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EXHIBIT 99.3
EXHIBIT 5(a)
The Sellers hereby represent and warrant to the Purchasers that the following
Representations and Warranties pertaining to the Companies are true and correct
on the date of this Agreement and shall survive the date of this Agreement.
The Representations and Warranties shall be qualified only by reference to those
matters specifically disclosed in the Disclosure Letter and shall not apply to
these matters.
Except if stated expressly otherwise, all Representations and Warranties apply
- -mutatis mutandis- to each of Roxell N.V., Roxell Inc. and Roxell Ltda., but not
to V.R. Equipment Ltd., for which specific representations and warranties will
apply. For the purposes of these representations and warranties, "Companies"
means collectively the following companies: Roxell N.V., Roxell Inc. and Roxell
Ltda. For Roxell Inc. some additional specific representations and warranties
according to US law apply.
Every reference to the knowledge, information, awareness or conviction of the
Sellers with respect to any of these Representations and Warranties shall mean
that the Sellers have reviewed, examined and investigated the subject matter of
such Representation and Warranty in the way a diligent and prudent Seller
("bonus pater familias") would have or ought to have done.
I. REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANIES
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1. CORPORATE AND STOCK REPRESENTATIONS
-----------------------------------
1.1. CAPITAL OF THE COMPANIES
------------------------
The registered capital of the Companies is as follows:
Roxell N.V.: BEF 6,796,000, represented by 49,460 bearer shares.
Roxell Inc.: USD 2,000, represented by registered shares numbered from
1 through 2,000, of which 2,000 are owned by Roxell N.V.
Roxell Ltda: 328,950 R$, represented by registered and numbered from 1
through 328,950, of which 263,160 are owned by Roxell N.V.
V.R. Equipment Ltd.: 15,000,000 Rupees, represented by registered
shares and numbered from 1 through 1,500,000, of which 338,000 are
owned by Roxell N.V.
The capital shares of the Companies are duly and validly issued in
compliance with all applicable laws and regulations and fully paid in,
and constitute all of the issued capital shares in the Companies.
The Companies have not issued any other shares, bonds, convertibles,
profit certificates, subscription rights or similar instruments. No
options, warrants, calls, agreements or commitments of any kind
obligating the Companies to issue any equity interests or other stock
exists. The Companies are not obligated or committed to purchase,
redeem or otherwise acquire any of its outstanding shares or options
relating thereto.
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1.2. OWNERSHIP OF THE SHARES OF THE COMPANIES AND OF VR EQUIPMENT LTD.
-----------------------------------------------------------------
The Sellers are on the date hereof the lawful holder and registered
owner of 49,460 shares in the Company, which is the lawful holder and
registered owner of: 2,533 shares in the Company (the shares in the
Company are referred to as the "Shares"), , 2,000 shares in Roxell
Inc., 263,160 shares in Roxell Ltda and 338,000 shares in V.R.
Equipment Ltd. All the above shares are owned free and clear of any
liens, pledges, encumbrances, "usufruit/vruchtgebruik", claims,
options, warrants, restrictions of any kind and nature whatsoever
affecting any of the rights attached to such shares or rights to
transfer the shares.
All transfers of the shares, whereto the Sellers were a party and which
occurred prior to the Closing Date, were effected legally, validly and
in good faith and no claims whatsoever exist or are threatened with
respect to any such transfer.
The Sellers have full legal right, power and authority to enter into
this Agreement and to convey and transfer the Shares to the Purchasers.
The conveyance of the Shares to the Purchasers transfers valid title
thereto including the full right to receive dividends, interim
dividends and other payments with respect to the Shares, free and clear
of any pledges, liens, encumbrances, "usufruit/vruchtgebruik", claims,
options, restrictions affecting any of the rights attached to such
Shares.
Except as set forth in Section 1.2 of the Disclosure Letter, no
shareholders' agreements or similar documents regarding the Shares
exist. The transfer of the Shares to the Purchasers will not constitute
an infringement of any provision of the articles of association of the
Companies, any laws or regulations or any obligation of the Sellers,
whether by contract or otherwise assumed.
For VR Equipment Ltd., only the following specific Representations and
Warranties apply:
(i) VR Equipment Ltd. is in all respects duly incorporated, validly
existing for an indefinite duration, and duly registered under the
applicable law;
(ii) the financial statements and documents of VR Equipment Ltd. are
audited by S.R. Batliboi & Co, members of Ernst & Young
International.
1.3. INTERESTS IN OTHER COMPANIES
----------------------------
The Company has no interest directly or indirectly in any company,
association or business organisation, other than:
- 100 % in Roxell Inc.
- 80 % in Roxell Ltda (Brazil)
- 22.5 % in V.R. Equipment Ltd (India).
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The Sellers have no interest directly or indirectly in any competing
company, association or business organisation other than those set out
in Section 1.3 of the Disclosure Letter.
1.4. INCORPORATION, ORGANIZATION AND EXISTENCE OF THE COMPANIES
----------------------------------------------------------
The Companies are in all respects duly incorporated, validly existing
for an indefinite duration, and duly registered, under the laws of
Belgium or any other applicable law.
The Companies have all requisite corporate power to own their assets
and to carry out their business as it is now being conducted, and said
business has been conducted and is being conducted in conformity with
the Companies' articles of association and all applicable laws and
regulations.
No action is pending or threatened to declare the Companies bankrupt
and the Companies have not filed or commenced any proceedings for
judicial or extra-judicial arrangement or settlement with their
creditors, nor is there any moratorium, liquidation or receivership
procedure pending or threatened against them.
The Companies are not a party to any merger.
1.5. CORPORATE DOCUMENTS
-------------------
The Sellers have delivered to the Purchasers true and complete copies
of the latest version of the articles of association and copies of the
certificate of registration (with latest updates) with the "registre du
commerce/ handelsregister" of the Companies or any similar institution,
in the form set forth in Section 1.5 of the Disclosure Letter.
All accounts, books, ledgers, financial and other records of whatever
kind, of the Companies to be maintained by law and according to good
business practices (including books and records maintained for tax
purposes) are kept at the Companies' offices, have been fully, properly
and accurately maintained and contain due and accurate records of all
matters required to be entered therein, and reflect truly and
accurately all transactions involving the businesses and affairs of the
Companies.
The minute books of the Companies contain complete and accurate records
of all shareholders' and directors' meetings and of all actions taken
by such shareholders and directors. The meetings referred to in such
minute books were duly and validly called and held, and the resolutions
appearing in such minute books were duly and validly adopted. The
signatures appearing on all documents contained in such minute books
are the true signatures of the persons purporting to have signed.
The Sellers have delivered to the Purchasers true and complete copies
of the updated share registers of the Companies, in the form set forth
in Section 1.5 of the Disclosure Letter, or true and complete lists of
the holders of bearer shares of the Companies. The share registers of
the Companies or the list of holders of bearer shares accurately
reflect the number of shares held by each shareholder as well as the
correct identity and address of the latter.
All particulars, resolutions and other documents required to be filed
or published in respect of the Companies have been properly filed or
published.
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1.6. REPRESENTATION AND BANKS
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Set forth in Section 1.6 of the Disclosure Letter are:
(a) the names and addresses of all persons holding a power of
attorney on behalf of the Companies and the subject, scope and
extent of such power; and
(b) the names and addresses of all banks and other financial
institutions in which the Companies have an account, deposit or
safe deposit box, with the names and addresses of all persons
authorised to draw on said accounts or deposits or who have
access to such boxes. All delegations of power and withdrawal of
same have been duly filed with the Register of Commerce and other
appropriate authorities.
