Exhibit (2) (b)
STOCK PURCHASE AGREEMENT
between
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ (hereinafter
"Seller")
and
Claire's Stores, Inc.
▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇ (hereinafter
"Purchaser")
regarding
Acquisition of any and all Shares/Company Contributions of:
Bijoux One AG, Zurich, Switzerland
Bijoux One Trading AG, Zurich, Switzerland
Bijoux One Trading GesmbH, ▇▇▇▇▇ am Gebirge, Austria
Bosco GmbH, Stuttgart, Germany
Table of Contents
1. Definitions.............................................. 5
2. Sale and Purchase of Shares/Company Contributions,
Purchase Price/Escrow ........ ........ . . 6
3. Closing ............................................... . 7
4. Representations and Warranties of Seller ................ 9
5. Representations and Warranties of Purchaser ............. 18
6. Duration of Representations and Warranties;
Consequences of Breach; General Exclusions .............. 20
7. Continuation of Certain Contracts ....................... 23
8. Miscellaneous . ............................... . . . 23
List of Annexes
1.1 Audited Financial Statement ofBijoux One AG
1.2 " Bijoux One Trading AG
1.3 " Bijoux One Trading GesmbH
1.4 Modewaren Femina
Handelsgesell
schaft m.b.H.
1.5 ModewarenFemina
Hanclelsgesell
schaft m.b.H. & Co. KG
1.6. Bosco GmbH
1.7 Interim Financial Statement ofBijoux One AG
1.8 " Bijoux One Trading AG
1.9 " Bijoux One Trading GesmbH
1.10 ModewarenFemina
Handelsgesell
schaft m.b.H.
