EXHIBIT 2.1
STOCK AND ASSET PURCHASE AGREEMENT
by and between
STANHOME INC.
and
LABORATOIRES DE BIOLOGIE VEGETALE YVES ROCHER S.A.
dated as of November 24, 1997
TABLE OF CONTENTS
ARTICLE I
PURCHASE AND SALE OF SHARES AND ASSETS
Section 1.1 Group Subsidiary Sale Shares to be Sold 4
Section 1.2 Assets to be Sold . . . . . . . . . . . 2
Section 1.3 Consideration . . . . . . . . . . . . 4
Section 1.4 Escrow . . . . . . . . . . . . . . . . 4
Section 1.5 Closing . . . . . . . . . . . . . . . . 4
Section 1.6 Deliveries by Stanhome . . . . . . . . 4
Section 1.7 Deliveries by the Buyer . . . . . . . . 5
Section 1.8 Requirements of Foreign Law . . . . . . 6
Section 1.9 Currency Valuation . . . . . . . . . . 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF STANHOME
Section 2.1 Corporate Organization . . . . . . . . 7
Section 2.2 Authorization . . . . . . . . . . . . . 7
Section 2.3 Capitalization . . . . . . . . . . . . 8
Section 2.4 Ownership of Group Subsidiary Sale Shares
and Assets . . . . . . . . . . . . . . 9
Section 2.5 Consents and Approvals; Non-
Contravention . . . . . . . . . . . . . 9
Section 2.6 Financial Statements . . . . . . . . . 10
Section 2.7 Bank Accounts . . . . . . . . . . . . . 11
Section 2.8 Inventory . . . . . . . . . . . . . . . 11
Section 2.9 Accounts Receivable . . . . . . . . . . 11
Section 2.10 Absence of Undisclosed Liabilities . . 11
Section 2.11 Interim Change . . . . . . . . . . . . 12
Section 2.12 Litigation . . . . . . . . . . . . . . 14
Section 2.13 No Violation . . . . . . . . . . . . . 14
Section 2.14 Owned Real Property . . . . . . . . . . 15
Section 2.15 Leases . . . . . . . . . . . . . . . . 16
Section 2.16 Intellectual Property . . . . . . . . . 17
Section 2.17 Contracts and Commitments . . . . . . . 18
Section 2.18 Product Warranty and Returns . . . . 21
Section 2.19 Insurance . . . . . . . . . . . . . . . 21
Section 2.20 Environmental Matters . . . . . . . . . 21
Section 2.21 Taxes . . . . . . . . . . . . . . . . . 22
Section 2.22 Labor Matters . . . . . . . . . . . . . 24
Section 2.23 60-Day Active Dealers . . . . . . . . . 24
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
Section 3.1 Corporate Organization . . . . . . . . 25
Section 3.2 Authorization . . . . . . . . . . . . . 25
Section 3.3 Consents and Approvals; Non-
Contravention . . . . . . . . . . . . . 25
Section 3.4 Litigation . . . . . . . . . . . . . . 26
Section 3.5 Acquisition of Capital Stock of
Each Group Subsidiary for Investment. . 26
Section 3.6 Financing . . . . . . . . . . . . . . . 26
ARTICLE IV
COVENANTS
Section 4.1 Spanish Transfer. . . . . . . . . . . . 26
Section 4.2 Interim Distributions . . . . . . . . . 27
Section 4.3 Italian Stock Transfer . . . . . . . . 27
Section 4.4 Retained Rights . . . . . . . . . . . . 27
Section 4.5 Conduct of the Business . . . . . . . . 29
Section 4.6 Access to Information . . . . . . . . . 33
Section 4.7 Regulatory Compliance . . . . . . . . . 33
Section 4.8 Consents and Approvals; Consultations . 34
Section 4.9 Further Assurances . . . . . . . . . . 34
Section 4.10 Tax Refunds and Credits . . . . . . . . 35
Section 4.11 Tax Benefit . . . . . . . . . . . . . . 35
Section 4.12 Taxes for Short Taxable Year . . . . . 36
Section 4.13 Record Maintenance . . . . . . . . . . 36
Section 4.14 Tax Returns . . . . . . . . . . . . . . 37
Section 4.15 Tax Contests . . . . . . . . . . . . . 37
Section 4.16 Tax Cooperation . . . . . . . . . . . . 38
Section 4.17 Resolution of Certain Conflicts . . . . 39
Section 4.18 Transfer Taxes . . . . . . . . . . . . 39
Section 4.19 Tax Allocations . . . . . . . . . . . . 39
Section 4.20 All Reasonable Efforts . . . . . . . . 40
Section 4.21 Acquisition Proposals . . . . . . . . . 40
Section 4.22 Publicity . . . . . . . . . . . . . . . 40
Section 4.23 Trade Payables, Royalties, Fees
and Intercompany Payables . . . . . . . 41
Section 4.24 Subsidiary Cash Amount . . . . . . . . 41
Section 4.25 Releases . . . . . . . . . . . . . . . 41
Section 4.26 Terminations of Agreements . . . . . . 41
Section 4.27 Importance of Stanhome Dealers; Key
Employee Incentives . . . . . . . . . . 41
Section 4.28 Liquidating Subsidiaries . . . . . . . 41
Section 4.29 Liabilities for Inadequate Reserves . . 42
Section 4.30 Distribution Facilities . . . . . . . . 42
ARTICLE V
CONDITIONS TO OBLIGATIONS OF THE PARTIES
Section 5.1 Conditions to Each Party's Obligation . 42
Section 5.2 Conditions to Obligations of Stanhome . 43
Section 5.3 Conditions to Obligations of the Buyer. 44
ARTICLE VI
TERMINATION
Section 6.1 Termination . . . . . . . . . . . . . . 45
Section 6.2 Procedure for and Effect of Termination 46
ARTICLE VII
SURVIVAL AND INDEMNIFICATION
Section 7.1 Survival . . . . . . . . . . . . . . . 47
Section 7.2 Indemnification . . . . . . . . . . . . 47
Section 7.3 Procedure for Indemnification . . . . . 48
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Amendment and Waiver . . . . . . . . . 50
Section 8.2 Expenses . . . . . . . . . . . . . . . 50
Section 8.3 Broker's and Finder's Fees . . . . . . 50
Section 8.4 Notices . . . . . . . . . . . . . . . . 51
Section 8.5 Entire Agreement; Binding Effect . . . 52
Section 8.6 Applicable Law . . . . . . . . . . . . 52
Section 8.7 Parties in Interest . . . . . . . . . . 52
Section 8.8 Counterparts . . . . . . . . . . . . . 52
Section 8.9 Interpretation . . . . . . . . . . . . 53
Section 8.10 Severability . . . . . . . . . . . . . 53
Schedules
SCHEDULE I -- GROUP SUBSIDIARIES/HOLDERS OF GROUP
SUBSIDIARY CAPITAL STOCK . . . . I-1
SCHEDULE II -- CERTAIN ASSETS TO BE SOLD . . . . II-1
SCHEDULE III -- GROUP SUBSIDIARY SALE SHARES . . . III-1
SCHEDULE IV -- DIRECTORS . . . . . . . . . . . . IV-1
SCHEDULE V -- REQUIREMENTS OF FOREIGN LAW . . . V-1
SCHEDULE VI -- KEY GROUP SUBSIDIARY EMPLOYEES . . VI-1
SCHEDULE VII -- TAX ALLOCATION . . . . . . . . . VII-1
Exhibits
Exhibit A -- REPRESENTATIVE AGREEMENT . . . . . A-1
Exhibit B -- ESCROW AGREEMENT . . . . . . . . . B-1
Exhibit C -- SUPPLY AGREEMENT - Term Sheet . . . C-1
Exhibit D -- BILL OF SALE, ASSIGNMENT AND
ASSUMPTION . . . . . . . . . . . D-1
Exhibit E -- TRANSFER AGREEMENT - France . . . . E-1
Exhibit F -- TRANSFER AGREEMENT - Italy . . . . F-1
Exhibit G -- TRANSFER AGREEMENT - Mexico . . . . G-1
Exhibit H -- TRANSFER AGREEMENT - Spain . . . . H-1
Exhibit I -- RESIGNATION LETTER . . . . . . . . I-1
STOCK AND ASSET PURCHASE AGREEMENT
This Stock and Asset Purchase Agreement (this
"Agreement") is made and entered into as of this 24th day
of November, 1997 by and between Stanhome Inc., a
Massachusetts corporation ("Stanhome"), on its own behalf
and as representative of and attorney-in-fact for the
Qualifying Holders (as defined below), and Laboratoires
de Biologie Vegetale Yves Rocher S.A., a corporation
organized under the laws of France (the "Buyer").
WHEREAS, Stanhome and the Qualifying Holders
(together, the "Sellers") collectively are the record
owners of all of the Group Subsidiary Sale Shares (as
defined below); and
WHEREAS, the record owners of the Group
Subsidiary Sale Shares other than Stanhome (the
"Qualifying Holders") are affiliates, employees or agents
of Stanhome who or which hold their respective Group
Subsidiary Sale Shares solely as nominal or qualifying
shareholders pursuant to the requirements of applicable
law; and
WHEREAS, the Qualifying Holders each have
executed and delivered to Stanhome a Representative
Agreement dated November 21, 1997, substantially in the
form attached hereto as Exhibit A, providing for Stanhome
to act as representative of and attorney-in-fact for the
Qualifying Holders under and in connection with this
Agreement; and
WHEREAS, the direct and indirect subsidiaries
of Stanhome listed on Schedule I hereto (the "Group
Subsidiaries") constitute all of the subsidiaries of
Stanhome necessary for the conduct of the business of the
Stanhome Worldwide Direct Selling Group, an operating
group of Stanhome, other than Stanhome Capital Inc.,
Stanhome Worldwide Direct Selling Group, Inc., Stanhome
European Development Center, S.A. and Cosmhogar, S.A.
(the "Group"), as it is currently being conducted; and
WHEREAS, Stanhome is the registered owner of
the Intellectual Property (as defined below) indicated as
owned by Stanhome on Section 2.16(f) of the Disclosure
Schedule (as defined below) and holds the contract assets
listed on Schedule II hereto (such Intellectual Property
and contract assets, subject to the Retained Rights (as
defined below), the "Assets") together with all
liabilities associated therewith, and, except as
described in Section 1.2 hereof, the Assets constitute
all of the contract and property rights and other assets
not owned, leased or licensed for use by one or more of
the Group Subsidiaries which are necessary to the conduct
of the business of the Group in the Territory (as defined
below) as it is currently being conducted; and
WHEREAS, the Sellers desire to sell the Group
Subsidiaries and Stanhome desires to sell the Assets, and
assign all associated liabilities, to the Buyer, and the
Buyer desires to purchase the Group Subsidiaries from the
Sellers and to purchase the Assets, and assume all
associated liabilities, from Stanhome, through the
purchase by the Buyer of the Group Subsidiary Sale Shares
from the Sellers and the Assets, together with all
associated liabilities, from Stanhome, in each case upon
the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the
foregoing and the respective representations, warranties,
covenants, agreements and conditions hereinafter set
forth, and intending to be legally bound hereby, each of
the parties hereto agrees as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES AND ASSETS
Section 1.1 Group Subsidiary Sale Shares to be
Sold. Upon the terms and subject to the conditions
contained herein, at the Closing (as hereinafter
defined), each Seller shall sell and transfer to the
Buyer and its nominees (together, the "Transferees"), if
any, and the Buyer shall purchase and accept from each
Seller on behalf of itself and any other Transferees, the
number and kind of shares of capital stock or other
equity interests (as applicable) set forth on Schedule
III hereto, which collectively constitute all of the
issued and outstanding shares of capital stock or other
equity interests (as applicable) of each of the Group
Subsidiaries not owned of record by another Group
Subsidiary (the "Group Subsidiary Sale Shares").
Section 1.2 Assets to be Sold.
(a) Upon the terms and subject to the
conditions contained herein, at the Closing, Stanhome
shall sell and transfer to the designated Transferees,
and the Buyer shall purchase and accept from Stanhome on
its own behalf and on behalf of any other Transferees the
Assets, together with all associated liabilities. The
Assets constitute all contract and property rights and
other assets not owned, leased or licensed for use by one
or more Group Subsidiaries which are necessary to the
conduct of the business of the Group as it is currently
being conducted in the Territory (as defined below).
Stanhome and the Buyer expressly acknowledge that the
Assets do not include, among other things, (i) capital
stock of any direct or indirect subsidiary of Stanhome
(including without limitation the Group Subsidiary Sale
Shares); (ii) the License Agreement dated January 16,
1995 between Stanhome and CPAC, Inc. ("CPAC") and the
related Agreement dated January 16, 1995 between Stanhome
and CPAC, as amended (together, the "CPAC Agreements");
(iii) the Trademark License Agreement dated August 6,
1992 between Stanhome and Stanlar Produtos Para o Lar
Ltda. ("Stanlar"), as amended, and the Manufacturing and
Distribution Agreement dated August 6, 1992 between
Stanhome and Stanlar (together, the "Stanlar Agreements"
and together with the CPAC Agreements, the "Third-party
Agreements"); and (iv) the "Stanley" and "Stanley Home
Products" word trademarks and the "C-PLUS" trademark in
Brazil, Canada, the United States and Puerto Rico,
together with such other rights, matters and things
(whether owned, leased, licensed for use or held as of
the date hereof by Stanhome) as necessary to ensure that
Stanhome is able to comply with its obligations under the
Third-party Agreements after the Closing (such
trademarks, rights, matters and things described in this
clause (iv) being referred to herein as the "Retained
Rights").
(b) For purposes of this Agreement,
"Territory" shall mean the world, except as otherwise
provided in this Section 1.2(b). Until the earlier of
the termination of the CPAC Agreements or the assignment
of the CPAC Agreements to the Buyer, the term "Territory"
shall mean, with respect to the Retained Rights
applicable to the CPAC Agreements (including without
limitation the "Stanley" and "Stanley Home Products" word
trademarks and the C-PLUS trademark in Canada, the United
States and Puerto Rico (the "CPAC Marks")), the world
other than Canada, the United States and Puerto Rico.
Until the earlier of the termination of the Stanlar
Agreements or the assignment of the Stanlar Agreements to
the Buyer, the term "Territory" shall mean, with respect
to the Retained Rights applicable to the Stanlar
Agreements (including without limitation the "Stanley"
and "Stanley Home Products" word trademarks in Brazil
(the "Stanlar Marks")), the world other than Brazil.
Section 1.3 Consideration. Upon the terms and
subject to the conditions contained herein and in
consideration of, and in full payment for, the aforesaid
sale and transfer of the Assets and the Group Subsidiary
Sale Shares, at the Closing, the Buyer shall pay to
Stanhome, the Escrow Agent (as defined below) and, to the
extent required, to the Tax (as defined below)
Authorities of Venezuela as specified in Schedule V
hereto, at the time and in the relative amounts set forth
in Section 1.7 hereof, in immediately available funds, an
aggregate amount equal to the sum (such sum being
referred to herein as the "Total Purchase Price") of:
(a) 330,000,000 French francs (the
"Transaction Cash Amount"); plus
(b) The Subsidiary Cash Amount (as defined
below).
For the purposes of this Agreement, "Subsidiary Cash
Amount" means the sum of:
$13,800,000, plus
the net after-tax gain on the Italian Stock Transfer
(as defined below), plus
the net after-tax gain on the Spanish Transfer (as
defined below), plus
any mutually agreed cash contribution to any of the
Group Subsidiaries between the date of this
Agreement and the Closing Date, less
all dividends and other distributions (including any
Interim Distribution) paid or made by any of the
Group Subsidiaries from October 30, 1997 to the
Closing Date (as defined below),
representing the minimum amount of cash and cash
equivalents (including the Common Stock (as defined
below) currently owned of record by Stanhome S.p.A. as of
the Closing Date), net of bank debt, calculated using the
Exchange Rate.
For purposes of this Agreement, "Exchange Rate" shall
mean the average U.S. dollar equivalent spot rate for the
respective currencies comprising the Subsidiary Cash
Amount over the two business days for which such rates
are published in the Eastern United States edition of The
Wall Street Journal on the day which is two business days
prior to the Closing Date.
Section 1.4 Escrow. Stanhome, the Buyer and
The First National Bank of Chicago or such other escrow
agent as the parties hereto mutually select, as escrow
agent (the "Escrow Agent"), are entering into an Escrow
Agreement as of the Closing Date, in substantially the
form attached hereto as Exhibit B (the "Escrow
Agreement"), providing for (a) the delivery of an amount
equal to FF66,000,000 (the "Escrow Amount"), by the Buyer
to the Escrow Agent and (b) the retention, holding,
distribution and delivery of the Escrow Amount by the
Escrow Agent upon the terms and subject to the conditions
set forth in the Escrow Agreement.
Section 1.5 Closing. The closings of the
transactions contemplated by this Agreement will occur at
10:00 a.m., local time, on December 18, 1997, at the
principal office of Stanhome in respect of the Assets and
at the principal office of each Group Subsidiary as to
which Group Subsidiary Sale Shares are to be sold hereby,
or on such other date or at such other time or place (or
places) as Stanhome and the Buyer shall mutually agree in
advance thereof, so long as the place of the closing of
the sale of Group Subsidiary Shares for each Group
Subsidiary is in the country of organization of that
Group Subsidiary. Such closings, which shall be deemed
to occur simultaneously, are referred to herein
collectively as the "Closing." The time and date of the
Closing is sometimes referred to herein as the "Closing
Date."
Section 1.6 Deliveries by Stanhome. On the
Closing Date, Stanhome will deliver or cause to be
delivered to the Buyer or the Buyer's nominees the
following:
(a) stock certificates evidencing the
Group Subsidiary Sale Shares free and clear of any Liens
(as defined below), duly endorsed in blank or accompanied
by appropriate stock powers or other stock transfer
forms, as applicable, duly executed in blank (if
permitted by applicable law), in proper form for transfer
and with all requisite stock transfer stamps, if any,
attached or provided for;
(b) the stock book, stock ledger,
minute book and corporate seal (if any) of each of the
Group Subsidiaries, where permitted by applicable law;
(c) the Escrow Agreement, executed by
Stanhome and the Escrow Agent;
(d) a Supply Agreement between
Cosmhogar, S.A. and the Buyer, incorporating and limited
to the terms and provisions set forth in Exhibit C hereto
(the "Supply Agreement"), executed by Cosmhogar, S.A.;
(e) a Bill of Sale, Assignment and
Assumption, substantially in the form attached hereto as
Exhibit D (the "Bill of Sale"); executed by Stanhome;
(f) instruments of assignment executed
by Stanhome covering each Asset which is Intellectual
Property, in proper form for filing with the appropriate
Governmental Entity (as defined below), to effect the
transfer of record ownership of each Asset which is
Intellectual Property from Stanhome to the Buyer or its
nominees;
(g) separate share purchase
agreements, substantially in the forms attached hereto
as Exhibits E through H (the "Transfer Agreements"),
executed by Stanhome;
(h) the written resignations,
substantially in the form attached hereto as Exhibit I,
of each of the directors of each of the Group
Subsidiaries listed on Schedule IV hereto from their
respective positions as directors, effective as of the
Closing Date; and
(i) such other instruments or
documents (including without limitation those required by
applicable law in various jurisdictions) as may be
reasonably necessary to carry out the transactions
contemplated by this Agreement and to comply with the
terms hereof, including without limitation all books and
records, accounting, regulatory and personnel files and
all other documentation material to the conduct of the
operations of the Group Subsidiaries and not in the
possession of one or more of the Group Subsidiaries at
the Closing Date.
Section 1.7 Deliveries by the Buyer. On the
Closing Date, the Buyer will deliver or cause to be
delivered the following:
(a) an amount equal to the Total
Purchase Price minus the Escrow Amount, to Stanhome and
to the Tax Authority of Venezuela as specified in
Schedule V hereto;
(b) the Escrow Amount, to the Escrow
Agent;
(c) the Escrow Agreement, executed by
the Buyer, to Stanhome;
(d) the Supply Agreement, executed by
the Buyer, to Cosmhogar, S.A.;
(e) the Bill of Sale, executed by the
Buyer, to Stanhome;
(f) a certificate from each Transferee
other than the Buyer, in accordance with the provisions
of Section 5.2(c) hereof, to Stanhome;
(g) the Transfer Agreements executed
by the Buyer, to Stanhome; and
(h) such other instruments or
documents (including without limitation those required by
applicable law in various jurisdictions) as may be
reasonably necessary to carry out the transactions
contemplated by this Agreement and to comply with the
terms hereof to Stanhome.
Section 1.8 Requirements of Foreign Law.
Certain significant procedural and substantive legal
requirements relating to the transactions contemplated
hereby (including without limitation separate share
purchase agreements) in each jurisdiction in which a
Group Subsidiary is organized are set forth in Schedule V
hereto.
Section 1.9 Currency Valuation. Except as
otherwise provided in Section 7.3(d) hereof, for purposes
of calculating or otherwise determining thresholds, caps
or other amounts set forth in this Agreement in U.S.
dollars, components of any such amounts which are
reflected or presented in any currency other than U.S.
dollars shall be converted to U.S. dollars using the
average U.S. dollar equivalent spot rate for such
currencies over the two business days for which such
rates are published in the Eastern United States edition
of The Wall Street Journal on the day which is two days
prior to the date hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF STANHOME
Stanhome hereby represents and warrants to the
Buyer as follows:
Section 2.1 Corporate Organization.
(a) Stanhome is a corporation duly
organized, validly existing and in good standing under
the laws of the Commonwealth of Massachusetts and has the
corporate power and authority to own or lease its
properties and to carry on its business as it is
currently being conducted.
(b) Each of the Group Subsidiaries
is a corporation or other entity duly organized, validly
existing and in good standing (if such status is
recognized under applicable law) under the laws of its
respective jurisdiction of organization, as specified and
listed in Section 2.1(b) of the Disclosure Schedule, and
has the corporate or other power and authority to own or
lease its properties and to carry on its business as it
is currently being conducted. The copies of the
organizational documents of each Group Subsidiary (the
"Organizational Documents"), attached to the disclosure
schedule delivered by Stanhome to the Buyer on or prior
to the date hereof (the "Disclosure Schedule") as Exhibit
D to the Disclosure Schedule, are complete and correct
copies of such instruments as currently in effect.
Section 2.2 Authorization.
(a) Stanhome has the requisite
corporate power and authority to enter into this
Agreement and the other agreements, documents and
instruments to be executed and delivered pursuant hereto
by Stanhome on its own behalf (the "Additional Stanhome
Documents") and to carry out the transactions
contemplated hereby and thereby. The execution and
delivery of this Agreement and the Additional Stanhome
Documents and the consummation of the transactions
contemplated hereby and thereby have been duly authorized
by the Board of Directors of Stanhome, and no other
proceedings on the part of Stanhome or its stockholders
are necessary to authorize the execution and delivery of
this Agreement and the Additional Stanhome Documents and
the transactions contemplated hereby and thereby. This
Agreement and each of the Additional Stanhome Documents
have been executed and delivered by Stanhome and,
assuming that this Agreement and each of the Additional
Stanhome Documents constitute valid and binding
obligations of the Buyer and the other parties thereto,
constitute valid and binding obligations of Stanhome,
enforceable against Stanhome in accordance with their
respective terms, except that enforcement hereof and
thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a
proceeding at law or in equity).
(b) Stanhome has the requisite
power and authority to enter into this Agreement and the
other agreements, documents and instruments to be
executed and delivered pursuant hereto by Stanhome as
representative and attorney-in-fact for the Qualifying
Holders (the "Additional Holder Documents") and to carry
out the transactions contemplated hereby and thereby.
When fully executed and delivered, assuming that this
Agreement and each of the Additional Holder Documents
constitute valid and binding obligations of the Buyer and
the other parties thereto, this Agreement and each of the
Additional Holder Documents will constitute valid and
binding obligations of the Qualifying Holders,
enforceable against the Qualifying Holders in accordance
with their respective terms, except that enforcement
hereof and thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a
proceeding at law or in equity).
Section 2.3 Capitalization. The entire
authorized and outstanding capital stock or other equity
interests (as applicable) of each of the Group
Subsidiaries is as set forth in Section 2.3(a) of the
Disclosure Schedule. All of the outstanding shares of
capital stock or other equity interests (as applicable)
of each Group Subsidiary are duly authorized for
issuance, have been validly issued and are fully paid,
nonassessable and, except as set forth in Section 2.3(b)
of the Disclosure Schedule, free of any mortgage, pledge,
security interest, encumbrance, lien, claim, liability or
charge of any kind or right of others of whatever nature,
preemptive rights or other restrictions with respect
thereto, whether pertaining to a Governmental Entity or
otherwise ("Liens"). Schedule I hereto sets forth
completely and accurately the record ownership of all
outstanding shares of capital stock or other equity
interests (as applicable) of each Group Subsidiary as of
the date hereof. There are no securities outstanding
which are convertible into or exercisable or exchangeable
for shares of capital stock or other equity interests (as
applicable) of any of the Group Subsidiaries, and there
are no outstanding options, rights, contracts, warrants,
subscriptions, conversion rights or other agreements or
commitments (a) pursuant to which any of the Group
Subsidiaries may be required to purchase, redeem, issue,
transfer subject to a Lien or sell any shares of the
capital stock or other equity interests (as applicable)
of itself or of any other Group Subsidiary or (b) in any
way relating to the issuance, ownership or voting of the
capital stock or other equity interests (as applicable)
of any Group Subsidiary or the placement of a Lien
thereon.
