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EXHIBIT 2.1
UR-NR. 1906 fur 1999
NOTARIAL DEED
Negotiated at Dusseldorf on 15 and 16 July 1999
Before me, the undersigned notary
Dr. Norbert Zimmermann
with offices in Dusseldorf within the district of the court appeals of
Dusseldorf, there appeared:
1. Mr. Rudolf Bresser, business resident Siemensstrasse 6, 46325 Borken,
acting
a) in his own name
b) as managing director with sole power of representation
("Einzelvertretungsbefugnis") of Bresser Optik
Geschaftsfuhrungs- und Verwaltungs GmbH, Siemensstrasse 6, 46325
Borken, a German limited liability company ("Gesellschaft mit
beschrankter Haftung, GmbH") registered under HRB 541 with the
commercial register of the local court of Borken;
c) Bresser Optik Geschaftsfuhrungs- und Verwaltungs GmbH is acting
in its own name and in its capacity as sole general partner
("Komplementar") of Bresser Optik GmbH & Co. KG, a German
limited partnership ("Kommanditgesellschaft, KG") registered
under HRA 1008 with the Commercial Register of the local court
in Borken.
2. Dr. Thorsten Haeberlin, acting not in his own name but pursuant to
undated powers-of-attorney in the name and on behalf of
a) Meade Instruments Corp., 6001 Oak Canyon, Irvine, California
92620, USA, a Delaware corporation
b) Meade Instruments Europe Corp., c/o Meade Instruments Corp.,
6001 Oak Canyon, Irvine, California 92620, USA, a California
corporation
Mr. Bresser and Dr. Haeberlin identified themselves to the notary by presenting
their Germany identity documents.
The notary ascertained that all persons appearing were in full command of the
German and of the English language. The notary is in full command of the English
language as well.
The parties, acting as stated above, then declared the following:
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INTEREST PURCHASE AGREEMENT
BY AND AMONG
BRESSER OPTIK GMBH & CO. KG,
A LIMITED PARTNERSHIP ORGANIZED UNDER THE LAWS
OF THE FEDERAL REPUBLIC OF GERMANY,
BRESSER OPTIK GESCHAFTSFUHRUNG UND VERWALTUNGS GMBH ,
A LIMITED LIABILITY COMPANY ORGANIZED UNDER THE LAWS
OF THE FEDERAL REPUBLIC OF GERMANY, AND
RUDOLF BRESSER,
AN INDIVIDUAL,
AND
MEADE INSTRUMENTS CORP.,
A DELAWARE CORPORATION, AND
MEADE INSTRUMENTS EUROPE CORP.,
A CALIFORNIA CORPORATION
DATED JULY 15-16, 1999
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TABLE OF CONTENTS
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ARTICLE I
PURCHASE & SALE/CLOSING
1.1 Purchase and Sale............................................................................1
1.2 Closing Matters..............................................................................2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
2.1 Organization and Good Standing...............................................................2
2.2 Capitalization...............................................................................2
2.3 Authorization................................................................................3
2.4 Compliance with Law and Taxes................................................................3
2.5 Litigation...................................................................................3
2.6 Title to Property and Assets.................................................................3
2.7 Patents, Trademarks, etc.....................................................................4
2.8 Insurance....................................................................................4
2.9 Material Contracts...........................................................................4
2.10 Related Party Transactions...................................................................4
2.11 Accuracy of Information......................................................................4
2.12 Customers and Suppliers......................................................................5
2.13 Environmental Compliance.....................................................................5
2.14 Employees and Employee Benefits..............................................................5
2.15 Rule 144.....................................................................................6
2.16 Inventories..................................................................................6
2.17 Accounts Receivable..........................................................................6
2.18 Accounts Payable.............................................................................6
2.19 Year 2000....................................................................................6
2.20 Governmental Approvals, Consents.............................................................6
2.21 Liquidation of Optus and Transfer of Rights to Optik.........................................7
2.22 Conduct of the Business......................................................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
3.1 Organization and Good Standing...............................................................7
3.2 Authorization................................................................................7
3.3 Valid Issuance of the Meade Stock............................................................7
3.4 Capitalization of Meade......................................................................7
3.5 SEC Documents................................................................................8
3.6 Accuracy of Information......................................................................8
3.7 Governmental Approvals, Consents.............................................................8
3.8 Current Reports..............................................................................8
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TABLE OF CONTENTS
(CONTINUED)
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ARTICLE IV
CONDITIONS TO CLOSING
4.1 General Conditions...........................................................................9
4.2 Conditions of Buyer's Obligations............................................................9
4.3 Conditions of Seller's Obligations..........................................................10
ARTICLE V
COVENANTS WITH RESPECT TO THE COMPANY PRIOR TO CLOSING
5.1 Preservation and Conduct of Business Prior to Closing Date..................................10
5.2 Access......................................................................................11
5.3 Notification of Certain Matters.............................................................11
5.4 Permits and Approvals.......................................................................12
5.5 Liquidation of Optus and Transfer of Rights to Optik........................................12
ARTICLE VI
TERMINATION OF OBLIGATIONS; SURVIVAL
6.1 Termination of Agreement....................................................................12
6.2 Effect of Termination.......................................................................12
6.3 Expenses....................................................................................13
ARTICLE VII
LEGAL CONSEQUENCES/INDEMNIFICATION
7.1 Legal Obligations of Seller.................................................................13
7.2 Legal Recourse of Buyer.....................................................................14
7.3 Legal Obligations of Buyer..................................................................14
7.4 Legal Recourse of Seller....................................................................14
7.5 Certain Tax Matters.........................................................................14
7.6 Survival of Representations and Warranties..................................................15
7.7 Procedure...................................................................................16
7.8 Notice by the Shareholder...................................................................16
7.9 Not Exclusive Remedy........................................................................16
7.10 Limitation on Shareholder and Buyer Liability...............................................16
ARTICLE VIII
GENERAL
8.1 Confidentiality.............................................................................16
8.2 Amendments..................................................................................17
8.3 Notices.....................................................................................17
8.4 Expenses and Attorneys' Fees................................................................17
8.5 Governing Law; Choice of Forum; Consent to Personal Jurisdiction............................17
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TABLE OF CONTENTS
(CONTINUED)
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8.6 Exchange Rate/Payments......................................................................17
8.7 Entire Agreement............................................................................17
8.8 Successors and Assigns......................................................................17
8.9 Severability................................................................................17
8.10 Further Assurances..........................................................................17
8.11 Counterparts................................................................................17
8.12 Publicity and Reports.......................................................................17
8.13 Exclusive Dealing...........................................................................18
8.14 Controlling Version.........................................................................18
SCHEDULES
Schedule 2.4 Compliance with Law and Taxes
Schedule 2.5 Litigation
Schedule 2.6 Title to Property and Assets
Schedule 2.7 Patents, Trademarks, etc.
Schedule 2.8 Insurance
Schedule 2.9 Material Contracts
Schedule 2.10 Related Party Transactions
Schedule 2.12 Customers and Suppliers
Schedule 2.13 Environmental Compliance
Schedule 2.14 Employees and Employee Benefits
Schedule 2.16 Inventories
Schedule 2.17 Accounts Receivable
Schedule 2.18 Accounts Payable
Schedule 2.20 Governmental Approvals; Consents
Schedule 3.4 Capitalization of Meade
Schedule 3.7 Governmental Approvals; Consents
Schedule 4.3(d) Shareholder Guarantee Releases
Schedule 7.2 Legal Recourse of Buyer
Schedule 7.4 Legal Recourse of Seller
EXHIBITS
Exhibit A Notarial Deed
Exhibit B Shareholder Employment Agreement
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INTEREST PURCHASE AGREEMENT
This Interest Purchase Agreement (this "Agreement") is made and
entered into as of July 15, 1999, by and among Bresser Optik GmbH & Co. KG, a
limited partnership registered under HRA 1008 with the Commercial Registry kept
at the Local Court in Borken, Germany ("Optik"), Bresser Optik Geschaftsfuhrung
und Verwaltungs GmbH, a limited liability company registered under HRB 541 with
the Commercial Registry kept at the Local Court in Borken, Germany and the
unlimited general partner of Optik ("GmbH," and together with Optik,
collectively, the "Company"), and Rudolf Bresser, an individual (the
"Shareholder," and together with the Company, collectively, "Seller") on the one
hand, and Meade Instruments Corp., a Delaware corporation ("Meade"), Meade
Instruments Europe Corp., a California corporation, or any subsidiary of Meade
Instruments Europe Corp. ("Sub," and together with Meade, collectively,
"Buyer"), on the other.