2. ASSETS
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2.1. OWNERSHIP OF FIXED AND CURRENT ASSETS
-------------------------------------
The Companies are the owner free and clear of all mortgages, pledges,
encumbrances, claims, options, preemption rights, restrictions,
easements ("servitude/ erfdienstbaarheid"), classification as a
monument and commitments of any kind of all the land, buildings,
installations, machinery, interests in other enterprises, accounts
receivable, cash and all other fixed and current assets ("actifs
immobilises et actifs circulants/vaste activa en vlottende activa"),
including but not limited to raw materials, in process products and
finished products that they presently own.
There is no pledge on the assets ("gage sur fonds de commerce/pand op
handelszaak") of the Companies to the benefit of any third party. There
are no assets which are secured by article 20.5 of the Belgian Mortgage
Law of December 16, 1851 ("voorrecht van de onbetaalde verkoper").
2.2. OPERATING CONDITION OF TANGIBLE ASSETS
--------------------------------------
Subject to ordinary wear and tear and obsolescence, the tangible assets
("immobilisations corporelles/materiele vaste activa") of the Companies
are in good operating condition and repair, fit and useable for the
purpose for which they are being utilized. The Sellers know of no
reason why the Purchasers may not anticipate full utilization of said
assets for the balance of the lifetime for which they were designed,
manufactured, built and/or installed.
2.3. INVENTORY
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All inventories, i.e. raw materials, in process products, finished
products and returned products, carried by the Companies, and reflected
on the Annual Accounts, the Estimated Closing Balance Sheet and the
Adjusted Closing Balance Sheet, are or will be valued at the lower of
cost or market on a first-in-first-out basis consistent with Belgian
GAAP. The Company has adequate obsolescence reserves to cover inventory
items which have a market value lower than cost.
Except to the extent of inventory reserves reflected in the Estimated
Closing Balance Sheet and the Adjusted Closing Balance Sheet, the items
included in said inventories
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are normal items of inventory suitable and merchantable at customary
prices for the filling of orders in the normal course of business.
2.4. REAL ESTATE
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Set forth in Section 2.4 of the Disclosure Letter is a true, accurate
and complete list of all real estate owned by the Companies. The
Companies own such real estate free and clear of any mortgages,
promises to mortgage; securities, easements, classification as a
monument or any restrictions. The Companies do not own or lease any
real estate other than as set forth in Section 2.4 of the Disclosure
Letter.
3. INTELLECTUAL PROPERTY
---------------------
3.1. LIST OF INTELLECTUAL PROPERTY
-----------------------------
At the latest at the Closing Date, the Sellers will deliver to the
Purchasers in Section 3.1. of the Disclosure Letter a true and complete
list of all trademarks, service marks, trade names, corporate names,
designs and logos, patents and copyrights, whether registered or not,
owned by the Companies, whether used or not, and of all registrations
and applications for registration (the "Proprietary Rights"), and of
all license, distributorship, franchise or other agreements (as a
licensor) relating to these Proprietary Rights.
At the latest at the Closing Date, the Sellers will deliver to the
Purchasers in this same Section 3.1. of the Disclosure Letter also a
true and complete list of all trademarks, service marks, trade names,
corporate names, designs and logos, patents and copyrights, whether
registered or not, licensed by the Companies as a licensee, whether
used or not, and of all registrations and applications for registration
(the "Licensed Rights"), and of all license, distributorship, franchise
or other agreements (as a licensor) relating to the Licensed Rights.
3.2. OWNERSHIP, RIGHT TO USE AND REGISTRATION
----------------------------------------
The Companies are the sole and exclusive owner of, and have the sole
and unrestricted right to use all of the Proprietary Rights . The
Companies have the right to assign any interest or rights held in any
such Proprietary Rights. The Companies and Sellers represent and
warrant that they have obtained in all material respects all rights and
transfers of rights, including from employees, agents, independent
consultants, clients, subcontractors and contractors, in such
Proprietary Rights to their benefit.
All registrable Proprietary rights, Licensed Rights and Intellectual
Property have been duly registered in all material respects with all
appropriate domestic, foreign or international administrative agencies.
Each such registration is current and valid in all material respects
and no cancellation or invalidity proceedings have been initiated or
threatened with respect to any registration.
Each license, distributorship, franchise or other agreements referred
to in paragraph 3.1. is valid, existing and in force in all material
respects, and there has not been, and the Sellers do not know of any
basis for, any claim of breach or default, with respect to such
agreements.
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3.3. RIGHTS OF THIRD PARTIES
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The Companies are not infringing upon or otherwise violating the rights
of any third party with respect to any of the Proprietary rights,
Licensed Rights and Intellectual Property. There are no claims or
proceedings pending or threatened, which would challenge the rights of
the Companies in respect of the Proprietary rights, Licensed Rights and
Intellectual Property. No third party is infringing upon or otherwise
violating the rights of the Companies with respect to any of the
Proprietary rights, Licensed Rights and Intellectual Property.
By using the Intellectual Property they use, by pursuing their business
and in any other manner, the Companies and Sellers warrant and
guarantee that they are not infringing upon or otherwise violating the
rights of any third party with respect to any trademarks, service
marks, corporate names and logos, trade names, patents, copyrights,
software rights, licenses and trade secrets. No proceedings have been
instituted or threatened, nor has any claim been made alleging any such
infringement or violation.
4. AGREEMENTS AND COMMITMENTS
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4.1. LIST OF AGREEMENTS AND COMMITMENTS
----------------------------------
Set forth in Section 4.1. of the Disclosure Letter is a true and
complete list of all material agreements and commitments of any kind
(other than license agreements related to intellectual property,
insurance policies, labor agreements, contracts with trade unions and
collective bargaining agreements referred to respectively in Sections
3.1., 5.1. and 6.1. of these Representations and Warranties) to which
the Companies are a party or by which they or any of their assets may
be bound. At the latest at the Closing Date, Section 4.1. of the
Disclosure Letter shall also include all distribution agreements and
agency agreements.
The agreements and commitments referred to in this paragraph 4.1.
include, but are not limited to, all agreements with the Sellers, real
property leases as lessor and lessee, equipment rental and leasing,
loans, borrowing facilities, State, regional, local or international
aids and subsidies, mortgages, security or guaranty agreements or
commitments to secure credit to it or to a third party, or to guarantee
obligations of a third party, letters of comfort issued for a third
party or by a third party for its benefit, service or product
guarantees, appointment as a corporate representative of another
corporate entity, service agreements with accountants, lawyers and
other independent consultants, joint venture agreements, agency and
distribution agreements, standard terms of purchase or sale, or terms
of business, agreements relating to the acquisition or disposal of
companies, businesses or fixed assets during the last 3 years and
commitments to enter into agreements or to modify existing agreements.
Section 4.1. of the Disclosure Letter also contains a schedule of the
top twenty customers and the top twenty major suppliers of the Company
indicating materials and/or services supplied or purchased.
For the purposes of this paragraph 4.1., the following agreements or
commitments shall be deemed to be "material":
(a) all agreements and commitments of any kind - other than insurance
contracts, license agreements related to intellectual property,
labor agreements and contracts
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with trade unions and collective bargaining agreements - to which
the Company is a party or by which it or any of its assets may be
bound and which are in excess of BF 1,500,000 and entered into
for a period in excess of 3 months;
(b) all agreements relating to the acquisition or disposal of
companies, businesses or fixed assets during the last three years
in excess of BF 5,000,000.
