<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): May 30, 1996
CHICAGO MINIATURE LAMP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
OKLAHOMA 0-25848 73-1412000
(STATE OF INCORPORATION) (COMMISSION (IRS EMPLOYER
FILE NUMBER) IDENTIFICATION NO.)
500 Chapman Street, Canton, Massachusetts 02021
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (617) 828-2948
NONE
------------------------------------------------------------
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
Item 2. Acquisition or Disposition of Assets
------------------------------------
On May 30, 1996, Chicago Miniature Lamp, Inc. (the "Registrant") and its
recently formed subsidiary, Alba Speziallampen Holding GmbH, a German limited
liability company ("Alba Holding") acquired capital stock and partnership
interests in several companies and partnerships, more particularly described
below and referred to herein collectively as the "Alba-Albrecht Group." The
capital stock and partnership interests were acquired in a series of related
transactions (the "Acquisitions"). The Sellers were Werner A. Arnold, Petra
Albrecht-Arnold and Willy Paul Albrecht (the "Individual Sellers") and certain
members of the Alba-Albrecht Group which were owned directly or indirectly by
one or more of the Individual Shareholders (the "Alba Group Sellers"). The
Individual Sellers and the Alba Group Sellers are collectively referred to as
the "Sellers".
The Sellers are all individuals, companies or partnerships located in
Germany, and none of them had any relationship with the Registrant or any of its
affiliates, officers or directors prior to the closing of the Acquisitions.
Effective with the closing Mr. Werner A. Arnold, one of the Sellers, was
retained as President and Managing Director of Alba Holding, pursuant to an
Employment Agreement, and, on June 7, 1996, was elected as a director of the
Registrant.
The name, jurisdiction of formation, type of entity, and percent of direct
and indirect ownership by the Registrant for each member of the Alba-Albrecht
Group acquired in the Acquisitions are as follows:
<TABLE>
<CAPTION>
% Ownership
Name Jurisdiction Type of Entity By Registrant
---- ------------ -------------- -------------
<S> <C> <C> <C>
Alba Speziallampen GmbH Germany Limited Liability 100%
Company
W. Albrecht GmbH u. Co KG Germany Partnership 100%
W. Albrecht Grundstucksgesellschaft Germany Partnership 100%
GmbH u. Co GbR
Arnold GmbH Germany Limited Liability 100%
Company
BSC Arnold GmbH & Co Germany Partnership 100%
Softwareentwicklung und-beratung
Alba Light Design GmbH Germany Limited Liability 100%
Company
A&S Electric, spol.s.r.o Czech Republic Limited Liability 60%
(GmbH) (CZ) Company
Alba Technology (M) Sdn. Bhd. Malaysia Corporation 70%
Alba Lamps, Inc. Illinois Corporation 100%
</TABLE>
The Acquisitions were consummated pursuant to the terms of four separate
but related agreements between one or more of the Sellers and the Registrant and
Alba Holding. The aggregate consideration for the acquisitions was 100,000
shares of common stock of the
- 2 -
<PAGE>
Company and DM 13,150,000 cash. The sources of funds for the cash portion of
the purchase price for the Acquisitions were loans made to Registrant by BANK IV
Oklahoma, N.A., under the Third Amended and Restated Credit Agreement with said
Bank.
The Registrant and Alba Holding intend to continue the operations of the
various members of the Alba-Albrecht Group in the businesses of designing,
manufacturing, marketing, trading and exporting miniature lamps, value-added
miniature lighting assemblies and other miniature lighting products.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
------------------------------------------------------------------
(a) Financial Statements of Businesses Acquired.
-------------------------------------------
It is impracticable at this time to provide the required financial
statements for the businesses acquired in the acquisition described in Item 2
above. The Registrant is in the process of preparing those financial
statements. None are available at this time. It is anticipated that such
financial statements will be available within 60 days from the date of this
report, and in any event will be filed as an amendment to this report as soon
as practicable, but no later than 60 days after this report has been filed.
(b) Pro Forma Financial Information.
-------------------------------
No pro forma financial information with respect to the acquisition
described in Item 2 above is available at this time. It is anticipated that the
required pro forma financial information will be available within 60 days from
the date of this report, and in any event will be filed as an amendment to this
report as soon as practicable, but no later than 60 days after this report has
been filed.
(c) Exhibits.
--------
10.27 Notarial Deed with Agreement on the Sale and Transfer of Shares and
Interests in the ALBA/Albrecht Group, dated May 15, 1996
10.28 Contract for Purchase and Sale of Stock of Alba Lamps, Inc. dated May 15,
1996 (Alba-U.S.)
10.29 Contract for Exchange of Stock for Alba Lamps, Inc. dated May 15, 1996
(Alba-U.S.)
10.30 Contract for Purchase and Sale of Stock of Alba Technology (M) Sdn. Bhd.,
dated May 15, 1996 (Alba-Malaysia)
10.31 Employment Agreement with Werner Arnold dated May 30, 1996
- 3 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHICAGO MINIATURE LAMP, INC.
By /s/ Ronald S. Goldstein
----------------------------
Ronald S. Goldstein
Chief Financial Officer
Date: June 14, 1996
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<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________
EXHIBITS TO
FORM 8-K
CHICAGO MINIATURE LAMP, INC.
<PAGE>
INDEX TO EXHIBITS
-----------------
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
10.27 Notarial Deed with Agreement on the Sale and Transfer of Shares and
Interests in the ALBA/Albrecht Group, dated May 15, 1996
10.28 Contract for Purchase and Sale of Stock of Alba Lamps, Inc. dated May
15, 1996 (Alba-U.S.)
10.29 Contract for Exchange of Stock for Alba Lamps, Inc. dated May 15, 1996
(Alba-U.S.)
10.30 Contract for Purchase and Sale of Stock of Alba Technology (M) Sdn.
Bhd., dated May 15, 1996 (Alba-Malaysia)
10.31 Employment Agreement with Werner Arnold dated May 30, 1996
<PAGE>
EXHIBIT 10.27
OFFENTLICHE URKUNDE
-----------------
NOTARIAL DEED
-------------
Before me, Dr. Thomas Gelzer, notary public in the Canton of Basle-City
(Switzerland), the following persons have appeared today:
Mr Dr. Thomas O.J. Burkert, Attorney-at-law, born 25th March 1958, German
- --------------------------
citizen, domiciled at Reutlinger Strasse 87, D-71732 Tamm, business address
Jahnstrasse 43, D-70597 Stuttgart, identified by his Passport No. 6170100991
and
Mr John Joseh Stinson, Attorney-at-law, born 14th January 1956, American
- -----------------------
citizen, domiciled at Duisburger Strasse 5B, D-70376 Stuttgart, business address
Mittlerer Pfad 15, D-70597 Stuttgart identified by his American Passport No. Z
5965149
Mr Dr. Thomas O.J. Burkert is not acting in his own name but according to the
power of attorney dated 6th May 1996, which is attached to this notarial deed as
annex A, on behalf of
a) Mr Wemer A. Arnold, Dipl.-Ingenieur
------------------
Wildensorger Hauptstrasse 8, D-96049 Bamberg
b) Mrs Petra Albrecht-Arnold
-------------------------
Wildensorger Hauptstrasse 8, D-96049 Bamberg
c) Mr Willy Paul Albrecht
----------------------
Stauffenbergstrasse 43, D-96052 Bamberg
<PAGE>
Mr. John Joseph Stinson is not acting in his own name but according to the
Secretary's Certificate and power of attorney, both dated 8th May 1996, which
are attached to this notarial deed as annex B, on behalf of
Mr Frank M. Ward, engineer,
27 Elm Street, Canton (MA), U.S.A.
The persons appearing requested the notarisation of the following notarial deed:
1. Mr Werner A. Arnold, is herein acting on his own behalf and as
a limited partner in BSC Arnold GmbH u. Co.
Softwareentwicklung und -beratung, and
<PAGE>
- 3 -
(ii) as the duly authorized managing director with power of sole
representation of ALBA Light Design GmbH, ALBA Speziallampen
Gesellschaft mit beschrankter Haftung, and Arnold GmbH;
2. Mr. Willy Paul AIbrecht, is herein
acting on his own behalf and as a limited partner in W. Albrecht GmbH u. Co
KG;
3. Mrs.Petra Albrecht-Arnold, is herein
acting on her own behalf and as a limited partner in W. Albrecht GmbH u. Co
KG and as a partner in W. Albrecht Grundstucksgesellschaft GmbH & Co GbR and
as a shareholder in Arnold GmbH, and as a shareholder in Alba Speziallampen
GmbH;
4. Mr. Frank M. Ward, Engineer, address 27 Elm Street, Canton, MA, U.S.A.
not acting on his own behalf but
(i) as a duly authorized member of the board of directors of ALBA
Speziallampen Holding GmbH i.G. with power of sole representation; and
(ii) as the duly authorized President with sole power of representation of
Chicago Miniature Lamp, Inc. (hereinafter "CML"), a corporation validly
existing under the laws of Massachusetts, with its seat in Canton,
Massachusetts.
<PAGE>
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Agreement on the Sale and Transfer of Shares and Interests
in the ALBA/Albrecht Group
1. General Provisions
Whereas
(1) W. Albrecht GmbH u. Co KG, with its statutory seat in Bamberg, is a
partnership under German law, with a fully-paid partnership capital of
DM2,400,000.00, registered in the Commercial Registry of the Bamberg
Municipal Court under the number HRA 8480, the partners of which are
- ALBA Speziallampen Gesellschaft mit beschrankter Haftung as general
partner with a capital interest of DM 2,400.00,
- Willy Paul Albrecht as a limited partner
with a capital interest of DM 1,173,600.00,
- Petra Albrecht-Arnold
as a limited partner with a capital interest of DM 1,224,000.00;
and whereas
(2) Alba Speziallampen Gesellschaft mit beschrankter Haftung, with its
statutory seat in Bamberg, is a limited liability company under German law,
with a fully paid share capital of DM 60,000.00, registered in the
Commercial Registry of the Bamberg Municipal Court under the number HRB"
865, the only shareholder of which is
- Petra Albrecht-Arnold with shares in an aggregate amount of DM 60,000.00;
<PAGE>
- 5 -
and whereas
(3) Alba Light Design GmbH, with its statutory seat in Bamberg, is a limited
liability company under German law, with a fully paid share capital of DM
50,000.00, registered in the Commercial Registry of the Bamberg Municipal
Court under the number HRB 2812, the only shareholder of which is
- W. Albrecht GmbH u. Co KG with shares in an aggregate amount of
DM 50,000.00;
and whereas
(4) A & S Electric, spol.s.r.o. (GmbH) (CZ), with its statutory seat in Hranice
(RoBbach), is a limited liability company (spolecnost s rucenim omezenym)
under Czech law, with a fully paid share capital of Kc 100,000.00,
registered in the Commercial Registry at Plzen (Pilsen) under the
identification number 45 35 83 54, the shareholders of which are
- Ladislav Sejrek with a share capital of Kc 40,000.00; and
- W. Albrecht GmbH u. Co KG with a share capital of Kc 60,000.00.
A & S Electric spol.s.r.o. (GmbH) (CZ) is the owner of certain real estate,
which real estate is unencumbered;
and whereas
(5) W. Albrecht Grundstucksgesellschaft GmbH u. Co GbR, with its statutory seat
in Bamberg, is a partnership under German law, with a fully-paid partnership
capital of DM 1,800,000.00, the partners of which are
- ALBA Speziallampen GmbH as general partner with a capital interest of
DM 1,800.00; and
<PAGE>
- 6 -
- Petra Albrecht-Amold as a limited partner w hose liability is limited to
her partnership assets, with a capital interest of DM 1,798,200.00.
The GbR is the owner of real estate as contained in Volume 568 Page 23357 of
the Real Property Registry at the Municipal Court of Bamberg:
a) entry 6:
lot # 5983/6 Kirschackerstr. 9
Wohn- und Fabrikgebaude, Hofraum 50 ar 70 qm,
b) entry 8:
lot # 5973 Am Furstenwiesenweg
Fabrikgelande I ha 14 ar 62 qm,
a) entry # 9:
lot # 6042/2 Bei der KirschackerstraBe
Hof- und Gebaudeflachen 9 ar 40 qm,
encumbered by three mortgages in the aggregate amount of DM 5,000,000.00;
and whereas
(6) BSC Arnold GmbH & Co Softwareentwicklung und -beratung, with its statutory
seat in Bamberg, is a partnership under German law, with a fully-paid
partnership capital of DM 30,000.00, registered in the Commercial Registry
of the Bamberg Municipal Court under the number HRA 9385, the partners of
which are
- Arnold GmbH as general partner with no capital interest; and
- Wemer Arnold as a limited partner with a capital interest of DM
30,000.00;
and whereas
<PAGE>
- 7 -
(7) Arnold GmbH, with its statutory seat in Bamberg, is a limited liability
company under German law, with a share capital of DM50,000.00, DM 25,250.00
thereof being paid in, and the remaining part of DM 24,750.00 still open,
registered in the Commercial Registry of the Bamberg Municipal Court under
the number HRB 1266, the shareholders of which are
- Wemer Arnold with a share capital of DM 49,500.00; and
- Petra Albrecht-Arnold with a share capital of DM 500.00;
and whereas
(8) the aforementioned corporations and partnerships are hereinafter
collectively referred to as the "Acquired Entities";
and whereas
(9) Alba Speziallampen Holding GmbH i.G., hereinafter referred to alternatively
as "GmbH" or "Buyer," with its statutory seat in Bamberg, is a limited
liability, company in formation under German law, with a fully-paid share
capital of DM 50,000.00, not yet registered, the shareholders of which are
- Chicago Miniature Lamp, Inc., with a share capital of DM 49,500.00; and
- ALBA Speziallampen GmbH with a share capital of DM 500.00;
and whereas
(10) Willy Paul Albrecht, Petra Albrecht-Arnold, and Wemer Arnold, hereinafter
collectively referred to as the Sellers, intend to sell all their shares
and interests in the Acquired Entities, and Alba Speziallampen Holding GmbH
i.G. intends to acquire all these shares and interests;
and whereas
<PAGE>
- 8 -
(II) the Sellers have shareholders' and partners' loans in some of the Acquired
Entities and certain partners' accounts with the Acquired Entities some of
which have a positive balance and others have a negative balance which
shall also be subject to the purchase contemplated in this Agreement;
and whereas
(12) Wemer Arnold intends to offer his services to Alba Speziallampen Holding
GmbH i.G. for at least 3 years;
and whereas
(13) Willy Paul Albrecht is the owner of the patents, patents pending and
trademarks listed in the Schedule to roman numeral I para. (13), and he
intends to contribute and transfer these patents, patents pending and
trademarks to W. Albrecht GmbH u. Co KG for no specific consideration.
Willy Paul Albrecht holds no ownership or other interest in any other
patents, patents pending, trademarks or other intellectual property which
is related to the businesses of the Aquired Entities.
and whereas
(14) Petra Albrecht-Arnold holds no ownership or other interest in any patents,
patents pending, trademarks or other intellectual property which is
related to the businesses of the Aquired Entities.
and whereas
(15) Wemer Arnold holds no ownership or other interest in any patents, patents
pending, trademarks or other intellectual property which is related to the
businesses of the Aquired Entities.
and whereas
<PAGE>
- 9 -
(16) Alba Speziallampen GmbH intends to sell and transfer its interest in W.
Albrecht Grundstucksgesellschaft GmbH u. Co GbR to CML;
now, therefore, this being said, the parties enter into the covenants and mutual
agreements as indicated below:
<PAGE>
- 10 -
II. AGREEMENT ON SALE AND TRANSFER OF SHARES AND INTERESTS
Section I
Sale, TRANSFER, and Consent
(1) The Sellers sell their shares and interests as describ6d under roman numeral
I., above, with all related rights attaching and all of their shareholders'
and partners' loans, as well as all of their accounts (including the one
with the negative balance), to the Buyer. The shareholders' and partners'
loans and the partners' accounts sold under this paragraph (1) are sold on a
consolidated basis, wherein the Sellers warrant and represent that a
positive balance will exist upon sale to the Buyer.
(2) Alba Speziallampen GmbH hereby sells and transfers its interest in W.
Albrecht Grundstucksgesellschaft GmbH u. Co GbR to CML, which accepts such
sale and transfer.
(3) Petra Albrecht-Arnold and Werner Arnold hereby transfer their shares, loans
and accounts in Arnold GmbH to Buyer, who accepts such transfer.
(4) Willy Paul Albrecht and Petra Albrecht-Arnold hereby transfer their
interests in W. Albrecht GmbH u. Co KG and all of their partners' loans and
accounts with W. Albrecht GmbH u. Co. KG to Buyer by way of special
succession (Sonderrechtsnachfolge), who accepts such transfer. Internally,
such transfer shall become effective as of the Takeover Date, externally,
the transfer shall become effective only upon entry of the Buyer as a
limited partner by way of special succession (im Wege der
Sonderrechtsnachfolge) in the Commercial Register. Sellers shall fully
cooperate with Buyer in any filing with the Commercial Register to be
effected only after Closing.
<PAGE>
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(5) Petra Albrecht-Arnold hereby transfers her interest in W. Albrecht
Grundstucksgesellschaft GmbH & Co GbR and all of her partners' loans and
accounts with W. Albrecht Grundstucksgesellschaft GmbH & Co. GbR to the
Buyer, who accepts such transfer.
(6) Petra Albrecht-Arnold hereby transfers her share, loans and accounts in Alba
Speziallampen Gesellschaft mit beschrankter Haftung to Buyer, who accepts
the transfer.
(7) Wemer Arnold hereby transfers his interest in BSC Arnold GmbH u. Co
Softwareentwicklung und -beratung and all of his partners' loans and
accounts with BSC Arnold GmbH u. Co. Softwareentwicklung und -beratung to
Buyer by way of special succession (Sonderrechtsnachfolge), who accepts the
transfer. Internally, such transfer shall become effective as of the
Takeover Date, externally, the transfer shall become effective only upon
entry of the Buyer as a limited partner by way of special succession (im
Wege der Sonderrechtsnachfolge) in the Commercial Register. Sellers shall
fully cooperate with Buyer in any filing with the Commercial Register.
(8) Any consents to the transfer of shares and interests necessary under the
pertinent Articles of Association have been given and are confirmed hereby.
(9) Willy Paul Albrecht hereby contributes and transfers the patents, patents
pending and trademarks, together with any licences granted to the Aquired
Entities indicated under roman numeral 1, para. (13) above to W. Albrecht
GmbH u. Co KG, and W. Albrecht GmbH u. Co KG accepts such contribution and
transfer.
Willy Paul Albrecht shall deliver to the Buyer on the Closing Date proper
forms of transfer and assignment, duly executed, for all the above mentioned
rights. Willy Paul Albrecht further agrees to provide such other
assigrunents, notices, and forms after the Closing as shall be necessary or
appropriate to effectuate and record such transfers to Buyer.
<PAGE>
- 12 -
(10) Buyer and Sellers agree that the shareholders'and partners' loans as well
as any partners' accounts with the Acquired Entities are sold on a
consolidated basis and that
(i) all positive balances as of the Takeover Date due to Sellers shall be
transferred to the benefit of Buyer and the Sellers shall not be entitled
to claim any amounts under such positive accounts after the execution of
this Agreement and
(ii) save Section 1 para. (1) Sentence 2, all negative balances as of the
Takeover Date due to any of the Acquired Entities shall be claimed by the
Acquired Entities against the Buyer after the execution of this Agreement
and the Acquired Entities and the Buyer hereby release the Sellers from any
claims that might arise of, or in connection with, such negative balances,
and the Sellers hereby accept this release.
Section 2
PURCHASE PRICE, PAYMENT OF PURCHASE PRICE
(1) The overall purchase price for the shares and interests, shareholders' and
partners' loans and partners' accounts and the intellectual property sold
shall be DM 9,700,000.00 (nine million seven hundred thousand German Marks)
payable in the following manner:
a) 90 percent by the transfer of funds into a bank account, to be specified
by the Sellers, at Closing;
b) 10 percent by the transfer of funds into a bank account, to be specified
by the Sellers, within 30 days after Closing (the "Post Closing
Payment").
(2) The overall purchase price shall be allocated as follows:
<PAGE>
- 13 -
a) an amount of DM 49,500.00 to Werner Arnold's share of par value DM 49,500.00
in Arnold GmbH,
b) an amount of DM 500.00 to Petra Albrecht-Arnold's share of par value DM
500.00 in Arnold GmbH,
c) an amount of DM 250,000.00 to Werner Arnold's interest of par value DM
30,000.00 in BSC Arnold GmbH u. Co Softwareentwicklung und -beratung,
d) an amount of DM 6,000,000.00 to Petra Albrecht-Arnold's interest of par
value DM 1,798,200.-- in W. Albrecht Grundstucksgesellschaft GmbH & Co GbR,
e) an amount of DM 60,000.00 to Petra Albrecht-Arnold's share of par value DM
60,000.00 in Alba Speziallampen Gesellschaft mit beschranker Haftung,
f) an amount of DM 1,631,600.00 to Petra Albrecht-Arnold's interest of par
value DM 1,224,000.-- in W. Albrecht GmbH u. Co KG,
g) an amount of DM 1,708,400.00 to Willy Paul Albrechfs interest of par value
DM 1,736,000.-- in W. Albrecht GmbH u. Co KG.