1.11 ModewarenFemina
Handelsgesel
schaft m.b.H. & Co. KG
1.12 " Bosco GmbH
2.4.1 Escrow Agreement
3.1 (a)1 Bijoux One AG Shares
3.1 (a)2 Bijoux One Trading AG Shares
3.1 (a)3 Transfer Deed regarding Bijoux One Trading Gesmb
3.1 (a)4 Transfer Deed regarding Bosco GmbH
3.1 (b)1 Board Resolution of Bijoux One Trading AG
3.1 (c)1 Share Register of Bijoux One Trading AG
3.1 (d)1/2Letters of Resignation
3.1 (e)1 Releases
3.2 (b)1 Opinion of Counsel to Purchaser
3.3.1 Minutes of Bijoux One AG
3.3.2 Minutes of Bijoux One Trading AG
3.4.1 Loan Contract between Seller and Bijoux One Trading AG of
February 1, 1993
3.4.2 Loan Contract between Seller and Bijoux One Trading AG of
March 1, 1993
3.4.3 Assignment of Seller's Loans granted to Bijoux One
Trading AG
3.4.4 Loan Contract between Seller and Minit Fashion GesmbH
(now: BijouxOne Trading GesmbH) of January 29, 1993
including Confirmation of December 31, 1995
3.4.5 Loan Contract between Seller and Bijoux One Trading
GesmbH of February 12, 1997
3.4.6 Loan Contract between Seller and Bijoux One Trading
GesmbH of August 12, 1997
3.4.7 Assignment of Seller's Loans granted to Bijoux One
Trading GesmbH
3.5.1 Employment Agreement
3.7.1 Loan Agreement between Purchaser and Bijoux One AG
3.7.2 Letter of Discharge from Credit Suisse
3.7.3 Credit Confirmation of Credit Suisse
3.7.4 CHF 750'000.-- Guaranty of Seller
3.7.5 Loan Agreement between Purchaser and Bijoux One Trading
GesmbH
3.7.6 Letter of Discharge from Creclitanstalt-Bankverein
3.7.7 Credit Confirmation of Creclitanstalt-Bankverein of July
7, 1997
3.7.8 Credit Confirmation of Creclitanstalt-Bankverein of
February 27, 1998
3.7.9 ATS 12'000'000.-- Guaranty of Seller
4.1.1 Articles of Incorporation of Bijoux One AG
4.1.2 Bijoux One Trading AG
4.1.3 Bijoux One Trading GesmbH
4.1.4 Modewaren Femina Handelsgesell-schaft m.b.H.
4.1.5 Modewaren Femina Handelsgesell-schaft m.b.H. & Co. KG
4.1.6 Bosco GmbH
4.1.7 Extract of Commercial Register re Bijoux One AG
4.1.8 Bijoux One Trading AG
4.1.9 Bijoux One Trading GesmbH
4.1.1 Modewaren Femina Handelsgesell-schaft m.b.H.
4.1.1 Modewaren Femina Handelsgesell-schaft m.b.H. & Co. KG
4.1.1 Bosco GmbH
4.4(a)1 Subsidiaries
4.7.1 Permits
4.8.1 Adverse Change
4.9.1 Claims and Litigation
4.10. Taxes
4.11.1 Arrangements with Companies/Subsidiaries
4.12.1 Intellectual Property
4.13.1 Effect of Execution
4.13.2 Rental Agreements excluded from liability under Article
4.14.1 Employee Matters
4.17 (a)1 Contracts
4.17 (c)1 Suppliers
4.21.1 Disclosed Information
7.1 Continuation of Certain Contracts
WHEREAS Bijoux One AG a Swiss company with registered
office in Zurich has a share capital of CHF
300'000.-, divided into 300 bearer shares with
nominal value of CHF 1'000.- each;
WHEREAS Bijoux One Trading AG a Swiss company with
registered office in Zurich has a share capital. of
CHF 100'000.--, divided into 100 registered shares
with a nominal value of CHF 1'000.-- each;
WHEREAS Bijoux One Trading GesmbH, an Austrian limited
liability company with registered office in ▇▇▇▇▇
am Gebirge, has a company capital of ATS
20'000'000.-, the only partner being Seller with
the company contribution of ATS 20'000'000. ;
WHEREAS Bosco GmbH, a German limited liability company with
registered office in Stuttgart, has a company
capital of DEM 100'000.-, the only partner being
Seller with a company contribution of DEM 100,00O. ;
WHEREAS the Seller owns 100% of the shares of Bijoux One'AG
and Bijoux One Trading AG and 100 % of the company
contributions of Bijoux One Trading GesmbH and
Bosco GmbH;
WHEREAS the Seller intends to sell the Shares/Company
Contributions to the Purchaser and the Purchaser
intends to purchase the Shares/ Company
Contributions from the Seller;
Now, THEREFORE, the parties have come to the following agreement:
1. DEFINITIONS
Agreement: this Agreement and its
Annexes;
Audited Financial
Statements 1997: the
Companies'/Subsidiaries'
audited financial
statements for the
business year ending
December 31, 1997 as
attached in Annexes 1.1 - 1.6
Closing: the consummation of the transaction
described in article 3 of this Agreement;
Company Contributions:the company contributions
in Bijoux One Trading
GesmbH and Bosco GmbH;
Companies: Bijoux One AG, Bijoux One
Trading AG, Bijoux One
Trading GesmbH and Bosco
GmbH collectively;
Disclosed Information:certain written
information relating to the
Companies/Subsidiaries,
in particular their business, financial,
fiscal and legal condition which was made
available by Seller as
part of the due diligence
process from August 27,
1998 through the
Execution Date comprising
the information disclosed
or referred to in this
Agreement;
Execution Date: the date of the execution
of this Agreement, i.e.
November 11, 1998;
Financial Statements:collectively, the Audited
Financial Statements 1997
and the Interim Financial
Statements;
Interim Financial
Statements: the
Companies'/Subsidiaries'
unaudited interim
financial statements as
per August 31, 1998 as
attached in Annexes 1.7 -
1.12
Party: the Seller or the Purchaser;
Parties: the Seller and the Purchaser;
Person: an individual, partnership, corporation,
limited liability company or other entity
of whatever nature;
Purchase Price: the Purchase Price
defined in article 2.2 of
this Agreement;
Purchaser: Claire's Stores, Inc., ▇
▇.▇. ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Purchaser's Group: the Purchaser its subsidiaries, any
direct or indirect holding company of the
Purchaser or its subsidiaries and any
subsidiary of such holding company;
Seller: ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇;
Shares: all the shares in Bijoux One AG and
Bijoux One Trading AG;
Stock: the Stock defined in article 2.2 of this
Agreement;
Subsidiaries: the Subsidiaries defined in article 4.4
of this Agreement.
2. SALE AND PURCHASE OF SHARES/COMPANY CONTRIBUTIONS, PURCHASE
PRICE/ESCROW
2.1 Sale and Purchase of Shares/Company Contributions
Subject to the terms and conditions defined herein,
Seller hereby agrees to sell to Purchaser, and Purchaser
agrees to buy from Seller, effective as from November 1,
1998, the Shares/Company Contributions.
2.2 Purchase Price
The total purchase price (the "'Purchase Price") amounts
to USD 9 Mio. for all the Shares/Company Contributions
sold pursuant to article 2.1 of this Agreement. USD 7.2
Mio. of the Purchase Price shall be in the form of cash
and USD 1.8 Mio. of the Purchase Price shall be in the
form of 100'000 shares of common stock of the Purchaser
(the N Stock").
2.3 Initial Purchase Price
An initial purchase price in the amount of USD 5.4 Mio.
(but in no event less than CHF 7.83 Mio.) (the initial
Purchase Price") shall be paid by Purchaser on Execution
Date in cash to account no. 8563-73668,007.11.01 of
Seller with Clariden Bank, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇.
2.4 Escrow
On Execution Date, Purchaser shall (a) pay the amount of
USD 1.8 Mio. and (b) submit the Stock to an escrow agent
pursuant to. the terms of an escrow agreement
substantially in the format of Annex 2.4.1 (the "Escrow
Agreements), such escrow to be decreased, except as
otherwise provided in the Escrow Agreement, as follows:
2.4.1 as to the USD 1.8 Mio.
a) on March 31, 1999 to USD 0.9 Mio.;
b) on March 31, 2000 to USD 0.0 Mio.
2.4.2 as to the Stock
a) on November 11, 1999 to 2/3 of the Stock (66667
shares)
b) on November 11, 2000 to 1/3 of the Stock (33'333
shares)
c) on November 11, 2001 to 0/3 of the Stock (0
shares).
3. CLOSING
3.1 Transfer of Shares/Company Contributions and Documents
On the Execution Date, Seller shall deliver to Purchaser:
(a) all the shares in Bijoux One AG copies of which are
attached hereto as Annex 3.1 (a) 1;
all the shares in Bijoux One Trading AG, duly endorsed in
blank, copies of which are attached hereto as Annex 3.1
(a)2;
transfer deeds with respect to all of the Company
Contributions duly notarized under the relevant laws of
Austria and Germany, substantially in the format as per
Annexes 3.1 (a)3 and 3.1 (a)4;
2. unanimous resolution of the board of directors of Bijoux
One Trading AG consenting to the transfer of all the
shares/ in Bijoux One Trading AG to Purchaser, as
attached hereto as Annex 3.1(b)l;
3. the share register of Bijoux One Trading AG in which
Purchaser has been registered as shareholder of all the
shares in Bijoux One Trading AG, as attached hereto as
Annex 3.1 (c)1;
4. letters of resignation of the Companies' directors, as
attached hereto as Annexes 3.1 (d)1/2; and
5. a release or releases (collectively, the "Releases") in
the format of Annex 3.1(e)1 releasing all of Seller's
claims of any nature against the Companies/Subsidiaries,
subject to Seller's rights and duties under the
Employment Agreement, and any claims arising out of the
transactions contemplated by this Agreement, provided
that such Releases shall not cover any rights of Seller
against Purchaser under this Agreement.
