Pilot S.A.S.
Meribel S.A.S.
Quiksilver Americas, Inc.
15202 Graham Street
Huntington Beach, CA 92649
Attention: Bob McKnight,
Chief Executive Officer
1. | Execution of Stock Purchase Agreement | |
The Purchaser hereby irrevocably undertakes to the Seller to execute and deliver the Stock Purchase Agreement and consummate the Transaction upon the terms set forth herein and in the Stock Purchase Agreement on the fifth (5th) Business Day following the later of (i) the Seller’s acceptance of the Offer and (ii) the satisfaction of the following conditions, or the written waiver (A) by the Purchaser in its sole discretion of the conditions set forth in Sections 1(a) through 1(c) and 1(g) through 1(i) below, and (B) by the Purchaser and the Seller of the other conditions set forth in this Section 1 (such later date, the “Execution Date”): |
(a) | from the date of this Offer Letter through the Execution Date, no event, change, occurrence or circumstance shall have occurred or existed that, individually or in the aggregate with any other event, change, occurrence or circumstance, has had |
or could reasonably be expected to (i) have a material adverse effect on the assets, properties, operations or condition (financial or otherwise) of the Acquired Companies, taken as a whole, or the Business, taken as a whole, or (ii) prevent the Seller to, on the Execution Date, complete the Closing or otherwise consummate the Transaction;provided that such material adverse effect described in the immediately preceding clause (i) shall not include any effect (an “Excluded Effect”) resulting from: (A) any change in general economic or business conditions or industry-wide financial conditions generally, or in local, regional, national or international conditions generally affecting the Acquired Companies or the Business (other than any such change which disproportionately affects the Acquired Companies, taken as a whole, or the Business, taken as a whole, as compared to other companies operating in the industry in which the Acquired Companies operate); (B) any engagement in hostilities by any Member State of the European Union or the United States, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon any Member State of the European Union or the United States (other than any such effect which disproportionately affects the Acquired Companies, taken as a whole, or the Business, taken as a whole, as compared to other companies operating in the industry in which the Acquired Companies operate); or (C) the execution and performance of the Offer Letter and the Stock Purchase Agreement or the public announcement of the Transaction; | |||
(b) | the representations and warranties set forth in ARTICLE 4 of the Stock Purchase Agreement shall have been true and correct as of the date of this Offer Letter and shall be true and correct on and as of the Execution Date as though made on and as of the Execution Date (except to the extent any such representation or warranty expressly speaks as of an earlier date, which representations and warranties shall be true and correct as of such date in the same manner as specified above), other than breaches or inaccuracies which, individually or in the aggregate, do not constitute and would not reasonably be expected to (i) have a material adverse effect on the assets, properties, operations or condition (financial or otherwise) of the Acquired Companies, taken as a whole, or the Business, taken as a whole, or (ii) prevent the Seller to, on the Execution Date, complete the Closing or otherwise consummate the Transaction,provided that any material adverse effect described in the immediately preceding clause (i) shall not include any Excluded Effect, and the Purchaser shall have received a certificate to such effect signed on behalf of the Parent by an executive officer of the Parent; | ||
(c) | the Seller shall have performed in all material respects all obligations required to be performed by the Seller under this Offer Letter at or prior to the Execution Date, and the Purchaser shall have received a certificate to such effect signed on behalf of the Parent by an executive officer of the Parent; | ||
(d) | no court or Governmental Body of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any statute, Law, ordinance, rule, regulation, judgment, decree, injunction or other order that is in effect and specifically enjoins or otherwise prohibits the consummation of the Transaction; |
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(e) | all Antitrust Clearances shall have been obtained and shall be in full force and effect, and there shall not have been commenced and continuing, or in effect, any investigation, order, decision, judgment, decree, ruling or injunction (preliminary or permanent) by any Governmental Body in the United States pursuant to any Antitrust Law; | ||
(f) | theComité central d’entrepriseof Skis Rossignol – Club Rossignol S.A.S. (the “Works Council”) shall have delivered to the Seller its opinion (avis) (the “WC Opinion”) with respect to the Transaction; | ||
(g) | the consents, approvals and releases of Encumbrances set forth on Annex III shall have been obtained, and shall be in full force and effect, in each case to the Purchaser’s reasonable satisfaction; | ||