BACKGROUND
A. GmbH is the unlimited general partner of Optik;
B. The Shareholder owns 100% of the issued and outstanding
equity interests of Optik (with nominal capital equal to DM
1,000,000.00) (the "Interests") and 100% of the issued and outstanding
shares of GmbH (with nominal capital equal to DM 50,000.00) (the
"Shares"); and
C. The Shareholder desires to sell, and Buyer desires to
buy, the Interests and the Shares for the consideration described
herein, pursuant to the terms and subject to the conditions of this
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and the
promises made in this Agreement, the parties hereby agree as follows:
ARTICLE I
PURCHASE & SALE/CLOSING
1.1 PURCHASE AND SALE. The Shareholder agrees to sell,
assign and transfer, with effect as of January 1, 1999, to Sub and Sub agrees to
purchase from the Shareholder, the Interests, together with balances on the
accounts which are kept pursuant to Section 5 of Optik's partnership agreement
as shown on the interim tax balance sheet as of the Closing Date, and the
Shares, together with all of GmbH's profit of the current fiscal year as well as
profit which has not yet been distributed in the previous fiscal years, for the
aggregate consideration of $US7,000,000 to be paid by Buyer to the Shareholder
as follows:
(a) At the Closing (as defined below), Buyer shall pay to
the Shareholder the sum of $US5,000,000 (the "Cash Payment"), by wire transfer
of immediately available funds free of costs and charges to an account to be
designated by the Shareholder at least three business days prior to the Closing;
and
(b) At the Closing, Buyer shall issue to the Shareholder
free of costs and charges such shares of Meade's common stock, $0.01 par value
per share ("Common Stock"), valuing $US2,000,000 (the "Meade Stock," and
together with the Cash Payment, the "Purchase Price"). The number of shares of
Meade Stock issued to the Shareholder hereunder shall be determined by using the
average closing price reported on the Nasdaq National Market for Meade's Common
Stock for the 20 trading day period ending on the day prior to the Closing (the
"Closing Price Per Share"). Notwithstanding the above, in no event shall the
Closing Price Per Share be in excess of $US20 per share.
(c) Buyer is aware that prior to the date hereof the
Shareholder has made withdrawals (Entnahmen) from Optik. All withdrawals which
have been made in the period from January 1, 1999 until the Closing Date (as
defined below) and exceed the aggregate amount of DM 113,500 shall be repaid by
the
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Shareholder to Optik on or prior to the Closing. All withdrawals made prior to
December 31, 1998 shall remain with the Shareholder. Shareholder shall not, for
any reason whatsoever, make any additional withdrawals. In addition, the
Shareholder agrees to repay Optik any amounts outstanding in any of the personal
accounts mentioned in Section 5 of Optik's partnership agreement.
1.2 CLOSING MATTERS.
(a) Closing. The closing (the "Closing") shall be conducted
at the offices of Feddersen Laule Ewerwahn Scherzberg Finkelnburg Clemm at
Jagerhofstrasse 29, D-40479, Dusseldorf, Germany at 5:00 p.m. local time, on
September 1, 1999 or at such other time and place as the parties hereto agree
(the "Closing Date").
(b) Deliveries of Seller at Closing. At the Closing, Seller
shall deliver or cause to be delivered to Buyer the following, in form and
substance satisfactory to Buyer and Buyer's counsel, against delivery of the
items specified in Section 1.2(c): (i) the closing certificates referred to in
Section 4.2(a); (ii) a duly signed Notarial Deed pursuant to which the Shares
and the Interests are transferred by the Shareholder to Buyer or its nominee
substantially in the form of Exhibit A; (iii) the employment agreement referred
to in Section 4.2(b) executed by the Shareholder and Buyer; (iv) the approvals
and permits as specifically set forth on the Schedules hereto as required
pursuant to the provisions of this Agreement; (v) proof, reasonably acceptable
to Buyer that the Shareholder qualifies for key man life insurance at reasonable
rates pursuant to Section 4.2(h); (vi) the resignation of Gabriele Bresser
referred to in Section 4.2(i); and (vii) the application to the commercial
register for the respective buyer's registration as a new partner of Optik.
(c) Deliveries of Buyer at Closing. At the Closing, Buyer
shall deliver or cause to be delivered to Seller the following, in form and
substance satisfactory to Seller and Seller's counsel, against delivery of the
items specified in Section 1.2(b): (i) the closing certificates referred to in
Section 4.3(a); (ii) certificates representing the Meade Stock duly endorsed for
transfer to the Shareholder or his nominee (with appropriate restrictive legends
in accordance with the laws and regulations of the U.S. Securities and Exchange
Commission ("SEC")); (iii) the Cash Payment; (iv) proof, reasonably acceptable
to Seller, that the transactions contemplated by this Agreement have been
approved, confirmed and ratified by Buyer; and (v) the Shareholder Guarantee
Releases referred to in Section 4.3(d), duly endorsed.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
As of the date hereof and the Closing Date, Optik, GmbH and the
Shareholder, jointly and severally, each hereby represents and warrants to Buyer
in the legal form of a guarantee (selbstandiges Garantieversprechen) pursuant to
Sections 241 and 305 of the German Civil Code (Burgerliches Gesetzbuch) as
follows (whenever used herein with respect to the Shareholder, the term
"knowledge" shall mean actual knowledge, after due inquiry of the Shareholder or
any of Mr. Stephan Wewers, Mr. Ulrich Hoing or Ms. Silke Brast):
2.1 ORGANIZATION AND GOOD STANDING. Optik and GmbH are a
limited partnership (Kommanditgesellschaft) and a limited liability company
(Gesellschaft mit beschrankter Haftung), respectively, and each is duly
organized under the laws of Germany and validly existing in accordance with the
excerpts of the commercial register, as delivered to Buyer, and the partnership
agreement of Optik (dated January 3, 1990) and articles of association of GmbH
(dated March 9, 1993), respectively, as delivered to Buyer, and there have not
been any later amendments of the aforesaid partnership agreement or articles of
association. There exist no side agreements with respect to the articles of
association, the partnership agreement and/or the organization of the Company.
No bankruptcy or composition of creditors' proceedings have been instituted
against the Company nor are any circumstances known which would justify the
institution of any insolvency proceedings in the future.
2.2 CAPITALIZATION . The Interests and the Shares represent
all of the issued and outstanding equity interests of each of Optik and GmbH.
There are no options, agreements or other rights obligating the Company to issue
any additional interests or any other securities convertible into, exchangeable
for or evidencing the right to subscribe for any interest in the Company. The
Interests and the Shares are free from any liens and
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encumbrances, are duly authorized, validly issued and outstanding and are fully
paid and nonassessable. To the extent such exists, the corporate minutes and
official record books of the Company are true, correct and complete in all
material respects and true, correct and complete copies of such minute and
record books have been delivered to Buyer. Neither Optik nor GmbH owns any
interest of any kind in any corporation, partnership, limited liability company
or other entity of any nature.
2.3 AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution, delivery and performance of this Agreement, and all
documents or actions relating hereto, has been taken. Seller has all requisite
legal and corporate power to enter into this Agreement, to sell the Interests
and the Shares hereunder and to carry out and perform its obligations under the
terms of this Agreement.
2.4 COMPLIANCE WITH LAW AND TAXES. The operations of the
Company do not violate its organization or charter documents, and are not in
violation of any agreement or instrument, or any applicable laws or regulations.
The Company has applied for or received all licenses, permits, consents or
approvals from all governmental or other agencies or persons or entities which
are necessary for the conduct of its business as of the Closing Date and the
marketing of its products, and the execution, delivery and performance of this
Agreement and the documents relating hereto. Seller is not aware of any fact,
which if disclosed, would prohibit, delay or in any way limit the Company's
ability to obtain and maintain all of such licenses, permits, consents or
approvals. Neither the Shareholder, the Company nor any of their respective
Affiliates has (a) made any contributions, payments or gifts to or for the
private use of any governmental official, employee, supplier, customer or agent
where either the payment or the purpose of such contribution, payment or gift is
illegal under any applicable law in any country in which the Company does
business or (b) made any payments to any person or entity with the intention or
understanding that any part of such payment was to be used for any purpose other
than that described in the documents supporting the payment. The Company has
timely filed or will file all required Tax Returns (as defined below) and has
timely paid or will timely pay all Taxes (as defined below) due for all periods
ending on or before the Closing Date. Adequate provision has been made in the
books and records of the Company, and in the financial statements prepared in
accordance with statutory German generally accepted accounting principles
("German GAAP") applied on a basis consistent with past practice for the year
ended December 31, 1998 delivered or to be delivered to Buyer, for all Taxes
until and including such period whether or not due and payable and whether or
not disputed. Schedule 2.4 lists the date or dates through which any applicable
taxing authority has examined any Tax Returns of the Company. All required Tax
Returns of the Company, including amendments to date, have been prepared in good
faith without negligence or willful misrepresentation and are complete and
accurate in all material respects. No Governmental Entity (as defined below) has
proposed (tentatively or definitively), asserted or assessed or, to the
knowledge of Seller, threatened to propose or assert, any deficiency, assessment
or claim for Taxes and to the knowledge of Seller there would be no basis for
any such delinquency assessment or claim. "Tax" means any tax or assessments or
charges of any kind imposed by any Governmental Entity, any interest and
penalties (civil or criminal) related thereto or to the nonpayment thereof, and
any Loss in connection with the determination, settlement or litigation of any
Tax liability. "Tax Return" means a report, return or other information required
to be supplied to a Governmental Entity with respect to Taxes. "Governmental
Entity" means any government or any agency, bureau, department or other
instrumentality of any government.
2.5 LITIGATION. Schedule 2.5 hereto lists all pending,
threatened or resolved litigation against the Company at any time during the
last 5 years, and except as listed on Schedule 2.5, there is no action, suit or
proceeding pending or threatened against Seller which could adversely affect
Seller's ability to consummate the transactions contemplated hereby and Seller
is not aware of any basis for the foregoing.
