1
EXHIBIT 2.2
-----------
KREBSOGE STOCK PURCHASE AGREEMENT
by and between
▇▇▇▇ HOLDING AG
as Seller
and
SINTER METALS, INC.
as Buyer
2
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS............................................................. -1-
ARTICLE II PURCHASE AND SALE OF SHARES AND OTHER SHARES............................ -7-
2.1 Sale, Purchase, Transfer, Assignment and
Acceptance (schuldrechtliches und dingliches
Rechtsgeschaft)................................................................ -7-
2.2 Profits........................................................................ -7-
2.3 Consideration.................................................................. -7-
2.4 Indemnity Escrow Account....................................................... -7-
ARTICLE III REPRESENTATIONS AND WARRANTIES
CONCERNING SELLER....................................................... -9-
3.1 Organization and Good Standing................................................. -9-
3.2 Authority of Seller............................................................ -9-
3.3 No Conflict or Breach.......................................................... -9-
3.4 Consents and Approvals......................................................... -10-
3.5 Share Ownership................................................................ -10-
3.6 Financial Advisors............................................................. -11-
ARTICLE IV REPRESENTATIONS AND WARRANTIES CONCERNING THE
COMPANY AND SUBSIDIARIES................................................ -11-
4.1 Organization and Good Standing................................................. -11-
4.2 Capitalization................................................................. -11-
4.3 Subsidiaries................................................................... -12-
4.4 No Conflict or Breach.......................................................... -13-
4.5 Consents and Approvals......................................................... -14-
4.6 Financial Statements........................................................... -14-
4.7 Title to Assets................................................................ -15-
4.8 Real Property.................................................................. -15-
4.9 Contracts...................................................................... -16-
4.10 Intellectual Property.......................................................... -17-
4.11 Litigation..................................................................... -18-
4.12 Taxes.......................................................................... -18-
4.13 Environmental Protection....................................................... -18-
4.14 Labor and Employment Matters................................................... -19-
4.15 Employee Benefit Plans......................................................... -20-
4.16 Absence of Certain Changes..................................................... -21-
4.17 Insurance...................................................................... -22-
4.18 Capital Projects............................................................... -22-
4.19 Condition of Properties and Equipment.......................................... -23-
4.20 No Undisclosed Liabilities..................................................... -23-
4.21 Entirety of Business........................................................... -23-
4.22 Compliance with Laws........................................................... -23-
4.23 Completeness of Warranties..................................................... -23-
4.24 Inventory...................................................................... -23-
4.25 Receivables.................................................................... -24-
4.26 Customers and Suppliers........................................................ -24-
4.27 Indebtedness................................................................... -▇▇-
-▇-
▇
▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ AND WARRANTIES OF BUYER............................................. -25-
5.1 Organization and Good Standing............................................................. -25-
5.2 Authority.................................................................................. -25-
5.3 No Conflict or Breach...................................................................... -25-
5.4 Consents and Approvals..................................................................... -25-
5.5 [Intentionally Left Blank.................................................................. -26-
5.6 Financial Advisors......................................................................... -26-
5.7 Financing.................................................................................. -26-
ARTICLE VI COVENANTS OF SELLER................................................................. -26-
6.1 Conduct of Business........................................................................ -26-
6.2 Access and Information..................................................................... -28-
6.3 No Solicitation............................................................................ -29-
6.4 Confidentiality............................................................................ -29-
6.5 Repayment of Indebtedness.................................................................. -29-
6.6 Intentionally Left Blank................................................................... -30-
6.7 Other Actions.............................................................................. -30-
6.8 Intentionally Left Blank................................................................... -30-
6.9 Working Capital............................................................................ -30-
6.10 Director Resignations...................................................................... -30-
6.11 Intellectual Property...................................................................... -30-
6.12 Other Assistance........................................................................... -30-
6.13 Consents................................................................................... -31-
ARTICLE VII COVENANTS OF BUYER.................................................................. -31-
7.1 Confidentiality............................................................................ -31-
7.2 Disclosure to Seller....................................................................... -31-
7.3 Management Notification.................................................................... -32-
ARTICLE VIII MUTUAL COVENANTS.................................................................... -32-
8.1 GWB Filings................................................................................ -32-
8.2 Casualty or Loss........................................................................... -32-
8.3 Further Actions............................................................................ -32-
ARTICLE IX CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS......................................... -33-
9.1 Representations and Warranties............................................................. -33-
9.2 Compliance with Covenants.................................................................. -33-
9.3 Absence of Litigation...................................................................... -34-
9.4 Antitrust Filings.......................................................................... -34-
9.5 Required Consents.......................................................................... -34-
9.6 No Injunction, etc......................................................................... -34-
9.7 Acquisition of Other Shares................................................................ -35-
9.8 Legal Opinion.............................................................................. -35-
9.9 Financing.................................................................................. -35-
9.10 Powder Metal Holding, Inc. Sale............................................................ -35-
9.11 Intentionally Left Blank................................................................... -35-
9.12 Indemnity Escrow Agreement................................................................. -35-
9.13 Intentionally Left Blank................................................................... -35-
9.14 Release or Termination of Liens............................................................ -35-
