to undertake an interest, whether
directly or through a Controlled Affiliate (except for such
business interests as they are at the date hereof interested in and
which are described in Exhibit II) in any other company that would
compete directly with IMPCO's Products within the Territory.
10.2 It is expressly understood between the parties that the provisions
of 10.1 do not apply to IMPCO existing or new manufacturing rights
or manufacturing activities and any licensing rights to manufacture
that IMPCO may have, develop or acquire as referred to in 2.1(b).
10.3 The Shareholders agree that any future issuance of shares in
the Joint Company or the granting of rights to subscribe for
shares in the Joint Company shall be made with due observance
of article 4 sub 3 of the Articles of Association with the
exclusion of article 4 sub 4 of the Articles of Association.
10.4 The Shareholders agree that they not amend the Articles of
Association to the effect that different types of shares are created
10.5 Each of the Shareholders shall (and shall procure that its
representatives on the Management Board and the Board of
Supervisory Directors) comply with the provisions of this
Agreement and the Articles of Association of the Joint Company
in order to ensure the observance of the terms of this Agreement
and to do all such acts and things as may be necessary to carry
out this Agreement, including the use of their (indirect) voting
rights in the Joint Company. The provisions of this Agreement
shall prevail in case of anyinconsistency with the Articles
of Association of the Joint Company.
10.6 In the event one of the parties to this Agreement discontinues
to be a Shareholder of the Joint Company, other than as a result
of a transfer of shares to a Controlled Affiliate, the other
party shall cause the Joint Company to, and the Joint Company
shall, take all necessary steps to amend the name of the Joint
Company in order to remove any references to the name of the
discontinuing party. The Joint Company shall relinquish any
right it may have, in whole or in part, to the name of, or to
the use of the name of, the discontinuing Shareholder when the
name change has been effectuated.
10.7 For the time that Centradas or a Controlled Affiliate, for the
purpose of this paragraph, hereinafter jointly referred to as
"Centradas", is a shareholder in the Joint Company, Centradas
hereby grants IMPCO an option to buy all the shares (the
"Shares") which Centradas holds in the Joint Company, its
rights, hereinafter referred to as "IMPCO's Option". IMPCO can
not exercise IMPCO's Option prior to November 1, 1998. After
November 1, 1998 IMPCO can exercise IMPCO's Option once a year,
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within a period of 30 days after the date that the Annual
Accounts of the Joint Company for the preceding year have been
adopted. IMPCO's Option can be exercised by sending a written
notice to that effect to Centradas. IMPCO may exercise IMPCO's
Option against the market value of the Shares to be acquired.
The purchase price for the Shares will be determined by the
Shareholders jointly. If the parties fail to reach agreement on
the purchase price within 30 days after IMPCO's notice that it
is interested in acquiring the shares, the price for the shares
will finally be determined by three corporate finance experts
jointly. Each of the Shareholders (being Centradas, IMPCO or
their respective Controlled Affiliates) will appoint a corporate
finance expert to that effect. The third-independent-expert,
also of a first class reputable accountants firm, bank or
merchant bank will be appointed by the experts so appointed by
the Shareholders. If the experts fail to reach agreement on
the third expert to be appointed, the third expert will be
appointed by the Chairman of the NIVRA at the request of the
party who has an interest in such a decision. The purchase price
will be based at the market value of the Joint Company taking
into consideration amongst other factors:
i. the earnings over the present year;
ii. the earnings over the two (2) preceding years;
iii. the expected earnings for the next two (2) years;
The transfer of the Shares shall be effected against payment
within 30 days after the determination of the price.
11. CONFIDENTIALITY
11.1 The parties shall treat as confidential any and all information
not in the public domain received in connection with and
pursuant to this Agreement and shall not communicate any such
information to third parties, other than its advisors, unless
it would be required to do so by law.
12. ANNOUNCEMENTS
12.1 All announcements to the press or to the public, employees,
customers and suppliers concerning the Joint Company and the
Business shall (in so far as permitted by law or other regulations
to which either party may be subject) be in a form agreed between
the parties, except in so far as they relate to the ordinary
promotion of the routine business of the Joint Company.
13. LEGALITY
13.1 The Joint Company and all operations and activities of the Joint
Company will be subject to applicable government laws and
regulations in the EC. The Joint Company shall make any
application to the EC Commission with respect to the ability
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<PAGE>
of the Joint Company to lawfully operate within the EC
territory, as legal counsel to the Joint Company may deem
advisable.
14. DURATION AND TERMINATION
14.1 The rights and obligations of each Shareholder under this
Agreement shall continue for only so long as it or its
Controlled Affiliate remains a Shareholder of the Joint
Company and shall upon such shareholder's ceasing to be a
Shareholder thereupon terminate, except for the provisions of
article 11, which provisions shall survive the termination of
this Agreement.
14.2 This Agreement shall continue in full force and effect until
terminated by the written consent of the Shareholders or until
the Joint Company is placed in liquidation, subject however to
the provisions of 9.3(c).
15. MISCELLANEOUS
15.1 Neither this Agreement nor any rights hereunder shall be
assignable directly or indirectly by any party, except with
express written consent of the other party(ies).