3.2 Payment of the Initial Purchase Price I Opinion of
Counsel
At the Closing, Purchaser shall concurrently:
a) pay to Seller the Initial Purchase Price, such
payment to be madeby wire transfer to the account
set forth in article 2.3; and
f) deliver to Seller an opinion dated as of the
Execution Date from counsel to Purchaser in the
format of Annex 3.2(b)1.
3.3 Shareholders' Meetings
Purchaser shall procure that (at the Execution Date,
after delivery of the Shares), extraordinary
shareholders' meetings be held which will elect new
members of the board of directors of Bijoux One AG and
Bijoux One Trading AG. Seller and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ will
remain members of the board of directors of Bijoux One AG
and Bijoux One Trading AG for a term of at least three
years as from the Execution Date or until the earlier
termination of Seller's employment with Bijoux One
Trading AG. Purchaser shall vote its Shares in favor of
discharge of the duty of all the board members who have
resigned. Copies of the relevant minutes are attached
hereto as Annexes 3.3.1 and 3.3.2.
3.4 Repayment of the Shareholders' Loan
At the Closing, Purchaser shall pay to Seller the
shareholders' loans in the amounts of CHF 400'000.- and
CHF 300'000.- in accordance with the loan agreements as
attached hereto in Annexes 3.4.1 and 3.4.2 plus accrued
interest as per Execution Date and Seller shall
concurrently assign all his rights against Bijoux One
Trading AG in accordance with such loans to Purchaser and
for this purpose sign the assignment as attached hereto
as Annex 3.4.3.
At the Closing, Purchaser shall pay to Seller the
shareholders' loans in the amounts of CHF 300'000.-, CHF
100'000.- and CHF 300'000.- in accordance with the loan
agreements as attached hereto in Annexes 3.4.4. 3.4.5 and
3.4.6 plus accrued interest as per Execution Date and
Seller shall concurrently assign all his rights against
Bijoux One Trading GesmbH in accordance with such loans
to Purchaser and for this purpose sign the assignment as
attached hereto as Annex 3.4.7.
The payment shall be made by wire transfer to Seller's
account with UBS, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, Nrich,
no.0230-671.654.01 K.
3.5 Employment Agreement
At the Closing, Bijoux One Trading AG shall concurrently
enter into a new employment agreement with Seller in the
format of Annex 3.5.1.
3.6 Escrow Agreement
At the Closing, Purchaser, Seller and Credit Suisse Trust
shall concurrently enter into the Escrow Agreement as per
article 2.4 hereof.
3.7 Release from Guaranties
At the Execution Date, Purchaser shall enter into a loan
agreement with Bijoux One AG as per Annex 3.7.1 and repay
the fixed CHF 750'000.- loan of Credit Suisse ("CS")
granted to Bijoux One AG and guaranteed by Seller. Seller
shall concurrently receive from CS (a) such guaranty
("SolidarbCjrgschafto) and (b) a letter of discharge as
per Annex 3.7.2. Copies of the respective credit
confirmation and guaranty are attached hereto as Annexes
3.7.3 and 3.7.4.
At the Execution Date, Purchaser shall enter into a loan
agreement with Bijoux One Trading GesmbH as per Annex
3.7.5 and- repay the two ATS 6'000'▇▇▇.▇▇▇▇▇ of
Creclitanstalt-Bankverein ("CABV") granted to Bijoux One
Trading GesmbH and guaranteed by Seller. Seller shall
concurrently receive from CABV (a) such guaranty
("Garantie") and (b) a letter of discharge as per Annex
3.7.6. Copies of the respective credit confirmations and
guaranty are attached hereto as Annexes 3.7.7. 3.7.8 and
3.7.9.
4. REPRESENTATIONS AND WARRANTIES OF SELLER
Unless otherwise fairly disclosed in this Agreement,
Seller represents and warrants to Purchaser that on the
Execution Date the following shall be true and accurate:
4.1 Organization and Qualification
The Companies/Subsidiaries are duly organized and validly
existing under the laws under which they have been
incorporated/organized. Annexes 4.1.1 - 6. contain the
articles of incorporation (or other governing document)
and Annexes 4.1.7 - 12. contain the extracts of the
relevant commercial registers of the
Companies/Subsidiaries as they are currently in force.
All information to be filed with the competent commercial
register offices has in fact been filed and registered.
No resolutions, agreements or actions are pending for a
voluntary or involuntary dissolution of the Companies /
Subsidiaries or which would otherwise affect the
continued existence of the Companies/Subsidiaries or
their ability to carry on their business.
4.2 Capital Structure
The Companies/Subsidiaries have the capital set forth in
Annexes 4.1.1 12. No further capital, company
contributions, non-voting stock, option, convertible
securities or similar rights in the
Companies/Subsidiaries will be created or issued or
agreed to be issued. All the Shares/Company Contributions
are validly issued and fully paid in.
4.3 Ownership
Seller is the sole owner of and has good and valid title
to the Shares/Company Contributions sold in accordance
with article 2.1 of this Agreement, free and clear of all
liens, encumbrances, options, charges and claims of
whatever nature. Seller has full right and capacity to
transfer and sell complete title to the Shares/Company
Contributions without any restrictions.
Upon delivery of the documents mentioned in article 3.1
of this Agreement, Purchaser will receive good and valid
title to the Shares/Company Contributions, free and clear
of all liens, encumbrances or other rights of third
parties.
Seller's liability in connection with the two preceding
paragraphs is not excluded by articles 6.4(a) and 6.4(d)
of this Agreement.
4.4 Subsidiaries
(a) Bijoux One Trading GesmbH owns, directly or
indirectly, such company contributions in Modewaren
Femina Handeisgesellschaft m.b.H. and Modewaren
Femina HandelsgeselIschaft m.b.H. & Co. KG
(collectively the "Subsidiaries 0) as are listed in
Annexes 4.1.10 and 4.1.11. The identity and company
contribution ownership of each partner of the
Subsidiaries other than Bijoux ne GesmbH is also
listed in Annexes 4.1.10 and 4.1.11.