9.15 Payment of Indebtedness.................................................................... -35-
9.16 U.S. Real Property Holding Company......................................................... -36-
9.17 Swiss Opinion.............................................................................. -36-
-ii-
4
ARTICLE X CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS........................................ -36-
10.1 Representations and Warranties............................................................. -36-
10.2 Compliance with Covenants.................................................................. -36-
10.3 Absence of Litigation...................................................................... -36-
10.4 Antitrust Filings.......................................................................... -37-
10.5 No Injunction, Etc......................................................................... -37-
10.6 Legal Opinion.............................................................................. -37-
ARTICLE XI CLOSING............................................................................. -37-
11.1 Closing.................................................................................... -37-
11.2 Deliveries by Seller....................................................................... -38-
11.3 Deliveries by Buyer........................................................................ -39-
ARTICLE XII INDEMNIFICATION............................................................................ -39-
12.1 Indemnification by Seller.................................................................. -39-
12.2 Indemnification by Buyer................................................................... -40-
12.3 Notice of Claim............................................................................ -40-
12.4 Defense.................................................................................... -41-
12.5 Time for Claims (Verjahrung)............................................................... -41-
12.6 Limitation................................................................................. -42-
12.7 Characterization........................................................................... -42-
12.8 Indemnity Amounts.......................................................................... -42-
ARTICLE XIII TAX MATTERS......................................................................... -43-
13.1 Straddle Periods........................................................................... -43-
13.2 Carrybacks................................................................................. -43-
ARTICLE XIV TERMINATION......................................................................... -43-
14.1 Termination................................................................................ -43-
14.2 Effect on Obligations...................................................................... -44-
ARTICLE XV EMPLOYEES........................................................................... -45-
ARTICLE XVI MISCELLANEOUS....................................................................... -45-
16.1 Access After the Closing Date.............................................................. -45-
16.2 Payment of Expenses........................................................................ -45-
16.3 Publicity.................................................................................. -46-
16.4 Commercially Reasonable Efforts............................................................ -46-
16.5 Notices.................................................................................... -46-
16.6 Governing Law.............................................................................. -47-
16.7 German Statutory Law....................................................................... -47-
16.8 Counterparts............................................................................... -47-
16.9 Assignment................................................................................. -47-
16.10 Third Party Beneficiaries.................................................................. -48-
16.11 Headings; References....................................................................... -48-
16.12 Amendments; Waiver......................................................................... -48-
16.13 Knowledge.................................................................................. -48-
16.14 Severability............................................................................... -48-
16.15 Entire Agreement........................................................................... -48-
16.16 Arbitration; Submission to Jurisdiction.................................................... -49-
16.17 Governing Language......................................................................... -50-
-iii-
5
SCHEDULES
Schedule 1.1 - Forecast of EBIT
Schedule 3.4 - Consent and Approvals
Schedule 3.5 - Share Ownership
Schedule 4.3(a) - Direct Subsidiaries
Schedule 4.3(b) - Indirect Subsidiaries
Schedule 4.3(c) - Subsidiary Shares
Schedule 4.3(d) - Other Participation
Schedule 4.4 - No Conflict or Breach
Schedule 4.5 - Consents and Approvals
Schedule 4.8(a) - Owned Real Property
Schedule 4.8(b) - Leased Real Property
Schedule 4.9(a) - Material Contracts with Automotive
Manufacturers
Schedule 4.9(b) - Material Employment Agreements
Schedule 4.9(c) - Material Purchase Orders with Suppliers
Schedule 4.9(d) - Material Equipment Maintenance Agreements
Schedule 4.9(e) - Material Other Agreements
Schedule 4.10 - Intellectual Property
Schedule 4.11 - Litigation
Schedule 4.12 - Tax Matters
Schedule 4.13 - Environmental Protection
Schedule 4.14 - Collective Bargaining Agreement
Schedule 4.15(a) - Employee Benefit Plans
Schedule 4.15(g) - Severance Pay
Schedule 4.15(h) - Employee Benefit Plan Reserves
Schedule 4.16 - Absence of Certain Changes
Schedule 4.18 - Capital Projects
Schedule 4.19 - Properties and Equipment
Schedule 4.20 - Undisclosed Liabilities
Schedule 4.22 - Compliance with Laws
Schedule 4.23 - Materials Provided to the Buyer
Schedule 4.26 - Customer and Suppliers
Schedule 4.27 - Indebtedness
Schedule 5.4 - Consents and Approvals of Buyer
Schedule 5.7 - Financing
Schedule 6.1(e) - Alterations of Material Contracts
Schedule 6.1(k) - Conduct of Business
Schedule 6.11 - Use of Intellectual Property
-iv-
6
KREBSOGE STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (together with all Schedules and
Exhibits hereto, this "Agreement"), dated as of October 11, 1996, is entered
into by and between ▇▇▇▇ HOLDING AG, a Swiss corporation (which, together with
its successors and assigns, is herein referred to as the"Seller"), and SINTER
METALS, INC., a Delaware corporation ("the Buyer").
RECITALS:
WHEREAS, the Seller is the owner of shares representing an
aggregate stated capital (Stammkapital) of DM 29,400,000 (all such shares
hereinafter collectively being referred to as the "Shares") and SGL Carbon AG is
the owner of one share representing an aggregate stated capital (Stammkapital)
of DM 3,700,000 (all such shares hereinafter collectively being referred to as
the "Other Shares"), in KREBSOGE SINTERHOLDING GMBH, a German limited liability
company registered in the Commercial Register of the Local Court of ▇▇▇▇▇▇▇▇▇▇▇
under the registration number HRB 1430 (the "Company"), with a total stated
capital (Stammkapital) of DM 33,700,000;
WHEREAS, the Seller desires to sell, and the Buyer desires to
buy from Seller, all of the Shares and all of the Other Shares on the terms and
conditions set forth in this Agreement;
WHEREAS, simultaneously with its purchase of the Shares and
the Other Shares hereunder, the Buyer intends to purchase shares in Powder Metal
Holding, Inc., a Delaware corporation, pursuant to the Powder Metal Agreement,
which has been executed and which shall close simultaneously with this
Agreement;
WHEREAS, prior to the Closing, the Seller intends to purchase
and obtain good title to all of the Other Shares from SGL Carbon AG;
WHEREAS, in connection with or relative to this Agreement, the
Seller and Buyer have executed, delivered and performed certain Seller Ancillary
Documents and Buyer Ancillary Documents, including, without limitation, the Side
Agreement, dated as of September 26, 1996;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
"AFFILIATE" -- Has the meaning ascribed to such term in Rule
12b-2 promulgated under the Exchange Act by the United States
7
Securities and Exchange Commission, as in effect on the date hereof.
