WISCONSIN

001-7635

39-0667110

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

[  ]

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry into a Material Definitive Agreement

2.1*

Share Purchase Agreement dated June 13, 2018, between Twin Disc NL Holding, B.V., and Het Komt Vast Goed, B.V.

99.1

Press Release dated June 13, 2018 issued by Twin Disc, Incorporated

99.2

Investor presentation of Twin Disc, Incorporated, dated June 13, 2018

Date: June 13, 2018

Twin Disc, Incorporated

/s/ JEFFREY S. KNUTSON

Jeffrey S. Knutson

Vice President – Finance,

Chief Financial Officer,

Treasurer, and Secretary

SHARE PURCHASE AGREEMENT

13 June 2018

relating to the sale and purchase of the entire issued share capital of

VETH PROPULSION HOLDING B.V.

between

HET KOMT VAST GOED B.V.

as Seller

TWIN DISC NL HOLDING B.V.

as Purchaser

Clause

Page

1

DEFINITIONS AND INTERPRETATION

2

2

SALE, purchase and transfer

12

3

PURCHASE PRICE

12

4

Purchase Price determination

13

5

Earn-Out

15

6

Repayment of Intercompany debt

18

7

Conditions Precedent

19

8

PRE-COMPLETION UNDERTAKINGS

20

9

COMPLETION

22

10

POST-COMPLETION obligations

23

11

WARRANTIES

27

12

BREACH

28

13

Claims

28

14

LIMITATION OF LIABILITY

30

15

SPECIFIC INDEMNITIES

32

16

TAX

32

17

Confidentiality and announcements

33

18

TERMINATION

35

19

MISCELLANEOUS

35

(1)

HET KOMT VAST GOED B.V., a private company with limited liability incorporated under Dutch law, having its official seat in Papendrecht, the Netherlands, and its registered office address at Nanengat 17, 3356 AA Papendrecht, the Netherlands, registered with the Dutch trade register under number 23089528 (the Seller); and

(2)

TWIN DISC NL HOLDING B.V., a private company with limited liability incorporated under Dutch law, having its official seat in Papendrecht, the Netherlands, and its registered office address at Nanengat 17, 3356 AA Papendrecht, the Netherlands, registered with the Dutch trade register under number 71859950 (the Purchaser);

(A)

the Seller and its group companies are engaged in the business of design, (product) development, production, sales, repair and service of auxiliary propulsions and propulsion machinery for (marine) vessels (the Business);

(B)

Twin Disc, Incorporated, a public corporation with a Nasdaq listing (TWIN), and its group companies are engaged in the business of design, manufacture and distribution of power transmission technology (Twin Disc);

(C)

Alnoseju Beheer B.V., Jaco B.V., DS Unctoh B.V. and Twin Disc entered into a letter of intent, dated 20 March 2018, in which the aforementioned parties set out the general terms under which Twin Disc may directly or indirectly, through the Purchaser or another entity controlled by Twin Disc, acquire Exploitatiemaatschappij Veth B.V., Veth Diesel B.V., Veth Electra B.V., Veth Propulsion B.V. and Veth Thrusters B.V., the particulars of which are set out in Schedule (C) (the Subsidiaries) from Alnoseju Beheer B.V., Jaco B.V. and DS Unctoh B.V.;

(D)

since 12 June 2018, the Seller holds the legal and beneficial title to 180 ordinary shares with a nominal value of EUR 100 (hundred euro) each (the Shares) in the capital of Veth Propulsion Holding B.V., a private company with limited liability incorporated under Dutch law, having its official seat in Papendrecht, the Netherlands, and its registered office address at Nanegat 17, 3356 AA, Papendrecht, the Netherlands, registered with the Dutch trade register under number 71870369 (the Company);

(E)

the Shares constitute 100% (one hundred per cent) of the issued and outstanding share capital of the Company;

(F)

Alnoseju Beheer B.V., Jaco B.V. and DS Unctoh B.V. hold the legal and beneficial title to the shares in the capital of the Seller;

(G)

following the restructuring as set forth in the EY/HVG Step Plan, the Company holds the legal and beneficial title to the shares the capital of the Subsidiaries;

(H)

the Purchaser and/or Twin Disc conducted a due diligence investigation into the Subsidiaries and its business by reviewing documents that the Seller made available to the Purchaser, amongst others on the basis of a due diligence questionnaire of Purchaser, through an electronic data room prepared for that purpose and by having had opportunity to ask questions, most of which questions have been answered by the Seller;

(I)

each of the Parties obtained all necessary corporate and other internal approvals to enter into this Agreement and to consummate the transactions contemplated by this Agreement;

(J)

the Parties have, and the Seller confirms that the Group Companies have, to the extent required in relation to the Transaction, complied with the provisions of the Social and Economic Council Merger Regulations (SER-Fusiegedragsregels 2015) and the Act on the works councils (Wet op de ondernemingsraden); and

(K)

the Seller now wishes to sell and transfer and the Purchaser wishes to purchase and accept the Shares, on the terms and subject to the conditions of this Agreement;

1

DEFINITIONS AND INTERPRETATION

1.1

Definitions

2018 EBITDA

has the meaning given in Clause 5.1.2;

2018 Financial Statement

has the meaning given in Clause 5.2.2;

2018 FS Disagreement Notice

has the meaning given in Clause 5.2.3;

2018 Reclassifications

has the meaning given in Clause 5.2.1(b);

Accounting Principles

means the accounting policies, bases, methods, practices and procedures as applied in the Accounts;

Accounts

means (i) the audited annual accounts of the Seller for the period ending on the Balance Sheet Date, comprising a balance sheet and a profit and loss account (each including the explanatory notes thereto) as well as a consolidated balance sheet and a consolidated profit and loss account (each including the explanatory notes thereto), reflecting the financial position of the Group Companies on a consolidated basis, (ii) the directors report regarding the Company (on a consolidated basis) for the period ending on the Balance Sheet Date, and (iii) the other information listed in Section 2:392 DCC, including the auditor’s statement in respect of the annual accounts and the directors report of the Company for the period ending on the Balance Sheet Date;

Affiliate

means (i) in relation to any person other than a natural person, any person which is Controlled by, Controls or is under common Control with, such person and with regard to the Seller: including but not limited to Mr. J. Veth, Mr. C.J. Veth, Mr. H.A. Veth; and (ii) in relation to a natural person, his first -degree relatives (whether by blood or marriage), the trustees, acting in their capacity as such, of any trust of which he or any of his first degree relatives is a beneficiary, or, in the case of a discretionary trust, is a potential beneficiary; and any person of which he or his first degree relatives have Control, in each case from time to time;

Agreement

has the meaning given in the introduction of this Agreement;

Anti-Corruption Law

means any Law which has the objective to prevent bribery and/or other corrupt practices;

Applicable Security Price

has the meaning given in Clause 5.2.5;

Associated Person

means a person who performs or has performed services for or on behalf of a Group Company, including any director, officer, employee or agent of a Group Company;

Balance Sheet Date

31 December 2017;

Breach

means a breach of any Seller’s Warranty;

Business

has the meaning given in Recital (A);

Business Day

means a day (other than a Saturday or a Sunday or a public holiday) on which banks are open for business in the Netherlands, other than for internet banking services only;

Cash

means any of the items listed under “Cash” in Part A of Schedule 4.1.1, including any cash at banks, cash in hand (to the extent in a currency other than euro converted into euro at the Exchange Rate) and any receivable of the Group Companies on the Seller (also referred to as the “current accounts”), including the aforementioned claims that form part of the Intercompany Debt, but excluding any Trapped Cash; 

Company 

has the meaning given in Clause (D);

Completion

means the transfer of the Shares and the payment of the Initial Purchase Price and the Intercompany Debt in accordance with this Agreement;

Completion Accounts

has the meaning given in Clause 4.2.1(b);

Completion Accounts Date

means the end of the reporting month immediately following Completion;

Completion Accounts Disagreement Notice

has the meaning given in Clause 4.2.2;

Completion Balance Sheet

has the meaning given in Clause 4.2.1(a);

Completion Date

means the date on which Completion takes place;

Completion Statement

has the meaning given in Clause 4.2.1(b);

Conditions Precedent

has the meaning given in Clause 7.1;

Confidential Information

has the meaning given in Clause 17.1.1;

Control

means, with respect to the relevant person, (i) the direct or indirect ownership or control of more than 50% (fifty per cent) of the (a) ownership interests or (b) voting power at the general meeting or a similar body, of that person, or (ii) the right or ability to (a) appoint or remove or (b) direct the appointment or removal of, such number of the members of the management board or a similar body of that person with decisive voting power in such body;

Damage

means the amount of damages within the meaning of section 6:96 et seq. Dutch Civil Code, provided however that such amount shall be determined without giving effect to the multipliers or ratios that the Purchaser has used for purposes of calculating the Purchase Price;

Data Room

means the electronic data room prepared by the Seller for the purpose of facilitating the Due Diligence Investigation, the content of which is electronically stored on DVDs, a copy of which has been provided to the Purchaser and the Seller, respectively, as at the date of this Agreement, and listed in an index attached hereto as Schedule 1.1(a);

DCC

means the Dutch Civil Code;

Debt

means any of the items listed under “Debt” in Part A of Schedule 4.1.1 and, in respect of the Group Companies and expressed as a negative number, the aggregate amount of:

Deed of Transfer

means the notarial instrument for the transfer of the Shares;

Difference 2018 EBITDA

has the meaning given in Clause 5.1.2;

Disclosed Information

means the information included in (i) this Agreement, (ii) the Data Room and (iii) the written information provided to the Purchaser or any of its professional advisers to the extent uploaded in the Data Room;

Due Diligence Investigation

means the due diligence investigations performed by and on behalf of the Purchaser as referred to in Recital (H);

Dutch GAAP

means the relevant provisions of the DCC and, to the extent applicable to the Group Companies, the prevailing guidelines for annual reporting in the Netherlands (Richtlijnen voor de Jaarverslaggeving) as published by the Dutch Accounting Standards Board (Raad voor de Jaarverslaggeving);

Earn-Out

has the meaning given in Clause 5.1.1;

Earn-Out Amount

has the meaning given in Clause 5.1.2;

Effective Time

means 23:59 local time on the Completion Accounts Date;

Employment Agreement

means the employment agreement to be entered into between Mr. H.A. Veth and Veth Propulsion B.V.;

Encumbrance

means any pledge, mortgage, right of usufruct, attachment, right of retention, reservation of title, leasehold interest, tenancy, easement, any right of first refusal, right of pre-emption or any other right to acquire, any arrangement concerning depositary receipts (certificering), restriction on voting or transfer, or any other third party right or security interest of any kind, or the commitment to create any of the foregoing; and Encumber shall be construed accordingly;