2.6 TITLE TO PROPERTY AND ASSETS. Schedule 2.6 hereto lists
all real property and interests in real property owned or held by the Company.
Except as set forth on Schedule 2.6, the Company has good and marketable title
to all of its assets, including but not limited to, all items of real property
(or an interest in real property), free and clear of all liens and encumbrances.
All leases pursuant to which the Company leases real or personal property are
valid and effective and there exists no default by the Company, and to Seller's
knowledge by any other party, or other occurrence or condition which could
result in a default or termination of any such lease.
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All material tangible properties of the Company are in a good state of
maintenance and repair, subject to normal wear and tear, and are adequate for
the business of the Company.
2.7 PATENTS, TRADEMARKS, ETC. Schedule 2.7 hereto lists by
country all patents, trademarks, service marks, trade names, copyrights,
material software, licenses and all registrations or applications for
registration of any of the foregoing owned, licensed or used by the Company
(collectively, the "Intellectual Property Rights"). The Company owns or has the
right to use, free and clear of all liens, claims and restrictions, all existing
or pending Intellectual Property Rights and all other rights necessary to its
business as now conducted or as proposed to be conducted. Seller has not
received any communications alleging that the Company has violated or, by
conducting its business as proposed, would violate, the proprietary or
intellectual property rights of any other person or entity. Except as set forth
on Schedule 2.7 hereto, Seller is not aware of any violation or infringement by
a third party of any of the Company's Intellectual Property Rights. There do not
exist any actual claims under the "Act to Employee Inventions"
(Arbeitnehmererfindungsgesetz).
2.8 INSURANCE. Schedule 2.8 hereto lists all insurance
policies maintained by the Company and all such insurance policies are in full
force and effect and the Company is not in default under any such policy. The
Company is, and at all times during the past 5 years has been, insured against
all risks normally insured against by companies engaged in businesses similar to
the Company's business.
2.9 MATERIAL CONTRACTS. Schedule 2.9 hereto lists each
Contract (as defined below) to which the Company is a party or by which the
Company or any of its respective properties is bound that is deemed a Material
Contract (as defined below) pursuant to this Agreement. Unless otherwise so
noted on Schedule 2.9, each such Contract was entered into in the ordinary
course of business. True, correct and complete copies of each Material Contract,
including all amendments and supplements, have been delivered to Buyer. Each
Material Contract is valid and subsisting; the Company has duly performed all
its obligations thereunder to the extent that such obligations to perform have
accrued; and no breach or default, alleged breach or default, or event which
would (with the passage of time, notice or both) constitute a breach or default
thereunder by the Company or, to the knowledge of Seller, any other party or
obligor with respect thereto, has occurred or as a result of this Agreement or
performance thereof will occur. Unless otherwise so noted on Schedule 2.9,
consummation of the transactions contemplated by this Agreement will not (and
will not give any person or entity a right to) terminate or modify any rights
of, or accelerate or augment any obligation of, the Company under any Material
Contract or require the consent of any party thereto. "Material Contract" means
any Contract material to the Company's business or any Contract upon which the
business of the Company is dependent as of or after the date hereof or at any
time during the preceding 12 months, including, but not limited to, any Contract
that (a) obligates the Company to pay an amount of, or equivalent to, $US50,000
or more, (b) has an unexpired term as of June 1, 1999 in excess of 6 months, (c)
represents an agreement by which another party is acting or is entitled to act
as a distribution or sales representative for the Company, (d) represents any
agreement pursuant to which products are manufactured for the Company, (e)
provides for an extension of credit other than consistent with normal credit
terms, (f) limits or restricts the ability of the Company to compete in any
manner or place, (g) contains a right or obligation other than in the ordinary
course of business of the Company, by any Affiliate (as defined below), officer
or director of the Company, or (k) was not made in the ordinary course of
business. "Contract" means any written or oral agreement, arrangement or
understanding. "Affiliate" means a person or entity that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with Seller.
2.10 RELATED PARTY TRANSACTIONS. Except as set forth on
Schedule 2.10 hereto, the Company has not engaged in any transaction with the
Shareholder or any Affiliate and the Company does not have any liabilities or
obligations to the Shareholder or any other Affiliate and none of the
Shareholder or such Affiliates has any obligations to the Company. The
consummation of the transactions contemplated by this Agreement will not (either
alone, or upon the occurrence of any act or event, or with the lapse of time, or
both) result in any payment arising or becoming due from the Company or the
successor thereof to the Shareholder or any Affiliate.
2.11 ACCURACY OF INFORMATION. None of the information
(including, but not limited to, all due diligence information and documentation
and financial statements) provided or to be supplied by or on behalf of Seller
to Buyer, its agents or representatives in connection with the transactions
contemplated by this Agreement,
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this Agreement or the negotiations leading up to this Agreement did contain, or
at the respective times such information is or was delivered, will contain any
materially untrue statement, or omitted or will omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. If any of such information at any time subsequent to delivery and
prior to the Closing becomes untrue or misleading, Seller will promptly notify
Buyer in writing of such fact and the reason for such change. To the knowledge
of Seller, all documents required to be filed by Seller with any Governmental
Entity previously, or in connection with this Agreement or the transactions
contemplated by this Agreement, will comply with the provisions of applicable
law and a copy of any such filing will have been delivered to Buyer. The Company
has no liability or obligation (actual, contingent or accrued) that, in
accordance with statutory German GAAP applied on a basis consistent with past
practice, should have been shown or reflected in the financial statements for
the year ended December 31, 1998 presented to Buyer.
2.12 CUSTOMERS AND SUPPLIERS. Schedule 2.12 hereto lists the
names of and describes all Contracts with, and the appropriate percentage of the
Company's business attributable to, the ten largest customers of and ten largest
suppliers to the business of the Company at the date of this Agreement, and any
sole-source suppliers of significant goods or services (other than electricity,
gas, telephone or water) to the Company with respect to which alternative
sources of supply are not readily available on comparable terms and conditions.
Seller provides no assurances in connection with this Section 2.12 that any
customer or supplier listed herein will continue their business relationship
with Seller after the Closing Date; provided, however, that to the extent Seller
has knowledge of any such proposed termination of an existing business
relationship, Seller shall set forth the details of such proposed termination in
Schedule 2.12.
2.13 ENVIRONMENTAL COMPLIANCE. The business of the Company
and all property used in connection with the operation of the business of the
Company is, and at all times in the past has been, used in compliance with all
Environmental Laws. The Company has obtained and presently maintains all permits
and other governmental authorizations required to operate the business of the
Company in compliance with all Environmental Laws. No Environmental Condition
exists upon any property owned or operated or formerly owned or operated by the
Company. The Company has not disposed of any Hazardous Substance in a manner
that could create any present or future liability under any Environmental Law.
"Environmental Laws" shall mean all laws applicable to the real property
currently in use or previously used in connection with the operation of the
business of the Company relating to the protection of human health, safety or
the environment including all requirements pertaining to reporting, licensing,
permitting, controlling, investigating or remediating emissions, discharges,
releases or threatened releases of Hazardous Substances. "Environmental
Condition" shall mean the presence in, on, under or about the real property of
the Company of any Hazardous Substance which, if the presence of such Hazardous
Substance was known, would be reportable under any Environmental Law, or which
could reasonably be anticipated to require investigation or remediation pursuant
to any Environmental Law. "Hazardous Substance" shall mean substances or wastes
that are regulated or classified under any German or other applicable European
law or regulation applicable as of the Closing Date because of their toxic or
dangerous properties. Schedule 2.13 hereto contains (i) a list of each report or
filing which relates to the use of Hazardous Substances in the historical or
current operation of the business of the Company, (ii) any historical or current
Environmental Condition that existed or exists upon any property of the Company,
and (iii) all permits and other governmental authorizations required to operate
the business of the Company in compliance with Environmental Laws.
2.14 EMPLOYEES AND EMPLOYEE BENEFITS. Schedule 2.14 hereto
lists all employees of the Company, the titles of each such employee, if any,
and the compensation and employee benefits received by each such employee at all
times during the 12 months immediately preceding the Closing Date. Schedule 2.14
lists all employee benefit plans, collective bargaining, written and oral
employment or severance Contracts or other similar arrangements to which the
Company is or has been during the last 12 months a party with respect to any
current employees. Except as specified in Schedule 2.14, as of the Closing Date,
the Company maintains good labor relations with all employees. Except as
specified in Schedule 2.14, each of the employee benefit plans and employment
agreements or arrangements may be amended, modified, augmented or terminated by
the Company within a period of 30 days following the Closing Date, without
payment of any additional compensation or amount or the additional vesting or
acceleration of any such benefits. All obligations of the Company under each
such plan, Contract and arrangement (i) that are due prior to the Closing Date
have been paid or will be paid prior to
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that date, and (ii) that have accrued prior to the Closing Date have been or
will be paid or properly accrued at that time.
2.15 RULE 144. The Shareholder understands: (a) the shares
which constitute the Meade Stock are restricted securities within the meaning of
Rule 144 promulgated under the U.S. Securities Act of 1933, as amended (the
"Securities Act"); (b) exemption from registration under Rule 144 will not be
available in any event for at least one year from the date of sale of the Meade
Stock to the Shareholder, and even then, exemption from the registration
requirements of Rule 144 will not be available unless: (i) a public trading
market then exists for the Meade Stock, (ii) adequate information concerning
Meade is then available to the public, and (iii) the other terms and conditions
of Rule 144 are met; and (c) any unregistered sale of the Meade Stock may be
made by the Shareholder only in accordance with the terms and conditions of Rule
144, or other applicable exemption under the Securities Act.