15.2 All notices and communications hereunder shall be in writing
and shall be deemed to have been given if delivered by hand,
mailed by registered letter, sent by telecopier (with receipt
confirmed) to the parties at their respective addresses as first
above written or to such other address as the parties shall have
given notice of pursuant hereto.
15.3 All Exhibits and Annexes to this Agreement are an integral part of
this Agreement and are incorporated herein. Any capitalized term
in an Exhibit or Annex has the same meaning as in this Agreement.
15.4 Failure of either party to enforce any of the terms of this
Agreement shall not be construed as a waiver of rights
thereunder, preventing the subsequent enforcement of such
provisions or recovery of damages for breach thereof.
15.5 Neither Shareholder shall be responsible for delays or failures
in performance from acts beyond the control of such party. Such
acts shall include but not be limited to acts of God, strikes,
lockouts, riots, acts of war, epidemics, governmental
regulations superimposed after the fact, fire, communication
line failures, power failures, earthquakes and other disasters.
15.6 This Agreement constitutes the entire agreement and
understanding between the parties hereto in respect to the
subject matter contained herein and any preceding or concurrent
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oral or written agreements are hereby superseded except to the
extent expressly provided for herein.
15.7 In the event of the provisions contained in this Agreement
being invalid, unlawful and unenforceable to any extent, such
provision(s), unless it/they may be deemed of essence to this
Agreement, shall be severed from the remaining provisions which
shall continue to be valid to the fullest extent permitted by
law. In addition the parties hereto shall endeavour to agree
valid and enforceable amended provisions, which shall as far as
possible effect the intentions expressed herein.
15.8 The parties hereto waive any right they may have to rescind or
annul this Agreement.
16. GOVERNING LAW AND JURISDICTION
16.1 This Agreement is subject to the laws of the Netherlands.
Notwithstanding the non-exclusive authority of the President
of the District Court of The Hague in summary proceedings any
and all disputes arising in connection with this Agreement or
agreements resulting therefrom shall be settled, subject to any
appeal in accordance with the Rules of the Netherlands
Arbitration Institute (Nederlands Arbitrage Instituut). Any
appeal from the arbitral award shall be governed by the same
procedural rules as applicable to the arbitral procedure in the
first instance. The arbitral panel shall be composed of three
arbiters. The place of arbitration shall be Amsterdam. The
arbitration shall be conducted in the English language.
In witness whereof this Agreement is signed in duplicate the day and year first
above written.
IMPCO TECHNOLOGIES, INC. DEPA HOLDING B.V.
- ------------------------ -----------------
/s/ S.A. in `t Veld /s/ G.P. Kersten
- -------------------- --------------------
S.A. in 't Veld G.P. Kersten
Attorney at proxy Managing Director
CENTRADAS B.V.
- --------------
/s/ G.P. Kersten
- --------------------
Depa Holding B.V.
By: G.P. Kersten
Managing Director
Page 13
LOAN AGREEMENT
THE UNDERSIGNED:
1. DEPA HOLDING B.V., a limited liability company duly organized under
the laws of The Netherlands, having its principal place of business
at Koningsweg 7 in (6816 TA) Arnhem, hereinafter referred to as
"HOLDING CO.",
2. TECHNISCH BUREAU MEDIA B.V., a limited liability company duly
organized under the laws of The Netherlands, having its principal
place of business at Van Gijnstraat 10 in (2288 GA) Rijswijk,
hereinafter referred to as "BORROWER"
3. TECHNISCH BUREAU MEDIA GmbH, a limited liability company duly
organized under the laws of Germany, having its principal place of
business at Perchstetten 14A in (35428) Langgons, Germany,
hereinafter referred to as "Media-GERMANY",
and
4. TECHNIQUE MEDIA S.A.R.L., a limited liability company duly organized
under the laws of France, having its principal place of business at
34 Rue Arago, BP 114, 69151 Decines, Cedex, France, hereinafter
referred to as "Media-FRANCE".
WHEREAS:
1. Holding Co. through its wholly owned subsidiary Centradas B.V., owns
100 % of the issued and outstanding shares of Borrower. Borrower owns
<PAGE>
page 2
100 % of the issued and outstanding shares of Media-GERMANY. Borrower
also owns 99 % of the issued and outstanding shares of Media-FRANCE.
Media-GERMANY owns 1 % of the issued and outstanding shares of Media-
FRANCE. Borrower, Media-GERMANY and Media-FRANCE are hereinafter
collectively referred to as "MEDIA PARTIES";
2. On the date hereof IMPCO Technologies Inc., a corporation organized
under the law of the State of Delaware, U.S.A., having its principal
place of business at 16804 Gridley Place, Cerritos, California 90703-
1741 (hereinafter referred to as "IMPCO") has entered into that
certain Purchase and Sale Agreement with Holding Co. and Centradas
B.V. whereby IMPCO has agreed to purchase and accept from Centradas
B.V. 51 % of Borrower's equity (the "AGREEMENT OF PURCHASE AND SALE
OF STOCK");
3. At the date of execution hereof, Borrower owes an amount to Holding
Co. on the basis of a current account. The balance of the current
account, as per October 31, 1995 will be converted into a loan to
Borrower in accordance with the terms and conditions of this
Agreement which loan Borrower may and will use only to finance the
Media Parties' operations.