Section 2.4 Ownership of Group Subsidiary
Sale Shares and Assets. Except as set forth in Section
2.4 of the Disclosure Schedule: (a) the Sellers have,
and at the Closing, upon delivery by the Buyer of the
Total Purchase Price pursuant to Sections 1.3 and 1.7
hereof, the Transferees will acquire, good and valid
record and beneficial ownership of the Group Subsidiary
Sale Shares, free and clear of any Liens; (b) the Group
Subsidiaries that own of record outstanding shares of
capital stock or other equity interests (as applicable)
of another Group Subsidiary (each, an "Indirect Group
Subsidiary") have, and at the Closing, upon delivery by
the Buyer of the Total Purchase Price pursuant to
Sections 1.3 and 1.7 hereof, the Transferees will acquire
by the Buyer's purchase of the Group Subsidiaries owning
of record such outstanding capital stock or other equity
interests (as applicable) beneficial ownership, free and
clear of all Liens, of all issued and outstanding shares
of capital stock or other equity interests (as
applicable) of the Indirect Group Subsidiaries other than
those shares or interests that are Group Subsidiary
Shares (the "Indirect Group Subsidiary Shares"); and (c)
Stanhome has, and at the Closing, upon delivery by the
Buyer of the Total Purchase Price pursuant to Sections
1.3 and 1.7 hereof, the Transferees will acquire, good,
valid and marketable title to the Assets, free and clear
of any Liens. The Assets constitute all contract and
property rights and other assets not owned, leased or
licensed for use by one or more Group Subsidiaries which
are necessary to the conduct of the business of the Group
as it is currently being conducted in the Territory. The
parties intend that all right, title and interest in the
Group Subsidiary Sale Shares transfer from the Seller to
the Buyer or other Transferees at the time and place of
the closing for such Group Subsidiary Sale Shares.
Section 2.5 Consents and Approvals; Non-
Contravention. Except as set forth herein or in Section
2.5 of the Disclosure Schedule, neither the execution or
delivery of this Agreement, the Additional Holder
Documents or of any of the Additional Stanhome Documents
by Stanhome (whether on its own behalf or on behalf of
any Seller), nor the consummation by Stanhome (whether
on its own behalf or on behalf of any Seller) of the
transactions contemplated hereby or thereby, nor the
compliance by Stanhome with any of the provisions hereof
or thereof will (a) violate any provision of the Restated
Articles of Organization, as amended, or By-Laws of
Stanhome or the Organizational Documents, each as
currently in effect, (b) except for any required filings
under applicable U.S. or foreign antitrust or trade
regulation laws or regulations (including without
limitation those under the Securities Exchange Act of
1934, as amended (the "Exchange Act")), require any
filing with, or permit, authorization, consent or
approval of, any court, arbitral tribunal, administrative
agency or commission or other governmental or regulatory
authority or agency (a "Governmental Entity"), (c)
require any consent, approval or authorization under any
note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to
which any of the Group Subsidiaries is a party or by
which any of the Group Subsidiaries or any of their
respective properties or assets may be bound, (d) violate
any order, writ, injunction, decree, statute, rule or
regulation applicable to Stanhome or any of the Group
Subsidiaries, or any of their respective properties or
assets, or (e) result in a violation or breach of, or
constitute (with or without notice or lapse of time or
both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration or
any loss of a material benefit) under, or result in the
creation or imposition of (or the obligation to create or
impose) any Lien upon the Assets or upon any of the
properties or assets of any of the Group Subsidiaries
under, any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or
obligation to which any of the Group Subsidiaries is a
party or by which (i) any of the Assets or (ii) any of
the Group Subsidiaries or any of their respective
properties or assets may be bound, except, in the case of
clauses (b), (c), (d) and (e), for such filings,
consents, violations, breaches, defaults or Liens which
would not reasonably be expected to materially impair the
ability of Stanhome to perform its obligations hereunder
or which, either individually or in the aggregate, would
not reasonably be expected to have a material adverse
effect on the business, operations, properties, assets,
liabilities, financial condition or results of operations
of the Group, it being agreed between the parties that
the termination of employment (whether voluntary or
involuntary) of any key Group Subsidiary employee (as set
forth on Schedule VI hereto) shall not be deemed to
constitute or, as to the direct, foreseeable consequences
of such termination, contribute to such a material
adverse effect (a "Material Adverse Effect").
Section 2.6 Financial Statements. The
respective (a) audited balance sheets of each of the
Group Subsidiaries dated December 31, 1996, 1995 and
1994, (b) unaudited balance sheets of each of the Group
Subsidiaries dated October 30, 1997, (c) audited income
statements of each of the Group Subsidiaries for the
years ended December 31, 1996, 1995 and 1994, (d)
unaudited statements of cash flow of each of the Group
Subsidiaries for the years ended December 30, 1996, 1995
and 1994 and (e) unaudited income statements and
statements of cash flow of each of the Group Subsidiaries
for the ten months ended October 30, 1997, in each case
as set forth and described in Section 2.6 of the
Disclosure Schedule (collectively, the "Financial
Statements"), fairly present the financial condition of
each of the Group Subsidiaries as of the dates and for
the periods indicated (subject in the case of interim
statements to normal year-end adjustments) and, except
for the statements of cash flow, have been prepared in
accordance with U.S. generally accepted accounting
principles as historically and consistently applied by
Stanhome as described in Section 2.6 of the Disclosure
Schedule (subject to the absence of required footnote
disclosure, if any); provided, however, that any matter
or thing relating to inventory, accounts receivable or
absence of undisclosed liabilities which does not
constitute a breach of the representations and warranties
set forth in Sections 2.8, 2.9 and 2.10 hereof shall not
constitute a breach of this Section 2.6.
Section 2.7 Bank Accounts. Section 2.7 of
the Disclosure Schedule sets forth a complete and
accurate list of each banking, brokerage or other
financial service account of each Group Subsidiary,
together with the authorized signatories thereto.
Section 2.8 Inventory. Except as set forth
in Section 2.8 of the Disclosure Schedule, the inventory
reflected in the Financial Statements, taken as a whole,
net of reserves for losses on slow-moving and obsolete
inventory, was determined in accordance with U.S.
generally accepted accounting principles as historically
and consistently applied, and the inventory of the Group
Subsidiaries, taken as a whole, is saleable in the
ordinary course of business for the aggregate amount
therefor reflected on the Financial Statements, net of
reserves for losses on slow-moving and obsolete
inventory.
Section 2.9 Accounts Receivable. Except as
set forth in Section 2.9 of the Disclosure Schedule,
accounts receivable reflected in the Financial
Statements, taken as a whole, were determined in
accordance with U.S. generally accepted accounting
principles, as historically and consistently applied, and
all outstanding accounts receivable of the Group
Subsidiaries, taken as a whole, net of allowance for
doubtful accounts, represent sales, actually made in the
ordinary course of business and are collectible in the
ordinary course of business for the aggregate amount
therefor reflected on the Financial Statements, net of
allowance for doubtful accounts.
Section 2.10 Absence of Undisclosed Liabilities.
Except as (a) set forth in the Financial Statements or
Section 2.10 of the Disclosure Schedule or (b) incurred
since October 30, 1997 in the Ordinary Course of Business
(as defined below), there are no debts, liabilities or
obligations, contingent or otherwise, which would, net of
reserves applicable thereto, reasonably be expected to
have a Material Adverse Effect. Notwithstanding the
previous sentence, no Group Subsidiary, taken
individually, has liabilities or obligations for legal
proceedings, Taxes or labor matters, contingent or
otherwise, covered in Sections 2.12, 2.21 and 2.22
hereof, including the Disclosure Schedules pertaining
thereto, in excess of the applicable aggregate reserves
for such liabilities or obligations, taken as a whole for
such Group Subsidiary.
Section 2.11 Interim Change. Except as set forth
in Section 2.11 of the Disclosure Schedule or as
otherwise contemplated by this Agreement, since October
30, 1997, the Group Subsidiaries have been operating only
in, and have not engaged in any material transactions
other than in, the ordinary course of business
consistent with past practice, after giving effect to
changes represented by the Group's "Vision 2000"
initiative (the "Ordinary Course of Business"), including
without limitation, with respect to quantity and
frequency, and there has not been (a) any damage,
destruction or other casualty loss with respect to any
asset or property owned, leased or otherwise used by any
of the Group Subsidiaries which was not covered by
insurance and which has had, or would reasonably be
expected to have, a Material Adverse Effect or (b) any
strike, lockout, work stoppage or slowdown by employees
of any of the Group Subsidiaries, in each case whether
actual or threatened, which has had, or would reasonably
be expected to have, a Material Adverse Effect. Without
limiting the foregoing, since October 30, 1997, except as
otherwise contemplated by this Agreement or set forth in
Section 2.11 of the Disclosure Schedule, none of the
individual Group Subsidiaries has:
(i) sold, leased, transferred or
otherwise disposed of any material tangible assets or
property (including Indirect Group Subsidiary Shares),
except for sales or transfers of inventory or surplus
assets in the Ordinary Course of Business, or waived or
released any rights of material value related to the
business of the Group, or cancelled, compromised,
released or assigned any material debt or material claim
of value relating to the business of the Group, except in
any such case in the Ordinary Course of Business;
(ii) mortgaged, pledged or
subjected to any Lien (a) any of the assets of any of the
Group Subsidiaries outside of the Ordinary Course of
Business or (b) any Indirect Group Subsidiary Shares;
(iii) made (or committed to make)
capital expenditures in an amount in excess of
US$200,000;
(iv) assigned, transferred or
granted any material licenses or sublicenses or other
material rights to use any Intellectual Property or
entered into any material settlement regarding the breach
or infringement of any Intellectual Property owned, used
or licensed by any of the Group Subsidiaries, or modified
any material existing rights with respect thereto;
(v) instituted, settled or agreed
to settle any material litigation, action or proceeding
before any Governmental Entity outside of the Ordinary
Course of Business;
(vi) made any material purchase
commitment or material change in the selling, pricing,
advertising, distribution, marketing, warranty or
personnel practices, in any such case outside of the
Ordinary Course of Business;
(vii) incurred (a) any indebtedness
for money borrowed on behalf of the Group Subsidiaries in
excess of US$500,000 in the aggregate or (b) any
liability or obligation of any of the Group Subsidiaries,
direct or indirect, whether accrued, absolute, contingent
or otherwise, in excess of US$500,000, except for
liabilities and obligations arising in the Ordinary
Course of Business;
(viii) assumed, guaranteed,
endorsed or otherwise become responsible for the
obligations of any individual, partnership, corporation,
limited liability company, association, joint stock
company, trust or joint venture (a "Person") other than a
Group Subsidiary or made any loans or advances to any
Person other than a Group Subsidiary, in each case except
in the Ordinary Course of Business;
(ix) to the knowledge of Stanhome
(as such term is defined below), suffered any change in
its relations with employees, agents, distributors,
customers or suppliers which would be reasonably expected
to have a Material Adverse Effect;
(x) declared, set aside, paid or
made any dividend or other distribution with respect to
its capital stock, whether payable in cash, stock or
property or redeemed any shares of capital stock or made
any other distributions with respect to its capital stock
or the holders thereof payable in stock or property;
(xi) entered into or terminated any
contracts other than purchase orders entered into or
terminated in the Ordinary Course of Business with
respect to which the aggregate amount reasonably expected
to be received or paid thereunder in the future by such
Group Subsidiary exceeds US$500,000 (or is in excess of
US$250,000 per annum);
(xii) granted any material increase
in compensation or fringe benefits (other than
compensation increases made in the Ordinary Course of
Business and related changes in fringe benefits) of any
employees, agents, distributors or consultants, or paid
or agreed to pay any material pension or retirement
allowance, life insurance premiums or other material
benefit payments not required by any existing employment
agreement or plan to any such employees and not in the
Ordinary Course of Business, or committed itself to make
material variations in or material waivers with respect
to, or amended in any material respect, any employment
agreement or plan with or for the benefit of any employee
or other person, or instituted or adopted any
compensation or benefit program, plan or arrangement for
employees or collective bargaining agreement, in any such
case outside the Ordinary Course of Business;
(xiii) entered into any supply,
franchise, distribution or preferred supplier agreement,
with respect to which the aggregate amount reasonably
expected to be received or paid thereunder in the future
exceeds US$200,000 (or is in excess of US$100,000 per
annum); or
(xiv) entered into any written
agreement or made any written commitment to take any of
the types of action described in paragraphs (i) through
(xiii) above, except as set forth or referenced elsewhere
herein.
For purposes of this Agreement, "knowledge of Stanhome"
shall mean the actual knowledge, based upon reasonable
investigation, of Stanhome and/or Stanhome Worldwide
Direct Selling Group, Inc.
Section 2.12 Litigation. Except as set forth in
Section 2.12 of the Disclosure Schedule, there is no claim,
action, suit, inquiry, proceeding or investigation by or
before any Governmental Entity or arbitrator pending or,
to the knowledge of Stanhome, threatened against or involving
Stanhome or any of the Group Subsidiaries or affecting the Assets
or any of the respective properties or assets of any of the
Group Subsidiaries, including without limitation, any
product liability or product warranty claim or
proceeding, which, individually or in the aggregate, has
had or would reasonably be expected to have a Material
Adverse Effect or which in any manner seeks to prevent,
enjoin, alter or delay any transaction contemplated
hereby.
Section 2.13 No Violation. Except as set forth in
Section 2.13 of the Disclosure Schedule, neither Stanhome, nor
any of the Group Subsidiaries is in breach or violation of,
or in default under (and no event has occurred which with
notice or lapse of time or both would constitute such a
breach, violation or default), any term, condition or
provision of (a) its respective Organizational Documents,
(b) any order, writ, injunction, decree, statute, rule or
regulation applicable to it or any of its properties or
assets, including without limitation, applicable consumer
protection and product safety laws and regulations or (c)
any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation,
including any Benefit Plan (as defined below), to which
it is a party or by which it or any of its properties or
assets are bound, which breach, violation or default
would reasonably be expected to have a Material Adverse
Effect or otherwise have a material adverse effect on the
consummation of the transactions contemplated hereby.
Each of Stanhome and the Group Subsidiaries has, and is
in compliance with, all licenses, permits, variances,
exemptions, orders, approvals and other authorizations of
all Governmental Entities as are necessary in order to
enable it to own and conduct its business as currently
conducted, the lack of which, under applicable law, rule
or regulation, (x) would have a material adverse effect
on the consummation of the transactions contemplated by
this Agreement or (y) individually or in the aggregate,
would reasonably be expected to have a Material Adverse
Effect.
Section 2.14 Owned Real Property.
(a) Section 2.14 of the Disclosure
Schedule contains a complete and correct list of all
material real property and appurtenant easements owned by
each Group Subsidiary (the "Owned Real Property").
(b) Except as set forth in Section 2.14
of the Disclosure Schedule, each Group Subsidiary has
good and marketable title to each parcel of Owned Real
Property identified as being owned by it on Section 2.14
of the Disclosure Schedule, free and clear of any Liens,
other than Liens for Taxes (as defined below) not yet
due.
(c) There are no outstanding options or
rights of first refusal to purchase the Owned Real
Property, or any portion thereof or interest therein.
(d) The Owned Real Property, the Leased
Real Property (as defined below) and appurtenant
easements listed in Section 2.14 of the Disclosure
Schedule include all of the land, buildings, offices and
structures necessary to the conduct of the business of
the Group as it is currently being conducted in the
Territory.
(e) There are no proceedings in eminent
domain or other similar proceedings pending or, to the
knowledge of Stanhome, threatened, affecting any portion
of the Owned Real Property that would reasonably be
expected to have a Material Adverse Effect.
(f) To the knowledge of Stanhome, the
current use and operation of the Owned Real Property does
not violate any applicable building, zoning, subdivision
and other land use or similar laws, codes, ordinances,
rules, regulations and orders of Governmental Entities
(collectively, the "Real Property Law"), except as would
not reasonably be expected to have a Material Adverse
Effect, and neither Stanhome nor any of the Group
Subsidiaries has received any notice of violation or
claimed violation of any Real Property Law. To the
knowledge of Stanhome, there is no pending or anticipated
change in any Real Property Law that would reasonably be
expected to have a Material Adverse Effect.
Section 2.15 Leases.
(a) Section 2.15 of the Disclosure
Schedule contains a complete and correct list of all real
property and personal property leases to which any of the
Group Subsidiaries is a party or is bound with respect to
which the aggregate amount reasonably expected to be
received or paid thereunder is in excess of US$100,000
per annum (the "Leases"). Stanhome has made available to
Buyer correct and complete copies of the Leases. Each of
the Leases is in full force and effect, except as
disclosed in Section 2.15 of the Disclosure Schedule and
except where failure to be in full force and effect would
not reasonably be expected to have a Material Adverse
Effect. Except as disclosed in Section 2.15 of the
Disclosure Schedule, none of the Group Subsidiaries, and
to the knowledge of Stanhome, no other party is, in
default under any Lease, and to the knowledge of
Stanhome, no event has occurred and is continuing that
constitutes or, with notice or the passage of time or
both, would constitute such a default under any Lease,
except for such defaults as would not reasonably be
expected to have a Material Adverse Effect. For purposes
of this Agreement, the term "Leased Real Property" means
all real property, subject to a Lease, that is used in
connection with or necessary to carry on the business of
the Group Subsidiaries.
(b) As to the Leases:
(i) neither Stanhome nor any of
the Group Subsidiaries has received notice of a
proceeding in eminent domain, for eviction or other
proceeding affecting or relating to the Leased Real
Property; and
(ii) neither Stanhome nor any of
the Group Subsidiaries has received notice that the
current use and operation of the Leased Real Property
violates, in any material respect, any instrument of
record, lease or other agreement affecting the Leased
Real Property or any Real Property Laws.
Section 2.16 Intellectual Property.
(a) Except as set forth in Section
2.16(a) of the Disclosure Schedule, Stanhome or one of
the Group Subsidiaries owns, licenses or otherwise has
the right to use, sell, license or dispose of all
industrial and intellectual property rights, including
without limitation all patents, patent applications,
patent rights, trademarks, trademark applications, trade
names, service marks, service mark applications,
copyrights, copyright registrations, computer programs,
technology, know-how, trade secrets, proprietary
processes and formulae necessary to the conduct of the
business of the Group within the Territory as it is
currently being conducted (collectively, "Intellectual
Property").
(b) Except as set forth in Section
2.16(b) of the Disclosure Schedule hereto, (i) to the
knowledge of Stanhome, the conduct of the business of the
Group Subsidiaries does not infringe upon any
intellectual property rights of any third party except as
would not reasonably be expected to have a Material
Adverse Effect, and (ii) there are not now any suits, to
the knowledge of Stanhome, pending or threatened, against
or by Stanhome or any of the Group Subsidiaries claiming
a conflict by Stanhome or any of the Group Subsidiaries
with any intellectual property rights of any third party
or, to the knowledge of Stanhome, a conflict by any third
party with any of Stanhome's or any of the Group
Subsidiaries' rights in the Intellectual Property.
(c) Except as set forth in Section
2.16(c) of the Disclosure Schedule, neither Stanhome nor
any of the Group Subsidiaries has received any notice
from any thirty party challenging the right of Stanhome
or any of the Group Subsidiaries to use the Intellectual
Property or any claims requesting payment (other than
pursuant to valid license agreements) from Stanhome or
any of the Group Subsidiaries for the use of the
Intellectual Property.
(d) Except as set forth in Section
2.16(d) of the Disclosure Schedule, neither Stanhome nor
any of the Group Subsidiaries has licensed any
Intellectual Property to any third party pursuant to
terms or conditions that restrict or prevent in any
material respect Stanhome or any of the Group
Subsidiaries from using, licensing or assigning any such
Intellectual Property, except in connection with the
Assets listed on Schedule II hereto.
(e) To the knowledge of Stanhome, any
Intellectual Property not owned by Stanhome and the Group
Subsidiaries necessary to conduct the business of the
Group Subsidiaries as currently conducted, is (i)
licensed pursuant to licensing agreements that are in
full force and effect or (ii) otherwise made available
for use to Stanhome or one of the Group Subsidiaries,
except where failure to be so licensed or made available
would not reasonably be expected to have a Material
Adverse Effect.
(f) Section 2.16(f) of the Disclosure
Schedule sets forth a list of all registrations of and
applications for Intellectual Property owned by (i)
Stanhome and being transferred to the Buyer pursuant to
this Agreement or (ii) any Group Subsidiary.
Section 2.17 Contracts and Commitments.
(a) Section 2.17(a) of the Disclosure
Schedule sets forth a complete and accurate list of all
of the contracts to which Stanhome is a party which are
material to the conduct of the business of the Group and
a complete and accurate list of all of the following
contracts and agreements of each Group Subsidiary
(together, the "Material Contracts"):
(i) supply contracts or other
agreements or commitments with any supplier or customer
(A) upon which the business or operations of the Group is
substantially dependent, (B) calling for future payments
in excess of US$500,000 (or in excess of US$250,000 per
annum), (C) not terminable within 12 months, (D)
containing any provision permitting any party other than
the Group Subsidiary party thereto to renegotiate the
price or other terms or (E) containing any pay-back or
other similar provision;
(ii) credit agreements, mortgages,
notes, indentures, security agreements, pledges,
guarantees of or agreements to acquire any such debt
obligation of others or similar documents relating to
indebtedness for borrowed money (including without
limitation interest rate or currency swaps, hedges or
straddles or similar transactions) to which a Group
Subsidiary is a party or by which any of the assets
material to the conduct of the business of such Group
Subsidiary are bound, restricted, subject to a Lien or
otherwise encumbered;
(iii) each employment, consulting,
advisory, management, personal services, severance,
change of control, or termination agreements providing
for the payment by a Group Subsidiary of an amount in
excess of US$200,000 per annum;
(iv) all contracts, agreements or
arrangements material to the conduct of business of the
Group (including without limitation contracts, agreements
or arrangements to provide for the sale, lease or other
disposition of any material assets used in, or necessary
to carry on, the business of the Group and to purchase,
lease or otherwise acquire any material assets used in
connection with, or necessary to carry on, the business
of the Group), and not made in the Ordinary Course of
Business;
(v) all joint venture, joint
research or development, joint financing, franchise,
partnership or other contracts, agreements or
arrangements pursuant to which one or more of the Group
Subsidiaries is required to share profits or expenses
which would reasonably be expected to be in excess of
US$200,000; and
(vi) all material (A)
distributorship agreements and (B) license agreements
relating to the Intellectual Property, whether Stanhome
or any Group Subsidiary is the licensor or licensee
thereunder.
(b) Except as set forth in Section
2.17(b) of the Disclosure Schedule:
(i) no purchase contract of any
Group Subsidiary (or group of related contracts with the
same party) (A) continues for a period of more than 24
months (including renewals or extensions at the option of
another party) or (B) requires payment of more than
US$200,000 in any 12-month period;
(ii) no Group Subsidiary has a
pension, profit-sharing, bonus, severance pay,
retirement, hospitalization, insurance, stock purchase,
stock option or other benefit plan, arrangement,
understanding, obligation or agreement with or for the
benefit of any individual (a "Benefit Plan");
(iii) no Group Subsidiary is
restricted by any agreement from competing with any
Person in any line of business or geographic area within
the Territory (other than by geographic or use
restrictions relating to, or contained in licenses
relating to, Intellectual Property in connection with the
Assets listed on Schedule II hereto);
(iv) no Group Subsidiary has any
outstanding loan to any individual or entity, other than
advances to employees (A) for travel and entertainment
expenses in the Ordinary Course of Business and (B) in
amounts not in excess of US$200,000 per employee against
termination indemnities;
(v) no Group Subsidiary has any
employee to whom it is paying base salary at an annual
rate of more than US$200,000 for services rendered;
(vi) other than the obligations of
the Group Subsidiaries and their respective officers or
directors set forth in Section 2.17(b) of the Disclosure
Schedule, no Group Subsidiary has any obligation or
liability as surety, co-signer, endorser, co-maker,
indemnitor or otherwise in respect of an obligation of
any individual or entity;
(vii) no Group Subsidiary has
executed a power of attorney in favor of or has otherwise
authorized any party other than directors and officers of
Stanhome or one or more of the Group Subsidiaries to
execute documents on behalf of any such Group Subsidiary;
(viii) there is in effect no
voting trust, shareholders' agreement, pledge agreement
or buy-sell agreement relating to any securities of any
Group Subsidiary; and
(ix) no Group Subsidiary has any
agreement or obligation (contingent or otherwise) to
issue or sell or to repurchase or otherwise acquire or
retire any shares of its capital stock or any of its
other equity securities.