"Aggregate Consideration" defined in Section 2.3.
"ANNUALIZED EBITDA" -- (x) the quotient of (i) EBIT of the
Company and the Subsidiaries, PLUS (ii) depreciation and amortization, PLUS
(iii) all other non-cash charges not in excess of DM 1 million in the aggregate
for the period beginning on January 1, 1996 and ending on the last day of the
month immediately preceding the month in which the Closing occurs divided by the
number of months in such period multiplied by (y) 12.
"BALANCE SHEET DATE" -- June 30, 1996.
"BUYER ANCILLARY DOCUMENT" -- Each other document or agreement
executed or to be executed by the Buyer in connection with or relating to this
Agreement.
"BUYER'S COUNSEL" -- ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇ or such other
counsel as is designated by the Buyer.
"CARTEL OFFICE" -- Defined in Section 8.1.
"CERCLA" -- The Comprehensive Environmental Response
Compensation and Liability Act, as amended.
"CLOSING" -- Defined in Section 11.1.
"CLOSING DATE" -- Defined in Section 11.1.
"COMPANY" -- Krebsoge Sinterholding GmbH, a German limited
liability company.
"COMPANY ACT" -- The German Act on Limited Liability Companies
(Gesetz betreffend die Gesellschaften mit beschrankter Haftung), as amended.
"DELIVERED DOCUMENT" - All documents, lists and disclosures
delivered on October 2, 1996 by Seller to Buyer and certified by Notary ▇▇.
▇▇▇▇▇▇ as true and correct copies.
"DEUTSCHMARK" or "DM" -- German Marks.
"DIRECT SUBSIDIARIES" -- Defined in Section 4.3.
"EBIT" -- Earnings of the Company and the Subsidiaries before
interest and taxes as calculated in accordance with the principles of Swiss
Accounting and Reporting Recommendations on the basis set forth in the Company's
1996 Forecast of EBIT set forth on Schedule 1.1 excluding, however, any
non-recurring income or charges of whatever nature, all non-recurring expenses
or reductions in reserves and all reversals of accruals.
-2-
8
"EBITDA SHORTFALL AMOUNT" -- (x) the amount, if any, by which
Annualized EBITDA is less than DM 32.5 million, multiplied by (y) 6.28.
"EFFECTIVE TIME" -- Defined in Section 11.1.
"ENVIRONMENTAL LAWS" -- Any and all federal, state,
provincial, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or
Requirements of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of the environment, as
now or may at any time hereafter be in effect.
"EXCHANGE ACT" -- The Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the United States
Securities and Exchange Commission promulgated from time to time thereunder.
"FINANCIAL STATEMENTS" -- Defined in Section 4.6.
"FINANCING" -- Defined in Section 5.7.
"GERMAN GAAP" -- Generally accepted accounting principles as
in effect in the Federal Republic of Germany from time to time.
"GOVERNMENTAL AUTHORITY" -- Any nation or government, any
province or other political subdivision thereof, and any entity or person
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GWB ACT" -- The German Act Against Restraints on Competition
(Gesetz gegen Wettbewerbsbeschrankungen), as amended, and the rules and
regulations promulgated thereunder.
"HAZARDOUS MATERIALS" -- Any hazardous or toxic substances,
materials, pollutants or wastes, defined or regulated as such in or under any
Environmental Law or that could reasonably result in liability under any
Environmental Law, including crude oil petroleum and any fraction thereof.
"HSR ACT" -- The ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder.
"INCOME TAX ACT"" -- The German Income Tax Act
(Einkommenssteuergesetz), as amended.
"INDEBTEDNESS" -- As to any Person, at any time, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (whether from public or private sources) (other
than current trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), (b) any other indebtedness of
such Person
-3-
9
which is evidenced by a note, bond, debenture or similar instrument, (c) all
obligations of such Person under capitalized leases, (d) all obligations of such
Person in respect of acceptances issued or created for the account of such
Person, (e) all liabilities secured by any lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof and (f) all guarantees of any Indebtedness or obligations
referred to in clauses (a) through (e) above.
"INDEMNIFIED PARTY" -- Defined in Section 12.3.
"INDEMNITY AMOUNTS" -- Defined in Section 12.8.
"INDEMNITY ESCROW ACCOUNT" -- Defined in Section 2.4.
"INDEMNITY ESCROW AGREEMENT" -- Defined in Section 2.4.
"INDEMNITY FUND" -- Defined in Section 2.4.
"INDEMNITY FUND DATE" -- Defined in Section 2.4.
"INDEMNITY LETTER OF CREDIT" -- Defined in Section 2.4.
"INDEMNITY OBLIGOR" -- Defined in Section 12.3.