Except as listed in Annex 4.4(a)l, Bijoux One
Trading GesmbH holds the company contributions or
interest in the Subsidiaries free of all pledges,
security interests, liens, charges, encumbrances,
claims and options of whatever nature. Bijoux One
Trading GesmbH has fully complied with the
trusteeship agreement entered into with Mrs.
▇▇▇▇▇▇▇▇ Frischeis on April 3, 1990, a copy of
which is enclosed in Annex 4.4(a)l, in particular
without limitation by having paid to Mrs. ▇▇▇▇▇▇▇▇
Frischeis on or before April 30, 1990 the amounts
referred to in section VI. of the trusteeship
agreement. Seller's liability in connection with
this clause (a) is not excluded by articles 6.4(a)
and 6.4(d) of this Agreement.
(b) Each Subsidiary is validly existing under the laws
under which it was incorporated and no resolutions,
agreements or actions are pending for a voluntary
or involuntary dissolution of any Subsidiary or
which would otherwise affect any Subsidiary's
existence or its ability to continue to do
business.
4.5 Distributions
Neither any of the Companies nor any of the Subsidiaries
has or will declare, set aside or pay any dividend or
other distribution in respect of their capital
stock/company contributions, redeem, purchase or
otherwise acquire any of their capital stock/company
contributions or any security relating thereto, or make
any other payment to any of its shareholders/partners.
4.6 Financial Statements
The Financial Statements are, as a whole, and each of the
entries therein is, correct and complete in all material
respects. The Financial Statements are prepared in
accordance with the applicable legislation and generally
accepted accounting principles as applicable in
Switzerland, Germany and Austria ("GAAP"); the Financial
Statements fairly present the financial position and the
results of the operations of the Companies/Subsidiaries.
Neither any of the Companies nor any of the Subsidiaries
is subject to any liability or obligation (actual,
contingent or unasserted), except for liabilities and
obligations
recorded as a liability or a provision in the
Financial Statements; and/or
arising or incurred in the ordinary course of
business since the respective balance sheet dates
of the Financial Statements.
Both the Companies and the Subsidiaries hold good and
unencumbered title to the assets listed in the Financial
Statements and all relevant risks, deprecations and
losses are accounted for by sufficient writeoffs and
provisions.
Since the respective balance sheet crates of the
Financial Statements, there has not been any material
adverse change in the business, financial conditions or
operations of the Companies/Subsidiaries.
4.7 Permits and Authorizations
Both the Companies and the Subsidiaries have all the
consents, permits and authorizations which are necessary
to conduct their businesses as presently conducted, in
particular without limitation the permits set forth in
Annex 4.7.1. To the best knowledge of Seller, such
consents, permits and authorizations are in full force
and effect and no circumstance exists which indicates
that any such consent, permit or authorization could be
revoked or withdrawn or not renewed by the fact of the
occurrence of the transactions contemplated in this
Agreement or otherwise. Seller's liability in connection
with this article 4.7 is not excluded by articles 6.4(a)
and 6.4(d) of this Agreement.
4.8 Adverse Change
In the period between December 31, 1997 and the Execution
Date save as disclosed in Annex 4.8.1 there has not been
any change in the nature of the business, results of
operations, financial condition, method of accounting or
accounting practices or manner of conducting the
businesses of the Companies/Subsidiaries.
4.9 Claims and Litigation
Except as set forth in Annex 4.9.1 there is no claim,
litigation, proceeding or investigation pending or
threatened by or against any of the
Companies/Subsidiaries involving an amount exceeding CHF
10'000.--. To the best knowledge of Seller there are no
facts or circumstances which could give rise to any
claim, litigation, proceeding or investigation with an
amount in dispute in excess of CHF 10'000.--(or multiple
cases of claims, litigation, proceeding or investigation
which in the aggregate exceed CHF 10'000.- and which have
the same cause of action) or which would materially
adversely affect the financial situation of any of the
Companies/Subsidiaries.
4.10 Taxes, Social Security and other Public Charges
All tax returns required to be filed by the
Companies/Subsidiaries with any competent tax authority
have been prepared in accordance with the relevant rules
of tax law and have been duly filed. All taxes invoiced,
due and/or assessed whether with respect to
such tax returns or otherwise have been paid
to the appropriate taxing authority and/or
accrued in the Financial Statements. The provisions for
taxes in the Financial Statements will be sufficient for
all unpaid taxes of any kind which are, will or might be
assessed in-respect of the business and any transactions
(including taxable profit distributions) of the
Companies/Subsidiaries until the Execution Date. There
are no open issues relating to any tax return that, if
determined adversely to the Companies/Subsidiaries, would
result in the assessment of additional taxes, interest or
penalties. Seller's liability with regard to (a) taxes,
in particular withholding taxes, (and associated
penalties and interest) to be paid in connection with
Seller's present or past loans to the Companies /
Subsidiaries, (b) taxes, in particular value added taxes,
(and associated penalties and interest) to be paid in
connection with the past and present rental agreements
entered into by the Companies / Subsidiaries and (c)
taxes, in particular value added taxes, (and associated
penalties and interest) to be paid in connection with the
franchise agreement with San Antonio Co. Ltd., Malta,
shall not be excluded by articles 6.4(a) and 6.4(d) of
this Agreement.
Except as listed in Annex 4.10.1, none of the
Companies/Subsidiaries is a party to any dispute or legal
proceeding with any authority for assessment or
collection of taxes (including any indirect taxes or
levies) with an amount in dispute in excess of CHF
12'000.-- or DEM 15'000.-- nor has any claim for
assessment or collection of taxes been asserted or
threatened against any of the Companies/Subsidiaries and
there are no .outstanding or threatened issues relating
to taxes or to tax regulations which could have a
material adverse effect on any of the
Companies/Subsidiaries.