Environmental Law

means any Law concerning the environment, the protection of human health, the conditions of the workplace, or the generation, transportation, storage, treatment or disposal of dangerous substances;

Environmental License

means any authorization, consent, certificate, permission, permit or license required under or in relation to any Environmental Law;

Escrow Account

means the bank account maintained by the Escrow Agent; 

Escrow Agent

means ABN AMRO Escrow & Settlement;

Escrow Agreement

means the escrow agreement to be entered into between the Purchaser, the Seller and the Escrow Agent in form as attached hereto as Schedule 3.2(a);

Exchange Rate

means, in relation to any currency to be converted into or from euro for the purposes of this Agreement, the average 5 (five) day spot rate of exchange (closing mid-point) for that currency into or, as the case may be, from euro, as published in the Dutch financial daily paper (Financieel Dagblad) on each of the 5 (five) Business Days immediately prior to the relevant date or, where no such rate is published on those dates, the average of the relevant rate quoted on the appropriate page of the Reuters screen as at the close of business in Amsterdam, the Netherlands, on each of the 5 (five) Business Days immediately prior to the relevant date;

EY/HVG Step Plan

means the step plan prepared by the advisors of the Seller in connection with the pre-completion restructuring of the Group attached hereto as Schedule 1.1(b);

Fundamental Warranties

means the Seller’s Warranties included in paragraphs 1 (Authority and capacity of the Seller) up to and including 4 (Shares) of Schedule 11.1.1, but excluding 1.3 of Schedule 11.1.1;

Governmental Entity

means any supranational, national or local body or authority exercising a legislative, judicial, executive, regulatory, administrative or other governmental function and with jurisdiction in respect of the relevant matter;

Group 

means the Company and the Subsidiaries;

Group Company

means any member of the Group;

Group Companies’ Insurance Policies

has the meaning given in Clause 16.1 Schedule 11.1.1;

Group Intellectual Property Rights

means all Intellectual Property Rights owned, used or licensed by the Group Companies as licensee or licensor;

Independent Expert

has the meaning given in Clause 4.2.3;

Initial Purchase Price

has the meaning given in Clause 3.1.2;

Initial Purchase Price Disagreement Notice

has the meaning given in Clause 4.1.1;

Initial Purchase Price Notice

has the meaning given in Clause 4.1.1;

Intellectual Property Rights

means trademarks, service marks, logos, domain names, trade and business names, rights in designs, patents, copy right, database rights, and rights in know-how and other intellectual property rights in each case whether registered or unregistered and all rights or forms of protection having equivalent or similar effect to any of the foregoing which may subsist anywhere in the world;

Intercompany Debt

means the balance of (i) all amounts owed to the Group Companies by the Seller and any of Seller’s Affiliates and (ii) all amounts owed to the Seller and any of Seller’s Affiliates by the Group Companies;

IT Systems

means all computer hardware, including network infrastructure and communication systems and equipment, and all computer software, including related databases and documentation, used by the Group Companies;

Key Employees

means each of Ms. T Vergeer, Mr. P. Kalkhoven, Mr. M. Van der Jagt, Mr. H.A. Veth and Mr. M. Huisman;

Law

means, with respect to the relevant subject matter or person, all applicable legislation, regulations, judgements, decrees, orders, instruments, by-laws, and other legislative measures or decisions having the force of law, as well as treaties, conventions and other agreements between states, or between states and the European Union or other supranational bodies, rules of common law, customary law and equity, and all other laws of, or having effect in, any jurisdiction from time to time;

Lease Agreement

means the lease agreement to be entered into between the Group Companies and Seller and P. Groenendijk Scheepsreparatie B.V. in the form attached hereto as Schedule 1.1(c);

Long Stop Date

has the meaning given in Clause 7.1;

Material Adverse Effect

means any effect which occurs between the date of signing of this Agreement and the Completion Date which has a materially adverse effect to the business, assets, financial condition or results of the Group Companies taken as a whole and, where quantifiable, in aggregate amounts to at least EUR 1,000,000 (one million euro), other than any such effect that (i) is disclosed through the Disclosed Information prior to the date of this Agreement, (ii) is resulting from a change of applicable Laws or general economic or political conditions (including changes arising out of acts of terrorism, sabotage, armed hostilities or war) after the date of this Agreement, or (iii) directly results from a written instruction by or written approval of the Purchaser after the date of this Agreement, whereby in all events the adverse effect shall be balanced against any benefits arising to a Group Company as a result of the underlying facts that gave rise to the Material adverse Effect;

Maximum 2018 EBITDA

has the meaning given in Clause 5.1.2;

NAI

has the meaning given in Clause 19.12.2;

Notary

means Mr. Pieter van Druten or another civil law notary (notaris) (or such notary’s substitute) of Loyens & Loeff N.V. in Amsterdam, the Netherlands;

Notary Account

means the third party account (derdengeldenrekening) in the name of “Loyens & Loeff Amsterdam Derdengelden Notariaat” with swiftcode ABNANL2A and IBAN NL62ABNA0557297133;

Other Principles

has the meaning given in Clause 4.1;

Party

has the meaning given in the introduction of this Agreement;

Practitioner

has the meaning given in Clause 13.3.1(c);

Purchase Price

has the meaning given in Clause 3.1.1;

Purchaser

has the meaning given in the introduction of this Agreement;

Purchaser’s Account

means the bank account of the Purchaser as specified by the Purchaser to the Notary, or the Seller, as the case may be, from time to time;

Purchaser’s Group

means the Purchaser and its Affiliates, including the Group Companies from Completion;

Purchaser’s Warranties

has the meaning given in Clause 11.2;

Relief

includes any loss, allowance, depreciation, amortisation, credit, relief, exemption, deduction or set-off or other relief of a similar nature granted by or available in relation to Tax, and any right to a repayment of or saving of Tax;

Representatives

means, in relation to a person, (i) any and all persons authorized to represent such person (whether or not such authority is subject to limitations), (ii) such person’s directors, officers and employees (whether or not authorized to represent such person) and (iii) any of the professional advisers of such person in each case from time to time;

Sanction Law

means any Law imposing economic sanctions such as trade barriers and restrictions, visa bans, asset freezes or restrictions on financial transactions, including the Sanctions Act 1977 (Sanctiewet 1977), any EU common foreign and security policy related to (financial) sanctions, any (financial) sanctions imposed by the United Nations Security Council and any sanctions administered by the U.S. Office of Foreign Asset Control;

Seller

has the meaning given in the introduction of this Agreement;

Seller’s Account

means the bank account of the Seller as specified by the Seller to the Notary, or the Purchaser, as the case may be, from time to time;

Seller’s Group

means the Seller and its Affiliates, excluding the Group Companies from Completion;

Seller’s Warranties

has the meaning given in Clause 11.1.1;

Shares

has the meaning given in Recital (D);

Subsidiaries

has the meaning given in Recital (C);

Target Working Capital

means the level of the monthly average month-end Working Capital calculated over the period as from 1 July 2017 up to and including 30 June 2018 as further set forth and determined in accordance with Part C of Schedule 4.1.1;

Tax

means all forms of taxes, levies, duties, imposts, social security charges, health security contributions, any other contributions or charges and withholdings of any nature whatsoever, whether direct or indirect, including without limitation corporate income tax, wage withholding tax, social security premium, value added tax, premiums or other contributions, consumption taxes, environmental taxes, (real estate) transfer tax, property tax, capital tax, energy tax, waste tax, import, export, custom and other duties, including all penalties, additions, interest, damage, fines, costs and expenses relating to any of them, any repayment of unlawful state aid in relation thereto, any contract or other agreement in relation to taxation, and regardless of whether these items are chargeable directly or primarily against or attributable directly or primarily to any other person and of whether any amount in respect of any of them is recoverable from any other person;

Tax Authority

means any Governmental Entity or other authority competent to impose any liability in respect of Tax or responsible for the administration and/or collection of Tax or enforcement of any law in relation to Tax;

Tax Benefit

means any Tax refund actually received by a Group Company and any reduction of Tax actually due by a Group Company;

Tax Claim

means any claim of the Purchaser under the Tax Indemnity or a claim for a Breach of a Tax Warranty;

Tax Indemnity

means the indemnity set out in paragraph 2 of Schedule 16;

Tax Return

means any return, (including any information return), report, statement, declaration, schedule, attachment, notice, form, or other document or information, including any amendment thereof, filed with or submitted to, or required to be filed with or submitted to, any Tax Authority in connection with the determination, assessment, collection, or payment of any Tax or in connection with the administration, implementation, or enforcement of or compliance with any requirement relating to Tax;

Tax Warranties

means the Seller’s Warranties set out in paragraph Fout! Verwijzingsbron niet gevonden. of Schedule 11.1.1;

Threshold 2018 EBITDA

has the meaning given in Clause 5.1.2;

Third Party Claim

has the meaning given in Clause 13.3.1;

Transaction

means the sale, purchase and transfer of the Shares, on the terms and subject to the conditions of this Agreement;

Transaction Document

means this Agreement, the Deed of Transfer, the Escrow Agreement, and each other material document to be executed by one or more members of the Seller’s Group (excluding the Group Companies) and one or more members of the Purchaser’s Group (including the Group Companies) in connection with the Transaction;

Trapped Cash

means any cash that cannot be lawfully spent, distributed, loaned or released by the Group Companies from the jurisdiction in which they are situated without deduction or withholding or additional cost (other than costs of transfer from a bank account incurred in the ordinary course) and which is not accessible in the manner described above within a period of five (5) Business Days, including, but not limited to: (i) any cash securing rent deposits or any other cash held as collateral in respect of obligations to any party, (ii) any bank guarantees (other than bank guarantees for which cash is deposited on a blocked account of the Group Companies) and (iii) employee loans or bonuses etc.;

Twin Disc

has the meaning given in Recital (B);

VAT

means (i) within the European Union, such Tax as may be levied in accordance with (but subject to derogations from) the Directive 2006/112/EC and (ii) outside the European Union, any Tax levied by reference to added value, sales or consumption;

Working Capital

means the working capital as calculated in accordance with the definitions as set out under “Working Capital” in Part A of Schedule 4.1.1 and the accounting principles in Part B of Schedule 4.1.1; and

Wrong Pocket Item

has the meaning given in Clause 10.3.1.