(c) Except as disclosed in Section
2.17(c) of the Disclosure Schedule: (i) each Material
Contract is in full force and effect as of the date
hereof; (ii) upon consummation of the transactions
contemplated by this Agreement and assuming compliance by
the other parties to each such Material Contract with the
terms thereof, each Material Contract shall continue in
full force and effect without penalty or other adverse
consequence; and (iii) no Group Subsidiary is in breach
of, or default under, any Material Contract or, as of the
date of this Agreement, has received any notice of
termination thereof or default thereunder.
Section 2.18 Product Warranty and Returns. The
product warranty and returns policies of each of the Group
Subsidiaries are as described in Section 2.18 of the
Disclosure Schedule.
Section 2.19 Insurance. Section 2.19 of the
Disclosure Schedule sets forth a complete and correct list
of all material policies or binders of insurance held by
or on behalf of each Group Subsidiary (specifying the
insurer, amount of the coverage, type of insurance,
expiration date of each policy, risks insured and any
pending claims thereunder). The Group Subsidiaries have
complied in all material respects with the terms and
conditions of such policies, there are no outstanding past
due premiums or claims, and there are no provisions for
retroactive or retrospective premium adjustments under any
such policy or binder. Each such policy is in full force
and effect, and no notice of cancellation or nonrenewal
with respect to, or disallowance of any claim under, any
such policy or binder has been received by any of the
Group Subsidiaries.
Section 2.20 Environmental Matters. Except as
set forth in Section 2.20 of the Disclosure Schedule, to
the knowledge of Stanhome:
(a) none of the Group Subsidiaries has
violated any applicable law, rule or legal requirement
relating to the environment or human health and safety or
the use of hazardous substances (an "Environmental Law"),
except where such violation would not reasonably be
expected to have a material adverse effect on the
business, operations, properties, assets, liabilities,
financial conditions or results of operations of that
Group Subsidiary;
(b) none of the Owned or Leased Real
Properties, nor any other property currently or formerly
utilized by the Group, has been or is polluted or
contaminated with any substance regulated pursuant to any
applicable Environmental Law, except where such pollution
or contamination would not reasonably be expected to have
a material adverse effect on the business, operations,
properties, assets, liabilities, financial condition or
results of operations of any individual Group Subsidiary;
(c) none of the Group Subsidiaries is
liable for any off-site disposal or contamination, except
where such liability would not reasonably be expected to
have a material adverse effect on the business,
operations, properties, assets, liabilities, financial
condition or results of operations of that Group
Subsidiary;
(d) none of the Group Subsidiaries has
received any notice of any claims or threatened claims
relating to any applicable Environmental Law;
(e) there are no circumstances,
conditions or events that would reasonably be expected to
result in claims, liability or investigation costs for
any individual Group Subsidiary, any restrictions on the
ownership, use or transfer of any Owned or Leased Real
Property under any applicable Environmental Law or
require any costs or capital expenditures as a matter of
sound environmental management practice, except, in each
such case, where such circumstances, conditions and
events which, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect
on the business, operations, properties, assets,
liabilities, financial condition or results of operations
of that Group Subsidiary; and
(f) Stanhome and the Group Subsidiaries
have delivered to Buyer copies of all environmental
reports, studies, assessments, sampling data and other
environmental information in their possession relating to
Stanhome, the Group Subsidiaries and their current and
former properties and operations except, in each such
case, where such violation, contamination, liability,
claims or threatened claims, circumstances, conditions,
events and failures to deliver which, individually or in
the aggregate, would not be reasonably likely to have a
material adverse effect on the business, operations,
properties, assets, liabilities, financial condition or
results of operations of any individual Group Subsidiary.
Section 2.21 Taxes.
(a) Except as disclosed in Section 2.21
of the Disclosure Schedule or as reflected in the
Financial Statements:
(i) All returns, declarations,
reports, estimates, information returns and statements
with respect to Taxes (collectively, "Tax Returns")
required to be filed on or before the date hereof by or
with respect to any Group Subsidiary for all periods
ending on or before the Closing Date have been (or will
be) timely filed (other than failures to file such Tax
Returns which would not have a Material Adverse Effect),
and all such Tax Returns are true, correct and complete
in all material respects.
(ii) No Group Subsidiary has any
liability with respect to income, franchise or similar
Tax Returns for the year ended December 31, 1996 or other
Tax Returns that were required to be filed on or before
October 30, 1997 in excess of the amounts accrued in
respect thereof that are reflected in the Financial
Statements.
(iii) The Tax Returns have been
examined by the appropriate Tax Authority (as defined
below) or the period for assessment of the Taxes in
respect of which such Tax Returns were required to be
filed has expired.
(iv) All deficiencies asserted or
assessments made as a result of such examination have
been paid in full.
(v) No material issues which have
been raised in writing by a relevant Tax Authority in
connection with the examination of any of the Tax Returns
are currently pending.
(vi) There are no liens for Taxes
upon the assets of any Group Subsidiary except liens for
Taxes not yet due and payable.
(vii) There are no outstanding
waivers or comparable consents regarding the application
of the statute of limitations with respect to any Taxes
or Tax Returns that have been given by or on behalf of
any of the Group Subsidiaries.
(viii) To the knowledge of
Stanhome, no audit or other administrative or judicial
proceeding by any foreign, federal, state or local court
or governmental, regulatory or administrative authority
is currently pending or threatened in writing with
respect to any Taxes or Tax Return of any of the Group
Subsidiaries.
(ix) Neither Stanhome nor any of
the Group Subsidiaries has (i) agreed to any extension of
the period for assessment or collection or (ii) executed
or filed any power of attorney with respect to any Taxes,
which agreement or power of attorney is currently in
force.
(x) No tax is required to be
withheld pursuant to Section 1445 of the Internal Revenue
Code of 1986, as amended (the "Code") as a result of the
transfers contemplated by this Agreement.
(b) For purposes of this Agreement,
"Taxes" (including, with correlative meaning, the term
"Tax") shall mean all taxes, charges, fees, levies or
other assessments, including without limitation all net
income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license,
withholding, payroll, employment, social security,
excise, estimated, severance, stamp, occupation, property
or other taxes, customs duties, fees, assessments or
charges of any kind whatsoever, together with any
interest, penalties or additions to tax, in each such
case, imposed with respect thereto by any taxing
authority, whether foreign or domestic (each, a "Tax
Authority").
Section 2.22 Labor Matters. Except as set forth
in Section 2.22 of the Disclosure Schedule, to the
knowledge of Stanhome: (a) the business of the Group and
each Group Subsidiary is operating and has been operated
in compliance with (i) collective bargaining arrangements,
(ii) applicable laws and regulations respecting employment
and employment practices, terms and conditions of
employment and wages and hours, including any such
applicable laws respecting employment discrimination,
equal opportunity, affirmative action, employee privacy,
wrongful or unlawful termination, workers' compensation,
occupational safety and health requirements,
labor-management relations and unemployment insurance and
(iii) the laws and regulations applicable to each Group
Subsidiary's obligations with respect to its independent
contractors, except, individually or in the aggregate, in
any such case as would not reasonably be expected to have
a Material Adverse Effect; (b) there is no labor strike,
dispute, or stoppage pending or threatened and none of the
Group Subsidiaries has experienced any work stoppage or
other labor difficulty which would reasonably be expected
to have a Material Adverse Effect; (c) none of the Group
Subsidiaries is materially delinquent in material payments
to any employees for any wages, salaries, commissions,
bonuses or other compensation for any services performed
by them or amounts required to be reimbursed to such
employees or payments required to Benefit Plans; and (d)
except for the contracts, agreements and other
arrangements listed in Section 2.22 of the Disclosure
Schedule, none of the Group Subsidiaries is a party to or
otherwise bound by any contract or other agreement with
any labor union or association representing any employee.
Except as set forth in Section 2.22 of the Disclosure
Schedule, no Governmental Entity has given any of the
Group Subsidiaries notice in writing regarding any pending
investigation or review by or before any Governmental
Entity concerning, or requested in writing any of the
Group Subsidiaries to explain, any possible conflicts with
or violations of any such applicable laws by Stanhome or
any of the Group Subsidiaries or in connection with the
operation of the business of the Group and the Group
Subsidiaries, nor, to the knowledge of Stanhome, is any
such investigation threatened or pending;
Section 2.23 60-Day Active Dealers. Section 2.23
of the Disclosure Schedule sets forth a listing of the
number of 60-Day Active Dealers of each Group Subsidiary
as of October 30, 1997, by country, within a positive or
negative variance of 10%. The number of 60-Day Active
Dealers, by country, set forth in Section 2.23 of the
Disclosure Schedule has been prepared on a basis
consistent with past practice.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE BUYER
The Buyer hereby represents and warrants to
each Seller as follows:
Section 3.1 Corporate Organization. The Buyer is
a corporation duly organized, validly existing and in good
standing under the laws of France.
Section 3.2 Authorization. The Buyer has the
requisite corporate power and authority to enter into this
Agreement and the other agreements, documents and
instruments to be executed and delivered by the Buyer
pursuant hereto (the "Additional Buyer's Documents") and
to carry out the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and
the Additional Buyer's Documents and the consummation of
the transactions contemplated hereby and thereby have been
duly authorized by the Board of Directors of the Buyer,
and no other corporate proceedings on the part of the
Buyer or its stockholders are necessary to authorize the
execution and delivery of this Agreement and the
Additional Buyer's Documents and the transactions
contemplated hereby and thereby. This Agreement and each
of the Additional Buyer's Documents have been duly
executed and delivered by the Buyer and, assuming that
this Agreement and the Additional Buyer's Documents
constitute valid and binding obligations of Stanhome,
constitute the valid and binding agreements of the Buyer,
enforceable against the Buyer in accordance with their
respective terms, except that enforcement hereof and
thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a
proceeding at law or in equity).
Section 3.3 Consents and Approvals;
Non-Contravention. Neither the execution or delivery of
this Agreement or any of the Additional Buyer's Documents
by the Buyer, nor the consummation by the Buyer of the
transactions contemplated hereby or thereby, nor
compliance by the Buyer with any of the provisions hereof
or thereof will (a) violate any provision of the statuts
of the Buyer, (b) except for any required filings under
applicable U.S. or foreign antitrust or trade regulation
laws or regulations, require any filing with, or permit,
authorization, consent or approval of, any Governmental
Entity, (c) require any consent, approval or authorization
under any material contract, lease or other agreement or
instrument or (d) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the
Buyer or any of its properties or assets, except, in the
case of clauses (b), (c) and (d), for such filings,
consents or violations which would not reasonably be
expected to have a material adverse effect on the Buyer's
ability to perform its obligations hereunder or to
consummate the transactions contemplated hereby.
Section 3.4 Litigation. There is no claim,
action, suit, inquiry, proceeding or investigation by or
before any Governmental Entity pending or, to the Buyer's
best knowledge, threatened against or involving the Buyer
which has had or would reasonably be expected to have a
material adverse effect on the Buyer's ability to perform
its obligations hereunder or to consummate the
transactions contemplated hereby.
Section 3.5 Acquisition of Capital Stock of Each
Group Subsidiary for Investment. The Buyer is acquiring
the capital stock of each Group Subsidiary being acquired
by it for investment and not with a view toward, or for
sale in connection with, any distribution thereof, nor
with any present intention of distributing or selling such
capital stock. The Buyer hereby acknowledges that no
capital stock of any Group Subsidiary has been registered
pursuant to the Securities Act of 1933, as amended, and
that no such capital stock may be transferred in the
absence of such registration or an applicable exemption
therefrom.
Section 3.6 Financing. The Buyer has sufficient
funds available or has received from responsible financial
institutions written commitments (copies of which have
been delivered to Stanhome), which have not been withdrawn
and remain in full force and effect, to provide sufficient
funds on the Closing Date to pay the Purchase Price.
ARTICLE IV
COVENANTS
Section 4.1 Spanish Transfer. Stanhome and the
Buyer acknowledge and agree that the warehouse and
distribution center owned by Stanhome, S.A., together with
certain related equipment and other personalty, will be
transferred, subject to certain rights to be granted to
the Buyer pursuant to the Supply Agreement, by Stanhome,
S.A. to Cosmhogar, S.A. for cash consideration equal to
the fair market value of the transferred assets at the
date of transfer (the "Spanish Transfer"). The net gain
realized on the Spanish Transfer, net of any applicable
Taxes, will comprise a portion of the Subsidiary Cash
Amount. If the Spanish Transfer is not completed prior to
the Closing Date, upon later completion of the Spanish
Transfer, the Buyer shall pay to Stanhome as soon as
practicable thereafter an amount equal to the net
after-tax gain realized by the Buyer on the Spanish
Transfer, which amount shall be accounted for as an
adjustment to the Total Purchase Price.
Section 4.2 Interim Distributions. Stanhome and
the Buyer acknowledge and agree that from and after the
date hereof and prior to the Closing, Stanhome and the
Group Subsidiaries may make distributions of cash or cash
equivalents which decrease the total U.S. dollar
equivalent of cash and cash equivalents, net of bank debt,
held by the Group Subsidiaries ("Interim Distributions") .
Section 4.3 Italian Stock Transfer. Stanhome and
the Buyer acknowledge and agree that the shares of common
stock, par value $.125 per share, of Stanhome (the "Common
Stock") owned of record by Stanhome S.p.A. will be
repurchased by Stanhome at a per share price equal to the
closing sale price of the Common Stock on the trading day
immediately preceding the date on which such shares of
Common Stock are so repurchased by Stanhome (the "Italian
Stock Transfer"). The net after-tax gain realized by the
Buyer on the Italian Stock Transfer, net of any applicable
Taxes, will comprise a portion of the Subsidiary Cash
Amount. If the Italian Transfer is not completed prior to
the Closing Date, upon later completion of the Italian
Transfer, the Buyer shall pay to Stanhome as soon as
practicable thereafter an amount equal to the net
after-tax gain realized by the Buyer on the Italian
Transfer, which amount shall be accounted for as an
adjustment to the Total Purchase Price.
Section 4.4 Retained Rights.
(a) Following the Closing, Stanhome shall
retain the Retained Rights on an exclusive, royalty-free
(as to the Buyer) basis (i) as to the Retained Rights
applicable to the CPAC Agreements through the end of the
original term (without any extension thereof) or earlier
assignment to the Buyer of the CPAC Agreements and (ii)
as to the Retained Rights applicable to the Stanlar
Agreements, through the end of the original term (without
any extension thereof) or earlier assignment to the Buyer
of the Stanlar Agreements. Upon the expiration of such
time in either such case, the Buyer shall own the
Retained Rights, Stanhome shall have no further rights
thereto and Stanhome shall take all action necessary to
transfer those Retained Rights to the Buyer without any
additional consideration therefor. During the time that
Stanhome has ownership of the Retained Rights, Stanhome
shall bear the cost and other burdens of compliance with
the terms and provisions of the CPAC Agreements and the
Stanlar Agreements and shall be entitled to the royalties
and other benefits of the CPAC Agreements and the Stanlar
Agreements. Stanhome agrees (A) not to renew or
otherwise extend the term of either the CPAC Agreements
or the Stanlar Agreements without the Buyer's prior
written consent, (B) at the request of the Buyer, to
assign the Stanlar Agreements to the Buyer 30 days prior
to the time that notice is required to be given to renew
or extend the original term of either of the Stanlar
Agreements, (C) use all reasonable efforts, including
making any necessary filings with Governmental Entities,
to prevent the denigration, dilution or infringement of
the intellectual property licensed for use under and
subject to the CPAC Agreements and the Stanlar Agreements
and not owned by CPAC or Stanlar, respectively (the
"Retained Intellectual Property"), and (D) use all
reasonable efforts to consult with the Buyer with respect
to the enforcement of Stanhome's termination, quality
control and other rights under the CPAC Agreements and
the Stanlar Agreements.
(b) In connection with the Retained
Rights, the Buyer agrees as follows:
(i) The Buyer acknowledges and
agrees that, pursuant to the Third-party Agreements, CPAC
and Stanlar have been granted, solely within the United
States, Puerto Rico, Canada and Brazil (the "Third-party
Territory"), as applicable, certain rights in and to,
among other assets: (A) certain trademarks registered in
the Third-party Territory which are substantially similar
or identical to certain of the trademarks included within
the Intellectual Property and (B) certain of the product
formulas included within the Intellectual Property
(collectively, the "Third-party Rights").
(ii) The Buyer further acknowledges
and agrees that (i) the provisions contained within the
Third-party Agreements relating to the Third-party Rights
have been disclosed to the Buyer and (ii) the exercise of
the Third-party Rights by CPAC or Stanlar, respectively,
solely within the Third-party Territory and in a manner
otherwise consistent with the Third-party Agreements
shall not infringe upon or in any way violate any of the
Intellectual Property sold to the Buyer hereunder.
(c) In light of the foregoing
acknowledgments of the Buyer and the other terms and
conditions hereof, the Buyer hereby agrees as follows:
(i) The Buyer shall not, and shall
not knowingly permit any third party to, in any way
utilize or otherwise exercise any rights under or in
connection with any Intellectual Property, including
without limitation any trademarks or formulas contained
therein, in the Third Party Territory during the terms of
the applicable Third-party Agreements. In the event that
the Buyer makes any disclosure, within the Territory as
permitted hereunder, to any third party (a "Permitted
Third Party") in connection with the utilization or other
exercise of any rights under or in connection with any
Intellectual Property, the Buyer shall (1) inform such
Permitted Third Party of the restrictions set forth in
this Section 4.4 and (2) obtain the written agreement of
such Permitted Third Party to comply with such
restrictions;
(ii) Buyer shall not export for
resale in the Third-party Territory any products
utilizing any formulas or marketed under any trademarks
contained within the Intellectual Property, nor shall
Buyer knowingly sell to others who would reasonably be
expected to export any such products for resale in the
Third-party Territory;
(iii) the Buyer shall not knowingly
interfere with any Third-party Rights and agrees not to
sell under the "Stanhome" marks in the Third-party
Territory any products currently manufactured and sold by
the Group during the terms of the applicable Third-party
Agreements; and
(iv) the Buyer shall not prosecute,
otherwise initiate, be a party to or a participant in or
voluntarily cooperate in any legal action or otherwise
assert any claim alleging that the proper exercise of the
Third-party Rights by CPAC or Stanlar, respectively,
within the Third-party Territory infringes upon or in any
way violates any of the Intellectual Property sold to
Buyer hereunder.
(d) Stanhome agrees that it has provided
the Buyer with complete and accurate copies of the CPAC
Agreements and the Stanlar Agreements. Stanhome agrees
that it shall not exercise the Retained Rights in a
manner which infringes upon or in any way violates any of
the Intellectual Property sold to the Buyer hereunder.
Stanhome acknowledges that the Buyer currently operates
in the Third-party Territory using its own marks and
other intellectual property and agrees that nothing
herein is intended to restrict those activities.
Stanhome further acknowledges that this Agreement is not
intended to give CPAC or Stanlar any rights with respect
to any products, formulas or other intellectual property
owned now or in the future by the Buyer, except that some
or all of the Retained Rights may be assigned to CPAC or
Stanlar as contemplated herein.
(e) The Buyer and Stanhome agree that,
until the first anniversary of the Closing Date, Stanhome
may discuss, negotiate and consummate a transaction or
series of transactions with CPAC after the date hereof
with respect to the CPAC Agreements and the CPAC Marks,
which transactions may include the sale of the CPAC Marks
to CPAC, the cancellation of the CPAC Agreements and the
transfer of the remaining Retained Intellectual Property
to the Buyer, the prepayment of royalties under the CPAC
Agreements, the cancellation of the related Agreement
dated January 16, 1995 between Stanhome and CPAC, as
amended, or the continuation in full force and effect of
the License Agreement dated January 16, 1995 between
Stanhome and CPAC and the transfer of the remaining
Retained Intellectual Property to the Buyer at the
expiration of the license term. Stanhome agrees to
consult with the Buyer prior to entering into any
agreement with respect to such transaction or
transactions with CPAC. The Buyer and Stanhome also
agree that, until the first anniversary of the Closing
Date, Stanhome may discuss, negotiate and consummate a
transaction or series of transactions with Stanlar after
the date hereof with respect to the Stanlar Agreements
and the Stanlar Marks, which transactions may include the
sale of the Stanlar Marks to Stanlar, the cancellation of
the Stanlar Agreements and the transfer of the remaining
Retained Intellectual Property to the Buyer, the
prepayment of royalties under the Stanlar Agreements, the
cancellation of the Manufacturing and Distribution
Agreement dated August 6, 1992 between Stanhome and
Stanlar or the continuation in full force and effect of
the Trademark License Agreement dated August 6, 1992
between Stanhome and Stanlar and the transfer of the
remaining Retained Intellectual Property to the Buyer at
the expiration of the license term. Stanhome agrees to
consult with the Buyer prior to entering into any
agreement with respect to such transaction or
transactions with Stanlar. The Buyer and Stanhome agree
that in the event that any of the transactions with CPAC
or Stanlar described in the preceding sentences of this
Section 4.4 are consummated prior to the Closing, this
Agreement will be amended to permit Stanhome to transfer
additional assets to the Buyer at Closing and make
related changes to this Agreement.
(f) Stanhome and the Buyer acknowledge and
agree that Stanhome's Trademark License Agreement with
McFarlan Smith Limited (the "Trademark License Agreement")
does not permit Stanhome to transfer, assign or sublicense
the Trademark License Agreement or the rights thereunder
which constitute a portion of the Assets without the
consent of McFarlan Smith Limited. Stanhome agrees to use
all reasonable efforts to secure consent to the transfer,
assignment or sublicense of those rights prior to the
Closing. If the consent to the transfer, assignment or
sublicense of those rights is not obtained prior to the
Closing, then Stanhome shall transfer those rights to the
Buyer as soon as practicable after the Closing and shall
use all reasonable efforts, including making any necessary
filings with Governmental Entities, to prevent the
denigration, dilution or infringement of the intellectual
property licensed for use under and subject to the
Trademark License Agreement until the transfer is
consummated.