2.16 INVENTORIES. Schedule 2.16 hereto (which shall be
delivered not less than 10 days prior to the Closing) lists all inventories of
the Company as of July 31, 1999. All inventories of the Company are of good
merchantable quality, are carried at the lower of cost or market, and are
merchantable (in the case of inventory held for sale) or currently usable (in
the case of other inventory) in the ordinary course of business. The value of
obsolete, damaged, below standard quality or excess inventory in Schedule 2.16
and as of the Closing Date has been written down on the books and records of the
Company to ascertainable market value, or adequate reserves described on
Schedule 2.16 have been provided therefor, and the value at which inventories
are carried reflects the customary inventory valuation policy of the Company
(which fairly reflects the value of obsolete, damaged or excess inventory) for
stating inventory, in accordance with past practices.
2.17 ACCOUNTS RECEIVABLE. Schedule 2.17 hereto (which shall
be delivered not less than 10 days prior to the Closing) lists all accounts
receivable of the Company as of July 31, 1999. All accounts receivable of the
Company as of the Closing Date, whether reflected in Schedule 2.17 or otherwise,
represent sales actually made in the ordinary course of business in amounts and
in a manner consistent with past practices, and are current and fully
collectible, net of any reserves shown in Schedule 2.17 (which reserves are
adequate and were calculated on a basis consistent with past practices). Seller
has delivered to Buyer a complete and accurate aging list of all accounts
receivable of the Company.
2.18 ACCOUNTS PAYABLE. Schedule 2.18 hereto (which shall be
delivered not less than 10 days prior to the Closing) lists all accounts payable
of the Company as of July 31, 1999. No account payable reflected on Schedule
2.18 or on any other balance sheet of the Company relates to any agent, broker,
finder, or investment or commercial banker or other person or entity engaged by
or acting on behalf of the Shareholder or the Company or any Affiliate in
connection with the negotiation, execution or performance of this Agreement or
the transactions contemplated by this Agreement. All accounts payable of the
Company as of the Closing Date, whether reflected in Schedule 2.18 or otherwise,
represent purchases and expenses actually made or incurred in the ordinary
course of business in amounts consistent with past practices and shall be paid
in a timely manner and in accordance with the stated terms thereof. Seller has
delivered to Buyer a complete and accurate aging list of all accounts payable of
the Company.
2.19 YEAR 2000. The Company is Year 2000 Compliant (as
defined hereafter). "Year 2000 Compliant" means, with respect the Company's
information technology, the information technology is designed to be used prior
to, during and after the calendar Year 2000, and the information technology used
during each such time period will accurately receive, provide and process
date/time data (including but not limited to calculating, comparing and
sequencing) from, into and between the twentieth and twenty-first centuries,
including the years 1999 and 2000, and leap year calculations and will not
malfunction, cease to function or provide invalid or incorrect results as a
result of date/time data, to the extent other information technology, used in
combination with the information technology being acquired, properly exchanges
date/time data with it. The Company is capable of invoicing the Euro-currency.
2.20 GOVERNMENTAL APPROVALS, CONSENTS. Except as set forth on
Schedule 2.20 hereto, no approval, authorization, consent, qualification, order
or registration, or any waiver of any of the foregoing, or any action of, or any
notice, statement or other communication is required to be filed with or
delivered to, any
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Governmental Entity or any other person or entity in connection with the
execution and delivery by Seller of this Agreement or the related documents or
the consummation by it of the transactions contemplated herein or therein.
2.21 LIQUIDATION OF OPTUS AND TRANSFER OF RIGHTS TO OPTIK.
Prior to the Closing Date, the shareholders of Optus GmbH ("Optus") shall have
resolved and commenced the liquidation and termination of all of the business
activities and operations of Optus, including, without limitation, the
appropriate registration with the commercial register and publication in the
Federal Gazette (Bundesanzeiger). All rights to use the "Optus" name and the
right to sell all the products sold by Optus prior to its liquidation shall have
been transferred to Optik free of cost. The Shareholder shall have agreed to
assume all liabilities relating to Optus following its liquidation. No
additional compensation shall be paid to the Shareholder in connection with the
actions of this Section 2.21 and all related transactions.
2.22 CONDUCT OF THE BUSINESS . Between January 1, 1999 and
the date hereof, (a) the Shareholder and the Company have used their reasonable
efforts to preserve the business of the Company and to preserve the goodwill of
customers, suppliers and others having business relations with the Company and
prior to or on the date hereof the Shareholder has disclosed in writing, in the
Schedules hereto or otherwise, any situation, of which the Shareholder has
knowledge, that exists between the Company or the Shareholder and any customer,
supplier or other party having business relations with the Company where the
goodwill between such parties has been damaged in any material way and (b) the
Company has paid all accounts payable in a timely manner in accordance with
stated terms thereof. During such time period, the Shareholder and the Company
have run the business of the Company in the ordinary course, with the care of a
good and prudent businessman and have not entered into any transactions which
could give rise to extraordinary profits, realization of hidden reserves or any
similar transactions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
As of the date hereof and the Closing Date, Buyer hereby
represents and warrants to Seller in the legal form of a guarantee
(selbstandiges Garantieversprechen) pursuant to Sections 241 and 305 of the
German Civil Code (Burgerliches Gesetzbuch) as follows:
3.1 ORGANIZATION AND GOOD STANDING. Meade and Sub are
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware and California, respectively, and have all
requisite corporate power and authority to carry on their respective businesses
as now conducted and as proposed to be conducted.
3.2 AUTHORIZATION. All corporate action on the part of
Buyer, its officers, directors and stockholders necessary for the authorization,
execution, delivery and performance of this Agreement, and all documents and
actions relating hereto, has been taken. Buyer has all requisite legal and
corporate power to enter into this Agreement and to carry out and perform its
obligations under the terms of this Agreement.
3.3 VALID ISSUANCE OF THE MEADE STOCK. The Meade Stock to be
issued hereby at the time of such issuance and upon payment therefor in
accordance with the terms of this Agreement, will be duly and validly issued,
fully paid and nonassessable, and will be free from any liens or encumbrances
other than those arising from this Agreement.
3.4 CAPITALIZATION OF MEADE. The authorized capital stock of
Meade consists of 20,000,000 shares of Common Stock, of which as of the date of
this Agreement 7,883,463 shares were issued and outstanding, and 1,000,000
shares of preferred stock, of which as of the date of this Agreement no shares
were issued and outstanding. All of the issued and outstanding shares have been
validly issued, are fully paid and non-assessable and were not issued in
violation of any preemptive rights. Except as set forth on Schedule 3.4 hereto,
there are no options, agreements or other rights obligating Meade to issue any
additional shares of capital stock or any other securities convertible into,
exchangeable for or evidencing the right to subscribe for any shares of capital
stock of Meade.
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3.5 SEC DOCUMENTS. Since April 14, 1997, Meade has filed
with the SEC all reports and forms and other documents required to be filed with
the SEC, including without limitation those documents required to be filed as
exhibits pursuant to Item 601 of Regulation S-K promulgated under the Securities
Act of 1933, as amended (the "Meade SEC Documents" and the "Securities Act,"
respectively). As of their respective dates, the Meade SEC Documents complied in
all material respects with the requirements of the Securities Act and/or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case
may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such Meade SEC Documents. Except to the extent that information
contained in any Meade SEC Document has been revised or superseded by a
later-filed Meade SEC Document filed and publicly available prior to the date of
this Agreement, none of the Meade SEC Documents contains any untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Meade included in the Meade SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with United States generally accepted accounting principles ("US
GAAP") (except, in the case of unaudited statements, as permitted by Form 10-Q
of the SEC) applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present in all material
respects the consolidated financial position of Meade and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended. Except as set forth in the
Meade SEC Documents, and except for liabilities and obligations incurred in the
ordinary course of business consistent with past practice since the date of the
most recent consolidated balance sheet included in the Meade SEC Documents,
neither Meade nor any of its subsidiaries has any material liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
required by US GAAP, to be recognized or disclosed on a consolidated balance
sheet of Meade and its consolidated subsidiaries or in the notes thereto.
3.6 ACCURACY OF INFORMATION. None of the information
(including, but not limited to, all due diligence information and documentation
and financial statements) provided or to be supplied by or on behalf of Buyer to
Seller, its agents or representatives in connection with the transactions
contemplated by this Agreement, this Agreement or the negotiations leading up to
this Agreement did contain, or at the respective times such information is or
was delivered, will contain any materially untrue statement, or omitted or will
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. If any of such information at any time
subsequent to delivery and prior to the Closing becomes untrue or misleading,
Buyer will promptly notify Seller in writing of such fact and the reason for
such change. To the knowledge of Buyer, all documents required to be filed by
Buyer with any Governmental Entity previously, or in connection with this
Agreement or the transactions contemplated by this Agreement, will comply with
the provisions of applicable law. Meade has had no liability (actual, contingent
or accrued) that, in accordance with US GAAP applied on a consistent basis,
should have been shown or reflected in any of the financial statements presented
to Seller.