4.2. ONEROUS OR UNUSUAL COMMITMENTS
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To the best of the Sellers' knowledge, the Companies are not a party to
any agreement or commitment, the performance of which by any of them
will have a material adverse effect on their assets or financial
condition. No purchase commitments of the Companies are in excess of
the normal requirements of the business or at an excessive price. There
are no agreements or commitments not made in the ordinary course of
business or which are not of an entirely arm's length nature. There are
no apparent at the time of the signing unusual, abnormal or onerous
agreements or commitments which could be considered as such for any
similar company in the same business.
4.3. REAL PROPERTY LEASES
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All lease agreements relating to real property to which the Companies
are a lessee are duly registered. The Companies enjoy peaceful and
undisturbed possession under all leases under which it is operating.
None are threatened with suspension or cancellation.
There are no disputes existing or threatened with adjoining land owners
or building owners. The Companies have not agreed to any sub-lease or
assignment of any rights arising under a lease. The leased properties
have not been built or leased, or are not occupied, in violation of any
building, zoning or land use regulations, legal or administrative
provisions, or agreements binding the Companies, from which it would
result that the use of a leased property would or could be affected,
reduced or excluded.
4.4. RESTRICTIONS AND INTERESTS IN COMPETITORS
-----------------------------------------
Except for this Agreement, the Companies are not bound by any
non-competition obligation and the Companies have not entered into any
written or oral agreement, commitment or understanding limiting or
restraining it from carrying out its activities by engaging or
competing, in any business, with any third party.
Neither the Sellers, nor their respective spouses, children or parents,
nor the Companies, nor any of their directors, nor, to the best of the
Sellers' knowledge, any of their officers, employees or agents nor any
Affiliate of the foregoing persons, has any direct or indirect interest
in any competitor of the Companies or in any other person with whom the
Companies do business.
4.5. INSIDER AGREEMENTS
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There is not outstanding any written or oral agreement or arrangement
to which the Companies are a party and in which the Sellers or any of
their present directors, or, to the best of the Sellers' knowledge, any
of their former directors, present officers, employees or agents, or
any of the Sellers' spouses, children or parents, or any Affiliate
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of any of the foregoing persons, are or have been interested, whether
directly or indirectly.
4.6. DEBTS TO AND FROM RELATED PARTIES
---------------------------------
As of the Closing Date, the Companies are not indebted to the Sellers
or to any present director or, to the best of the Sellers' knowledge,
to any former director, present officer, employee or agent of the
Sellers or of the Companies, or to any of the Sellers' spouses,
children or parents, or to any Affiliate of any of the foregoing
persons, other than for payment of salaries and compensation for
services actually rendered to the Companies in the ordinary course of
their business. As of the Closing Date, there are no debts owed to the
Companies by any of the same persons or any Affiliate thereof.
5. INSURANCE
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5.1. LIST OF INSURANCE POLICIES
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Set forth in Section 5.1. of the Disclosure Letter is a true and
complete list of all insurance policies maintained by the Companies.
5.2. SCOPE OF COVERAGE
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All the assets of the Companies of an insurable nature are and have at
all material times been insured in amounts representing the full
replacement or reinstatement thereof against fire and other risks
customarily insured against by persons carrying on the same classes of
business as those carried on by the Companies. The Companies are and
have at all material times been adequately covered against such
casualties, risks and contingencies (including, but not limited to,
accident, injury, third party loss and loss of profits), and in such
amounts, types and forms, as are customarily covered by persons
carrying on the same classes of business as those carried on by the
Companies.
5.3. VALIDITY AND ENFORCEABILITY
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All of the foregoing insurance policies are currently in full force and
effect and all billed or due premiums have been paid. To the best of
the Sellers' knowledge, nothing has been done or omitted to be done
which would make any insurance policy void, avoidable or non operative.
Neither the Sellers nor the Companies have received any notification of
the cancellation or suspension of any policy or any notification of the
cancellation, suspension or reduction of the guarantee thereunder, or
that any policy will not be renewed. There are no claims, demands or
offsets which impairs the full value of these policies.
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6. EMPLOYEES, CONSULTANTS AND INDEPENDANT CONTRACTORS
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6.1. LABOR AGREEMENTS AND COLLECTIVE BARGAINING AGREEMENTS
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Set forth in Section 6.1.(a) of the Disclosure Letter is a true and
complete list of all employees of the Companies and Livinco N.V. and a
true and complete description of their names and addresses (and, if
possible, their duties, duration of agreement, possible protected
employee status (trade union representative), age, length of service
and, taking into account any applicable indexation, their current
salary, commissions, remunerations in kind, bonuses, pensions, group
insurance contributions and other fringe benefits). Except as set forth
in Section 6.1.(a) of the Disclosure Letter there are no expatriates in
the Companies and Livinco N.V.
Set forth in Section 6.1.(b) of the Disclosure Letter is a true and
complete list of all collective bargaining agreements entered into by,
or applicable to the Companies and Livinco N.V.. Attached in Section
6.1.(b) of the Disclosure Letter is a true and complete copy of all
such agreements which are not publicly available.
6.2. CONSULTANT AND INDEPENDENT CONTRACTOR AGREEMENTS
------------------------------------------------
Set forth in Section 6.2.(a) of the Disclosure Letter is a true and
complete list of all persons and companies rendering consulting
services to the Companies and Livinco N.V. and of all independant
contractors, subcontractors, management companies or any other person
or company working in an independant capacity for or on behalf of the
Companies and Livinco N.V., including a true and complete description
of their names and addresses (and, if possible, their duties, duration
of the agreements, their current fees, commissions, remunerations in
kind, bonuses, pensions, and other fringe benefits).
6.3. BENEFITS, PENSIONS AND OTHER INSURANCES
---------------------------------------
No benefits or rights other than those described in the individual
labor agreements or mentioned in the pay slips ("loonbrieven") or in
the Companies' group insurance plan, consulting or contractor
agreements or the collective bargaining agreements referred to in
paragraph 6.1.and 6.2. have been granted to the employees, consultants
or contractors. The Companies and Livinco N.V. have not entered into
any additional agreement for the granting of life and group insurance,
and pensions of any kind.
6.4. COMPLIANCE
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The Companies and Livinco N.V. have fully complied with all individual
labor and consulting or contractor agreements and all collective
bargaining agreements referred to in paragraph 6.1. and 6.2. All
remunerations and moneys to be paid to the employees or consultants or
contractors of the Companies and Livinco N.V. have been calculated and
paid in conformity with the applicable legal and tax rules. This
includes all holiday pay for the Companies' and Livinco N.V.'s
employees and the prorated part of the year end bonus -if any-, of the
Companies' and Livinco N.V.'s employees, as well as the social security
contributions on the said amounts, and related to the employment of the
said employees, prior to the Closing Date.
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All social security payments and withholding tax payments due at or
prior to the date of this Agreement in connection with said employment
agreements have been made in due time and the Companies and Livinco
N.V. fully complied with all applicable tax and social security
legislation pertaining thereto.
The Companies and Livinco N.V. do not have as of the date of this
Agreement and will not have at any subsequent date any unsatisfied
obligation, whether in the form of a requirement to give notice or
payment of an indemnity in lieu thereof, towards any persons with
regard to the termination of their employment,consulting or contractor
agreement with the Companies and Livinco N.V. prior to the date of
this Agreement.
The Companies and Livinco N.V. are not and have not engaged in any
labor leasing activities ("interimarbeid") without the necessary
permits and licenses.
6.5. LABOR TROUBLES AND STRIKES
--------------------------
There have not been and there are no labor troubles or strikes existing
or threatened, affecting or that would affect adversely the financial
condition, operations, liquidity, assets or prospects of the Companies
and Livinco N.V.