1.2

Interpretation

1.2.1

In this Agreement, unless the context requires otherwise:

(a)

the singular includes the plural and vice versa, and each gender includes the other genders;

(b)

except as otherwise provided in this Agreement, references to any time of day are to the time on that day in the Netherlands;

(c)

references to Recitals, Clauses, Schedules or Annexes are to recitals, clauses, schedules or annexes of this Agreement, and references to this Agreement include the Recitals, Schedules, Annexes and other attachments to this Agreement;

(d)

a reference to a person includes any natural person, corporate body, Governmental Entity or any other entity, whether or not having separate legal personality;

(e)

references to any Dutch legal term or concept shall in any jurisdiction other than the Netherlands be construed as a reference to the term or concept which most nearly corresponds to it in that jurisdiction;

(f)

English terms to which another language translation has been added in italics shall be interpreted in accordance with such other language translation, disregarding the English term to which such other language translation relates;

(g)

the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, unless the context clearly requires otherwise;

(h)

references to books and records are to the books and records (administratie) stored in any form;

(i)

where information is qualified by the expression “fairly disclosed”, the information concerned is limited to the information specifically disclosed in writing prior to the date of this Agreement, in such way and manner that after studying the relevant information on a prima facie basis and without it being necessary to cross-refer to other documents outside of the Disclosed Information, a diligent purchaser (assisted by professional advisors) is aware or should reasonably be expected to be aware of such facts, matters, circumstances and events;

(j)

references to “Seller’s knowledge” or words or expressions of a similar nature shall be deemed to refer to the actual knowledge of the Seller, Mr. H.A. Veth, Ms. T. Vergeer, Mr. M. Huisman, Mr. J. Veth and Mr. J.C. Veth as per the date of this Agreement;

(k)

references to “ordinary course” shall be deemed to be followed by the phrase “consistent with past practice during the last three years”.

1.2.2

Headings and sub-headings in this Agreement are inserted for convenience only and shall not affect the interpretation of this Agreement.

1.2.3

Except as otherwise provided in this Agreement, all periods of time set out in this Agreement shall start on the day following the day on which the event triggering the relevant period of time occurred. The expiration date shall be included in the period of time. If the expiration date is not a Business Day, the expiration date shall be the next Business Day.

1.2.4

All interest accruing under this Agreement is to be calculated on the basis of the actual number of days elapsed and a year of 360 (three hundred sixty) days.

1.2.5

All notices, demands, requests, statements, certificates and other documents and communications related to this Agreement shall be in English.

1.2.6

No provision of this Agreement shall be interpreted against a Party solely as a result of the fact that such Party was responsible for drafting such a provision.

2

SALE, purchase and transfer

2.1

Sale and purchase

2.2

Transfer

2.2.1

On the Completion Date the Seller shall transfer its Shares it sells pursuant to clause 2.1 to the Purchaser and the Purchaser agrees to accept the Shares, on the Completion Date, free from Encumbrances and with all rights attached to them, on the terms and subject to the conditions of this Agreement and through the execution of the Deed of Transfer.

2.2.2

Subject to Completion and the terms and conditions of this Agreement, the Shares, the Group Companies and their respective businesses shall be for the benefit and risk of the Purchaser with effect from Completion.

3

PURCHASE PRICE

3.1

Purchase Price

3.1.1

The aggregate purchase price for the Shares (the Purchase Price) shall be:

(a)

an amount of EUR 49,700,000 (forty nine million seven hundred thousand euro);

(b)

the Cash at Completion;

(c)

the Debt at Completion;

(d)

the amount, if any, by which the Working Capital at Completion exceeds the Target Working Capital, provided however that this amount shall never exceed an amount of EUR 2,000,000 (two million euro). For the avoidance of doubt, to the extent that the Working Capital at Completion exceeds the Target Working Capital with an amount of more than EUR 2,000,000 (two million euro), such amount shall for the purpose of the calculation of the Purchase Price be deemed EUR 2,000,000 (two million euro);

(e)

the amount, if any, by which the Target Working Capital exceeds the Working Capital at Completion; and

(f)

the Earn-Out Amount (if any).

3.1.2

The Cash, Debt and Working Capital at Completion shall, prior to Completion, be estimated in accordance with Clause 4.1 and such pre-Completion estimates shall be binding for purposes of calculating the Purchase Price payable at Completion (the Initial Purchase Price).

3.1.3

The Cash, Debt and Working Capital at Completion shall, post Completion, be finally agreed or determined in accordance with Clause 4.2. The Initial Purchase Price shall be adjusted in accordance with Clause 4.4 if the Cash, Debt and/or Working Capital at Completion deviate from the abovementioned pre-Completion estimates.

3.2

Payment of the Purchase Price

(a)

a portion of the Initial Purchase Price in an amount equal to 5% (five per cent) of the Initial Purchase Price shall be paid in full and in cash at Completion by the Purchaser into the Notary Account and, subject to Clause 9.2.3, paid by the Notary into the Escrow Account 1 (one) Business Days following Completion, and will be held in the Escrow Account in accordance with the provisions of the Escrow Agreement attached hereto as Schedule 3.2(a);

(b)

the balance of the Initial Purchase Price shall be paid in full and in cash at Completion by the Purchaser to the Seller via the Notary Account;

(c)

a further payment, if any, of the Purchase Price excluding the Earn-Out Amount shall be made as and when required pursuant to Clause 4.4; and

(d)

a further payment, if any, of the Earn-Out Amount shall paid by means of the issue of securities in the capital of Twin Disc, Incorporated to Seller as further set forth in Clause 5.2.5.

4

Purchase Price determination

4.1

Pre-Completion estimates

4.1.1

The Seller shall provide the Purchaser with a written notice in the form attached hereto as Part D of Schedule 4.1.1, setting out its good faith best estimate of the Debt, Cash and Working Capital at Completion (the Initial Purchase Price Notice) and its calculations of each estimate, together with the relevant supporting documents, by no later than 10 (ten) Business Days prior to the date on which Completion is envisaged to take place. Such estimates shall be made applying the Accounting Principles and the additional (or deviating) principles set out in Part B of Schedule 4.1.1 (the Other Principles). Such estimates shall be binding for purposes of calculating the Initial Purchase Price payable at Completion, unless the Purchaser notifies the Seller within 5 (five) Business Days after receipt of the Initial Purchase Price Notice that it disputes the Initial Purchase Price Notice, specifying the items of the Initial Purchase Price Notice it disputes and the basis upon which it disputes such items, and including its own good faith estimates of such disputed items (the Initial Purchase Price Disagreement Notice).

4.1.2

Where the Initial Purchase Price Disagreement Notice is served in time, the following estimates shall be binding for purposes of calculating the Initial Purchase Price:

(a)

if the estimated Debt is disputed: the average of the Seller’s estimate thereof (as included in the Initial Purchase Price Notice) and the Purchaser’s estimate thereof (as included in the Initial Purchase Price Disagreement Notice);

(b)

if the estimated Cash is disputed: the average of the Seller’s estimate thereof (as included in the Initial Purchase Price Notice) and the Purchaser’s estimate thereof (as included in the Initial Purchase Price Disagreement Notice); and

(c)

if the estimated Working Capital is disputed: the average of the Seller’s estimate thereof (as included in the Initial Purchase Price Notice) and the Purchaser’s estimate thereof (as included in the Initial Purchase Price Disagreement Notice).

4.2

Post-Completion determination

4.2.1

The Purchaser shall provide the Seller with the following documents within 60 (sixty) Business Days after the Completion Date:

(a)

an unaudited balance sheet of the Company reflecting the financial position of the Group Companies on a consolidated basis at Completion as if Completion was at the end of an accounting reference period of the Company, prepared in conformity with the Accounting Principles and the Other Principles (the Completion Balance Sheet), accompanied by the relevant working papers, including a specification of the relevant line items (and sub-items) and bookkeeping codes; and

(b)

a written statement setting out the Cash, Debt and Working Capital at Completion, each as derived from the Completion Balance Sheet (the Completion Statement, and together with the Completion Balance Sheet, the Completion Accounts) and the underlying calculations.

4.2.2

The Completion Accounts shall be binding on the Parties, unless the Seller notifies the Purchaser within 20 (twenty) Business Days after receipt thereof that it disputes the Completion Accounts, specifying the items of the Completion Accounts it disputes and the basis upon which it disputes such items, including the adjustments it reasonably believes should be made to the Cash, Debt and/or Working Capital and the basis therefor, providing sufficient detail so as to enable the Purchaser to assess the proposed adjustments (the Completion Accounts Disagreement Notice).

4.2.3

Following receipt of the Completion Accounts Disagreement Notice in accordance with Clause 4.2.2, the Parties shall, in good faith, attempt to reach agreement on all disputed items within 20 (twenty) Business Days after such notification, failing which the items still in dispute shall be resolved, and the Cash, Debt and Working Capital at Completion shall be finally determined, by an independent expert (the Independent Expert) who shall be appointed and instructed by the Parties in accordance with Schedule 4.2.3.

4.3

Access to information

4.4

Adjustment

(a)

the Purchaser shall ensure that the amount, if any, by which the Purchase Price calculated on the basis of the Cash, Debt and Working Capital at Completion exceeds the Initial Purchase Price calculated on the basis of the pre-Completion estimates of the Cash, Debt and Working Capital at Completion is paid to the Seller; and

(b)

the Seller shall ensure that the amount, if any, by which the Initial Purchase Price calculated on the basis of the pre-Completion estimates of the Cash, Debt and Working Capital at Completion exceeds the Purchase Price calculated on the basis of the Cash, Debt and Working Capital at Completion is paid to the Purchaser.

4.5

Conflicts

4.5.1

If and to the extent there is a conflict between the Accounting Principles and the Other Principles, the Other Principles shall prevail for purposes of this Clause 4.

4.5.2

If and to the extent there is a conflict between the definition of Cash, Debt or Working Capital on the one hand, and the relevant parts of the Completion Balance Sheet or the accompanying working papers on the other hand, the definitions shall prevail, provided that if a Cash, Debt or Working Capital element is partly treated as cash or debt and partly as working capital in such balance sheet or working papers, that differentiation shall be adopted for purposes of this Clause 4. To illustrate this conflict rule, the following two examples have been added:

5

Earn-Out

5.1

Earn-out Amount

5.1.1

As an increase (if applicable) to the Purchase Price, the Seller is entitled to an earn out payment by the Purchaser (the Earn-Out) subject to the terms and conditions as set out in this Clause 5.