3.7 GOVERNMENTAL APPROVALS, CONSENTS. Except as set forth on
Schedule 3.7 hereto, no approval, authorization, consent, qualification, order
or registration, or any waiver of any of the foregoing, or any action of, or any
notice, statement or other communication is required to be filed with or
delivered to, any Governmental Entity or any other person or entity for the
execution and delivery by Buyer of this Agreement or the related documents or
the consummation by it of the transactions contemplated herein or therein.
3.8 CURRENT REPORTS. Subject to any permitted extensions
pursuant to the securities regulations and other applicable rules and
regulations, Meade represents and covenants that it will file, as and when
applicable, on a timely basis, all reports required to be filed by it under the
Exchange Act. If Meade is not required to file reports pursuant to the Exchange
Act, upon the request of the Shareholder, Meade shall make publicly available
the information specified in subparagraph (c)(2) of Rule 144 of the Securities
Act, and take such further action as may be reasonably required from time to
time and as may be within the reasonable control of Meade, to enable the
Shareholder to transfer the Meade Stock without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144
under the Securities Act or any similar rule or regulation hereafter adopted by
the SEC.
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ARTICLE IV
CONDITIONS TO CLOSING
4.1 GENERAL CONDITIONS. The obligations of the parties to
effect the Closing shall be subject to the following conditions:
(a) No Orders; Legal Proceedings. No Law (as defined below)
or Order (as defined below) shall have been enacted, entered, issued,
promulgated or enforced by any Governmental Entity or has been threatened to be
enacted and remains enacted at what would otherwise be the Closing Date, which
prohibits or restricts or would (if successful) prohibit or restrict the
transactions contemplated by this Agreement. "Law" means any law, rule,
regulation, or interpretation of any Governmental Entity and any Order. "Order"
means any decree, injunction, judgment, order, ruling, assessment or writ.
(b) Approvals. All permits and approvals required to be
obtained from any Governmental Entity shall have been received or obtained on or
prior to the Closing Date.
4.2 CONDITIONS OF BUYER'S OBLIGATIONS. The obligations of
Buyer under this Agreement are subject to the satisfaction or written waiver of
each of the following conditions:
(a) Representations and Warranties and Covenants of Seller.
The representations and warranties of Seller contained in Article II hereof
shall be true and correct as of the Closing Date with the same effect as though
made at such time; Seller shall have in all material respects performed all
obligations and complied with all covenants and conditions required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date, and Seller shall have delivered to Buyer closing certificates of Seller in
form and substance satisfactory to Buyer, dated the Closing Date and signed by
the Shareholder in his capacity as an individual and an officer of the Company
to such effect;
(b) Shareholder Employment Agreement. Prior to the Closing
Date, the Shareholder and Buyer shall have entered into a mutually satisfactory
Employment Agreement (the "Shareholder Employment Agreement") substantially in
the form of Exhibit B attached hereto;
(c) No Material Adverse Change. In Buyer's reasonable
determination, there shall not have been any material adverse change in the
business, commercial relationships, financial condition or prospects of the
Company prior to the Closing Date;
(d) Satisfactory Audit Completion. Buyer's independent
accountants, PricewaterhouseCoopers GmbH Wirtschaftsprufungsgesellschaft, shall
have satisfactorily completed the audits (the "Audits") of the Company's
statements of financial position at December 31, 1997 and 1998 and the results
of the operations and the cash flows for each of the three years in the period
ending December 31, 1998, and completed the consolidated financial statements
for the Company prepared in accordance with US GAAP;
(e) Approval and Permits. All required consents or approvals
of Governmental Entities, lenders, lessors and other third parties with respect
to material matters and compliance with any and all other legal, environmental
or contractual requirements for or preconditions to the execution and
consummation of this Agreement , each as specifically set forth on the Schedules
hereto as required pursuant to the provisions of this Agreement shall have been
obtained;
(f) Seller's Corporate Approval. Seller shall supply proof
satisfactory to Buyer that the transactions contemplated by this Agreement have
been approved, confirmed and ratified by Optik's partners. According to GmbH's
Articles of Association no prior approval of shareholders is required;
(g) Buyer's Corporate Approval. Buyer shall have obtained
all necessary corporate approval, confirmation and ratification for the
transactions contemplated by this Agreement (including, without limitation,
approval of Meade's Board of Directors);
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(h) Key Man Life Insurance. Because of Buyer's anticipated
dependence upon the Shareholder's services to the Company and that the loss of
such services could have a material adverse effect on the Company's business,
results of operations and financial condition, the Shareholder shall have taken
all necessary actions to allow Buyer to have obtained a policy of key man life
insurance (one year term for up to DM 3,500,000 coverage) with respect to the
Shareholder and such key man life insurance policy shall be available to Buyer
at reasonable rates given the Shareholder's age and gender; and
(i) Gabriele Bresser's Resignation. Prior to or concurrent
with the Closing Date, Gabriele Bresser shall have resigned as managing director
of the Company and shall no longer hold any position as an officer, director,
employee or agent of the Company.
(j) Optik Registration. Prior to or concurrent with the
Closing, Seller shall provide to Buyer the application for the respective
buyer's registration with the commercial register as a new partner of Optik.
(k) Shareholder Non-Competition. The Shareholder hereby
agrees that, in accordance with the Articles of Association of Optik, for two
years after the Shareholder's withdrawal as a partner of Optik, the Shareholder
shall be prohibited, and shall refrain, from engaging in any form of competition
(including, without limitation, any direct or indirect shareholdings, including
through trustees or subparticipations, in rival companies, and participation in
supervisory bodies of rival companies) against Seller, or any company within
Seller's group of affiliated companies, within the territory where the Company
currently does business.
(l) Withdrawals. All withdrawals which have been made by the
Shareholder from Optik in the period from January 1, 1999 until the Closing Date
and exceed the amount of DM 113,500 shall have been repaid by the Shareholder to
Optik on or prior to the Closing. Shareholder shall not, for any reason
whatsoever, have made any additional withdrawals. In addition, the Shareholder
agrees to repay Optik any amounts outstanding in any of the personal accounts
mentioned in Section 5 of Optik's partnership agreement.
4.3 CONDITIONS OF SELLER'S OBLIGATIONS. The obligations of
Seller to effect the Closing are subject to the satisfaction or written waiver
of each of the following conditions:
(a) Representations and Warranties and Covenants of Buyer.
The representations and warranties of Buyer herein contained shall be true and
correct as of the Closing Date with the same effect as though made at such time;
Buyer shall have in all material respects performed all obligations and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by it at or prior to the Closing Date, and Buyer shall have
delivered to Seller certificates of Buyer in form and substance satisfactory to
Seller, dated the Closing Date and signed by John C. Diebel and Brent W.
Christensen in their capacity as Chief Executive Officer and Chief Financial
Officer of Buyer, respectively, to such effect;
(b) Buyer's Corporate Approval. Buyer shall supply proof
satisfactory to Seller that the transactions contemplated by this Agreement have
been approved, confirmed and ratified by Buyer;
(c) Shareholder Employment Agreement. Prior to the Closing
Date, Buyer shall have provided to the Shareholder an Employment Agreement
substantially in the form of Exhibit B attached hereto; and
(d) Shareholder Guarantee Releases. Prior to or concurrent
with the Closing Date, Buyer shall provide satisfactory evidence to Seller of
the release of all personal guarantees of the Shareholder as set forth on
Schedule 4.3(d) with respect to any outstanding bank debt of the Company (the
"Shareholder Guarantee Releases").
ARTICLE V
COVENANTS WITH RESPECT TO THE COMPANY PRIOR TO CLOSING
5.1 PRESERVATION AND CONDUCT OF BUSINESS PRIOR TO CLOSING
DATE.
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(a) Preservation of Business. During the period beginning on
the date hereof and ending on the Closing Date, (a) the Shareholder and the
Company will each use its best efforts to preserve the business of the Company
and to preserve the goodwill of customers, suppliers and others having business
relations with the Company, (b) the Shareholder, the Company and Buyer will
consult with each other concerning, and the Shareholder and the Company each
will cooperate to keep available to Buyer, the services of the officers and
employees of the Company that Buyer may wish to have the Company retain and (c)
the Company shall pay all accounts payable in a timely manner in accordance with
stated terms thereof. During such time period, the Shareholder and the Company
will run the business of the Company in the ordinary course, with the care of a
good and prudent businessman and will not enter into any transactions which
could give rise to extraordinary profits, realization of hidden reserves or any
similar transactions.