No additional consideration shall be allocated to shareholders' and partners'
loans and partners' accounts and intellectual property rights.
As an additional part of the purchase price Buyer agrees and commits that it
will bear and pay the attorneys' fees up to DM 300,000.00 plus V.A.T. of
Sellers' attorneys Hennerkes, Jeschke, Kirchdorfer & Partner, Stuttgart,
Germany. Immediately after Closing, the attorneys will send a bill of their
fees showing the net amount, the V.A.T. attributable into the net amount, and
the gross amount to the Buyer, and the Buyer will promptly pay the gross amount
to the attorneys as shown in their bill. After full payment of the billed
amount
<PAGE>
- 14 -
the Buyer shall have fully performed, and be released from, its duty to pay
under this paragraph.
(3) Should the consolidated equity of the Acquired Entities as determined in the
Takeover Balance Sheets according to Section 4 of this agreement fall short
of the consolidated equity of these entities as determined in the 1995
Balance Sheets the shortfall, to the extent that it exceeds DM 2,000,000.00
shall be deducted from the purchase price.
(4) The purchase price for the interest of Alba Speziallampen GmbH in W.
Albrecht Grundstucksgesellschaft GmbH u. Co GbR sold to CML shall be DM
9,000.00 and such amount shall be transferred to a bank account specified by
Alba Speziallampen GmbH.
Section 3
TAKEOVER DATE, EXECUTION DATE, CLOSING
(1) The Takeover Date shall be May 1, 1996. Economic ownership in the shares
and interests shall change as of the Takeover Date. Dividends distributed
after Takeover Date by the acquired corporate entities shall inure to the
benefit of Buyer. Profits of the Acquired Entities made betwen December 31,
1995 and the Takeover Date shall belong to the Buyer, and taxes attributable
to these profits shall be borne by the Buyer. For the purposes of this
paragraph, the profits will be calculated by Schitag Ernst & Young on the
basis of the 1995 Balance Sheets and the Takeover Balance Sheets, and an
agreed tax rate of 50% shall be applied irrespective of the ultimate tax
liability of the Sellers.
(2) Execution Date shall be the date of the notarization of this Agreement.
(3) Closing shall be within 15 days of the execution of this Agreement, or
sooner, if the parties agree, but in no event before the execution of a
service agreement
<PAGE>
- 15 -
between Werner Arnold and the Buyer. Closing shall be contingent on the
simultaneous closing on the acquisition of all shares of Alba Lamps, Inc.
and Alba Technology (M) Sdn. Bhd., Malaysia ("Related Agreements").
(4) Once this Agreement and the Related Agreements have been closed on, the
parties shall give each other written confirm to this effect.
Section 4
Takeover Balance Sheets
(1) The parties charge Schitag Ernst & Young (and/or affiliated auditing firms,
collectively referred to as "Schitag Ernst & Young"), to present the parties
on or before May 31, 1996, with the audited consolidated Balance Sheets and
inventory counts of the Acquired Entities upon December 31, 1995, ("1995
Balance Sheets") and upon Takeover Date ("Takeover Balance Sheets"). The
costs for the preparation and the confirmation of the 1995 Balance Sheets
and the Takeover Balance Sheets are to be borne by the Buyer.
(2) The 1995 Balance Sheets and the Takeover Balance Sheets are to be presented
and confirmed on the basis of GAAP applicable in the country of the audited
Acquired Entity, under the preservation of balance continuity, on a
consolidated basis, on a "going concern" basis and without a view to the
transaction contemplated by this Agreement.
(3) Before finalizing the preparation and confirmation of the 1995 Balance
Sheets and the Takeover Balance Sheets Schitag Ernst & Young will present
drafts to the Buyer and the Sellers and explain how they have found their
results and particularly how they have exercised any discretion available
under the applicable GAAP. The Sellers may raise reasonable objections to
the drafts, and Sellers and Buyer shall agree on such objections.
<PAGE>
- 16 -
(4) If the Sellers and the Buyer cannot agree on Sellers' objections according
to para. 3 above, Schitag Ernst & Young shall finalize their balance sheets
and Sellers shall appoint another auditing firm to present the Sellers'
version of the same balance sheets under the same rules as outlined
hereabove in this Section 4 and at their own cost. If the two auditors
cannot agree on the outcome of these examinations, the dispute shall
finally be settled by an Arbitrator who must be an auditor certified under
the laws of Germany (the "Arbitrator") and shall be appointed by both
parties. In case that the parties cannot agree on the Arbitrator, the
Chamber of Commerce of Bamberg shall appoint the Arbitrator. The Arbitrator
shall also determine who of the parties shall bear the fees and costs of the
arbitration (including the reasonable attorneys' fees) taking into account
who of the parties has won or lost, or partially won or lost, the
arbitration.
(5) For purposes of determining the shortfall of consolidated equity to be paid
by the Sellers according to Section 2 para. (3) of this Agreement, the
parties agree that Buyer shall be entitled to any amount he would be
entitled to under Section 2 para. (3) of this Agreement if the balance
sheets of the Sellers' auditor were to be applied. The parties further
agree that after Schitag Ernst & Young and the Sellers' auditor have agreed
on a matter or after the Arbitrator has ruled on the dispute, according to
Section 4 para. (4) of this Agreement the Buyer shall be entitled to the
amount he is entitled to under Section 2 para. (3) of this Agreement after
taking into account the agreement of the auditors or the ruling of the
Arbitrator. If the amount is more than already paid by the Sellers to the
Buyer according to this paragraph, the Sellers shall pay the balance due to
the Buyer. If the amount is less than already paid by the Sellers to the
Buyer according to this paragraph, the Buyer shall pay the balance due to
the Sellers.
<PAGE>
- 17 -
Section 5
WARRANTIES AND REPRESENTATIONS (ZUSICHERUNGEN)
(1) The Sellers warrant and represent, that upon the Execution Date of this
Agreement and at the Closing, the assertions made under roman numeral 1. of
this Agreement are correct, the shares and interests are fully-paid unless
otherwise indicated in roman numeral 1. of this Agreement, non-assessable,
not encumbered with third parties' rights or options, at the Sellers' free
disposal, and that no repayments on such shares and interests have been
made.
(2) The Sellers warrant and represent, that upon the Execution Date of this
Agreement and at Closing
a) the balance sheets and profit & loss statements of the Acquired
Entities for the fiscal years 1994 and 1995 (hereinafter "Financial
Statements") have been determined under principles of the pertinent
national GAAP (German GAAP for all Acquired Entities except for A & S
Electric, spol.s.r.o. (GmbH), whose financial statements have been
determined under principles of Czech GAAP), and that such financial
statements are a reflection of the actual relations in the asset and
financial situation of the Acquired Entities;
b) the fixed and current assets shown in the Financial Statements were/are
the property of the Acquired Entities, were/are not encumbered
with the rights of third parties (except for customary retained rights
(,,Eigentumsvorbe-halte") given in the normal course of business) and
included all economic goods that were necessary for the operation of
the Acquired Entities;
c) the fixed assets are in a proper and workable condition and the
necessary replacements and repair have been carried out;
d) the Financial Statements show all pension and fringe benefit
obligations and all liabilities in accordance with the pertinent
national GAAP;
<PAGE>
- 18 -
e) the Financial Statements include sufficient provision for all tax
liabilities accruing to the Acquired Entities for the periods through
December 31, 1995;
f) that the Schedule to roman numeral I. para. (13) and the
representations made in roman numeral I. pares. (1 3), (14) and (1 5)
are correct;
g) the execution and implementation of this Agreement does not entail the
revocability of government grants, subsidies or loans.
3) The Sellers further warrant and represent that in the time period from
December 31, 1995 through the Closing:
a) the Acquired Entities have conducted business in a reasonable and
ordinary course, and will continue to do so, and have engaged in no
extraordinary transactions (in particular additional borrowings or
liabilities of any kind), nor will they do so;
b) the scope and content of the business activities of the Acquired
Entities have not substantially varied from those of the preceding
fiscal year, nor will they do so;
c) the fixed and current assets of the Acquired Entities have been and/or
will be maintained and supplemented under the principles of reasonable
and ordinary business behavior, and the amount of the claims, which
needs to be reserved (Forderungswertberichtigungen), has not risen and
is not rising and new pension obligations have been or are being
undertaken only in the usual scope;
d) no extraordinary events have occurred or are threatened to occur which
could deleteriously affect the current or future business activities or
the economic outcome of the Acquired Entities, such as a price
reduction of more than 10 percent;
<PAGE>
- 19 -
e) no repayments on shareholders' or partners' loans have been made except
of the payment of the first installment in the amount of DM 30,000.00 on
a loan given by Willy Paul Albrecht to A & S Electric, Spol.s.r.o.
(GmbH) (CZ) and due on December 31, 1995.
(4) The Sellers finally warrant and represent (sichern zu), that upon the
Closing, as far as not disclosed in the Schedule to Section 5 para. 4 and
in this Agreement,
a) the Acquired Entities are not bound to agreements with the Sellers or
any persons or entities related to the Sellers;
b) the Acquired Entities are not bound by contracts with managing
directors, employees, counsel or other persons which contemplate a
yearly remuneration of more than DM 100,000.00 gross except of fringe
benefits and car use, or any turnover or profit participation;
c) the Acquired Entities are not bound on any lease agreements, rental
agreements or other agreements which have a term of more than one year
or would lead respectively to a yearly expense of more than DM
100,000.00 gross (except of inter-company agreements);
d) the Acquired Entities are not bound as licensors or as licensees on
agreements regarding intellectual property or other unprotected
knowledge or inventions (know-how), and are, or will be at closing, the
rightful owners of all patents, patents pending, trademarks and other
intellectual property used in their business operations.
e) the Acquired Entities are not bound by any sales agents or distribution
contracts;
f) the Acquired Entities are not bound by agreements which can be
cancelled, changed or supplemented by third parties as a result of the
sale of the shares and/or interests;
<PAGE>
- 20 -
g) the Acquired Entities are in possession of all government/administrative
permits and allowances, that are necessary to the continuation of the
operation of the businesses of the Acquired Entities; these permits and
allowances have not been cancelled or rescinded and no situation is
present which gives reason to believe that such rescission or
cancellation of these would happen and the operation of the businesses
of the Acquired Entities is being conducted in accordance with these
permits and allowances; the Acquired Entities do not infringe, to the
actual or constructive knowledge of the Seller, any third parties'
rights under the law or under any agreement;
h) the Acquired Entities are not engaged in any processes before a court or
administrative agency nor in any arbitration proceedings with an amount
in controversy of over DM 10,000.00; nor is any such process or
proceeding threatened or impending;
i) the Acquired Entities are not bound by any agreements which could
reasonably be of interest for the Buyer as far as the businesses of the
Acquired Entities are concerned;
j) the Acquired Entities have fulfilled all their contractual and public
obligations including tax filings and payments;
k) all products manufactured or sold before the Takeover Date by the
Acquired Entities are in accordance with the applicable technical
regulations and with the latest product standards, and no facts,
circumstances, or conditions exist which are reasonably probable to give
rise to product recall and the Acquired Entities are not anticipating
such product recalls within the next three years;
l) the Acquired Entities' insurance coverage extends to damages relating to
products sold on or before the Closing Date, if such damages are raised
within three years after Closing;
<PAGE>
- 21 -
m) there are no silent partnership agreements between the Acquired Entities
and the Sellers or third parties and that the thus existing silent
partnerships have been converted to equity at no cost for the respective
Acquired Entities;
n) all members of Supervisory Boards of the Acquired Entities shall have
resigned, evidenced by resigning letters, unless requested otherwise
within ten days after the execution of this Agreement;
o) the quantities contained in the inventory counts of the Acquired
Entities as of the Takeover Date are correct;
p) the employees currently with the Acquired Entities, the periods of the
contracts concluded with such employees and their major remuneration
entitlements and pension rights are correctly reflected in Schedule to
Sectioti 5 para. (4) and no claims under the Law on Employee Inventions
(Arbeitnehmererfindergesetz) have been raised.
q) the Acquired Entities own neither land nor buildings other than that
described under roman numeral I. paras. (4) and (5) and that such land
and buildings are not environmentally contaminated, and that the
assessed value (Einheitswert) according to the most recent Taxation
Notice of Assessment (Einheitswertbescheid) of January 1, 1987,
(Wertfortschreibung auf 1.1.87), and unchanged since then is DM
1,426,800.00 in the aggregate.
r) the indebtedness secured by the mortgages described under roman numeral
I. para. 5 (in the aggregate amount of DM 5,000,000.00) are included in
the bank indebtedness of approximately DM 7,587,000.00 reflected on the
December 31, 1995 financial statements.
<PAGE>
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SECTION 6
LIABILITY
(1) Should one of the warranties and/or representations made in Section 5 of
this Agreement remain fully or partially unfulfilled, the Buyer can reduce
the purchase price in the amount of the value of the breach, as long as the
Buyer has demanded in written form from the Sellers, that within ten
calendar days of receipt of the demand the Sellers put the Buyer in such a
position as if the warranty were completely fulfilled and this deadline, for
whatever reason, expires having borne no fruit. Should the purchase price be
reduced as set forth above, the Post Closing Payment shall be reduced by the
amount of such reduction in the purchase price, and should such reduction
exceed the unpaid amount of the Post Closing Payment or should the Post
Closing Payment have been previously made, then the Sellers shall remain
liable to the Buyer for the amounts not satisfied and the Sellers shall make
prompt payment of said amounts.
(2) Should any of the warranties and/or representations in Section 5 paras 2
through 4 of this Agreement remain partially or fully unfulfilled, the Buyer
can renounce its right to a reduction of the purchase price and instead
demand that the Acquired Entities be put in such a position as it would be
if the warranty had been fulfilled.
(3) The claims of the Buyer under paras. 1 and 2 of this Section can only be
raised if they exceed a value of DM 100,000.00 in the aggregate.
<PAGE>
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SECTION 7
DEFENSE OF CLAIMS
(1) The Buyer is obligated to immediately notify the Sellers, if a third party
makes or threatens to make any claim that could lead to the liability of the
Sellers under Section 6 of this Agreement. The Buyer must give the Sellers
access to all relevant documentation and all relevant information and must
allow the Sellers to view the books and written documents of the Acquired
Entities insofar as this is necessary to make a judgement on the
righteousness of any claim that has been made or threatened.
(2) The parties will inform one another regarding the defense of claims under
para. 1. The Sellers must be given the reasonable opportunity to participate
in the defense of these claims. The Buyer must permit the Sellers to defend
the claims in their own names and at their own cost, if the Buyer,
regardless of reason, is not prepared to take up the defense of claims
himself, and the defense of claims does not conflict with the Buyer's
commercial interests.
(3) Should the Buyer not notify the Seller as provided for in paras. (1) and (2)
of this Section, the Sellers shall be released from their liability under
Section 6 of this Agreement with respect to such claims, unless the Buyer
can prove that his omission was immaterial for the defense of such claims.
SECTION 8
LIMITATION PERIODS
(1) The claims of the Buyer which are based on one of the warranties and/or
representations made in Section 5 of this Agreement expire (erloschen),
unless otherwise specified in para. 2 of this Section, six months from the
point in
<PAGE>
- 24 -
time, at which the Buyer has come into the knowledge of the unfulfillment of
a warranty or representation, and at the latest June 30, 1997.
(2) The claims of the Buyer which are based on the unfulfillment of a warranty
or representation in Section 5 para. 1 of this Agreement or on other
grounds not covered by this Section 8 and referred to in Section 9 of this
Agreement expire five years after the Closing.
(3) The expiration of claims shall be prevented by a first written notification
of claim (setting forth in reasonable detail the facts and circumstances of
the cause of the claim) made to the Sellers. In this case, claims lapse
(verjdhren) one year after the written notice of claim.
SECTION 9
LIMITATION OF LIABILITY
The Buyer can, insofar as not otherwise explicitly provided for in this
Agreement, bring no claim against the Sellers, regardless of reason, for the
breach of contractual or pre-contractual obligations or obligations under law
unless the Sellers, the Sellers' management or employees breached any such
obligation intentionally or the Sellers or the Sellers' management breached any
such obligation with gross negligence.
In any event, the liability of the Sellers under this Agreement, especially
Sections 6 and 9, shall be limited to the purchase price.
<PAGE>
- 25 -
SECTION 10
NON-COMPETE AGREEMENT
(1) The Sellers are obligated not to compete with the Acquired Entities,
directly or indirectly, on any substantive or geographical market in Europe,
on which the Acquired Entities are doing business upon the execution of this
Agreement, for a period of five years after the disassociation of Werner
Arnold with the Buyer, the Acquired Entities, or CML. This obligation not
to compete does not, however, prevent the Sellers from acquiring and/or
holding passive minority investments in publicly traded shares (including
those of the Buyer and/or CML).
(2) The Sellers warrant, that at the time of Closing, they have no other
businesses or participations in other corporations or partnerships (except
for participations in Alba Lamps, Inc. and Alba Technology (M) Sdn. Bhd.,
Malaysia, which shall be sold to the Buyer in a separate deed), other than
those contemplated by this Agreement, shares in CML or the Buyer, and a 60%
share in Witte GmbH, Katzhutte (Thuringen), which is a manufacturer of
metal bases for lamps and does other assembly work.
(3) The Sellers will pay liquidated damages in the amount of DM 1,000,000.00 for
every breach of the non-compete agreement. By continuing breach of the
noncompete agreement, every successive calendar month shall be deemed a
separate violation. The proof of an actual damage greater than the
liquidated damages shall not be barred.
(4) Any claims arising out of or in connection with any violation of the
Sellers' duties and obligations under this Section 10 shall be fmally barred
if the Buyer does not notify the Seller of any such claim within a period of
three months of the time that the Buyer first learns of such a violation of
this non-compete agreement.
<PAGE>
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SECTION 11
NAME OF THE ACQUIRED ENTITIES AND BUYER
The Acquired Entities and Buyer have the right to use any reference to
the names Albrecht, Arnold, and Alba, in their corporate or partnership
names and logos at their full discretion, provided, however, that such
use shall not violate public policy.
SECTION 12
CONFIDENTIALITY, PRESS RELEASES, INFORMATIONAL RIGHTS
(1) The parties are obligated to keep the substance of this Agreement,
especially the purchase price, strictly confidential and inaccessible to
third parties, other than their respective advisors (lawyers, tax advisors,
auditors) and unless required by law or necessary under the applicable tax
laws.
(2) The parties shall agree on the full scope of any declarations which they
intend to make public regarding the execution of this Agreement.
(3) The Sellers shall assure that the Acquired Entities, upon execution of this
Agreement, will give the Buyer and the Buyer's employees access (together
with representatives of Sellers if requested so by Sellers) to the Acquired
Entities' property, access to books and documents of the Acquired Entities
as well as access to Acquired Entities workers, during normal working hours,
in order that the Buyer may inform itself of the Acquired Entities' legal,
technical and financial/economic factors. The Sellers shall also assure
that the Acquired Entities continually inform the Buyer of all essential
business matters of the Acquired Entities.
<PAGE>
- 27 -
SECTION 13
ACCESS TO BUSINESS DOCUMENTS
The Buyer shall assure that the Sellers and the Sellers' counsel obligated to
professional confidentiality will be given on demand within a reasonable scope
and reasonable time the opportunity to examine the books and records of the
Acquired Entities relating to the time period up through the Closing, and that
the Buyer will prepare the necessary copies of these records insofar as such is
necessary to enable the Sellers the ordinary, timely fulfillment of the Sellers'
tax or other legal/administrative obligations.
SECTION 14
EFFECTIVENESS OF THIS AGREEMENT
This Agreement - with the exception of the provisions of roman numeral II
Section 1 para. (9), Section 4, and Section 12 - which become effective
immediately - becomes effective at Closing, if the Closing conditions are
fulfilled.
SECTION 15
NOTARIAL AND OTHER STATUTORY FEES, COSTS
The notarial and other statutory fees which are or become applicable as a result
of the execution and implementation of this Agreement shall be borne by the
Buyer. Each party shall bear the costs of its own counsel, except as provided
for under Section 2 para. (2).
<PAGE>
- 28 -
SECTION 16
FEDERAL CARTEL OFFICE ANNOUNCEMENT
The parties agree that the prospective acquisition is not subject to examination
by the Bundeskartellamt due under Sections 23 et seq Anti-Trust Code (Gesetz
gegen Wettbewerbsbeschrankungen).