HEREBY DECLARE TO HAVE AGREED AS FOLLOWS:
ARTICLE 1 - DEFINITIONS
All capitalised terms shall have the same meaning as these capitalised terms
have in the Purchase and Sale Agreement unless explicitly indicated
differently. In addition thereto, the following terms shall have the meaning
as assigned to them below.
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page 3
"BUSINESS DAY": means a day on which banks and foreign exchange markets are
open in Amsterdam for the transactions of the nature required by this
Agreement.
"ENCUMBRANCE": means any mortgage, charge, assignment for the purpose of
security, pledge, lien, right to set-off, arrangements for retention of
title, preferential right or trust arrangement for the purpose of, or which
has the effect of, granting security or other security interest of any kind
whatsoever, and any agreement, whether expressed to be conditional or
otherwise, to create any of the same.
"INDEX RATE": means the day to day rate of interest at the Amsterdam Inter-
Bank Offer Rate for a period of three, six or twelve months, such period
corresponding with the Interest Period as elected in conformity with Article
4 hereof plus one percentage point.
"OPTIONAL FIXED RATE": means the annual interest rate which MeesPierson
charges its best customers for a five year loan, the amount of the Term Loan
outstanding on the first day of the Optional Fixed Rate Period, as per the
first Business Day of the Optional Fixed Rate Period plus one percentage
point.
"OPTIONAL FIXED RATE PERIOD": this term shall have the meaning as assigned
to it in Article 4 hereof.
"PARENT-GUARANTEE": this term shall have the meaning as assigned to it in
Article 10 hereof.
"SUBORDINATED PLEDGE": this term shall have the meaning as assigned to it in
Article 10 hereof.
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page 4
ARTICLE 2 - THE LOAN
1. Subject to the terms and conditions hereinafter set forth, the
balance of the current account between Holding Co. and Media-Holland
outstanding as per October 31, 1995 being an amount of 4,250,000 NLG
(four million two hundred and fifty thousand Dutch guilders) is
converted into a term loan to Borrower of 4,250,000 NLG (i.w. four)
million two hundred fifty thousand Dutch guilders), hereinafter to
be referred to as the Term Loan.
ARTICLE 3 - REPAYMENT OF THE TERM LOAN
1. Subject to article 6 hereof Borrower shall repay the principal of the
Term Loan in forty (40) instalments on the first day of each quarter
(the "REPAYMENT DATE") commencing on January 1, 1996 until the
principal amount of the Term Loan is repaid in full. The first thirty
nine (39) of such instalments shall be in the amount of 107,000 NLG
(one hundred and seven thousand Dutch guilders), and the fortieth
(40th) and last of such instalments shall be 77,000 NLG (seventy
seven thousand Dutch guilders) or the unpaid principal balance for
the Term Loan.
ARTICLE 4 - INTEREST
1. For a period of either (i) three months, (ii) six months and (iii)
twelve months starting as of the Closing Date, the Term Loan will
bear interest equal to the Index Rate at the date of this Agreement.
Borrower shall indicate at signing of this Agreement which period it
elects, such elected period hereinafter referred to as the "INTEREST
PERIOD". Failing such a choice, the Interest Period will be three
months.
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2. At the day following the expiration of the Interest Period (the
"ADJUSTMENT DATE"), a newly to be elected Interest Period of either
(i) three months, (ii) six months or (iii) twelve months will
commence. During this newly to be elected Interest Period, the unpaid
principal balance of the Term Loan will bear interest at an interest
rate equal to the Index Rate at the Adjustment Date. At least five
Business Days prior to the Adjustment Date, Borrower will inform
Holding Co. in writing which Interest Period it wishes to elect,
failing which the new Interest Period will be three months.
3. During the duration of this Agreement, paragraph 2 of Article 4 shall
be applied continuously after each expiration of an Interest Period,
whereby the day following the termination of any Interest Period will
be considered as the relevant Adjustment Date for the next Interest
Period. An Interest Period once elected cannot be lengthened or
shortened.
4. Contrary to the above, Borrower may, however, elect to have the Term
Loan bear an interest - effective as of the next Adjustment Date -
based on a fixed rate of interest ("OPTIONAL FIXED RATE") for a
period of five years ("OPTIONAL FIXED RATE PERIOD"). Borrower will
inform Holding Co. in writing of its choice for the Optional Fixed
Rate at least five Business Days prior to the Adjustment Date on
which Borrower wishes the Optional Fixed Rate to become effective.
The Optional Fixed Rate Period once elected cannot be lengthened or
shortened.
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page 6
5. Upon termination of the Optional Fixed Rate Period, paragraph 2 of
this Article 4 will apply again, whereby the day following the
termination of the Optional Fixed Rate Period will be considered as
an Adjustment Date.