(b) Conduct of the Business. The Shareholder and the Company
agree with and for the benefit of Buyer that without the prior consent in
writing of Buyer, as of the date hereof and until the Closing Date, the
Shareholder shall not permit the Company or cause the Company to: (a) incur or
agree to incur any obligation or liability (absolute or contingent) that
individually calls for payment by the Company of more than $US50,000 in any
specific case or $US100,000 in the aggregate, except in the ordinary course of
business and consistent with past practice and where the liability or obligation
is offset by a corresponding asset; or (b) engage in any transaction exceeding
$US100,000 out of the usual and ordinary course of business; or (c) make any
special or extraordinary payment, loan, guaranty or other extension of credit,
or enter into any commitment to make any loan, guaranty or other extension of
credit, to or for the benefit of any director, officer, employee, stockholder or
any of their respective Affiliates; or (d) except where required by applicable
law, grant any general or uniform increase in the rates of pay or benefits to
officers, directors or employees (or a class thereof) or any increase in salary
or benefits of any officer, director, employee or agent or pay any special bonus
to any person or entity, or enter into any new employment of any person or
entity with a salary in excess of $US50,000 per year, collective bargaining or
severance agreement; or (e) change or amend the Company's organization or
charter documents or bylaws; or (f) compromise or otherwise settle any claims,
or adjust any assertion or claim of a deficiency in Taxes of the Company(or
interest thereon or penalties in connection therewith), or file any appeal from
an asserted deficiency, except in a form previously approved by Buyer in
writing, or file or amend any Tax Return, in any case before furnishing a copy
to Buyer and affording Buyer an opportunity to consult with respect thereto.
5.2 ACCESS. Seller shall authorize and permit Buyer and its
representatives (including its independent accountants, counsel and
representatives of prospective financing institutions of Buyer) to have
reasonable access to all of the Company's properties, books, records, operating
instructions and procedures, Tax Returns and all other information with respect
to the Company's business as Buyer may from time to time reasonably request, and
to make copies of such books, records and other documents and to discuss the
business of the Company with such other persons or entities, including, without
limitation, Seller's directors, officers, employees, accountants, counsel,
suppliers, customers, distributors, sales representatives, and creditors, as
Buyer considers necessary or appropriate for the purposes of familiarizing
itself with the business of the Company, obtaining any necessary approvals of or
permits for the transactions contemplated by this Agreement and conducting an
evaluation of the business of the Company. Buyer shall also be entitled to
conduct or cause to be conducted (at its expense) on any real property such
soils and geological tests and environmental inspections, audits and tests
(including the taking of soils and ground water samples) and such structural and
other physical inspections as Buyer shall deem necessary or useful in connection
with the transactions contemplated by this Agreement.
5.3 NOTIFICATION OF CERTAIN MATTERS. The Shareholder and the
Company shall give prompt notice to Buyer, and Buyer shall give prompt notice to
the Shareholder and the Company, of (i) the occurrence, or failure to occur, of
any event that would be likely to cause any representation or warranty contained
in this Agreement to be untrue or inaccurate at any time from the date of this
Agreement to the Closing Date and (ii) any failure of Buyer, the Shareholder or
the Company, as the case may be, to comply with or satisfy, in any material
respect, any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement.
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5.4 PERMITS AND APPROVALS.
(a) The Shareholder and the Company each agree to cooperate
with Buyer's efforts to obtain all registrations, filings and applications,
requests and notices preliminary to all approvals and permits that may be
necessary, or which may be reasonably requested by Buyer, to consummate the
transactions contemplated by this Agreement.
(b) To the extent that the approval of a third party with
respect to any Material Contract is required in connection with the transactions
contemplated by this Agreement, the Shareholder and the Company each agree to
use their best efforts to obtain such approval prior to the Closing Date. In the
event that any such approval is not obtained prior to the Closing Date, the
Shareholder shall cooperate with Buyer to ensure that Buyer obtains the benefits
of each such contract.
5.5 LIQUIDATION OF OPTUS AND TRANSFER OF RIGHTS TO OPTIK.
Prior to the Closing Date, the shareholders of Optus GmbH ("Optus") shall have
resolved and commenced the liquidation and termination of all of the business
activities and operations of Optus, including, without limitation, the
appropriate registration with the commercial register and publication in the
Federal Gazette (Bundesanzeiger). All rights to use the "Optus" name and the
right to sell all the products sold by Optus prior to its liquidation shall have
been transferred to Optik free of cost. The Shareholder shall have agreed to
assume all liabilities relating to Optus following its liquidation. No
additional compensation shall be paid to the Shareholder in connection with the
actions of this Section 5.5 and all related transactions.
ARTICLE VI
TERMINATION OF OBLIGATIONS; SURVIVAL
6.1 TERMINATION OF AGREEMENT. Anything herein to the
contrary notwithstanding, this Agreement and the transactions contemplated by
this Agreement shall terminate if the Closing does not occur on or before the
close of business on November 30, 1999, unless extended by mutual consent in
writing of Buyer and Seller and otherwise may be terminated at any time before
the Closing as follows and in no other manner:
(a) Mutual Consent. By mutual consent in writing of Buyer
and Seller.
(b) Conditions to Buyer's Performance Not Met. By Buyer by
written notice to Seller if any event occurs or condition exists which would
render impossible the satisfaction of one or more conditions to the obligations
of Buyer to consummate the transactions contemplated by this Agreement as set
forth in Section 4.1 or 4.2.
(c) Conditions to Seller's Performance Not Met. By Seller by
written notice to Buyer if any event occurs or condition exists which would
render impossible the satisfaction of one or more conditions to the obligation
of Seller to consummate the transactions contemplated by this Agreement as set
forth in Section 4.1 or 4.3.
(d) Inaccurate and Withheld Information. By Buyer if (i) any
material information (whether or not in writing) delivered by or on behalf of
Seller to Buyer is inaccurate or incomplete in any material respect, or (ii)
Seller withholds material information from or denies access to Buyer in any
material respect.
(e) Material Breach. By Buyer or Seller if there has been a
material misrepresentation or other material breach by the other party (or, in
the case of Buyer, by the Shareholder or the Company) in its representations,
warranties and covenants set forth herein; provided, however, that if such
breach is susceptible to cure, the breaching party shall have 10 business days
in which to cure such breach after receipt of notice from the other party of its
intention to terminate this Agreement if such breach continues.
6.2 EFFECT OF TERMINATION. In the event that this Agreement
shall be terminated pursuant to Section 6.1, all further obligations of the
parties under this Agreement shall terminate without further liability of any
party to another; provided that the obligations of the parties contained in
Section 6.3, Section 8.1, Section 8.4
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and Section 8.5 shall survive any such termination. A termination under Section
6.1 shall not relieve any party of any liability for a breach of, or for any
misrepresentation under this Agreement, or be deemed to constitute a waiver of
any available remedy (including specific performance if available) for any such
breach or misrepresentation.
6.3 EXPENSES.
(a) In the event this Agreement or the transactions
contemplated hereby is (i) terminated by Buyer pursuant to Section 6.1(b)
because an event occurs or condition exists which renders impossible the
satisfaction of any of the conditions set forth in Sections 4.2(a), (b), (f),
(i), (k) and (l), or (ii) is terminated by Seller pursuant to Section 6.1(c)
because an event occurs or condition exists which renders impossible the
satisfaction of the condition set forth in Sections 4.3(a) and (b), the
nonterminating party shall promptly (and in any event within 10 business days
after such event) pay the terminating party, by wire transfer of immediately
available funds to an account designated by the terminating party, an amount
equal to all Expenses of the terminating party (as defined in Section 6.3(b));
provided, however, that (i) if the Agreement is terminated for nonsatisfaction
of any of the conditions set forth in Sections 4.2(a) or 4.3(a), such event must
have been caused by the negligence or lack of good faith of the Shareholder or
Buyer (as applicable) and (ii) in no event shall the nonterminating party be
required to pay to the terminating party an amount in excess of US$300,000 in
connection with this Article VI.
(b) "Expenses" shall mean all out-of-pocket expenses and
fees (including but not limited to all fees, expenses and disbursements of
counsel, accountants, investment bankers and other representatives) incurred by
the terminating party or its Affiliates or on their behalf in connection with
(i) the transactions contemplated by this Agreement (including in the case of
Buyer, commitment fees of banks and other lenders or financial institutions and
all other fees and expenses relating to any proposed financing by Buyer) and
(ii) the negotiation, preparation, execution or performance of this Agreement
and any related due diligence investigations.
(c) The notarial fees for recording this Agreement shall be
borne 50% each by the Shareholder and Buyer. The notarial fees for recording the
Notarial Deed attached hereto as Exhibit A shall be borne by Buyer.
(d) Except as otherwise provided in this Section 6.3, Seller
and Buyer shall each pay their own Expenses incident to the negotiation,
preparation, execution and performance of this Agreement and the transactions
contemplated hereby.
ARTICLE VII
LEGAL CONSEQUENCES/INDEMNIFICATION
7.1 LEGAL OBLIGATIONS OF SELLER. In the event of any Loss
(as defined below) of Buyer, directly or indirectly, as a result of, or based
upon or arising from: (i) any inaccuracy in or breach or nonperformance of any
of the representations, warranties, covenants or agreements made by Seller in or
pursuant to this Agreement; (ii) any nonfulfillment of any obligation incurred
by Seller pursuant to this Agreement; and/or (iii) any claim by a current or
former employee of the Company, if the facts upon which such claim is based
occurred prior to the Closing Date, including but not limited to, claims
alleging wrongful discharge, employment discrimination and wage and hour
violations, Seller shall promptly (and in any event within 10 days) cure such
inaccuracy, breach, claim or nonperformance so as to put Buyer in the same
position as if the relevant representation and warranty had been correct and
complete or, as the case may be, as if the relevant obligation, breach, claim
and/or nonperformance had been fulfilled or remedied. "Loss" means any action,
cost, damage, disbursement, expense, liability, loss, deficiency, diminution in
value, obligation, penalty or settlement of any kind or nature, whether
foreseeable or unforeseeable, including but not limited to, interest or other
carrying costs, penalties, legal (to the extent contemplated in Section 8.4
hereof), accounting and other reasonable professional fees and expenses incurred
in the investigation, collection, prosecution and defense of claims and amounts
paid in settlement, that may be imposed on or otherwise incurred or suffered by
the specified person or entity.