6.6. INCENTIVE SCHEMES
-----------------
The Companies and Livinco N.V. do not have in existence nor are they
proposing to introduce any share incentive scheme, share option scheme,
profit sharing, commissions, bonus packages or other such incentive
schemes for all or any of their directors, employees, consultants or
other third party except for the advantages expressly provided for in
the employment or consulting agreements or mentioned in the pay slips
("loonbrieven") which have been fully disclosed to the Purchasers.
6.7. RETIREMENT
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The Companies and Livinco N.V. do not have any obligation of whatever
nature towards any present or former director or employee in
connection with retirement or early retirement.
All obligations of the Companies and Livinco N.V. which are due and
payable with respect to all former and current pension policies and
which are related to the employment of employees or directors prior to
the Closing Date have been fully and finally settled and all
liabilities of the Companies and Livinco N.V. in respect of or in
relation to the accrued pension entitlements of former and current
employees and which are related to the employment prior to the Closing
Date have been properly and duly funded or provided for in the
Accounts.
7. ENVIRONMENTAL MATTERS
---------------------
The Companies have not been subject to any environmental audit, study
or test performed by or on behalf of any administration or governmental
authority and there is no reason for any remedial works or clean-up. No
such authority has given any direction or order to the Companies in
connection with environmental matters.
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The soil, subsoil and groundwater of the land presently and previously
owned or leased by the Companies are not polluted. The Companies have
not caused any soil, subsoil or groundwater pollution in the land owned
or leased by it. Pollution means the presence of substances that might
have an adverse effect on men, public health and/or the environment.
The land and buildings presently and previously owned or leased by the
Companies are and have not been used for the handling, processing,
treatment, storage or disposal of hazardous substances, in violation of
any legislation or regulation pertaining to the use, labelling,
manufacturing, storage, disposal and transport of such substances, or
in a way that could give rise to any liability. No underground tanks or
other underground storage receptacles for those substances are located
in such land or buildings.
There is no asbestos in the buildings owned or leased by the Companies.
The Companies have not disposed of, or arranged for the disposal of,
any waste, or drained any waste water, or pumped any surface water or
groundwater, nor carried out any other activity subject to a permit,
authorization or notification obligation in violation of any
legislation or regulation pertaining to the disposal of waste and
wastewater, to the pumping of groundwater or surface water, or of any
legislation or regulation that subjects the performance of activities
to a permit, authorization or notification obligation, or in a way that
could give rise to any liability.
8. AUTHORIZATIONS, DEFAULT AND LITIGATION
--------------------------------------
8.1. AUTHORIZATIONS
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The Companies have all proper administrative or other licenses,
permits, certificates, consents, approvals and other authorizations
required for the conduct of its activities in the places and in the
manner in which such activities are presently carried out by it,
including, but not limited to, building and operating permits, export
and import licenses, water intake, sewer outlets and discharges.
A list of all such authorizations is attached in Section 8.1. of the
Disclosure Letter.
The Companies are operating in conformity with all conditions imposed
by such authorizations.
No such authorization has expired before the date of this Agreement or
will expire before the end of term for which they have been delivered,
and none are threatened with suspension, modification, revocation or
cancellation nor will be affected by the execution and delivery of this
Agreement or the consummation of the transactions contemplated herein.
To the extent necessary, requests for renewal of such authorization
have been timely filed.
No such authorization requires in order to be maintained and to remain
valid any notification prior or after the execution and delivery of
this Agreement.
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The Companies have made all investments necessary to maintain its
activities in compliance with the licenses, permits, certificates,
consents, approvals and other authorizations.
The Companies have no reason to believe that such licenses, permits,
certificates, consents, approvals and other authorizations (A) will not
be renewed, (B) will be renewed under terms that could reasonably be
expected to have an adverse effect on the Companies.
8.2. COMPLIANCE WITH LAWS
--------------------
To the best of the Sellers' knowledge, the Companies have complied with
all applicable laws, regulations, court decisions, arbitration awards
and other legal requirements affecting their business and operations in
each jurisdiction in which they do business.
To the best of the Sellers' knowledge, no part of the business and
operations of the Companies is threatened by published or announced
changes in such legal requirements.
No agreement, commitment or arrangement to which the Companies are a
party infringes Belgian or EC competition law and in particular, but
without prejudice to the generality of the foregoing, Articles 85 and
86 of the Treaty establishing the European Economic Community or any
legislative or administrative act issued thereunder.
To the best of the Sellers' knowledge, the Companies have not, directly
or indirectly, paid or delivered any fees, commissions or other sums of
money or items of property however characterized to any finders,
agents, customers, government officials or other parties, in the United
States or in any other country, which in any manner are related to the
business or operations of the Companies, and which have been illegal
under any federal, state or local laws of the United States, including,
without limitation, the U.S. Foreign Corrupt Practices Act, or any
other country or territory having jurisdiction over any or all of the
Companies. The Companies have not participated, directly or indirectly,
in any boycotts or similar practices, including, without limitation,
the Arab Boycott of Israel.
8.3. COMPLIANCE WITH AGREEMENTS
--------------------------
To the best of the Sellers' knowledge, all material agreements of any
kind to which the Companies are a party or by which they or any of
their assets may be bound are valid, binding and enforceable in
accordance with their terms. To the best of the Sellers' knowledge,
they have been fully complied with by the parties thereto. To the best
of the Sellers' knowledge, there is no breach or default by any of the
parties thereto which has not been waived and no event has occurred
which, with notice or lapse of time or both, would constitute such a
breach or default.
8.4. LITIGATION
----------
No claim, investigation, lawsuit or similar proceeding is existing, on
request from or against the Companies, nor, to the best of the
Sellers' knowledge, threatened against the Companies, before any
judicial or administrative court, arbitrage tribunal or any official
authority. All claims, investigations, lawsuits or similar proceedings
set forth in Section
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8.4 of the Disclosure Letter are fully reflected or adequately
reserved against in the Annual Accounts and the Estimated Closing
Balance Sheet.
To the best of the Sellers' knowledge, there are no circumstances or
events or facts arisen prior to the date of this Agreement which could
give rise to such claims, investigations, lawsuits or similar
proceedings.
8.5. EFFECT OF THIS AGREEMENT
------------------------
The execution and delivery of this Agreement by the Sellers and the
consummation of the transactions contemplated herein will not result in
or constitute any of the following:
(a) a default or an event that would be a default, breach or
violation of the charter of the Sellers or the Companies or of
any agreement or commitment of any kind to which the Companies,
the Sellers are a party or by which it or any of its assets may
be bound;
(b) an event that would result in the termination of any agreement of
the Companies or that would permit any party to terminate any
agreement or to accelerate the maturity of any indebtedness or
other obligation of the Companies;
(c) the creation or imposition of any mortgage, charge or other
encumbrance on any of the assets of the Companies;
(d) to the best of the Sellers' knowledge, an event that would permit
any domestic, foreign, international or supranational
jurisdiction or regulatory body to suspend, modify, revoke or
cancel the valid transfer of the Shares as contemplated by this
Agreement or any of the authorizations referred to in paragraph
8.1. of this Agreement, to impose any restrictions on the
Purchasers or on the Companies or any of their assets and
activities;
(e) to the best of the Sellers' knowledge, a violation of any
domestic, foreign, international or supranational applicable laws
and regulations, court decisions, arbitrage awards and other
legal requirements;
(f) to the best of the Sellers' knowledge, an event that would
jeopardize the continued legal existence and normal business
operations of the Companies in any manner whatsoever.
8.6. AUTHORITY TO ENTER INTO THIS AGREEMENT
--------------------------------------
The Sellers have the right, corporate power, capacity and authority to
enter into this Agreement and to perform and consummate the
transactions contemplated therein.