5.1.2

If the EBITDA generated by the Company and its Group Companies for the 2018 financial year, as is apparent from the 2018 Financial Statement (the 2018 EBITDA) and taking account the calculation formula and adjustments set forth Clause 5.2.1, is in excess of EUR 6,450,000 (six million four hundred fifty thousand euro) (the Threshold 2018 EBITDA), the Purchase Price shall be adjusted upwards with an amount (the Earn-Out Amount) equal to the difference (the Difference 2018 EBITDA) between EUR 6,800,000 (the Maximum 2018 EBITDA) and the Threshold 2018 EBITDA multiplied with factor 9,4286, provided however that such Earn-Out Amount shall never exceed an amount of EUR 3,300,000 (three million three hundred thousand euro):

2018 EBITDA

Earn-Out Amount (in EUR)

˃EUR 6,800,000

EUR 3,300,000

≥EUR 6,450,000 - ≤EUR 6,800,000

9,4286 multiplied by the Difference 2018 EBITDA 

˂EUR 6,450,000

0

5.2

Determination of the 2018 EBITDA and Earn-Out Amount

5.2.1

For the purpose of determining the Earn-Out Amount, the Parties agree to the following:

(a)

the 2018 EBITDA will be calculated as follows: EBIT (bedrijfsresultaat) plus depreciation and amortisation (afschrijvingen) as included in the 2018 Financial Statement prepared in accordance with the Accounting Principles;

(b)

as:

(i)

the threshold amount of EUR for the entitlement of Seller to the Earn-Out Amount is determined on the basis of the Accounts; and

(ii)

prior to the consummation and for the benefit of the Transaction a reorganization in accordance with the EY/HVG Step Plan of the group of companies included in the consolidation of the Accounts has taken place,

(c)

charges and costs imposed by Twin Disc (including Representatives of Twin Disc in the board of the Group Companies) or its Affiliates on the Group Companies, including inter alia (i) additional audit or consultancy fees imposed on the Group Companies (ii) any exploitation costs, marketing and sales expenses and development expenses of the Group outside of Group 2018 budget and/or (iii) costs in connection with the hiring of new employees not being employed with the Group Companies in the period 12 (twelve) months preceding the Completion Date after the Completion Date, but not those additional employees considered in the Group’s 2018 budget, will be eliminated;

(d)

any book profit or loss related to the sale of fixed assets will be eliminated;

(e)

costs in connection with the integration of (the business of) the Group Companies and Twin Disc will be eliminated;

(f)

one-off or non-recurring income and costs of the Group Companies outside the ordinary course of business, including any costs in relation to the Transaction as contemplated by this Agreement, will be eliminated;

(g)

any dividend, interest, tax or other non-operating or financial income or costs;

(h)

any losses or cash-out of the Group Companies which have been compensated by the Seller pursuant to the provisions of this Agreement shall be deemed to have been neutralised through such compensation; and

(i)

any non-cash reduction in a provision, accrual or liability set up on or prior to 31 December 2017 will be eliminated.

5.2.2

The Purchaser shall provide the Seller with the following documents within 4 (four) months after 31 December 2018:

(a)

the balance sheets of the Company reflecting the financial position of the Group Companies on a consolidated basis as per 31 December 2018, prepared by the Group Companies’ accountant at that time in conformity with the Accounting Principles and the Other Principles; and

(b)

a written statement setting out the 2018 EBITDA and the applicable Earn-Out Amount (if any) (the 2018 Financial Statement) together with the underlying calculations and a specific reconciliation per line item that has been normalized.

5.2.3

The 2018 Financial Statement shall be binding on the Parties, unless the Seller notifies the Purchaser within 60 (sixty) Business Days after receipt thereof that it disputes the 2018 Financial Statement, specifying the items of the 2018 Financial Statement it disputes and the basis upon which it disputes such items, including the adjustments it reasonably believes should be made to the 2018 EBITDA and the basis therefore, providing sufficient detail so as to enable the Purchaser to assess the proposed adjustments (the 2018 FS Disagreement Notice).

5.2.4

Following receipt of the 2018 FS Disagreement Notice in accordance with Clause 5.2.3, the Parties shall, in good faith, attempt to reach agreement on all disputed items within 60 (sixty) Business Days after such notification, failing which the items still in dispute shall be resolved, and the 2018 EBITDA and the Earn-Out Amount shall be finally determined, by the Independent Expert who shall be appointed and instructed by the Parties in accordance with Schedule 4.2.3.

5.2.5

Within 10 (ten) Business Days after the 2018 Financial Statement (setting forth the 2018 EBITDA and the Earn-Out Amount) has been finally agreed or determined in accordance with Clause 5.2.4, the Purchaser shall ensure that such Earn-Out Amount (if any) is paid to the Seller by means of the issue or transfer of securities in the capital of Twin Disc, Incorporated, or, to the extent the Seller has assigned its right to receive such securities to Alnojesu Beheer B.V., Jaco B.V. and DS Unctoh B.V. in accordance with Clause 19.4.4, by means of the issue or transfer of securities in the capital of Twin Disc, Incorporated to Alnojesu Beheer B.V., Jaco B.V. and DS Unctoh B.V. in the proportion of their shareholdings held in the Seller on the date of this Agreement. To the extent the Seller wishes to assign this right to Alnojesu Beheer B.V., Jaco B.V. and DS Unctoh B.V., it will notify the Purchaser thereof in writing. The number of any such securities to be issued or transferred will be determined as follows:

5.3

Other

5.3.1

The Purchaser covenants that as from Completion up to and including 31 December 2018 (the Earn-Out Period), it shall comply with the provisions in Schedule 5.3.1.

6

Repayment of Intercompany debt

7

Conditions Precedent

7.1

Conditions Precedent

(a)

the Purchaser having reached agreement with Mr. H.A. Veth regarding his continued employment after Completion;

(b)

the Purchaser having availability to the funds necessary to consummate the Transaction from an external debt financing institution on arm’s length terms;

(c)

between the date of this Agreement and the date on which the Conditions Precedent set out in Clauses 7.1(a) and 7.1 are satisfied or waived in accordance with Clause 7.3, the Seller not having become aware of a material Breach or any fact, matter, circumstance or event which is reasonably expected to result in a material Breach, it being understood that for the purpose of this Clause 7.1(c), a Breach resulting in, or reasonably expected to result in, the Purchaser and/or the Group Companies suffering or incurring Damages in amount equal to at least EUR 1,000,000 is deemed to be a “material Breach”;

(d)

between the date of this Agreement the date on which the Conditions Precedent set out in Clauses 7.1(a) and 7.1(b) are satisfied or waived in accordance with Clause 7.3, no Party becoming aware of any fact, matter, circumstance or event that, individually or together with other facts, matters, circumstances or events that it has become aware of, has had, has a Material Adverse Effect;

(e)

between the date of this Agreement the date on which the Conditions Precedent set out in Clauses 7.1(a) and 7.1(b) are satisfied or waived in accordance with Clause 7.3, this Agreement nor the consummation of the Transaction or any other transaction contemplated by this Agreement having been prohibited or restricted permanently by or pursuant to any Law; and

(f)

between the date of this Agreement the date on which the Conditions Precedent set out in Clauses 7.1(a) up to and including 7.1(f) are satisfied or waived in accordance with Clause 7.3, no Governmental Entity having commenced any legal action or proceedings that may prevent or delay past the Long Stop Date.

7.2

Responsibility for satisfaction of the Conditions Precedent

7.2.1

The Purchaser shall use its best efforts to ensure satisfaction of each of the Conditions Precedent as soon as reasonably possible.

7.2.2

Each of the Parties shall, and the Seller shall procure that each Group Company shall, use its best efforts to ensure that each of the Conditions Precedent is satisfied as soon as reasonably possible.

7.2.3

Each Party shall notify the other Party as soon as reasonably possible after becoming aware that any Condition Precedent has been satisfied.

7.2.4

If any Party becomes aware of anything that could reasonably be expected to prevent or delay the satisfaction of any Condition Precedent, it shall as soon as reasonably possible inform the other Party, providing appropriate details and clarification as to the reason why the relevant Condition Precedent will or may not be satisfied.

7.3

Waiver of Conditions Precedent

(a)

the Conditions Precedent set out in Clauses 7.1(e) and 7.1(f) may only be waived by written agreement between the Parties; and

(b)

the Conditions Precedent set out in Clauses 7.1(a), 7.1(b), 7.1(c) and 7.1(d) may only be waived by the Purchaser.

7.4

Non-satisfaction of any Condition Precedent

8

PRE-COMPLETION UNDERTAKINGS

8.1

Conduct of business

8.1.1

Except as (i) otherwise provided in this Agreement, (ii) required by Law, or (iii) approved in advance by the Purchaser, the Seller and the Seller shall procure that Alnoseju Beheer B.V., Jaco B.V. and DS Unctoh B.V. shall, from the date of this Agreement until Completion ensure that:

(a)

each Group Company:

(i)

carries on its business as a going concern, in the ordinary course and in a manner most likely to preserve its value, maintaining its relations and goodwill with its suppliers, customers, landlords, creditors, employees and others having business relationships with it;

(ii)

refrains from assuming any obligation or making any changes concerning operational matters with a minimum value of EUR 200,000 (two hundred thousand euro), save for matters regarding customer contracts or tenders; and

(iii)

immediately reports to the Purchaser on any fact, matter, circumstance or event outside the ordinary course which it should reasonably understand to be of material importance to the Business; and

(b)

notwithstanding Clause 8.1.1(a), none of the Group Companies:

(i)

enters into any transaction with, or makes any payment to, any member of the Seller’s Group (excluding the Group Companies), or any of their respective directors, officers or employees or any Affiliate of such directors, officers or employees other than in the ordinary course of business and on arm’s length terms;

(ii)

acquires (by merger, consolidation or acquisition of securities or assets) any corporation, partnership or other business organisation or division thereof or any interest therein;

(iii)

sells, transfers or otherwise disposes of any of its assets that has a fair market value or for which consideration shall be due in excess of EUR 200,000 (two hundred thousand euro);

(iv)

makes any material changes (other than those required by Law or by the applicable terms of employment) to the terms of employment or engagement, as the case may be, of any of its Key Employees, independent contractors or board members (or – in its capacity as shareholder – of any other Group Company’s board members), employs any new person in a management position or terminates (except for good cause) the employment of any Key Employee or sets up or amends any pension scheme or awards any pension rights, in each case except as (a) included in the budget of the relevant Group Company or as disclosed to the Purchaser as part of the Disclosed Information;

(v)

amends its or any other Group Company’s articles of association, enters into or authorises any transaction which affects its or any other Group Company’s corporate status or effects or authorises the restructuring or reorganisation of any Group Company, other than the restructuring as set out in the EY/HVG Step Plan;

(vi)

institutes or settles any legal proceedings or other disputes which results in a payment by or to any Group Company in excess of EUR 50,000 (fifty thousand euro), except in respect of debt collection in the ordinary course;

(vii)

cancels any debt or otherwise waives any claim or other right, except in the ordinary course or in excess of EUR 10,000 (ten thousand euro);

(viii)

amend, revoke or re-submit any Tax Return which has previously been submitted to a Tax Authority, or amend, disclaim or revoke any Relief relating to Tax or any claim, surrender or election relating to Tax which has previously been received or submitted or notified to any Tax Authority or otherwise given effect pursuant to applicable Law;

(ix)

settle, compromise, agree or materially negotiate any audit, enquiry, assessment, dispute or litigation relating to Tax with any Tax Authority, enter into any closing agreement or similar agreement with any Tax Authority, or consent to any extension or waiver of the limitation period relating to Tax;

(x)

change its residence for Tax purposes;

(xi)

agrees or commits to any of the foregoing; and

(c)

no Shares are sold, transferred, otherwise disposed of, or Encumbered, and that no profit instruments relating to, or shares or options for shares or any other debt or equity securities in the capital of the Company are granted or issued; and

(d)

no shareholders’, partners’ or members’ resolution (or equivalent resolution) relating to any of the Group Companies will be passed (whether at or outside of any general meeting).