6. Borrower will for the first time pay interest to Holding Co. on 1
January 1996 and subsequently on every first day of each quarter (the
"INTEREST PAYMENT DATES"). On 1 January 1996, the interest will be
calculated over the outstanding Term Loan during the time elapsed
between the execution hereof and 1 January 1996, using the interest
rate(s) as has/have applied from time to time during this period.
Thereafter, the interest will be calculated over the outstanding
Term Loan during the three months preceding the next Interest
Payment Date using the interest rate(s) as has/have applied from
time to time during these three months.
ARTICLE 5 - PAYMENT CONDITIONS
1. All payments of principal, interest and cost due hereunder to Holding
Co. shall be made to Holding Co.'s bank account numbered 25.71.98.520
with Bank MeesPierson N.V. or such other account as designated by
Holding Co.
2. If any payment of principal or interest to be made hereunder becomes
due and payable on a day other than a Business Day, the due date of
such payment shall be extended to the first succeeding Business Day.
This shall not affect the interest rate or the calculation of
interest due.
3. All payments will be made in Dutch guilders or such other currency as
shall be legal tender in the Netherlands from time to time.
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4. All payments made by Borrower to Holding Co. hereunder will in first
instance be applied against expenses or other costs payable by
Borrower to Holding Co., in second instance against late payment
interest payable under article 11 hereof, in third instance against
interest payable under article 4 hereof and finally against the
outstanding principal amount of the Loan.
5. Subject to the provisions of article 9.2(c) all payments due to
Holding Co. hereunder shall be made to Holding Co. without any set-
off or counter-claim and free and clear of any restrictions or
conditions and free and clear of any deductions for or on account of,
any present or future taxes, levies, imposts, duties, charges, fees,
deductions or withholding of any nature now or hereafter imposed by
any competent governmental or other authority. If Borrower is
compelled by law to make any such deductions or withholdings it shall
pay such additional amount as to result in the receipt by Holding
Co. of the amount which it should have received had no deductions or
withholdings been required to be made.
6. Notwithstanding the other provisions of this agreement, all sums due
hereunder to Holding Co., including principal, interest and cost must
be repaid no later than ten years after the execution hereof.
7. The total outstanding amount of the Term Loan with accrued interest
and costs due to Holding Co. will become due and payable subject to a
written notice from Holding to Borrower to that effect in the event
that IMPCO exercises its option right as referred to in article 10.7
of the Shareholders Agreement executed between Holding Co. and IMPCO
at the date hereof.
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ARTICLE 6 - PREPAYMENT
1. Borrower shall be entitled to make prepayments of all or part of the
outstanding Loan, provided, however, that such prepayment is made on
an Adjustment Date and that Borrower has given Holding Co. five
Business Days prior written notice. Such notice will be irrevocable
and will oblige Borrower to make the prepayment so announced.
2. Any prepayment of the Term Loan shall be accompanied by the payment
of all accrued but unpaid principal, interest and costs to the date
of such prepayment.
3. Any partial prepayment made may reduce the number of instalments but
will never effect the amount payable per instalment to be paid in
accordance with article 3 hereof.
ARTICLE 7 - COVENANTS OF BORROW AND OTHER MEDIA PARTIES
1. Each of Media Parties covenant and agree that, from the date hereof
until all amounts of principal, interest and other costs due to be
paid by Borrower hereunder have been paid in full, each of Media
Parties will:
a. immediately inform Holding Co. of the occurrence of any event
which is or may become (with the passage of time or the giving of
notice or both) one of the events mentioned in Article 9
paragraph 1 and 2 hereof;
b. promptly furnish to Holding Co. details of any event which could
have an adverse effect on Media Parties ability to perform their
obligations hereunder;
c. pay all taxes to which each of them are assessed, and comply with
all instruments having the force of law, judgments and the
lawful requirements of any governmental or appropriate
<PAGE>
page 9
administrative authority if, in any such case, non-compliance
would adversely affect the ability of Media Parties to perform
their obligations under this Agreement;
d. maintain sufficient insurance of their assets and to maintain
such other insurances which are appropriate and sufficient for
business like the business carried out by Media Parties.
ARTICLE 8 - FEES
1. No fees will be charged to Borrower for loan origination, loan
processing, attorneys fees, or any other expense incurred by Holding
Co. in relation to the preparation of or exercise of Borrower's
rights under this Agreement.