(h) | the Debt Financing (as hereinafter defined) shall have been consummated, or all of the conditions precedent to the consummation of the Debt Financing shall have been satisfied or waived in accordance with their terms (except those which by their respective terms are only capable of being satisfied at the Closing, but subject to the satisfaction or waiver of such conditions at or as of the Closing) and each lender under the Debt Financing shall be prepared to fund the Debt Financing simultaneously with the consummation of the Closing; and | ||
(i) | (A) not more than four days after the date hereof, the Seller shall have delivered to the Purchaser Schedule 4.3.3(a) to the Stock Purchase Agreement, and (B) the Purchaser shall have indicated to the Parent in writing that it is reasonably satisfied with the contents of such Schedule 4.3.3(a) and the accuracy thereof. |
2. | Financing | |
The Purchaser hereby undertakes and confirms that: |
(a) | As of the Execution Date, pursuant to the Commitment Letters (as hereinafter defined) and the Debt Financing (if consummated), it will have funds in an amount sufficient to enable it to pay in full any and all cash payments (including the payment of fees and expenses) to be made by it as of such date in connection with the consummation of the Transaction. Simultaneously with the Closing, the Purchaser will cause any borrower under the Note to execute and deliver to the Parent the Note; | ||
(b) | Concurrently with the execution of this Offer Letter, it has delivered to the Seller correct and complete copies of two executed commitment letters, each dated the date hereof (the “Commitment Letters”), from certain investors in the Purchaser (the “Providers”) to provide financing in an aggregate amount of at least twenty five million euros (€25,000,000) to fund a portion of the payments required to be made at Closing under the Stock Purchase Agreement, to the Seller or its Affiliates or any creditors of the Acquired Companies (the “Investor Financing”). Each Commitment Letter in the form so delivered is valid and in full force and effect, any commitment it contains has not been withdrawn, terminated or otherwise amended or modified in any respect, and no event has occurred, and no facts or circumstances currently exist, that, with or without notice, lapse of time or both, would constitute a default or a breach on the part of the Purchaser under any term or condition of any of the Commitment Letters. Except as set forth in the Commitment Letters, there are no conditions precedent to the obligations of the Providers to fund their respective portions of the Investor Financing; |
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(c) | It shall use its commercially reasonable efforts to obtain debt financing (the “Debt Financing”) that the Purchaser reasonably deems is sufficient to consummate the Transaction and operate its business and the businesses of the Acquired Companies following the Closing; provided that, so long as the Purchaser so uses such commercially reasonable efforts, if it determines that, based on relevant facts and circumstances, the terms of any proposed Debt Financing are not commercially reasonable, then the Purchaser shall have the rights to reject, and to decline to enter into or consummate, such proposed Debt Financing. The Purchaser shall use and cause its Affiliates to use commercially reasonable efforts to keep the Seller apprised of the conduct and status of matters concerning the Debt Financing, including promptly furnishing the other with copies of any commitment letters, highly confident letters or other equivalent documents entered into in connection with the Debt Financing; | ||
(d) | It shall, and shall cause its Affiliates to use, their commercially reasonable efforts to (i) take, or cause to be taken, all appropriate actions necessary under applicable Law, and to execute and deliver, or cause to be executed and delivered, such instruments and documents as may be required, to consummate as promptly as reasonably practicable (A) the Investor Financing on the terms and subject only to the conditions contained in the Commitment Letters and (B) the Debt Financing on the terms and subject only to the conditions of the terms thereof, and (ii) refrain from taking, directly or indirectly, any action that is reasonably likely to result in the failure of any of the conditions contained in the Commitment Letters or in any definitive agreement related to the Investor Financing or the Debt Financing; and | ||
(e) | Without the Parent’s prior written consent (which consent shall not be unreasonably withheld or delayed), the Purchaser shall not agree to or permit any amendment, supplement or other modification of, or waive any of its rights under, the Commitment Letters or the definitive agreements relating to the Investor Financing. |
3. | Acceptance of the Offer | |
Should the Seller accept the Offer, and without prejudice to the rights of the Works Council under applicable Law, the Seller and the Purchaser shall use their commercially reasonable efforts to consummate the Transaction no later than October 31, 2008. | ||