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7.2 LEGAL RECOURSE OF BUYER. If Seller does not fulfill the
duties set forth in Section 7.1 hereof or if the fulfillment of these duties is
not possible, Buyer may demand monetary compensation or terminate this Agreement
as provided in Section 6.1. Buyer's right to demand compensation in connection
with this Section 7.2 shall be excluded in the event Buyer has actual knowledge
of Seller's incorrect or incomplete fulfillment of said obligations due to their
specific disclosure (i) in the Schedules hereto, (ii) in the documents listed in
Schedule 7.2 hereto provided true and correct copies of such documents have been
provided to Buyer prior to the date hereof or (iii) in the audited financial
statements of Seller referred to in Section 4.2(d) above. It is expressly agreed
between Buyer and Seller that Sections 460 and 464 of the German Civil Code
(Burgeliches Gesetzbuch) as well as Section 377 of the German Commercial Code
(Handelsgesetzbuch) shall not apply notwithstanding the provisions stated in (i)
to (iii) above.
7.3 LEGAL OBLIGATIONS OF BUYER. In the event of any Loss of
Seller, directly or indirectly, as a result of, or based upon or arising from:
(i) any inaccuracy in or breach or nonperformance of any of the representations,
warranties, covenants or agreements made by Seller in or pursuant to this
Agreement; and/or (ii) any nonfulfillment of any obligation incurred by Seller
pursuant to this Agreement, Buyer shall promptly (and in any event within 10
days) cure such inaccuracy, breach, claim or nonperformance so as to put Seller
in the same position as if the relevant representation and warranty had been
correct and complete or, as the case may be, as if the relevant obligation,
breach, claim and/or nonperformance had been fulfilled or remedied.
7.4 LEGAL RECOURSE OF SELLER. If Buyer does not fulfill the
duties set forth in section 7.4 hereof or if the fulfillment of these duties is
not possible, Seller may demand monetary compensation or terminate this
Agreement as provided in Section 6.1. Seller's right to demand compensation in
connection with this Section 7.4 shall be excluded in the event Seller has
actual knowledge of Buyer's incorrect or incomplete fulfillment of said
obligations due to their specific disclosure (i) in the Schedules hereto, (ii)
in the documents listed in Schedule 7.4 hereto provided true and correct copies
of such documents have been provided to Seller prior to the date hereof or (iii)
in the Meade SEC Documents. It is expressly agreed between Buyer and Seller that
Sections 460 and 464 of the German Civil Code (Burgeliches Gesetzbuch) as well
as Section 377 of the German Commercial Code (Handelsgesetzbuch) shall not apply
notwithstanding the provisions stated in (i) to (iii) above.
7.5 CERTAIN TAX MATTERS.
(a) Promptly after the Closing, but in no case later than 30
days after the Closing, the Shareholder and Buyer shall cause
PricewaterhouseCoopers GmbH Wirtschaftsprufungsgesellschaft to prepare and
deliver to the parties an interim balance sheet as of the Closing Date of Optik
for tax purposes in accordance with statutory German GAAP applied on a basis
consistent with past practice (the "Interim Balance Sheet"). Unless either party
objects thereto in writing within 14 business days of such delivery date, the
Interim Balance Sheet shall be binding on both parties. If either party objects
in due time, such party shall be entitled to cause the Interim Balance Sheet to
be reviewed and, if necessary, amended by Wollert-Elmendorff Deutsche
Industrie-Treuhand GmbH Wirtschaftsprufungsgesellschaft (WEDIT), Dusseldorf with
binding effect on the parties. The accounting firm shall be bound by the
principles described above. Each party shall be responsible for 50% of the cost
of the preparation of the Interim Balance Sheet and any review or amendment
thereof. In the unlikely event that the German tax authorities do not accept the
allocation of 1999 profits made to the Shareholder in the Interim Balance Sheet
and levy income taxes for 1999 profits of the Company on the Shareholder on
another basis, the Shareholder and Buyer will put one another in the same
position in which they would have been had the authorities accepted the profit
allocation made in the Interim Balance Sheet.
(b) The Shareholder shall have the responsibility for, and
the right to control, at the Shareholder's expense, the filing or audit of any
Tax Return relating to periods ending on or prior to December 31, 1998 and to
participate in the filing or audit of any Tax Return relating to the period
ending December 31, 1999; provided, however, that all final decisions as to the
filing of such December 31, 1999 Tax Return shall be determined by Buyer after
having consulted with the Shareholder. Buyer shall have the right, directly or
through its designated representatives, to review in advance and comment upon
all submissions made in the course of any filings, audits or appeals thereof to
any Governmental Entity relating to periods ending on or prior to the Closing
Date. The Shareholder shall himself bear responsibility for all personal income
tax attributable to the Shareholder with respect to any periods ending on or
prior to December 31, 1998; the Shareholder shall not make any further
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withdrawals from Optik for such purpose. Buyer agrees to promptly return to the
Shareholder any amount refunded directly to the Company for the benefit of the
Shareholder or the Company after the Closing Date resulting from an excess
payment of Taxes by the Shareholder or the Company for any period ending on or
prior to December 31, 1998. Notwithstanding the above, any such refund that is
paid directly to the Company for the benefit of the Company shall only be
returned or paid to the Shareholder to the extent such return exceeds
US$100,000, after which, all of such refund, including this threshold amount,
shall be returned to the Shareholder as set forth above.
(c) The Shareholder agrees to indemnify, defend and hold
harmless Buyer against (i) any deficiencies in any Tax payable by or on behalf
of Seller or any or its Affiliates arising from any audit by any taxing agency
or authority or otherwise with respect to any period ending on or prior to the
Closing Date; provided, however, that, with respect to trade tax
("Gewerbesteuer") payable for the 1999 calendar year, as the Company has made
prepayments as of the date hereof in the amount of DM 220,000.00 and will be
caused by Buyer following the Closing Date to make two further payments of an
additional DM 220,000.00 in the 1999 calendar year, the Shareholder shall not be
liable for any 1999 trade tax levied against the Company in excess of DM
440,000.00, (ii) Taxes of any member of a consolidated or combined tax group of
which Seller or any of its Affiliates is, or was at any time, a member or (iii)
any claim or demand for reimbursements or indemnification resulting from any
transfer by Seller prior to the Closing of any Tax benefits or credits to any
other person or entity. The indemnification obligation under (i) shall not apply
to the extent additional taxes levied against the Company or Buyer in one tax
period are compensated for in subsequent tax periods by corresponding amounts of
tax reductions ("Phase Displacement" - "Phasenverschiebung").
(d) The Shareholder and Buyer agree that although the
Shareholder shall repay all withdrawals made in 1999 as provided for in Section
1.1(c) hereof and shall not make any further withdrawals prior to the Closing
Date, the Shareholder shall himself bear all responsibility for all personal
income taxes arising from Optik and attributable to the Shareholder for the
period from January 1, 1999 until the Closing Date, which are affected by (i)
the tax balance sheet as at December 31, 1998 and the Interim Balance Sheet to
be prepared by the Shareholder and (ii) the purchase price. Buyer shall in turn
itself bear responsibility for all income taxes arising from Optik and
attributable to Buyer for the period from the day after the Closing Date until
December 31, 1999, which are affected by the Interim Balance Sheet and by the
tax balance sheet as at December 31, 1999 to be prepared by Buyer and by the
allocation of the purchase price to the assets of Optik. Consequently, neither
party shall have a claim against the other party for reimbursement of any income
tax benefits or detriments relating to any period of the 1999 fiscal year ending
on or after the Closing Date.
(e) The Shareholder shall bear responsibility for any
personal income tax arising out of the transfer of the Interests and the Shares.
Buyer shall bear any US taxes incurred by Buyer in connection with issuing the
Meade Stock referred to in Section 1.1 or with the acquisition of the Interests
and the Shares. The Shareholder shall have no responsibility to pay the real
estate transfer tax (Grunderwerbsteuer) which may be triggered in connection
with the consummation of the transaction and which shall be settled by the
Company and/or Buyer.
7.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in or made pursuant to this Agreement
shall survive the Closing and remain in full force and effect and subject to the
legal consequences/indemnification provisions of Article VII hereof until
expiration on the second anniversary of the Closing Date, except that (i) the
representations and warranties contained in Section 2.2 Capitalization shall
survive the Closing and continue for a period of ten years, the representations
and warranties of Section 2.4 Compliance with Law and Taxes shall survive the
Closing and shall continue for three months after the existence of a final,
unappealable notice of assessment of the respective taxes and the respective
assessment period (this does not apply for tax fraud, fiscal evasion or failure
to take due care); the representations and warranties contained in Section 2.13
Environmental Compliance shall survive the Closing and continue for a period of
five years; the representations and warranties contained in Section 2.19 Year
2000 Compliance shall survive the Closing and continue until December 31, 2001
and (ii) if a claim has been asserted or notice is given under Article VII
hereof with respect to any representation or warranty prior to the applicable
expiration date, such representation or warranty shall continue indefinitely
until six months after the date of its final resolution; provided, however, that
if actual notice is given by the party indemnified hereunder and such party does
not
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commence legal action for the resulting claim within six months of the receipt
of such actual notice, then the applicable representation or warranty shall
survive only for the time period set forth in (i) above.