ARTICLE 9 - ACT OF DEFAULT
1. ACT OF DEFAULT
The total outstanding amount of the Term Loan with accrued interest
and costs due to Holding Co. will become due and payable at once
without a notice of default by summons or writ or a similar deed
being necessary, all of which notices are expressly waived by
Borrower (except for those notices explicitly mentioned hereunder),
if any of the following events ("ACT OF DEFAULT") should occur:
a) any instalment of principal, interest or any other sum payable
under this Agreement has not been received by Holding Co. within
10 days after the due date thereof and such failure has not been
remedied within a thirty days period after a written notice of
default has been sent by Holding Co. to Borrower;
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b) Borrower fails to meet any of the other conditions or terms
contained herein and such a failure has not been remedied within
a thirty days period after a written notice of default has been
send by Holding Co. to Borrower;
c) any of Media Parties change the legal form of its company or of
any part of it without the prior written approval of Holding
Co., if any of them sells or otherwise transfers the ownership or
control of its business or if the control over any of Media
Parties or IMPCO is transferred to a third party;
d) without the prior written approval of Holding Co., which approval
shall not unreasonably withheld, any of Media Parties moves its
business to another country than the country in which its
principal place of business is presently located or if any of
Media Parties ceases to carry on its business;
e) a petition is filed or an order is made or an effective
resolution is passed for the winding up of any of the Media
Parties save for the purpose of amalgamation or reconstruction
without Holding Co.'s prior written approval;
f) any of Media Parties is adjudicated bankrupt or placed under
moratorium or if a petition is filed for the purpose of
effecting any of the foregoing and such petition is not withdrawn
within a period of 14 days;
g) any of Media Parties makes a special arrangement or composition
with its creditors or an important part of its creditors;
h) execution has been entered or levied against any of Media Parties
or if a substantial part of any of Media Parties' property or
assets has been attached or seized and such attachment or seizure
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page 11
remains undischarged for a period of 30 days unless challenged in
good faith;
i) the Parent-Guarantee proves or is likely to prove invalid,
unenforceable or otherwise ineffective for the purpose of
securing the repayment of the loan and/or payment of interest
and/or costs,
j) banks, of which any of the Media Parties is a client, are
demanding partial or complete repayment of loans.
2. CROSS-DEFAULT
a) Any material default under the Agreement of Purchase and Sale of
Stock and the Ancillary Agreements to the extent that such act of
default at Holding Co.'s discretion would or could adversely
affect the ability of Media Parties to perform their obligations
under this Agreement regardless whether it concerns an act of
default by or on the part of any of Media Parties or IMPCO shall
also constitute an Act of Default under the present Loan
Agreement in which case paragraph 1 of this Article applies
accordingly.
b) Any material default under the Agreement of Purchase and Sale of
Stock and the Ancillary Agreements by Holding Co. or Centradas
to the extent that such act of default could or would adversely
affect the ability of Media Parties to perform their obligations
under this Agreement gives Borrower the right to suspend its
payment obligation under this Agreement until such time that:
i. said default has been cured,
ii. the parties have come to an amicable settlement with regard
to the default claim, or
iii. in case of proceedings until a final and binding decision
has been rendered.
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Borrower's right hereunder will at all times be restricted to an
amount not exceeding an amount of the alleged claim against
Holding Co. and/or Centradas. Borrower will not unreasonably use
its right of suspension of payment and will only use such right
subject to a written notice of 30 days allowing the defaulting
party to cure the default.
c) Should the claim of Borrower have been established on the basis
of a final and binding (arbitral) award, Borrower shall be
authorized to set-off the amount of the claim against its payment
obligations under this Agreement.
3. DAMAGES
Media Parties will pay and compensate Holding Co. all reasonable
damages, including but not limited to losses, interest, costs and
reasonable attorneys fees which Holding may have incurred as a result
of an Act of Default as referred to in article 9.1 of this Agreement,
notwithstanding the consequences as set forth in paragraph 1 and 2
of this Article.
4. JOINT AND SEVERAL LIABILITY
Each of the Media Partners is jointly and severally liable for the
full and complete fulfilment of the obligations and liabilities of
Borrower vis-a-vis Holding Co. under this Agreement.
ARTICLE 10 - CONDITIONS PRECEDENT
1. PARENT-GUARANTEE
The execution of this Agreement is conditional upon the execution by
AirSensors, Inc. of the Parent-Guarantee as attached hereto as
Schedule 1.
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2. SUBORDINATED PLEDGE ON ASSETS
In the event of Borrower securing financing from a third party
financial institution, Holding Co. shall be granted a subordinated
right of pledge on all goods and Receivables owned by Borrower.
ARTICLE 11 - INTEREST ON LATE PAYMENTS
1. Any amount not paid when due be it principal, interests or costs
shall bear interest from the date it was due until paid either (i)
at the Index Rate plus two percentage points or (ii) the Optional
Fixed Rate plus two percentage points, depending on whether the
Index Rate or Optional Fixed Rate is in effect on the day prior to
the date on which payment was due.
2. Such interest shall be immediately due and payable.
ARTICLE 12 - MISCELLANEOUS
1. BOOK CLAUSE
In order to determine the amount and cause of any amount due under
the Loan Agreement at any time by Media Parties to Holding Co.
hereunder, the books and accounts of Holding Co. shall be conclusive
save for manifest error of computation to the effect that payment of
any amount being claimed due by Holding Co. can at no time be
suspended or withheld by Media Parties by reason of a dispute on what
is due and payable, without prejudice however to the obligation of
Holding Co. to repay any amount and the interest thereof collected or
received in excess. Media Parties shall at all times have the right
to inspect the books and accounts of Holding Co., insofar as they
relate to the Term Loan and at the first written request Holding Co.
shall provide Media Parties with a statement by Holding Co.'s
accountant as to the amount and cause of any amount due under the
Loan Agreement.