The Offer and the provisions of this Offer Letter shall remain irrevocable and binding on the Purchaser through 6:00 p.m., New York City Time, on January 31, 2009 (the “Expiration Time”);provided,however, that: (a) if as of such time, either of the conditions precedent set forth in Section 1(e) or 1(f) hereof shall have not been satisfied or waived in accordance with their terms, then the Expiration Time shall be automatically extended until 6:00 p.m., New York City Time, on April 30, 2009; and (b) if, on or before October 31, 2008, the Purchaser shall have not waived in writing the condition set forth in Section 1(h) and such condition shall not have otherwise been satisfied (the date on which such waiver shall have been granted or such condition shall have been satisfied, in each case if at all, the “Trigger Date”), each of the Parent and the Purchaser shall have the right to terminate the Offer and the provisions of this Offer Letter (and any and all |
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rights and obligations set forth herein) at any time after October 31, 2008 upon not less than three Business Days’ written notice thereof to the other (the date of any such termination, the “Termination Date”) (without prejudice, however, to (i) the rights of the Seller or the Purchaser in the event of a breach or violation hereof by the other party, and (ii) the provisions of the Confidentiality Agreement, which shall survive the termination of this Offer Letter in accordance with their terms). | ||
Without limiting the right of the Parent or the Purchaser to terminate the Offer and the provisions of this Offer Letter pursuant to the immediately preceding paragraph, if (a) no such termination shall have occurred and (b) at or prior to the Expiration Time, the Offer shall have not been accepted by the Seller or the conditions precedent set forth in Section 1 of this Offer Letter shall have not been satisfied or waived in accordance with their terms, then the Offer and the provisions of this Offer Letter (and any and all rights and obligations set forth herein) shall automatically expire and terminate and be of no further force or effect, without prejudice, however, to (i) the rights of the Seller or the Purchaser in the event of a breach or violation hereof by the other party, and (ii) the provisions of the Confidentiality Agreement, which shall survive the termination of this Offer Letter in accordance with their terms. | ||
4. | Access | |
From and after the date hereof until the earliest of (a) the Expiration Time (as extended pursuant to Section 3 hereof, as the case may be), (b) the Execution Date and (c) the Termination Date (such period, the “Offer Period”), subject to the requirements of applicable Law (including any Antitrust Law (as hereinafter defined)), the Seller shall procure that the Acquired Companies afford to the Purchaser and its officers, employees, accountants, legal counsel, financial advisors, consultants, representatives and financing sources (and their respective legal counsel) reasonable access during normal business hours to the personnel, properties, Contracts and books and records of the Acquired Companies, and shall furnish promptly to the Purchaser all other information concerning the Business, properties, operations and personnel of the Acquired Companies as the Purchaser may from time to time reasonably request, all for the sole purpose of preparing for the Closing, should the Offer be accepted by the Seller. Information obtained by the Purchaser under this Section 4 shall be subject to the Confidentiality Agreement. | ||
5. | Certain Filings and Notifications; Other Actions | |
During the Offer Period and without prejudice to the right of the Seller hereunder to not accept the Offer: |
(a) | Each of the Seller and the Purchaser shall, as promptly as reasonably practicable after the date hereof, file, make or effect (or cause to be filed, made or effected) with each applicable Governmental Body any and all filings, notifications, applications, reports or other documents or instruments (collectively, “Required Filings”) required to be filed, made or effected by such party pursuant to applicable Law and/or the rules and regulations promulgated thereunder in connection with such party’s (i) execution and delivery of the Stock Purchase Agreement or any other document or instrument to be executed, entered into or delivered pursuant thereto, (ii) consummation of the Transaction and (iii) receipt |
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of all Antitrust Clearances applicable to such party. Each of the Seller and the Purchaser shall use its commercially reasonable efforts to cause such Required Filings to be filed, made or effected in an accurate, comprehensive and timely manner, to ensure that no such Required Filings will be declared incomplete or lead to any suspension of any time periods for approval of the Transaction by the competent Governmental Bodies, and to respond in an equally accurate, comprehensive and timely manner to any requests for additional information made by any relevant Governmental Body in connection with the foregoing matters described in any of the immediately preceding clause (i), (ii) or (iii). | |||