Section 4.5 Conduct of the Business. Stanhome
agrees that, between the date of this Agreement and the
Closing, except as (i) otherwise contemplated by this
Agreement, (ii) set forth in Section 4.5 of the Disclosure
Schedule or (iii) consented to by the Buyer in writing:
(a) Stanhome shall use all reasonable efforts to
cause the business operations of the Group to be conducted
in the Ordinary Course of Business and to preserve intact
the Group's organization in all material respects, subject
to certain rights to be granted to the Buyer pursuant to
the Supply Agreement;
(b) Other than as part of or in connection with
the Spanish Transfer, an Interim Distribution, the Italian
Stock Transfer, the CPAC Transaction, the Stanlar
Transaction, the provision of key employee incentives as
described in Section 4.27 hereof or the dissolution or
liquidation of the Liquidating Subsidiaries (as defined
below), Stanhome shall not, and shall cause the Group
Subsidiaries not to:
(i) sell, lease, transfer or
otherwise dispose of any material tangible assets or
property of any of the Group Subsidiaries, except in the
Ordinary Course of Business, or waive or release any
rights of material value related to the business of the
Group, or cancel, compromise, release or assign any
material debt or material claim of value relating to the
business of the Group or indebtedness owed to any of the
Group Subsidiaries or any claims held by any of the Group
Subsidiaries, except in any such case in the Ordinary
Course of Business;
(ii) mortgage, pledge or subject
to any Lien any of the assets, property or income of any
of the Group Subsidiaries outside of the Ordinary Course
of Business;
(iii) make (or commit to make)
capital expenditures on behalf of any of the Group
Subsidiaries in an amount in excess of US$200,000, except
in the Ordinary Course of Business;
(iv) assign, transfer or grant any
licenses or sublicenses or other rights to use any of the
Intellectual Property other than in the Ordinary Course
of Business or enter into any material settlement
regarding the breach or infringement of any Intellectual
Property owned, used or licensed by any of the Group
Subsidiaries, or modify any material existing rights with
respect thereto outside of the Ordinary Course of
Business;
(v) institute, settle or agree to
settle any litigation, action or proceeding before any
court or Governmental Entity involving any Group
Subsidiary outside of the Ordinary Course of Business;
(vi) make any material purchase
commitment for the business of the Group in excess of the
normal requirements of the Group Subsidiaries or at any
price materially in excess of the then current market
price of the assets being purchased, or make any change
in the selling, pricing, advertising, distribution,
marketing, warranty or personnel practices of the Group,
in each case outside of the Ordinary Course of Business;
(vii) incur (A) any indebtedness
for money borrowed on behalf of the Group Subsidiaries in
excess of US$500,000 in the aggregate or (B) any
liability or obligation of any of the Group Subsidiaries,
direct or indirect, whether accrued, absolute, contingent
or otherwise, in excess of US$500,000 in the aggregate,
except for indebtedness, liabilities and obligations
arising in the Ordinary Course of Business;
(viii) assume, guarantee, endorse
or otherwise become, on behalf of any of the Group
Subsidiaries, responsible for the obligations of any
other Person other than a Group Subsidiary in excess of
US$20,000 or make any loans or advances to any Person
other than a Group Subsidiary in excess of US$200,000 in
each case except in the Ordinary Course of Business;
(ix) amend any of the
Organizational Documents of any of the Group
Subsidiaries;
(x) issue, pledge or otherwise
encumber or sell any shares of capital stock of any of
the Group Subsidiaries, or issue, sell or create any
securities convertible into or exchangeable for, or
options or other rights with respect to, or warrants to
purchase or rights to subscribe to, any shares of capital
stock of any of the Group Subsidiaries or enter into any
agreement obligating it to do any of the foregoing;
(xi) declare, set aside, pay or
make any dividend or other distribution with respect to
capital stock of any of the Group Subsidiaries, whether
payable in cash, stock or property or redeem any shares
of capital stock of any of the Group Subsidiaries or make
any other distributions with respect to capital stock of
any of the Group Subsidiaries or the holders thereof
payable in stock or property;
(xii) split, combine or reclassify
any outstanding securities of any of the Group
Subsidiaries;
(xiii) directly or indirectly,
redeem, purchase or otherwise acquire any shares of
capital stock of any of the Group Subsidiaries;
(xiv) enter into any collective
bargaining agreements on behalf of any of the Group
Subsidiaries;
(xv) enter into or terminate any
other contracts to which any of the Group Subsidiaries is
a party, other than contracts between Stanhome and any of
the Group Subsidiaries, with respect to which the
aggregate amount reasonably expected to be received or
paid thereunder in the future exceeds US$200,000 (or is
in excess of US$100,000 per annum);
(xvi) fail to use reasonable
efforts to prevent any insurance policy naming a Group
Subsidiary as a beneficiary or a loss payable payee to be
canceled or terminated or any of the coverage thereunder
to lapse, unless simultaneously with such termination or
cancellation replacement policies providing substantially
the same coverage are in full force and effect;
(xvii) increase in any manner the
compensation or fringe benefits (other than compensation
increases made in the Ordinary Course of Business and
related changes in fringe benefits) of any employees of a
Group Subsidiary, or pay or agree to pay any pension or
retirement allowance, life insurance premiums or other
benefit payments not required by any existing written
employment agreement or plan to any such employees of a
Group Subsidiary, commit itself to or amend in any
material respect, make material variations in or material
waivers with respect to, any employment agreement or plan
with or for the benefit of any employee of a Group
Subsidiary institute or adopt any compensation or benefit
program, plan or arrangement for employees of a Group
Subsidiary, in any such case, other than as required in
order to comply with any applicable law;
(xviii) enter into any supply,
franchise, distribution, maintenance or preferred
supplier agreement on behalf of any of the Group
Subsidiaries with respect to which the aggregate amount
reasonably expected to be received or paid thereunder in
the future exceeds US$200,000 (or US$100,000 per annum);
(xix) establish new operations of
any Group Subsidiary, including without limitation,
establishing branch offices and representation offices
and hiring employees at such offices;
(xx) agree to either any real or
personal property Tax valuation in excess of 20% above
the real or personal property Tax valuation, as last
assessed, or any assessment in excess of US$100,000 with
respect to real or personal property of any Group
Subsidiary wherever located;
(xxi) institute any material
change in accounting policies or procedures of any Group
Subsidiary, except as required by law; or
(xxii) enter into an agreement or
make any written commitment to take any of the types of
actions described in paragraphs (i) through (xxi) above.
Section 4.6 Access to Information.
(a) Between the date of this Agreement and the
Closing, Stanhome shall (i) give to the Buyer and its
respective authorized representatives reasonable access to
all books, records, offices and other facilities and
properties of the Group, (ii) permit the Buyer to make
such inspections thereof as the Buyer may reasonably
request, including without limitation environmental
assessments, and (iii) cause the officers of the Group to
furnish the Buyer with such financial and operating data
and other information with respect to the business and
properties of the Group as the Buyer may from time to time
reasonably request. Any and all communications (whether
oral or written) between the Buyer and any Group
Subsidiary employee prior to the Closing (including
without limitation for the purposes set forth in the first
sentence of this Section 4.6 (a)) shall only occur after
having been mutually agreed between John Dur for Stanhome
and Jean-Yves Usunier for the Buyer. If any Group
Subsidiary employee voluntarily terminates his or her
employment with that Group Subsidiary as a result of a
breach by the Buyer of the covenant contained in the
immediately preceding sentence, then the termination of
employment (whether voluntary or involuntary) of any Group
Subsidiary employee shall not be deemed to constitute or
contribute to a Material Adverse Effect.
(b) During the term described in Section 7.1
hereof, each of the Buyer and Stanhome agrees to grant to
the other such reasonable access and inspection rights as
are necessary, in the good faith judgment of the party
requesting access, to ensure that it receives the full
benefit of the transactions contemplated by this
Agreement.
(c) All information concerning Stanhome or the
Group furnished or provided by Stanhome or any of the
Group Subsidiaries or their affiliates to the Buyer or its
representatives (whether furnished before or after the
date of this Agreement) shall be held subject to the
Confidentiality Agreement dated June 12, 1997 by and
between Stanhome and the Buyer (the "Confidentiality
Agreement"). Notwithstanding anything to the contrary
contained in this Agreement, neither Stanhome nor any of
its affiliates shall have any obligation to make available
or provide to the Buyer or its representatives a copy of
any consolidated, combined or unitary Tax Return filed by
Stanhome or any of its affiliates or any related
materials, except to the extent that it relates solely to
one or more of the Group Subsidiaries.
Section 4.7 Regulatory Compliance.
(a) The parties hereto shall make all necessary
filings as promptly as practicable in order to facilitate
prompt consummation of the transactions contemplated
hereby, including without limitation any required filings
under applicable U.S. or foreign antitrust or trade
regulation laws and regulations and the Exchange Act and
the rules and regulations thereunder. In addition, the
Buyer and Stanhome each will use all reasonable efforts,
and will cooperate fully with each other, to (i) comply as
promptly as practicable with all governmental requirements
applicable to the transactions contemplated by this
Agreement and (ii) obtain promptly all approvals, permits,
orders or other consents of any applicable governmental
authorities necessary for the consummation of the
transactions contemplated by this Agreement. Each of the
parties hereto will furnish to the other party such
necessary information and reasonable assistance as such
other party may reasonably request in connection with the
foregoing.
(b) Subject to the Confidentiality Agreement,
Stanhome and the Buyer will coordinate and cooperate with
each other in exchanging such information and providing
such assistance as the other may reasonably request in
connection with the foregoing and in seeking regulatory
approvals and consents. Stanhome and the Buyer each agree
to respond promptly to, and comply fully with, any request
for additional information or documents under applicable
U.S. or foreign antitrust or trade regulation laws or
regulations and prior to Closing, Stanhome will cause the
Group Subsidiaries to so respond and comply. Subject to
the Confidentiality Agreement, Stanhome will provide the
Buyer, and the Buyer will provide Stanhome, with copies of
all correspondence, filings or communications (or
memoranda setting forth the substance thereof) between
such party or any of its representatives, on the one hand,
and any Governmental Entity or members of the staff of any
Governmental Entity, on the other hand, with respect to
this Agreement and the transactions contemplated hereby.
Section 4.8 Consents and Approvals;
Consultations.
(a) The Buyer and Stanhome shall, and Stanhome
shall cause each of the Group Subsidiaries and each of the
other Sellers to, take reasonable actions necessary to
comply promptly with all legal requirements which may be
imposed on the Group Subsidiaries with respect to the
transactions contemplated hereby (which actions shall
include without limitation furnishing all information
required in connection with approvals of or filings with
any other Governmental Entity), if any, and will promptly
cooperate with and furnish information to each other in
connection with any such requirements imposed on any of
them in connection with the transactions contemplated
hereby. The Buyer and Stanhome shall, and Stanhome shall
cause each of the Group Subsidiaries and each of the other
Sellers to, take reasonable actions necessary to obtain
(and shall cooperate with each other in obtaining) any
consent, authorization, order or approval of, or any
exemption by, any Governmental Entity or other public or
private third party, required to be obtained or made by
the Buyer, any Seller or any Group Subsidiary in
connection with the transactions contemplated hereby, if
any.
(b) Stanhome shall continue to receive, review
and respond to the comments and suggestions of the French
Comite d'Enterprise (Enterprise Committee) until the
Closing.
Section 4.9 Further Assurances. Except as
otherwise contemplated herein, prior to the Closing,
Stanhome will use all reasonable efforts to transfer
benefits to the Buyer or its assignee under any leases,
licenses and other contracts, commitments and agreements
which relate to the Group to which Stanhome or any
affiliate of Stanhome (other than a Group Subsidiary) is a
party, in all such cases on terms which are at least as
favorable as those in effect on the date hereof. The Buyer
agrees to facilitate the Spanish Transfer, the Italian
Stock Transfer, the Transactions, if any, contemplated by
Section 4.4(e) hereof and the dissolution or liquidation
of the Liquidating Subsidiaries, whether the same occur
before or after the Closing Date.
Section 4.10 Tax Refunds and Credits. The Buyer
shall, within 10 days of receipt of any Tax refund or
credit which is unrelated to the Tax position or Tax
status of the Buyer or any other Transferees or their
affiliates, relates to any Tax period beginning prior to
the Closing Date and is received by or on behalf of the
Buyer or any affiliate or successor thereto with respect
to any of the Group Subsidiaries (a) for or attributable
to any Tax period of any of the Group Subsidiaries ending
on or prior to the Closing Date or (b) for or attributable
to any period up to and including the Closing Date which
is part of a Tax period of any of the Group Subsidiaries
beginning prior to and ending after the Closing Date, pay
the amount of such Tax refund or credit to Stanhome, net
of Taxes and costs expended by the Buyer (including any
interest thereon, net of taxes, or other addition
thereto); provided, however, that the amount shall not be
required to be paid by the Buyer to Stanhome under and in
accordance with this first sentence of Section 4.10 unless
and until the aggregate of such amounts total at least
$20,000. If the amount of any such Tax refund or credit is
applied against any other Tax liability of any of the
Group Subsidiaries, the Buyer or any affiliate or
successor thereto for Taxes for any Tax period, the Buyer
shall, within 10 days of the date of such application, pay
to Stanhome an amount equal to the amount of the Tax
refund or credit (including any interest thereon or other
addition thereto). The Buyer shall deliver with the
payment to Stanhome a written explanation of the facts
surrounding the Tax refund or credit and a copy of any
related notice or statement received from the relevant Tax
Authority. In the event that any refund or credit of Taxes
for which a payment has been made is subsequently reduced
or disallowed by final decision of a court of competent
jurisdiction, Stanhome shall indemnify and hold harmless
the Buyer for any Tax liability, including interest and
penalties, assessed against Buyer by reason of the
reduction or disallowance. The payment of any amount to
Stanhome pursuant to this Section 4.10 shall be considered
to be a Total Purchase Price adjustment.
Section 4.11 Tax Benefit. To the extent that any
income, gain, loss, deduction, credit, refund or other Tax
item of the Sellers or the Group Subsidiaries or any
affiliate thereof which is unrelated to the Tax position
or Tax status of the Buyer or any other Transferees or
their affiliates is adjusted with respect to (a) any Tax
period of Stanhome or the Group Subsidiaries ending on or
prior to the Closing Date or (b) that portion of any Tax
period up through the Closing Date which is part of a Tax
period of Stanhome or the Group Subsidiaries beginning
before and ending after the Closing Date, which results in
a Tax Benefit (as defined below) to the Buyer or any
successor of the Buyer or affiliate of the Buyer or any
such successor (the "Benefit Party"), the Buyer or its
successor will, within 10 days of the realization of such
benefit by the Benefit Party, pay the amount of the Tax
Benefit, net of Taxes and costs expended by the Buyer, to
Stanhome. To the extent that the Buyer pays the amount of
any Tax Benefit to the Sellers and such Tax Benefit is
subsequently reduced or disallowed by the final decision
of a court of competent jurisdiction, Stanhome shall pay
the amount of the reduced or disallowed Tax Benefit plus
interest and penalties, if any, to the Buyer to the extent
previously paid to Stanhome. "Tax Benefit" means the
amount determined in good faith by the Buyer and Stanhome
to reasonably estimate the actual aggregate net Tax
benefit realized by the Benefit Party, assuming the
highest marginal income Tax rate imposed on corporations
at the time such determination is made.
Section 4.12 Taxes for Short Taxable Year. For
purposes of Sections 4.10 and 4.11 hereof, whenever it is
necessary to determine the liability for Taxes of Stanhome
or the Group Subsidiaries for a portion of a taxable year
or period that begins before and ends after the Closing
Date, the determination of the Taxes of Stanhome and the
Group Subsidiaries for the portion of the year or period
ending on, and the portion of the year or period beginning
after, the Closing Date shall be determined by assuming
that Stanhome and the Group Subsidiaries had a taxable
year which ended at the close of the Closing Date and that
the published tax rate in each relevant jurisdiction on
the Closing Date is the effective tax rate for each
portion of the year or period, except that exemptions,
allowances or deduction that are calculated on an annual
basis, such as the deduction for depreciation, shall be
apportioned on a time basis.
Section 4.13 Record Maintenance. The Buyer shall
not dispose of any records relating to Taxes paid or
payable by any of the Group Subsidiaries with respect to
Tax periods beginning prior to the Closing Date
(including, but not limited to Tax Returns, reports,
books, records, financial data, receipts, notices,
assessments, reassessments, earnings and profits data and
workpapers) prior to the later of (a) the expiration of
the applicable statute of limitations or (b) the final
resolution of all litigation initiated prior to the
expiration of the applicable statute of limitations
relating to Taxes paid or payable by or with respect to
any of the Group Subsidiaries for any Tax period ending on
or prior to the Closing Date.
Section 4.14 Tax Returns. Stanhome shall be
solely responsible for, and shall have the exclusive right
in respect of, the preparation and filing, on a timely
basis, of all necessary Tax Returns for Tax periods of
each of the Group Subsidiaries ending on or prior to the
Closing Date. Such Tax Returns shall be filed on a basis
consistent with each such Group Subsidiary's past practice
in filing its Tax Returns. The Buyer shall cooperate with
Stanhome in the preparation and filing of any such Tax
Returns as provided for in Section 4.16 hereof, and
Stanhome shall provide the Buyer with a copy of any Tax
Return so filed by Stanhome. Stanhome shall be solely
responsible for, and shall have the exclusive right in
respect of the preparation and filing of any amended Tax
Return and/or refund claim relating to any Tax period of
any of the Group Subsidiaries ending on or prior to the
Closing Date. Unless Stanhome's written consent is first
obtained, the Buyer agrees to refrain from any action
which would in any way alter the balance of Taxes owing or
Tax refunds or credits obtainable with respect to (a) any
Tax period of any of the Group Subsidiaries ending on or
prior to the Closing Date or (b) in the case of Tax
refunds or credits, any period up to and including the
Closing Date which is part of a Tax period of any of the
Group Subsidiaries beginning prior to and ending after the
Closing Date. Notwithstanding the foregoing, Stanhome (i)
shall consult with the Buyer with respect to the
resolution of any Tax issue that would adversely affect
the Buyer with respect to Tax periods subject to such
proceeding or any other taxable periods ending on or after
the Closing Date (including, but not limited to, any such
resolution that would result in the imposition of income
Tax deficiencies, the reduction of asset basis or cost
adjustments, the lengthening of any amortization or
depreciation periods, the denial of amortization or
depreciation deductions or the reductions of loss or
credit carryforwards to the Buyer or any of the Group
Subsidiaries) and (ii) shall not settle any such issue or
file any amended Tax Return relating to such issue without
the consent of the Buyer, which consent shall not be
unreasonably withheld.
Section 4.15 Tax Contests. Stanhome shall have
the exclusive right to control, conduct and/or represent
the interests of all affected parties hereto in any audit,
to initiate any claim for a Tax refund, to contest,
resolve and defend against any determination, assessment,
reassessment, notice of deficiency or other adjustment or
proposed adjustment of Taxes (including the right to agree
to any determination, assessment, reassessment, deficiency
or settlement of any of the foregoing items) relating to
any Tax Return filed with respect to any of the Group
Subsidiaries for any Tax period ending on or prior to the
Closing Date; provided, however, that Stanhome shall use
its reasonable efforts to exercise its rights under this
Section 4.15 in a manner which proscribes or limits any
foreseen potential damage or detriment to the Buyer and
will use reasonable efforts to consult with the Buyer to
avoid such damage or detriment. The Buyer covenants and
agrees to execute and deliver (or to cause each of the
Group Subsidiaries to execute and deliver) to Stanhome,
promptly upon request, such powers of attorney as may be
reasonably necessary to authorize Stanhome to extend
statutes of limitations, receive Tax refunds, defend
assessments, reassessments or notices of deficiency and
take such other actions that Stanhome may reasonably
consider to be appropriate or helpful to contest any audit
or claim any Tax refund and shall not take any action
inconsistent with the authority granted to Stanhome
hereunder. Further, the Buyer shall promptly forward to
Stanhome any notice of any pending or threatened audit or
other proceeding that may affect Stanhome's liability for
Taxes.
Section 4.16 Tax Cooperation. The Buyer shall
cooperate, and cause each of the Group Subsidiaries to
cooperate, with Stanhome in the filing of any Tax Return
(including without limitation the provision of all
information and data, and execution of all powers of
attorney and Tax forms and documents requested by Stanhome
in connection with Tax Returns contemplated by Section
4.14 hereof), amendment thereto or consent contemplated by
this Agreement, the Disclosure Schedule or any schedule or
exhibit hereto with respect to Tax periods beginning prior
to the Closing Date and shall take such other action as
Stanhome may reasonably request, including without
limitation:
(a) providing data for the preparation of any
original or amended Tax Returns;
(b) cooperating in any audit and providing
reasonable access to the Buyer's Tax personnel;
(c) filing protests or otherwise contesting any
audit, including the filing of petitions for
redetermination or prosecuting actions for refund in any
court and pursuing the appeal of any such actions;
(d) providing information and data required by
Stanhome and its affiliates to compute their foreign Tax
credits (including without limitation U.S. federal income
Tax foreign Tax credits), including without limitation the
delivery by the Buyer to Stanhome of certified copies of
all receipts in the Buyer's or its affiliates' possession
(or obtainable by the Buyer or its affiliates) for any
Taxes with respect to which Stanhome or any of its
affiliates could claim a foreign Tax credit, and any other
documentation in the Buyer's or its affiliates' possession
(or obtainable by the Buyer or its affiliates) that is
required by Stanhome in connection with Stanhome or its
affiliates claiming or supporting a claim for such foreign
Tax credits, promptly following a request by Stanhome for
such receipts or documentation or payment of any such
Taxes by the Buyer or any affiliate of the Buyer; and
(e) providing books, records, documentation or
other information relating to any Tax Return until the
expiration of the applicable statute of limitations
(giving effect to any extension, waiver or mitigation
thereof), providing additional information and explanation
of material provided hereunder and using the Buyer's
commercially reasonable efforts to obtain any
documentation from a governmental authority or third party
that may be necessary or helpful in connection with the
foregoing.
Section 4.17 Resolution of Certain Conflicts. In
the event that the Buyer and Stanhome cannot agree on the
calculation of the amount of any liability for Taxes
(including liability for indemnification concerning Taxes)
or entitlement to Tax credits or refunds hereunder, the
Buyer and Stanhome shall engage an internationally
recognized independent public accounting firm, reasonably
acceptable to each party, to make such calculation, and
the decision of such firm will be conclusive and binding
on both parties. The cost of such engagement will be borne
solely by the party that does not prevail in substantial
part (in the determination of the public accounting firm
so engaged); provided, however, that if the public
accounting firm determines that neither party prevailed in
substantial part, the cost of such engagement shall be
shared equally by the Buyer and Stanhome.
Section 4.18 Transfer Taxes. The Buyer and
Stanhome each shall be responsible for 50% all sales, use,
transfer, transfer gains, recording, ad valorem, stamp,
notarial and any similar Tax arising out of, in connection
with or attributable to the transactions consummated
pursuant to this Agreement.
Section 4.19 Tax Allocations. No Group
Subsidiary is a party to any Tax sharing or Tax allocation
agreement, except as provided herein. Stanhome and Buyer
shall allocate the portion of the Total Purchase Price for
the Group Subsidiary Sale Shares as set forth in Schedule
VII hereto. Stanhome and the Buyer each further agree to
report the transactions contemplated by this Agreement in
a manner consistent with the foregoing for all Tax
purposes, and the Buyer shall file all Tax forms requested
by Stanhome in connection therewith.
Section 4.20 All Reasonable Efforts. The parties
hereto agree to use all reasonable efforts to effect the
Closing and otherwise consummate the transactions
contemplated hereby.
Section 4.21 Acquisition Proposals. Stanhome
agrees that Stanhome, the Group Subsidiaries, their
respective officers and directors and any Qualifying
Holders shall not, and Stanhome and the Group Subsidiaries
shall direct and shall use their reasonable efforts to
cause their respective employees, agents and
representatives (including without limitation, any
investment banker, attorney or accountant retained by
Stanhome and the Group Subsidiaries) not to, initiate or
solicit, directly or indirectly, any inquiries or the
making of any proposal or offer with respect to a merger,
consolidation, management buy-out or similar transaction
involving, or any sale or purchase of all or any
significant portion of the assets or equity securities of,
any of the Group Subsidiaries (any such proposal or offer
being hereinafter referred to as an "Acquisition
Proposal") or engage in any negotiations concerning, or
provide any confidential information or data to, or have
any discussions with, any Person in furtherance of an
Acquisition Proposal, or otherwise facilitate any effort
or attempt to make or consummate an Acquisition Proposal.
Stanhome will and will cause the Group Subsidiaries to
immediately cease and cause to be terminated any exiting
activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing;
provided, however, that notwithstanding anything contained
in this Agreement shall prevent Stanhome and the Group
Subsidiaries or their respective Boards of Directors,
directly or through representatives or agents on behalf of
such Boards of Directors, from approving an unsolicited
Acquisition Proposal, if and only to the extent that such
Acquisition Proposal would, if consummated, result in a
transaction that would, in the good faith judgment of any
of such Boards of Directors, result in a transaction more
favorable to the stockholders of Stanhome or such Group
Subsidiary from a financial point of view than the
transactions contemplated by this Agreement. Stanhome will
notify the Buyer promptly, but in any event within 48
hours, if any Person makes an Acquisition Proposal.
Section 4.22 Publicity. Except as required by
applicable law or by the regulations of a recognized stock
exchange, for so long as this Agreement is in effect, no
announcement or notice in respect of this Agreement or the
transactions contemplated hereby shall be made by either
party hereto without the prior consent of the other. To
the extent practicable, Stanhome and the Buyer shall
consult with each other prior to issuing any press
releases or other public statements with respect to the
transactions contemplated hereby and prior to making any
filings with any Governmental Entity or with any
securities exchange with respect thereto.
Section 4.23 Trade Payables, Royalties, Fees and
Intercompany Payables. The Buyer agrees to pay when due to
Stanhome and its affiliates in the Ordinary Course of
Business any trade payable, royalty, technical services
fee and intercompany payable owed by any Group Subsidiary
to Stanhome or its affiliates (including without
limitation any trade payables owed to Cosmhogar S.A. and
Stanhome European Development Center, S.A.) which trade
payable, royalty, technical services fee or intercompany
payable was incurred prior to the Closing Date. Stanhome
and the Buyer acknowledge that such trade payables,
royalties, technical services fees and intercompany
payables are not reflected in the Total Purchase Price and
are not subject to any set-off.
Section 4.24 Subsidiary Cash Amount. At the
Closing Date, Stanhome will cause the Group Subsidiaries
to hold an amount of cash and cash equivalents (including
the Common Stock currently owned of record by any Group
Subsidiary as of the Closing Date), net of bank debt equal
to or in excess of the Subsidiary Cash Amount plus the
amount of unpaid taxes relating to any Interim
Distribution to Stanhome, the Spanish Transfer and the
Italian Stock Transfer.
Section 4.25 Releases. Stanhome agrees to use
its reasonable efforts to obtain, prior to the Closing,
releases, in form and substance satisfactory to Stanhome,
of all guarantees issued by Stanhome of any liability or
other obligation of any Group Subsidiary.
Section 4.26 Terminations of Agreements.
Stanhome agrees to use its reasonable efforts to
terminate, prior to the Closing, (i) all contracts between
it and any of the Group Subsidiaries and (ii) the
indemnity agreement dated June 22, 1995 between Stanhome
and Ian Talbot.
Section 4.27 Importance of Stanhome Dealers; Key
Employee Incentives. Stanhome and the Buyer each (a)
acknowledge the importance and value of the Group's sales
force in the countries in which the Group Subsidiaries
conduct operations and (b) agree to work diligently to
preserve the Group's sales force intact between the date
hereof and the Closing. In this connection, the Buyer
agrees that Stanhome may provide to certain key employees
of the Group Subsidiaries additional incentives in the
form of "stay bonuses" and enhanced severance, in forms
and amounts to be determined by Stanhome, in consultation
with the Buyer, prior to the Closing. The Buyer shall be
notified of the nature, existence and extent of these
additional incentives on or prior to the date which is two
days prior to the Closing.