The Companies/Subsidiaries have fully provided for all
social security and other public charges, including
without limitation Old Age and Survivors' Insurance
(Alters- und Hinterlassenenversicherung), Disability
insurance (Invaliclenversicherung), Professional Old Age,
Survivors' and Disability Pension (Berufliche Alters-,
Hinterlassenen- und Invalidenversicherung), Unemployment
Insurance (Arbeitslosenversicherung) and Casualty
Insurance (Unfallversicherung).
4.11 Arrangements with the Companies/Subsidiaries
Except as listed in Annex 4.11.1, no indebtedness (actual
or contingent) and no contract or arrangement is
outstanding between any of the Companies/Subsidiaries, on
the one hand, and Seller, the board members or the
partners of the Companies/Subsidiaries, or any person who
is related or connected to Seller, the board members or
the partners, on the other hand, and none of the
Companies/Subsidiaries has provided for the transfer of
any assets of any of the Companies/Subsidiaries to any
such other member or person. All contracts or
arrangements between the persons pursuant to the
immediately preceding sentence were entered into and
conducted at arm's length. All directors' fees, salaries,
bonuses and any other benefits to shareholders, partners
and board members of the Companies/Subsidiaries or Seller
as well as all social security payments due thereon have
been duly paid.
4.12 Intellectual Property
All patents, trade marks, registered designs, logos,
copyrights, business names and other similar rights,
together with all applications for any of the foregoing
(together the *Intellectual Property') of the
Companies/Subsidiaries or otherwise used in connection
with their respective businesses are described in Annex
4.12.1, are owned by such Company/Subsidiary as specified
in Annex 4.12.1 and are not subject to any liens, charges
or encumbrances. Neither Seller nor any of the
Companies/Subsidiaries has received any notice of an
infringement of any Intellectual Property. All
registrations for registered Intellectual Property are in
force, with renewal fees paid up to date. All
applications for trade marks and logos fulfil all
requirements under the applicable laws and will result in
the registration of the respective trade marks and logos
as applied for. Any costs (including registration and
lawyers' fees) arising in connection with such
applications shall be borne by Seller. Seller shall be
liable for all costs and expenses arising in connection
with Bijoux One Trading AG's pending trademark
registration application in Greece as set forth in Annex
4.12.1 and shall hold Seller and/or Bijoux One Trading AG
harmless from any damages and losses caused by the
non-registration of such trademark. Seller's liability
for costs and damages pursuant to this article 4.12 shall
not be excluded by articles 6.4(a) and 6.4(d) of this
Agreement.
4.13 Effect of Execution of Agreement
The execution and delivery of this Agreement by Seller do
not, and the consummation of all transactions
contemplated in this Agreement by Seller will not violate
any provision of the articles of incorporation of any of
the Companies/Subsidiaries or any rental agreement or any
material agreement (other than as contained in Annex
4.13.1) to which any of the Companies/Subsidiaries are a
party or cause any such rental agreement and/or material
agreement to terminate or gives any third party the right
to cause such termination. If a rental agreement, with
the exception of the rental agreements as listed in Annex
4.13.2 to which this article 4.13 shall not apply, is
terminated by the landlord as a result of the execution
and delivery of this Agreement and/or the consummation of
any transaction contemplated in this Agreement, then the
reduction in value of the Shares/Company Contributions in
accordance with article 6.2 shall be CHF 200'000.--,
provided however, that article 6.4(d) of this Agreement
shall not apply. Seller's liability pursuant to the
immediately preceding sentence is not excluded by article
6.4(a). Except as disclosed in Annex 4.13.1, Seller has
the power and authority and does not need any
governmental or other consent of any nature to enter into
this Agreement and to consummate any of the transactions
contemplated in this Agreement.
4.14 Employee Matters
Since December 31, 1997, there has been no material
change in the numbers of employees of the
Companies/Subsidiaries or in the terms and conditions of
their employment or remuneration other than in the
ordinary course of business. Except as set forth in Annex
4.14.1 no employees of the Com pan ies/Su bsidiaries are
entitled to claim against any of the
Companies/Subsidiaries with respect to any severance
payments or similar termination compensation, incentive
or bonus arrangement, option plan or life, health or
accident insurance plan or other benefit plan. Neither
any of the Companies nor any of the Subsidiaries is
liable to make any outstanding payment to any director,
officer or employee by way of damages or compensation for
loss of office or employment or for redundancy or unfair
or wrongful dismissal. The Companies/Subsidiaries are not
subject to any collective bargaining agreements.
4.15 Employee Pension Plan
Seller has disclosed to Purchaser copies of the pension
plans as listed in Annex 4.17(a)l to which the
Companies'/Subsidiaries' employees are beneficiaries. The
Companies/Subsidiaries have complied with the ,minimum
funding requirements of, and the legal regulations for,
the pension plans of which the Companies'/Subsidiaries'
employees are beneficiaries. All outstanding employees,
and employers' contributions have been made or have been
properly reserved for in the Financial Statements in
accordance with the law and the statutes and regulations
governing such plans. There are no other pension plans,
schemes or pension commitments or arrangements for the
benefit of the Companies'/Subsidiaries' directors,
officers or employees.
4.16 Compliance with Laws
To the best knowledge of Seller
(a) Both the Companies and the Subsidiaries have been
and are in compliance with all applicable laws and
governmental regulations.
(b) Neither any of the Companies nor any of the
Subsidiaries has violated, or is in default with
respect to, any judgement, order, writ, injunction,
settlement agreement or decree of, or any permit,
license or other authority from, any court,
department, agency or instrumentality which in any
way concerns or may affect the
Companies/Subsidiaries or their businesses.
(c) None of the assets used by Companies/Subsidiaries
for their respective operations is likely to
constitute a risk to the environment or to human
health due, in particular, to the manufacture,
storage, transport, presence or use of toxic or
dangerous substances. There have been no such
conditions at any property owned, operated or
otherwise used by any Company/Subsidiary under
applicable laws and regulations related to the
environment, health and safety. The
Companies/Subsidiaries have complied with all
applicable laws and regulations related to the
environment, health and safety and have possessed
and complied with all permits required under such
laws and regulations.