(b) | Neither the Seller nor the Purchaser shall extend any waiting period under the HSR Act, the Canadian Competition Act, the Antitrust Laws of Austria, France, Germany and Spain or, if applicable, the EC Merger Regulation, or enter into any agreement with any Governmental Body not to consummate the Transaction. | ||
(c) | Subject to applicable Law, confidentiality obligations and/or the preservation of any applicable attorney-client privilege, each of the Seller and the Purchaser shall, upon any reasonable request by the other, use commercially reasonable efforts to furnish the other with all information concerning itself, its Subsidiaries, directors (or Persons in similar positions), officers, stockholders, equity owners or Affiliates and such other matters as may be reasonably necessary or advisable in connection with the WC Opinion or any Required Filing that is or will be filed, made or effected by or on behalf of the Seller or the Purchaser or any of their respective Subsidiaries or Affiliates to any Governmental Body in connection with the Stock Purchase Agreement or the Transaction. | ||
(d) | Without limiting, and in furtherance of, the foregoing, and without prejudice to the rights of the Seller hereunder to not accept the Offer and of the Works Council under applicable Law, if any objections are asserted with respect to the Transaction under any Antitrust Law or if any suit is instituted (or threatened to be instituted) by any Governmental Body challenging the Transaction as violative of any Antitrust Law or which would otherwise prohibit or materially impair or materially delay the consummation of the Transaction, the Purchaser shall use its commercially reasonable efforts to resolve any such objections or suits so as to permit consummation of the Transaction in accordance with the Offer Letter and the Stock Purchase Agreement;provided that, following the date hereof, the Purchaser shall have the sole and exclusive right, at its option, to propose, negotiate, offer to commit and effect, by consent decree, hold separate order or otherwise, the sale, disposition or divestiture (collectively, “Divestitures”) of such assets of any Acquired Company or otherwise offer to take or offer to commit (and if such offer is accepted by any such Governmental Body, commit to and effect) to take any action as may be required to resolve such objections or suits;provided,however, that the closing of any such Divestiture by any Acquired Company may, at the Parent’s option, be conditioned upon, and effective as of or after, the Closing. Notwithstanding the foregoing, in no event shall the Purchaser be required pursuant to this Section 5(d) to take any action, that, individually or together with any other actions, would reasonably be expected to have (i) a material adverse effect on the assets, properties, operations or condition (financial or otherwise) of the Acquired Companies, taken as a whole, or the Business, taken |
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as a whole, or (ii) a material adverse effect on the assets, properties, operations or condition (financial or otherwise) of the Purchaser or any of its Affiliates. For the purposes of this Offer Letter, “Antitrust Law” shall mean any Law that is designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition or otherwise applicable to any Antitrust Clearance. | |||
(e) | Without limiting, and in furtherance of the foregoing, and without prejudice to the rights of the Works Council under applicable Law, the Seller shall use reasonable best efforts to obtain the WC Opinion from the Works Council, as required by applicable Law, in connection with the Transaction, as promptly as practicable after the date hereof;provided that the Purchaser shall fully cooperate with the Seller in order to obtain the WC Opinion, including in the preparation of any notifications to, and any information to be presented in meetings (to which one or more appropriate representatives of the Purchaser and/or any Affiliate of the Purchaser shall participate at the Parent’s reasonable request, provided that the Works Council shall not have prohibited such participation) with, or otherwise reasonably requested by or delivered to, the Works Council. | ||
(f) | Subject to applicable Law, each of the Seller and the Purchaser shall be entitled to timely participate in and reasonably contribute to all material actions, meetings, documents, communications or other information exchanges (in whatever form), whether with Governmental Bodies or not, relating to the WC Opinion or Required Filings filed, made or effected by or on behalf of such Party to obtain Antitrust Clearances, and the Seller and the Purchaser shall generally do all things reasonably necessary or advisable (including, without limitation, (x) by providing reasonable advance notice and regular and reasonably detailed information and (y) by taking account of any reasonable suggestions or comments made by the other) in furtherance thereof. Subject to any applicable confidentiality obligations and the preservation of any applicable attorney-client privilege, each of the Seller and the Purchaser shall use its commercially reasonable efforts to keep the other apprised of the conduct and status of matters (i) concerning the Purchaser, relating to Antitrust Clearances and (ii) concerning the Seller, relating to the WC Opinions, including, in each case, promptly furnishing the other with copies of notices or other communications received by the Seller or the Purchaser, as the case may be, from any Governmental Body or the Works Council, respectively, with respect to the Stock Purchase Agreement or the Transaction. | ||