"INDIRECT SUBSIDIARY" -- Defined in Section 4.3.
"INTELLECTUAL PROPERTY" -- Defined in Section 4.10.
"LEASED REAL PROPERTY" -- The land, buildings and structures
leased by the Company or any Subsidiary, as lessee, and listed in Schedule
4.8(b), including any additions thereto or substitutions therefor.
"LOAN AGREEMENTS" -- Defined in Section 9.14.
"LOSS" -- Defined in Section 12.1.
"MATERIAL ADVERSE EFFECT" -- A material adverse effect on or
material adverse change in the business, operations, property, results of
operations or financial condition of the Seller or the Company and the
Subsidiaries, taken as a whole, or the Buyer, as the case may be, or on the
ability of the Seller, the Company and the Subsidiaries or the Buyer, as the
case may be, to consummate the transactions contemplated hereby.
"MATERIAL CONTRACTS" -- All contracts, commitments, agreements
(including agreements for the borrowing of money or the extension of credit),
leases, licenses, guarantees, understandings and obligations, whether written or
oral, to which the Company or either of the Subsidiaries are party or by which
any of them are bound except for (a) contracts with automotive manufacturers
which may be canceled by the Company or either of the Subsidiaries
-4-
10
without penalty on not more than sixty days' notice; (b) employment contracts
providing for total annual compensation below DM 100,000 and miscellaneous
service contracts terminable on not more than sixty days' notice without
penalty; (c) purchase orders with suppliers involving payment by the Company or
the Subsidiaries of amounts less than DM 375,000 in the aggregate; (d) equipment
maintenance agreements involving payment by the Subsidiaries of amounts less
than DM 375,000 per year in the aggregate; and (e) other contracts not involving
other aggregate liabilities under all such contracts exceeding DM 375,000 in any
twelve month period.
"NET INDEBTEDNESS" -- On the Closing Date, all Indebtedness of
the Company and its Subsidiaries (excluding any accrued but unpaid interest
thereon) less the Company's and the Subsidiaries' cash on hand and cash
deposited in their respective bank accounts.
"NET INDEBTEDNESS ADJUSTMENT" -- The amount by which Net
Indebtedness on the day immediately preceding the Closing Date (i) exceeds DM
117,000,000, in which case the amount of such excess shall be added to the
Purchase Price pursuant to Section 2.3 or (ii) is less than DM 113,000,000, in
which case the amount less than DM 113,000,000 shall be deducted from the
Purchase Price as provided in Section 2.3.
"NON-WHOLLY OWNED SUBSIDIARIES" -- Defined in Section 4.3.
"OFFICER'S CERTIFICATE" -- Defined in Section 12.8.
"OTHER SHARES" -- Any one or more of the Shares of the Company
owned by SGL Carbon AG in the aggregate amount of DM 3,700,000, which constitute
10.98% of the stated capital (Stammkapital) of the Company.
"OWNED REAL PROPERTY" -- The land, building and structures
owned by the Company or any Subsidiary, including any additions thereto or
substitutions therefor.
"PERSON" -- An individual, partnership, corporation, business
trust, joint stock company, limited liability company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLANS" -- (a) Employee benefit plans whether or not funded
and whether or not terminated; (b) employment agreements; and (c) personnel
policies or fringe benefit plans, policies, programs and arrangements, whether
or not funded, and whether or not terminated, including, without limitation,
stock bonus, deferred compensation, pension, severance, bonus, vacation, travel,
incentive and health, disability and welfare.
"POWDER METAL AGREEMENT" -- Defined in Section 9.9.
-5-
11
"PURCHASE PRICE" -- Defined in Section 2.3.
"REAL PROPERTY LEASES" -- Defined in subsection 4.8(b).
"REPRESENTATIVES" -- Defined in Section 7.1.
"REQUIRED CONSENTS" -- Defined in Section 4.5.
"REQUIREMENTS OF LAW" -- As to any Person, the Articles of
Association, (Gesellschaftsvertrag) Certificate of Incorporation, and By-laws or
other organizational or governing documents of such Person, and any federal,
state, local, municipal, foreign, international, multinational or other
administrative order, constitution, ordinance, law (statutory or
otherwise), treaty, rule or regulation or determination of any arbitrator or
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
"SELLER" -- ▇▇▇▇ Holding AG, a Swiss corporation, together
with its successors and assigns.
"SELLER ANCILLARY DOCUMENT" -- Each other document or
agreement executed or to be executed by the Seller, the Company or the
Subsidiaries, as the case may be, in connection with or relating to this
Agreement.
"SELLER'S COUNSEL" -- Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, or such
other counsel as is designated by Seller.
"SHARES" -- Any one or more of the shares of the Company owned
by the Seller in the aggregate amount of DM 29,400,000, which constitute 87.24%
of the stated capital (Stammkapital) of the Company.
"STOCK CORPORATION ACT" -- The German Act on Stock
Corporations (Aktiengesetz), as amended.
"SUBSIDIARIES" -- Defined in Section 4.3.
"SUBSIDIARY SHARES" -- Defined in Section 4.3.
"SURVIVAL DATE" -- Defined in Section 12.5.
"TAX OR TAXES" -- Any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes;
license, registration and
-6-
12
documentation fees; and customs duties, tariffs, and similar charges.
"TAX RETURN OR TAX RETURNS" -- Any report, return declaration
or other information, or any amendment thereof, required to be filed or supplied
in connection with any Tax.