No prior authorization, consent or approval of, or notification to, any
other person or any domestic, foreign, international or supranational
jurisdiction or regulatory body or any workers' council or union is
required prior or after the execution and delivery of this Agreement,
under any agreement, law, regulation court decision, arbitrage award or
other legal requirement.
The execution and delivery of this Agreement has been duly authorized
by the Sellers's boards of directors and no further corporate action is
necessary. All persons who execute
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this Agreement and the Disclosure Letter and all attachments,
schedules, financial statements and other documents delivered on
behalf of the Sellers have been duly authorized by all necessary
corporate action of the Sellers. Attached in Section 8.6. of the
Disclosure Letter is a true and complete copy of all supporting
documents.
8.7. VALIDITY AND ENFORCEABILITY OF THIS AGREEMENT
---------------------------------------------
This Agreement is valid, binding upon the Sellers, and enforceable
against the Sellers in accordance with its terms by the Purchasers.
8.8. BROKERS
-------
All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by the Purchasers directly
with the Sellers without the intervention of any other Person on behalf
of the Sellers in such manner as to give rise to any valid claim by any
Person against the Purchasers and the Companies or any affiliate for a
finder's fee, brokerage commission or similar payment.
9. FINANCIAL STATEMENTS
--------------------
9.1. REFERENCED FINANCIAL STATEMENTS
-------------------------------
Attached in Section 9.1. of the Disclosure Letter are the audited
consolidated financial statements of the Company showing the financial
situation of the Companies as per October 31, 1995, 1996 and 1997, as
certified by the Companies' statutory auditors
("commissaires-reviseurs/commissaris-revisor") (the "Annual
Accounts").
In Exhibit 3.1 to the Agreement, the unaudited estimated consolidated
financial statements of the Company showing the financial situation of
the Companies as per the Closing Date, drafted in accordance with
Article 3.1 of the Agreement (the "Estimated Closing Balance Sheet")
will be attached.
The Annual Accounts of the Companies have been timely deposited in the
form as required by Belgian or any other applicable law with the
competent authorities.
9.2. ACCOUNTS WARRANTY
-----------------
The Financial Statements of the Company, on the basis of which the sale
referred to herein is made, have been prepared in accordance with (i)
Belgian Generally Accepted Accounting Principles ("GAAP") and (ii)
prior years accounting principles, estimates, allowances and valuation
rules of the Company consistently applied on a going concern basis, and
truly and accurately reflect the financial condition and results of
operations of the Companies on the dates indicated.
The financial records and books of account are complete and properly
and accurately reflect the business of the Companies.
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9.3. VALUATION OF FIXED AND CURRENT ASSETS
-------------------------------------
The value attributed to each fixed and current asset ("actifs
immobilises et actifs circulants/vaste activa en vlottende activa") of
the Companies does not exceed the current market value thereof as at
the respective dates of the Financial Statements. The rate of
depreciation applied, when appropriate, to each fixed asset is adequate
to write down the value of such fixed asset to its net realizable value
as at the end of its useful working life.
9.4. ACCOUNTS RECEIVABLE
-------------------
All accounts receivable and all other receivables reflected on the
Closing Balance Sheet are good and collectible within normal payment
terms after the date of this Agreement in the currency in which they
are billed or due. They are not and, to the best of the Sellers'
knowledge, will not be subject to a valid defense, counterclaim or
offset.
All doubtful accounts have been duly provisioned in accordance with (i)
Belgian Generally Accepted Accounting Principles ("GAAP") and (ii)
prior years accounting principles, estimates, allowances and valuation
rules of the Company consistently applied on a going concern basis.
9.5. OUTSTANDING INDEBTEDNESS
------------------------
Except for Debt disclosed in the Annual Accounts and the Closing
Balance Sheet, the Companies do not have any such liabilities or
obligations or are not directly or indirectly liable or obligated in
any way to guarantee or assume any such debt or obligation of any
person.
The Sellers have no reasonable grounds to know of any basis for the
assertion against the Companies of any liability, obligation or claim
not fully reflected or reserved against in the Annual Accounts and the
Closing Balance Sheet.
9.6. PRODUCTS LIABILITY
------------------
The Sellers verify the actual known complaints of products liability on
a regular basis with their distributors and resellers. To the Sellers'
knowledge there are no facts or events which have occurred forming the
basis for any claim against the Companies for products liability,
whether in tort or strict liability or on account of any express or
implied warranty, and all reserves therefor on the Annual Accounts and
the Closing Balance Sheet are adequate.
10. TAXES
-----
10.1. The tax liabilities of the Companies have been examined by and/or
reported to the appropriate taxing authorities and are closed by
applicable statutes and finally determined for all taxes of any kind
and all taxable years through and including the year ended October 31,
1993.
10.2. The Companies and Livinco N.V. have fulfilled all material obligations
with respect to all national, local and other domestic or foreign, both
direct or indirect taxes (including
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income taxes, registration duties, real estate taxes, customs duties,
etc.) of any nature whatsoever, including their filing obligations and
the payment of such taxes, duties and levies of any nature whatsoever.
10.3. The Companies and Livinco N.V.:
(a) have timely filed all federal, state, national, local and other
domestic or foreign tax returns, reports and declarations, required
to be filed with respect to taxes, both direct and indirect
(including, but not limited to income taxes, registration taxes,
real and personal property taxes, customs duties and parafiscal,
social security payments and similar charges) in conformity with
all applicable laws and regulations, and such returns, reports and
declarations are true and accurate in all material respects;
(b) have timely paid all such taxes, duties, levies, charges,
assessments, prepayments, withholding taxes, tax increases,
penalties and interests, related to all earnings, activities, acts,
omissions, events or facts which occurred in any tax period up to
the Closing Date, due to or claimed to be due by all national,
local and other authorities, and there is no further liability for
any such taxes, assessments, prepayments and withholding taxes, and
no interest or penalties accrued or accruing with respect thereto,
except as has been fully reserved for in the Financial Statements;
(c) have not executed or filed with any tax and social security
authority any agreement extending the period of filing of any tax
return, report or declaration or the period of assessment or
collection of any taxes or charges; and
(d) have made full provisions for taxes not yet due and attributable
to all periods ended on or before the date of this Agreement, where
allowed pursuant to Belgian Generally Accepted Accounting
Principles; and
(e) have filed timely and correctly all protests, requests for relief,
reimbursement of taxes to which the Companies could be legally
entitled.
10.4. There are no tax liens or mortgages on any asset of the Companies and
Livinco N.V. There are no law suits, proceedings, investigations or
claims initiated or pending against the Companies and Livinco N.V.
with respect to taxes of any nature and there is no basis for such law
suits, proceedings, investigations or claims. No relief (by way of
deducting, reduction, set-off, exemption or otherwise) from, against
or in respect of any taxation or charge has been claimed by or given
to the Companies and Livinco N.V. which could be withdrawn, postponed,
restricted or otherwise lost as a result of any act, omission, event
or circumstance arising or occurring at any time after the date of
this Agreement. All deferred tax liabilities of the Companies and
Livinco N.V., if any, are reflected in the Financial Statements and
the respective amounts have been fully reserved for.
10.5. The Companies and Livinco N.V. have not entered into, nor are, nor have
been a party to, nor otherwise have been involved in any scheme or
arrangement designed wholly or partly for the purpose of unlawfully
avoiding taxes and have not unlawfully invoked an exemption or
reduction of tax.
10.6. Set forth in Section 10.6. of the Disclosure Letter is a list and
description of the tax carry-forward losses ("pertes
recuperables/aftrekbare bedrijfsverliezen") and investment credits
("deductions pour investissements/investeringsaftrek") available to the
Companies, which are admitted by the tax authorities.