7.7 PROCEDURE.
(a) Notice. Any party seeking indemnification with respect
to any Loss or Losses (the "Indemnified Party") shall give notice to the party
required to provide indemnity hereunder (the "Indemnifying Party") on or before
the date specified in Section 7.5.
(b) Defense. If any claim, demand or liability is asserted
by any third party against any Indemnified Party, the Indemnifying Party shall
upon the written request of the Indemnified Party, defend any actions or
proceedings brought against the Indemnified Party in respect of matters embraced
by the indemnity. Counsel for the Indemnifying Party shall be agreed upon in
writing by the Indemnifying Party and the Indemnified Party. If, after a request
to defend any action or proceeding, the Indemnifying Party neglects to defend
the Indemnified Party, a recovery against the latter suffered by it in good
faith, is conclusive in its favor against the Indemnifying Party; provided,
however, that, if the Indemnifying Party has not received reasonable notice of
the action or proceeding against the Indemnified Party, or is not allowed to
control its defense, judgment against the Indemnified Party is only presumptive
evidence against the Indemnifying Party.
7.8 NOTICE BY THE SHAREHOLDER. The Shareholder agrees to
notify Buyer of any liabilities, claims or misrepresentations, breaches or other
matters covered by this Article VII upon discovery or receipt of notice thereof
(other than from Buyer), whether before or after Closing.
7.9 NOT EXCLUSIVE REMEDY. Except as otherwise specifically
stated herein, this Article VII shall not be deemed to preclude or otherwise
limit in any way the exercise of any other rights or pursuit of other remedies
for the breach of this Agreement or with respect to any misrepresentation. Buyer
shall, however, not have and shall therefore not be able to assert any claims
against the Shareholder under the representation letter of the Shareholder to be
executed on or about July 15, 1999 to PricewaterhouseCoopers GmbH
Wirtschaftsprufungsgesellschaft or under certain rules of statutory German Law
denominated as "culpa in contrahendo" and "positive Vertragsverletzung."
7.10 LIMITATIONS ON SHAREHOLDER AND BUYER LIABILITY.
Notwithstanding any other provision of this Agreement, neither the Shareholder
on the one hand, nor Buyer on the other, shall have any indemnification
obligations or liability to the other under this Article VII until the total of
all Losses exceeds US$100,000 (the "Threshold Amount") and thereafter Buyer and
Shareholder shall be liable with respect to all Losses indemnified under this
Article VII (including the Threshold Amount); provided, however, that neither
Buyer nor Shareholder shall have indemnification obligations or liability to the
other under this Article VII in excess of the Purchase Price. In the event that
Shareholder shall be required to pay to Buyer under this Article VII an amount
in excess of US$5,000,000, then to the extent Shareholder continues to own,
directly or indirectly, the Meade Stock, any such amount in excess of
US$5,000,000 owed to Buyer shall be satisfied by Shareholder by delivering to
Buyer that number of shares of Meade Stock necessary to equal the amount owed to
Buyer in excess of the US$5,000,000 (all Meade Stock used to satisfy
indemnification obligations hereunder shall be valued at the Closing Price Per
Share).
ARTICLE VIII
GENERAL
8.1 CONFIDENTIALITY. Buyer on the one hand, and Seller on
the other, will treat all information concerning the other furnished, or to be
furnished, by or on behalf of the other, (collectively, the "Information"), in
accordance with the provisions of this Section 8.1. The Information will be used
solely for the purpose of evaluating the transactions contemplated by this
Agreement, and will be kept confidential by the parties and their respective
officers, directors, employees, representatives, agents, and advisors; provided
that (i) any of such Information may be disclosed to such party's officers,
directors, employees, representatives, agents, and advisors who need to know
such Information for the purpose of evaluating the transactions contemplated by
this Agreement, (ii) any disclosure of such Information may be made after
receipt of the written consent of the other party, and (iii) such Information
may be disclosed if required by law or regulation. If the transactions
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contemplated by this Agreement are not consummated, the parties will return to
the other or destroy all material containing or reflecting the Information and
will not retain any copies, extracts, or other reproductions thereof.
8.2 AMENDMENTS. Any amendment of this Agreement, including
this Section, must be in writing and executed by the party against whom the
amendment is sought to be enforced.
8.3 NOTICES. All communications made in connection with this
Agreement or the documents relating hereto shall be in writing and shall be
deemed to have been duly given on the date of delivery, if personally delivered,
or if addressed as set forth on the signature page hereof, three days after
being sent, when sent by professional overnight courier service with delivery
confirmed. The addresses may be changed by means of a notice given in accordance
with this Section.
8.4 EXPENSES AND ATTORNEYS' FEES. Except as provided in
Section 6.3, Seller and Buyer shall each pay their own Expenses incident to
negotiation, preparation and performance of this Agreement and the transactions
contemplated herein, including but not limited to their respective accountant
and counsel Expenses. In the event of any action for the breach of this
Agreement or misrepresentation by any party hereunder, the prevailing party
shall be entitled to reimbursement of all its legal expenses and costs according
to Section 91 of the German Civil Code of Procedure; provided, however, the
reimbursement of the costs for legal counsel will include and be limited to an
amount up to three times the statutory fee according to the Federal Code of
Lawyers' Fees (Bundesgebuhrenordnung fur Rechtsanwalte - BRAGO) and reasonable
out-of-pocket expenses for the information of a foreign party including at least
one informational trip of up to two officers of such party to Germany.
8.5 GOVERNING LAW; CHOICE OF FORUM; CONSENT TO PERSONAL
JURISDICTION. This Agreement shall be governed by, and construed in accordance
with, the laws of the Federal Republic of Germany and the place of jurisdiction
shall be Dusseldorf.
8.6 EXCHANGE RATE/PAYMENTS. The exchange rate to be used to
calculate all post-Closing Date valuations, payments, offsets or adjustments
shall be the exchange rate for the Deutsche Mark against the US Dollar as
published in the Key Currency Cross Rate table in the Wall Street Journal on the
date such valuation, payment, offset or adjustment is made (the "Adjustment Date
Exchange Rate"). All payments to be made pursuant to the terms of this Agreement
shall be made in U.S. Dollars.
8.7 ENTIRE AGREEMENT. This Agreement, together with the
Shareholder Employment Agreement, contains all the terms and conditions agreed
upon by the parties relating to the subject matter hereof and thereof and
supersedes any and all prior agreements, negotiations and communications of the
parties, whether oral or written, respecting that subject matter.
8.8 SUCCESSORS AND ASSIGNS. Neither this Agreement nor any
rights or obligations under it are assignable without the prior written consent
of Buyer and Seller.
8.9 SEVERABILITY. If any provision of this Agreement is held
to be unenforceable, it shall be adjusted rather than voided, if possible, to
achieve the intent of the parties to the extent possible. In any event, all
other provisions of this Agreement shall be deemed valid and enforceable to the
extent possible.
8.10 FURTHER ASSURANCES. The parties agree to execute such
other documents and perform such further acts as may be necessary or desirable
to carry out the purposes of this Agreement and the documents relating hereto.
8.11 COUNTERPARTS. not applicable
8.12 PUBLICITY AND REPORTS. Seller and Buyer shall coordinate
all publicity relating to the transactions contemplated by this Agreement and no
party shall issue any press release, publicity statement or other public notice
relating to this Agreement, or the transactions contemplated by this Agreement,
without obtaining the prior consent of Seller and Buyer except to the extent
that a particular action is required by
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applicable law in which case the party issuing the press release, publicity
statement or other public statement shall give notice to the other party.
8.13 EXCLUSIVE DEALING. Prior to the termination or
expiration of this Agreement, neither Seller nor any of its Affiliates shall,
directly or indirectly, conduct negotiations with, or solicit, accept or approve
any bids from, any firm, person, corporation or other entity relating to the
sale or transfer of the Company, including without limitation a merger or sale
of the assets or the Shareholder's interests in the Company, or any investment
in the Company. During such time period, Seller will promptly notify Buyer of
the details of any unsolicited inquiry, proposal or offer and will not provide
any information to anyone with respect to such inquiries, proposals or offers.
8.14 CONTROLLING VERSION. In the event this Agreement is
translated into another language, this English version of this Agreement shall
govern and control the terms of the transactions contemplated hereby.
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This notarial deed, its Exhibits A and B and all Schedules attached to this deed
were read to the individuals present, except for page 27 of Schedule 2.14 and
Schedule 7.4.
The individuals present waived their right to have such Schedules, to which they
hereby refer (verweisen) and which are attached to this deed, read to them.
Instead, such Schedules were presented to them for their review and signing.
Thereafter, the individuals present approved this deed including all of its
Exhibits and Schedules and signed this deed with me, the notary, in their own
hands as follows:
/s/ Thorsten Haeberlin
/s/ Rudolf Bresser
/s/ Dr. Zimmermann, Notary