8.1.2

Notwithstanding Clause 8.1.1, any member of the Seller’s Group shall, without incurring any liability as a result thereof, be allowed to act immediately, without awaiting the Purchaser’s response to a request for prior approval or even without requesting the Purchaser’s prior approval, if the circumstances so required, in which case the Seller shall inform the Purchaser of any such situation and acts as soon as possible thereafter.

8.2

Access and information

9

COMPLETION

9.1

Date and place

9.2

Payment of the Initial Purchase Price and the Intercompany Debt

9.2.1

The Purchaser shall procure that the Initial Purchase Price and the Intercompany Debt, if any, are paid, with value on the Completion Date, to the Notary Account under the reference “Project Ship - Initial Purchase Price” by no later than 13:00 on the Completion Date.

9.2.2

Subject to Clause 9.2.3, the Initial Purchase Price and the Intercompany Debt, if any, (or any relevant part thereof) shall remain for the benefit of the person who paid it into the Notary Account up to the moment the Deed of Transfer is duly executed.

9.2.3

If the Notary, on the first Business Day following Completion, as part of his Independent Investigation ascertains that the Seller or the Purchaser was declared bankrupt (failliet) or granted a moratorium of payment (surseance van betaling) in the Netherlands on or prior to the Completion Date, the Purchase Price (or any relevant part thereof) shall be deemed to always have remained for the benefit of the person who paid it into the Notary Account.

9.3

Completion actions

9.4

Failure to take Completion actions

9.4.1

If the Purchaser fails to fulfil any of its obligations pursuant to Clause 9.2, then the Seller may, in its absolute discretion, by notice to the Purchaser:

(a)

proceed to Completion to the extent reasonably practicable and permitted by Law;

(b)

defer Completion, in which event the provisions of this Clause 9.4 shall apply to Completion so deferred, provided that Completion cannot be deferred past the Long Stop Date; or

(c)

terminate this Agreement with immediate effect, without incurring any liability as a result of thereof and without any obligation on any Party to consummate the Transaction or to continue negotiations, in which case Clause 18 shall apply.

9.4.2

If the Seller fails to fulfil any of its obligations pursuant to Clause 9.3, then the Purchaser may, in its absolute discretion, by notice to the Purchaser:

(a)

proceed to Completion to the extent reasonably practicable and permitted by Law, insofar as practicable having regard to the default(s) that has or have occurred and the Seller will be obliged to proceed to Completion to such extent;

(b)

defer Completion, in which event the provisions of this Clause 9.4 shall apply to Completion so deferred, provided that Completion cannot be deferred past the Long Stop Date; or

(c)

terminate this Agreement with immediate effect, without incurring any liability as a result of thereof and without any obligation on any Party to consummate the Transaction or to continue negotiations, in which case Clause 18 shall apply.

10

POST-COMPLETION obligations

10.1

Books and records

10.1.1

The Purchaser acknowledges that the Seller may after Completion from time to time require access to certain information pertaining to the Group that is available to the Purchaser or the Group Companies. Accordingly:

(a)

the Purchaser and the Group Companies shall, for a period of 7 (seven) years from Completion or as much longer as required (i) by Law or (ii) in connection with any dispute under this Agreement, retain all books and records relating to any Group Company concerning the period up to Completion;

(b)

the Seller and its respective Representatives shall, on reasonable notice and at Seller's costs, be granted reasonable access, at reasonable times, to such books, records, key personnel and premises relating to any Group Company; and

(c)

the Seller and its Representative shall, at Purchaser’s costs, be allowed to make copies of documents and files as they may reasonably require,

10.1.2

The Seller acknowledges that the Purchaser may after Completion from time to time require access to certain information pertaining to the Group Companies that is available to the Seller. Accordingly:

(a)

the Seller shall, for a period of 7 (seven) years from Completion or as much longer as required (i) by Law or (ii) in connection with any dispute under this Agreement, retain all books and records relating to any Group Company concerning the period up to Completion;

(b)

the Purchaser and its respective Representatives shall, on reasonable notice and at Purchaser's costs, be granted reasonable access, at reasonable times, to such books, records, key personnel and premises relating to any Group Company; and

(c)

the Purchaser and its Representative shall, at Seller’s costs, be allowed to make copies of documents and files as they may reasonably require,

10.2

Capital Maintenance

10.3

Wrong pocket

10.3.1

If, following Completion, any member of the Seller’s Group owns any asset or right or is a party to any contract which should have been transferred to the Company in connection with the pre-Completion restructuring as set forth in the EY/HVG Step Plan (each, a Wrong Pocket Item) the Seller shall procure that the relevant member of the Seller’s Group shall notify the Purchaser of that fact as soon as reasonably possible.

10.3.2

Following notification pursuant to Clause 10.3.1, the Parties shall, in good faith, negotiate with a view to finding a solution reasonably acceptable to each of them, involving the relevant members of the Seller’s Group in such negotiations as applicable.

10.3.3

Any solution pursuant to Clause 10.3.2 shall be effectuated at the Seller’s cost and expense, for nil consideration and, for the avoidance of doubt, without any amendment to the Purchase Price, and any Wrong Pocket Item shall be for the benefit and risk of the Purchaser with effect from the Completion Date, irrespective of the fact that its transfer takes place at a later date.

10.4

Customer loans

10.5

Insurance

10.5.1

The Seller shall ensure that all insurance policies taken out at the level of the Seller’s Group (excluding the Group Companies) and providing cover for risks relating to any Group Company’s business remain in force after Completion on a month-by-month basis (but otherwise on the same terms), provided that the Seller shall not be obligated to ensure such continuation for a period longer than one month.

10.5.2

In respect of such continued insurance policies:

(a)

the Purchaser shall procure that the relevant Group Companies continue to pay to the relevant members of the Seller’s Group the usual related insurance premiums or the pro rata part thereof usually charged to them;

(b)

the Seller shall, to the extent the relevant Group Companies are not entitled to notify, make or pursue claims under such insurance policies, ensure that the relevant members of the Seller’s Group shall, at the costs of the relevant Group Companies, take such steps as the relevant Group Companies reasonably require in that respect; and

(c)

the Seller shall procure that the relevant members of the Seller’s Group as soon as reasonably possible pay to the relevant Group Companies any proceeds relating to claims made by or on behalf of any such Group Companies as well as any rebate of premium received as a consequence of such Group Companies ceasing to be insured under any such policies at any point in time after Completion.

10.5.3

The Purchaser shall ensure that all insurance policies taken out at the level of the Group Companies (excluding the Seller’s Group) providing cover for risks relating to the Seller’s Group business remain in force after Completion on a month-by-month basis (but otherwise on the same terms), provided that the Purchaser shall not be obligated to ensure such continuation for a period longer than one month.

10.5.4

In respect of such continued insurance policies:

(a)

the Seller shall procure that the relevant members of the Seller’s Group continue to pay to the relevant Group Companies (excluding the Seller’s Group) the usual related insurance premiums or the pro rata part thereof usually charged to them;

(b)

the Purchaser shall, to the extent the relevant members of the Seller’s Group are not entitled to notify, make or pursue claims under such insurance policies, ensure that the relevant Group Companies (excluding the Seller’s Group) shall, at the costs of the relevant members of the Seller’s Group, take such steps as the relevant members of the Seller’s Group reasonably require in that respect; and

(c)

the Purchaser shall procure that the Group Companies as soon as reasonably possible pay to the relevant members of the Seller’s Group any proceeds relating to claims made by or on behalf of any such members of the Seller’s Group as well as any rebate of premium received as a consequence of such members of the Seller’s Group ceasing to be insured under any such policies at any point in time after Completion.

10.6

Termination of use of names

10.7

Waiver liability regarding deed of transfer property

10.8

Bonuses and retention payments

10.9

Protective covenants

10.9.1

The Seller hereby undertakes to the Purchaser that it shall not, and shall procure that neither any of the members of the Seller’s Group nor any of its Affiliates will, for a period of 2 (two) years after Completion, in any way (whether directly or indirectly and in whatever capacity), except with the Purchaser’s prior written consent:

(a)

have an interest in, be engaged in, or be financially concerned with, any business involving the development or production of, or the trading in, any products developed, produced or traded by, or the provision of services developed or provided by, the Group Companies as at the Completion Date or which competes therewith, in a country in which the Group Companies carry on their business at the Completion Date;

(b)

persuade, cause or attempt to persuade any distributor, commercial agent, employee or independent contractor of, or natural person engaged on the basis of a management or similar agreement by, any Group Company, to terminate its relationship with such Group Company, or employ or engage any such person within 1 (one) year after the effective termination of such person’s relationship with such Group Company;

(c)

persuade, cause or attempt to persuade any customer of any Group Company to terminate its relationship with such Group Company, including by seeking to obtain orders from, or offering goods or services to, any person who has been a customer of any Group Company within 12 (twelve) months immediately preceding the Completion Date;

(d)

persuade, cause or attempt to persuade any supplier of any Group Company to terminate its relationship with such Group Company, including by soliciting or enticing away from any Group Company any supplier who supplied goods or services to such Group Company within 12 (twelve) months immediately preceding the Completion Date; or

(e)

persuade, cause or attempt to persuade any other person doing business with any Group Company to terminate its relationship with such Group Company, or knowingly take any action that may result in the impairment of such relationship.

10.9.2

The Purchaser acknowledges and agrees that Clause 10.9 does not apply to any activities performed by Mr. H.A. Veth under the Employment Agreement or an employment agreement or other similar services agreement with a Group Company after Completion.

10.9.3

The consideration for the Seller’s obligations under Clause 10.9.1 is included in the Purchase Price.

10.9.4

In the event of a breach of Clause 10.9.1 which is not remedied within 5 (five) Business Days after the Purchaser has notified the Seller in writing of such breach, the Seller shall pay to the Purchaser an amount equal to EUR 25,000 (twenty-five thousand euro) per breach, to be increased by EUR 1,000 (one thousand euro) for each day such breach continues, as a penalty (and not in lieu of damages), without prejudice to any other rights or remedies available to the Purchaser, including a claim for damages.