<PAGE>
page 14
2. COUNTERPARTS
This Loan Agreement may be executed in as many counterparts as
necessary or convenient, and by the different parties on separate
counterparts each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the
same agreement;
3. PARTIES IN INTEREST
The rights and obligations under this Loan Agreement are personal and
may not be transferred or assigned in any manner whatsoever without
the previous written consent of all parties hereto; otherwise, any
purported transfer or assignment shall be void.
4. NO REPRESENTATION
Each party to this Agreement expressly warrants and represents to the
others that it has not relied upon any representation, inducement,
promise or agreement, oral or otherwise, by any party, or anyone
acting on behalf of any party, which is not embodied herein.
5. WAIVER
Media Parties waive the right to dissolve, rescind or otherwise
terminate this Agreement.
6. FAILURE TO EXERCISE
No failure to exercise and no delay in exercising, on the part of
Holding Co., any rights, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege prelude any other or further exercise
<PAGE>
page 15
thereof, or the exercise of any other power or right. The rights and
remedies herein provided are cumulative and not exclusive of any
rights or remedies provided for by law.
7. NOTICES
Unless otherwise provided herein all notices to be given hereunder
shall be given in writing or by telefax confirmed by letter, shall
be effective on receipt and shall (unless another address has been
specified to the other party by 15 (fifteen) days prior written
notice) be sent to the following addresses:
if to Holding Co.: Koningsweg 7
6816 TA Arnhem
The Netherlands
if to Borrower: Van Gijnstraat 10
2288 FA Rijswijk
The Netherlands
if to Media-GERMANY: Perchstetten 14A
35428 Langgons
Germany
if to Media-FRANCE: 34 Rue Arago, BP 114
69151 Decines, Cedex
France
8. VALIDITY
In the case any one or more of the provisions contained herein shall
be invalid, illegal or unenforceable in any respect under any law,
the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired
thereby.
<PAGE>
page 16
9. SEVERABILITY
This Agreement with the appendices attached thereto constitute the
entire agreement between the parties hereto with respect to the
subject matter and supersede all prior agreements and understandings,
oral and written, between the parties hereto. No modification or
amendment of this Agreement shall be binding unless fully executed in
writing.
10. GOVERNING LAW JURISDICTION
This Agreement is subject to the laws of the Netherlands.
Notwithstanding the non-exclusive authority of the President of the
District Court of The Hague in summary proceedings any and all
disputes arising in connection with this Agreement or agreements
resulting therefrom shall be settled, subject to any appeal in
accordance with the Rules of the Netherlands. Arbitration Institute
(Nederlands Arbitrage Instituut). Any appeal from the arbitral award
shall be governed by the same procedural rules as applicable to the
arbitral procedure in the first distance. The arbitral panel shall be
composed of three arbiters. The place of arbitration shall be
Amsterdam. The arbitration shall be conducted in the English
language.
<PAGE>
page 17
Thus agreed upon and executed in fourfold on October 31, 1995 at Amsterdam.
On behalf of:
DEPA HOLDING B.V. TECHNISCH BUREAU MEDIA B.V.
/s/ G.P. Kersten /s/ R.M.H. Frings
- -------------------- --------------------
Name: G.P. Kersten Name: R.M.H. Frings
Its: Managing Director Its: Managing Director
TECHNISCH BUREAU MEDIA GmbH TECHNIQUE MEDIA S.A.R.L.
/s/ R.M.H. Frings /s/ R.M.H. Frings
- -------------------- --------------------
Name: R.M.H. Frings Name: R.M.H. Frings
Its: Managing Director Its: Managing Director
GUARANTEE
THE UNDERSIGNED:
1. DEPA HOLDING B.V., a limited liability company duly organized
under the laws of The Netherlands, having its principal place of
business at Koningsweg 7 in (6816 TA) Arnhem, hereinafter referred
to as "HOLDING CO.",
2. IMPCO TECHNOLOGIES, INC., a company incorporated under the laws of
the state of Delaware, United States of America, having its principal
place of business at 16804 Gridley Place, Cerritos, California, the
United States of America, hereinafter referred to as "IMPCO", and
3. AIRSENSORS, INC., a company incorporated under the laws of Delaware,
having its principal place of business at 16804 Gridley Place,
Cerritos, California, United States of America, 90703, hereinafter
referred to as "AIRSENSORS"
WHEREAS
1. By agreement of even date, Holding Co. has provided a Loan to
Media-HOLLAND of 4,250,000.00 NLG (i.w. four million two hundred
fifty thousand Dutch guilders), hereinafter to be referred to
respectively as the "LOAN AGREEMENT", "BORROWER" and the "LOAN".
<PAGE>
page 2
2. The Loan Agreement is conditional, among others, upon the execution
of this Guarantee.
HEREBY DECLARE TO HAVE AGREED AS FOLLOWS
ARTICLE 1 - DEFINITIONS
1. All capitalised terms shall have the same meaning as these terms
have in the Loan Agreement unless explicitly indicated difficulty.