(g) | Without limiting, and in furtherance of, the foregoing, each of the Seller (jointly and severally), on the one hand, and the Purchaser, on the other hand, shall pay one-half of any and all filing and similar fees payable in connection with any notifications, filings, approval applications or the like required to be filed under Antitrust Laws with respect to the Transaction. |
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6. | Certain Pre-Execution Covenants | |
During the Offer Period, except pursuant to and in accordance with this Offer Letter, the Restructuring or the Stock Purchase Agreement, and without prejudice to the right of the Seller hereunder to not accept the Offer: |
(a) | The Seller shall operate, and shall cause operation of, the Business and the Acquired Companies in the ordinary course and consistent with past practice in all material respects and, without limiting the foregoing, shall obtain the Purchaser’s written consent (which consent shall not be unreasonably withheld or delayed) prior to (i) entering into a material transaction referred to in Section 4.3.11 of the Stock Purchase Agreement, or (ii)(A) changing any method of accounting or accounting practice, (B) making (other than in the ordinary course of business) or changing any material election with respect to Taxes, except, with respect to subclauses (A) and (B), as required by Law or accounting pronouncements, or (C) entering into any closing agreement, settling any material Tax Audit or surrendering any right to claim a material refund of Taxes, in each case with respect to the Business or any Acquired Company that would give rise to a Tax liability associated with any taxable period following the Closing Date; | ||
(b) | The Seller shall cause any and all proceeds (whether in the form of cash or property) of any sale or transfer of any Non-Operational Property to be retained by the Acquired Companies; | ||
(c) | The Parent shall (i) use its commercially reasonable efforts to obtain any and all consents, approvals and releases of Encumbrances that are required to be obtained or effected in connection with the entry into or consummation of the Transaction by the Seller or any of its Affiliates, including, without limitation, each of the consents, approvals and releases of Encumbrances listed onAnnex III hereto;provided that the Purchaser shall reasonably cooperate with the Parent in good faith, including participating in meetings, providing information or otherwise reasonably facilitating the Parent’s efforts, in furtherance thereof, and (ii) notify, as soon as reasonably practicable, each of BNP Paribas (Canada), HSBC Bank Canada and Société Générale (Canada Branch), of the contemplated sale of Skis Rossignol Canada Ltd and Skis Dynastar Canada Ltd pursuant to the Transaction. For the avoidance of doubt, the failure to obtain any consents, approvals and releases of Encumbrances other than those listed onAnnex III hereto shall not be considered to constitute a failure of the conditions set forth in Sections 1(c) and 1(g). | ||
(d) | The Purchaser shall use its commercially reasonable efforts, at the Parent’s request, to release the Seller and its Affiliates (other than the Acquired Companies) from any and all Guarantee Liabilities;provided,however, that nothing contained in this Section 6(d) shall be deemed to require the Purchaser to serve as a guarantor or otherwise incur any liabilities with respect to any Guarantee Liabilities on terms that are less favorable to the Purchaser than the terms on which the Seller or any of its Affiliates (as applicable) serves as a guarantor with respect to such Guarantee Liabilities;provided,further, that, in the event that the Seller or any of its Affiliates shall permit or agree to any amendment or modification to, or waiver under, the terms of their respective obligations with respect to any Guarantee Liability without the prior written consent of the Purchaser (which consent shall not be unreasonably withheld or delayed), the Purchaser shall automatically, and irrevocably and unconditionally, be forever released and discharged from any and all of its obligations under this |
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Section 6(d) and Section 6.1(b) of the Stock Purchase Agreement with respect to such Guaranty Liability. | |||