SECTION 17
NOTICES, KNOWLEDGE, JOINT AND SEVERAL LIABILITY
(1) Notices required to be given to or by the Sellers or any one of the Sellers
shall be effective when made to or by Werner Arnold, Wildensorgerstr. 8,
96049 Bamberg, Germany.
(2) Notices required to be given to or by the Buyer shall be effective when made
to or by the President of Chicago Miniature Lamp, Inc., 500 Chapman Street,
Canton, MA 02021, USA.
(3) Constructive knowledge shall be defined as that knowledge that a reasonable
person would be deemed to have under similar circumstances.
(4) Actual or constructive knowledge of any relevant circumstance of any one
Seller shall be attributed to any and all other Sellers.
(5) Actual or constuctive knowledge of Werner Arnold shall not be attributable
to the Buyer on the ground of his being managing director of Buyer.
(6) Sellers shall be jointly and severally liable for all obligations deriving
from this Agreement, except that Werner Arnold shall not be liable for any
obligation incumbent upon Willy Paul Albrecht and/or Petra Albrecht-Amold,
and Willy
<PAGE>
- 29 -
Paul Albrecht and/or Petra Albrecht-Arnold shall not be liable for any
obligation incumbent on Werner Arnold.
SECTION 18
TAXES, TAX AUDIT
(1) The Acquired Entities have filed all tax returns in a due and proper manner.
All taxes due up to the Takeover Date and other commercial duties ("sonstige
betriebliche Abgaben") including tax payments in advance and social security
payments have been duly and properly paid or provisions therefor have been
made in the respective Takeover Balance Sheets.
(2) In the event that additional payments are required in respect of the period
up until the Takeover Date as the result of a tax audit, the Sellers shall
indemnify the Acquired Entities in respect of any sum paid by the Acquired
Entities in respect of such additional payments together with all costs,
claims, loss and damage arising therefrom.
(3) In the event that the tax authorities attribute to the Sellers or the
Acquired Entities, regardless of the actual or legal reasons therefor, any
hidden dividends or do not recognize expenses in respect of transactions up
until the Takeover Date, the Sellers shall indemnify the Acquired Entities
in respect of any sum paid by the Acquired Entities in respect of such
additional payments together with all costs, claim, loss and damage arising
therefrom.
(4) The Sellers shall be entitled to take part in any external tax audit
("steuerliche AuBenprufung") which relates to the periods before the
Takeover Date. In case of a dispute with the tax authorities on matters that
might lead to tax claims against the Sellers or claims by the Buyer against
the Sellers under this Section 18 of this Agreement, the Sellers may, at
their discretion, risk, and
<PAGE>
- 30 -
cost, oppose to such matters and file the appropriate appeals with the
competent tax authorities and/or tax courts unless the Buyer opposes to such
matters and/or files the appropriate appeals with the competent tax
authorities and/or tax courts. In the case that the Buyer makes an
opposition or filing as mentioned above, the Sellers have to be informed by
the Buyer on the current status of the proceedings and are entitled to
participate as far as legally possible in such proceedings and/or make
proposals as to the facts, arguments, and objections that might be raised as
a defense against tax claims. Should the Buyer not accept the Sellers'
proposals the Buyer shall save harmless the Sellers for any loss, damage, or
claims they suffer as a result of the final settlement, order or judgment in
such proceedings unless the Buyer can prove that Sellers' proposal would not
have avoided such loss, damage or claims. Should the Buyer accept the
Sellers' proposals the Sellers shall save harmless the Buyer for any loss,
damage, or claims it suffers as a result of the final settlement, order or
judgment in such proceedings.
(5) Personal income taxes of the Sellers shall be borne by the individual Seller
or Sellers.
(6) External tax audits shall leave the 1995 Balance Sheets and the Takeover
Balance Sheets under this Agreement unaffected.
SECTION 19
SURETYSHIP OF CML
CML shall serve as a surety on first demand for the purchase-price obligations
of the Buyer under this Agreement. In case that the Sellers have and/or will
incur any liability as shareholder and/or managing director and/or person acting
(including refraining from acting) on behalf or in the interest of the Buyer for
any activities of, and/or attributable to, the Buyer, particularly arising out
of or in connection with the
<PAGE>
- 31 -
establishment of the Buyer (the "Liability"), CML shall release the Sellers from
any such Liability and save the Sellers harmless from and against any claims,
demands, actions, causes of action, damage, loss, deficiency, cost (including
reasonable attorneys' fees), liability and expense which may be made or brought
against the Sellers or which the Sellers may suffer or incur as a result of, in
respect of or arising out of such Liability.
SCETION 20
PARTIAL INVALIDITY, FORM OF WRITINGS, VENUE,
APPLICABLE LAW, LETTER OF INTENT
(1) Should any provision of this Agreement become ineffective or unenforceable,
the validity of this Agreement shall not otherwise be affected. The
ineffective or unenforceable provision shall be substituted with an
effective and enforceable provision, which approaches the economic result of
the ineffective or unenforceable provision as far as possible.
(2) Changes and supplementations of this Agreement require notarized form.
(3) This Agreement shall, by the extent permitted by law, be subject to the
exclusive jurisdiction (ausschlie,B1iche Gerichtsbarkeit) of the court for
commercial matters (KAMMERFUR Handelssachen) of Bamberg.
(4) The law applicable to this Agreement is the law of the Federal Republic of
Germany.
(5) The Letter of Intent between the parties of April 4, 1996, shall be deemed
consummated by the execution of this Agreement.
<PAGE>
The Notary has instructed the parties as to the legal implications of this
document.
IN WITNESS THEREOF, this notarial deed as well as the annexes were read aloud to
the persons appearing, approved by them and signed by each of them before me,
the notary public, who also signed and fixed the official seal.
BASLE, this 15. (fifteenth) May 1996 (nineteen hundred and ninety-six)
[NOTARY SEAL APPEARS HERE] /s/
/s/
/s/
Allg.Prot.Nr.44/1996
- --------------------
<PAGE>
EXHIBIT 10.28
CONTRACT FOR PURCHASE AND SALE OF STOCK
---------------------------------------
THIS CONTRACT, made and entered into this 15th day of May, 1996, by and
between WERNER A. ARNOLD (the "Seller") and CHICAGO MINIATURE LAMP, INC., an
Oklahoma corporation (the "Buyer").
W I T N E S S E T H:
WHEREAS, the Seller is the beneficial and record owner of all of the
issued and outstanding shares of capital stock of ALBA LAMPS, INC., an Illinois
corporation (the "Company") and desires to sell 50% of such shares of capital
stock (the "Shares") pursuant to this Agreement; and
WHEREAS, the Seller desires to sell to the Buyer and the Buyer desires to
purchase from the Seller the Shares on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the covenants,
terms and conditions herein contained, the Seller and the Buyer hereby agree as
follows:
ARTICLE II
Sale of Shares
--------------
The Seller agrees to sell to the Buyer and the Buyer agrees to purchase
from the Seller the Shares. The Seller shall transfer the Shares to the Buyer
on the Closing Date (as hereinafter defined), and immediately prior to the
transfer the Shares shall be duly and validly issued in the name of the Seller,
fully paid and nonassessable, and free and clear of any claim, lien or
encumbrance of any kind.
ARTICLE II
Purchase Price for the Shares
-----------------------------
The purchase price to be paid by the Buyer to the Seller for the Shares
shall be DM 3,100,000 in cash to be paid by the Buyer to the Seller by wire
transfer on the Closing Date.
ARTICLE III
Representations, Warranties and Covenants of the Seller
-------------------------------------------------------
The Seller represents, warrants and covenants as follows:
3.1 Stock and Stockholdings. The authorized capital stock of the
-----------------------
Company consists of 10,000 shares of common stock (no par value), 1,000 shares
of which constitute the Shares and, as of the Closing Date, shall be outstanding
and issued to the Seller. Except for the Shares, there are no other shares of
capital stock of the Company issued and outstanding except for an additional
1,000 shares of common stock of the Company owned by the Seller. The Shares
have been duly and legally issued to the Seller, are fully paid and
nonassessable and are free and clear of any mortgage, pledge, hypothecation,
lien, encumbrance or burden of any kind. There are no other classes of stock
authorized, and there are not authorized, issued or outstanding, any options,
warrants or other rights to purchase or otherwise acquire from the Company or
the Seller any shares of stock or other securities of the Company, except for
agreements with the Buyer. The Seller
<PAGE>
is subject to no agreement with any other person or entity relating in any
respect to the Company, the Shares or the sale or transfer of the Shares. The
Seller has full power, capacity and authority to sell, assign and transfer the
Shares to the Buyer.
3.2 Financial Statements. The Seller has heretofore delivered to the
--------------------
Buyer financial statements consisting of (i) an unaudited Balance Sheet for the
Company, as of December 31, 1995, (ii) an unaudited Profit and (Loss) Statement
for the Company for the fiscal year ended December 31, 1995 and (iii) an
unaudited Balance Sheet for the Company as of April 30, 1996. Such financial
statements present fairly the financial condition of the Company, as of the
respective dates of such financial statements, and except as disclosed in said
financial statements, as of the respective dates of such financial statements,
the Company had no liabilities of any nature, whether accrued, absolute, direct,
contingent, unliquidated or otherwise.
3.3 Employment and Labor Matters. Schedule 3.3 contains a list of all
----------------------------
employees, their commissions, accrued vacation pay, sick pay, severance pay and
other accrued employee benefits through December 31, 1995. Except as set forth
on Schedule 3.3 or shown as liabilities on the April 30, 1996 balance sheet of
the Company provided to the Buyer, the Company is not liable to any of its
employees for any amount of commissions, bonuses, profit sharing payments,
severance pay, accrued vacation, or any other similar payments, and from April
30, 1996 to the Closing Date no additional accruals shall occur for any
obligations to the Company's employees (except for salaries). Except as set
forth on Schedule 3.3, the Company is not a party to any pension, profit
sharing, retirement or other deferred compensation plan or agreement. Prior to
the Closing Date, the Company's profit sharing plan and 401(k) Plan will have
been terminated, and neither the Company nor the Buyer shall be liable for any
expense or liability as a result of such termination. The Company has not
incurred any unfunded deficiency or liability within the meaning of the Employee
Retirement Income Security Act of 1974 ("ERISA"), has not incurred any liability
to the Pension Benefit Guaranty Corporation established under ERISA in
connection with any employee benefit plan and has no outstanding obligations or
liabilities under any employee benefit plan. The Company has not been a party
to a "prohibited transaction," which would subject it to any tax or penalty.
Except as set forth on Schedule 3.3, there are no collective bargaining
agreements or negotiations therefor, labor grievances or arbitration proceedings
against the Company pending or threatened, and to the knowledge of the Seller,
there are no union organizing activities currently pending or threatened against
or involving the Company.
3.4 Material Contracts. Except as set forth in Schedule 3.4, the Company
------------------
has no purchase, sale, commitment, or other contract, the breach or termination
of which would have a materially adverse effect on the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Company.
3.5 Compliance with Environmental Laws. The Company is in compliance
----------------------------------
with all applicable pollution control and environmental laws, rules and
regulations. Schedule 3.5 describes all environmental licenses, permits and
other authorizations held by the Company relative to compliance with
environmental laws, rules and regulations, each of which is valid and in full
force and effect.
- 2 -
<PAGE>
3.6 No Litigation. There are no actions, suits, claims, complaints or
-------------
proceedings pending or threatened against the Company, at law or in equity, or
before or by any governmental department, commission, court, board, bureau,
agency or instrumentality; and there are no facts which would provide a valid
basis for any such action, suit or proceeding. There are no orders, judgments
or decrees of any governmental authority outstanding which specifically apply to
the Company or any of its assets.
3.7 No Adverse Changes. Since December 31, 1995, there have been no
------------------
actual or threatened developments of a nature that is materially adverse to or
involves any materially adverse effect upon the business, financial condition,
results of operations, assets, liabilities, or prospects of the Company. The
amount of stockholders equity of the Company on the Closing Date (determined in
a manner consistent with that used in the preparation of the April 30, 1996
balance sheet provided to Buyer) shall be equal to or greater than the amount of
stockholders equity shown on the April 30, 1996 balance sheet.
3.8 Taxes. Except as set forth in Schedule 3.8, the Company has filed
-----
all federal, state, local and national tax and other returns and reports which
were required to be filed with respect to all taxes, levies, imposts, duties,
licenses and registration fees, charges or withholdings of every nature
whatsoever ("Taxes"), and there exists a substantial basis in law and fact for
all positions taken in such reports. All Taxes in respect of the operations of
the Company have been paid. No waivers of periods of limitation are in effect
with respect to any taxes arising from and attributable to the ownership of
properties or operations of the business of the Company.
3.9 Properties. The Company has good and marketable title to all its
----------
personal property, equipment, processes, patents, copyrights, trademarks,
franchises, licenses and other properties and assets, including all patents,
licenses and other intellectual property used in the business of the Company and
all property reflected in the Company's financial statements provided to the
Buyer (except for assets reflected therein which have been sold in the normal
course of its business where the proceeds from such sale or other disposition
have been properly accounted for in the financial statements of the Company), in
each case free and clear of all liens, claims and encumbrances of every kind and
character, except as set forth in Schedule 3.9. The Company owns no real
property. The assets and properties owned, operated or leased by the Company
and used in its business are in good operating condition, reasonable wear and
tear excepted, and suitable for the uses for which intended. Schedule 3.9 also
contains a list of all leases of real and personal property used by the Company.
All such leases are valid and binding in accordance with their respective terms,
and there are no defaults or events of default or events which with giving of
notice or lapse of time which would constitute a default on the part of the
Company.
3.10 Inventories. The inventory of raw materials and supplies of the
-----------
Company is useable in the ordinary course of its business. Inventory of
finished goods and work-in-process of the Company is saleable in the ordinary
course of its business without discount.
3.11 Accounts Receivable. The amount shown as accounts receivable in the
-------------------
Company's financial statements provided to the Buyer and all accounts receivable
arising thereafter have been collected or represent good and collectible
receivables within 120 days after the invoice date.
- 3 -
<PAGE>
3.12 Changes. From December 31, 1995 to the Closing Date:
-------
(a) The Company has operated and will operate its business in the
usual, regular and ordinary course and not otherwise and has performed
and will perform the usual and normal maintenance of and upon its
property so as to keep it in good order, repair and condition.
(b) The Company has kept and will keep in full force and effect all
of the fire, casualty, liability, product liability and other insurance,
and all bonds on personnel, which it was carrying on December 31, 1995.
(c) The Company has not sold, disposed of, mortgaged or encumbered,
nor will it sell, dispose of, mortgage or encumber any of its property or
assets or interests therein other than products sold in the usual,
regular and ordinary course of business from its inventory. The Company
has not acquired nor will it acquire, any property or assets other than
inventory and products used in the usual, regular and ordinary course of
business.
(d) Except as set forth on Schedule 12(d), the Company has not
entered into any employment contract, collective bargaining agreement,
consultation agreement or employees' pension, retirement, insurance,
profit sharing or stock plan or other contract or agreement, nor will it
enter into any such contracts or agreements or into negotiations with
respect to any such contracts or agreements without the prior written
consent of the Buyer.
(e) Seller will use its best efforts to cause the Company to
preserve its present organizations intact and to keep available the
services of its present employees and agents.
(f) The Company has not incurred nor will it incur any indebtedness
for borrowed moneys. Except as set forth on Schedules 3.3, 3.9 and
3.12(d), the Company has not become nor will it become a guarantor or
surety or otherwise become responsible in any manner with respect to any
undertaking of another person or entity.
(g) The Company has not authorized, declared, paid or made nor will
it authorize, declare, pay or make any dividends on capital stock or any
distribution, liquidating or otherwise, on or with respect to its capital
stock (whether in property or money). The Company has not authorized or
made nor will it authorize or make any direct or indirect redemption,
purchase, or acquisition of any of its capital stock or any split-up,
combination, or other reclassification of any of such stock.
(h) The Company has not authorized nor will it authorize the
issuance of any capital stock or other securities.
(i) The Company has not authorized or entered into, nor will it
authorize or enter into any merger, consolidation, reorganization,
dissolution or other action or transaction which would change its
corporate or capital structure.
- 4 -
<PAGE>
(j) The Company has maintained and will maintain all books, accounts
and records in the usual, regular and ordinary manner on a basis
consistent with prior periods.
(k) There has not occurred and there shall not occur any increase
(or discussion of any increase) in the compensation payable or to become
payable by the Company to any of its officers and employees, and, except
as set forth on Schedule 3.3, no bonus has been discussed or paid or will
be paid to, any of its officers or employees.
(l) There has not occurred and shall not occur any transaction or
event which adversely affects the financial condition, results of
operations, assets, liabilities, or prospects of the Company in any
material adverse respect.
(m) There has not occurred and shall not occur any amendment or
changes in the by-laws or certificate of incorporation or organization of
the Company.
PROVIDED, however, that the Buyer may in writing waive or approve noncompliance
by the Seller with any provision of this Section 3.12 or any action by the
Company which would result in a breach of this Section 3.12, and such
noncompliance or action, so waived or approved, shall not be deemed a breach
hereof.
3.13 Right of Inspection. The Seller hereby covenants and agrees with
-------------------
the Buyer that during the period between the date hereof and the Closing Date,
the Buyer and its employees, agents, consultants, attorneys and auditors, shall
be permitted full access during normal business hours to all of the properties,
books, contracts, charter documents, documents of title, accounts and other
financial data and all related business records of the Company and that the
Buyer shall be furnished during such period with all information concerning the
affairs of the Company as the Buyer may reasonably request. It is expressly
understood and agreed that in the event the transactions contemplated by this
Contract shall not close as herein set forth, all information acquired pursuant
to this Contract or otherwise shall remain confidential to the parties and shall
not be disclosed to any third parties.
ARTICLE IV
Representations, Warranties and Covenants of the Buyer
------------------------------------------------------
The Buyer represents, warrants and covenants as follows:
4.1 Authority. The execution and delivery of this Contract and the
---------
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Buyer.
4.2 Investment Intent. Buyer is acquiring the Shares for investment for
-----------------
its own account, and not with a view to the sale or distribution thereof, and
Buyer has no present intention of selling, assigning, transferring or otherwise
distributing the same. Buyer understands that the transaction in which it is
purchasing the Shares has not been registered under the Securities Act of 1933,
as amended or applicable state securities laws.
- 5 -
<PAGE>
ARTICLE V
Trade Secrets; Nonsolicitation; and Non-Competition
---------------------------------------------------
The Seller hereby agrees that for a period of five years after the later
of (i) the Closing Date or (ii) the termination of his employment with the
Company or any other subsidiaries or affiliates of the Buyer, the Seller will
not, directly or indirectly, through a family member, a business controlled by
himself or a family member, as an employee, associate, partner, manager, agent
or otherwise:
(a) divulge in any manner to persons outside the Buyer's
organization any of the trade secrets of the Company and the Buyer,
including all patents, patent applications, designs, blueprints, business
methods and procedures, names of customers and suppliers, pricing
information, training and operating manuals and any other items
considered as trade secrets under applicable law;
(b) compete, directly or indirectly, with the Buyer or the Company
in any business activities in which either the Company or the Buyer was
engaged on the date of this Contract;
(c) influence or attempt to influence any employee of the Buyer or
of the Company on the date of this Contract to terminate his or her
employment or to work for any competitor of the Company or the Buyer;
(d) engage directly or indirectly in sales of products or services
similar to or competitive with those of the Company or the Buyer on the
date of this contract;
(e) solicit customers for, or otherwise aid or assist, anyone
engaged in a business or businesses which market products or services
similar to or competitive with the Company or the Buyer on the date of
this Contract;
(f) have or acquire an interest in any business operation which
markets products or services similar to or competitive with those of the
Company or the Buyer on the date of this Contract; provided, however,
that this obligation shall not prevent the Seller from holding the 60%
share in Witte GmbH, Katzhutte (Thuringen), he is actually holding at the
signing of this Contract, and provided, further that this obligation
shall not prevent the Seller from acquiring and/or holding passive
investments in publicly traded companies (not to exceed 5% of the capital
stock of any such company); or
(g) solicit any customer or active dealers or sales representatives
of the Company or the Buyer, except on behalf of the Buyer.
The scope of the foregoing prohibited actions includes all of North America,
Europe, Malaysia and any other relevant markets of the Company or the Buyer on
the date of this Contract. The Seller hereby acknowledges that any of the
actions prohibited above would cause irreparable harm to the Company and to the
Buyer, and the Seller hereby consents to the entry of a restraining order or
injunction prohibiting any such solicitation or interference. For
- 6 -
<PAGE>
purposes of this Article V, the Company shall mean the Company and any successor
corporation into which it may be merged or consolidated, and the Buyer shall
mean the Buyer and each of its subsidiaries or affiliates and any successor
corporation into which any of them may be merged or consolidated. The covenants
contained in this Article V shall survive the Closing Date.