4.17 Contracts
(a) Annex 4.17(a)l attached hereto provides a true,
accurate and complete list of (a) all oral and
written employment agreements providing for annual
salaries in excess of CHF80'000.-- or the
equivalent in ATS or DEM as well as (b) all
material oral and written rental agreements (it
being understood that all rental agreements for
shops, offices and storage space are considered to
be material), lease agreements, credit agreements,
loan agreements, pledge agreements, guaranties,
suretyships, indemnities, franchise agreements,
license agreements, agency agreements, supply
agreements, and insurance agreements entered into
by the Companies/Subsidiaries (including without
limitation any of such agreements entered into
between the Companies/Subsidiaries) which are in
full force and effect and which are yet to be
performed in full or in part by either of the
contracting parties. To .the best knowledge of
Seller, no default exists under any..agreement
which is material for the ordinary course of
business of the Companies/Subsidiaries. Except for
the agreements listed in Annex 4.17(a)l, the
Companies/Subsidiaries have not entered into any
material agreements, it being understood that
agreements regarding the sale by the
Companies/Subsidiaries of their products in the
ordinary course of business are not considered to
be material. If any rental agreement is terminated
by the landlord as a result of the Companies' /
Subsidiaries' failure to have notified the landlord
of sub-rental agreements, then the reduction in
value of the Shares / Company Contributions in
accordance with article 6.2 shall be CHF 200'000.--
, provided however, that article 6.4(d) shall not
apply. Seller's liability pursuant to the
immediately preceding sentence is not excluded by
article 6.4(a).
(b) All open purchase orders, agreements or other
arrangements between the Companies/Subsidiaries and
third parties or affiliates regarding the
purchasing of inventory items and/or other supplies
exist as a result of the ordinary course of
business.
(c) Annex 4.17(c)l is a list of the ten main suppliers
of the Companies/Subsidiaries (taken on a
consolidated basis). None of these suppliers have
broken off or interrupted, nor have threatened to
break off or interrupt, relations with the
Companies/Subsidiaries.
4.18 Inventory
All inventories (collectively referred to as "inventory"
or "inventories") of the Companies/Subsidiaries consist
of items of quality and quantity saleable in the ordinary
course of business except that the value of such
inventories at August 31, 1998, calculated at the lower
of cost or realizable or current market value in
accordance with GAAP, was not less than CHF 3.6 Mio. The
values at which inventories are carried on the Financial
Statements reflect the normal inventory valuation policy
of the Companies/Subsidiaries, as applicable, in
accordance with GAAP and on a basis consistent with that
of preceding periods, of stating inventory at the lower
of cost or market value. To the best knowledge of Seller,
there is no reason to believe that the
Companies/Subsidiaries will experience in the foreseeable
future any difficulty in obtaining, in the desired
quantity and quality, the inventory necessary to conduct
their business in the manner now conducted, including,
without limitation, inventory which historically has been
imported. All items included in the inventories are the
property of the Companies/Subsidiaries and no items
included in the inventories have been pledged as
collateral or are held by the Companies/Subsidiaries on
consignment from others. The value of inventory reflected
on the Audited Financial Statements 1997 was based upon
physical inventory counts conducted in connection with
the preparation and audit of the Audited Financial
Statements 1997.
4.19 Year 2000
All computer software used by the Companies/Subsidiaries
operates substantially as intended and no bug, defect or
flaw interferes in any material respect with the
operation thereof. All necessary and appropriate measures
have been taken that year 2000 compliance (that is, that
all computer applications used by the
Companies/Subsidiaries including those of their suppliers
and vendors that are material to the business and
operations of the Companies/Subsidiaries will, on a
timely basis, be able to properly perform date-sensitive
functions for all dates before and after December 31,
1999 as may reasonably be necessary in the ordinary
course of business) is ensured.
4.20 Euro
The necessary and appropriate measures have been taken
that settlement of transactions in Euro and the running
of bank accounts in Euro in addition to the currency
which is legal tender in the relevant jurisdiction where
the accounts of the Companies/Subsidiaries are maintained
and/or settled is ensured as from January 1, 1999.
4.21 Information
There is no fact or circumstance relating to the
Companies/Subsidiaries which has not been disclosed to
Purchaser and which, if so disclosed, would beyond a
doubt cause a reasonable buyer to abstain from entering
into this transaction. Notwithstanding the foregoing,
Annex 4.21.1 contains a list of information disclosed to
Purchaser and not otherwise disclosed or referred to in
this Agreement.
4.22 Exceptions to Representations and Warranties
Seller is not aware of any material exceptions to any of
the representations and warranties contained in this
Agreement.
4.23 No further Representations and Warranties
Except as provided for in article 4, Seller makes no
representations and warranties.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Unless otherwise fairly disclosed in this Agreement,
Purchaser -represents and warrants to Seller that on the
Execution Date the following shall be true and accurate:
5.1 Organization and Standing
Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of Delaware.
5.2 Effect of Execution of Agreement
The execution and delivery of this Agreement by Purchaser
do not, and the consummation of the transactions
contemplated hereby by Purchaser will not violate any
provision of the articles of incorporation of Purchaser
or any agreement to which Purchaser is a part or any law
or order of any court or governmental authority binding
upon, or applicable to Purchaser. Purchaser has the full
corporate power, authority and the right and does not
need any governmental consent of any nature to enter into
this Agreement and to consummate the purchase
contemplated hereby. Purchaser's board of directors has
taken all necessary corporate action to duly authorize
the execution, delivery and performance of this
Agreement.
5.3 Actions and Proceedings
To the best of the knowledge of Purchaser, there are no
actions, claims or other proceedings or investigations
pending or threatened against or involving Purchaser or
any of its present directors, officers, properties or
assets, that individually or in the aggregate, prevent
Purchaser from consummating the transactions contemplated
hereby in accordance with the terms hereof, or affect the
validity of enforceability of this Agreement.