11

WARRANTIES

11.1

Seller’s Warranties

11.1.1

The Seller hereby warrants to the Purchaser that each of the statements included in Schedule 11.1.1 (the Seller’s Warranties) is true and accurate on the date of this Agreement and each of the Fundamental Warranties and the statements included in paragraph 7 (Conduct of business) of Schedule 11.1.1 is true and accurate on the Completion Date.

11.1.2

The Seller acknowledges that the Purchaser is entering into this Agreement on the basis of and in reliance on the Seller’s Warranties and that Clause 11.1.1 reflects a negotiated allocation of risks between the Parties.

11.1.3

The Seller's Warranties are the only representations and warranties given by the Seller or any other member of the Seller's Group (whether express or implied) in connection with the Transaction.

11.1.4

Any disclosure against or qualification of any of the Seller’s Warranties through the Disclosed Information, shall be deemed to be a disclosure against or qualification of all of the Seller’s Warranties.

11.2

Purchaser’s Warranties

12

BREACH

13

Claims

13.1

Notification of claims

13.2

Claims capable of remedy

13.3

Third Party Claims

13.3.1

If the Purchaser is notified or becomes aware of any fact, matter, circumstance or event which has given rise to a claim against any member of the Purchaser’s Group (a Third Party Claim) and which, in turn, has given rise to a Breach, other than a Tax Claim in relation to which paragraph 5 of Schedule 16 shall apply instead:

(a)

the Purchaser shall and shall procure that the relevant Group Companies shall prior to any action to be conducted in connection with the Third Party Claim, notify the Seller thereof in accordance with Clause 13.1 and discuss with the Seller the most appropriate course of action to be taken and will negotiate in good faith to agree on the steps to be taken regarding the defense and control of the Third Party Claim;

(b)

in setting out their course of action for the defense and control of such Third Party Claim, the Purchaser and the Seller will use their reasonable endeavours to strike a fair balance between the interests of the Seller in keeping the Damages in connection with the Third Party Claim as low as possible and the interests of the Purchaser and the Group Companies to maintain good business relations with the third party concerned;

(c)

if the Parties do not agree on the course of action for defense of the Third Party Claim, the Seller shall be entitled to inform Purchaser that it wishes to pursue the conduct of the Third Party Claim within 10 (ten) Business Days following the conclusion of Parties on their disagreement on the course of action for the conduct of the Third Party Claim. If Seller does not wish to pursue the conduct of the Third Party Claim, Purchaser is entitled to do so. The Party that shall pursue the conduct of the Third Party Claim (the Practitioner), shall use its best efforts to strike a fair balance between the interests of the Seller in keeping the Damage in connection with the Third Party Claim as low as possible and the interests of the Purchaser and the Group Companies to maintain good business relations with the third party concerned;

(d)

in the conduct of the Third Party Claim, the Practitioner and the Group Companies shall always act in good faith and with reasonable prudence to minimize the Damages in connection with the Third Party Claim;

(e)

the Practitioner shall and shall procure that the Group Companies shall not (i) admit any liability or acknowledgement of standpoint or (ii) waive any defence, or (iii) reach any agreement, settlement or compromise, concerning such Third Party Claim, without Seller's prior written consent (which consent not to be unreasonably withheld); and

(f)

the Practitioner shall and shall procure that the Group Companies shall (i) keep the Parties promptly informed on the status and the progress of each aspect of the Third Party Claim throughout the process and development of the Third Party Claim, (ii) provide the Parties with copies or details (if not in writing) of communications and received information concerning the Third Party Claim which are reasonably required for the Parties, (iii) invite the other Party (or its own selected counsel or Representative) to participate in meetings and telephone conferences and the like and (iv) provide a draft of any prepared correspondence or documentation in connection with the conduct of the Third Party Claim to the other Party for input prior to sending or submitting the correspondence or documentation to the third party and incorporate the other Party’s input in those drafts.

13.4

No claims against employees

14

LIMITATION OF LIABILITY

14.1

Disclosures and knowledge

14.2

General exclusions

(a)

any change after Completion in accounting policies, bases, practices, group structure or methods applied in preparing any accounts or valuing any assets or liabilities of any Group Company; or

(b)

any change or enactment of Law coming into effect after the Completion Date (whether or not taking effect retroactively).

14.3

Overall time limitation

(a)

before the 4^th (fourth) anniversary of the Completion Date where any Breach of the Fundamental Warranties is concerned;

(b)

before the date that is 6 (six) months after the last day on which a Tax Authority can claim the underlying Tax from any Group Company where any Tax Claim is concerned; and

(c)

before the date that is 15 (fifteen) months after the Completion Date where any other Breach is concerned.

14.4

Minimum claims

(a)

the amount of the claim concerned or of a series of related claims exceeds EUR 10,000 (ten thousand euro); and

(b)

the aggregate amount of all claims for Breach that are not excluded by Clause 14.4(a) exceeds EUR 50,000 (fifty thousand euro), in which case the Seller shall be liable for the full amount and not merely the excess.

14.5

Maximum liability

14.6

General reductions

(a)

any amount recovered (net of any Tax arising in respect thereof (or any Tax which would arise but for the availability of any Relief) by or benefit accruing to the Purchaser or any of the Group Companies from any third party, including an insurer, in respect of the matter that gave rise to such Breach;

(b)

the amount of any Tax Benefit arising to a Group Company that arises as a direct result of the underlying facts giving rise to the Breach;

(c)

the amount of any allowance, provision or reserve (other than in respect of deferred Tax) in respect of the fact, matter, circumstance or event giving rise to such Breach which has specifically been made in the Completion Accounts, as amended pursuant to Clause 4 finally agreed; and

(d)

the amount of the Damages that have increased as the result of any act or omission of the Purchaser or any of the Group Companies after Completion.

14.7

Obligation to mitigate

14.8

No double recovery

14.9

No limitations of liability

14.10

Termination of liability

15

SPECIFIC INDEMNITIES

(a)

the transfer of the shares in the capital of the Subsidiaries to the Company;

(b)

the transfer of the real estate and other assets as listed in the EY/HVG Step Plan from Exploitatiemaatschappij Veth B.V. to an entity controlled by the Seller;

(c)

the part of the contribution by Veth Propulsion B.V. to Rederij Jules Verne B.V. in the amount of EUR 150,000 (one hundred and fifty thousand euro) for the purposes of funding the sale of the Partycruiser Jules Verne which is not repaid to Veth Propulsion B.V. by Rederij Jules Verne B.V. pursuant to article 7, second indent, Samenweringsovereenkomst “Inruilgarantie Jules Verne” dated 21 April 2017, from which amount EUR 60.000 will be subtracted in connection with the benefits obtained in the same amount by the Group Companies pursuant to the Samenweringsovereenkomst “Inruilgarantie Jules Verne” dated 21 April 2017; and

(d)

a claim from Seller to Exploitatiemaatschappij Veth B.V. pursuant to the statements in articles 7 (Bodemonderzoek/ondergrondse tanks/asbest) and Garanties as included on pages 5 and 6 of the deed of transfer between Exploitatiemaatschappij Veth B.V. and Seller dated 25 May 2018 numbered 2018034201 regarding the sale and purchase of real property.

16

TAX

17

Confidentiality and announcements

17.1

Confidential Information

17.1.1

Subject to Clause 17.2, each Party shall, and shall procure that its Representatives and each other person to whom it discloses Confidential Information or to whom Confidential Information is disclosed at its request, shall keep confidential and not disclose or make available to anyone:

(a)

the existence or contents of the Transaction Documents, including this Agreement and any ancillary documents;

(b)

the subject matter or process of negotiations or any disputes between the Parties in connection with the Transaction;

(c)

in case of the Seller, Alnoseju Beheer B.V., Jaco B.V. or DS Unctoh B.V., any information of a secret, confidential or commercially sensitive nature or not generally known to the public with respect to Purchaser's Group received or held by the Seller, Alnoseju Beheer B.V., Jaco B.V. or DS Unctoh B.V. or any of their Representatives which relates to the Purchaser’s Group or, following Completion, any of the Group Companies or their respective businesses; or

(d)

in case of the Purchaser, any information of a secret, confidential or commercially sensitive nature received or held by the Purchaser or any of its Representatives which relates to the Seller’s Group or, prior to Completion, any of the Group Companies or their respective businesses;

17.1.2

Each of the Parties shall, or shall procure that each of its Representatives and other persons to whom it disclosed Confidential Information shall, on reasonable written demand from the other Party, immediately and at its own cost and expense, without keeping copies, (i) return to the other Party, all documents containing Confidential Information made available to it by (or on behalf of) the other Party or any of the other Party’s Representatives, (ii) destroy all reports, analyses, compilations, studies or other materials which contain or have been derived from or otherwise reflect any Confidential Information, (iii) expunge all Confidential Information from any of its computers or other devices containing Confidential Information, and (iv) upon request by the other Party, deliver to the other Party a certificate signed by it confirming that the obligations contained in this Clause 17.1.2 have been complied with, provided that each of the Parties may retain any Confidential Information as may be required by Law.

17.2

Permitted disclosures of Confidential Information

17.2.1

A Party may disclose Confidential Information only:

(a)

with the prior written approval of the other Party;

(b)

to the extent required by Law (including the regulations of any relevant stock exchange as applicable to either Party or its Affiliates) or pursuant to an order of a Governmental Entity;

(c)

to any Tax Authority in connection with the Tax affairs of the Purchaser or any Group Company (or as otherwise required to be disclosed by any Tax Law);

(d)

to the extent required for the purposes of fulfilling its obligations under this Agreement, the Employment Agreement or any other Transaction Documents;

(e)

to the extent reasonably required to conduct the defence of a claim or to enforce any rights or to exercise any remedies under the Transaction Documents, including this Agreement or any related agreement;

(f)

to that Party’s Representatives or Affiliates, but only to the extent necessary and provided that before any such disclosure is made, the person to whom such disclosure will be made is informed of the terms of this Clause and instructed to adhere to those terms as if such person were bound by them;

(g)

to a person that has the intention to assume rights or obligations of such Party under and in accordance with this Agreement, but only to the extent necessary and provided that before any such disclosure is made, the person to whom such disclosure will be made is informed of the terms of this Clause and instructed to adhere to those terms as if such person were bound by them;

17.2.2

The Parties acknowledge that the Purchaser (or any of its Affiliates) is required by Law to disclose the content of this Agreement as part of their 8K-filing as a result of which such disclosure is permitted under this Agreement. By signing this Agreement, the Parties agree that no further notifications in this respect are required to be made by the Purchaser to the Seller and the Purchaser will be entitled to disclose the content of this Agreement as part of their 8K-filing on the date of this Agreement.

17.3

Announcements

18

TERMINATION

18.1

Events of termination

(a)

at any time by mutual agreement between the Parties with immediate effect; or

(b)

by the Purchaser in accordance with Clause 7.4 (Non-satisfaction of any Condition Precedent).