(e) | The Parent and the Purchaser acknowledge and agree that the phrase “two hundred twenty two million euros (€222,000,000)” set forth in Sections 2.4(a)(i) and 2.4(a)(ii) of the Stock Purchase Agreement has been determined on the assumption that the consummation of the Transaction would occur on or before October 31, 2008. In the event that the Closing fails to occur on or before October 31, 2008, the Parent and the Purchaser shall use their commercially reasonable efforts to negotiate in good faith and, prior to the Closing, agree upon a euro amount to replace the phrase “two hundred twenty two million euros (€222,000,000)” set forth in Sections 2.4(a)(i) and 2.4(a)(ii) of the Stock Purchase Agreement, which replacement euro amount shall consist of a good faith estimate of the Working Capital as of the then reasonably expected Closing Date;provided,however, that, in the event that the Parent and the Purchaser shall have failed to so agree upon any such euro amount or replacement phrase at or prior to the Closing, Sections 2.4(a)(i) and 2.4(a)(ii) of the Stock Purchase Agreement shall remain unchanged. | ||
(f) | The Purchaser and the Seller shall reasonably cooperate with each other in order to satisfy the condition set forth in Section 1(i)(B) hereof, it being understood that the Purchaser shall act in good faith to deliver to the Parent the notice described in such condition as promptly as reasonably practicable. |
7. | Transition Services; Roxy License Agreement | |
During the Offer Period, the Seller and the Purchaser shall use their respective best efforts to negotiate in good faith and mutually agree upon and, simultaneously with the Closing, enter into (and cause their relevant Affiliates to enter into) the Roxy License Agreement and the Transition Services Agreement. | ||
8. | Amendment of Stock Purchase Agreement; Disclosure Schedule Updates | |
The Stock Purchase Agreement may not be amended, modified, supplemented or altered in any respect without the prior written consent of the Parent and the Purchaser; provided that, during the Offer Period, the Seller shall have the right to amend or supplement the Disclosure Schedule contained inAnnex II hereto solely in order to include or reflect (i) immaterial changes affecting the Business which have occurred during the Offer Period in the ordinary course of business and consistent with past practice (if any), and (ii) the sale or transfer of any Non-Operational Property. The Disclosure Schedule and the representations and warranties made by the Seller under the Stock Purchase Agreement shall be deemed for all purposes to include and reflect such supplements and amendments as of the date hereof and at all times thereafter, including on the Execution Date; provided that any amendment or supplement to the Disclosure Schedule after the date hereof shall not be taken into account in the determination of whether the condition set forth in Section 1(b) hereof has been satisfied. | ||
9. | Confidentiality; Announcements | |
The provisions of the Confidentiality Agreement shall remain binding and in full force and effect until the Execution Date. The information contained herein (including the Annexes hereto) shall be subject to the Confidentiality Agreement until the Execution Date and, for that sole purpose and only to that extent, the terms of the Confidentiality Agreement are incorporated herein by reference. Except to the extent required by |
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applicable Law, and subject to the terms of the Confidentiality Agreement, the Purchaser and the Parent will mutually agree on the nature, content and timing of any and all publicity, public announcements, press releases, or other public disclosures regarding this Offer Letter, the Transaction or the transactions contemplated herein (including, but not limited to, on any website). Nothing contained herein shall restrict the ability of any Party to disclose any information relating to this Offer Letter and the transactions contemplated hereby (including the Transaction) as required by applicable Law, stock exchange or securities market rules or the rules of any self-regulatory body having competent jurisdiction. | ||
10. | Non-Solicitation; Transaction Fee |
(a) | In consideration for the Purchaser submitting the Offer and undertaking the actions set forth in this Offer Letter, from and after the Trigger Date until the Expiration Time (as extended pursuant to Section 3 hereof, as the case may be) (such period, the “No Shop Period”), the Seller shall not, and it shall use its reasonable best efforts to cause each of its Affiliates (including the Acquired Companies), directors (and Persons in similar positions), officers, employees, agents and representatives not to, (i) solicit, initiate or knowingly encourage any inquiry, expression of interest, proposal or offer from any Person (other than the Purchaser, an Affiliate of the Purchaser (or any other Person having an economic interest in the Purchaser, directly or indirectly), a Provider, any Person providing financing to the Purchaser for the Transaction or their respective Affiliates, each a “Purchaser Party”), relating to the Transaction or any competing transaction or other transaction involving the acquisition, directly or indirectly, of a significant interest in the Acquired Companies or all or a substantial portion of the assets of the Acquired Companies (any such competing or other transaction, a “Competing Transaction”) or (ii) engage in any discussions or negotiations, enter into any agreement, or provide any non-public information concerning the Acquired Companies or any of their assets to, any Person (other than a Purchaser Party) relating to an actual or potential Competing Transaction. During the No Shop Period, the Seller will cease, and will cause to be ceased, any and all then existing discussions and negotiations with, including the provision of any non-public information concerning the Acquired Companies or any of their assets to, any Person (other than a Purchaser Party) with respect to any actual or potential Competing Transaction. | ||