5.4 Funding of Purchase Price
Purchaser has made available the necessary funds and
Stock to pay the Purchase Price at the Execution Date.
5.5 Approvals and Consents
Purchaser declares that there will to the best of its
knowledge be no obstacle to obtaining all approvals and
consents necessary for the Purchaser to consummate the
purchase pursuant to this Agreement.
5.6 Taxes
To avoid a requalification of the private capital gain
resulting from the sale of the Shares/Company
Contributions into taxable income to Seller (since these
actions and measures are considered to constitute an
Indirect Partial Liquidation ('Indirekte
Teilliquidation) or any other taxable event to the
Seller) Purchaser shall not, with respect to one, several
or all of the Companies, during five years after the
Execution Date, undertake any of the following actions
and measures unless there is a written confirmation of
the competent Swiss tax authorities stating that such
actions and measures will not trigger any income tax
consequences to Seller:
(a) Any distribution of retained earnings or reserves
of the Companies already existing on the Execution
Date;
(b) merger of the Companies with any entity of the
Purchaser's Group;
(c) lending funds of the Companies in order to directly
or indirectly finance the Purchase Price;
(d) pledging assets of the Companies in order to
directly or indirectly secure the Purchase Price
financing;
5.5.A The Purchaser covenants and agrees with die Seller
that so long as the Shares constitute "restricted
securities" within the meaning of Rule 144(a)(3) under
the Securities Act, the Purchaser will comply with the
information requirements of Rule 144(c).
5.5.B The Purchaser represents and covenants that upon
receipt from the Seller of a request to remove the
restrictive legend on the stock certificates representing
the Shares accompanied by a signed letter containing such
certifications, legal opinions or other information as
the Purchaser may reasonably require to confirm that a
transfer or sale is being made pursuant to an exemption
from, or in a transaction not subject to, the
registration requirements of the Securities Act, the
Purchaser (at the Purchaser's expense) will issue to the
Seller stock certificates representing the Shares Without
any restrictive legend as soon as commercially
practicable.
(e) any other measure which could be considered as
direct or indirect financing or securing of the
Purchase Price by the Companies.
5.7 No further Representations and Warranties
Except as provided for in article 5, Purchaser makes no
representations and warranties.
6. DURATION OF REPRESENTATIONS AND WARRANTIES;
CONSEQUENCES OF BREACH; GENERAL EXCLUSIONS
6.1 Duration and Notice of Breach
The representations and warranties contained in articles
4 and 5 of this Agreement shall remain in force
(a) with respect to claims for misrepresentation or breaches
of warranties and representations under article 4.10 of
this Agreement, three months after the date when the
respective income tax assessments based on all business
years ending on or before December 31, 1997 and on all
business transactions executed on or before the Execution
Date have become final and through March 31, 2000 with
respect to other taxes and tax returns due on or before
the Execution-Date.
(b) with respect to claims for misrepresentation or breaches
of warranties and representations under article 5.6 of
this Agreement, five years and three months after the
Execution Date or - whatever period is longer -three
months after the date when all the personal tax
assessments of Seller up to and including the Tax Year
1999 issued by the competent authorities become final.
(c) with respect to Seller's obligation pursuant to the
second sentence of article 4.13, until September 31,
1999.
(d) with respect to claims for all other misrepresentations
or breaches of representations or warranties, until March
31, 2000.
Each Party shall notify the other Party in writing within
60 days after it has detected a misrepresentation or
breach of representations or warranties of the other
Party and knows about the relevant details, describing in
reasonable details as reasonably known by the respective
Party at the date of notification such misrepresentation
or breach (indicating the article or the articles of this
Agreement which are alleged to be violated) and any
losses suffered by any of the Companies/Subsidiaries (or
Seller as the case may be) as a consequence of such
breach. The notified Party shall then have the
opportunity with the other Party's written consent (such
consent not being unreasonably withheld) to remedy such
breach within 60 days from receipt of the notification.
The Parties waive all notification and examination
requirements under article 201 of the Swiss Code of
Obligations. In particular, the Purchaser may assert
claims for misrepresentation or breaches of
representations or warranties in any written form and,
subject to the requirement that notice must be given in
writing within 60 days of the detection of the
misrepresentation or breach of representations or
warranties as set out above, at any time prior to the
lapse of the respective period set out in this article
6.1.
6.2 Consequences of Breach by Seller
Any misrepresentation or breach of representations or
warranties contained herein by Seller shall entitle
Purchaser to the following remedy:
Purchaser may claim a reduction of the Purchase Price by
an amount (the n Reduction Amount") which corresponds to
the reduction in value of the Shares/Company
Contributions caused by the breach, provided that such
reduction in value shall be deemed to be equal to the
aggregate amounts of losses, liabilities, damages, costs,
taxes, duties, penalties, expenditures and expenses which
Purchaser and/or the Companies/Subsidiaries as a whole
incur as a result of the breach. The Reduction Amount
shall be paid by Seller, at Purchaser's election, either
to Purchaser or to that Company/Subsidiary which was
directly affected by the breach in accordance with the
Escrow Agreement.
6.3 Limitation
The Seller's aggregate liability under this Agreement
shall, for all purposes (i.e. not only in case of a
breach of representation and warranty but in any case),
be limited to the amount in escrow under the Escrow
Agreement.
6.4 Exclusions
The liability of Seller shall be excluded
(a) if and to the extent the facts or circumstances giving
rise to the damage or loss have been fairly disclosed as
Disclosed Information; or
(b) if where such breach can be remedied, Seller has within
60 days following receipt of Purchaser's notice remedied
such breach by specific performance; or
(c) if and to the extent Purchaser has received recovery for
such damage or loss (in particular under any insurance
policy), or, if nonrecovery is the result of Purchaser's
failure to exercise reasonable efforts to obtain
recovery, it being understood that under no circumstances
shall Purchaser be required to institute suit or other
legal proceeding to obtain recovery, but Purchaser, upon
obtaining recovery from Escrow or Seller, shall assign
its rights to institute suit or other legal proceeding to
Seller, or
(d) if such damages or losses are less than CHF 100'000.-- in
the aggregate provided that if the threshold of CHF
100'000.-- is exceeded, then Seller shall be liable for
the exceeding amount only, or
(e) if and to the extent such damage or loss arises or is
increased as a result of the passing of, or any change in
any legislation, including the tax legislation or any
change of court rulings with precedent nature, after the
Execution Date, or change in accounting practice after
the Execution Date.