-7-
13
ARTICLE II PURCHASE AND SALE OF SHARES AND OTHER
SHARES
2.1 SALE, PURCHASE, TRANSFER, ASSIGNMENT AND ACCEPTANCE
(SCHULDRECHTLICHES UND DINGLICHES RECHTSGESCHAFT). Under the conditions
precedent (aufschiebende Bedingungen) contained in Articles IX and X of this
Agreement, the Seller hereby agrees to sell, and to transfer and assign
ownership to the Buyer, and the Buyer hereby agrees to buy, and to accept
transfer and assignment of ownership from the Seller in respect to, all, and not
less than all, of the Shares and the Other Shares, free and clear of all claims,
liens, security interests, charges, community property interests, equitable
interests, options, pledges, rights of first refusal or restrictions or
encumbrances of any kind, including any restrictions on use, transfer, voting,
receipt of income or other attribute of ownership, other than those created by
the Buyer. The transfer and assignment of ownership (dingliche Wirkung) of the
Shares and the Other Shares by the Seller to the Buyer, and the acceptance by
the Buyer of such transfer and assignment of ownership (dingliches
Rechtsgeschaft), shall occur on the Closing Date as more closely described in
Sections 11.2 and 11.3.
2.2 PROFITS. Upon the effectiveness of the transactions
contemplated in this Agreement, the Buyer and any remaining shareholder shall be
entitled to the profits of the Company and the Subsidiaries in the current
fiscal year and in any previous fiscal year, if such previous profits have not
been distributed to the shareholders of the Company and the Subsidiaries.
2.3 CONSIDERATION. The purchase price (the "Purchase Price")
to be paid for the Shares and the Other Shares shall be an amount equal to (a)
(i) $150,000,000 (the "Aggregate Consideration") minus (ii) the sum of (x) the
principal amount of all Indebtedness of the Company and the Subsidiaries
(whether assumed by the Buyer or paid on behalf of the Seller) and (y) the
EBITDA Shortfall Amount, if any, and (iii) plus or minus, as appropriate, the
Net Indebtedness Adjustment, if any, as appropriate multiplied by (b) a
fraction, the numerator of which shall be the aggregate stated capital
(Stammkapital) of the Shares and the Other Shares sold to the Buyer on the
Closing Date and the denominator of which shall be the aggregate stated capital
(Stammkapital) of all the shares of the Company on a fully-diluted basis. The
Purchase Price shall be paid to Seller by wire transfer of immediately available
funds at the Closing.
2.4 INDEMNITY ESCROW ACCOUNT. (a) At the Closing, the Buyer
shall deposit DM 15,000,000 (which may be in the form of an irrevocable, direct
pay letter of credit or similar bank guarantee (the "Indemnity Letter of
Credit") (in either case acceptable to the Buyer) from a financial institution
acceptable to the Buyer issued to the Escrow Agent on behalf of the Seller) into
an escrow account with an escrow agent mutually acceptable to the Buyer and the
Seller (the "Indemnity Escrow Account"). Such amount or
-8-
14
instrument shall be held in and paid out of the Indemnity Escrow Account in
accordance with the terms hereof and the terms of an Indemnity Escrow Agreement
to be entered into among the Buyer, the Seller and the escrow agent (the "Escrow
Agent"), in form and substance mutually agreeable among such parties (the
"Indemnity Escrow Agreement").
(b) Pursuant to the terms hereof and of the Indemnity Escrow
Agreement, funds held in the Indemnity Escrow Account or drawn under the
Indemnity Letter of Credit shall be applied by the Escrow Agent to make cash
payments to the Buyer equal to the Indemnity Amounts. The "Indemnity Amounts"
shall be those amounts which are due to the Buyer as indemnification pursuant to
the provisions of Section 12.1 hereof. The Escrow Agent shall promptly pay the
Indemnity Amounts out of the Indemnity Escrow Account to the Buyer in accordance
with Section 12.1 hereof and the Indemnity Escrow Agreement. The aggregate
Indemnity Amounts payable pursuant to Section 12.1 hereof may exceed the amount
of cash deposited by the Buyer on behalf of the Seller in the Indemnity Escrow
Account or the face amount of the Indemnity Letter of Credit deposited therein,
as the case may be.
(c) If the Seller deposited cash in the Indemnity Escrow
Account at the Closing, the Escrow Agent shall pay promptly to the Seller in
immediately available funds (i) on the sixth-month anniversary of the Closing
Date, one-half of the aggregate amount remaining in the Indemnity Escrow Account
on such date and not subject to any claim for Indemnity Amounts, and (ii) on the
Survival Date, the aggregate amount remaining in the Indemnity Escrow Account on
such date and not subject to any claim for Indemnity Amounts. If the Seller
deposited the Indemnity Letter of Credit in the Indemnity Escrow Account at the
Closing, the face amount of the Indemnity Letter of Credit shall be reduced in a
corresponding manner pursuant to the terms of the Indemnity Escrow Agreement.
(d) In the event claims to Indemnity Amounts shall have been
made on or prior to the Survival Date pursuant to Section 12.1, and such claims
shall not be resolved or paid as of such date, an amount (the "Indemnity Fund")
equal to such unresolved or unpaid claims (or an Indemnity Letter of Credit with
a face value equal to such amount) shall be held by the Escrow Agent in escrow,
and not distributed, until following the date of resolution or payment to the
Buyer of such claims, together with interest thereon (the "Indemnity Fund
Date"). Promptly after the Indemnity Fund Date, the Escrow Agent shall pay
promptly to the Seller in immediately available funds the aggregate amount
remaining in the Indemnity Fund or return the Indemnity Letter of Credit.