Section 4.28 Covenant not to Compete. For a
period of two years from and after the Closing Date,
Stanhome will not engage directly or indirectly in any
direct selling business that sells products currently sold
by the Group (excluding giftware and collectibles) in any
country in which the Group conducts business as of the
date hereof (the "Restricted Activities"). Stanhome shall
not be deemed to be engaging in a Restricted Activity
solely by reason of its ownership of less than 5% of the
outstanding stock of any publicly traded corporation. For
a period of two years from and after the Closing Date,
Stanhome will not directly or indirectly hire, solicit or
attempt to hire or solicit any Group Subsidiary employee
or sales force member. If the final judgment of a court of
competent jurisdiction declares that any term or provision
of this letter is invalid or unenforceable, the parties
agree that the court making the determination of
invalidity or unenforceability shall have the power to
reduce the scope, duration, or area of the term or
provision, to delete specific words or phrases or to
replace any invalid or unenforceable term or provision
with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be
appealed.
Section 4.29 Liquidating Subsidiaries. Stanhome
and the Buyer acknowledge that Nuova Lunaria S.r.l.,
Stanhome Trading Company d.o.o. Ljubljana and Stanhome
Financial ATC Limited, each of which is a Group Subsidiary
(the "Liquidating Subsidiaries"), are currently in
liquidation. Stanhome agrees to continue, at Stanhome's
cost, to control, conduct and direct the liquidation
process with respect to each Liquidating Subsidiary
(including without limitation the termination of any and
all contracts and the conclusion of any necessary or
desirable legal proceeding) from and after the Closing
until that process is complete. Stanhome also agrees to
hold the Buyer harmless against and in respect of any
loss, liability, damage, deficiency, cost and expense
which may be incurred or sustained by the Buyer as a
result of any and all actions taken by Stanhome in
accordance with this Section 4.29.
Section 4.30 Liabilities for Inadequate
Reserves. In connection with Stanhome's representation set
forth in the last sentence of Section 2.10 hereof, the
Buyer agrees to (a) give to Stanhome and its respective
authorized representatives reasonable access to all books,
records, offices and other facilities and properties of
the Group for the purpose of, among other things,
assessing the inadequacy of the aggregate reserves, (b)
continue to retain the same counsel or accountant used by
Stanhome on each proceeding or matter covered unless and
until the proceeding or matter has been completed or
resolved or Stanhome has consented to the replacement of
such counsel or accountant and (c) not to consent to entry
of any judgment or enter into any settlement without the
written consent of Stanhome, which will not be
unreasonably withheld.
Section 4.31 Distribution Facilities. Stanhome
agrees to make available to the Buyer, free of rent, the
use of such an amount of space in the distribution
facility currently used by the Group in Barcelona, Spain
as is necessary to permit the Buyer to use the facility as
it is currently being used by the Group. Stanhome agrees
to continue to make such space available until the earlier
to occur of the expiration of the Supply Agreement and
cessation of the Buyer's activity use of such facility as
its product distribution center.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF THE PARTIES
Section 5.1 Conditions to Each Party's
Obligation. The respective obligations of each party to
consummate the transactions contemplated hereby are
subject to the satisfaction at or prior to the Closing of
the following conditions:
(a) any waiting periods applicable to the
transactions contemplated by this Agreement under
applicable U.S. and foreign antitrust or trade regulation
laws and regulations shall have expired or been
terminated, and all governmental authorizations or
approvals required in connection with the transactions
contemplated by this Agreement shall have been obtained or
given, other than authorizations and approvals which, if
not obtained or given, would not: (i) in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(ii) result in the imposition of a fine or charge against
Stanhome or the Buyer in excess of $200,000 or criminal
charges against Stanhome or the Buyer or their respective
directors or officers; or (iii) prohibit consummation of
the transactions contemplated hereby;
(b) no statute, rule or regulation is in force
or shall have been enacted, entered, promulgated or
enforced by any court or Governmental Entity which
prohibits or restricts the consummation of the
transactions contemplated hereby or which would have a
Material Adverse Effect;
(c) there shall not be in effect any judgment,
order, injunction or decree of any court of competent
jurisdiction enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby;
(d) all procedural and substantive legal
requirements necessary for the consummation of the
transactions contemplated hereby under the laws of each
jurisdiction in which Stanhome, to the extent of the
Group's operations, or any Group Subsidiary is organized
as the same are set forth in Schedule IV hereto have been
satisfied in full; and
(e) the Escrow Agreement shall have been
executed and delivered by the parties thereto.
Section 5.2 Conditions to Obligations of
Stanhome. The obligations of Stanhome to consummate the
transactions contemplated hereby are further subject to
the satisfaction (or waiver) at or prior to the Closing of
the following conditions:
(a) the representations and warranties of the
Buyer contained in this Agreement shall be true and
correct at the date hereof and as of the Closing Date as
if made at and as of such time, except for (i) changes
permitted or contemplated hereby, (ii) representations
which are as of a specific date and (iii) failures to be
true and correct which (in the aggregate), without giving
effect to any qualifications and exceptions contained
therein relating to materiality or material adverse
effect, would not reasonably be expected to have a
material adverse effect on Buyer's ability to consummate
the transactions contemplated hereby;
(b) the Buyer shall have performed in all
material respects each of its agreements under this
Agreement required to be performed by it at or prior to
the Closing pursuant to the terms hereof, and Stanhome
shall have received a certificate from the Buyer signed by
an authorized officer of the Buyer, dated the Closing
Date, certifying that the conditions contained in both
this paragraph (b) and paragraph (a) of this Section 5.2
have been satisfied;
(c) Stanhome shall have received a certificate
from each Transferee other than the Buyer to the effect
that (i) such Transferee has the power and authority to
carry out the transactions contemplated to be carried out
by it hereby, (ii) there is no claim, action, suit,
inquiry, proceeding or investigation by or before any
Governmental Entity pending or, to the best knowledge of
such Transferee, threatened against or involving such
Transferee which in any manner seeks injunctive or other
non-monetary relief or seeks to prevent, enjoin, alter or
delay any transaction contemplated hereby, nor is there
any basis for any such claim, action, suit, inquiry,
proceeding or investigation, (iii) such Transferee is not
subject to any order, writ, injunction or decree which,
individually or in the aggregate, has or would reasonably
be expected to have a material adverse effect on the
ability of the Transferee to consummate the transactions
contemplated hereby and (iv) such Transferee makes
representations substantially identical to those made by
the Buyer in Section 3.5 hereof; and
(d) the Supply Agreement shall have been
executed and delivered by the parties thereto.
Section 5.3 Conditions to Obligations of the
Buyer. The obligations of the Buyer to consummate the
transactions contemplated hereby are further subject to
the satisfaction (or waiver) at or prior to the Closing of
the following conditions:
(a) the representations and warranties of
Stanhome contained in this Agreement shall be true and
correct at the date hereof and as of the Closing Date as
if made at and as of such time, except for (i) changes
permitted or contemplated hereby, (ii) representations
which are as of a specific date and (iii) failures to be
true and correct which (in the aggregate), without giving
effect to any qualifications and exceptions contained
therein relating to materiality or Material Adverse Effect
would not reasonably be expected to have a Material
Adverse Effect;
(b) Stanhome shall have performed in all
material respects each of its agreements under this
Agreement required to be performed by it at or prior to
the Closing pursuant to the terms hereof, and Buyer shall
have received a certificate from Stanhome, dated the
Closing Date, signed by an authorized officer of Stanhome
certifying that the conditions contained in both this
paragraph (b) and paragraph (a) of this Section 5.3 have
been satisfied; and
(c) Stanhome shall have obtained signed
resignation letters from all of the directors whose names
are set forth on Schedule IV.
ARTICLE VI
TERMINATION
Section 6.1 Termination. This Agreement may be
terminated prior to the Closing and the transactions
contemplated hereby thereupon may be abandoned:
(a) at any time, by mutual written consent of
Stanhome and the Buyer; or
(b) by the Buyer, if (i) there has been a
violation or breach by Stanhome of any one or more of the
agreements, representations, warranties or covenants
contained in this Agreement, the Buyer has previously
given Stanhome reasonable written notice thereof and such
violation or breach (or the aggregate of all such
violations or breaches), without giving effect to any
qualifications and exceptions contained therein relating
to materiality or Material Adverse Effect, would
reasonably be expected to have a Material Adverse Effect,
unless Stanhome has informed the Buyer that any such
violation or breach is cured to the reasonable
satisfaction of the Buyer on or before the Closing Date
with the effect that the aggregate of such violations or
breaches would no longer be reasonably expected to have a
Material Adverse Effect or (ii) any condition to the
obligations of the Buyer set forth in Section 5.1(a), (b),
(c) or (d) or Section 5.3(c) hereof has (in the good faith
judgment of the Board of Directors of the Buyer or on
advice of Stanhome) become impossible to fulfill; or
(c) by Stanhome, if (i) there has been a
violation or breach by the Buyer of any one or more of the
agreements, representations, warranties or covenants
contained in this Agreement, Stanhome has previously given
the Buyer reasonable written notice thereof and such
violation or breach (or the aggregate of all such
violations or breaches), without giving effect to any
qualifications and exceptions contained therein relating
to materiality or material adverse effect, would
reasonably be expected to have a material adverse effect
on the Buyer's ability to consummate the transactions
contemplated hereby, unless the Buyer has informed
Stanhome that any such violation or breach is cured to the
reasonable satisfaction of Stanhome on or before the
Closing Date with the effect that the aggregate of such
violations or breaches would no longer be reasonably
expected to have a material adverse effect on the Buyer's
ability to consummate the transactions contemplated hereby
or (ii) any condition to the obligations of Stanhome set
forth in Section 5.1(a), (b), (c) or (d) or Section 5.2(c)
has (in the good faith judgment of the Board of Directors
of Stanhome or on advice of the Buyer) become impossible
to fulfill; or
(d) by either the Buyer or Stanhome, if through
no fault of the party seeking termination the Closing
shall not have occurred on or prior to February 1, 1998.
Section 6.2 Procedure for and Effect of
Termination. In the event of the termination of this
Agreement and the abandonment of the transactions
contemplated hereby pursuant to Section 6.1 hereof,
written notice thereof shall forthwith be given by the
party so terminating to the other party, and this
Agreement shall terminate and the transactions
contemplated hereby shall be abandoned, without further
action. If this Agreement is terminated pursuant to
Section 6.1 hereof:
(a) each party shall redeliver all documents,
work papers and other materials of the other parties
relating to the transactions contemplated hereby, whether
so obtained before or after the execution hereof, to the
party furnishing the same, and all confidential
information received by any party hereto with respect to
the other party shall be treated in accordance with
Section 4.6(c) hereof;
(b) all filings, applications and other
submissions made pursuant hereto shall, at the option of
Stanhome and to the extent practicable, be withdrawn from
the agency or other entity to which they were made; and
(c) there shall be no liability or obligation
hereunder on the part of Stanhome or the Buyer or any of
their respective directors, officers, employees,
affiliates, controlling persons, agents or
representatives, except that Stanhome or the Buyer, as the
case may be, may have liability to the other party if the
basis of termination is a willful or reckless material
breach by Stanhome or the Buyer, as the case may be, of
one or more of the provisions of this Agreement, and
except that the obligations provided for in this Section
6.2 and Sections 4.22, 8.2, 8.3, 8.6 and 8.7 hereof, and
the obligation to treat information in a confidential
manner as set forth in Section 4.6(c) hereof, shall
survive any such termination.
ARTICLE VII
SURVIVAL AND INDEMNIFICATION
Section 7.1 Survival. The representations and
warranties contained in Section 2.21 of this Agreement
shall survive the Closing until the expiration of the
applicable statute of limitations. All other
representations and warranties contained in this Agreement
shall survive the Closing only until the close of business
(Boston time) on the date which is three years after the
date of the Closing. This Section 7.1 shall not limit any
covenant or agreement of the parties which by its terms
impliedly or expressly contemplates performance after the
Closing.
Section 7.2 Indemnification.
(a) Stanhome agrees to indemnify and hold
harmless the Buyer and its subsidiaries and affiliates and
their respective officers, directors, employees and agents
against and in respect of any loss, liability, damage,
deficiency, cost and expense (collectively, "Losses")
incurred or sustained by any of them as a result of (i)
any breach by Stanhome of this Agreement discovered after
the Closing, including the representations, warranties and
covenants contained herein or in any of the Additional
Stanhome Documents or (ii) any purported termination of
this Agreement by Stanhome not provided for in Section 6.1
hereof; provided, however, that no indemnification shall
be available under Section 7.2(a)(i) for any actions taken
by the Buyer or the Group Subsidiaries after the Closing,
including without limitation any change by the Buyer or
the Group Subsidiaries in any use of any Intellectual
Property from the use of such Intellectual Property made
by Stanhome or the Group Subsidiaries prior to the
Closing. No investigation made by the Buyer or any other
Person shall affect any representation or warranty of
Stanhome contained in this Agreement or the
indemnification obligation of Stanhome set forth in this
Article VII.
(b) The Buyer agrees to indemnify and hold
harmless Stanhome and its subsidiaries and affiliates and
their respective officers, directors, employees and agents
against and in respect of any Losses incurred or sustained
by any of them as a result of (i) any breach by the Buyer
of this Agreement discovered after the Closing, including
the representations, warranties and covenants contained
herein or in any of the Additional Buyer's Documents, (ii)
any purported termination of this Agreement by the Buyer
not provided for in Section 6.1 hereof or (iii) any
statutory indemnities or severance payments arising from
employee terminations occurring at or after the Closing
Date, other than statutory indemnities or severance
payments that would give rise to Losses payable by
Stanhome under Section 7.2(a) hereof. No investigation
made by Stanhome or any other Person shall affect any
representation or warranty of the Buyer contained in this
Agreement or the indemnification obligations of the Buyer
set forth in this Article VII.
(c) No party shall be entitled to make any claim
for indemnification under this Article VII on account of
any representation, warranty or covenant contained herein
after the date on which the same ceases to survive
pursuant to Section 7.1 hereof; provided, however, that if
prior to such date, the Indemnitor (as hereinafter
defined) shall have received written notice of a claim or
event in accordance with Section 7.3 hereof, such claim or
event, if diligently pursued, shall continue as a basis
for indemnity until it is finally resolved.
(d) Stanhome shall not be required to indemnify
the Buyer (and the other Indemnitees (as defined below)
set forth in Section 7.2(a) hereof) under Section 7.2(a)
hereof (i) for aggregate Losses in excess of FF125,000,000
and (ii) unless and until the aggregate Losses for which
indemnification would otherwise be due under Section
7.2(a) hereof exceeds FF2,500,000, in which case Stanhome
shall be responsible for the total amount of such Losses.
(e) Recovery under this Article VII for Losses
shall be limited to the amount of actual Losses sustained
by the Indemnitee, net of (i) any insurance proceeds
recovered by the Indemnitee under its insurance policies,
(ii) any reserves expressly provided therefor on the date
hereof and (iii) any Tax benefits realized by the
Indemnitee in connection therewith. The Indemnitee shall
use reasonable efforts to recover insurance proceeds under
any applicable policy, and to realize any applicable Tax
benefits, for any Losses sustained by the Indemnitee.
Section 7.3 Procedure for Indemnification.
(a) Any Person or entity entitled to assert a
claim for indemnification under this Agreement (the
"Indemnitee") shall give prompt written notice to the
indemnifying party (the "Indemnitor") of any claim or
event known to it which does or may give rise to a claim
for indemnification hereunder by the Indemnitee against
the Indemnitor; provided that the failure of any
Indemnitee to give notice as provided in this Section 7.3
shall not relieve the Indemnitor of its obligations under
this Article VII, except to the extent that such failure
has materially and adversely affected the rights of the
Indemnitor. In the case of any claim for indemnification
hereunder arising out of a claim, action, suit or
proceeding brought by any Person who is not a party to
this Agreement (a "Third- party Claim"), the Indemnitee
shall also give the Indemnitor copies of any written
claims, process or legal pleadings with respect to such
Third-party Claim promptly after such documents are
received by the Indemnitee.
(b) An Indemnitor may elect to compromise or
defend, at such Indemnitor's own expense and by such
Indemnitor's own counsel, any Third- party Claim. If an
Indemnitor elects to compromise or defend a Third-party
Claim, it shall, within 30 days of its receipt of the
notice provided pursuant to Section 7.3(a) hereof (or
sooner, if the nature of such Third- party Claim so
requires), notify the related Indemnitee of its intent to
do so, and such Indemnitee shall reasonably cooperate in
the compromise of, or defense against, such Third-party
Claim. After notice from an Indemnitor to an Indemnitee of
its election to assume the defense of a Third-party Claim,
such Indemnitor shall not be liable to such Indemnitee
under this Article VII for any legal expenses subsequently
incurred by such Indemnitee in connection with the defense
thereof; provided that such Indemnitee shall have the
right to employ one counsel of its choice in each
applicable jurisdiction (if more than one jurisdiction is
involved) to represent such Indemnitee if, in the opinion
of counsel to the Indemnitee, delivered to the Indemnitor
in writing, a conflict of interest between such Indemnitee
and such Indemnitor exists in respect of such claim, and
in that event, the fees and expenses of such separate
counsel shall be paid by such Indemnitor. If an Indemnitor
elects not to compromise or defend against a Third-party
Claim, or fails to notify an Indemnitee of its election as
provided in this Section 7.3, such Indemnitee may pay,
compromise or defend such Third-party Claim on behalf of
and for the account and risk of the Indemnitor. No
Indemnitor shall consent to entry of any judgment or enter
into any settlement without the written consent of each
related Indemnitee (which consent shall not be
unreasonably withheld), unless such judgment or settlement
provides solely for money damages or other money payments
for which such Indemnitee is entitled to indemnification
hereunder and includes as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnitee
of a release from all liability in respect of such
Third-party Claim.
(c) If the amount of any Losses shall, at any
time subsequent to payment by any Indemnitor to any
Indemnitee pursuant to this Article VII, be reduced by
recovery, settlement or otherwise, the amount of such
reduction, less any expenses incurred in connection
therewith, shall promptly be repaid by the Indemnitee to
the Indemnitor.
(d) For purposes of calculating or otherwise
determining amounts payable under this Article VII which
are not payable under the Escrow Agreement and are stated
in currencies other than U.S. dollars, components of any
such amounts shall be converted to U.S. dollars using the
average U.S. dollar equivalent spot rate for such
currencies over the two business days for which such rates
are published in the Eastern United States edition of The
Wall Street Journal on the day which is two days prior to
the relevant payment date.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Amendment and Waiver. No amendment
of any provision of this Agreement shall in any event be
effective, unless the same shall be in writing and signed
by the parties hereto. Any failure of any party to comply
with any obligation, agreement or condition hereunder may
only be waived in writing by the other party, but such
waiver shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. No failure by
any party to take any action against any breach of this
Agreement or default by the other party shall constitute a
waiver of such party's right to enforce any provision
hereof or to take any such action.
Section 8.2 Expenses. Except as set forth
herein, whether or not the transactions contemplated by
this Agreement shall be consummated, each of the parties
hereto agrees to pay all costs and expenses incurred by it
in connection with this Agreement and the transactions
contemplated hereby, including without limitation the fees
of its counsel, accountants and consultants.
Section 8.3 Broker's and Finder's Fees. Stanhome
hereby represents and warrants to the Buyer with respect
to Stanhome and each Group Subsidiary, and the Buyer
hereby represents and warrants to Stanhome with respect to
the Buyer, that no Person or entity is entitled to receive
from Stanhome or any Group Subsidiary, on the one hand, or
from the Buyer, on the other hand, any investment banking,
brokerage or finder's fee or fees for financial consulting
or advisory services in connection with this Agreement or
the transactions contemplated hereby, except for an
investment banking fee payable by Stanhome to Stanhome's
investment banker in connection with this Agreement and
the transactions contemplated hereby, as previously
disclosed by Stanhome to the Buyer in writing and except
for an investment banking fee payable by the Buyer to the
Buyer's investment banker in connection with this
Agreement and the transactions contemplated hereby, as
previously disclosed by the Buyer to Stanhome in writing.
Section 8.4 Notices. All notices, requests and
other communications hereunder shall be in writing and
shall be deemed given if delivered personally, sent by
facsimile (if confirmed) or mailed by registered or
certified mail (postage prepaid, return receipt requested)
to the parties at the following addresses (or at such
other address for a party as shall be specified by like
notice, as specified below):
(a) If to Stanhome:
Stanhome Inc.
333 Western Avenue
Westfield, Massachusetts 01085
United States of America
Attention: Bruce H. Wyatt, Esq.
Facsimile No.: (413) 572-0055
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, Massachusetts 02108
United States of America
Attention: Louis A. Goodman, Esq.
Facsimile No.: (617) 573-4822
(b) If to the Buyer:
Laboratoires de Biologie Vegetale Yves Rocher S.A.
No. 3, allee de Grenelle
92444 Issy-les-Moulineaux
France
Attention: FranCois Bompard
Facsimile No.: 331-41-08-5878
With a copy to:
Sullivan & Cromwell
No. 8, Place Vendome
75001, Paris
France
Attention: Pierre Servan-Schreiber
Facsimile No.: 331-44-50-6060
The address of a party for the purposes of this Section
8.4 may be changed by giving written notice to the other
party of such change in the manner provided herein for
giving notice. Unless and until such written notice is
received, the addresses as provided herein shall be deemed
to continue in effect for all purposes hereunder.
Section 8.5 Entire Agreement; Binding Effect.
This Agreement and the agreements, documents and other
instruments referred to herein (a) constitute the entire
agreement, and supersede all other agreements and
understandings, both written and oral, between the parties
with respect to the subject matter hereof (provided that
the Confidentiality Agreement shall survive the execution
of this Agreement) and (b) shall not be assigned by either
party (by operation of law or otherwise) without the prior
written consent of the other party; provided, however,
that the Buyer may assign its right to receive and own of
record Group Subsidiary Sale Shares, but not its other
rights and obligations hereunder, to other Transferees as
necessary to comply with applicable law.
Section 8.6 Applicable Law. This Agreement shall
be governed by and be construed in accordance with the
laws of the State of New York, without giving effect to
the principles thereof relating to conflicts of law.
Section 8.7 Parties in Interest. This Agreement
shall be binding upon and inure solely to the benefit of
each party hereto and their respective successors and
permitted assigns, and nothing in this Agreement, express
or implied, is intended to confer upon any other Person
any rights or remedies of any nature whatsoever under or
by reason of this Agreement, except as set forth in this
Section 8.7. Stanhome and the Buyer hereby acknowledge and
agree that the Qualifying Holders and the Transferees make
no representations or warranties, and provide no
indemnification, to Stanhome or the Buyer herein or
otherwise in connection with the transactions contemplated
hereby.
Section 8.8 Counterparts. This Agreement may be
executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of
which, when so executed and delivered, shall be deemed an
original, but all of which together shall constitute one
and the same instrument.
Section 8.9 Interpretation. The section and
other headings contained in this Agreement are for
reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever
the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the
words "without limitation." Unless otherwise indicated
herein or the context otherwise requires, the masculine
pronoun shall include the feminine and neuter, and the
singular shall include the plural. The word "or" shall not
be deemed exclusive.
Section 8.10 Severability. In case any term,
provision, covenant or restriction of this Agreement is
held to be invalid, illegal or unenforceable by a
competent court in any jurisdiction, the validity,
legality and enforceability of the remaining terms,
provisions, covenants or restrictions, or of such term,
provision, covenant or restriction in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
IN WITNESS WHEREOF, the parties hereto have
signed this Agreement under seal as of the date first
written above.
STANHOME INC.,
on its own behalf and as
representative and
attorney-in-fact for
the Qualifying Holders
By: /s/Allan G. Keirstead
_____________________________
Name: Allan G. Keirstead
Title: Executive Vice President
and Chief Administrative
and Financial Officer
LABORATOIRES DE BIOLOGIE
VEGETALE YVES ROCHER S.A.
By: /s/Jean-Christian Fandeux
_________________________________
Name: Jean-Christian Fandeux
Title: President du Directoire
Executed in London, England this 24th day of November, 1997.
SCHEDULE I
GROUP SUBSIDIARIES/HOLDERS OF GROUP SUBSIDIARY CAPITAL STOCK
Name of Group Subsidiary Name of Holder Number and Kind of
Shares of Capital Stock Held
Nuova Lunaria S.r.l. Stanhome S.p.A. 99,000 quotas, par value
(Italy) 200,000 Lire per quota
John J. Dur 1 quota, par value
200,000 Lire per quota
Stanhome S.A. (France) Stanhome Inc. 19,988 shares, par value
100 Francs per share
John J. Dur 2 shares
Elisabeth Boujenah 2 shares
Allan G. Keirstead 2 shares
Mark A. Peterson 2 shares
John W. Rogers 2 shares
Michael S. Young 2 shares
Stanhome de Colombia Stanhome Capital, 458,356 quotas, par
Ltda. (Colombia) Inc. value Col. Peso 1,000
per quota
Stanhome Worldwide 1 quota
Direct Selling
Group, Inc.