6.5 Consequences of Breach by Purchaser
Any breach of representations or warranties contained in
article 5.6 of this Agreement by Purchaser shall entitle
Seller to an indemnification payment in the amount of the
personal income taxes plus late payment interest and
penalties to be paid by Seller as a result of the
re-qualification of the tax-free capital gain into
taxable income.
6.6 Third Party Claims and Governmental Notices
Should Purchaser wish to enforce claims for damages
against Seller arising from any legal proceeding
involving the Companies, it shall provide the Seller with
the necessary information and consult with Seller about
the procedure to the extent that such information and
consultation is legally permissible and deemed
appropriate by Purchaser. Failure to do so shall diminish
Purchaser's claims under this article 6 to the extent
Seller is prejudiced by such failure.
7. CONTINUATION OF CERTAIN CONTRACTS
Seller and Purchaser further undertake to continue, or
procure to be continued, the agreements listed in Annex
7.1 hereto for the term mentioned in this Annex.
Seller shall indemnify and hold harmless Purchaser for
all and any expenses, damages, claims and costs,
including one half of the minimum commission of USD
70'000.-- (i.e., USD 35'000.--) and damages or claims for
early termination, which may arise in connection with the
termination of the agency agreement (including
amendments) between Bijoux One Trading AG and ▇▇▇ Fashion
Accessory Co., Hong Kong, except for the balance of the
minimum commission of USD 70'000.-- (i.e., the remaining
USD 35'000.--) which will be borne by Bijoux One Trading
AG. Seller's liability in connection with the immediately
preceding sentence is not subject to the limitations and
exclusions applying to Seller's liability pursuant to
article 6.
8. MISCELLANEOUS
8.1 Press Releases
Any press releases or other disclosures to the public
regarding this Agreement and the transactions
contemplated hereby shall be mutually agreed upon by the
parties hereto, provided that neither Party shall
unreasonably withhold its agreement.
8.2 Expenses, Costs and Transfer Duties
The Parties shall pay their own costs and expenses
(including also legal, accounting, auditors' and other
fees) relating to this Agreement. Transfer expenses,
stamp duties as well as any transactional taxes payable
on the sale of the Shares/Company Contributions shall be
borne by the Purchaser.
8.3 Modifications
This Agreement shall not be amended or modified except by
a document in writing duly executed by all parties
hereto. This undertaking itself may only be modified by
an agreement in writing.
8.4 Previous Agreements Superseded
This Agreement supersedes all prior agreements,
negotiations, correspondence, undertakings and
communications of the parties, oral or written, with
respect to such subject matter.
8.5 Notices
All notices and other communications under this Agreement
shall be in writing and shall be considered duly given
when received, if delivered, mailed by registered mail or
telefaxed.
If to the Seller: ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇
Fax no.: + ▇▇-▇ ▇▇▇ ▇▇ ▇▇
If to the Purchaser:
▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Fax no.: ▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as may be hereafter communicated
in writing by Seller to Purchaser or vice versa.
8.6 Severabillity
If any provision of this Agreement is held to be invalid
or unenforceable for any reason it shall be adjusted
rather than voided, if possible, in order to achieve the
intent of the parties to this Agreement to the fullest
extent possible. In any event, all other provisions of
this Agreement shall be deemed valid and enforceable to
the fullest extent possible.
8.7 Non-Assignability
No Party shall assign, in whole or in part, or delegate
all or any part of its rights or obligations under this
Agreement without the prior written consent of the other
Party. Any assignment or delegation made without such
consent shall be void.
8.8 Governing Law
This Agreement shall be subject to and governed by
material Swiss law. The United Nations Convention on
Contracts for the International Sales of Goods of April
11, 1980, is not applicable.
8.9 Arbitration
All disputes arising out of or in connection with this
Agreement, including disputes on its conclusion, binding
effect, amendment and termination shall be judged by an
arbitration tribunal with seat in Zurich, Switzerland,
consisting of three (3) arbitrators and acting in
accordance with the rules of the Swiss Federal Code on
Conflicts of Law of December 18, 1987 (hereafter referred
to as *IPRG). As far as the IPRG does not contain
mandatory provisions, the arbitrators shall apply the
procedural laws of the Canton of Zurich then in force
(Art. 182 para. 2 IPRG). Upon written notice by the
claimant party, which notice must be accompanied by the
designation of one arbitrator, the defendant party shall
appoint an arbitrator within thirty (30) days from
receipt of such notice and, within a further period of
thirty (30) days, the two arbitrators shall appoint a
third arbitrator who shall act as chairman. Any
arbitrator not appointed as provided above, upon request
by one Party, shall be appointed by the Zurich Supreme
Court (239 para. 2 Zurich procedural laws applicable
pursuant to Art. 179 para. 2 IPRG). Eligible for
appointment as arbitrators are persons who are familiar
with the English language and English shall be the
language governing the arbitration procedures.
Subject to a possible appeal to the Swiss Federal Supreme
Court in accordance with Art. 190 et seq. IPRG the
Parties undertake to recognize the award of the
arbitration tribunal as final, binding and enforceable.
Without prejudice to the right of either party to have
recourse to the arbitration tribunal for such relief,
either Party may seek preliminary or injunctive measures
or relief in any competent court having jurisdiction.
In witness whereof, the Parties have executed this Agreement
effective as of November 1, 1998.
Zurich, November 11, 1998
Seller: Purchaser:
Claire's Stores, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ by: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Annexes