(b) | In the event that, during the No Shop Period, the Seller enters into a definitive agreement with any Person (other than a Purchaser Party) in relation to a Competing Transaction, the Purchaser shall have the right to terminate the Offer and the provisions of this Offer Letter and, within five Business Days after such termination, the Seller (jointly and severally) shall pay to the Purchaser ten million euros (€10,000,000) as liquidated damages for such breach or noncompliance,provided that the Purchaser shall not be in material breach of its obligations hereunder at the time of any such termination;provided,further, that any amount of damages paid by the Seller to the Purchaser under this Section 10 shall be reduced by any amount (the “Letter of Intent Amount”) paid by the Parent or the Seller pursuant to Section 9 of that certain letter of intent between the Parent and Macquarie Capital (USA) Inc., dated July 1, 2008 or, should any |
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payment hereunder be made prior to, and be greater than, the Letter of Intent Amount, the Purchaser shall pay the Letter of Intent Amount to the Seller. | |||
(c) | Without limiting the foregoing, in the event that (i) the Closing shall not have occurred during the No-Shop Period as a result of a failure by the Seller to satisfy the condition set forth in Section 1(c) hereof, whereas at such time all of the other conditions set forth in Section 1 hereof (other than Section 1(b) hereof) have been satisfied or waived in writing by the Purchaser, (ii) the Offer and the provisions of this Offer Letter shall not have been terminated by the Purchaser pursuant to Section 10(b) hereof, (iii) during the No-Shop Period, the Seller shall have committed a breach of its obligations pursuant to Section 10(a) hereof and (iv) within 12 months after the Expiration Time, the Seller or any of its Affiliates shall have entered into a definitive agreement with respect to, or otherwise consummated, a Competing Transaction, as a condition precedent to such entry into a definitive agreement or consummation of a Competing Transaction (whichever occurs first), the Seller (jointly and severally) shall pay to the Purchaser ten million euros (€10,000,000). | ||
(d) | Notwithstanding anything to the contrary contained in this Offer Letter, the provisions of this Section 10 shall survive any expiration or termination of the Offer or the provisions of this Offer Letter for any reason whatsoever (provided, for the avoidance of doubt, that this Section 10 shall not become applicable until the Trigger Date). |
11. | Specific Performance | |
Each of the Seller and the Purchaser agrees that it could be irreparably injured by a breach of this Offer Letter by the other party, that money damages will not be an adequate and/or fully sufficient remedy for any breach of this Offer Letter and that, in addition to all other remedies available at law, each of the Seller and the Purchaser shall be entitled to seek injunctive relief and specific performance (including in respect of the Seller, causing the Purchaser to enforce its rights under the Commitment Letters) as a remedy for any such breach. |
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Very truly yours, | ||||||||||
CHARTREUSE ET MONT BLANC LLC | ||||||||||
By: | ||||||||||
Name: | ||||||||||
Title: | ||||||||||
ACKNOWLEDGED AND AGREED: | ||||||||||
QUIKSILVER, INC. | PILOT S.A.S. | |||||||||
By: | By: | |||||||||
Name: Charles S. Exon | Name: Sébastien Loux | |||||||||
Title: Chief Administrative Officer | Title:Président | |||||||||
and General Counsel | ||||||||||
QUIKSILVER AMERICAS, INC. | MERIBEL S.A.S. | |||||||||
By: | By: | |||||||||
Name: Charles S. Exon | Name: Pierre Lalande | |||||||||
Title: Secretary | Title:Président |
Page | ||||||||
Article 1. | DEFINITIONS | 2 | ||||||
1.1. | Defined Terms | 2 | ||||||
1.2. | General Interpretive Principles | 12 | ||||||
Article 2. | SALE AND PURCHASE OF THE SHARES | 13 | ||||||
2.1. | Sale and Purchase of the Shares | 13 | ||||||
2.2. | Purchase Price | 13 | ||||||
2.3. | Remaining Offset Amount | 13 | ||||||
2.4. | Working Capital Adjustment | 16 | ||||||
2.5. | Access to Purchaser and Acquired Companies Information and Persons | 21 | ||||||
2.6. | Withholding Rights | 21 | ||||||
Article 3. | CLOSING | 21 | ||||||
3.1. | Date and Place of Closing | 21 | ||||||
3.2. | Closing Transactions and Deliveries | 21 | ||||||
Article 4. | REPRESENTATIONS AND WARRANTIES OF THE PARENT, PILOT, MERIBEL AND QUIKSILVER AMERICAS | 23 | ||||||