ARTICLE 2 - THE GUARANTEE
1. AirSensors hereby declares to bind itself as surety to and in favour
of Holding Co. by way of security for the true and proper discharge
by Borrower of whatever Borrower may be found to be indebted to
Holding Co, by virtue of a final and conclusive judgement (IN KRACHT
VAN GEWIJSDE GEGANE BESLISSING) rendered against the Borrower by a
competent court of law or arbitral tribunal having jurisdiction in
the matter hereinafter mentioned or by virtue of a written amicable
settlement between the parties to the Loan Agreement, in respect of
the Loan Agreement and any other agreement arising therefrom or
connected therewith, including Borrower's obligation to pay
principal, interest and costs (the "SECURED OBLIGATIONS").
2. A judgement as referred to in paragraph 1 will include a judgment
by default (VERSTEK VONNIS) rendered against Borrower, provided that
such judgment has been sent to AirSensors by registered mail and
provided that no appeal has been entered against such judgment within
<PAGE>
page 3
6 weeks after the date of service of the registered letter.
3. In the event that anyone or all of the Media Parties have been
declared bankrupt or granted suspension of payment, Holding Co. is
entitled to bring legal proceedings against AirSensors in accordance
with the terms of the Loan Agreement in order to have the
indebtedness of Borrower ascertained by court or arbitration. In that
event, AirSensors undertakes to pay Holding Co. the entire
indebtedness of Borrower as established by a final and conclusive
judgment (in kracht van gewijsde gegane beslissing) rendered in those
proceedings.
4. The obligations of AirSensors under the terms and conditions of this
Agreement shall remain in force as long as the Secured Obligations
have not been fully and finally been met.
5. At all times AirSensors' aggregate liability under this Agreement
will be limited to 51% of the amount due under the Term Loan,
including any interest or costs..
ARTICLE 3 - WAIVER BY AIRSENSORS
1. AirSensors waives and renunciates hereby to the benefit of Holding
Co. all means of defence, rights and privileges conferred on
guarantees, including the right of set-off (VERREKENING), provided
for by law be it the laws of the Netherlands or the laws of any other
relevant jurisdiction in as far as such a renunciation is allowed by
<PAGE>
page 4
law, including but not limited to the provisions of article 7:855 of
the Dutch Civil Code.
2. The obligations of AirSensors shall continue to be in force when
Holding Co. renunciates any of its rights towards Borrower or any
third persons responsible for any secured obligations debts or when
Holding Co., with written permission of AirSensors, comes to terms
with Borrower, be it during a bankruptcy or not, or reaches a
settlement or an assessment. The same shall apply when Holding Co.
grants Borrower a postponement or when Holding Co. grants Borrower
more credit or otherwise obtains a larger claim on Borrower.
ARTICLE 4 - SUBORDINATION
1. All claims which IMPCO or AirSensors may have against Borrower shall
be subordinated to all claims of Holding Co. against Borrower. IMPCO
and AirSensors shall not demand payment for any of such subordinated
claims in case of bankruptcy, (temporal) moratorium (AL DAN NIET
VOORLOPIGE SURSEANCE VAN BETALING), winding up, placing under legal
restraint (ONDER BEWINDSTELLING), or if a judgement of distress or
execution is entered or levied against Borrower as long as Holding
Co. still has any claim against Borrower in respect of the Term Loan.
<PAGE>
page 5
ARTICLE 5 - ASSIGNMENT
1. When assigning its claims against Borrower to third parties in
accordance with the provisions of the Loan Agreement and provided
Air Sensors has given its prior written approval to such assignment,
which approval shall not unreasonably be withheld, Holding Co. is
entitled to transfer its rights under this Guarantee as well, such
to an amount to be determined by Holding Co., whilst the Guarantee
remains valid for any other possible secured claim of Holding Co.
against Borrower in respect of the Term Loan. The same shall apply
in case of subrogation under article 6:150 of the Dutch Civil Code.
AirSensors waives its rights under article 6:154 of the Dutch Civil
Code.
2. The obligations of AirSensors hereunder shall continue to be in force
and effect when Borrower transfers its rights and obligations under
the Loan Agreement upon a third party in accordance to article 6:155
or 6:159 of the Dutch Civil Code through debt assignment
(SCHULDOVERDRACHT) or contract assignment (CONTRACTOVERNAME),
provided the prior written approval of Airsensors to such transfer
has been obtained which approval shall not unreasonably be withheld.
ARTICLE 6 - CHANGE IN LEGAL FORM OF BORROWER
1. No change in the legal form of Borrower, be it by amendment of the
articles of association or otherwise, in the composition of the board
of directors or of the membership or in the name of Borrower shall
terminate the obligations of AirSensors hereunder, nor shall its
<PAGE>
page 6
obligations cease to be in force and effect because one or more
shares in or the business of Borrower is transferred or new shares
are issued. The same shall apply when on the side of Borrower any
requirements necessary to commit Borrower according to law, the
articles of associations or otherwise, such as but not limited to
signature or permission for the Loan Agreement, have not been met.
If Borrower merges, the obligations of AirSensors hereunder do not
cease.