ARTICLE VI
Conditions to Obligations of the Buyer
--------------------------------------
The obligations of the Buyer to complete the transactions contemplated by
this Contract and to acquire the Shares are subject, at the Buyer's option, to
satisfaction of the following conditions on or before the Closing Date:
6.1 The representations, warranties and covenants of the Seller
contained herein shall be true, complete and correct on and as of the Closing
Date as though such representations, warranties and covenants were made on and
as of the Closing Date, and the Seller shall not be in default under any of the
provisions of this Contract on or prior to the Closing Date.
6.2 The Seller shall have transferred and delivered to the Buyer stock
certificates for the Shares, with stock powers attached, duly endorsed in blank,
all properly executed in proper form.
6.3 The Buyer shall have received the written resignation of all members
of the boards of directors of the Company as Buyer shall request and of such
officers of each of the Company as Buyer shall request.
6.4 The Buyer shall have received possession or control of all corporate
and other records of the Company including but not limited to minute books,
stock transfer books and registers, books of account, leases and material
contracts.
6.5 Seller shall have entered into an employment agreement with Buyer or
its subsidiaries or affiliates for a term of 36 months, on terms acceptable to
the Buyer and the Seller, and a separate agreement on the same terms as the
Seller's agreement in Article V hereof.
6.6 Daniel S. Savocchia shall have entered into an employment agreement
with Buyer or its subsidiaries or affiliates for a term of 36 months, on terms
acceptable to the Buyer and Mr. Savocchia, and an agreement on the same terms
(except made applicable to Mr. Savocchia) as the Seller's agreement in Article V
hereof.
6.7 All obligations and indebtedness of the Company to the Seller, to
any other shareholder or prior shareholder of the Company, or to any affiliate
of the Company (except of W. Albrecht GmbH & Co KG, Alba Speziallampen GmbH,
Alba Light Design GmbH, A&S Electric Production, W. Albrecht
Grundstuckgesellschaft GbR, Arnold GmbH, BSC Arnold GmbH & Co KG, Alba
Technology (M) Sdn, Bhd) (except for salaries and the items described on
Schedule 3.3 including the repaid loan to Daniel S. Savocchia) shall have been
converted to capital of the Company.
- 7 -
<PAGE>
6.8 The transactions described in (i) the Agreement on the Sale and
Transfer of Shares and Interests in the ALBA/Albrecht Group, among Seller, Willy
Paul Albrecht, Petra Albrecht-Arnold, Buyer and Alba Speziallampen Holding GmbH
and (ii) the Contract for Exchange of Stock between the Seller and the Buyer,
relating to the remaining capital stock of the Company, shall have been
completed simultaneously with the closing of the transactions described in this
Agreement.
6.9 The foregoing provisions of this Article VI shall be for the
exclusive benefit of the Buyer but such provisions, or any of them, may be
waived in whole or in part by the Buyer and if any condition contained in this
Article VI is not fulfilled, the Buyer shall have the right to cancel this
Contract in addition to any other rights or remedies it may have hereunder, or
otherwise.
ARTICLE VII
Conditions to Obligations of the Seller
---------------------------------------
The obligations of the Seller to complete the transactions contemplated
by this Contract and to sell the Shares are subject, at the Seller's option, to
satisfaction of the following conditions on or before the Closing Date:
7.1 The representations, warranties and covenants of the Buyer set forth
herein shall be true, complete and correct on and as of the Closing Date as
though such representations, warranties and covenants were made on and as of the
Closing Date, and the Buyer shall not be in default under any of the provisions
of this Contract on or prior to the Closing Date.
7.2 The Buyer shall have made payment of DM 3,100,000 to the Seller by
wire transfer.
7.3 The transactions described in (i) the Agreement on the Sale and
Transfer of Shares and Interests in the ALBA/Albrecht Group, among Seller, Willy
Paul Albrecht, Petra Albrecht-Arnold, Buyer and Alba Speziallampen Holding GmbH
and (ii) the Contract for Exchange of Stock between the Seller and the Buyer,
relating to the remaining capital stock of the Company, shall have been
completed simultaneously with the closing of the transactions described in this
Agreement.
7.4 The foregoing provisions of this Article VII shall be for the
benefit of the Seller and such provisions, or any of them, may be waived in
whole or in part by the Seller and if any condition contained in this Article
VII is not fulfilled the Seller shall have the right to cancel this Contract in
addition to any other rights or remedies he may have hereunder, or otherwise.
ARTICLE VIII
Closing
-------
The closing of the transactions contemplated by this Contract shall take
place on the Closing Date at such location as the Seller and the Buyer may
mutually agree. The "Closing Date", as used in this Contract, shall mean ten
o'clock A.M. (applicable time then
- 8 -
<PAGE>
in effect at the location of the closing) on May 29, 1996, provided that the
Seller and the Buyer may by mutual written agreement set an earlier or later
time for the Closing Date.
ARTICLE IX
Termination or Failure to Close
-------------------------------
9.1 Voluntary Termination. This Contract may be terminated and purchase
---------------------
of the Shares abandoned before Closing by the mutual consent of the Seller and
the Buyer.
9.2 Failure of Buyer to Close. Should the conditions set forth in
-------------------------
Article VII hereof fail to be met on or before the Closing Date, at the option
of the Seller, the Contract shall be deemed terminated and abandoned. Such
termination shall not prohibit any claims by the Seller against the Buyer for
damages.
9.3 Failure of Seller to Close. Should the conditions set forth in
--------------------------
Article VI hereof fail to be met on or before the Closing Date, at the option of
the Buyer, the Contract shall be deemed terminated and abandoned. Such
termination shall not prohibit any claims by the Buyer against the Seller for
damages.
ARTICLE X
Survival and Limitations of Representations and Warranties
----------------------------------------------------------
10.1 Survival of Warranties by the Seller. The representations and
------------------------------------
warranties made by the Seller and contained in this Contract will survive the
closing of the purchase of the Shares provided for herein and, notwithstanding
such closing or any investigation made by or on behalf of the Buyer or any other
person or any knowledge of the Buyer or any other person, shall continue in full
force and effect for the benefit of the Buyer, subject to the following
provisions of this section.
(a) Except as provided in (b) and (c) of this section, no warranty
claim may be made or brought by the Buyer after the date which is the
earlier of (i) six months after the Buyer received actual knowledge of
the breach of the representation or warranty, and (ii) June 30, 1997.
(b) Any warranty claim which is based upon or relates to the tax
liability of the Company for a particular taxation year may be made or
brought by the Buyer at any time prior to ninety days after the
expiration of the period (if any) during which an assessment,
reassessment or other form of recognized document assessing liability for
tax, interest or penalties in respect of such taxation year under
applicable tax legislation could be issued.
(c) Any warranty claim which is based upon or relates to the title
to the Shares or which is based upon intentional misrepresentation or
fraud by the Seller may be made or brought by the Buyer at any time prior
to June 30, 2001.
After the expiration of the period of time referred to in (a) of this section,
the Seller will be released from all obligations and liabilities in respect of
the representations and warranties made by the Seller and contained in this
Contract or in any document or certificate given in
- 9 -
<PAGE>
order to carry out the transactions contemplated hereby, except with respect to
any warranty claims made by the Buyer in writing (setting forth in reasonable
detail the facts and circumstances of the cause of the claim) prior to the
expiration of such period and subject to the rights of the Buyer to make any
claim permitted by (b) and/or (c) of this section. For purposes of this Section
10.1 "Buyer" shall refer to the Buyer, its successors and assigns, and any
affiliates or other entities controlled directly or indirectly by the Buyer.
10.2 Survival of Warranties by Buyer. The representations and warranties
-------------------------------
made by the Buyer and contained in this Contract will survive the closing of the
purchase and sale of the Shares provided for herein and, notwithstanding such
closing or any investigation made by or on behalf of the Seller or any other
person or any knowledge of the Seller or any other person, shall continue in
full force and effect for the benefit of the Seller; provided that no warranty
claim may be made or brought by the Seller after the date which is the earlier
of (i) six months after the Buyer received actual knowledge of the breach of the
representation or warranty, and (ii) June 30, 1997.
10.3 Limitations on Warranty Claims. The Buyer shall not be entitled to
------------------------------
make a warranty claim if the Buyer has received written notice prior to the
Closing Date of the inaccuracy, non-performance, non-fulfillment or breach which
is the basis for such warranty claim and the Buyer completes the transactions
hereunder notwithstanding such inaccuracy, non-performance, non-fulfillment or
breach.
ARTICLE XI
Indemnity
---------
11.1 Indemnity by the Seller.
-----------------------
(a) The Seller hereby agrees to indemnify and save the Buyer
harmless from and against any claims, demands, actions, causes of action,
damage, loss, deficiency, cost, liability and expense which may be made
or brought against the Buyer or which the Buyer may suffer or incur as a
result of, in respect of or arising out of:
(i) any non-performance or non-fulfillment of any covenant
or agreement on the part of the Seller contained in this Contract or
in any document given in order to carry out the transactions
contemplated hereby;
(ii) any misrepresentation, inaccuracy, incorrectness or
breach of any representation or warranty made by the Seller
contained in this Contract; and
(iii) all costs and expenses including, without limitation,
legal fees incidental to or in respect of the foregoing.
(b) The obligations of indemnification by the Seller pursuant to
this section will be:
- 10 -
<PAGE>
(i) subject to the limitations referred to in Section 10.1
hereof with respect to the survival of the representations and
warranties by the Seller;
(ii) subject to the limitations referred to in Section 10.3
hereof; and
(iii) limited, in any case whatsoever (including any punitive
damages and similar rights or remedies of the Buyer), to the amount
of DM 3,000,000.
For purposes of this Section 11.1 "Buyer" shall refer to the Buyer, its
successors and assigns, and any affiliates or other entities controlled directly
or indirectly by the Buyer.
11.2 Indemnity by the Buyer.
----------------------
(a) The Buyer hereby agrees to indemnify and save the Seller
harmless from and against any claims, demands, actions, causes of action,
damage, loss, deficiency, cost, liability and expense which may be made
or brought against the Seller or which the Seller may suffer or incur as
a result of, in respect of or arising out of:
(i) any non-performance or non-fulfillment of any covenant
or agreement on the part of the Buyer contained in this Contract or
in any document given in order to carry out the transactions
contemplated hereby;
(ii) any misrepresentation, inaccuracy, incorrectness or
breach of any representation or warranty made by the Buyer contained
in this Contract; and
(iii) all costs and expenses including, without limitation,
legal fees incidental to or in respect of the foregoing.
(b) The obligations of indemnification by the Buyer pursuant to this
section will be subject to the limitations referred to in Section 10.2
hereof with respect to the survival of the representations and warranties
by the Buyer.
11.3 Rights of Indemnitors. Anything in this Contract to the contrary
---------------------
notwithstanding, in no case shall any indemnitor under this Contract be liable
under this Contract with respect to any action, claim or proceeding by a third
party against any indemnitee ("Indemnified Party") under this Contract, unless
the Indemnified Party shall notify the indemnifying party ("Indemnifying Party")
of the assertion or commencement of such action, claim or proceeding within a
reasonable period of time or, if citation or service of process has been made,
within twenty (20) days thereafter. The Indemnifying Party may, at its option
and at its sole expense, participate in the defense of and contest any such
action, claim or proceeding, provided that the Indemnified Party shall at all
times also have the right to participate fully therein. If the Indemnifying
Party, within a reasonable time after receiving such notice, fails to
participate, the Indemnified Party shall have the right, but shall not be
obligated, to undertake the defense of the action, claim or proceeding for the
account of and at the risk of the Indemnifying Party; provided, however, that in
the event that the
- 11 -
<PAGE>
Indemnified Party shall determine to compromise or settle (exercising its
judgment in good faith) any such action, claim or proceeding, the Indemnified
Party shall be required to give the Indemnifying Party fifteen (15) days notice
of such determination. If the Indemnifying Party shall not undertake the
defense of such action, claim or proceeding prior to the expiration of such
fifteen day period, the Indemnified Party shall then be entitled to compromise
or settle the action, claim or proceeding for the account of and at the risk of
the Indemnifying party. The parties agree that any Indemnified Party may join
any Indemnifying Party in any action, claim or proceeding brought by a third
party, as to which any right of indemnity created by this Agreement would or
might apply, for the purpose of enforcing any right of the indemnity granted to
such Indemnified Party pursuant to this Contract.
11.4 Additional Rights. Any right of indemnity of any party pursuant to
-----------------
this Article XI of this Contract shall be in addition to and shall not operate
as a limitation on any other right to indemnity of such party pursuant to this
Contract, any document or instrument executed in connection with the
consummation of the transaction contemplated hereby, or otherwise.
ARTICLE XII
Notices
-------
All notices, requests, demands and other communications hereunder shall
be in writing and will be deemed to have been duly given when delivered or faxed
(with a contemporaneous mailing, first class postage prepaid):
(1) If to the Seller, to:
Werner A. Arnold
Wildensorgerstr. 8
96049 Bamberg, Germany
Telephone: (0951) 9338-166
FAX: (001) 951-500323
with a copy to:
Dr. Thomas O.J. Burkert
Hennerkes, Jeschke, Kirchdorfer & Partner
Jahnstrasse 43
70597 Stuttgart, Germany
Telephone: (0711) 725790
FAX: (0711) 7257920
- 12 -
<PAGE>
(2) If to Buyer, to:
Chicago Miniature Lamp, Inc.
P.O. Box 101
500 Chapman Street
Canton, Massachusetts 02021, USA
Attention: Frank M. Ward
Telephone: (617) 828-2948
FAX: (617) 828-2012
with copy to:
Gary H. Baker
Baker & Hoster
800 Kennedy Building
Tulsa, Oklahoma 74103, USA
Telephone: (918) 592-5555
FAX: (918) 587-6152
These addresses may be changed from time to time by written notice to the
other parties.
ARTICLE XIII
Miscellaneous
-------------
13.1 Further Assurances. Each party hereto shall with reasonable
------------------
diligence do all things and provide such reasonable assurances as may be
required to consummate the transactions contemplated herein and each party
hereto shall provide such further documents or instruments requested by any
other party as may be reasonably necessary or desirable to effect the purposes
of this Contract and carry out its provisions, whether before or after the
Closing Date.
13.2 Costs and Expenses. Each party shall bear all of its costs and
------------------
expenses incurred in connection with this Contract and the transactions
contemplated hereby.
13.3 Brokerage. Each of the parties represents and warrants to the other
---------
that it has not in any way incurred any liability for any finder's fee or other
remuneration to any broker, finder or agent, or made any arrangement whereby it
or any other party hereto might become liable for any such fee or remuneration
and if any such fee or other remuneration becomes payable as a result of any
arrangements made by it, the party concerned agrees to indemnify the other
parties hereto in respect of such liability.
13.4 Governing Law. This Contract shall be construed and governed in
-------------
accordance with the laws of the State of Illinois.
13.5 JURISDICTION; PROCESS; CHOICE OF FORUM. EACH PARTY HEREBY CONSENTS
--------------------------------------
TO THE JURISDICTION OF ANY OF THE LOCAL, STATE OR FEDERAL COURTS LOCATED WITHIN
LAKE COUNTY, ILLINOIS AND WAIVES ANY OBJECTION WHICH THE
- 13 -
<PAGE>
PARTY MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF
----- --- ----------
ANY PROCEEDING IN ANY SUCH COURT AND WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON THE UNDERSIGNED, AND COVENANTS THAT ALL SUCH SERVICE OF PROCESS BE
MADE BY MAIL OR MESSENGER DIRECTED TO THE RESPECTIVE PARTIES AT THE ADDRESSES
SET FORTH IN ARTICLE XII ABOVE AND THAT SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT OR FIVE (5) BUSINESS DAYS AFTER
MAILED OR DELIVERED BY MESSENGER.
13.6 Headings. The titles and headings of the Articles and Sections of
--------
the Contract are inserted herein for convenience of reference only and shall not
affect the interpretation or construction of this Contract.
13.7 Entire Agreement; Amendments; Waivers. This Contract, together with
-------------------------------------
any schedules and exhibits attached hereto, constitute the entire agreement
between the parties with respect to the subject matters hereof and supersede all
prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written. No supplement, modification or waiver of
this Contract shall be binding unless executed in writing by the parties. No
waiver of any of the provisions of this Contract shall be deemed or shall
constitute a waiver of any other provision hereof, nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
13.8 Inurement. This Contract shall inure to the benefit of and be
---------
binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns.
13.9 Modification and Severability. If a court of competent jurisdiction
-----------------------------
declares that any provision of this Contract is illegal, invalid or
unenforceable, then such provision shall be modified automatically to the extent
necessary to make such provision fully enforceable. If such court does not
modify any such provision as contemplated herein, but instead declares it to be
wholly illegal, invalid or unenforceable, then such provision shall be severed
from this Contract and such declaration shall in no way affect the legality,
validity and enforceability of the other provisions of this Contract to which
such declaration does not relate. In that event, this Contract shall be
construed as if it did not contain the particular provision held to be illegal,
invalid or unenforceable, the rights and obligations of the parties hereto shall
be construed and enforced accordingly, and this Contract shall remain in full
force and effect.
13.10 Counterparts. This Contract may be executed in multiple
------------
counterparts by the various parties hereto, each of which shall constitute an
original counterpart, and all of which when taken together shall constitute but
one and the same Contract.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Contract on the day
and year first above written.
BUYER: CHICAGO MINIATURE LAMP, INC.
By /s/ Frank M. Ward
-----------------------------------------
President
SELLER:
/s/ Werner A. Arnold
------------------------------------------
WERNER A. ARNOLD
- 15 -
<PAGE>
SCHEDULE 3.3
------------
EMPLOYMENT, PENSION AND LABOR MATTERS
-------------------------------------
The Company has a 401(k) Plan which will be terminated prior to the Closing
Date.
DUE AS OF 12/31/95
<TABLE>
<CAPTION>
===================================================================================
Bonus due Profit
Salary Commission Accrued for Sharing
Employee Due Due Vacation 1995 due for 1995
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Paul Albrecht 0.00 0.00 0.00 12000.00 0.00
- -----------------------------------------------------------------------------------
Werner Arnold 0.00 41459.35 0.00 12119.32 22500.00
- -----------------------------------------------------------------------------------
Giovanni Fioccoia 0.00 0.00 0.00 4000.00 0.00
- -----------------------------------------------------------------------------------
Daniel S. Savocchia 0.00 103648.37 4153.86 163000.00 22500.00
- -----------------------------------------------------------------------------------
Peggy Cook 0.00 0.00 0.00 11917.88 7082.02
- -----------------------------------------------------------------------------------
Jack Wicks 0.00 18095.39 0.00 3946.15 15053.85
- -----------------------------------------------------------------------------------
TOTALS 0.00 163203.11 4153.86 206983.35 67135.87
===================================================================================
</TABLE>
Commissions due paid on 03/29/96
Accrued vacations to Daniel S. Savocchia paid 4/29/96
Bonuses for 1995 operations paid 03/15/96
Profit Sharing for 1995 operations paid 4/29/96(Profit Sharing Plan will be
terminated prior to Closing)
Loan to Daniel S. Savocchia repaid 4/29/96
Loan to Werner Arnold still outstanding as of 5/08/96.
COMMISSIONS FOR 1ST QUARTER 1996
<TABLE>
<CAPTION>
=================================================================
Commissions
Employee Due
<S> <C>
- -----------------------------------------------------------------
Paul Albrecht 0.00
- -----------------------------------------------------------------
Werner Arnold 28543.14
- -----------------------------------------------------------------
Giovanni Fioccoia 0.00
- -----------------------------------------------------------------
Daniel S. Savocchia 85629.44
- -----------------------------------------------------------------
Peggy Cook 0.00
- -----------------------------------------------------------------
Jack Wicks 16615.07
- -----------------------------------------------------------------
TOTALS 130787.65
=================================================================
</TABLE>
Commissions for 1st Quarter were paid on 04/29/96.
VACATIONS FOR 1996 WILL ACCRUE UNTIL CLOSING (APPROXIMATELY 6/01/96)
<TABLE>
<CAPTION>
=================================================
Employee Weeks Additional Vacation
due 6/01/96
- -------------------------------------------------
<S> <C> <C>
Paul Albrecht 0 0.00
- -------------------------------------------------
Werner Arnold 0 0.00
- -------------------------------------------------
Giovanni Fioccoia 2 760.00
- -------------------------------------------------
Daniel S. Savocchia 3 4153.86
- -------------------------------------------------
Peggy Cook 3 2019.24
- -------------------------------------------------
James Boch 2 1730.76
- -------------------------------------------------
Jack Wicks 3 1730.79
- -------------------------------------------------
TOTALS 10394.65
=================================================
</TABLE>
<PAGE>
SCHEDULE 3.4
------------
MATERIAL CONTRACTS
------------------
Agency Agreement, dated February 10, 1995, between W. Albrecht GmbH and Co KG
and Alba Lamps, Inc.