4.1. | Representations and Warranties Regarding the Parent, Pilot, Meribel, Quiksilver Americas and the Acquired Companies | 23 | ||||||
4.2. | Representations and Warranties Regarding the Company, Tyax and Rossignol US | 25 | ||||||
4.3. | Representations and Warranties Regarding the Acquired Companies | 29 | ||||||
Article 5. | REPRESENTATIONS AND WARRANTIES OF THE PURCHASER | 43 | ||||||
5.1. | Organization and Good Standing | 43 | ||||||
5.2. | Power and Authority | 44 | ||||||
5.3. | Valid and Binding | 44 | ||||||
5.4. | No violation | 44 | ||||||
5.5. | Absence of Litigation | 44 | ||||||
5.6. | Consents | 45 | ||||||
5.7. | Ability to Evaluate and Bear Risks | 45 | ||||||
5.8. | Investigation by the Purchaser; Parent’s Liability | 45 | ||||||
5.9. | No Brokers | 46 | ||||||
5.10. | No Other Representations and Warranties | 46 |
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Article 6. | COVENANTS | 46 | ||||||
6.1. | Other Intercompany Arrangements | 46 | ||||||
6.2. | Insurance Policies | 47 | ||||||
6.3. | Tax Matters | 47 | ||||||
6.4. | Non-Competition; Non-Solicitation | 50 | ||||||
6.5. | Confidentiality | 51 | ||||||
6.6. | Company Options; Liquidity Agreements | 52 | ||||||
6.7. | Tyax Hedging | 53 | ||||||
Article 7. | INDEMNIFICATION | 53 | ||||||
7.1. | Indemnification by the Parent Indemnifying Persons | 53 | ||||||
7.2. | Indemnification by the Purchaser Indemnifying Persons | 55 | ||||||
7.3. | Survival; Threshold; Cap | 55 | ||||||
7.4. | Computation of Losses; Additional Conditions and Limitations | 57 | ||||||
7.5. | Notice of Claims; Third-Party Claims | 61 | ||||||
7.6. | Resolution of Tax Calculation Disputes | 64 | ||||||
7.7. | Sole Remedy | 64 | ||||||
7.8. | Tax Effect of Indemnification Payments | 64 | ||||||
Article 8. | GENERAL PROVISIONS | 64 | ||||||
8.1. | Cooperation | 64 | ||||||
8.2. | Confidentiality | 65 | ||||||
8.3. | Announcements | 65 | ||||||
8.4. | Joint and Several Liability | 65 | ||||||
8.5. | Absence of Third-Party Rights; Assignment | 65 | ||||||
8.6. | Entire Agreement | 66 | ||||||
8.7. | Waivers and Amendments | 66 | ||||||
8.8. | Severability | 66 | ||||||
8.9. | Interest | 66 | ||||||
8.10. | Notices and Communications | 66 | ||||||
8.11. | Costs | 68 | ||||||
8.12. | Specific Performance | 68 | ||||||
8.13. | Governing Law; Jurisdiction; Waiver of Jury Trial | 68 | ||||||
8.14. | Counterparts | 69 |
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1 | Form of entity to be determined prior to Closing. |
DEFINITIONS
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2 | Most recent fiscal quarter prior to Closing with respect to which Parent consolidated financial information has been publicly disclosed in the Parent’s SEC filings. |
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SALE AND PURCHASE OF THE SHARES
3 | Parties’ respective tax specialists to reasonably agree Schedule 2.2 prior to the Closing so as to reflect agreed Purchase Price allocation. |
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CLOSING
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REPRESENTATIONS AND WARRANTIES
OF THE PARENT, PILOT, MERIBEL AND QUIKSILVER AMERICAS
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REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
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COVENANTS
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INDEMNIFICATION
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GENERAL PROVISIONS
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[ ]
Attention: [ ]
Facsimile: [ ]
787 Seventh Avenue
New York, NY 10019
Attention: William J. Grant, Esq.
Facsimile: (212) 728-9223
21-23 rue de la Ville l’Evêque
Paris, France
Attention: Eduardo J. Fernandez, Esq.
Facsimile: +33 1 4006 9606
15202 Graham Street,
Huntington Beach, California 92649
U.S.A.
Attention: Charles S. Exon
Facsimile: +1 714 889 3306
300 South Grand Avenue Suite 3400
Los Angeles, California 90071
Attention: Brian McCarthy, Esq.
Facsimile: +1 (213) 687 5600
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QUIKSILVER, INC. | ||||||
By: | ||||||
Title: | ||||||
PILOT S.A.S. | ||||||
By: | ||||||
Title: | ||||||
MERIBEL S.A.S. | ||||||
By: | ||||||
Title: | ||||||
QUIKSILVER AMERICAS, INC. | ||||||
By: | ||||||
Title: | ||||||
[ ] | ||||||
By: | ||||||
Title: |
€[25,000,000] | New York, New York | |
[___]1 |
1 | Insert Closing Date | |
2 | Insert name of Purchaser | |
3 | Insert name of Purchaser | |
4 | Insert Closing Date |
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26 rue Danièle Casanova
75002 Paris
France
Attn: Président
Facsimile: +33 5 59 26 9716
15202 Graham Street,
Huntington Beach, California 92649
U.S.A.
Attention: Charles S. Exon
Facsimile: +33 714 889 3306
300 South Grand Avenue
Suite 3400
Los Angeles, California 90071
Facsimile: +1 (213) 687 5600
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By: | ||||
Name: | ||||
Title: | ||||
By: | ||
Name: | ||
Title: |
5 | Insert name of Purchaser |
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3 | Insert Closing Date |
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6 | Include details of Purchaser under the Stock Purchase Agreement. |
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