Stanhome de Mexico, S.A. Stanhome Inc. 124,997 registered
de C.V. (Mexico) shares, par value 100
Pesos per registered
share
Allan G. Keirstead 1 registered share
Bruce H. Wyatt 1 registered share
John J. Dur 1 registered share
Stanhome Panamericana, Stanhome Inc. 164,350 shares, par
C.A. (Venezuela) value Bs. 100 per share
Stanhome S.p.A. (Italy) Stanhome Inc. 28,650 shares, par value
100,000 Lire per share
Stanhome Capital, 1,350 shares
Inc.
Stanhome Trading Company Stanhome S.p.A. 25,616,797.76 shares,
d.o.o., Ljubljana par value SIT 1 per
(Slovenia) share
Stanhome Capital, 202.24 shares
Inc.
Stanhome, S.A. (Spain) Stanhome Inc. 209,998 bearer shares,
par value 1,000 Ptas.
per bearer share
Stanhome Capital, 1 bearer share
Inc.
Stanhome West 1 bearer share
Germany Limited
Stanhome Financial ATC Stanhome, S.p.A. 16,372,500 "A" Ordinary
Limited (Ireland) Shares, par value ITL 1
per share 1 Ordinary Share,
par value 1RPOUND 1 per
share
Stanhome Capital Inc. 1 Ordinary Share
Stanhome, C.A. Stanhome Inc. 100 shares, par value
(Venezuela) Bs. 100 per share
Stanhome Pan- 20,000 per share
americana, C.A.
SCHEDULE II
CERTAIN ASSETS TO BE SOLD
Trademark License Agreement dated December 12, 1989 between
MacFarlan Smith Limited and Stanhome Inc., and amendments of May
15, 1992 and November 16, 1993(1).
Manufacturing and Distribution Agreement dated December 1, 1990
between Stanhome Inc. and Associated Manufacturers Limited
(Jamaica)
Standard Distribution Agreement dated as of June 5, 1990 between
Stanhome Inc. and CP Young and Active Traders Ltd. (Cyprus)
Distribution Agreement dated January 1, 1994 between Stanhome
Inc. and STANLAR - Sociedade Tecnica de Artigos Novos para o Lar,
Lda (Portugal)
Agreement dated December 29, 1979 between Stanley Home Products,
Inc. and Tonina, Ltd. (Trinidad)
Agreement dated as of August 11, 1982 between Stanhome Inc. and
Chauyjuljit Co., Ltd. (Thailand)
Standard Distribution Agreement dated as of May 1, 1997 between
Stanhome Inc. and Net Global d.o.o. (Slovenia)
_________________
1 To be separated by geographical region, which
requires a contract amendment.
SCHEDULE III
GROUP SUBSIDIARY SALE SHARES
Name of Group Name of Seller Number and Kind of Name of
Subsidiary Shares of Capital Trans-
Stock Held feree
Nuova Lunaria S.r.l. John J. Dur 1 quota, par value
(Italy) 200,000 Lire per
quota
Stanhome S.A. Stanhome Inc. 19,988 shares,
(France) par value 100
Francs per share
John J. Dur 2 shares
Elisabeth Boujenah 2 shares
Allan G. Keirstead 2 shares
Mark A. Peterson 2 shares
John W. Rogers 2 shares
Michael S. Young 2 shares
Stanhome de Colombia Stanhome Capital, 458,356 quotas,
Ltda. (Colombia) Inc. par Value Col.
Peso 1,000
per quota
Stanhome Worldwide 1 quota
Direct Selling
Group, Inc.
Stanhome de Mexico, Stanhome Inc. 124,997
S.A. de C.V. registered shares,
(Mexico) par value 100
Pesos per
registered share
Allan G. Keirstead 1 registered share
Bruce H. Wyatt 1 registered share
John J. Dur 1 registered share
Stanhome Panamericana, Stanhome Inc. 164,350 shares, par
C.A. (Venezuela) value Bs. 100 per
share
Stanhome S.p.A. Stanhome Inc. 28,650 shares, par
(Italy) value 100,000 Lire
per share
Stanhome Capital, 1,350 shares
Inc.
Stanhome Trading Stanhome Capital, 202.24 shares, par
Company d.o.o. Inc. value SIT 1 per
Ljubljana (Slovenia) share
Stanhome, S.A. Stanhome Inc. 209,998 bearer
(Spain) shares, par value
1,000 Ptas. per
bearer share
Stanhome Capital, 1 bearer share
Inc.
Stanhome West 1 bearer share
Germany Limited
Stanhome Financial Stanhome Capital, 1 Ordinary Share,
ATC Limited Inc. par value IRPOUND
(Ireland) 1 per share
Stanhome, C.A. Stanhome Inc. 100 shares, par
value Bs. 100
SCHEDULE IV
DIRECTORS
Stanhome S.A. - Allan G. Keirstead
John J. Dur
Mark A. Peterson
John W. Rogers
Stanhome de Colombia Ltda. - Alvaro de Brigard
Maria Margarita Zuleta
Sergio Michelson Jaramillo
Maria Lucia del Castillo
Stanhome de Mexico, S.A. de C.V. - Allan G. Keirstead
Bruce H. Wyatt
John J. Dur
Antonio Obregan Barrena (Alternate)
Alvaro Quintana Crespo (Alternate)
Leonardo Pontones Quesada (Alternate)
Alfonso Villalua Cabera (Alternate)
Stanhome Panamericana, C.A. - John J. Dur
Allan G. Keirstead
Bruce H. Wyatt
Farid Antakly K. (Alternate)
Lubin Chacon Garcia (Alternate)
Alberto Parra-Febres (Alternate)
Maria Isabel Ponce (Alternate)
Stanhome S.p.A. - Allan G. Keirstead
John J. Dur
John W. Rogers
Stanhome, S.A. - John J. Dur
Mark A. Peterson
John W. Rogers
SCHEDULE V
REQUIREMENTS OF FOREIGN LAW
Mexico
Under Mexican law, a meeting of shareholders is
required in order to approve the resignations of the
members of the board of directors of Stanhome de Mexico,
S.A. de C.V. and to appoint new directors thereof.
Colombia
Under Colombian law, a meeting of the partners is
required in order to remove the General Manager of
Stanhome de Colombia Ltda. and to appoint a new General
Manager thereof.
Under Colombian law, the transfer of shares must be
accomplished by an Amendment of the by-laws of Stanhome
de Colombia Ltda. which must be registered before the
Chamber of Commerce of Bogata. At the time of
registration a registry tax of 0.7% of the value of the
transferred shares will be assessed.
Ireland
Under Irish law, a meeting of shareholders is
required in order to approve the resignations of the
members of the board of directors of Stanhome Financial
ATC Limited and to appoint new directors thereof.
France
Under French law, the share transfer is subject to a
FF20,000 tax.
Under French law, Stanhome must have consulted its
Enterprise Committee prior to the execution of the
Agreement.
Under French law, a meeting of shareholders is
required in order to approve the resignations of the
members of the board of directors of Stanhome S.A. and to
appoint new directors thereof.
Under French law, the Enterprise Committee must be
given 3 days notice of, and an opportunity to attend, any
meeting of Stanhome S.A.'s board of directors at which
such board calls a shareholders meeting for the purpose
of replacing the members of the board of directors.
Italy
Under Italian law, all anti-trust filings must be
completed prior to Closing.
Under Italian law, the quotas, par value 200,000
Lire per quota, of Nuova Lunaria S.r.l. are non-
negotiable and may be transferred only pursuant to a
notarial deed of sale.
Under Italian law, the certificates representing the
shares of Stanhome S.p.A. cannot be endorsed in blank and
any endorsement thereof must take place before a notary.
Under Italian law, a meeting of shareholders is
required in order to approve the resignations of the
members of the board of directors of each of Nuova
Lunaria S.r.l. and Stanhome S.p.A. and to appoint new
directors thereof.
Under Italian law, shareholders meeting may be
convened provided that all existing shareholders,
Directors, and statutory Auditors are in attendance and
there is no objection to lack of notice.
Venezuela
Under Venezuelan tax law, the Buyer must withhold 5%
based on sales proceeds prior to Closing and the Buyer
must pay such withholding tax to the Venezuelan Tax
Administration Service and must certify to the Venezuelan
Mercantile Registry Office that such payment has been
made.
Under Venezuelan law, the shares of Stanhome
Panamericana, C.A. cannot be endorsed in blank. In order
to obtain valid legal title to such shares, the Buyer
must have its name registered in the stock ledger of
Stanhome Panamericana, C.A.
Under Venezuelan law, a meeting of shareholders is
required in order to approve the resignations of the
members of the board of directors of Stanhome
Panamericana, C.A. and to appoint new directors thereof.
Slovenia
Under Slovenian law, a meeting of shareholders is
required in order to approve the resignations of the
members of the board of directors of Stanhome Trading
Company d.o.o., Ljubljana and to appoint new directors
thereof.
Spain
Under Spanish law, the Buyer must apply for
clearance from the Spanish monetary authorities at least
15 days prior to the Closing.
Under Spanish law, the stock ledgers, books and
other organizational/record documents of Stanhome, S.A.
must remain in Spain.
Under Spanish law, a meeting of shareholders is
required in order to approve the resignations of the
members of the board of directors of each of Stanhome,
S.A., and to appoint new directors thereof.
Under Spanish law, shareholder resolutions approving
the resignations of the directors of each of Stanhome,
S.A. and appointing new directors thereof must be raised
to public deed and recorded in the Spanish Mercantile
Registry.
Under Spanish law, in order for the Buyer to
register as a foreign investor the Transfer Agreement
associated with Stanhome, S.A. (Spain) must be
"validated" in Spain. "Validation" involves the
following:
1) the grant of powers of attorney, before a
Notary Public and bearing the Apostille of the
Hague Convention, by the shareholders Stanhome
Inc., Stanhome Capital Inc., and Stanhome West
Germany Limited;
2) the grant of powers of attorney by the Buyer;
3) stock certificates;
4) originals of the documents filed by Stanhome
Inc., Stanhome Capital Inc. and Stanhome West
Germany Limited with the Spanish monetary
authorities declaring the investments made;
5) documents declaring the divestment made by
Stanhome Inc., Stanhome Capital Inc. and
Stanhome West Germany Limited as a consequence
of the sale; and
6) documents declaring the foreign investment to
be made by the Buyer.
Under Spanish law, Form 210 must be filed with the
Spanish Tax Administration to settle capital gains tax
within thirty days of the date of the sale of shares in
Spain.
SCHEDULE VI
GROUP SUBSIDIARY KEY EMPLOYEES
Stanhome S.p.A
Cesj Castiglion Commercial Director
Sergio Stellin Managing Director
Giuseppe Castagna Chief Administrative Officer
Stanhome S.A. (France)
Elisabeth Boujenah Commercial Director
Pascale Caillaux National Sales Manager
Marie-Claire Emery Assistant National Sales Manager
Stanhome S.A. (Spain)
Paolo Giuliani Acting General Manager
Jose Maria Pardos Chief Administrative Officer
Maria Pilar Vives de Costa National Sales Manager
Stanhome de Mexico
Gerry Aguinaga General Manager
Rebecca Pacheco Marketing Director
Javier Rubio Chief Administrative Officer
M.E. Zavala Sales Director
Venezuela
Julio Ubieda General Manager
Claret Perez Marketing Manager
SCHEDULE VII
TAX ALLOCATION
COUNTRY OF ALLOCATED PORTION OF
GROUP OPERATIONS TOTAL PURCHASE PRICE
ITALY FF 140,000,000
FRANCE FF 50,000,000
MEXICO FF 36,000,000
SPAIN FF 30,000,000
VENEZUELA FF 12,000,000
COLUMBIA FF 2,000,000
_______________ _______________
Total FF 270,000,000
EXHIBIT A
REPRESENTATIVE AGREEMENT
This Representative Agreement (this
"Agreement") is entered into as of November 21, 1997 by
and among Stanhome Inc., a Massachusetts corporation
("Stanhome" or the "Representative"), and the sellers
listed on the signature pages hereto (the "Sellers").
WHEREAS, as of the date hereof, Laboratoires
De Biologie Vegetale Yves Rocher S.A., a corporation
organized under the laws of France (the "Buyer"), and
Stanhome are entering into a Stock and Asset Purchase
Agreement (the "Purchase Agreement"); and
WHEREAS, pursuant to the terms of the Purchase
Agreement, the Buyer is purchasing certain shares (or
other equity ownership interests) from the Sellers, as
set forth on Schedule I hereto (the "Shares"); and
WHEREAS, the Shares were acquired by the
Seller from the Representative or its nominee, or
directly from the issuer of such Shares and are held of
record by the Sellers solely as nominal or qualifying
shares pursuant to the requirements of applicable law,
and accordingly, the Sellers have no financial interest
of any kind in the Shares; and
WHEREAS, the Purchase Agreement contemplates
the execution and delivery by each of the Sellers of an
agreement pursuant to which Stanhome acts as
representative of and attorney-in-fact for each of the
Sellers under and in connection with the Purchase
Agreement;
NOW, THEREFORE, in consideration of the
foregoing and the respective representations, warranties
and agreements hereinafter set forth and intending to be
legally bound hereby, the parties hereto agree as
follows:
1. Custody Arrangements.
(a) Each of the Sellers is delivering to
the Representative herewith certificates, if any,
representing the Shares set forth opposite such Seller's
name on Schedule I hereto, such certificates to be held,
administered and delivered by the Representative in
accordance with the terms and provisions of this
Agreement.
(b) Each of the Sellers is delivering to
the Representative herewith stock powers or other stock
transfer forms, as applicable, executed by such Seller
in blank (if permitted by applicable law), in proper
form for transfer and with all requisite stock transfer
stamps, if any, attached or provided for, for use in
connection with the anticipated delivery of the
certificates representing the Shares being delivered to
the Representative by such Seller herewith.
(c) Each of the Sellers hereby authorizes
and directs the Representative to hold the certificates
representing the Shares being delivered herewith by such
Seller to the Representative until (i) such Shares are
sold and delivered to the Buyer pursuant to the terms of
the Purchase Agreement and this Agreement or (ii) the
Purchase Agreement is terminated. In the event that the
Purchase Agreement is terminated, the Representative
shall, as soon as practicable thereafter, return to each
Seller the Shares delivered herewith by such Seller to
the Representative, and thereupon, this Agreement also
shall terminate.
2. Appointment of Representative.
(a) Each of the Sellers hereby
authorizes, directs and appoints the Representative such
Seller's true and lawful representative, agent and
attorney-in-fact with respect to any and all matters
arising under or in connection with the Purchase
Agreement, in all cases with full power and authority to
make any and all judgments and determinations for and on
behalf of such Seller and to execute and deliver or file
(or cause to be filed), for and on behalf of such
Seller, all such agreements, consents, waivers, notices,
certificates and other documents and instruments in
connection therewith as the Representative may deem
advisable. Without in any way limiting the foregoing,
each of the Sellers hereby authorizes and directs the
Representative to (i) take any and all actions
(including without limitation executing or delivering
any and all instruments (including without limitation
those referenced in Section 1 hereof) and other
documents and making any and all determinations) which
may be required or permitted by the Purchase Agreement
to be taken by the Sellers or the Representative, (ii)
exercise such other rights, power and authority as are
authorized, delegated and granted to the Representative
under the Purchase Agreement in connection with the
transactions contemplated thereby and (iii) exercise
such rights, power and authority as are incidental to
any of the foregoing. Each of the Sellers hereby gives
the Representative full power and authority to act in
the premises (including, without limitation, the power
and authority to execute and deliver any certificate,
notice or instructions and any and all other documents
(including without limitation any Transfer Agreement (as
defined in the Purchase Agreement) required to be
executed and delivered by such Seller under the Purchase
Agreement) in connection with the closing of the
transactions contemplated by the Purchase Agreement (the
"Closing")).
(b) In furtherance and not in limitation
of the foregoing, each of the Sellers hereby expressly
authorizes and directs the Representative to (i) sell
and deliver to the Buyer the Shares set forth opposite
such Seller's name on Schedule I hereto at such prices
and on such terms as are set forth in the Purchase
Agreement or any related Transfer Agreement, (ii) take
such actions as the Representative, in its sole
discretion, deems appropriate to transfer such Shares to
the Buyer in accordance with the terms of the Purchase
Agreement or any related Transfer Agreement against
receipt by the Representative of the purchase price to
be paid therefor, (iii) deliver to the Buyer at the
Closing the certificates representing the Shares set
forth opposite such Seller's name on Schedule I hereto
being held by the Representative pursuant to the terms
hereof, (iv) endorse (in blank or otherwise) on behalf
of such Seller, if necessary in connection with the
Closing, the certificates representing the Shares set
forth opposite such Seller's name on Schedule I hereto
or (v) take such other actions as may be necessary or
desirable to effect the intents and purposes hereof.
Also, in furtherance and not in limitation of the
foregoing, each of the Sellers further expressly
authorizes and directs the Representative to execute a
receipt for payment in respect of the Shares and to
deliver such receipt to the Buyer.
(c) Any action, exercise of rights, power
or authority, decision or determination taken or made by
the Representative consistent herewith, shall be
absolutely and irrevocably binding on each Seller as if
such Seller personally had taken such action, exercised
such rights, power or authority or made such decision or
determination in such Seller's individual capacity. The
Representative hereby acknowledges and accepts the
foregoing authorization and appointment and agrees to
serve as the representative and agent of and attorney-
in-fact for the Sellers in accordance with this
Agreement and the Purchase Agreement.
3. Sellers' Representations and Warranties.
Each Seller represents and warrants to the
Representative that to such Seller's knowledge, such
Seller has not taken any action without the instructions
or consent of the Representative with respect to the
Shares since the time the Shares were acquired by such
Seller and that this representation and warranty is true
and correct as of the date hereof and will be true and
correct at the date and time of the Closing.
4. Representative's Representations and
Warranties. The Representative represents and warrants
to and agrees with each Seller that this Agreement has
been duly authorized, executed and delivered by the
Representative and constitutes the valid and binding
obligation of the Representative, enforceable against
the Representative in accordance with its terms and that
this representation and warranty is true and correct as
of the date hereof and will be true and correct at the
Date and time of the Closing.
5. Limitations on Liability; Indemnification.
(a) The Representative agrees that it
shall be responsible to each Seller for, and that it
shall indemnify each Seller and hold each Seller
harmless from and against, any and all losses,
liabilities, damages, deficiencies, obligations, costs
and expenses to the extent incurred by such Seller in
such Seller's capacity as a Seller under the Purchase
Agreement (whether in connection with this Agreement,
the Purchase Agreement or any other agreement entered
into herewith or therewith or otherwise), except to the
extent that such losses, liabilities, damages,
deficiencies, obligations, costs or expenses are
incurred as a result of such Seller's breach of any
representation, warranty or agreement made herein.
(b) The provisions of this Agreement
shall in no way impose any liability or obligations on
the Buyer. In particular, notwithstanding any notice
received by the Buyer to the contrary, the Buyer (i)
shall be fully protected in relying upon and shall be
entitled to rely upon, and shall have no liability to
any of the Sellers with respect to, actions, decisions
and determinations of the Representative taken or made
in accordance with this Agreement and (ii) shall be
entitled to assume that all actions, decisions and
determinations of the Representative taken or made in
accordance with this Agreement are fully authorized by
each of the Sellers.
6. Counterparts. This Agreement may be
executed in two or more counterparts, all of which
together shall be deemed to be one and the same
document.
7. Headings. The paragraph headings
contained herein are for convenience only and are not to
be used in interpreting this Agreement.
8. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts, without giving effect
to the principles thereof relating to conflicts of law.
9. Successors. This Agreement shall be
binding upon each of the Sellers and their respective
heirs, personal representatives, successors and assigns,
as the case may be.
IN WITNESS WHEREOF, the undersigned have
hereunto set their hands as of the date first written
above.
REPRESENTATIVE:
STANHOME INC.
By: /s/ H. L. Tower
---------------------------
Name: H. L. Tower
Title: Chairman and C.E.O.
SELLERS:
STANHOME WEST GERMANY LIMITED
By: /s/ Allan G. Keirstead
---------------------------
Name: Allan G. Keirstead
Title: Treasurer
STANHOME CAPITAL, INC.
By: /s/ Allan G. Keirstead
---------------------------
Name: Allan G. Keirstead
Title: Vice President
STANHOME WORLDWIDE
DIRECT SELLING GROUP, INC.
By: /s/ Allan G. Keirstead
---------------------------
Name: Allan G. Keirstead
Title: Treasurer
/s/ John J. Dur
------------------------------
John J. Dur
/s/ Allan G. Keirstead
------------------------------
Allan G. Keirstead
/s/ Mark A. Peterson
------------------------------
Mark A. Peterson
/s/ John W. Rogers
------------------------------
John W. Rogers
/s/ Michael S. Young
-----------------------------
Michael S. Young
/s/ Bruce H. Wyatt
-----------------------------
Bruce H. Wyatt
/s/ Elisabeth Boujenah
-----------------------------
Elisabeth Boujenah
SCHEDULE I
SHARES SUBJECT TO CUSTODY ARRANGEMENTS TO BE SOLD PURSUANT TO PURCHASE AGREEMENT
NAME OF SELLER COMPANY NUMBER OF SHARES TO BE
SOLD PURSUANT TO
PURCHASE AGREEMENT
Stanhome West Germany Stanhome, S.A. (Spain) 1 bearer share
Limited
Stanhome Capital, Inc. Stanhome de Colombia 458,356 quotas per Value
Ltda (Colombia) Col. Peso 1,000 per
quota.
Stanhome, S.p.A. (Italy) 1.350 shares
Stanhome Trading Comapny 202.24 shares, per value
d.o.o. Ljubljana SIT 1 per share
(Slovenia)
Stanhome, S.A. (Spain) 1 bearer per share
Stanhome Financial ATC 1 Ordinary Share, per
Limited (Ireland) value IR POUND 1 per share
Stanhome Worldwide Stanhome de Colombia 1 quota
Direct Selling Ltda. (Colombia)
Group, Inc.
John J. Dur Nuova Lunaria S.r.l. 1 quota, par value
(Italy) 200,000 Lire
Stanhome S.A. (France) 2 shares
Stanhome de Mexico, S.A. 1 registered share
de C.V. (Mexico)
Elisabeth Boujenah Stanhome S.A. (France) 2 shares
Allan G. Keirstead Stanhome S.A. (France) 2 shares
Stanhome de Mexico, S.A. 1 registered share
de C.V. (Mexico)
Mark A. Peterson Stanhome S.A. (France) 2 shares
John W. Rogers Stanhome S.A. (France) 2 shares
Michael S. Young Stanhome S.A. (France) 2 shares
Bruce H. Wyatt Stanhome de Mexico, S.A. 1 registered share
de C.V. (Mexico)
EXHIBIT B
ESCROW AGREEMENT
This Escrow Agreement (this "Escrow Agree-
ment") is entered into as of December [ ], 1997 by
and among Laboratoire de Biologie Vegetale Yves Rocher
S.A., a corporation organized under the laws of France
(the "Buyer"), Stanhome Inc., a Massachusetts corpora-
tion ("Stanhome"), and The First National Bank of
Chicago, a national bank, as escrow agent (the "Escrow
Agent").
The Buyer and Stanhome are parties to a
Stock and Asset Purchase Agreement dated November 21,
1997 (the "Purchase Agreement") providing for, among
other things, (i) the purchase by the Buyer and the
sale by Stanhome and certain of Stanhome's nominees of
the stock of certain of the subsidiaries comprising
Stanhome's Worldwide Direct Selling Group (the
"Group") and (ii) the purchase by the Buyer and the
sale by Stanhome of certain assets of Stanhome neces-
sary to the conduct of business of the Group.
The closing under the Purchase Agreement
(the "Closing") is taking place concurrently with the
execution and delivery of this Escrow Agreement.
This Escrow Agreement and the escrow ar-
rangements set forth herein are part of the terms and
conditions of the Purchase Agreement and have been
entered into for the purpose of carrying the transac-
tions contemplated by the Purchase Agreement into
effect.
The Buyer and Stanhome desire to place a
portion of the consideration payable by the Buyer to
Stanhome under the Purchase Agreement in escrow, upon
the terms and subject to the conditions set forth
below.
Capitalized terms used and not otherwise
defined herein shall have the respective meanings
ascribed thereto in the Purchase Agreement.
In consideration of the foregoing and the
agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Buyer, Stanhome and
the Escrow Agent hereby agree as follows:
1. Escrow Funds.
(a) At the Closing, in accordance with
Section 1.4 of the Purchase Agreement, the Buyer will
deliver to the Escrow Agent an amount equal to FF66
million in immediately available funds (the "Escrow
Amount"). The Escrow Agent hereby acknowledges re-
ceipt of the Escrow Amount.
(b) The Escrow Agent hereby agrees to
act as escrow agent and to hold, safeguard and dis-
burse the Escrow Amount, together with any interest,
dividends or other amounts earned thereon (the "Escrow
Funds") pursuant to the terms and conditions hereof.