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11. ABSENCE OF CHANGES
------------------
11.1. Since the last day of the period covered by the Annual Accounts and up
to the Signing Date:
(a) there has not been any change in the capitalization, financial
condition, operations, liquidity, assets, rights, liabilities,
and prospects of the Companies except in their ordinary course of
business and no such change is threatened or anticipated;
(b) the Companies have carried out their business as a bonus pater
familiae and so as to maintain the same as a going concern and
have not otherwise entered into, carried out or been involved with
any contracts or disposed of any or jeopardised any assets or
increased any liability;
(c) the Companies have not distributed, declared or paid any dividends
or "tantiemes", or otherwise distributed or taken corporate action
to distribute any additional funds to directors, shareholders or
holders of other stock;
(d) no material contract, liability or commitment (whether in respect
of expediture or otherwise) has been entered into by the
Companies which is of a long term (i.e. in excess of 12 months)
or of an unusual (i.e. not in the ordinary course of business of
the Companies) nature;
(e) the Companies have not disposed of or agreed to dispose any
assets except in the ordinary course of business;
(f) no debtor has been released by the Companies on terms that it
pays less than the book value of its debt and no debt owing to
the Companies has been deferred, subordinated or written off or
proven to any extent irrecoverable;
(g) the Companies have not made any change in the numbers of their
senior managers, directors or independant consultants nor in the
remuneration, benefits or other terms of employment of their
senior managers, directors or independant consultants;
(h) the businesses of the Companies have not been affected by the
loss of any important customer or source of supply, and the
Sellers are not aware of any fact likely to give rise to any such
effect whether before or after the Closing Date;
(i) there has not been by the Companies any investment made in the
debt or equity of another entity;
(j) there has not been any material (x) change in any investment,
accounting, tax accounting, financial reporting, inventory,
credit, allowance or tax practice, election or policy of the
Companies; (y) change in any method of calculating any bad debt,
contingency or other reserve of the Companies or any subsidiary
for accounting, financial reporting or tax purposes, or any
change in the fiscal year of the Companies or (z) decrease in
selling prices or increase of purchase prices.
11.2. Without prejudice to Section 11.1, as of the Signing Date and up to the
Closing Date:
(a) there will not be, as a result of any action and/or omission of
the Sellers, any change in the capitalization, financial
condition, operations, liquidity, assets,
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rights, liabilities, and prospects of the Companies except in
their ordinary course of business and no such change is threatened
or anticipated;
(b) the Companies will carry out their business as a bonus pater
familiae and so as to maintain the same as a going concern and
will not otherwise enter into, carry out or be involved with any
contracts or dispose of any or jeopardise any assets or increase
any liability;
(c) the Companies will not distribute, declare or pay any dividends
or "tantiemes", or otherwise distribute or take corporate action
to distribute any additional funds to directors, shareholders or
holders of other stock;
(d) no material contract, liability or commitment (whether in respect
of expediture or otherwise) will be entered into by the Companies
which is of a long term (i.e. in excess of 12 months) or of an
unusual (i.e. not in the ordinary course of business of the
Companies) nature;
(e) the Companies will not dispose of or agree to dispose any assets
except in the ordinary course of business;
(f) no debtor will be released by the Companies on terms that it pays
less than the book value of its debt and no debt owing to the
Companies will be deferred, subordinated or written off or proven
to any extent irrecoverable;
(g) the Companies will not make any change in the numbers of their
senior managers, directors or independant consultants nor in the
remuneration, benefits or other terms of employment of their
senior managers, directors or independant consultants;
(h) as a result of any action and/or omission from the Sellers, the
businesses of the Companies will not be affected by the loss of
any important customer or source of supply, and the Sellers are
not aware of any fact which is likely to give rise to any such
effect whether before or after the Closing Date;
(i) there will not be by the Companies any investment made in the
debt or equity of another entity;
(j) there will not be any material (x) change in any investment,
accounting, tax accounting, financial reporting, inventory,
credit, allowance or tax practice, election or policy of the
Companies; (y) change in any method of calculating any bad debt,
contingency or other reserve of the Companies or any subsidiary
for accounting, financial reporting or tax purposes, or any
change in the fiscal year of the Companies or (z) decrease in
selling prices or increase of purchase prices.
12. SUBSIDIES AND PREMIUMS
----------------------
Nothing has occurred and the Companies have not done or agreed to do
anything as a result of which either (i) any subsidy or grant paid to
the Companies is or may be liable to be refunded in whole or in part or
(ii) any such subsidy or grant for which application has been made by
them will or may not be paid or may be reduced. The sale of the Shares
as such contemplated by this Agreement will not require the
reimbursement of or otherwise jeopardise the Companies entitlement to
benefit from any subsidies or grants in accordance with the terms under
which they were granted to the Companies.
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13. YEAR 2000
---------
Concerning the year 2000 no problems will arise with regard to the
software developed, installed, modified or otherwise taken care of by
the Companies which might result in claims against the Companies,
except for software made by third parties. Sellers are not aware of any
such problems in such software made by third parties. Sellers are not
aware of any such problems affecting the businesses of the Companies or
any material customer or supplier of any of the Companies.
14. DATABASE
--------
The Companies are in full compliance with the law of December 8, 1992
on the Protection of Privacy with regard to the Processing of Personal
Data and its implementing Royal Decrees.
15. INFORMATION
-----------
15.1. GENERAL
-------
All information in written or documentary form which has been provided
by the Sellers and/or their advisers or agents to the Purchasers or its
advisers or agents in the course of the negotiations leading to the
Agreement, was when given and is, per the date hereof, true complete
and accurate and not misleading in any respect.
15.2. EXHIBITS
--------
The facts set out in the Exhibits, including the Disclosure Letter and
its attachments, are true complete and accurate in all respects,
subject to the qualifications and limitations set out in the Disclosure
Letter.
15.3. DISCLOSURE
----------
There are no facts relating to the Companies or their business which
are material for disclosure to intending Purchasers thereof which have
not been disclosed in writing to the Purchasers or which having been
disclosed, would cause the Purchasers not to enter into this Agreement.
II. SPECIFIC ADDITIONAL REPRESENTATIONS AND WARRANTIES REGARDING ROXELL INC.
------------------------------------------------------------------------
16. US TAX MATTERS
--------------
16.1. All federal, state, local and foreign tax returns and tax reports
required to be filed by or with respect to Roxell Inc. have been duly
filed. All taxes (including interest, penalties and related costs) with
respect to Roxell Inc. for all taxable periods ending on or prior to
the Closing Date have been paid, except:
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(a) to the extent of reserves for taxes (other than deferred taxes)
reflected on the Financial Statements less payments of such taxes
on or prior to the Closing Date and
(b) for such taxes (other than deferred taxes) that are provided for
in the books and records of Roxell Inc. for the period beginning
immediately following the date of the Financial Statements and
ending on the Closing Date but only to the extent that such taxes
arise from taxable income resulting from the day to day sales and
operations of Roxell Inc. occurring during such period and not
taxes arising from other transactions or events, including,
without limitation, any taxes on income resulting from
transactions contemplated by this Agreement and any taxes
relating to prior periods;
provided, however, that the reserve set forth in clause (a) above and
the provision for taxes set forth in clause (b) above shall be reduced
for the tax effect of any deductions relating to the exercise or
cancellation of any stock options.
No issues have been raised, either orally or in writing, (and are
currently pending) by any foreign, federal, state or local taxing
authority in connection with any of the returns or reports referred to
in this Section 16.1. No waivers of statutes of limitations as to any
tax matters are currently in effect with respect to Roxell Inc.