(e) The Escrow Agent shall retain in the Indemnity Escrow
Account all income earned by the Indemnity Escrow Account pursuant to the
Indemnity Escrow Agreement.
-9-
15
(f) The Escrow Agent shall pay out of the Indemnity Escrow
Account all fees and expenses associated with the Indemnity Escrow Account, as
provided in the Indemnity Escrow Agreement, including, without limitation, its
own reasonable fees and expenses.
ARTICLE III REPRESENTATIONS AND WARRANTIES
CONCERNING SELLER
The Seller represents and warrants to the Buyer in the form of
an independent guarantee (selbstandiges Garantieversprechen) as follows:
3.1 ORGANIZATION AND GOOD STANDING. The Seller is a stock
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and has all requisite power and authority
to own, operate and lease its properties and assets and to conduct its business
as presently conducted. A True, complete and correct copy of the Excerpt from
the Commercial Registry in respect of the Seller, as amended to date, has been
furnished to the Buyer. No bankruptcy or conciliation proceedings have been
initiated in respect to the Seller.
3.2 AUTHORITY OF SELLER. The Seller has all requisite power
and authority to execute and deliver this Agreement and any Seller Ancillary
Document, and to perform the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement and any Seller Ancillary
Document in connection herewith have been duly and validly authorized by all
necessary corporate and shareholder action on the part of the Seller and no
further such action is required on the part of the Seller or its shareholders.
This Agreement has been, and each of the Seller Ancillary Documents will be, on
or prior to the Closing Date, duly executed and delivered by the Seller and each
constitutes or will constitute a valid and binding obligation of the Seller,
enforceable in accordance with its respective terms, except that enforceability
hereof or thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
3.3 NO CONFLICT OR BREACH. The execution, delivery and
performance of this Agreement and each of the Seller Ancillary
Documents do not and will not:
(a) conflict with or constitute a violation of the
Articles of Association (Statuten), any other constituent documents
and the excerpt from the Commercial Registry of the Seller;
-10-
16
(b) assuming compliance with the requirements of the GWB Act
(and HSR Act, if required), conflict with or constitute a violation of
any law, statute, judgment, order, decree or regulation of any
legislative body, court, administrative agency, Governmental Authority
or arbitrator applicable to or relating to the Seller or its properties
or assets; or
(c) conflict with, violate or result in a breach of, or
constitute a default (or an event which, with notice or lapse of time
or both would constitute a default) under, or result in the termination
of or accelerate the performance required by, or result in a right of
termination or acceleration under, any mortgage, note, indenture, deed
of trust, lease, loan agreement or other agreement or instrument
applicable to the Seller or its properties or assets, or any subsidy or
incentive provided to the Seller by any federal, state, provincial, or
local judicial authority or Governmental Authority or administrative
agency, except for conflicts, violations, breaches or defaults which,
individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
3.4 CONSENTS AND APPROVALS. Except as set forth on Schedule
3.4, no (a) consent, approval, authorization, registration or filing with any
federal, state or local judicial or Governmental Authority or administrative
agency (including the German Federal Agency for Reunification-Related
Extraordinary Tasks (Bundesanstalt fur vereinigungsbedingte Sonderaufgaben)),
other than as required under the GWB Act (and, if required, the HSR Act), or (b)
consent, approval, authorization of or notice to any other third party, is
required in connection with the valid execution, delivery and performance by the
Seller of this Agreement or any of the Seller Ancillary Documents or the
consummation by the Seller of the transactions contemplated herein or therein.
3.5 SHARE OWNERSHIP. The Seller is the owner, beneficially and
of record, of all of the Shares and, on the Closing Date, the Other Shares. At
the Closing, the Seller will deliver or cause to be delivered to the Buyer full
right, title and interest in and to the Shares and the Other Shares, free and
clear of all liens, security interests, charges, community property interests,
equitable interests, options, pledges, rights of first refusal or encumbrances
of any kind, including any restrictions on use, transfer, voting, receipt of
income or other attribute of ownership. Except as set forth on Schedule 3.5, the
Seller is not a party to any option, warrant, right, contract, call, put or
other agreement or commitment providing for the disposition or acquisition of
any of the capital stock of the Company, including the Shares and the Other
Shares (other than as set forth in this Agreement). The Shares and the Other
Shares, taken together, do not constitute all or substantially all of the assets
of the Seller for purposes of Article 181 of the Swiss Code of Obligations
(Obligationenrecht) dated March 30, 1911, as amended. On the
-11-
17
Closing Date, the only holder of the Shares, Other Shares or any other stated
capital (Stammkapital) of the Company other than the Seller is ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇. Schedule 3.5 contains a complete and correct description of the
development of the stated capital (Stammkapital) and the changes in shareholders
of the Company since its incorporation, including a list of all notarial
documents providing for the incorporation, for the increase or decrease of the
stated capital, and for the transfer of shares in the Company. The Shares
constitute all of the shares of the stated capital of the Company which are
owned by the Seller.
3.6 FINANCIAL ADVISORS. Except for Europeans Investors
Corporate Finance, Inc. and ▇▇▇▇▇ & Company Limited, for whose fees the Seller
shall be solely responsible, the Seller has not retained any finder, broker,
agent or other intermediary to act for it or on its behalf in connection with
the negotiation or consummation of this Agreement, and no party has made any
claim for any brokerage commission, finder's fee or similar payment due from the
Seller. None of the Company or any of the Subsidiaries nor any of their
respective managing directors (Geschaftsfuhrer), officers, directors or
employees has employed any broker, finder or investment banker or incurred any
liability for any brokerage fees, commissions, finders' fees or investment
banking fees in connection with the transactions contemplated hereby.