<PAGE>
SCHEDULE 3.5
------------
ENVIRONMENTAL LICENSES AND PERMITS
----------------------------------
NONE
<PAGE>
SCHEDULE 3.8
------------
UNPAID TAXES
------------
Tax returns for Federal and Illinois State Income Taxes for 1995 have not been
filed as of the date of the Agreement. An extension until September 15, 1996,
for filing such returns has been obtained. The taxes due for the periods
covered by the 1995 returns have been paid.
<PAGE>
SCHEDULE 3.9
------------
ENCUMBRANCES AND LEASES
-----------------------
Lease, dated October 23, 1995, between Anita Foertsch (Lessor) and Alba Lamps,
Inc. (Lessee) relating to approximately 1300 sq. ft. of office and warehouse
space at 5230 Wesley Terrace, Rosemont, Illinois, with a termination date of
October 31, 1997.
<PAGE>
SCHEDULE 3.12(D)
----------------
Alba Lamps, Inc. entered into an Employment Agreement with James Boch, as sales
manager, dated February 19, 1996, with an annual compensation of $40,000 plus 1%
of net sales commission and employee benefits of approximately $8,000 plus
medical benefits.
<PAGE>
EXHIBIT 10.29
CONTRACT FOR EXCHANGE OF STOCK
------------------------------
THIS CONTRACT, made and entered into this 15th day of May, 1996, by and
between WERNER A. ARNOLD (for purposes of identification only hereinafter called
the "Seller") and CHICAGO MINIATURE LAMP, INC., an Oklahoma corporation (for
purposes of identification only hereinafter called the "Buyer").
W I T N E S S E T H:
WHEREAS, the Seller is the beneficial and record owner of all of the
issued and outstanding shares of capital stock of ALBA LAMPS, INC., an Illinois
corporation (the "Company") and desires to exchange 50% of such shares of
capital stock (the "Shares") for a certain number of shares of the Buyer's stock
pursuant to this Agreement; and
WHEREAS, the Seller and the Buyer desire to exchange the Shares for the
CHML Shares (hereinafter defined) on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the covenants,
terms and conditions herein contained, the Seller and the Buyer hereby agree as
follows:
ARTICLE II
Transfer of Shares
------------------
The Seller agrees to exchange and transfer to the Buyer the Shares and
the Buyer agrees to issue the CHML Shares to the Seller in exchange for the
Shares. The Seller shall transfer the Shares to the Buyer on the Closing Date
(as hereinafter defined), and immediately prior to the transfer the Shares shall
be duly and validly issued in the name of the Seller, fully paid and
nonassessable, and free and clear of any claim, lien or encumbrance of any kind.
ARTICLE II
Consideration for the Shares
----------------------------
In consideration of the transfer of the Shares to the Buyer, the Buyer
shall transfer to the Seller 100,000 shares of the Buyer's common stock ($.01
par value) on the Closing Date by the delivery by the Buyer to the Seller of a
stock certificate for the number of 100,000 shares (the "CHML Shares"). The
CHML Shares may be evidenced by a temporary certificate, which shall be
presented by the Seller to the Buyer's stock transfer agent in exchange for a
new certificate within ten days after the Closing Date. The Seller acknowledges
that the CHML Shares have not been registered under the Securities Act of 1933
or applicable state securities laws; that the CHML Shares are "restricted
stock"; and that the certificates evidencing the CHML Shares shall bear a
restrictive legend to such effect. Reference is also made to the
acknowledgments of Seller set forth in Section 3.14 hereof.
ARTICLE III
Representations, Warranties and Covenants of the Seller
-------------------------------------------------------
The Seller represents, warrants and covenants as follows:
<PAGE>
3.1 Stock and Stockholdings. The authorized capital stock of the
-----------------------
Company consists of 10,000 shares of common stock (no par value), 1,000 shares
of which constitute the Shares and, as of the Closing Date, shall be outstanding
and issued to the Seller. Except for the Shares, there are no other shares of
capital stock of the Company issued and outstanding, exept for an additional
1,000 shares of common stock of the Company owned by the Seller. The Shares
have been duly and legally issued to the Seller, are fully paid and
nonassessable and are free and clear of any mortgage, pledge, hypothecation,
lien, encumbrance or burden of any kind. There are no other classes of stock
authorized, and there are not authorized, issued or outstanding, any options,
warrants or other rights to purchase or otherwise acquire from the Company or
the Seller any shares of stock or other securities of the Company, except for
agreements with the Buyer. The Seller is subject to no agreement with any other
person or entity relating in any respect to the Company, the Shares or the sale
or transfer of the Shares. The Seller has full power, capacity and authority to
sell, assign and transfer the Shares to the Buyer.
3.2 Financial Statements. The Seller has heretofore delivered to the
--------------------
Buyer financial statements consisting of (i) an unaudited Balance Sheet for the
Company, as of December 31, 1995, (ii) an unaudited Profit and (Loss) Statement
for the Company for the fiscal year ended December 31, 1995 and (iii) an
unaudited Balance Sheet for the Company as of April 30, 1996. Such financial
statements present fairly the financial condition of the Company, as of the
respective dates of such financial statements, and except as disclosed in said
financial statements, as of the respective dates of such financial statements,
the Company had no liabilities of any nature, whether accrued, absolute, direct,
contingent, unliquidated or otherwise.
3.3 Employment and Labor Matters. Schedule 3.3 contains a list of all
----------------------------
employees, their commissions, accrued vacation pay, sick pay, severance pay and
other accrued employee benefits through December 31, 1995. Except as set forth
on Schedule 3.3 or shown as liabilities on the April 30, 1996 balance sheet of
the Company provided to the Buyer, the Company is not liable to any of its
employees for any amount of commissions, bonuses, profit sharing payments,
severance pay, accrued vacation, or any other similar payments, and from April
30, 1996 to the Closing Date no additional accruals shall occur for any
obligations to the Company's employees (except for salaries). Except as set
forth on Schedule 3.3, the Company is not a party to any pension, profit
sharing, retirement or other deferred compensation plan or agreement. Prior to
the Closing Date, the Company's profit sharing plan and 401(k) Plan will have
been terminated, and neither the Company nor the Buyer shall be liable for any
expense or liability as a result of such termination. The Company has not
incurred any unfunded deficiency or liability within the meaning of the Employee
Retirement Income Security Act of 1974 ("ERISA"), has not incurred any liability
to the Pension Benefit Guaranty Corporation established under ERISA in
connection with any employee benefit plan and has no outstanding obligations or
liabilities under any employee benefit plan. The Company has not been a party
to a "prohibited transaction," which would subject it to any tax or penalty.
Except as set forth on Schedule 3.3, there are no collective bargaining
agreements or negotiations therefor, labor grievances or arbitration proceedings
against the Company pending or threatened, and to the knowledge of the Seller,
there are no union organizing activities currently pending or threatened against
or involving the Company.
- 2 -
<PAGE>
3.4 Material Contracts. Except as set forth in Schedule 3.4, the Company
------------------
has no purchase, sale, commitment, or other contract, the breach or termination
of which would have a materially adverse effect on the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Company.
3.5 Compliance with Environmental Laws. The Company is in compliance
----------------------------------
with all applicable pollution control and environmental laws, rules and
regulations. Schedule 3.5 describes all environmental licenses, permits and
other authorizations held by the Company relative to compliance with
environmental laws, rules and regulations, each of which is valid and in full
force and effect.
3.6 No Litigation. There are no actions, suits, claims, complaints or
-------------
proceedings pending or threatened against the Company, at law or in equity, or
before or by any governmental department, commission, court, board, bureau,
agency or instrumentality; and there are no facts which would provide a valid
basis for any such action, suit or proceeding. There are no orders, judgments
or decrees of any governmental authority outstanding which specifically apply to
the Company or any of its assets.
3.7 No Adverse Changes. Since December 31, 1995, there have been no
------------------
actual or threatened developments of a nature that is materially adverse to or
involves any materially adverse effect upon the business, financial condition,
results of operations, assets, liabilities, or prospects of the Company. The
amount of stockholders equity of the Company on the Closing Date (determined in
a manner consistent with that used in the preparation of the April 30, 1996
balance sheet provided to Buyer) shall be equal to or greater than the amount of
stockholders equity shown on the April 30, 1996 balance sheet.
3.8 Taxes. Except as set forth in Schedule 3.8, the Company has filed
-----
all federal, state, local and national tax and other returns and reports which
were required to be filed with respect to all taxes, levies, imposts, duties,
licenses and registration fees, charges or withholdings of every nature
whatsoever ("Taxes"), and there exists a substantial basis in law and fact for
all positions taken in such reports. All Taxes in respect of the operations of
the Company have been paid. No waivers of periods of limitation are in effect
with respect to any taxes arising from and attributable to the ownership of
properties or operations of the business of the Company.
3.9 Properties. The Company has good and marketable title to all its
----------
personal property, equipment, processes, patents, copyrights, trademarks,
franchises, licenses and other properties and assets, including all patents,
licenses and other intellectual property used in the business of the Company and
all property reflected in the Company's financial statements provided to the
Buyer (except for assets reflected therein which have been sold in the normal
course of its business where the proceeds from such sale or other disposition
have been properly accounted for in the financial statements of the Company), in
each case free and clear of all liens, claims and encumbrances of every kind and
character, except as set forth in Schedule 3.9. The Company owns no real
property. The assets and properties owned, operated or leased by the Company
and used in its business are in good operating condition, reasonable wear and
tear excepted, and suitable for the uses for which intended. Schedule 3.9 also
contains a list of all leases of real and personal property used by the Company.
All such leases are valid and binding in accordance with their respective terms,
- 3 -
<PAGE>
and there are no defaults or events of default or events which with giving of
notice or lapse of time which would constitute a default on the part of the
Company.
3.10 Inventories. The inventory of raw materials and supplies of the
-----------
Company is useable in the ordinary course of its business. Inventory of
finished goods and work-in-process of the Company is saleable in the ordinary
course of its business without discount.
3.11 Accounts Receivable. The amount shown as accounts receivable in the
-------------------
Company's financial statements provided to the Buyer and all accounts receivable
arising thereafter have been collected or represent good and collectible
receivables within 120 days after the invoice date.
3.12 Changes. From December 31, 1995 to the Closing Date:
-------
(a) The Company has operated and will operate its business in the
usual, regular and ordinary course and not otherwise and has performed
and will perform the usual and normal maintenance of and upon its
property so as to keep it in good order, repair and condition.
(b) The Company has kept and will keep in full force and effect all
of the fire, casualty, liability, product liability and other insurance,
and all bonds on personnel, which it was carrying on December 31, 1995.
(c) The Company has not sold, disposed of, mortgaged or encumbered,
nor will it sell, dispose of, mortgage or encumber any of its property or
assets or interests therein other than products sold in the usual,
regular and ordinary course of business from its inventory. The Company
has not acquired nor will it acquire, any property or assets other than
inventory and products used in the usual, regular and ordinary course of
business.
(d) Except as set forth on Schedule 12(d), the Company has not
entered into any employment contract, collective bargaining agreement,
consultation agreement or employees' pension, retirement, insurance,
profit sharing or stock plan or other contract or agreement, nor will it
enter into any such contracts or agreements or into negotiations with
respect to any such contracts or agreements without the prior written
consent of the Buyer.
(e) Seller will use its best efforts to cause the Company to
preserve its present organizations intact and to keep available the
services of its present employees and agents.
(f) The Company has not incurred nor will it incur any indebtedness
for borrowed moneys. Except as set forth on Schedules 3.3, 3.9 and
3.12(d), the Company has not become nor will it become a guarantor or
surety or otherwise become responsible in any manner with respect to any
undertaking of another person or entity.
- 4 -
<PAGE>
(g) The Company has not authorized, declared, paid or made nor will
it authorize, declare, pay or make any dividends on capital stock or any
distribution, liquidating or otherwise, on or with respect to its capital
stock (whether in property or money). The Company has not authorized or
made nor will it authorize or make any direct or indirect redemption,
purchase, or acquisition of any of its capital stock or any split-up,
combination, or other reclassification of any of such stock.
(h) The Company has not authorized nor will it authorize the
issuance of any capital stock or other securities.
(i) The Company has not authorized or entered into, nor will it
authorize or enter into any merger, consolidation, reorganization,
dissolution or other action or transaction which would change its
corporate or capital structure.
(j) The Company has maintained and will maintain all books, accounts
and records in the usual, regular and ordinary manner on a basis
consistent with prior periods.
(k) There has not occurred and there shall not occur any increase
(or discussion of any increase) in the compensation payable or to become
payable by the Company to any of its officers and employees, and, except
as set forth on Schedule 3.3, no bonus has been discussed or paid or will
be paid to, any of its officers or employees.
(l) There has not occurred and shall not occur any transaction or
event which adversely affects the financial condition, results of
operations, assets, liabilities, or prospects of the Company in any
material adverse respect.
(m) There has not occurred and shall not occur any amendment or
changes in the by-laws or certificate of incorporation or organization of
the Company.
PROVIDED, however, that the Buyer may in writing waive or approve noncompliance
by the Seller with any provision of this Section 3.12 or any action by the
Company which would result in a breach of this Section 3.12, and such
noncompliance or action, so waived or approved, shall not be deemed a breach
hereof.
3.13 Right of Inspection. The Seller hereby covenants and agrees with
-------------------
the Buyer that during the period between the date hereof and the Closing Date,
the Buyer and its employees, agents, consultants, attorneys and auditors, shall
be permitted full access during normal business hours to all of the properties,
books, contracts, charter documents, documents of title, accounts and other
financial data and all related business records of the Company and that the
Buyer shall be furnished during such period with all information concerning the
affairs of the Company as the Buyer may reasonably request. It is expressly
understood and agreed that in the event the transactions contemplated by this
Contract shall not close as herein set forth, all information acquired pursuant
to this Contract or otherwise shall remain confidential to the parties and shall
not be disclosed to any third parties.
- 5 -
<PAGE>
3.14 CHML Shares; Investment Purpose; Restrictions on Transfer; and
--------------------------------------------------------------
Securities Law Matters.
- ----------------------
(i) The Seller understands and acknowledges that (A) the CHML
Shares have not been registered under the Securities Act of 1933, as
amended (the "Federal Act") or under any state securities laws, in
reliance upon exemptions provided thereunder and (B) the representations,
warranties and acknowledgments of Seller contained herein are being
relied upon by the Buyer as a basis for the exemption of the offer and
sale or exchange of the CHML Shares pursuant to this Agreement from the
registration requirements of the Federal Act and any applicable state
securities laws. The Seller is acquiring the CHML Shares for the
Seller's own account, for investment, and without a view to or intent to
participate directly or indirectly in any resale or distribution thereof.
(ii) The certificate or certificates representing the "restricted"
CHML Shares to be issued to Seller will be stamped or otherwise imprinted
with a legend substantially in the following form (in addition to any
legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1993 (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS. SUCH SHARES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR
AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION AS TO THE
AVAILABILITY OF AN EXEMPTION FROM REGISTRATION.
(iii) The Seller agrees that he will not sell, transfer, assign,
convey, pledge, hypothecate or otherwise dispose of any of the CHML
Shares except in a transaction that is (i) the subject of an effective
registration statement under the Federal Act and any applicable state
securities laws or regulations, or (ii) preceded by an opinion of
counsel, which counsel and opinion of counsel shall be reasonably
satisfactory to the Buyer, to the effect that any such registration is
not required.
(iv) The Seller is an "accredited investor" as defined in
Regulation D promulgated under the Federal Act. The Seller's overall
commitments to investments that are not readily marketable is not
disproportionate to the Seller's net worth, and the Seller's investment
in the CHML Shares will not cause such overall commitment to become
excessive, and the Seller has adequate means of providing for his current
needs and personal contingencies and has no need for liquidity in his
investment in the CHML Shares.
(v) The Seller has been furnished (and has reviewed) copies of
the Buyer's Annual Report on Form 10-K for its year ended December 3,
1995, its 1995 Annual Report to Shareholders, its proxy statement
relating to such year and its Quarterly Report on Form 10-Q, for the
three months ended March 3, 1996. The
- 6 -
<PAGE>
Seller has made its decision to purchase, exchange and receive the CHML
Shares solely on the basis of the information contained in such
documents.
(vi) The Seller has sufficient knowledge and experience in
business and financial matters to capably evaluate the merits and risks
of the investment decision contemplated by the receipt of the CHML Shares
and the exchange of such CHML Shares for the Shares, and the Seller has
had the opportunity to ask questions and receive answers concerning the
investment decision.
(vii) The Seller has not, nor has any other person or entity on the
Seller's behalf, paid or given or agreed to pay or give, directly or
indirectly, any brokerage fee, commission or other remuneration of any
kind whatsoever to any person or entity in respect or issuance of the
CHML Shares or the transactions contemplated by this Agreement.
ARTICLE IV
Representations, Warranties and Covenants of the Buyer
------------------------------------------------------
The Buyer represents, warrants and covenants as follows:
4.1 Authority. The execution and delivery of this Contract and the
---------
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Buyer.
4.2 Investment Intent. Buyer is acquiring the Shares for investment for
-----------------
its own account, and not with a view to the sale or distribution thereof, and
Buyer has no present intention of selling, assigning, transferring or otherwise
distributing the same. Buyer understands that the transaction in which it is
purchasing the Shares has not been registered under the Securities Act of 1933,
as amended or applicable state securities laws.
ARTICLE V
Trade Secrets; Nonsolicitation; and Non-Competition
---------------------------------------------------
The Seller hereby agrees that for a period of five years after the later
of (i) the Closing Date or (ii) the termination of his employment with the
Company or any other subsidiaries or affiliates of the Buyer, the Seller will
not, directly or indirectly, through a family member, a business controlled by
himself or a family member, as an employee, associate, partner, manager, agent
or otherwise:
(a) divulge in any manner to persons outside the Buyer's
organization any of the trade secrets of the Company and the Buyer,
including all patents, patent applications, designs, blueprints, business
methods and procedures, names of customers and suppliers, pricing
information, training and operating manuals and any other items
considered as trade secrets under applicable law;
(b) compete, directly or indirectly, with the Buyer or the Company
in any business activities in which either the Company or the Buyer was
engaged on the date of this Contract;
- 7 -
<PAGE>
(c) influence or attempt to influence any employee of the Buyer or
of the Company on the date of this Contract to terminate his or her
employment or to work for any competitor of the Company or the Buyer;
(d) engage directly or indirectly in sales of products or services
similar to or competitive with those of the Company or the Buyer on the
date of this contract;
(e) solicit customers for, or otherwise aid or assist, anyone
engaged in a business or businesses which market products or services
similar to or competitive with the Company or the Buyer on the date of
this Contract;
(f) have or acquire an interest in any business operation which
markets products or services similar to or competitive with those of the
Company or the Buyer on the date of this Contract; provided, however,
that this obligation shall not prevent the Seller from holding the 60%
share in Witte GmbH, Katzhutte (Thuringen), he is actually holding at the
signing of this Contract, and provided, further that this obligation
shall not prevent the Seller from acquiring and/or holding passive
investments in publicly traded companies (not to exceed 5% of the capital
stock of any such company); or
(g) solicit any customer or active dealers or sales representatives
of the Company or the Buyer, except on behalf of the Buyer.
The scope of the foregoing prohibited actions includes all of North America,
Europe, Malaysia and any other relevant markets of the Company or the Buyer on
the date of this Contract. The Seller hereby acknowledges that any of the
actions prohibited above would cause irreparable harm to the Company and to the
Buyer, and the Seller hereby consents to the entry of a restraining order or
injunction prohibiting any such solicitation or interference. For purposes of
this Article V, the Company shall mean the Company and any successor corporation
into which it may be merged or consolidated, and the Buyer shall mean the Buyer
and each of its subsidiaries or affiliates and any successor corporation into
which any of them may be merged or consolidated. The covenants contained in
this Article V shall survive the Closing Date.
ARTICLE VI
Conditions to Obligations of the Buyer
--------------------------------------
The obligations of the Buyer to complete the transactions contemplated by
this Contract and to acquire the Shares in exchange for the CHML Shares are
subject, at the Buyer's option, to satisfaction of the following conditions on
or before the Closing Date:
6.1 The representations, warranties and covenants of the Seller
contained herein shall be true, complete and correct on and as of the Closing
Date as though such representations, warranties and covenants were made on and
as of the Closing Date, and the Seller shall not be in default under any of the
provisions of this Contract on or prior to the Closing Date.
- 8 -
<PAGE>
6.2 The Seller shall have transferred and delivered to the Buyer stock
certificates for the Shares, with stock powers attached, duly endorsed in blank,
all properly executed in proper form.
6.3 The Buyer shall have received the written resignation of all members
of the boards of directors of the Company as Buyer shall request and of such
officers of each of the Company as Buyer shall request.
6.4 The Buyer shall have received possession or control of all corporate
and other records of the Company including but not limited to minute books,
stock transfer books and registers, books of account, leases and material
contracts.
6.5 Seller shall have entered into an employment agreement with Buyer or
its subsidiaries or affiliates for a term of 36 months, on terms acceptable to
the Buyer and the Seller, and a separate agreement on the same terms as the
Seller's agreement in Article V hereof.