16.2. All tax returns filed by Roxell Inc. were true and correct in all
material respects as of the date on which they were filed.
Complete copies of all federal, state and local income tax returns for
Roxell Inc. that have been filed with respect to taxable periods for
which the statute of limitations period has not run have been delivered
to the Purchasers.
Roxell Inc. has provided to the Purchasers all revenue agent's reports
and other written assertions by governmental authorities of
deficiencies or other liabilities for taxes of Roxell Inc. with
respect to past periods for which the statute of limitations period
has not run.
All amounts required to be collected or withheld by Roxell Inc. with
respect to taxes have been duly collected or withheld and any such
amounts that are required to be remitted to any taxing authority have
been duly remitted.
16.3. No extension of time within which to file any tax return that related
to Roxell Inc. has been requested, which return has not since been
filed.
There are no tax rulings, requests for rulings, or closing agreements
to which Roxell Inc. is a party or is subject which could affect the
liability for taxes for any period after the Closing Date.
All federal income tax returns of Roxell Inc. with respect to taxable
periods through the year ended September 30, 1993 have been examined
and closed or are returns with respect to which the applicable statute
of limitations period has expired without extension or waiver.
No power of attorney has been granted by Roxell Inc. with respect to
any matter relating to taxes of Roxell Inc. which is currently in
force.
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16.4. Roxell Inc. has not filed a consent under Section 341(f) of the
Internal Revenue Code (the "CODE") or any comparable provision of state
revenue statutes. Roxell Inc. has made all payments of estimated taxes
required to be made under Section 6655 of the Code and any comparable
provisions of state, local or foreign law. Any adjustment of taxes of
Roxell Inc. made by the Internal Revenue Service in any examination
which is required to be reported to the appropriate state, local or
foreign taxing authorities has been reported, and any additional taxes
due with respect thereto have been paid.
16.5. Roxell Inc. has not agreed or are not required to include in income
any adjustment pursuant to Section 481(a) of the Code (or similar
provisions of other laws or regulations) by reason of a change in
accounting method.
No excess loss accounts exist with respect to Roxell Inc. There is no
deferred gain or loss arising from deferred intercompany transactions
between Roxell Inc. and its subsidiaries. Roxell Inc. is not a party to
any agreement that would result by its terms in the payment of a
non-deductible "excess parachute payment" within the meaning of Section
280G of the Code. The amount of deferred tax assets and liabilities
reflected on the Financial Statements are determined in accordance with
GAAP (subject, in the case of Estimated Closing Balance Sheet, to
normal year-end adjustments consistent with past practice).
16.6. For the purpose of this Agreement, any federal, state, local or foreign
income, franchise, sales, use, transfer, payroll, unemployment, Social
Security, personal property, occupancy or other tax, levy, impost,
imposition, assessment or similar charge, together with any related
addition to tax, interest or penalty thereon, is referred to as a
"tax".
17. US EMPLOYEE MATTERS
-------------------
17.1. EMPLOYEE BENEFIT PLANS
----------------------
Section 17.1 of the Disclosure Letter contains a complete list of
Roxell Inc.'s employee benefit plans ("Plans") consisting of each:
(i) "employee welfare benefit plan", as defined in Section 3(1) of
the Employee Retirement Income Security Act of 1974 ("ERISA"), to
which Roxell Inc. contributes or is required to contribute,
including each multi-employer welfare plan ("Welfare Plan"), and
sets forth the amount of any liability of Roxell Inc. for
payments more than thirty days past due with respect to each
Welfare Plan as of the Closing Date;
(ii) "multi-employer pension plan", as defined in Section 3(37) of
ERISA, to which Roxell Inc. (or any entity which is a member of a
"controlled group or corporations" with or is under "common
control" with Roxell Inc. as defined in Section 414(b) or (c) of
the Internal Revenue Code of 1986 as amended ("Common Control
Entity") has contributed or been obligated to contribute at any
time after September 25, 1980 ("Multi-employer Plan");
(iii) "employee pension benefit plan", as defined in Section 3(2) of
ERISA, (other than a Multi-employer Plan) to which Roxell Inc. or
any Common Control Equity contributes or is required to
contribute ("Pension Plan"); and
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(iv) deferred compensation plan, bonus plan, stock option plan,
employee stock purchase plan and any other employee benefit plan,
agreement, arrangement or commitment, other than normal payroll
practices and policies concerning holidays, vacations and salary
continuation during short absences for illness or other reasons,
maintained by Roxell Inc.
17.2. PENSION PLANS
-------------
The funding method used in connection with each Pension Plan which is
subject to the minimum funding requirements of ERISA is acceptable and
the actuarial assumptions used in connection with funding each such
plan, in the aggregate, are reasonable. The assets of each Pension Plan
are sufficient to discharge all liabilities under such plan, on an
ongoing basis and on a termination basis, and there is no "accumulated
funding deficiency", as defined in Section 302(a)(2) of ERISA, with
respect to any plan year of any such plan. Neither Roxell Inc. nor any
Common Control Entity has any liability for unpaid contributions with
respect to any Pension Plan.
(i) Each Pension Plan and each related trust agreement, annuity
contract or other funding instrument is qualified and tax-exempt
under the provisions of Code Sections 401(a) (or 403(a) as
appropriate) and 501(a).
(ii) To the best of the Sellers' knowledge, each Pension Plan and each
related trust agreement, annuity contract or other funding
instrument complies currently, and has complied at all times in
the past, both as to form and in operation, with the provisions
of applicable Federal law, including the Code and ERISA.
(iii) Roxell Inc. has paid all premiums (and interest charges and
penalties for late payment, if applicable) due the Pension
Benefit Guaranty Corporation ("PBGC") with respect to each
Pension Plan for each plan year thereof for which such premiums
are required. To the best of the Sellers' knowledge, there has
been no "reportable event" (as defined in Section 4043(b) of
ERISA and the PBGC regulations under such Section) with respect
to any Pension Plan. No liability to the PBGC has been incurred
by Roxell Inc. or any Common Control Entity on account of the
termination of any Pension Plan.
No filing has been made by Roxell Inc. or any Common Control
Entity with PBGC, and no proceeding has been commenced by the
PBGC, to terminate any Pension Plan. NeitherRoxell Inc. nor any
Common Control Entity has, at any time, (a) ceased operations at
a facility so as to become subject to the provisions of Section
4062(e) of ERISA, (b) withdrawn as a substantial employer so as
to become subject to the provisions of Section 4063 of ERISA, or
(c) ceased making contributions on or before the Closing Date to
any Pension Plan subject to Section 4064(a) of ERISA to which
Roxell Inc. or any Common Control Entity made contributions
during the five years prior to the Closing Date.
17.3. MULTI-EMPLOYER PLANS
--------------------
Neither Roxell Inc. nor any Common Control Entity has, at any time,
withdrawn from a Multi-employer Plan in a "complete withdrawal" or a
"partial withdrawal" as defined in ERISA Section 4203 and 4205,
respectively.
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17.4. PROHIBITED TRANSACTIONS
-----------------------
Neither Roxell Inc. nor, to the Sellers' knowledge after due inquiry,
any Plan fiduciary of any Welfare Plan or Pension Plan has engaged in
any transaction in violation of Section 406(a) or (b) of ERISA or any
"prohibited transaction", as defined in Section 4975(c)(1) of the Code,
for which no exemption exists under Section 4975(c)(2) or 4975(d) of
the Code.