The Escrow Funds shall be held as a trust fund and
shall not be subject to any lien, attachment, trustee
process or any other judicial process of any creditor
of any party hereto.
2. Investment of Escrow Funds. Except as
the Buyer and Stanhome may from time to time jointly
instruct the Escrow Agent in writing, the Escrow Funds
shall be invested from time to time, to the extent
possible, in United States Treasury bills having a
remaining maturity of 90 days or less and repurchase
obligations secured by such United States Treasury
Bills, with any remainder being deposited and main-
tained in a money market deposit account with the
Escrow Agent, until disbursement of all of the Escrow
Funds in accordance with this Escrow Agreement. The
Escrow Agent is authorized to liquidate in accordance
with its customary procedures any portion of the Es-
crow Funds consisting of investments to provide for
payments required to be made under this Escrow Agree-
ment.
3. Claims.
(a) Upon receipt by the Escrow Agent
and Stanhome of notice (a "Claim Notice") from the
Buyer on or before the close of business (Boston time)
on March 31, 1998 (the "Escrow Release Date"), that
the Buyer is asserting a claim for indemnification
pursuant to Article VII of the Purchase Agreement (an
"Indemnifiable Claim"), which Claim Notice shall spec-
ify the nature and estimated amount, in French francs
(the "Claimed Amount"), of such Indemnifiable Claim,
the Escrow Agent shall retain, set aside and continue
to hold the Escrow Funds, or such lesser portion of
the Escrow Funds having a value equal to the Claimed
Amount, in escrow hereunder subject to the further
provisions hereof.
(b) Within 20 days after receipt of a
Claim Notice by the Escrow Agent and Stanhome,
Stanhome shall provide to the Buyer, with a copy to
the Escrow Agent, a written response (a "Response
Notice") in which Stanhome shall either (i) agree
that the full Claimed Amount specified in that Claim
Notice may be released to the Buyer from the Escrow
Funds, (ii) agree that part, but not all, of the
Claimed Amount specified in that Claim Notice (the
"Agreed Amount") may be released to the Buyer from the
Escrow Funds and contest the release to the Buyer of
the balance or (iii) contest the release to the Buyer
of any part of the Claimed Amount specified in that
Claim Notice from the Escrow Funds. If no Response
Notice is received by the Escrow Agent within such 20-
day period, Stanhome shall be deemed to have agreed
that all of the Claimed Amount may be released to the
Buyer from the Escrow Funds.
(c) If Stanhome in any Response Notice
agrees (or is deemed to have agreed) that the entire
Claimed Amount specified in the related Claim Notice
may be released to the Buyer from the Escrow Funds,
the Escrow Agent shall promptly, following the re-
quired delivery date for the Response Notice, trans-
fer, deliver and assign to the Buyer, free and clear
of any interest of Stanhome therein, such portion of
the Escrow Funds having an aggregate value equal to
the Claimed Amount (or such lesser value of Escrow
Funds as are held in escrow hereunder at such time).
(d) If Stanhome in any Response Notice
agrees that part, but not all, of the Claimed Amount
specified in the related Claim Notice may be released
to the Buyer from the Escrow Funds, the Escrow Agent
shall promptly, following the required delivery date
for the Response Notice, transfer, deliver and assign
to the Buyer, free and clear of any interest of
Stanhome therein, the Escrow Funds having an aggregate
value equal to the Agreed Amount (or such lesser
amount of the Escrow Funds as are held in escrow here-
under at such time).
(e) If Stanhome in any Response Notice
contests the release of all or part of the Claimed
Amount specified in the related Claim Notice (the
"Contested Amount"), the Buyer and Stanhome shall
first make a good faith effort to settle the matter
themselves. [If they do not settle the matter within
30 days of the receipt of Stanhome's Response Notice
contesting the Claimed Amount, either the Buyer or
Stanhome shall have the right, by delivery of written
notice thereof (the "Arbitration Notice") to the other
party, to submit the matter to binding arbitration in
Boston, Massachusetts. All matters so submitted to
arbitration shall be settled by three (except as oth-
erwise provided below) arbitrators in accordance with
the Commercial Arbitration Rules then in effect of the
American Arbitration Association (the "AAA Rules").
Stanhome and the Buyer shall each designate one arbi-
trator within 10 days of the delivery of the Arbitra-
tion Notice. If either Stanhome or the Buyer fails so
to timely designate an arbitrator, the matter shall be
resolved by the one arbitrator timely designated.
Stanhome and the Buyer shall cause the designated
arbitrators to mutually agree upon and to designate a
third arbitrator; provided, however, that failing such
agreement within 45 days of delivery of the Arbitra-
tion Notice, the third arbitrator shall be appointed
in accordance with the AAA Rules. Stanhome and the
Buyer shall be responsible for the payment of the fees
and expenses of their respectively designated arbitra-
tors and shall bear equally the fees and expenses of
the third arbitrator. Stanhome and the Buyer shall
cause the arbitrators to decide the matter to be arbi-
trated pursuant hereto within 60 days after the ap-
pointment of the last arbitrator. The arbitrators'
decision shall relate solely to whether the Buyer is
entitled to receive all or a portion of the Escrow
Funds pursuant to the applicable terms of the Purchase
Agreement and this Escrow Agreement and, if so, the
amount of such portion of the Escrow Funds. The final
decision of the majority of the arbitrators shall be
furnished to Stanhome, the Buyer and the Escrow Agent
in writing and shall constitute a conclusive determi-
nation of the matter in question, binding upon
Stanhome, the Buyer and the Escrow Agent and shall not
be contested by any of them.] Such decision may be
used in a court of law only for the purpose of seeking
enforcement of the arbitrators' award. Notwithstand-
ing any provision of this Escrow Agreement or the
Purchase Agreement to the contrary, after delivery of
any Response Notice contesting the Claimed Amount
specified in the related Claim Notice is contested by
Stanhome, the Escrow Agent, pursuant to this Section
3, shall continue to hold Escrow Funds having a value
equal to the Contested Amount (up to the amount of
Escrow Funds then held in escrow hereunder), notwith-
standing the occurrence of the Escrow Release Date,
until (i) delivery of a copy of a settlement agreement
executed by the Buyer and Stanhome setting forth in-
structions to the Escrow Agent as to the release of
the Escrow Funds, if any, that shall be made with
respect to the Contested Amount or (ii) delivery of a
copy of the final decision of a majority of the arbi-
trators setting forth instructions to the Escrow Agent
as to the release of the Escrow Funds, if any, that
shall be made with respect to the Contested Amount.
If applicable, the Escrow Agent shall thereupon re-
lease those Escrow Funds from escrow (to the extent
that any portion of the Escrow Funds is then held in
escrow hereunder) in accordance with such agreement or
instructions. All costs and expenses of any proceed-
ing described in this paragraph 3(e) shall be borne by
the losing party in any such proceeding (with costs
and expenses to be assessed and assigned by the arbi-
trator or arbitrators in the event of an arbitration
in which there is no losing party). The Escrow Agent
shall be under no duty whatsoever to institute or
defend any proceedings which might in its judgment
involve expense or liability unless it shall have been
furnished with indemnity acceptable to it. The Escrow
Agent shall have the right to interplead the parties
to any dispute in any court of competent jurisdiction
and request that such court determine the respective
rights of the parties with respect to this Escrow
Agreement, and upon doing so, the Escrow Agent shall
be released from any obligations or liability as a
consequence of such claims or demands.
(f) In the event that, on or prior to
the Escrow Release Date, (i) the Escrow Agent and
Stanhome have not received a Claim Notice from the
Buyer or (ii) one or more Claim Notices have been
received by the Escrow Agent and Stanhome from the
Buyer specifying Claimed Amounts aggregating less than
the value of the Escrow Funds held in escrow hereun-
der, then, within three business days after the Escrow
Release Date, the Escrow Agent shall deliver to
Stanhome such portion of the Escrow Funds not subject
to a Claim Notice.
4. Duties of Escrow Agent.
(a) The Escrow Agent shall not be
under any duty to give the Escrow Funds held by it
hereunder any greater degree of care than it gives its
own similar property and shall not be required to
invest any funds held hereunder except as directed in
this Escrow Agreement.
(b) The Escrow Agent shall not be
liable, except for its own gross negligence or willful
misconduct and, except with respect to claims based
upon such gross negligence or willful misconduct that
are successfully asserted against the Escrow Agent,
the other parties hereto shall jointly and severally
indemnify and hold harmless the Escrow Agent from and
against any and all losses, liabilities, claims, ac-
tions, damages and expenses, including reasonable
attorneys' fees and disbursements, arising out of and
in connection with this Escrow Agreement. Without
limiting the foregoing, the Escrow Agent shall in no
event be liable in connection with its investment or
reinvestment of the Escrow Funds held by it hereunder
in good faith, in accordance with the terms hereof,
including without limitation any liability for any
delays (not resulting from its gross negligence or
willful misconduct) in the investment or reinvestment
of the Escrow Funds, or any loss of interest incident
to any such delays.
(c) The Escrow Agent shall be entitled
to rely upon any order, judgment, certification, de-
mand, notice, instrument or other writing delivered to
it hereunder reasonably believed by the Escrow Agent
to be authentic, correct and properly and validly
served without being required to determine the authen-
ticity or the correctness of any fact stated therein
or the propriety or validity of the service thereof.
The Escrow Agent may act in reliance upon any instru-
ment or signature reasonably believed by it to be
genuine and may assume that the person purporting to
give notice or advice or make any statement or execute
any document in connection with the provisions hereof
has been duly authorized to do so. The Escrow Agent
may conclusively presume that the undersigned repre-
sentative of each of the Buyer and Stanhome has full
power and authority to instruct the Escrow Agent on
behalf of such party unless written notice to the
contrary is delivered to the Escrow Agent.
(d) The Escrow Agent may act pursuant
to the advice of counsel with respect to any matter
relating to this Escrow Agreement and shall not be
liable for any action taken or omitted by it in accor-
dance with such advice, except that the Escrow Agent
shall be liable for any actions or omissions which
result from the Escrow Agent's gross negligence or
willful misconduct.
(e) The Escrow Agent does not have any
interest in the Escrow Funds deposited hereunder other
than as escrow agent hereunder. Any payments from the
Escrow Funds shall be subject to withholding regula-
tions then in force with respect to United States
taxes and the parties hereto will provide the Escrow
Agent with all appropriate information necessary to
effectuate such withholdings.
(f) The resignation of the Escrow
Agent will take effect only upon the appointment of a
successor escrow agent (which successor escrow agent
shall be deemed the "Escrow Agent" for all purposes
under this Escrow Agreement from and after the ap-
pointment of such successor) jointly designated by
the Buyer and Stanhome in writing or by any court of
competent jurisdiction. Upon delivery of the Escrow
Funds to any successor Escrow Agent, the Escrow Agent
shall be discharged of and from any and all further
obligations arising in connection with this Escrow
Agreement.
(g) In the event of any disagreement
between Stanhome and the Buyer relating to this Escrow
Agreement, including without limitation with respect
to the disposition of the Escrow Funds, or in the
event that the Escrow Agent is in doubt as to what
action it should take hereunder, the Escrow Agent
shall be entitled to retain the Escrow Funds until the
Escrow Agent shall have received (i) a copy of the
final arbitration decision directing delivery of the
Escrow Funds or (ii) a written agreement executed by
Stanhome and the Buyer directing delivery of an Agreed
Amount, in which event the Escrow Agent shall disburse
such Agreed Amount in accordance with such order or
agreement. Any arbitration decision shall be accompa-
nied by a legal opinion by counsel for the presenting
party satisfactory to the Escrow Agent to the effect
that the arbitration decision is final. The Escrow
Agent shall act on such arbitration decision and legal
opinion without further question.
(h) The Buyer agrees to pay the Escrow
Agent compensation (as payment in full) for the ser-
vices to be rendered by the Escrow Agent, and the
Buyer agrees to reimburse the Escrow Agent for all
reasonable expenses, disbursements and advances in-
curred or made by the Escrow Agent in performance of
its duties hereunder (including reasonable fees, ex-
penses and disbursements of its counsel).
5. Ownership for Tax Purposes. The Buyer
agrees that, for purposes of federal and other taxes
based on income, Stanhome will be treated as the owner
of the Escrow Funds and that Stanhome will report all
income, if any, as reported to Stanhome by the Escrow
Agent, that is earned on, or derived from, the Escrow
Funds as Stanhome's income, in such proportions, in
the taxable year or years in which such income is
properly includible and pay any taxes attributable
thereto.
6. Notices. All notices, requests and
other communications hereunder shall be in writing and
shall be deemed given if delivered personally, sent by
facsimile (if confirmed) or mailed by registered or
certified mail (postage prepaid, return receipt re-
quested) to the parties at the following addresses (or
at such other address for a party as shall be speci-
fied by like notice, as specified below):
(a) If to Stanhome:
Stanhome Inc.
333 Western Avenue
Westfield, Massachusetts 01085
United States of America
Attention: Bruce H. Wyatt, Esq.
Facsimile No.: (413) 572-0055
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, Massachusetts 02108
United States of America
Attention: Louis A. Goodman, Esq.
Facsimile No.: (617) 573-4822
(b) If to the Buyer:
Laboratoire de Biologie Vegetale
Yves Rocher S.A.
No. 3, allee de Grenelle
92444 Issy-les-Moulineaux
France
Attention: FranCois Bompard
Facsimile No.: 331-41-08-5878
With a copy to:
Sullivan & Cromwell
No. 8, Place Vendome
75001, Paris
France
Attention: Pierre Servan-Schreiber
Facsimile No.: 331-44-50-6060
(c) If to the Escrow Agent:
The First National Bank of Chicago
One First National Plaza
Suite 0634
Chicago, Illinois 60670
United States
Attention:
Facsimile No.: 312-732-4840
The address of a party for the purposes of this Sec-
tion 6 may be changed by giving written notice to the
other parties hereto of such change in the manner
provided herein for giving notice. Unless and until
such written notice is received, the addresses as
provided herein shall be deemed to continue in effect
for all purposes hereunder.
7. Entire Agreement; Binding Effect. This
Agreement and the agreements, documents and other
instruments referred to herein (a) constitute the
entire agreement, and supersede all other agreements
and understandings, both written and oral, between the
parties with respect to the subject matter hereof and
(b) shall not be assigned by any party (by operation
of law or otherwise) without the prior written consent
of the other parties.
8. Applicable Law. This Agreement shall
be governed by and be construed in accordance with the
laws of the State of New York, without giving effect
to the principles thereof relating to conflicts of
law.
9. Parties in Interest. This Agreement
shall be binding upon and inure solely to the benefit
of each party hereto and their respective successors
and permitted assigns, and nothing in this Agreement,
express or implied, is intended to confer upon any
other Person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
10. Counterparts. This Agreement may be
executed in any number of counterparts and by the
different parties hereto on separate counterparts,
each of which, when so executed and delivered, shall
be deemed an original, but all of which together shall
constitute one and the same instrument.
11. Interpretation. The section and other
headings contained in this Agreement are for reference
purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever
the words "include," "includes" or "including" are
used in this Agreement, they shall be deemed to be
followed by the words "without limitation." Unless
otherwise indicated herein or the context otherwise
requires, the masculine pronoun shall include the
feminine and neuter, and the singular shall include
the plural. The word "or" shall not be deemed exclu-
sive.
12. Severability. In case any term, provi-
sion, covenant or restriction of this Escrow Agreement
is held to be invalid, illegal or unenforceable by a
competent court in any jurisdiction, the validity,
legality and enforceability of the remaining terms,
provisions, covenants or restrictions, or of such
term, provision, covenant or restriction in any other
jurisdiction, shall not in any way be affected or
impaired thereby.
13. Amendment and Waiver. No amendment of
any provision of this Agreement shall in any event be
effective, unless the same shall be in writing and
signed by the parties hereto. Any failure of any
party to comply with any obligation, agreement or
condition hereunder may only be waived in writing by
the other party, but such waiver shall not operate as
a waiver of, or estoppel with respect to, any subse-
quent or other failure. No failure by any party to
take any action against any breach of this Agreement
or default by the other party shall constitute a waiv-
er of such party's right to enforce any provision
hereof or to take any such action.
14. Termination. This Escrow Agreement
shall terminate upon the later of (i) the Escrow Re-
lease Date or (ii) the release by the Escrow Agent of
all of the Escrowed Materials in accordance with this
Escrow Agreement.
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first written
above.
STANHOME INC.
By
Name:
Title:
LABORATOIRE DE BIOLOGIE VEGETALE
YVES ROCHER S.A.
By
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By
Name:
Title:
EXHIBIT C
SUPPLY AGREEMENT
SUMMARY OF TERMS
Parties Laboratoire de Biologie Vegetale Yves Rocher
S.A. ("YR") and Cosmhogar S.A. ("Cosmhogar") .
Term 5 years (through December 31, 2002) for
household care products (including chemicals,
brushes and other home care items); 1 year
(through December 31, 1998, subject to
extension at terms to be negotiated) for
cosmetics and personal care.
Guaranteed Household care:
Minimum Using 1997 as a base year, unless 1997 year-end
Volumes inventory levels are materially inconsistent
with 1996 inventory levels ("Base"), a minimum
volume of production is guaranteed to Cosmhogar
over the 5-year contract term. Specifically,
93% of Base is guaranteed for 1998, 89% of Base
for 1999, 85% of Base for 2000, 81% of Base for
2001 and 77% of Base for 2002.
Cosmetics and personal care:
A minimum volume of production is guaranteed to
Cosmhogar over the 12-month contract term.
Specifically, 100% of Base is guaranteed for
1998.
Volume Production for volume requirements for existing
Requirements products in excess of the minimum guarantees,
in Excess of up to Base, is guaranteed to Cosmhogar at the
Minimum then current year price. If, and only if,
Guarantees volume requirements exceed Base, YR is
permitted to seek competitive bids for
production from Cosmhogar and others.
Pricing For 1998:
2% higher than actual prices for 1997.
After 1998:
Increases will be at the applicable Spanish
CPI, adjusted January 1, except for raw
materials and components.
Raw materials and components:
Except as set forth below, increases or
decreases will be made upon four months'
notice, based solely on increases or decreases
in costs; provided, however, that no increases
or decreases will be made until costs have
increased or decreased by at least 2% on a
cumulative basis.
Raw Cosmhogar will use any supplier of raw
Materials materials or packaging introduced by YR. Under
Sourcing these circumstances, price savings or increases
will be directly to the benefit or detriment of
YR.
Payment 30 days, payable on the 10th of the following
Terms month.
Production For 1998:
Flexibility YR will be afforded the same production
flexibility currently in practice at Cosmhogar
for the Group's production units.
After 1998:
Cosmhogar will act in good faith to maintain
some production flexibility, but without a
specific guarantee.
Production Cosmhogar will supply YR with:
Forecasts * a 1-year, nonbinding forecast
* a 4-month, binding forecast.
Development Operations at Stanhome European Development
Center Center S.A. will be restructured after the
Operations Closing to eliminate cosmetics and personal
and care as required services. Household care
Development requirements may be supplied through
Activities Cosmhogar's technical center, augmented as
necessary. Specifically identified new product
concepts and related details will be executable
by Cosmhogar. YR will be responsible for
proactive, creative design initiation and
interaction with Group Subsidiaries.
YR is permitted to develop and manufacture new
products. If YR requests that product
developed in YR labs be produced by Cosmhogar,
this will count toward minimum guaranteed
production volumes.
Warranties Same as for arms' length, third party vendor.
Performance Cosmhogar to provide YR with standard, ordinary
Protections course performance protections -- for example,
quality assurances, no excessive delays --
together with a related right to remedy --
which will be binding on and enforceable
against any purchaser of Cosmhogar.
Product Mix YR to agree that the product demand
requirements of YR in any given year during the
term of the contract will approximate the
profitability mix for Cosmhogar in 1997. Any
material change from the profitability mix for
Cosmhogar in 1997 must be agreed to by both YR
and Cosmhogar.
Mutual Audit Cosmhogar and YR agree to grant each other
Rights reasonable mutual audit rights during the term
of the Supply Agreement.
Indemnifica- Cosmhogar will be compensated per unit of
tion for any shortfall for its labor, over head and profits
Shortfalls expenses under the following formula:
in Guaran-
teed Mini- (guaranteed units x unit selling price)
mum Volumes - (actual units x unit selling price) = total
lost revenue
gross indemnity for shortfalls = total lost
revenue - cost of raw material per unit x lost
units
net indemnity for shortfalls = gross indemnity
- 3% x lost revenue as presumed variable costs
Example:
where: 9300 guaranteed raw materials:
units
8000 actual
units 70
labor overhead and
profit: 30
---
unit selling price: 100
guaranteed units x unit
selling price: 930,000
9300 x unit price 100
less ...
actual units x unit
selling price:
8000 x unit price 100 800,000
-------
total lost revenue 130,000
less ...
cost of raw materials
per unit x lost units 91,000
-------
1300 x 70 per unit
gross Indemnity 39,000
less ...
3% of total lost revenue 3,900
-------
130,000 x 3%
net indemnity = 35,100
EXHIBIT D
BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
BILL OF SALE, ASSIGNMENT AND ASSUMPTION
AGREEMENT dated as of [ ] entered into by
Stanhome Inc., a Massachusetts corporation
("Stanhome"), and Laboratoire de Biologie Vegetale
Yves Rocher S.A., a corporation organized under the
laws of France ("Buyer").
Stanhome has determined that it is in the
best interests of Stanhome and its stockholders for
Stanhome to sell, transfer and assign certain of its
intellectual property listed in Schedule A and
contract assets listed in Schedule B hereto (together,
the "Assets") to Buyer and has entered into a Stock
and Asset Purchase Agreement dated as of November 21,
1997 (the "Purchase Agreement") with Buyer in
furtherance of such transfer.
Stanhome desires to sell, transfer and
assign to Buyer, and Buyer desires to purchase,
acquire and assume from Stanhome, the Assets.
Stanhome, in consideration of the promises
and agreements of Buyer made herein and for other good
and valuable consideration, receipt of which is hereby
acknowledged, by these presents sells, conveys,
assigns, transfers and delivers to Buyer and Buyer
acquires and assumes from Stanhome, all right, title
and interest to and in, and all goodwill attendant to,
the Assets set forth below:
(a) the intellectual property listed on
Schedule A hereto; and
(b) the contract assets listed on Schedule
B hereto;
TO HAVE AND TO HOLD such Assets, unto Buyer and its
successors and assigns to and for its or their own use
and behoof forever.
Section 1. Notwithstanding the foregoing,
the Assets being sold, conveyed, assigned, transferred
and delivered hereby shall not include any Asset which
is a contract, lease or agreement (each a "Contract")
that is not assignable without the consent or waiver
of another party, which consent has not been obtained
on or before the date hereof, if such assignment or an
attempted assignment of such Contract would constitute
a breach thereof, until such time as such consent or
waiver is obtained.
Section 2. Stanhome does hereby warrant,
covenant, undertake and agree that it:
(a) will warrant and defend its title to and
sale of the Assets unto Buyer, its successors and
assigns, against each and every person or persons
whomsoever claiming or who may claim against any or
all of the same; and
(b) will take all steps reasonably necessary
to put Buyer and its successors and assigns in actual
possession and operating control of such Assets.
Section 3. Nothing in this instrument,
express or implied, is intended or shall be construed
to confer upon, or give to, any person, corporation or
entity other than Stanhome, Buyer and their respective
successors and assigns any remedy or claim under or by
reason of this instrument or any terms, covenants,
conditions, promises or agreements contained herein,
and all the terms, covenants, conditions, promises and
agreements contained in this instrument shall be for
the sole and exclusive benefit of Stanhome, Buyer and
their respective successors and assigns.
Section 4. This instrument is executed by
Stanhome and Buyer and shall be binding upon Stanhome,
Buyer and their respective successors and assigns for
the uses and purposes above set forth and referred to,
effective immediately upon its delivery.
IN WITNESS WHEREOF, Stanhome and Buyer have
caused this Bill of Sale, Assignment and Assumption
Agreement to be signed under seal by their respective
duly authorized officers as of the date first above
written.
STANHOME INC.
By:
---------------------------------
Name:
Title:
LABORATOIRE DE BIOLOGIE
VEGETALE YVES ROCHER S.A.
By:
---------------------------------
Name:
Title:
SCHEDULE A
INTELLECTUAL PROPERTY BEING TRANSFERRED
[to be excerpted from list of Worldwide Selling Group
IP list]
SCHEDULE B
CONTRACTS BEING TRANSFERRED
Trademark License Agreement dated December 12, 1989
between MacFarlan Smith Limited and Stanhome Inc., and
amendments of May 15, 1992 and November 16, 1993
Manufacturing and Distribution Agreement dated
December 1, 1990 between Stanhome Inc. and Associated
Manufacturers Limited (Jamaica)
Standard Distribution Agreement dated as of June 5, 1990
between Stanhome Inc. and CP Young and Active Traders
Ltd. (Cyprus)
Distribution Agreement dated January 1, 1994 between
Stanhome Inc. and STANLAR - Sociedade Tecnica de Artigos
Novos para o Lar, Lda (Portugal)
Agreement dated December 29, 1979 between Stanley Home
Products, Inc. and Tonina, Ltd. (Trinidad)
Agreement dated as of August 11, 1982 between Stanhome
Inc. and Chauyjuljit Co., Ltd. (Thailand)
Standard Distribution Agreement dated as of May 1,
1997 between Stanhome Inc. and Net Global d.o.o. (Slovenia)
Exhibit E
TRANSFER AGREEMENT - France
Intentionally omitted. Stanhome Inc. agrees to furnish supplementally
to the Commission a copy of this omitted exhibit upon request.