6.6 Daniel S. Savocchia shall have entered into an employment agreement
with Buyer or its subsidiaries or affiliates for a term of 36 months, on terms
acceptable to the Buyer and Mr. Savocchia, and an agreement on the same terms
(except made applicable to Mr. Savocchia) as the Seller's agreement in Article V
hereof.
6.7 All obligations and indebtedness of the Company to the Seller, to
any other shareholder or prior shareholder of the Company, or to any affiliate
of the Company (except of W. Albrecht GmbH & Co KG, Alba Speziallampen GmbH,
Alba Light Design GmbH, A&S Electric Production, W. Albrecht
Grundstuckgesellschaft GbR, Arnold GmbH, BSC Arnold GmbH & Co KG, Alba
Technology (M) Sdn, Bhd) (except for salaries and the items described on
Schedule 3.3 including the repaid loan to Daniel S. Savocchia) shall have been
converted to capital of the Company.
6.8 The transactions described in (i) the Agreement on the Sale and
Transfer of Shares and Interests in the ALBA/Albrecht Group, among Seller, Willy
Paul Albrecht, Petra Albrecht-Arnold, Buyer and Alba Speziallampen Holding GmbH
and (ii) the Contract for Purchase and Sale of Stock between the Seller and the
Buyer, relating to the remaining capital stock of the Company, shall have been
completed simultaneously with the closing of the transactions described in this
Agreement.
6.9 The foregoing provisions of this Article VI shall be for the
exclusive benefit of the Buyer but such provisions, or any of them, may be
waived in whole or in part by the Buyer and if any condition contained in this
Article VI is not fulfilled, the Buyer shall have the right to cancel this
Contract in addition to any other rights or remedies it may have hereunder, or
otherwise.
- 9 -
<PAGE>
ARTICLE VII
Conditions to Obligations of the Seller
---------------------------------------
The obligations of the Seller to complete the transactions contemplated
by this Contract and to sell the Shares are subject, at the Seller's option, to
satisfaction of the following conditions on or before the Closing Date:
7.1 The representations, warranties and covenants of the Buyer set forth
herein shall be true, complete and correct on and as of the Closing Date as
though such representations, warranties and covenants were made on and as of the
Closing Date, and the Buyer shall not be in default under any of the provisions
of this Contract on or prior to the Closing Date.
7.2 The Buyer shall have transferred and delivered to the Seller stock
certificates for the CML Shares, as described in Article II hereof.
7.3 The transactions described in (i) the Agreement on the Sale and
Transfer of Shares and Interests in the ALBA/Albrecht Group, among Seller, Willy
Paul Albrecht, Petra Albrecht-Arnold, Buyer and Alba Speziallampen Holding GmbH
and (ii) the Contract for Purchase and Sale of Stock between the Seller and the
Buyer, relating to the remaining capital stock of the Company, shall have been
completed simultaneously with the closing of the transactions described in this
Agreement.
7.4 The foregoing provisions of this Article VII shall be for the
benefit of the Seller and such provisions, or any of them, may be waived in
whole or in part by the Seller and if any condition contained in this Article
VII is not fulfilled the Seller shall have the right to cancel this Contract in
addition to any other rights or remedies he may have hereunder, or otherwise.
ARTICLE VIII
Closing
-------
The closing of the transactions contemplated by this Contract shall take
place on the Closing Date at such location as the Seller and the Buyer may
mutually agree. The "Closing Date", as used in this Contract, shall mean ten
o'clock A.M. (applicable time then in effect at the location of the closing) on
May 30, 1996, provided that the Seller and the Buyer may by mutual written
agreement set an earlier or later time for the Closing Date.
ARTICLE IX
Termination or Failure to Close
-------------------------------
9.1 Voluntary Termination. This Contract may be terminated and purchase
---------------------
of the Shares abandoned before Closing by the mutual consent of the Seller and
the Buyer.
9.2 Failure of Buyer to Close. Should the conditions set forth in
-------------------------
Article VII hereof fail to be met on or before the Closing Date, at the option
of the Seller, the Contract shall be deemed terminated and abandoned. Such
termination shall not prohibit any claims by the Seller against the Buyer for
damages.
- 10 -
<PAGE>
9.3 Failure of Seller to Close. Should the conditions set forth in
--------------------------
Article VI hereof fail to be met on or before the Closing Date, at the option of
the Buyer, the Contract shall be deemed terminated and abandoned. Such
termination shall not prohibit any claims by the Buyer against the Seller for
damages.
ARTICLE X
Survival and Limitations of Representations and Warranties
----------------------------------------------------------
10.1 Survival of Warranties by the Seller. The representations and
------------------------------------
warranties made by the Seller and contained in this Contract will survive the
closing of the purchase of the Shares provided for herein and, notwithstanding
such closing or any investigation made by or on behalf of the Buyer or any other
person or any knowledge of the Buyer or any other person, shall continue in full
force and effect for the benefit of the Buyer, subject to the following
provisions of this section.
(a) Except as provided in (b) and (c) of this section, no warranty
claim may be made or brought by the Buyer after the date which is the
earlier of (i) six months after the Buyer received actual knowledge of
the breach of the representation or warranty, and (ii) June 30, 1997.
(b) Any warranty claim which is based upon or relates to the tax
liability of the Company for a particular taxation year may be made or
brought by the Buyer at any time prior to ninety days after the
expiration of the period (if any) during which an assessment,
reassessment or other form of recognized document assessing liability for
tax, interest or penalties in respect of such taxation year under
applicable tax legislation could be issued.
(c) Any warranty claim which is based upon or relates to the title
to the Shares or which is based upon intentional misrepresentation or
fraud by the Seller may be made or brought by the Buyer at any time prior
to June 30, 2001.
After the expiration of the period of time referred to in (a) of this section,
the Seller will be released from all obligations and liabilities in respect of
the representations and warranties made by the Seller and contained in this
Contract or in any document or certificate given in order to carry out the
transactions contemplated hereby, except with respect to any warranty claims
made by the Buyer in writing (setting forth in reasonable detail the facts and
circumstances of the cause of the claim) prior to the expiration of such period
and subject to the rights of the Buyer to make any claim permitted by (b) and/or
(c) of this section. For purposes of this Section 10.1 "Buyer" shall refer to
the Buyer, its successors and assigns, and any affiliates or other entities
controlled directly or indirectly by the Buyer.
10.2 Survival of Warranties by Buyer. The representations and warranties
-------------------------------
made by the Buyer and contained in this Contract will survive the closing of the
purchase and sale of the Shares provided for herein and, notwithstanding such
closing or any investigation made by or on behalf of the Seller or any other
person or any knowledge of the Seller or any other person, shall continue in
full force and effect for the benefit of the Seller; provided that no warranty
claim may be made or brought by the Seller after the date which is the earlier
- 11 -
<PAGE>
of (i) six months after the Buyer received actual knowledge of the breach of the
representation or warranty, and (ii) June 30, 1997.
10.3 Limitations on Warranty Claims. The Buyer shall not be entitled to
------------------------------
make a warranty claim if the Buyer has received written notice prior to the
Closing Date of the inaccuracy, non-performance, non-fulfillment or breach which
is the basis for such warranty claim and the Buyer completes the transactions
hereunder notwithstanding such inaccuracy, non-performance, non-fulfillment or
breach.
ARTICLE XI
Indemnity
---------
11.1 Indemnity by the Seller.
-----------------------
(a) The Seller hereby agrees to indemnify and save the Buyer
harmless from and against any claims, demands, actions, causes of action,
damage, loss, deficiency, cost, liability and expense which may be made
or brought against the Buyer or which the Buyer may suffer or incur as a
result of, in respect of or arising out of:
(i) any non-performance or non-fulfillment of any covenant
or agreement on the part of the Seller contained in this Contract or
in any document given in order to carry out the transactions
contemplated hereby;
(ii) any misrepresentation, inaccuracy, incorrectness or
breach of any representation or warranty made by the Seller
contained in this Contract; and
(iii) all costs and expenses including, without limitation,
legal fees incidental to or in respect of the foregoing.
(b) The obligations of indemnification by the Seller pursuant to
this section will be:
(i) subject to the limitations referred to in Section 10.1
hereof with respect to the survival of the representations and
warranties by the Seller;
(ii) subject to the limitations referred to in Section 10.3
hereof; and
(iii) limited, in any case whatsoever (including any punitive
damages and similar rights or remedies of the Buyer), to the amount
of DM 2,000,000.
For purposes of this Section 11.1 "Buyer" shall refer to the Buyer, its
successors and assigns, and any affiliates or other entities controlled directly
or indirectly by the Buyer.
- 12 -
<PAGE>
11.2 Indemnity by the Buyer.
----------------------
(a) The Buyer hereby agrees to indemnify and save the Seller
harmless from and against any claims, demands, actions, causes of action,
damage, loss, deficiency, cost, liability and expense which may be made
or brought against the Seller or which the Seller may suffer or incur as
a result of, in respect of or arising out of:
(i) any non-performance or non-fulfillment of any covenant
or agreement on the part of the Buyer contained in this Contract or
in any document given in order to carry out the transactions
contemplated hereby;
(ii) any misrepresentation, inaccuracy, incorrectness or
breach of any representation or warranty made by the Buyer contained
in this Contract; and
(iii) all costs and expenses including, without limitation,
legal fees incidental to or in respect of the foregoing.
(b) The obligations of indemnification by the Buyer pursuant to this
section will be subject to the limitations referred to in Section 10.2
hereof with respect to the survival of the representations and warranties
by the Buyer.
11.3 Rights of Indemnitors. Anything in this Contract to the contrary
---------------------
notwithstanding, in no case shall any indemnitor under this Contract be liable
under this Contract with respect to any action, claim or proceeding by a third
party against any indemnitee ("Indemnified Party") under this Contract, unless
the Indemnified Party shall notify the indemnifying party ("Indemnifying Party")
of the assertion or commencement of such action, claim or proceeding within a
reasonable period of time or, if citation or service of process has been made,
within twenty (20) days thereafter. The Indemnifying Party may, at its option
and at its sole expense, participate in the defense of and contest any such
action, claim or proceeding, provided that the Indemnified Party shall at all
times also have the right to participate fully therein. If the Indemnifying
Party, within a reasonable time after receiving such notice, fails to
participate, the Indemnified Party shall have the right, but shall not be
obligated, to undertake the defense of the action, claim or proceeding for the
account of and at the risk of the Indemnifying Party; provided, however, that in
the event that the Indemnified Party shall determine to compromise or settle
(exercising its judgment in good faith) any such action, claim or proceeding,
the Indemnified Party shall be required to give the Indemnifying Party fifteen
(15) days notice of such determination. If the Indemnifying Party shall not
undertake the defense of such action, claim or proceeding prior to the
expiration of such fifteen day period, the Indemnified Party shall then be
entitled to compromise or settle the action, claim or proceeding for the account
of and at the risk of the Indemnifying party. The parties agree that any
Indemnified Party may join any Indemnifying Party in any action, claim or
proceeding brought by a third party, as to which any right of indemnity created
by this Agreement would or might apply, for the purpose of enforcing any right
of the indemnity granted to such Indemnified Party pursuant to this Contract.
- 13 -
<PAGE>
11.4 Additional Rights. Any right of indemnity of any party pursuant to
-----------------
this Article XI of this Contract shall be in addition to and shall not operate
as a limitation on any other right to indemnity of such party pursuant to this
Contract, any document or instrument executed in connection with the
consummation of the transaction contemplated hereby, or otherwise.
ARTICLE XII
Notices
-------
All notices, requests, demands and other communications hereunder shall
be in writing and will be deemed to have been duly given when delivered or faxed
(with a contemporaneous mailing, first class postage prepaid):
(1) If to the Seller, to:
Werner A. Arnold
Wildensorgerstr. 8
96049 Bamberg, Germany
Telephone: (0951) 9338-166
FAX: (001) 951-500323
with a copy to:
Dr. Thomas O.J. Burkert
Hennerkes, Jeschke, Kirchdorfer & Partner
Jahnstrasse 43
70597 Stuttgart, Germany
Telephone: (0711) 725790
FAX: (0711) 7257920
(2) If to Buyer, to:
Chicago Miniature Lamp, Inc.
P.O. Box 101
500 Chapman Street
Canton, Massachusetts 02021, USA
Attention: Frank M. Ward
Telephone: (617) 828-2948
FAX: (617) 828-2012
with copy to:
Gary H. Baker
Baker & Hoster
800 Kennedy Building
Tulsa, Oklahoma 74103, USA
Telephone: (918) 592-5555
FAX: (918) 587-6152
- 14 -
<PAGE>
These addresses may be changed from time to time by written notice to the
other parties.
ARTICLE XIII
Miscellaneous
-------------
13.1 Further Assurances. Each party hereto shall with reasonable
------------------
diligence do all things and provide such reasonable assurances as may be
required to consummate the transactions contemplated herein and each party
hereto shall provide such further documents or instruments requested by any
other party as may be reasonably necessary or desirable to effect the purposes
of this Contract and carry out its provisions, whether before or after the
Closing Date.
13.2 Costs and Expenses. Each party shall bear all of its costs and
------------------
expenses incurred in connection with this Contract and the transactions
contemplated hereby.
13.3 Brokerage. Each of the parties represents and warrants to the other
---------
that it has not in any way incurred any liability for any finder's fee or other
remuneration to any broker, finder or agent, or made any arrangement whereby it
or any other party hereto might become liable for any such fee or remuneration
and if any such fee or other remuneration becomes payable as a result of any
arrangements made by it, the party concerned agrees to indemnify the other
parties hereto in respect of such liability.
13.4 Governing Law. This Contract shall be construed and governed in
-------------
accordance with the laws of the State of Illinois.
13.5 JURISDICTION; PROCESS; CHOICE OF FORUM. EACH PARTY HEREBY CONSENTS
--------------------------------------
TO THE JURISDICTION OF ANY OF THE LOCAL, STATE OR FEDERAL COURTS LOCATED WITHIN
LAKE COUNTY, ILLINOIS AND WAIVES ANY OBJECTION WHICH THE PARTY MAY HAVE BASED ON
IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY
----- --- ----------
SUCH COURT AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON THE
UNDERSIGNED, AND COVENANTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL OR
MESSENGER DIRECTED TO THE RESPECTIVE PARTIES AT THE ADDRESSES SET FORTH IN
ARTICLE XII ABOVE AND THAT SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON
THE EARLIER OF ACTUAL RECEIPT OR FIVE (5) BUSINESS DAYS AFTER MAILED OR
DELIVERED BY MESSENGER.
13.6 Headings. The titles and headings of the Articles and Sections of
--------
the Contract are inserted herein for convenience of reference only and shall not
affect the interpretation or construction of this Contract.
13.7 Entire Agreement; Amendments; Waivers. This Contract, together with
-------------------------------------
any schedules and exhibits attached hereto, constitute the entire agreement
between the parties with respect to the subject matters hereof and supersede all
prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written. No supplement, modification or waiver of
this Contract shall be binding unless executed in writing by the parties. No
waiver of any of the provisions of this Contract shall be deemed
- 15 -
<PAGE>
or shall constitute a waiver of any other provision hereof, nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.
13.8 Inurement. This Contract shall inure to the benefit of and be
---------
binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns.
13.9 Modification and Severability. If a court of competent jurisdiction
-----------------------------
declares that any provision of this Contract is illegal, invalid or
unenforceable, then such provision shall be modified automatically to the extent
necessary to make such provision fully enforceable. If such court does not
modify any such provision as contemplated herein, but instead declares it to be
wholly illegal, invalid or unenforceable, then such provision shall be severed
from this Contract and such declaration shall in no way affect the legality,
validity and enforceability of the other provisions of this Contract to which
such declaration does not relate. In that event, this Contract shall be
construed as if it did not contain the particular provision held to be illegal,
invalid or unenforceable, the rights and obligations of the parties hereto shall
be construed and enforced accordingly, and this Contract shall remain in full
force and effect.
13.10 Counterparts. This Contract may be executed in multiple
------------
counterparts by the various parties hereto, each of which shall constitute an
original counterpart, and all of which when taken together shall constitute but
one and the same Contract.
IN WITNESS WHEREOF, the parties have executed this Contract on the day
and year first above written.
BUYER: CHICAGO MINIATURE LAMP, INC.
By /s/ Frank M. Ward
-----------------------------------------
President
SELLER:
/s/ Werner A. Arnold
-----------------------------------------
WERNER A. ARNOLD
- 16 -
<PAGE>
SCHEDULE 3.3
------------
EMPLOYMENT, PENSION AND LABOR MATTERS
-------------------------------------
The Company has a 401(k) Plan which will be terminated prior to the Closing
Date.
DUE AS OF 12/31/95
<TABLE>
<CAPTION>
======================================================================================
Profit
Employee Salary Commissions Accrued Bonus due for Sharing
Due Due Vacation 1995 due for 1995
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Paul Albrecht 0.00 0.00 0.00 12000.00 0.00
- --------------------------------------------------------------------------------------
Werner Arnold 0.00 41459.35 0.00 12119.32 22500.00
- --------------------------------------------------------------------------------------
Giovanni Fioccoia 0.00 0.00 0.00 4000.00 0.00
- --------------------------------------------------------------------------------------
Daniel S. Savocchia 0.00 103648.37 4153.86 163000.00 22500.00
- --------------------------------------------------------------------------------------
Peggy Cook 0.00 0.00 0.00 11917.88 7082.02
- --------------------------------------------------------------------------------------
Jack Wicks 0.00 18095.39 0.00 3946.15 15053.85
TOTALS 0.00 163203.11 4153.86 206983.35 67135.87
======================================================================================
</TABLE>
Commissions due paid on 03/29/96
Accrued vacations to Daniel S. Savocchia paid 4/29/96
Bonuses for 1995 operations paid 03/15/96
Profit Sharing for 1995 operations paid 4/29/96(Profit Sharing Plan will be
terminated prior to Closing)
Loan to Daniel S. Savocchia repaid 4/29/96
Loan to Werner Arnold still outstanding as of 5/08/96.
COMMISSIONS FOR 1ST QUARTER 1996
<TABLE>
<CAPTION>
=================================================================
Commissions
Employee Due
- -----------------------------------------------------------------
<S> <C>
Paul Albrecht 0.00
- -----------------------------------------------------------------
Werner Arnold 28543.14
- -----------------------------------------------------------------
Giovanni Fioccoia 0.00
- -----------------------------------------------------------------
Daniel S. Savocchia 85629.44
- -----------------------------------------------------------------
Peggy Cook 0.00
- -----------------------------------------------------------------
Jack Wicks 16615.07
- -----------------------------------------------------------------
TOTALS 130787.65
=================================================================
</TABLE>
Commissions for 1st Quarter were paid on 04/29/96.
VACATIONS FOR 1996 WILL ACCRUE UNTIL CLOSING (APPROXIMATELY 6/01/96)
<TABLE>
<CAPTION>
=========================================================
Employee Weeks Additional Vacation
due 6/01/96
<S> <C> <C>
- ---------------------------------------------------------
Paul Albrecht 0 0.00
- ---------------------------------------------------------
Werner Arnold 0 0.00
- ---------------------------------------------------------
Giovanni Fioccoia 2 760.00
- ---------------------------------------------------------
Daniel S. Savocchia 3 4153.86
- ---------------------------------------------------------
Peggy Cook 3 2019.24
- ---------------------------------------------------------
James Boch 2 1730.76
- ---------------------------------------------------------
Jack Wicks 3 1730.79
- ---------------------------------------------------------
TOTALS 10394.65
=========================================================
</TABLE>
<PAGE>
SCHEDULE 3.4
------------
MATERIAL CONTRACTS
------------------
Agency Agreement, dated February 10, 1995, between W. Albrecht GmbH and Co KG
and Alba Lamps, Inc.
<PAGE>
SCHEDULE 3.5
------------
ENVIRONMENTAL LICENSES AND PERMITS
----------------------------------
NONE
<PAGE>
SCHEDULE 3.8
------------
UNPAID TAXES
------------
Tax returns for Federal and Illinois State Income Taxes for 1995 have not been
filed as of the date of the Agreement. An extension until September 15, 1996,
for filing such returns has been obtained. The taxes due for the periods
covered by the 1995 returns have been paid.
<PAGE>
SCHEDULE 3.9
------------
ENCUMBRANCES AND LEASES
-----------------------
Lease, dated October 23, 1995, between Anita Foertsch (Lessor) and Alba Lamps,
Inc. (Lessee) relating to approximately 1300 sq. ft. of office and warehouse
space at 5230 Wesley Terrace, Rosemont, Illinois, with a termination date of
October 31, 1997.
<PAGE>
SCHEDULE 3.12(D)
----------------
Alba Lamps, Inc. entered into an Employment Agreement with James Boch, as sales
manager, dated February 19, 1996, with an annual compensation of $40,000 plus 1%
of net sales commission and employee benefits of approximately $8,000 plus
medical benefits.