ARTICLE IV REPRESENTATIONS AND WARRANTIES
CONCERNING THE COMPANY AND SUBSIDIARIES
The Seller represents and warrants to the Buyer in the form of
an independent guarantee (selbstandiges Garantieversprechen) as follows:
4.1 ORGANIZATION AND GOOD STANDING. The Company and each
Subsidiary are each companies duly organized and validly existing under the laws
of its jurisdiction of organization. The Company, each Subsidiary and each
Non-Wholly Owned Subsidiary have all requisite corporate power and authority and
governmental authorizations to own, operate and lease its properties and assets
and to carry on its respective business as presently conducted. The Company,
each Subsidiary and each Non-Wholly Owned Subsidiary have all corporate power
and authority to consummate the transactions contemplated by this Agreement and
any Seller Ancillary Document. Complete and correct copies of each of the
Subsidiaries' constituent documents and governing instruments, each as amended
to date, have been furnished to the Buyer. There are no shareholder resolutions
in existence which amend the Articles of Association (Gesellschaftsvertrag) of
the Company or any Subsidiary and which have not been registered in the
Commercial Register or, if required under applicable law, any similar register.
No bankruptcy or conciliation proceedings have been initiated in respect to the
Company, any Subsidiary or Non- Wholly Owned Subsidiary.
-12-
18
4.2 CAPITALIZATION. The authorized stated capital
(Stammkapital) of the Company consists of: (i) shares owned by the Seller in the
aggregate nominal amount of DM 29,400,000, (ii) one share in the nominal amount
of DM 3,700,000, and (iii) one share in the nominal amount of DM 600,000. The
Shares and the Other Shares have been validly issued and are fully paid and
nonassessable. The shareholders of the Company and of any Subsidiary are not
required to make additional capital contributions (keine Nachschu(beta)pflicht).
None of the capital contributions of any shareholder of the Company or the
Subsidiary have been paid back to any shareholder. There are no outstanding or
authorized options, warrants, rights, contracts, calls, puts, rights to
subscribe, conversion rights or other agreements or commitments or rights of any
kind to which the Company or the Seller is a party or which are binding upon the
Company providing for the issuance, disposition or acquisition or voting of any
of the stated capital (Stammkapital) or other equity or similar interest of the
Company (other than this Agreement), or giving rise to any rights in connection
with the disposition, acquisition or voting of any of the Shares or the Other
Shares. There are no voting trusts, proxies or any other agreements or
understandings with respect to the voting of any stated capital (Stammkapital)
of the Company. Except as set forth on Schedule 3.5, the Company is not subject
to any obligation (contingent or otherwise) to repurchase or otherwise acquire
or retire any of its stated capital (Stammkapital). The shareholders of the
Company have not resolved to increase the stated capital (Stammkapital) of the
Company.
4.3 SUBSIDIARIES.
(a) DIRECT SUBSIDIARIES. The Company is the owner,
beneficially and of record, of all of the shares of the companies
listed in Schedule 4.3(a) hereto and, except as contained in Delivered
Document 4.5, free and clear of all liens, security interests, charges,
community property interests, equitable interests, options, pledges,
rights of first refusal or restrictions or encumbrances of any kind,
including any restrictions on use, transfer, voting, receipt of income
or other attribute of ownership (other than liens that will be released
at Closing and liens related to Indebtedness assumed by the Buyer).
(Such companies are referred to herein as the "Direct Subsidiaries").
The authorized stated capital (Stammkapital) of each of the Direct
Subsidiaries is as shown in Schedule 4.3(a).
(b) INDIRECT SUBSIDIARIES. The Direct Subsidiaries listed in
Schedule 4.3 (a) are the owners, beneficially and of record, of shares
of the companies listed in Schedule 4.3(b), free and clear of all
liens, security interests, charges, community property interests,
equitable interests, options, pledges, rights of first refusal or
restrictions or encumbrances of any kind, including any restrictions on
use, transfer, voting, receipt of income or other attribute of
ownership (other than liens that will be released at Closing
-13-
19
and liens related to Indebtedness assumed by the Buyer). (Such
companies other than Krebsoge Excel (Filters) PVT, Ltd., Krebsoge
Feida Danyang Filters and Sintered Metal Components (Pty.) Ltd. are
referred to herein as the "Indirect Subsidiaries," Krebsoge Excel
(Filters) PVT, Ltd., Krebsoge Feida Danyang Filters and Sintered Metal
Components (Pty). Ltd. are referred to herein as the "Non-Wholly Owned
Subsidiaries" and the Indirect Subsidiaries and the Direct
Subsidiaries are referred to herein as the "Subsidiaries". The shares
in the Subsidiaries and the shares in the Non-Wholly Owned
Subsidiaries are collectively referred to herein as the "Subsidiary
Shares"). The authorized stated capital (Stammkapital) of each of the
Indirect Subsidiaries and Non-Wholly Owned Subsidiaries is as shown in
Schedule 4.3(b).