18.2

Consequences of termination

18.2.1

Termination of this Agreement shall not affect the accrued rights and obligations of the Parties at that time, nor the continued validity of the provisions of Clauses 1 (Definitions and interpretation) and 17 (Confidentiality and announcements), this Clause 18 (Termination), and Clauses 19.2 (Costs and expenses), 19.3 (Payments), 19.4 (Assignment), 19.5 (Entire agreement), 19.6 (Remedies), 19.7 (Waiver and variation), 19.8 (No third party beneficiaries), 19.9 (Severability), 19.10 (Notices), 19.11 (Notarial independence), 19.12 (Governing law and jurisdiction), and 19.13 (Counterparts).

18.2.2

To the extent any of the obligations under this Agreement were performed prior to termination of this Agreement, the Parties shall reverse any performance already received.

19

MISCELLANEOUS

19.1

Further assurances

19.2

Costs and expenses

19.2.1

Except as otherwise provided in this Agreement or any other Transaction Documents, each Party shall pay its own costs and expenses relating to the negotiation, preparation and execution by it of this Agreement and any other Transaction Documents and the fulfilment of its obligations hereunder.

19.2.2

The costs and expenses of the Deed of Transfer and other notarial documents required to give effect to the transfer of the Shares shall be borne by the Purchaser.

19.3

Payments

19.3.1

Except as otherwise provided in this Agreement, all payments to be made hereunder shall be made in euro by way of electronic transfer in immediately available funds on or before the due date for payment and for the same day value:

(a)

if to the Seller, to the Seller’s Account;

(b)

if to the Purchaser, to the Purchaser’s Account

(c)

if to the Escrow Agent, to the Escrow Account; and

(d)

if to the Notary, to the Notary Account.

19.3.2

Except as otherwise provided in this Agreement, if a Party defaults in the payment, when due, of any sum payable under this Agreement, it shall pay statutory interest on the basis of Section 6:119 DCC at the then applicable rate on that sum from the date on which payment is due up to and including the date of actual payment, which interest shall accrue from day to day and be compounded monthly.

19.3.3

Where any payment is made under this Agreement (other than the payment of the Purchase Price itself or of the Intercompany Debt, that payment shall, to the extent possible, be treated as an adjustment of the Purchase Price equal to any such amount and be treated accordingly by the Parties in all relevant respects.

19.3.4

Subject to Clause 19.2.2, all payments made by a Party under this Agreement shall be made free from any counterclaim or set-off and without deduction or withholding of any Tax other than Taxes to be deducted or withheld by Law. If a Party is required by Law to make a deduction or withholding in respect of any sum payable under this Agreement, such sum shall be increased to the extent necessary to ensure that, after the making of any such deduction or withholding, the other Party receives the full amount which would have been received but for such deduction or withholding.

19.3.5

If any payment to a member of the Purchaser’s Group under this Agreement is or becomes subject to Tax in the hands of the recipient, the amount paid shall be increased to ensure that the net amount received by the recipient after such Tax is equal to the amount which would have been received by the recipient had the payment not been subject to Tax.

19.4

Assignment

19.4.1

Subject to Clauses 19.4.2, 19.4.3 and 19.4.4 the rights and obligations of a Party under this Agreement cannot be assigned, otherwise transferred (whether directly or indirectly) or Encumbered, without the prior written consent of the other Party.

19.4.2

The Purchaser may assign its rights and transfer its obligations under this Agreement to:

(a)

any of its Affiliates, provided that the Purchaser shall remain liable on a joint and several (hoofdelijke) basis for the due and proper fulfilment by such Affiliate of all obligations under this Agreement; or

(b)

a purchaser of the Business (or any part thereof) or any of the Assets;

19.4.3

Any receivables (vorderingen) of the Purchaser under this Agreement, and for the avoidance of doubt only such receivables, can and may be assigned or pledged in connection with the financing of the Transaction. The Seller shall countersign any notice of pledge in this respect. The Seller hereby grants its prior written approval to the Purchaser to disclose this Agreement to any of the Purchaser’s financiers, provided that before any such disclosure is made, such financiers are informed of the terms of Clause 17.1 and instructed to adhere to those terms as if they were bound by them, it being understood that such financiers will be entitled to disclose the same to any office, registrar or Governmental Entity (including the Dutch tax authorities) in any jurisdiction for purposes of perfection or execution of such assignment or pledge.

19.4.4

The Seller may assign its right in respect of the Earn-Out (if any) under this Agreement once the Earn-Out has become payable to Alnoseju Beheer B.V., Jaco B.V. and DS Unctoh B.V. in the proportions of their shareholdings held in the Seller on the date of this Agreement provided that the Seller shall notify the Purchaser thereof in writing and the Purchaser hereby irrevocably grants its consent, in advance, to the Seller for purposes of such assignment, provided that:

(a)

the Seller shall remain (i) up to the moment on which the securities in the capital of Twin Disc, Incorporated have been acquired by Alnoseju Beheer B.V., Jaco B.V. and DS Unctoh B.V. liable on a joint and several basis for the due and proper fulfilment by each of Alnoseju Beheer B.V., Jaco B.V. and DS Unctoh B.V. of all its obligations under this Agreement and (ii) the sole person of contact for the Purchaser under this Agreement; and

(b)

no change of Control in Alnoseju Beheer B.V., Jaco B.V. and DS Unctoh B.V, respectively, has occurred after the date of this Agreement.

19.4.5

Any purported assignment, transfer or Encumbrance in breach of this Clause 19.4 shall be null and void.

19.5

Entire agreement

19.6

Remedies

19.7

Waiver and variation

19.7.1

Except as otherwise provided in this Agreement, no omission or delay on the part of any Party in exercising any right or remedy under this Agreement or by Law shall be construed as a waiver thereof or of any other right or remedy, nor shall prejudice or impair any further exercise of such or any other right or remedy. Any single or partial exercise of any right or remedy under this Agreement or by Law shall not preclude the further or any future exercise thereof or of any other right or remedy.

19.7.2

A waiver of any right or remedy under this Agreement shall only be effective if given in writing and executed by or on behalf of the Party giving the waiver, and shall not be deemed a waiver of any right or remedy in respect of any subsequent breach or default.

19.7.3

An amendment of or supplement to this Agreement shall only be valid if it is in writing and duly signed by or on behalf of the Parties.

19.8

No third party beneficiaries

19.9

Severability

19.10

Notices

19.10.1

Any communication to be made under or in connection with this Agreement, including any notice to be given by a Party to the other Party, shall be in writing and in English, and unless otherwise provided in this Agreement, may be by letter or email.

19.10.2

The (email) address and the company, department or officer, if any, for whose attention the communication is to be made of each Party for purposes of any communication under or in connection with this Agreement is that identified in this Clause 19.10.2 or any substitute (email) address or company, department or officer as a Party may notify the other Party by not less than 5 (five) Business Days' notice.

19.10.3

Any notice shall be delivered by hand or courier, or sent by registered post, and shall be deemed to have been received:

(a)

in the case of delivery by hand or courier service, at the time of delivery;

(b)

in the case of registered post, on the 3^rd (third) Business Day following the date of posting; and

(c)

in the case of email, on the date and time transmitted, as evidenced by confirmation of delivery by a delivery receipt.

19.10.4

Any notice not received on a Business Day or received after 17:00 on any Business Day in the place of receipt shall be deemed to be received at the start of the following Business Day in the place of receipt.

19.11

Notarial independence

(a)

the Notary shall execute any notarial deeds and other relevant Transaction Documents related to this Agreement; and

(b)

the Purchaser is and may in future be assisted and represented by Loyens & Loeff N.V. in relation to this Agreement and any documents that may be concluded, or disputes that may arise, in connection therewith.

19.12

Governing law and jurisdiction

19.12.1

This Agreement (for the avoidance of doubt including the provisions of Clause 19.12.2) and any non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with the laws of the Netherlands.

19.12.2

Except as expressly otherwise provided in this Agreement (e.g. in case the independent expert procedure pursuant to Clause 4.2.3 applies), any disputes arising out of or in connection with this Agreement, including regarding the existence or validity of this Agreement, and any non-contractual obligations arising out of or in connection with this Agreement, shall be referred to and finally resolved by arbitration under the rules of the Netherlands Arbitration Institute (Nederlands Arbitrage Instituut) (NAI), taking into account the following:

(a)

the number of arbitrators shall be 3 (three) of which at least one shall be a lawyer with a Dutch law degree or admitted to practice Dutch law, and shall be appointed in accordance with Section 13 of the NAI rules;

(b)

the seat of the arbitration shall be Amsterdam, the Netherlands;

(c)

the language of the arbitration shall be English;

(d)

the arbitrators shall decide according to the rules of law;

(e)

consolidation of the arbitral proceedings with other arbitral proceedings pending in the Netherlands, as provided for in Section 1046 of the Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering) and in Section 39 of the NAI rules, is excluded; and

(f)

the arbitral award shall not be disclosed other than to the Parties to the arbitration proceedings, not even on an anonymous basis, and the Parties agree to take all action reasonably required to prevent any such disclosure.

19.13

Counterparts

___________________________

Name:

Mr. H.A. Veth

Title:

Director

Signed for and on behalf of Alnoseju Beheer B.V. by,

___________________________

Name:

H.A. Veth

Title:

director

Signed for and on behalf Jaco B.V. by,

___________________________

Name:

J. Veth

Title:

director

Signed for and on behalf DS Unctoh B.V. by,

___________________________

Name:

C.J. Veth

Title:

director

___________________________

Name:

J.H. Batten

Title:

Proxy holder

___________________________

___________________________

Name:

H.A. Veth

Name:

J. Veth

___________________________

Name:

C.J. Veth

Company name 

Veth Propulsion Holding B.V.

Form of company

Dutch private limited liability company

Registered number 

71870369

Registered office

Nanegat 17, 3356 AA, Papendrecht

Date of incorporation

12 June 2018

Managing directors

H.A. Veth

Registered proxy holders

N/A

Authority to represent the company

The general managers individually

Share capital

Issued

EUR 18,000

Paid up

EUR 18,000

Shares

Nominal value

EUR 100

Classes

Ordinary shares

Shareholders and shares held

Het komt vast goed B.V. (100%)

Financial year

Calendar year

Company name 

Exploitatiemaatschappij Veth B.V.

Form of company

Dutch private limited liability company

Registered number 

23071520

Registered office

Papendrecht

Date of incorporation

25 March 1993

Managing directors

●   Mr. Jan Veth; and

●   Mr. Erik Veth.

Registered proxy holders

Marco Gerrit Huisman (up to EUR 75,000)

Authority to represent the company

Each managing director individually

Share capital

Issued

EUR 18,152

Paid up

EUR 18,152

Shares

Nominal value

EUR 453.80

Classes

Ordinary shares

Shareholders and shares held

Het komt vast goed B.V.: 40 shares

Financial year

Calendar year

Company name 

Veth Diesel B.V.