<PAGE>
EXHIBIT 10.30
CONTRACT FOR PURCHASE AND SALE OF STOCK
---------------------------------------
THIS CONTRACT, made and entered into this 15th day of May, 1996, by and
between WERNER A. ARNOLD (the "Seller") and CHICAGO MINIATURE LAMP, INC., an
Oklahoma corporation (the "Buyer").
W I T N E S S E T H:
WHEREAS, the Seller is the beneficial and record owner of 70% of the
issued and outstanding shares (the "Shares") of capital stock of Alba Technology
(M) Sdn. Bhd., a Malaysia corporation (the "Company"); and
WHEREAS, the Seller desires to sell to the Buyer and the Buyer desires to
purchase from the Seller the Shares on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the covenants,
terms and conditions herein contained, the Seller and the Buyer hereby agree as
follows:
ARTICLE II
Sale of Shares
--------------
The Seller agrees to sell to the Buyer and the Buyer agrees to purchase
from the Seller the Shares. The Seller shall transfer the Shares to the Buyer
on the Closing Date (as hereinafter defined), and immediately prior to the
transfer the Shares shall be duly and validly issued in the name of the Seller,
fully paid and nonassessable, and free and clear of any claim, lien or
encumbrance of any kind.
ARTICLE II
Purchase Price for the Shares
-----------------------------
The purchase price to be paid by the Buyer to the Seller for the Shares
shall be DM 50,000 cash payable to Seller by wire transfer on the Closing Date.
ARTICLE III
Representations, Warranties and Covenants of the Seller
-------------------------------------------------------
The Seller represents, warrants and covenants as follows:
3.1 Stock and Stockholdings. The authorized capital stock of the
-----------------------
Company consists of 100,000 ordinary shares (RM 1.00 per share), 70 shares of
which constitute the Shares which are outstanding and issued to the Seller.
Except for the Shares, there are no other shares of capital stock of the Company
issued and outstanding, except for 30 ordinary shares (RM 1.00 per share) of the
Company issued to Ong Swee Guan. The Shares have been duly and legally issued
to the Seller, are fully paid and nonassessable and are free and clear of any
mortgage, pledge, hypothecation, lien, encumbrance or burden of any kind. There
are no other classes of stock authorized, and there are not authorized, issued
or outstanding, any options, warrants or other rights to purchase or otherwise
acquire from the Company or the Seller any shares of stock or other securities
of the Company. The Seller is subject to no agreement with any other person or
entity relating in any respect to the Company, the Shares or the sale or
transfer of the Shares. The Seller has full power, capacity and authority to
sell, assign and transfer the Shares to the Buyer.
3.2 Financial Statements. The Seller has heretofore delivered to the
--------------------
Buyer financial statements consisting of (i) an audited Balance Sheet for the
Company as of December 31, 1995, (ii) an audited Profit and Loss Account for the
Company for the period from October 15, 1994 to December 31, 1995 and (iii) an
audited Statement of Changes in Financial Position for the Company for the
period from October 15, 1994 to December 31, 1995. Such financial statements
present fairly the financial condition of the Company, as
<PAGE>
of December 31, 1995, and except as disclosed in said financial statements, as
of December 31, 1995, the Company had no liabilities of any nature, whether
accrued, absolute, direct, contingent, unliquidated or otherwise.
3.3 Employment and Labor Matters. Schedule 3.3 contains a list of all
----------------------------
employees, their commissions, accrued vacation pay, sick pay, severance pay and
other accrued employee benefits through December 31, 1995. Except as set forth
thereon, the Company is not liable to any of its employees for any amount of
commissions, severance pay, accrued vacation, or any other similar payments.
Except as set forth on Schedule 3.3, the Company is not a party to any pension,
profit sharing, retirement or other deferred compensation plan or agreement.
3.4 Material Contracts. Except as set forth in Schedule 3.4, the Company
------------------
has no purchase, sale, commitment, or other contract, the breach or termination
of which would have a materially adverse effect on the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Company.
3.5 Compliance with Environmental Laws. The Company is in compliance
----------------------------------
with all applicable pollution control and environmental laws, rules and
regulations. Schedule 3.5 describes all environmental licenses, permits and
other authorizations held by the Company relative to compliance with
environmental laws, rules and regulations, each of which is valid and in full
force and effect.
3.6 No Litigation. There are no actions, suits, claims, complaints or
-------------
proceedings pending or threatened against the Company, at law or in equity, or
before or by any governmental department, commission, court, board, bureau,
agency or instrumentality; and there are no facts which would provide a valid
basis for any such action, suit or proceeding. There are no orders, judgments
or decrees of any governmental authority outstanding which specifically apply to
the Company or any of its assets.
3.7 No Adverse Changes. Since December 31, 1995, there have been no
------------------
actual or threatened developments of a nature that is materially adverse to or
involves any materially adverse effect upon the business, financial condition,
results of operations, assets, liabilities, or prospects of the Company.
3.8 Taxes. Except as set forth in Schedule 3.8, the Company has filed
-----
all federal, state, local and national tax and other returns and reports which
were required to be filed with respect to all taxes, levies, imposts, duties,
licenses and registration fees, charges or withholdings of every nature
whatsoever ("Taxes"), and there exists a substantial basis in law and fact for
all positions taken in such reports. All Taxes in respect of the operations of
the Company have been paid. No waivers of periods of limitation are in effect
with respect to any taxes arising from and attributable to the ownership of
properties or operations of the business of the Company.
3.9 Properties. The Company has good and marketable title to all its
----------
personal property, equipment, processes, patents, copyrights, trademarks,
franchises, licenses and other properties and assets, including all patents,
licenses and other intellectual property used in the business of the Company and
all property reflected in the Company's financial statements provided to the
Buyer (except for assets reflected therein which have been sold in the normal
course of its business where the proceeds from such sale or other disposition
have been properly accounted for in the financial statements of the Company), in
each case free and clear of all liens, claims and encumbrances of every kind and
character, except as set forth in Schedule 3.9. The Company owns no real
property. The assets and properties owned, operated or leased by the Company
and used in its business are in good operating condition, reasonable wear and
tear excepted, and suitable for the uses for which intended. Schedule 3.9 also
contains a list of all leases of real and personal property used by the
- 2 -
<PAGE>
Company. All such leases are valid and binding in accordance with their
respective terms, and there are no defaults or events of default or events which
with giving of notice or lapse of time which would constitute a default on the
part of the Company.
3.10 Inventories. The inventory of raw materials and supplies of the
-----------
Company is useable in the ordinary course of its business. Inventory of
finished goods and work-in-process of the Company is saleable in the ordinary
course of its business without discount.
3.11 Accounts Receivable. The amount shown as trade debtor assets in the
-------------------
Company's financial statements provided to the Buyer and all such trade debtor
assets or accounts receivable, arising thereafter have been collected or
represent good and collectible receivables within 120 days after the invoice
date.
3.12 Changes. From December 31, 1995 to the Closing Date:
-------
(a) The Company has operated and will operate its business in the
usual, regular and ordinary course and not otherwise and has performed
and will perform the usual and normal maintenance of and upon its
property so as to keep it in good order, repair and condition.
(b) The Company has kept and will keep in full force and effect all
of the fire, casualty, liability, product liability and other insurance,
and all bonds on personnel, which it was carrying on December 31, 1995.
(c) The Company has not sold, disposed of, mortgaged or encumbered,
nor will it sell, dispose of, mortgage or encumber any of its property or
assets or interests therein other than products sold in the usual,
regular and ordinary course of business from its inventory. The Company
has not acquired nor will it acquire, any property or assets other than
inventory and products used in the usual, regular and ordinary course of
business.
(d) The Company has not entered into any employment contract,
collective bargaining agreement, consultation agreement or employees'
pension, retirement, insurance, profit sharing or stock plan or other
contract or agreement, nor will it enter into any such contracts or
agreements or into negotiations with respect to any such contracts or
agreements without the prior written consent of the Buyer.
(e) Seller will use its best efforts to cause the Company to
preserve its present organizations intact and to keep available the
services of its present employees and agents.
(f) The Company has not incurred nor will it incur any indebtedness
for borrowed moneys. The Company has not become nor will it become a
guarantor or surety or otherwise become responsible in any manner with
respect to any undertaking of another person or entity.
(g) The Company has not authorized, declared, paid or made nor will
it authorize, declare, pay or make any dividends on capital stock or any
distribution, liquidating or otherwise, on or with respect to its capital
stock (whether in property or money). The Company has not authorized or
made nor will it authorize or make any direct or indirect redemption,
purchase, or acquisition of any of its capital stock or any split-up,
combination, or other reclassification of any of such stock.
(h) The Company has not authorized nor will it authorize the
issuance of any capital stock or other securities.
- 3 -
<PAGE>
(i) The Company has not authorized or entered into, nor will it
authorize or enter into any merger, consolidation, reorganization,
dissolution or other action or transaction which would change its
corporate or capital structure.
(j) The Company has maintained and will maintain all books, accounts
and records in the usual, regular and ordinary manner on a basis
consistent with prior periods.
(k) There has not occurred and there shall not occur any increase
(or discussion of any increase) in the compensation payable or to become
payable by the Company to any of its officers and employees, and no bonus
has been discussed or paid or will be paid to, any of its officers or
employees.
(l) There has not occurred and shall not occur any transaction or
event which adversely affects the financial condition, results of
operations, assets, liabilities, or prospects of the Company in any
material adverse respect.
(m) There has not occurred and shall not occur any amendment or
changes in the by-laws or certificate of incorporation or organization of
the Company.
PROVIDED, however, that the Buyer may in writing waive or approve noncompliance
by the Seller with any provision of this Section 3.12 or any action by the
Company which would result in a breach of this Section 3.12, and such
noncompliance or action, so waived or approved, shall not be deemed a breach
hereof.
3.13 Right of Inspection. The Seller hereby covenants and agrees with
-------------------
the Buyer that during the period between the date hereof and the Closing Date,
the Buyer and its employees, agents, consultants, attorneys and auditors, shall
be permitted full access during normal business hours to all of the properties,
books, contracts, charter documents, documents of title, accounts and other
financial data and all related business records of the Company and that the
Buyer shall be furnished during such period with all information concerning the
affairs of the Company as the Buyer may reasonably request. It is expressly
understood and agreed that in the event the transactions contemplated by this
Contract shall not close as herein set forth, all information acquired pursuant
to this Contract or otherwise shall remain confidential to the parties and shall
not be disclosed to any third parties.
ARTICLE IV
Representations, Warranties and Covenants of the Buyer
------------------------------------------------------
The Buyer represents, warrants and covenants as follows:
4.1 Authority. The execution and delivery of this Contract and the
---------
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Buyer.
4.2 Investment Intent. Buyer is acquiring the Shares for investment for
-----------------
its own account, and not with a view to the sale or distribution thereof, and
Buyer has no present intention of selling, assigning, transferring or otherwise
distributing the same. Buyer understands that the transaction in which it is
purchasing the Shares has not been registered under the Securities Act of 1933,
as amended or applicable state securities laws.
- 4 -
<PAGE>
ARTICLE V
Trade Secrets; Nonsolicitation; and Non-Competition
---------------------------------------------------
The Seller hereby agrees that for a period of five years after the later
of (i) the Closing Date or (ii) the termination of his employment with the
Company or any other subsidiaries or affiliates of the Buyer, the Seller will
not, directly or indirectly, through a family member, a business controlled by
himself or a family member, as an employee, associate, partner, manager, agent
or otherwise:
(a) divulge in any manner to persons outside the Buyer's
organization any of the trade secrets of the Company and the Buyer,
including all patents, patent applications, designs, blueprints, business
methods and procedures, names of customers and suppliers, pricing
information, training and operating manuals and any other items
considered as trade secrets under applicable law;
(b) compete, directly or indirectly, with the Buyer or the Company
in any business activities in which either the Company or the Buyer was
engaged on the date of this Contract;
(c) influence or attempt to influence any employee of the Buyer or
of the Company on the date of this Contract to terminate his or her
employment or to work for any competitor of the Company or the Buyer;
(d) engage directly or indirectly in sales of products or services
similar to or competitive with those of the Company or the Buyer on the
date of this contract;
(e) solicit customers for, or otherwise aid or assist, anyone
engaged in a business or businesses which market products or services
similar to or competitive with the Company or the Buyer on the date of
this Contract;
(f) have or acquire an interest in any business operation which
markets products or services similar to or competitive with those of the
Company or the Buyer on the date of this Contract; provided, however,
that this obligation shall not prevent the Seller from holding the 60%
share in Witte GmbH, Katzhutte (Thuringen), he is actually holding at the
signing of this Contract, and provided, further that this obligation
shall not prevent the Seller from acquiring and/or holding passive
investments in publicly traded companies (not to exceed 5% of the capital
stock of any such company); or
(g) solicit any customer or active dealers or sales representatives
of the Company or the Buyer, except on behalf of the Buyer.
The scope of the foregoing prohibited actions includes all of North America,
Europe, Malaysia and any other relevant markets of the Company or the Buyer on
the date of this Contract. The Seller hereby acknowledges that any of the
actions prohibited above would cause irreparable harm to the Company and to the
Buyer, and the Seller hereby consents to the entry of a restraining order or
injunction prohibiting any such solicitation or interference. For purposes of
this Article V, the Company shall mean the Company and any successor corporation
into which it may be merged or consolidated, and the Buyer shall mean the Buyer
and each of its subsidiaries or affiliates and any successor corporation into
which any of them may be merged or consolidated. The covenants contained in
this Article V shall survive the Closing Date.
- 5 -
<PAGE>
ARTICLE VI
Conditions to Obligations of the Buyer
--------------------------------------
The obligations of the Buyer to complete the transaction contemplated by
this Contract and to acquire the Shares are subject, at the Buyer's option, to
satisfaction of the following conditions on or before the Closing Date:
6.1 The representations, warranties and covenants of the Seller
contained herein shall be true, complete and correct on and as of the Closing
Date as though such representations, warranties and covenants were made on and
as of the Closing Date, and the Seller shall not be in default under any of the
provisions of this Contract on or prior to the Closing Date.
6.2 The Seller shall have transferred and delivered to the Buyer stock
certificates for the Shares, with stock powers attached, duly endorsed in blank,
all properly executed in proper form.
6.3 The Buyer shall have received the written resignation of all members
of the boards of directors of the Company as Buyer shall request, except for Ong
Swee Guan, and of such officers of each of the Company as Buyer shall request.
6.4 The Buyer shall have received possession or control of all corporate
and other records of the Company including but not limited to minute books,
stock transfer books and registers, books of account, leases and material
contracts.
6.5 Seller shall have entered into an employment agreement with Buyer or
its subsidiaries or affiliates for a term of 36 months, on terms acceptable to
the Buyer and the Seller, and a separate agreement on the same terms as the
Seller's agreement in Article V hereof.
6.6 All obligations and indebtedness of the Company to the Seller, to
any other shareholder or prior shareholder of the Company, or to any affiliate
of the Company (except of W. Albrecht GmbH & Co KG, Alba Speziallampen GmbH,
Alba Light Design GmbH, A&S Electric Production, W. Albrecht
Grundstuckgesellschaft GbR, Arnold GmbH, BSC Arnold GmbH & Co KG, Alba
Technology (M) Sdn, Bhd) (except for salaries and the items described on
Schedule 3.3) shall have been converted to capital of the Company.
6.7 The transactions described in the Agreement on the Sale and Transfer
of Shares and Interests in the ALBA/Albrecht Group, among Seller, Willy Paul
Albrecht, Petra Albrecht-Arnold, Buyer and Alba Speziallampen Holding GmbH shall
have been completed simultaneously with the closing of the transactions
described in this Agreement.
6.8 The foregoing provisions of this Article VI shall be for the
exclusive benefit of the Buyer but such provisions, or any of them, may be
waived in whole or in part by the Buyer and if any condition contained in this
Article VI is not fulfilled, the Buyer shall have the right to cancel this
Contract in addition to any other rights or remedies it may have hereunder, or
otherwise.
ARTICLE VII
Conditions to Obligations of the Seller
---------------------------------------
The obligations of the Seller to complete the transactions contemplated
by this Contract and to sell the Shares are subject, at the Seller's option, to
satisfaction of the following conditions on or before the Closing Date:
- 6 -
<PAGE>
7.1 The representations, warranties and covenants of the Buyer set forth
herein shall be true, complete and correct on and as of the Closing Date as
though such representations, warranties and covenants were made on and as of the
Closing Date, and the Buyer shall not be in default under any of the provisions
of this Contract on or prior to the Closing Date.
7.2 The Buyer shall have made payment of DM 50,000 to the Seller by wire
transfer.
7.3 The transactions described in the Agreement on the Sale and Transfer
of Shares and Interests in the ALBA/Albrecht Group, among Seller, Willy Paul
Albrecht, Petra Albrecht-Arnold, Buyer and Alba Speziallampen Holding GmbH shall
have been completed simultaneously with the closing of the transactions
described in this Agreement.
7.4 The foregoing provisions of this Article VII shall be for the
benefit of the Seller and such provisions, or any of them, may be waived in
whole or in part by the Seller and if any condition contained in this Article
VII is not fulfilled the Seller shall have the right to cancel this Contract in
addition to any other rights or remedies he may have hereunder, or otherwise.
ARTICLE VIII
Closing
-------
The closing of the transactions contemplated by this Contract shall take
place on the Closing Date at such location as the Seller and the Buyer may
mutually agree. The "Closing Date", as used in this Contract, shall mean ten
o'clock A.M. (applicable time then in effect at the location of the closing) on
May 29, 1996, provided that the Seller and the Buyer may by mutual written
agreement set an earlier or later time for the Closing Date.
ARTICLE IX
Termination or Failure to Close
-------------------------------
9.1 Voluntary Termination. This Contract may be terminated and purchase
---------------------
of the Shares abandoned before Closing by the mutual consent of the Seller and
the Buyer.
9.2 Failure of Buyer to Close. Should the conditions set forth in
-------------------------
Article VII hereof fail to be met on or before the Closing Date, at the option
of the Seller, the Contract shall be deemed terminated and abandoned. Such
termination shall not prohibit any claims by the Seller against the Buyer for
damages.
9.3 Failure of Seller to Close. Should the conditions set forth in
--------------------------
Article VI hereof fail to be met on or before the Closing Date, at the option of
the Buyer, the Contract shall be deemed terminated and abandoned. Such
termination shall not prohibit any claims by the Buyer against the Seller for
damages.
ARTICLE X
Survival and Limitations of Representations and Warranties
----------------------------------------------------------
10.1 Survival of Warranties by the Seller. The representations and
------------------------------------
warranties made by the Seller and contained in this Contract will survive the
closing of the purchase of the Shares provided for herein and, notwithstanding
such closing or any investigation made by or on behalf of the Buyer or any other
person or any knowledge of the Buyer or any other person, shall continue in full
force and effect for the benefit of the Buyer, subject to the following
provisions of this section.
- 7 -
<PAGE>
(a) Except as provided in (b) and (c) of this section, no warranty
claim may be made or brought by the Buyer after the date which is the
earlier of (i) six months after the Buyer received actual knowledge of
the breach of the representation or warranty, and (ii) June 30, 1997.
(b) Any warranty claim which is based upon or relates to the tax
liability of the Company for a particular taxation year may be made or
brought by the Buyer at any time prior to ninety days after the
expiration of the period (if any) during which an assessment,
reassessment or other form of recognized document assessing liability for
tax, interest or penalties in respect of such taxation year under
applicable tax legislation could be issued.
(c) Any warranty claim which is based upon or relates to the title
to the Shares or which is based upon intentional misrepresentation or
fraud by the Seller may be made or brought by the Buyer at any time prior
to June 30, 2001.
After the expiration of the period of time referred to in (a) of this section,
the Seller will be released from all obligations and liabilities in respect of
the representations and warranties made by the Seller and contained in this
Contract or in any document or certificate given in order to carry out the
transactions contemplated hereby, except with respect to any warranty claims
made by the Buyer in writing (setting forth in reasonable detail the facts and
circumstances of the cause of the claim) prior to the expiration of such period
and subject to the rights of the Buyer to make any claim permitted by (b) and/or
(c) of this section. For purposes of this Section 10.1 "Buyer" shall refer to
the Buyer, its successors and assigns, and any affiliates or other entities
controlled directly or indirectly by the Buyer.
10.2 Survival of Warranties by Buyer. The representations and warranties
-------------------------------
made by the Buyer and contained in this Contract will survive the closing of the
purchase and sale of the Shares provided for herein and, notwithstanding such
closing or any investigation made by or on behalf of the Seller or any other
person or any knowledge of the Seller or any other person, shall continue in
full force and effect for the benefit of the Seller; provided that no warranty
claim may be made or brought by the Seller after the date which is the earlier
of (i) six months after the Buyer received actual knowledge of the breach of the
representation or warranty, and (ii) June 30, 1997.