ARTICLE 7 - INDEPENDENCY
1. This Guarantee is given independently of other securities already
granted or to be granted, by Borrower, Media Parties, AirSensors or
third parties on behalf of Borrower.
2. Holding Co. shall at all times be entitled to give up existing or
future securities. The obligations of AirSensors hereunder shall in
such a case continue to be in force and effect.
ARTICLE 8 - BOOK CLAUSE
1. In order to determine the amount and cause of any amount due at any
time by AirSensors to Holding Co. pursuant to this Guarantee, the
books and accounts of Holding Co. shall be conclusive unless in case
of manifest error of calculation.
2. AirSensors shall at no time be entitled to more proof of the amounts
due under this Guarantee or under the Loan Agreement than Borrower is
entitled to, nor shall AirSensors be entitled to provide proof of the
<PAGE>
page 7
contrary against a writ of execution obtained by Holding Co. against
Borrower or against admission of the Secured Obligations by Borrower.
AirSensors is familiar with the terms and conditions of the Loan
Agreement and submits itselves to said terms and conditions.
ARTICLE 9 - PAYMENT PROVISIONS
1. All payments due by AirSensors to Holding Co. hereunder shall be made
to Holding Co. without any set-off or counter-claim and free and
clear of any restrictions or conditions and free and clear of any
deductions for or on account of, any present or future taxes, levies,
imposts, duties, charges, fees, deductions or withholding of any
nature now or hereafter imposed by any competent governmental or
other authority on Airsensors. If AirSensors is compelled by law to
make any such deductions or withholdings, it shall pay such
additional amount as to result in the receipt by Holding Co. of the
amount which it should have received had no deductions or
withholdings been required to be made.
ARTICLE 10 - MISCELLANEOUS
1. NOTICES
Unless otherwise provided herein all notices to be given hereunder
or in connection herewith shall be given in writing or by telefax
confirmed by letter, shall be effective on receipt and shall (unless
another address has been specified to the other party by 15 (fifteen)
days prior written notice) be sent to the addresses as set out below.
<PAGE>
page 8
if to Holding Co.: Koningsweg 7
6816 TA Arnhem
The Netherlands
if to IMPCO: 16804 Gridley Place
Cerritos, California
United States of America
if to AirSensors: 16804 Gridley Place
Cerritos, California
United States of America
2. SEVERABILITY
In the case any one or more of the provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect
under any law, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby.
3. NO WAIVER
No failure to exercise and no delay in exercising, on the part of
Holding Co., any rights, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege prelude any other or further exercise
thereof, or the exercise of any other power or right. The rights and
remedies herein provided are cumulative and not exclusive of any
right or remedy provided for by law.
4. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Netherlands.
<PAGE>
page 9
5. JURISDICTION
Notwithstanding the non-exclusive authority of the President of the
District Court of The Hague in summary proceedings any and all
disputes arising in connection with this Agreement or agreements
resulting therefrom shall be settled, subject to any appeal in
accordance with the Rules of the Netherlands. Arbitration Institute
(Nederlands Arbitrage Instituut). Any appeal from the arbitral award
shall be governed by the same procedural rules as applicable to the
arbitral procedure in the first distance. The arbitral panel shall be
composed of three arbiters. The place of arbitration shall be
Amsterdam. The arbitration shall be conducted in the English
language.
<PAGE>
page 10
Thus agreed upon and executed in threefold on October 31, 1995 at
Amsterdam.
On behalf of:
DEPA HOLDING B.V. IMPCO TECHNOLOGIES, INC
/s/ G.P. Kersten /s/ S.A. in `t Veld
-------------------- --------------------
Name: G.P. Kersten Name: S.A. in 't Veld
Its: Managing Director Attorney at proxy
AIRSENSORS, INC.
/s/ S.A. in `t Veld
--------------------
Name: S.A. in 't Veld
Attorney at proxy
Exhibit 23.1
DELOITTE &
TOUCHE
- ---------- ---------------------------------------------------
REGISTERACCOUNTANTS Van Alkemadelaan 700
Telephone (0)70-326 4701 2597 AW The Hague
Telefax (0)70-324 4482 P.O. Box 90721
2509 LS The Hague
The Netherlands
IMPCO Technologies, Inc.
Attn. Mr. Brian Olson
16804 Gridley Place
CERRITOS
CA 90703 1741
UNITED STATES OF AMERICA
Date From Our reference
13 November, 1995 Henk L.A. Habraken 2650950.01/00-3-pdv
Subject Your reference
8-K filing
Dear Mr. Olson
This letter serves to confirm that we consent to the incorporation in the
8-K filing (form 8-K no. 34-36968) pertaining to AirSensors, Inc.'s
acquisition, through its wholly-owned subsidiary IMPCO Technologies, Inc.,
of the Media group of companies our audited report for the period ending
31 December 1994 and 31 December 1993 dated September 27, 1995 for the
Media group of companies on a consolidated/combined basis.
The Hague, November 13, 1995
Deloitte & Touche
Registeraccountants
/s/ Henk L.A. Habraken
Henk L.A. Habraken