Exhibit F
TRANSFER AGREEMENT - Italy
Intentionally omitted. Stanhome Inc. agrees to furnish supplementally
to the Commission a copy of this omitted exhibit upon request.
Exhibit G
TRANSFER AGREEMENT - Mexico
TABLE OF CONTENTS
ARTICLE I
PURCHASE AND SALE OF SHARES
Section 1.1 Shares to be Sold......................................2
Section 1.2 Consideration..........................................2
Section 1.3 Closing................................................2
Section 1.4 Deliveries by Stanhome.................................2
Section 1.5 Deliveries by the Buyers...............................3
Section 1.6 Currency Valuation.....................................4
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF STANHOME
Section 2.1 Corporate Organization.................................3
Section 2.2 Authorization..........................................4
Section 2.3 Capitalization.........................................5
Section 2.4 Ownership of Sale Shares...............................5
Section 2.5 Consents and Approvals;
Non-Contravention......................................5
Section 2.6 Financial Statements...................................6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE Buyers
Section 3.1 Corporate Organization.................................7
Section 3.2 Authorization..........................................7
Section 3.3 Consents and Approvals;
Non-Contravention......................................7
Section 3.4 Litigation.............................................8
Section 3.5 Acquisition of Capital Stock of
the Company For Investment.............................8
Section 3.6 Financing..............................................8
ARTICLE IV
COVENANTS
Section 4.1 Confidentiality.........................................9
Section 4.2 Publicity...............................................9
ARTICLE V
GENERAL PROVISIONS
Section 5.1 No Survival of Representations..........................9
Section 5.2 Amendment and Waiver....................................9
Section 5.3 Expenses...............................................10
Section 5.4 Broker's and Finder's Fees.............................10
Section 5.5 Notices................................................10
Section 5.6 Entire Agreement; Binding Effect.......................11
Section 5.7 Applicable Law.........................................12
Section 5.8 Parties in Interest....................................12
Section 5.9 Counterparts...........................................12
Section 5.10 Interpretation.........................................12
Section 5.11 Severability...........................................12
Schedules
SCHEDULE I -- SELLERS AND SHARES...................................I-1
SCHEDULE II -- DIRECTORS...........................................II-1
Exhibits
Exhibit A -- RESIGNATION LETTER....................................A-1
STOCK PURCHASE AGREEMENT
by and between
STANHOME INC.
and
YVES ROCHER de MEXICO, S.A. de C.V.
and
Y.R. MEXICANA, S.A. de C.V.
dated as of December 18, 1997
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made
and entered into as of this 18th day of December, 1997 by and between
Stanhome Inc., a Massachusetts corporation ("Stanhome"), on its own
behalf and as representative of and attorney-in-fact for the Represented
Holders (as defined below), Yves Rocher de Mexico, S.A. de C.V. and Y.R.
Mexicana, S.A. de C.V., corporations organized under the laws of Mexico
(the "Buyers").
WHEREAS, Stanhome and the Represented Holders (together,
the "Sellers") collectively are the record owners of all of the issued
and outstanding registered shares, par value 100 Mexican pesos per
registered share (the "Shares") of Stanhome de Mexico, S.A. de C.V., a
corporation organized under the laws of Mexico and a direct subsidiary of
Stanhome (the "Company"), which together constitute all of the issued and
outstanding shares of capital stock of the Company; and
WHEREAS, the record owners of the Shares other than
Stanhome (the "Represented Holders") are affiliates, employees or agents
of Stanhome who or which hold their respective Shares solely as nominal
or qualifying shareholders pursuant to the requirements of applicable
law; and
WHEREAS, the Represented Holders each have executed and
delivered to Stanhome a power of attorney providing for Stanhome to act
as representative of and attorney-in-fact for the Represented Holders
under and in connection with this Agreement; and
WHEREAS, the Sellers desire to sell the Company to the
Buyers and the Buyers desires to purchase the Company from the Sellers
through the purchase by the Buyers of the Shares from the Sellers, upon
the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and
conditions hereinafter set forth, and intending to be legally bound
hereby, each of the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
Section 1.1 Shares to be Sold. Upon the terms and subject
to the conditions contained herein, at the Closing (as hereinafter
defined), each Seller shall sell and transfer to the Buyers and their
nominees (together, the "Transferees"), if any, and the Buyers shall
purchase and accept from each Seller on behalf of itself and any
Transferees, the number of Shares set forth on Schedule I hereto, which
collectively constitute all of the issued and outstanding Shares (the
"Sale Shares").
Section 1.2 Consideration. Upon the terms and subject to
the conditions contained herein and in consideration of, and in full
payment for, the aforesaid sale and transfer of the Sale Shares, at the
Closing, the Buyers shall pay to Stanhome, in immediately available
funds, 36,000,000 French francs (the "Purchase Price").
Section 1.3 Closing. The closing of the transactions
contemplated by this Agreement is occurring simultaneously with the
execution of this Agreement at the principal office of the Company, or on
such other date or at such other time or place (or places) as Stanhome
and the Buyers shall mutually agree in advance thereof. Such closing is
referred to herein as the "Closing"). The time and date of the Closing is
sometimes referred to herein as the "Closing Date."
Section 1.4 Deliveries by Stanhome. On the Closing Date,
Stanhome will deliver or cause to be delivered to the Buyers the
following:
(a) stock certificates evidencing the Sale Shares or
stock transfer forms, as applicable, free and clear of any Liens (as
defined below), duly endorsed in blank or accompanied by appropriate stock
powers duly executed in blank, in proper form for transfer and with all
requisite stock transfer stamps, if any, attached or provided for;
(b) the stock book, stock ledger, minute book and
corporate seal (if any) of the Company;
(c) the written resignations, substantially in the
form attached hereto as Exhibit B, of the directors of the Company listed
on Schedule II hereto from their respective positions as directors,
effective as of the Closing Date; and
(d) such other instruments or documents (including
without limitation those required by applicable law) as may be reasonably
necessary to carry out the transactions contemplated by this Agreement and
to comply with the terms hereof (including without limitation all books and
records, accounting, regulatory and personnel files and all other
documentation material to the conduct of the operations of the Company and
not in the possession of the Company at the Closing Date).
Section 1.5 Deliveries by the Buyers. On the Closing
Date, the Buyers will deliver or cause to be delivered the following:
(a) an amount equal to the Purchase Price; plus
(b) such other instruments or documents (including
without limitation those required by applicable law) as may be reasonably
necessary to carry out the transactions contemplated by this Agreement and
to comply with the terms hereof, to Stanhome.
Section 1.6 Income Tax. Pursuant to article 151 of the
Mexican Income Tax Law, the Buyer will withold an amount equal to 20% of
the Purchase Price without deductions, for the purpose of paying all
applicable witholding taxes. the Buyer shall remit such amount to the
appropriate taxing authorities within the time period specified in the
Mexican Income Tax Law. Immediately upon payment of the witholding tax by
the Buyer on behalf of the Seller, the Buyer will provide the Seller with
the original receipt for the corresponding tax return and filing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF STANHOME
Stanhome hereby represents and warrants to the Buyers as
follows:
Section 2.1 Corporate Organization.
(a) Stanhome is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and has the corporate power and authority to own or lease its
properties and to carry on its business as it is currently being conducted.
(b) The Company is a corporation duly organized,
validly existing under the laws of Mexico and except as set forth in
writing to the Buyers, has the corporate power and authority to own or
lease its properties and to carry on its business as it is currently being
conducted. The copies of the organizational documents of the Company (the
"Organizational Documents") heretofore delivered to the Buyers are complete
and correct copies of such instruments as currently in effect.
Section 2.2 Authorization.
(a) Stanhome has the requisite corporate power and
authority to enter into this Agreement and the other agreements, documents
and instruments to be executed and delivered pursuant hereto by Stanhome on
its own behalf (the "Additional Stanhome Documents") and to carry out the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Additional Stanhome Documents and the consummation
of the transactions contemplated hereby and thereby have been duly
authorized by the Board of Directors of Stanhome, and no other proceedings
on the part of Stanhome or its stockholders are necessary to authorize the
execution and delivery of this Agreement and the Additional Stanhome
Documents and the transactions contemplated hereby and thereby. This
Agreement and each of the Additional Stanhome Documents have been executed
and delivered by Stanhome and, assuming that this Agreement and each of the
Additional Stanhome Documents constitute valid and binding obligations of
the Buyers and the other parties thereto, constitute valid and binding
obligations of Stanhome, enforceable against Stanhome in accordance with
their respective terms, except that enforcement (i) hereof and thereof may
be limited by (A) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (B) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and (ii)
of the indemnification provisions contained herein may be limited by public
policy.
(b) Stanhome has the requisite power and authority to
enter into this Agreement and the other agreements, documents and
instruments to be executed and delivered pursuant hereto by Stanhome as
representative and attorney-in-fact for the Represented Holders (the
"Additional Holder Documents") and to carry out the transactions
contemplated hereby and thereby. When fully executed and delivered,
assuming that this Agreement and each of the Additional Holder Documents
constitute valid and binding obligations of the Buyers and the other
parties thereto, this Agreement and each of the Additional Holder Documents
will constitute valid and binding obligations of the Represented Holders,
enforceable against the Represented Holders in accordance with their
respective terms, except that enforcement hereof and thereof may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
Section 2.3 Capitalization. The entire authorized and
outstanding capital stock of the Company is as set forth in the Financial
Statements (as defined below). All of the outstanding shares of capital
stock of the Company are duly authorized for issuance, have been validly
issued and are fully paid, nonassessable and, except as set forth in
Writing to the Buyers, free of any mortgage, pledge, security interest,
encumbrance, lien, claim or charge of any kind or right of others of
whatever nature ("Liens"), preemptive rights or other restrictions with
respect thereto. Stanhome has accurately disclosed in writing to the
Buyers the record ownership of all outstanding shares of capital stock of
the Company as of the date hereof. There are no securities outstanding
which are convertible into or exercisable or exchangeable for shares of
capital stock of the Company, and there are no outstanding options,
rights, contracts, warrants, subscriptions, conversion rights or other
agreements or commitments (a) pursuant to the Company may be required to
purchase, redeem, issue or sell any shares of its capital stock or (b) in
any way relating to the issuance or voting of the capital stock of the
Company.
Section 2.4 Ownership of Sale Shares. Except as set forth
in Writing to the Buyers, the Sellers have, and at the Closing, upon
delivery by the Buyers to Stanhome of the Purchase Price pursuant to
Sections 1.3 and 1.7 hereof, the Transferees will acquire, good and valid
record and beneficial ownership of the Sale Shares, free and clear of any
Liens. The parties intend that all right, title and interest in the Sale
Shares transfer from the Sellers to the Buyers or other Transferees at
the time and place of the Closing.
Section 2.5 Consents and Approvals; Non-Contravention.
Except as set forth herein or otherwise in Writing to the Buyers, neither
the execution or delivery of this Agreement or of any of the Additional
Stanhome Documents by Stanhome, nor the consummation by Stanhome of the
transactions contemplated hereby or thereby, nor the compliance by
Stanhome with any of the provisions hereof or thereof will (a) violate
any provision of the Restated Articles of Organization, as amended, or
By-Laws of Stanhome or the Organizational Documents, as currently in
effect, (b) except for any required filings under applicable U.S. or
foreign antitrust or trade regulation laws or regulations (including
without limitation those under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), require any filing with, or permit,
authorization, consent or approval of, any court, arbitral tribunal,
administrative agency or commission or other governmental or regulatory
authority or agency (a "Governmental Entity"), (c) require any consent,
approval or authorization under any material note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which the Company is a party or by which the Company or any
of its properties or assets may be bound, (d) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Stanhome or
the Company, or any of their respective properties or assets, or (e)
result in a violation or breach of, or constitute (with or without notice
or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration or any loss of a
material benefit) under, or result in the creation or imposition of (or
the obligation to create or impose) any Lien upon any of the properties
or assets of the Company under, any material note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which the Company is a party or by which the Company or any
of its properties or assets may be bound, except, in the case of clauses
(b), (c), (d) and (e), for such filings, consents, violations, breaches,
defaults or Liens which (i) have been obtained, made, cured or expunged
(as applicable) or (ii) would not reasonably be expected to materially
impair the ability of Stanhome to perform its obligations hereunder or
which, either individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on the business, operations,
properties, assets, liabilities, financial condition or results of operations
of the Company (a "Material Adverse Effect").
Section 2.6 Financial Statements. The (a) audited balance
sheet of the Company dated December 31, 1996, (b) unaudited balance sheet
of the Company dated October 30, 1997, (c) audited income statement of
the Company for the year ended December 31, 1996, (d) unaudited
statements of cash flow of the Company for the year ended December 30,
1996 and (e) unaudited income statements and statements of cash flow of
the Company for the ten months ended October 30, 1997, in each case as
set forth and described in Writing to the Buyers (collectively, the
"Financial Statements"), fairly present the financial condition of the
Company taken as a whole as of the dates and for the periods indicated
(subject in the case of interim statements to normal year-end
adjustments) and have been prepared in accordance with U.S. generally
accepted accounting principles as historically and consistently applied
by Stanhome as described in Writing to the Buyers (subject to the absence
of required footnote disclosure, if any).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE BUYERS
The Buyers hereby represent and warrant to each Seller as
follows:
Section 3.1 Corporate Organization. The Buyers are
corporations duly organized, validly existing and in good standing under
the laws of Mexico.
Section 3.2 Authorization. The Buyers have the requisite
corporate power and authority to enter into this Agreement and the other
agreements, documents and instruments to be executed and delivered by the
Buyers pursuant hereto (the "Additional Buyers' Documents") and to carry
out the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Additional Buyers' Documents and the
consummation of the transactions contemplated hereby and thereby have been
duly authorized by the Boards of Directors of the Buyers, and no other
corporate proceedings on the part of the Buyers or their stockholders are
necessary to authorize the execution and delivery of this Agreement and the
Additional Buyers' Documents and the transactions contemplated hereby and
thereby. When fully executed and delivered, this Agreement and each of the
Additional Buyers' Documents have been duly executed and delivered by the
Buyers, and, assuming that this Agreement and the Additional Buyers'
Documents constitute valid and binding obligation of Stanhome, constitute
the valid and binding agreements of the Buyers, enforceable against the
Buyers in accordance with their respective terms, except that (i)
enforcement hereof and thereof may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (B) general
principles of equity (regardless of whether enforceability is considered in
a proceeding at law or in equity) and (ii) the indemnification provisions
contained herein may be limited by public policy.
Section 3.3 Consents and Approvals; Non-Contravention.
Neither the execution or delivery of this Agreement or any of the
Additional Buyers' Documents by the Buyers, nor the consummation by the
Buyers of the transactions contemplated hereby or thereby, nor compliance
by the Buyers with any of the provisions hereof or thereof will (a)
violate any provision of the Buyers' organizational documents, including
without limitation the Buyers' charters and corporate by-laws or
regulations of the Buyers, (b) except for any required filings under
applicable U.S. or foreign antitrust or trade regulation laws or
regulations, require any filing with, or permit, authorization, consent
or approval of, any Governmental Entity, (c) require any consent,
approval or authorization under any material contract, lease or other
agreement or instrument or (d) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Buyers or any of
their properties or assets, except, in the case of clauses (b), (c) and
(d), for such filings, consents or violations which (i) have been
obtained, made or cured or (ii) would not reasonably be expected to
materially impair the ability of the Buyers to perform their obligations
hereunder or to consummate the transactions contemplated hereby.
Section 3.4 Litigation. There is no claim, action, suit,
inquiry, proceeding or investigation by or before any Governmental Entity
pending or, to the Buyers' best knowledge, threatened against or
involving the Buyers which has had or would reasonably be expected to
have a material adverse effect on the Buyers' abilities to perform their
obligations hereunder or to consummate the transactions contemplated
hereby.
Section 3.5 Acquisition of Capital Stock of the Company for
Investment. The Buyers are acquiring the capital stock of the Company being
acquired by them for investment and not with a view toward, or for sale in
connection with, any distribution thereof, nor with any present intention
of distributing or selling such capital stock. The Buyers hereby
acknowledge that no capital stock of the Company has been registered
pursuant to the Securities Act of 1933, as amended, and that no such
capital stock may be transferred in the absence of such registration or
an applicable exemption therefrom.
Section 3.6 Financing. The Buyers have sufficient funds
available or have received from responsible financial institutions
written commitments (copies of which have been delivered to Stanhome),
which have not been withdrawn and remain in full force and effect, to
provide sufficient funds on the Closing Date to pay the Purchase Price.
ARTICLE IV
COVENANTS
Section 4.1 Confidentiality. All information concerning
Stanhome furnished or provided by Stanhome or the Company or their
affiliates to the Buyers or their representatives (whether furnished
before or after the date of this Agreement) shall be held subject to the
Confidentiality Agreement dated June 12, 1997 by and between Stanhome and
the Laboratoires de Biologie Vegetale Yves Rocher S.A. (the
"Confidentiality Agreement"). Notwithstanding anything to the contrary
contained in this Agreement, neither Stanhome nor any of its affiliates
shall have any obligation to make available or provide to the Buyers or
their representatives a copy of any consolidated, combined or unitary tax
return filed by Stanhome or any of its affiliates or any related
materials, except to the extent that it relates solely to the Company.
Section 4.2 Publicity. Except as required by applicable
law or by the regulations of a recognized stock exchange, for so long as
this Agreement is in effect, no announcement or notice in respect of this
Agreement or the transactions contemplated hereby shall be made by either
party hereto without the prior written consent of the other. To the
extent practicable, Stanhome and the Buyers shall consult with each other
prior to issuing any press releases or otherwise making public statements
with respect to the transactions contemplated hereby and prior to making
any filings with any Governmental Entity or with any securities exchange
with respect thereto.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 No Survival of Representations. The
representations and warranties of the parties contained herein shall not
survive the Closing, shall thereafter be of no further force or effect,
and accordingly, after the Closing Date no party shall have any liability
in respect thereof.
Section 5.2 Amendment and Waiver. No amendment of any
provision of this Agreement shall in any event be effective, unless the
same shall be in writing and signed by the parties hereto. Any failure of
any party to comply with any obligation, agreement or condition hereunder
may only be waived in writing by the other party, but such waiver shall
not operate as a waiver of, or estoppel with respect to, any subsequent
or other failure. No failure by any party to take any action against any
breach of this Agreement or default by the other party shall constitute a
waiver of such party's right to enforce any provision hereof or to take
any such action.
Section 5.3 Expenses. Except as set forth herein, whether
or not the transactions contemplated by this Agreement shall be
consummated, each of the parties hereto agrees to pay all costs and
expenses incurred by it in connection with this Agreement and the
transactions contemplated hereby, including without limitation the fees
of its counsel, accountants and consultants.
Section 5.4 Broker's and Finder's Fees. Stanhome hereby
represents and warrants to the Buyers with respect to Stanhome and the
Company, and the Buyers hereby represent and warrant to Stanhome with
respect to the Buyers, that no Person or entity is entitled to receive from
Stanhome or the Company, on the one hand, or from the Buyers, on the other
hand, any investment banking, brokerage or finder's fee or fees for
financial consulting or advisory services in connection with this Agreement
or the transactions contemplated hereby, except for an investment banking
fee payable by Stanhome to Stanhome's investment banker in connection with
this Agreement and the transactions contemplated hereby, as previously
disclosed by Stanhome to the Buyers in writing and except for an investment
banking fee payable by the Buyers to the Buyers' investment banker in
connection with this Agreement and the transactions contemplated hereby, as
previously disclosed by the Buyers to Stanhome in writing.
Section 5.5 Notices. All notices, requests and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally, sent by facsimile (if confirmed) or mailed by
registered or certified mail (postage prepaid, return receipt requested)
to the parties at the following addresses (or at such other address for a
party as shall be specified by like notice, as specified below):
(a) If to Stanhome:
Stanhome Inc.
333 Western Avenue
Westfield, Massachusetts 01085
USA
Attention: Bruce H. Wyatt, Esq.
Facsimile No.: (413) 572-0055
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, Massachusetts 02108
USA
Attention: Louis A. Goodman, Esq.
Facsimile No.: (617) 573-4822
(b) If to the Buyers:
Yves Rocher de Mexico, S.A. de C.V.
Y.R. Mexicana, S.A. de C.V.
Calderon de la Barca No. 308
Colonia Polanco
Mexico, D.F.
C.P. 11590
Attention: Manuel Fontanals Viesca
Facsimile No.: 255-1649
With a copy to:
Sullivan and Cromwell
No. 8, Place Vendome
75001, Paris
France
Attention: Pierre Servan-Schreiber
Facsimile No.: 331-44-50-6060
The address of a party for the purposes of this Section 5.5 may be
changed by giving written notice to the other party of such change in the
manner provided herein for giving notice. Unless and until such written
notice is received, the addresses as provided herein shall be deemed to
continue in effect for all purposes hereunder.
Section 5.6 Entire Agreement; Binding Effect. This
Agreement and the agreements, documents and other instruments referred to
herein (a) constitute the entire agreement, and supersede all other
agreements and understandings, both written and oral, between the parties
with respect to the subject matter hereof (provided that the
Confidentiality Agreement shall survive the execution of this Agreement)
and (b) shall not be assigned by either party (by operation of law or
otherwise) without the prior written consent of the other party;
provided, however, that the Buyers may assign their right to receive and
own of record Sale Shares, but not its other rights and obligations
hereunder, to other Transferees as necessary to comply with applicable
law.
Section 5.7 Applicable Law. This Agreement shall be
governed by and be construed in accordance with the laws of the State of
New York, without giving effect to the principles thereof relating to
conflicts of law.
Section 5.8 Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and
their respective successors and permitted assigns, and nothing in this
Agreement, express or implied, is intended to confer upon any other
Person any rights or remedies of any nature whatsoever under or by reason
of this Agreement, except as set forth in this Section 5.8. Stanhome and
the Buyers hereby acknowledge and agree that the Represented Holders and
the Transferees make no representations or warranties, and provide no
indemnification, to Stanhome or the Buyers herein or otherwise in
connection with the transactions contemplated hereby.
Section 5.9 Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties hereto on
separate counterparts, each of which, when so executed and delivered,
shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Section 5.10 Interpretation. The section and other
headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation." Unless otherwise indicated herein or the context
otherwise requires, the masculine pronoun shall include the feminine and
neuter, and the singular shall include the plural. The word "or" shall
not be deemed exclusive.
Section 5.11 Severability. In case any term, provision,
covenant or restriction of this Agreement is held to be invalid, illegal
or unenforceable by a competent court in any jurisdiction, the validity,
legality and enforceability of the remaining terms, provisions, covenants
or restrictions, or of such term, provision, covenant or restriction in
any other jurisdiction, shall not in any way be affected or impaired
thereby.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement under seal as of the date first written above.
STANHOME INC.,
on its own behalf and as
representative and
attorney-in-fact for
the Represented Holders
By:_____________________________
Name:
Title:
YVES ROCHER DE MEXICO, S.A.
DE C.V.
By:____________________________
Name:
Title:
Y.R. MEXICANA, S.A. DE C.V.
By:____________________________
Name:
Title:
SCHEDULE I
SELLERS AND SHARES
NAME OF SELLER NUMBER AND KIND OF SHARES NAME OF TRANSFEREE
OF CAPITAL STOCK HELD
Stanhome Inc. 124,997 registered shares, par
value 100 Mexican pesos per
registered share
Allan G. Keirstead 1 registered share
Bruce H. Wyatt 1 registered share
John J. Dur 1 registered share
SCHEDULE II
DIRECTORS
Allan G. Keirstead
Bruce H. Wyatt
John J. Dur
Antonio Obregan Barrena (alternate)
Alvaro Quintana Crespo (alternate)
Leonardo Pontones Quesada (alternate)
Alfonso Villalua Cabera (alternate)
Exhibit H
TRANSFER AGREEMENT - Spain
Intentionally omitted. Stanhome Inc. agrees to furnish supplementally
to the Commission a copy of this omitted exhibit upon request.
Exhibit I
FORM OF RESIGNATION LETTER
The undersigned hereby resigns as director of [name
of subsidiary] [or any subsidiary thereof] effective
immediately prior to the Closing, as such term is defined
in the Stock and Asset Purchase Agreement, dated November
24, 1997, between Stanhome Inc. and Laboratoires de
Biologie Vegetale Yves Rocher S.A.
______________________________
[Name of Director]
[Director of [name of entity]]