10.3 Limitations on Warranty Claims. The Buyer shall not be entitled to
------------------------------
make a warranty claim if the Buyer has received written notice prior to the
Closing Date of the inaccuracy, non-performance, non-fulfillment or breach which
is the basis for such warranty claim and the Buyer completes the transactions
hereunder notwithstanding such inaccuracy, non-performance, non-fulfillment or
breach.
ARTICLE XI
Indemnity
---------
11.1 Indemnity by the Seller.
-----------------------
(a) The Seller hereby agrees to indemnify and save the Buyer
harmless from and against any claims, demands, actions, causes of action,
damage, loss, deficiency, cost, liability and expense which may be made
or brought against the Buyer or which the Buyer may suffer or incur as a
result of, in respect of or arising out of:
(i) any non-performance or non-fulfillment of any covenant
or agreement on the part of the Seller contained in this Contract or
in any document given in order to carry out the transactions
contemplated hereby;
- 8 -
<PAGE>
(ii) any misrepresentation, inaccuracy, incorrectness or
breach of any representation or warranty made by the Seller
contained in this Contract; and
(iii) all costs and expenses including, without limitation,
legal fees incidental to or in respect of the foregoing.
(b) The obligations of indemnification by the Seller pursuant to
this section will be:
(i) subject to the limitations referred to in Section 10.1
hereof with respect to the survival of the representations and
warranties by the Seller;
(ii) subject to the limitations referred to in Section 10.3
hereof; and
(iii) limited, in any case whatsoever (including any punitive
damages and similar rights or remedies of the Buyer), to the amount
of DM 50,000.
For purposes of this Section 11.1 "Buyer" shall refer to the Buyer, its
successors and assigns, and any affiliates or other entities controlled directly
or indirectly by the Buyer.
11.2 Indemnity by the Buyer.
----------------------
(a) The Buyer hereby agrees to indemnify and save the Seller
harmless from and against any claims, demands, actions, causes of action,
damage, loss, deficiency, cost, liability and expense which may be made
or brought against the Seller or which the Seller may suffer or incur as
a result of, in respect of or arising out of:
(i) any non-performance or non-fulfillment of any covenant
or agreement on the part of the Buyer contained in this Contract or
in any document given in order to carry out the transactions
contemplated hereby;
(ii) any misrepresentation, inaccuracy, incorrectness or
breach of any representation or warranty made by the Buyer contained
in this Contract; and
(iii) all costs and expenses including, without limitation,
legal fees incidental to or in respect of the foregoing.
(b) The obligations of indemnification by the Buyer pursuant to this
section will be subject to the limitations referred to in Section 10.2
hereof with respect to the survival of the representations and warranties
by the Buyer.
11.3 Rights of Indemnitors. Anything in this Contract to the contrary
---------------------
notwithstanding, in no case shall any indemnitor under this Contract be liable
under this Contract with respect to any action, claim or proceeding by a third
party against any indemnitee ("Indemnified Party") under this Contract, unless
the Indemnified Party shall notify the indemnifying party ("Indemnifying Party")
of the assertion or commencement of such action, claim or proceeding within a
reasonable period of time or, if citation or service of process has been made,
within twenty (20) days thereafter. The Indemnifying Party may, at its option
and at its sole expense, participate in the defense of and contest any such
action, claim or proceeding, provided that the Indemnified Party shall at all
times also have the right to participate fully therein. If the Indemnifying
Party, within a reasonable time after receiving such notice, fails to
participate, the Indemnified Party shall have the right, but shall not be
obligated, to undertake the defense of the action, claim or proceeding for the
account of and
- 9 -
<PAGE>
at the risk of the Indemnifying Party; provided, however, that in the event that
the Indemnified Party shall determine to compromise or settle (exercising its
judgment in good faith) any such action, claim or proceeding, the Indemnified
Party shall be required to give the Indemnifying Party fifteen (15) days notice
of such determination. If the Indemnifying Party shall not undertake the
defense of such action, claim or proceeding prior to the expiration of such
fifteen day period, the Indemnified Party shall then be entitled to compromise
or settle the action, claim or proceeding for the account of and at the risk of
the Indemnifying party. The parties agree that any Indemnified Party may join
any Indemnifying Party in any action, claim or proceeding brought by a third
party, as to which any right of indemnity created by this Agreement would or
might apply, for the purpose of enforcing any right of the indemnity granted to
such Indemnified Party pursuant to this Contract.
11.4 Additional Rights. Any right of indemnity of any party pursuant to
-----------------
this Article XI of this Contract shall be in addition to and shall not operate
as a limitation on any other right to indemnity of such party pursuant to this
Contract, any document or instrument executed in connection with the
consummation of the transaction contemplated hereby, or otherwise.
ARTICLE XII
Notices
-------
All notices, requests, demands and other communications hereunder shall
be in writing and will be deemed to have been duly given when delivered or faxed
(with a contemporaneous mailing, first class postage prepaid):
(1) If to the Seller, to:
Werner A. Arnold
Wildensorgerstr. 8
96049 Bamberg, Germany
Telephone: (0951) 9338-166
FAX: (001) 951-500323
with a copy to:
Dr. Thomas O.J. Burkert
Hennerkes, Jeschke, Kirchdorfer & Partner
Jahnstrasse 43
70597 Stuttgart, Germany
Telephone: (0711) 725790
FAX: (0711) 7257920
(2) If to Buyer, to:
Chicago Miniature Lamp, Inc.
P.O. Box 101
500 Chapman Street
Canton, Massachusetts 02021, USA
Attention: Frank M. Ward
Telephone: (617) 828-2948
FAX: (617) 828-2012
- 10 -
<PAGE>
with copy to:
Gary H. Baker
Baker & Hoster
800 Kennedy Building
Tulsa, Oklahoma 74103, USA
Telephone: (918) 592-5555
FAX: (918) 587-6152
These addresses may be changed from time to time by written notice to the
other parties.
ARTICLE XIII
Miscellaneous
-------------
13.1 Further Assurances. Each party hereto shall with reasonable
------------------
diligence do all things and provide such reasonable assurances as may be
required to consummate the transactions contemplated herein and each party
hereto shall provide such further documents or instruments requested by any
other party as may be reasonably necessary or desirable to effect the purposes
of this Contract and carry out its provisions, whether before or after the
Closing Date.
13.2 Costs and Expenses. Each party shall bear all of its costs and
------------------
expenses incurred in connection with this Contract and the transactions
contemplated hereby.
13.3 Brokerage. Each of the parties represents and warrants to the other
---------
that it has not in any way incurred any liability for any finder's fee or other
remuneration to any broker, finder or agent, or made any arrangement whereby it
or any other party hereto might become liable for any such fee or remuneration
and if any such fee or other remuneration becomes payable as a result of any
arrangements made by it, the party concerned agrees to indemnify the other
parties hereto in respect of such liability.
13.4 Governing Law. This Contract shall be construed and governed in
-------------
accordance with the laws of the State of Illinois.
13.5 JURISDICTION; PROCESS; CHOICE OF FORUM. EACH PARTY HEREBY CONSENTS
--------------------------------------
TO THE JURISDICTION OF ANY OF THE LOCAL, STATE OR FEDERAL COURTS LOCATED WITHIN
LAKE COUNTY, ILLINOIS AND WAIVES ANY OBJECTION WHICH THE PARTY MAY HAVE BASED ON
IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY
----- --- ----------
SUCH COURT AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON THE
UNDERSIGNED, AND COVENANTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL OR
MESSENGER DIRECTED TO THE RESPECTIVE PARTIES AT THE ADDRESSES SET FORTH IN
ARTICLE XII ABOVE AND THAT SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON
THE EARLIER OF ACTUAL RECEIPT OR FIVE (5) BUSINESS DAYS AFTER MAILED OR
DELIVERED BY MESSENGER.
13.6 Headings. The titles and headings of the Articles and Sections of
--------
the Contract are inserted herein for convenience of reference only and shall not
affect the interpretation or construction of this Contract.
13.7 Entire Agreement; Amendments; Waivers. This Contract, together with
-------------------------------------
any schedules and exhibits attached hereto, constitute the entire agreement
between the parties with respect to the subject matters hereof and supersede all
prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written. No supplement, modification or waiver of
this Contract shall be binding unless executed in
- 11 -
<PAGE>
writing by the parties. No waiver of any of the provisions of this Contract
shall be deemed or shall constitute a waiver of any other provision hereof, nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
13.8 Inurement. This Contract shall inure to the benefit of and be
---------
binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns.
13.9 Modification and Severability. If a court of competent jurisdiction
-----------------------------
declares that any provision of this Contract is illegal, invalid or
unenforceable, then such provision shall be modified automatically to the extent
necessary to make such provision fully enforceable. If such court does not
modify any such provision as contemplated herein, but instead declares it to be
wholly illegal, invalid or unenforceable, then such provision shall be severed
from this Contract and such declaration shall in no way affect the legality,
validity and enforceability of the other provisions of this Contract to which
such declaration does not relate. In that event, this Contract shall be
construed as if it did not contain the particular provision held to be illegal,
invalid or unenforceable, the rights and obligations of the parties hereto shall
be construed and enforced accordingly, and this Contract shall remain in full
force and effect.
13.10 Counterparts. This Contract may be executed in multiple
------------
counterparts by the various parties hereto, each of which shall constitute an
original counterpart, and all of which when taken together shall constitute but
one and the same Contract.
IN WITNESS WHEREOF, the parties have executed this Contract on the day
and year first above written.
BUYER: CHICAGO MINIATURE LAMP, INC.
By /s/ Frank M. Ward
--------------------------------------
President
SELLER:
/s/ Werner A. Arnold
--------------------------------------
WERNER A. ARNOLD
- 12 -
<PAGE>
SCHEDULE 3.3
------------
EMPLOYMENT, PENSION AND LABOR MATTERS
-------------------------------------
NONE
<PAGE>
SCHEDULE 3.4
------------
MATERIAL CONTRACTS
------------------
Agency Agreement, dated February 9, 1995 between W. Albrecht GmbH and Co KG and
Alba Technology (M) Sdn Bhd.
<PAGE>
SCHEDULE 3.5
------------
ENVIRONMENTAL LICENSES AND PERMITS
----------------------------------
NONE
<PAGE>
SCHEDULE 3.8
------------
UNPAID TAXES
------------
NONE
<PAGE>
SCHEDULE 3.9
------------
ENCUMBRANCES AND LEASES
-----------------------
NONE
<PAGE>
EXHIBIT 10.31
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT is effective as of the 30th day of May, 1996
(the "Agreement"), by and among Werner Arnold ("Arnold"), ALBA Speziallampen
Holding GmbH, a German limited liability company ("ALBA"), and Chicago Miniature
Lamp, Inc., an Oklahoma corporation ("CML").
WITNESSETH:
WHEREAS, Arnold wishes to serve as President of ALBA upon the terms and
conditions contained herein; and
WHEREAS, ALBA desires to employ Arnold in such capacity upon the terms
and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Employment. ALBA agrees to employ Arnold, and Arnold agrees to be so
----------
employed, in the capacity of President. Subject to the provisions for
termination as hereinafter provided, employment shall be for a term of thirty
six (36) months effective as of May 30, 1996 and shall terminate on May 29, 1999
(the "Initial Term"). The parties hereto may agree to extend the Initial Term
of this Agreement for one (1) year upon written notice of such an intent signed
by all of the parties hereto, given at least six (6) months before the end of
the Initial Term. Thereafter, the parties may agree to extend this Agreement
for successive one (1) year periods upon written notice of such an intent signed
by all of the parties hereto, given at least six (6) months before the end of
the then current term. The period of Arnold's employment, including the Initial
Term and any extensions thereof, shall be referred to as the "Employment."
2. Function and Responsibilities. During the Employment, Arnold shall
-----------------------------
devote full time to such employment. Arnold shall perform duties customarily
incident to the office of President (and the office of a "Geschaftsfuhrer") and
all other duties the Boards of Directors of ALBA and CML may from time to time
assign to him. Furthermore, Arnold specifically agrees to the following
responsibilities:
a. Arnold will manage the business and operations of ALBA and all of its
subsidiaries (the "ALBA Group") in Europe and the Far East;
b. Arnold will manage all light-pipe design projects for CML and the
ALBA Group;
c Arnold will assist in the identification and implementation of
acquisitions for CML and the ALBA Group in Europe;
d. Arnold will perform all duties in a proper and competent manner in
line with the goals and directives set by the Board of Directors of CML
under the leadership of Frank Ward; and
e. Arnold will report directly to the President of CML, Frank M. Ward.
<PAGE>
3. Compensation.
------------
a. During his Employment, ALBA shall pay to Arnold as compensation for
his services the sum of DM 225,000. This amount shall be paid in equal
monthly installments of DM 18,750 on the first day of each calendar month.
Subject to the provisions of this section of the Agreement, Arnold shall
receive no other compensation from ALBA, the ALBA Group or CML. These
installments shall be paid irrespective of a possible disability of Arnold
(as defined in Section 7.a.) until the Employment has been terminated
according to the terms and provisions contained in this Agreement,
provided, that any disability benefits which Arnold is entitled pursuant to
statutory law and/or any disability plan will be deducted from such
installments to the extent such benefits are financed by ALBA.
b. The Stock Option Committee of CML will grant Arnold 50,000 stock
options under CML's 1995 Incentive and Non-Statutory Stock Option Plan.
These stock options shall have an exercise price of $36.50 per share. The
stock options shall vest on each anniversary date of this Agreement,
commencing May 30, 1997, at the rate of 10,000 shares per year. In the
event the Employment is terminated before all stock options vest, then all
unvested options shall lapse and be of no force or effect.
4. Vacation. Arnold shall be entitled to a yearly paid vacation of 30
--------
working days.
5. Expenses.
--------
a. Reimbursement. ALBA shall reimburse Arnold for all reasonable and
necessary expenses incurred in carrying out his duties under this
Agreement. Arnold shall present to ALBA from time to time an itemized
account of such expenses in any form required by ALBA.
b. Automobile. ALBA will make available to Arnold a first-class car
free of charge that can be used privately as well. Arnold shall pay all
income taxes attributable to the use of the car.
6. Employee benefits. This Agreement shall not be in lieu of any
-----------------
rights, benefits and privileges to which Arnold may be entitled as an employee
of ALBA under any retirement, pension, profit-sharing, insurance, hospital or
other plans which may now be in effect or which may hereafter be adopted.
Arnold shall have the same rights and privileges to participate in such plans
and benefits as any other employee during his Employment.
7. Termination.
-----------
a. Termination Upon Disability. If Arnold becomes totally or
substantially unable to perform his duties during the term of this
Agreement by reason of illness, disability or incapacity, and such
disability continues beyond six (6) consecutive months, then ALBA
-2-
<PAGE>
shall have the right, by action of the Board of Directors of CML, to
terminate Arnold's employment by giving him notice in writing.
b. Termination Upon Death. This Agreement shall terminate automatically
and without notice upon the occurrence of the death of Arnold.
c. Termination by ALBA for Cause. In the event Arnold has committed an
act of willful misconduct, fraud or gross negligence in the performance of
his duties hereunder or if there has occurred by Arnold a material breach
of this Agreement, including, but not limited to, Arnold's failure to
comply in a proper and competent manner with any directives set by the
Board of Directors of CML under the leadership of Frank Ward and applicable
law, ALBA may in any such event, by resolution of the Board of Directors of
CML, terminate Arnold's employment by giving Arnold ten (10) days' prior
written notice. Upon payment to Arnold of all amounts of compensation and
expense reimbursement payable through the effective date of such
termination notice, this Agreement shall thereupon terminate and be of no
further force and effect and Arnold shall have no further rights to
compensation or benefits hereunder.
d. Termination by Arnold for Cause. This Agreement may be terminated by
Arnold at any time for cause if there is a material breach by ALBA of its
covenants hereunder provided however Arnold provides ALBA with thirty (30)
days prior written notice of the termination and the alleged breach and the
breach is not cured by the ALBA during said 30 day period. In the event of
termination by Arnold for cause pursuant to this section, Arnold shall be
entitled to a continuation of his compensation and benefits as provided
hereunder for a period of three (3) months after said termination or until
the expiration of the term of his Employment, whichever is later.
8. Trade Secrets; Non-Solicitation; and Non-competition. Arnold hereby
----------------------------------------------------
agrees that for a period of five (5) years after the termination of the
Employment, Arnold will not, directly or indirectly, through a family member, a
business controlled by himself or a family member, as an employee, associate,
partner, manager, agent or otherwise:
a. Divulge in any manner to persons outside ALBA, the ALBA Group or CML
any of the trade secrets of ALBA, the ALBA Group or CML, including all
patents, patent applications, designs, blueprints, business methods and
procedures, names of customers and suppliers, pricing information, training
and operating manuals and any other items considered as trade secrets under
applicable law;
b. Compete, directly or indirectly, with ALBA, the ALBA Group or CML in
any business activities in which any of ALBA, the ALBA Group or CML was
engaged on the date of the termination of the Employment;
c. Influence or attempt to influence any employee of ALBA, the ALBA
Group or CML on the date of the termination of the
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<PAGE>
Employment to terminate his or her employment or to work for any competitor
of ALBA, the ALBA Group or CML;
d. Engage directly or indirectly in sales of products or services
similar to or competitive with those of ALBA, the ALBA Group or CML on the
date of the termination of the Employment;
e. Solicit customers for, or otherwise aid or assist, anyone engaged in
a business or businesses which market products or services similar to or
competitive with ALBA, the ALBA Group or CML on the date of the termination
of the Employment;
f. Have or acquire an interest in any business operation which markets
products or services similar to or competitive with those of ALBA, the ALBA
Group or CML on the date of the termination of the Employment; provided,
however, that this obligation shall not prevent Arnold from holding the 60%
share in Witte GmbH, Katzhutte (Thuringen), he is actually holding at the
signing of this Agreement, and provided, further that this obligation shall
not prevent Arnold from acquiring and/or holding passive investments in
publicly traded companies (not to exceed 5% of the capital stock of any
such company); or
g. Solicit any customer or active dealers or sales representatives of
ALBA, the ALBA Group or CML, except on behalf of ALBA, the ALBA Group or
CML.
The scope of the foregoing prohibited actions includes all of North America,
Europe, the Far East and any other relevant markets of ALBA, the ALBA Group or
CML on the date of the termination of the Employment. Arnold hereby
acknowledges that any of the actions prohibited above would cause irreparable
harm to ALBA, the ALBA Group and/or CML, and Arnold hereby consents to the entry
of a restraining order or injunction prohibiting any such solicitation or
interference. For purposes of this section, ALBA shall mean ALBA and any
successor corporation into which it may be merged or consolidated, the ALBA
Group shall mean ALBA and each of its subsidiaries and any successor corporation
into which any of them may be merged or consolidated, and CML shall mean CML and
each of its subsidiaries or affiliates and any successor corporation into which
any of them may be merged or consolidated.
9. Notices. All notices required to be given hereunder shall be given
-------
in writing and delivered, personally or by certified mail, return receipt
requested, postage pre-paid, addressed to the parties as follows:
If to CML or ALBA:
Chicago Miniature Lamp, Inc.
500 Chapman Street
Canton, Massachusetts 02021
Attention: Frank M. Ward
and
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<PAGE>
Werner Arnold
KirchackerstaBe 9
96052 Bamberg
Germany
10. Governing law. This Agreement shall be governed by and construed,
-------------
interpreted and enforced in accordance with the laws of the Germany. In the
event of a breach of this Agreement, venue for any legal proceedings shall be
proper in Bamberg, Germany.
11. Entire Agreement. This Agreement contains the entire agreement
----------------
between the parties hereto and supersedes all agreements previously made between
the parties relating to the subject matter of this Agreement.
12. Modification. This Agreement may be modified only by a written
------------
instrument executed by the parties hereto.
13. Severability. If any provision of this Agreement is determined to be
------------
invalid and/or unenforceable by a final decision of a court of competent
jurisdiction, the offending provision shall be severed and the remainder of the
Agreement shall survive and remain in full force and effect.
14. Non-waiver. No delay or failure by either party to exercise any
----------
right under this Agreement shall constitute a wavier of that or any other right.
15. Binding effect. This Agreement shall inure to the benefit of, and be
--------------
binding upon, ALBA and CML, and their respective affiliates, subsidiaries,
successors and assigns. In addition, this Agreement shall inure to the benefit
of, and be binding upon Arnold, his heirs, personal representatives, successors
and assigns.
16. Headings. Headings used in this Agreement are for convenience only
--------
and shall not be used to interpret or construe its provisions.
17. Counterparts. This Agreement may be executed in counterparts, all of
------------
which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the day and year first above written.
CHICAGO MINIATURE LAMP, INC.
By /s/ Frank M. Ward
-----------------------------
Frank M. Ward, President
"CML"
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<PAGE>
ALBA SPEZIALLAMPEN HOLDING GmbH
By /s/ Werner Arnold
-----------------------------
Werner Arnold, President
"ALBA"
/s/ Werner Arnold
--------------------------------
Werner Arnold
"Arnold"
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