17.5. COPIES OF RELEVANT PLAN DOCUMENTS
---------------------------------
True and complete copies of each of the following documents have been
delivered by Roxell Inc. to the Purchasers:
(i) each Welfare Plan and each Pension Plan, related trust
agreements, annuity contracts or other funding instruments,
(ii) each plan, agreement, arrangement and commitment referred to in
Sections 2.2(m) and (n), and complete descriptions of any such
plan which is not in writing,
(iii) the most recent determination letter issued by the Internal
Revenue Service with respect to each Pension Plan,
(iv) Annual Reports on Form 5500 Series required to be filed with any
governmental agency for each Welfare Plan and each Pension Plan
for the two most recent plan years and
(v) all actuarial reports prepared for the last three years for each
Pension Plan.
17.6. VALIDITY AND ENFORCEABILITY OF PLANS
------------------------------------
To the best of the Sellers' knowledge and after due examination , each
Welfare Plan, Pension Plan, related trust agreement, annuity contract
or other funding instrument and each plan, agreement, arrangement and
commitment referred to in Section 2.2(m) and (n) is legally valid and
binding and in full force and effect.
17.7. PAYMENTS TO RETIREES
--------------------
Neither Roxell Inc. nor any Welfare Plan has any obligation to make
any payment to or with respect to any former or current employee of
Roxell Inc. pursuant to any retiree medical benefit or other Welfare
Plan.
17.8. LITIGATION UNDER PLANS
----------------------
Neither Roxell Inc. nor any Plan is a party to any litigation relating
to, or seeking benefits under, any Plan.
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17.9. EMPLOYMENT AGREEMENTS
---------------------
Roxell Inc. is not a party to any employment, severance or similar
agreements.
17.10. LABOR MATTERS
-------------
There are no controversies pending between Roxell Inc. and any of its
employees or officers. Roxell Inc. is not subject to any collective
bargaining agreements and, to the Sellers' knowledge after due
inquiry, there is no current prospect for any union election.
18. US ENVIRONMENTAL MATTERS
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18.1. Roxell Inc. is in compliance in all material respects with all
applicable Environmental Laws (as defined below), and for the past five
(5) years has been in such compliance, and to the Sellers' knowledge
there is no reason to believe that circumstances exist which could
prevent or interfere with (A) continued compliance in all material
respects by Roxell Inc. with all applicable Environmental Laws after
the Closing Date, or (B) Environmental Laws that are reasonably likely
to become applicable to Roxell Inc. after the Closing Date and that
could individually or in the aggregate, have a Material Adverse Effect
after the Closing Date if adopted.
18.2. Roxell Inc. holds all material Environmental Permits (as defined
bellow) necessary to conduct its operations as they are currently
conducted; Section 18.2. of the Disclosure Letter includes a true and
complete list of all such Environmental Permits and their expiration
dates, and Roxell Inc. has no reason to believe that such permits (A)
will not be renewed, or (B) will be renewed under terms that could
reasonably be expected to have an adverse effect on Roxell Inc.
18.3. There are no Materials of Environmental Concern (as defined below)
present at, and no Materials of Environmental Concern are or have been
in any way released or threatened to be released from, any Roxell Inc.
Property (as defined below), former Roxell Inc. Property, or as a
result of present or former operations of Roxell Inc. or any
predecessor entity (including without limitation the disposal of
Materials of Environmental Concern at any location other than a Roxell
Inc. Property or former Roxell Inc. Property), that could reasonably be
expected to be in material violation of or otherwise to give rise to
material liability of Roxell Inc. under any Environmental Law.
18.4. No reports of any kind have been made to or required by any
governmental authority pursuant to any Environmental Law concerning
spills or any other releases of any kind at, or in any way from, any
Roxell Inc. Property, former Roxell Inc. Property, or as a result of
present or former operations of Roxell Inc. or any predecessor entity,
for which spills, releases, or reports thereof Roxell Inc. may be
liable under any Environmental Law; true and complete copies of all
written reports concerning such spills and other releases have been
provided or made available to the Purchasers.
18.5. None of the following are or have been on, under, in or at any Roxell
Inc. Property, or to the Sellers' knowledge after due inquiry, any
former Roxell Inc. Property: (A) underground or aboveground storage
tanks containing Materials of Environmental
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Concern; (B) polychlorinated biphenyls; (C) asbestos or
asbestos-containing materials; (D) septic tanks, septic fields,
dry-wells, or similar structures; (E) lagoons or impoundments; or
other bodies of water to which Materials of Environmental Concern may
have been discharged; (F) landfills or dumping areas; or similar
locations where Materials of Environmental Concern may have been
placed.
18.6. Roxell Inc. has not received any Environmental Claim (as defined
below), and to the Sellers' knowledge after due inquiry, no
Environmental Claim has been threatened against Roxell Inc. by any
person.
18.7. Roxell Inc. has not entered into, agreed to, nor is Roxell Inc.
otherwise subject to any judgement, decree, order or similar
requirement under any Environmental Law, nor to the Sellers' knowledge
after due inquiry is any such judgment, decree, order or requirement
being negotiated that may obligate or affect Roxell Inc.
18.8. Roxell Inc. has not assumed or retained, contractually or by
operation of law, any liabilities or obligations of other persons,
contingent or otherwise, in connection with any Environmental Law.
18.9. There are no past or present actions, activities, events, conditions or
circumstances, including without limitation the release, threatened
release, emission, discharge, generation, treatment, storage or
disposal of Materials of Environmental Concern, that could reasonably
be expected to give rise to any material liability or obligation of
Roxell Inc. under any Environmental Laws. None of the matters set forth
in the Disclosure Letter, or any aggregation thereof, could reasonably
be expected to have a Material Adverse Effect.
18.10. True and complete copies of all reports, studies, assessments, audits,
and similar documents in the possession or control of Roxell Inc., the
Company or any Seller that address any issues of actual or potential
noncompliance in any material respect with, or actual or potential
material liability under, any Environmental Laws that may affect Roxell
Inc. have been provided to the Purchasers prior to the signing hereof.
18.11. As used in this Section 18:
"ENVIRONMENTAL CLAIM" means any written or oral notice, claim, demand,
action, suit, complaint, proceeding or other communication by any
person alleging liability or potential liability (including without
limitation liability or potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resource damages,
property damage, personal injury, fines or penalties) arising out of,
relating to, based on or resulting from (i) the presence, discharge,
emission, release or threatened release of any Materials of
Environmental Concern at any location, (ii) circumstances forming the
basis of any violation or alleged violation of any Environmental Law or
Environmental Permit, or (iii) otherwise relating to obligations or
liabilities under any Environmental Law.
"ENVIRONMENTAL LAWS" means all foreign (to the extent applicable),
federal, state and local statutes, rules, regulations, ordinances,
orders, judgements, decrees and common law relating in any manner to
contamination, pollution, or protection of human health or the
environment, including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act, the Solid Waste
Disposal Act, the Clean Air Act, the Clean Water Act, the Toxic
Substances Control Act, the ENDANGERED
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Species Act, the National Environmental Protection Act, the
Occupational Safety and Health Act, the Emergency Planning and
Community-Right-to-Know Act, the Safe Drinking Water Act, all as
amended, and similar laws of any other governmental authority.
"ENVIRONMENTAL PERMITS" means all permits, licenses, registrations and
other governmental authorizations or exemptions required under
Environmental Laws.
"MATERIALS OF ENVIRONMENTAL CONCERN" refers to any waste, pollutant,
contaminant or other substance of any kind (including without
limitation odors, radioactivity, and electromagnetic fields) regulated
by or under, or which may otherwise give rise to liability under, any
Environmental Law.
"ROXELL INC. PROPERTY" means all real property in which Roxell Inc.
has any legal interest, including without limitation a leasehold
interest, and any equipment or other property owned or leased by
Roxell Inc.
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