Form of company

Dutch private limited liability company

Registered number 

23072995

Registered office

Papendrecht

Date of incorporation

19 September 1993

Managing directors

●   Mr. Jan Veth; and

●   Mr. Erik Veth.

Registered proxy holders

N/A

Authority to represent the company

Each managing director individually

Share capital

Issued

EUR 18,152

Paid up

EUR 18,152

Shares

Nominal value

EUR 453.80

Classes

Ordinary shares

Shareholders and shares held

Het komt vast goed B.V.: 40 shares

Financial year

Calendar year

Company name 

Veth Electra B.V.

Form of company

Dutch private limited liability company

Registered number 

24414585

Registered office

Papendrecht

Date of incorporation

3 May 2007

Managing directors

Mr. Erik Veth

Registered proxy holders

N/A

Authority to represent the company

Each managing director individually

Share capital

Issued

EUR 32,400

Paid up

EUR 32,400

Shares

Nominal value

EUR 180

Classes

Ordinary shares

Shareholders and shares held

Het komt vast goed B.V.: 180 shares

Financial year

Calendar year

Company name 

Veth Propulsion B.V.

Form of company

Dutch private limited liability company

Registered number 

23071521

Registered office

Papendrecht

Date of incorporation

23 March 1993

Managing directors

●   Mr. Jan Veth; and

●   Mr. Erik Veth.

Registered proxy holders

●   Mr. Marco Huisman (up to EUR 500,000); and

●   Mr. Willem Clausing (signing export documents).

Authority to represent the company

Each managing director individually

Share capital

Issued

EUR 18,152

Paid up

EUR 18,152

Shares

Nominal value

EUR 453.80

Classes

Ordinary shares

Shareholders and shares held

Het komt vast goed B.V.: 40 shares

Financial year

Calendar year

Company name 

Veth Thrusters B.V.

Form of company

Dutch private limited liability company

Registered number 

24313395

Registered office

Papendrecht

Date of incorporation

30 November 2000

Managing directors

●   Mr. Jan Veth; and

●   Mr. Erik Veth.

Registered proxy holders

N/A

Authority to represent the company

Each managing director individually

Share capital

Issued

EUR 18,000

Paid up

EUR 18,000

Shares

Nominal value

EUR 100

Classes

Ordinary shares

Shareholders and shares held

Het komt vast goed B.V.: 180 shares

Financial year

Calendar year

Currency: EUR in millions

Illustrative
Dec-17

Completion

accounts

Account description (English translation)

Account description (GL)

Cash on hand

Kas

0.0

[ ]

Cash on hand FX

Kas Vreemde Valuta's

0.0

[ ]

ING bank (inz. Scylla Tours)

ING bank (inz. Scylla Tours)

- 

[ ]

ING bank (ST) 671.892.541 dep.

ING bank (ST) 671.892.541 dep.

- 

[ ]

ING bank (ST) 671.918.133 dep.

ING bank (ST) 671.918.133 dep.

- 

[ ]

Rabobank 1023.57.42.76

Rabobank 1023.57.42.76

- 

[ ]

Rabobank 3930 12.123 

Rabobank 3930 12.123 

0.0

[ ]

Suspense accounts Rabobank/ING

Tussenrekening rabobank/ING

- 

[ ]

Pledged bankguarantees

Verpanding bankgaranties

- 

[ ]

Rabobank savings accounts

Rabobank spaarrekening

- 

[ ]

Rabobank savings account 1334829756

Rabobank spaarr 1334829756

- 

[ ]

Rabobank deposito 123552540

Rabo depositorek 123552540

- 

[ ]

Deposits

Deposito's

- 

[ ]

Rabobank internet savingsaccounts

Rabobank internetsparen

- 

[ ]

ING bankguarantees

ING bankgaranties

- 

[ ]

USD Rabobank

$ rekening Rabobank

- 

[ ]

USD Rabobank FX diff

$ rekening Rabobank koersv.

- 

[ ]

USD ING bank

$ rekening ING

0.1

[ ]

RMB ING bank

Rmb rekening ING

0.1

[ ]

Postgiro bank

Postgiro

- 

[ ]

ING bank

ING bank 66.182.60

0.1

[ ]

ING savings account 6718

ING spaar zakelijk 6718

- 

[ ]

ING savings account 1666

ING spaar bonus 1666

- 

 [ ]

Investments

Beleggingen

- 

[ ]

Current accounts 

Current accounts due to/from Seller 

 [0.6 ] 

[ ]

Cash <c>

0.9 

[ ]

Currency: EUR in millions

Illustrative
Dec-17

Completion

accounts

Account description (English translation)

Account description (GL)

Current accounts

Vorderingen VMH agv proforma opstelling

-

[ ]

Corporate income tax accured and unpaid

Vennootschapsbelasting

- 

[ ]

Dividend payables

 -

 [ ]

Transaction cost payable

 -

 [ ]

Any bonus payable in relation to the transaction

 -

 [ ]

Any interest or breakage fees 

 -

 [ ]

Financial debt <d>

-

[ ]

Currency: EUR in millions

Illustrative
Dec-17

Completion

accounts

Account description (English translation)

Account description (GL)

Invoices to be received

Te ontvangen goederenfacturen

0.2

[ ]

Work in progress (inventory)

Onderhanden werk (voorraad)

0.5

[ ]

Unallocated internal projects

Te verdelen interne projecten

- 

[ ]

Veth-jet parts

Voorraad veth-jet onderdelen

1.5

[ ]

Compact-Jet parts

Voorraad compact-jet delen

0.5

[ ]

Z-drive parts

Voorraad z-drive onderdelen

5.2

[ ]

Additional scope spare parts

Voorraad scope extra artikelen

0.4

[ ]

Hydraulic parts

Voorraad hydrauliek onderdelen

0.3

[ ]

Mechanical seals

Voorraad lagers en seals

0.7

[ ]

Ballast pump parts

Voorraad ballastpomp onderd.

0.1

[ ]

Scania parts

Voorraad scania onderdelen

0.8

[ ]

Sisu-diesel parts

Voorraad sisu-diesel onderd.

0.3

[ ]

Capitol parts

Voorraad capitol onderdelen

0.0

[ ]

Electronic parts

Voorraad electra onderdelen

1.4

[ ]

Electronic nv parts

Voorraad electra nv

0.1

[ ]

Fitwerk' parts

Voorraad fitwerk

0.1

[ ]

Bow rudder parts

Voorraad onderdelen koproeren

0.0

[ ]

Spude pole parts

Voorraad spudpaal onderdelen

0.1

[ ]

Spare parts

Voorraad onderdelen

0.6

[ ]

Spare parts nv

Voorraad onderdelen nv

0.1

[ ]

Packaging material

Voorraad verpakkingsmateriaal

0.0

[ ]

Returnable parts

Statiegeld

0.0

[ ]

Obsolete stock provision

Voorz. incourante voorraad

(1.7)

[ ]

Projects to be capitalised

Te activeren tbv projecten

- 

[ ]

Purchases to be invoiced (projects)

Ntf inkopen voor projecten

(0.0)

[ ]

Purchases project diesel

Inkoop project diesel

- 

[ ]

Purchases electra

Inkoop project electra

- 

[ ]

Purchases veth-jet/vp/cj

Inkoop project veth-jet/vp/cj

 - 

[ ]

Purchases z-drive/tunnel

Inkoop project z-drive/tunnel

 - 

[ ]

Inventory adjustments

-

[ ]

Stock count differences

-

[ ]

Inventory

11.0

[ ]

Debtors (Netherlands)

Debiteuren binnenland

3.7

[ ]

Debtors (EU)

Debiteuren eu

0.9

[ ]

Debtors (export)

Debiteuren export

0.9

[ ]

Debtors to be invoiced

Nog te factureren goederen

0.0

[ ]

Provision for doubtful debtors

Reserv. dubieuze debiteuren

(0.1)

[ ]

Trade debtors

5.4

[ ]

Creditors (Netherlands)

Crediteuren binnenland

(1.2)

[ ]

Creditors (EU)

Crediteuren eu

(0.2)

[ ]

Creditors (export)

Crediteuren export

(0.1)

[ ]

Creditors in transit

Crediteurenbet. onderweg

- 

[ ]

Trade creditors

(1.5)

[ ]

VAT payable 19%

Af te dragen btw 19%

- 

[ ]

VAT receivable 19%

Te vorderen btw 19%

- 

[ ]

VAT payable 

Af te dragen btw

- 

[ ]

VAT payable low rate

Af te dragen btw laag

 - 

[ ]

VAT receivable

Te vorderen btw

- 

[ ]

VAT receivable low rate

Te vorderen btw laag

- 

[ ]

Received/paid VAT

Terug ontvangen/betaalde btw

0.6

[ ]

VAT EU

Verleggingsrekening btw eu

- 

[ ]

VAT EU 19%

Verleggingsrekening btw eu 19%

- 

[ ]

VAT payable 21%

Af te dragen btw 21%

- 

[ ]

VAT receivable 21%

Te vorderen btw 21%

0.0

[ ]

VAT doubtful accounts

Btw dubieuze debiteuren

0.0

[ ]

VAT personal spendings

Te verdelen btw prive

- 

[ ]

VAT balance

0.6

[ ]

Holliday money 

Reservering vakantietoeslag

(0.5)

[ ]

Social securities employee and employer

Sociale lasten wn+wg (ingeh)

 - 

[ ]

Pension premium paid

Betaalde premies mn

1.2

[ ]

Pension premium paid (withheld)

Ingehouden premies mn

(1.2)

[ ]

Wage taxes payable

Loonheffing tb

(0.1)

[ ]

Health insurance premium payable

Premie ziektekostenverzekering

0.1

[ ]

Suspense account wages payable

Tussenrek. te verr. met lonen

 0.0

[ ]

Suspense account pv

Tussenrekening pv

- 

[ ]

Wages payable

Uit te betalen lonen

- 

[ ]

Other wage amounts payable

Te verdelen tantieme

(0.1)

[ ]

Social securities balance

(0.6)

[ ]

Prepaid fiinscrew

Vooruitbetaald fiinscrew

0.0

[ ]

Prepaid duritcast

Vooruitbetaald duritcast

0.0

[ ]

Amounts in transit

Kruisposten

0.0

[ ]

General insurance receivable/payable

Te verdelen alg verzekering

0.1

[ ]

Car insurance receivable/payable

Te verdelen autoverzekering

0.0

[ ]

Ohc

Te verdelen ohc

0.0

[ ]

Other prepaid/receivables

Te ontv./vooruitbet. bedragen

0.0

[ ]

Other receivables

0.3

[ ]