(c) SUBSIDIARY SHARES. All of the Subsidiary Shares have been
validly issued and are fully paid and nonassessable. Except as set
forth on Schedule 4.3(c) and contained in Delivered Document 4.3(c),
there are no outstanding or authorized options, warrants, rights,
contracts, calls, puts, rights to subscribe, conversion rights or
other agreements, commitments or rights of any kind to which any
Subsidiary or Non-Wholly Owned Subsidiary or the Seller or the Company
is a party or which are binding upon any Subsidiary or Non-Wholly
Owned Subsidiary providing for the issuance, disposition, acquisition
or voting of any of its stated capital (Stammkapital), or giving rise
to any rights in connection with the disposition, acquisition or
voting of any of the Subsidiary Shares. Except as set forth on
Schedule 4.3(c), there are no voting trusts, proxies or any other
agreements or understandings with respect to the voting of the stated
capital (Stammkapital) of any Subsidiary or Non-Wholly Owned
Subsidiary. No Subsidiary or Non-Wholly Owned Subsidiary is subject to
any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any of its stated capital (Stammkapital).
(d) OTHER PARTICIPATIONS. The Subsidiaries and Non- Wholly Owned
Subsidiaries are the only entities in which the Company owns, directly
or indirectly, any stated capital (Stammkapital), share capital or
other equity interest other than equity interests held for investment
in the ordinary course of business. Except as disclosed on Schedule
4.3 (d), the Company is not a member in any partnership
(Personengesellschaft), including silent partnerships, cooperatives
(Genossenschaften) or joint ventures. Except as disclosed on Schedule
4.3 (d), there are no enterprise contracts (Unternehmensvertrage) as
defined in Sections 291 and 292 of the Stock Corporation Act, to which
the Company or any Subsidiary or Non-Wholly Owned Subsidiary is a
party.
4.4 NO CONFLICT OR BREACH. Except as set forth on Schedule 4.4
or contained in Delivered Document 4.4, the execution, delivery and performance
of this Agreement or the Seller Ancillary
-14-
20
Documents by the Seller or the performance of this Agreement by the Company does
not and will not:
(a) conflict with or constitute a violation of the Articles of
Association (Gesellschaftsvertrag) or other governing instrument of
the Company or any Subsidiary;
(b) assuming compliance with the requirements of the GWB Act
(and, if required, the HSR Act), conflict with or constitute a
violation of any Requirement of Law applicable to or relating to the
Company or any Subsidiary in any manner that would have a Material
Adverse Effect; or
(c) conflict with, constitute a default under, result in a breach
or acceleration of or, give to others any interest or rights under or
require notice to or the consent of any third party under any
contract, agreement, commitment, mortgage, note, license or other
instrument or obligation applicable to the Company or any Subsidiary
or their respective properties or assets, or any subsidy or incentive
provided to the Company or any Subsidiary by any federal, state,
provincial or local judicial or Governmental Authority or
administrative agency.
4.5 CONSENTS AND APPROVALS. Schedule 4.5 describes each of the
following which is required on the part of the Company or the Subsidiaries in
connection with the execution and delivery by the Seller of this Agreement or
any Seller Ancillary Document or the consummation by the Seller or the Company
or any Subsidiary, of the transactions contemplated herein or therein: (a) each
consent, approval, authorization, registration, permit, notice or filing with
any federal, state or local judicial or Governmental Authority or administrative
agency, other than as required under the GWB Act (and, if required, the HSR Act)
and (b) each consent, approval, authorization of or notice to any other third
party as contained in Delivered Document 4.5, except with respect to clause (a)
or (b) above, such consents, approvals, authorizations and notices as the
failure to obtain or give would not have a Material Adverse Effect. The consents
described on Schedule 4.5 shall be referred to collectively herein as the
"Required Consents."
4.6 FINANCIAL STATEMENTS. The Buyer has received copies of (a)
the audited consolidated financial statements of the Company and its
Subsidiaries for the fiscal years ended December 31, 1994 and December 31, 1995
and (b) unaudited interim consolidated financial statements of the Company and
its Subsidiaries, for the period ended on the Balance Sheet Date. The financial
statements referred to in the previous sentence are sometimes referred to as the
"Financial Statements." The Financial Statements have been prepared in
accordance with German GAAP (Grundsaetze ordnungsgemaesser Buchfuehrung und
Bilanzierung), consistently applied, from books and records which are maintained
in accordance with the controls and procedures of the Company and its
Subsidiaries with the exceptions that such interim statements do not contain the
disclosures required by German GAAP in notes accompanying financial statements,
-15-
21
and are subject to normal year-end adjustments. The Financial Statements fully
reflect reserves for commitments under any Plan of the Company or its
Subsidiaries, including pension commitments vested prior to December 31, 1986 to
the extent required under German or other applicable law. In respect to
Financial Statements for which the applicable statute of limitations has not
expired, the Company and the Subsidiaries have not obtained improper benefits
from transactions which were concluded with the Seller, with Affiliates, or with
third parties for the benefit of the Seller or Affiliates. A benefit shall for
example be deemed improper if the Company or the Subsidiaries have made or
received shipments, or have provided or received services, for which prices
other than market rate prices were charged for the benefit of the Company or any
Subsidiary. Except as noted the Financial Statements fairly present the
financial condition and results of operation of the Company and each of the
Subsidiaries, taken as a whole, as of the dates and for the periods indicated.
4.7 TITLE TO ASSETS. The Company and each Subsidiary has good
and marketable title to all of its Owned Real Property. Set forth on Schedule
4.8(a) is a list of all Owned Real Property having a value in excess of DM
75,000. The Company has good title to all tangible personal property owned by
the Company or such Subsidiary and used in the operations of the businesses of
the Company and each Subsidiary ("Tangible Personal Property") and to any and
all tangible personal properties necessary to the operation of the business of
each. Seller has heretofore delivered to Buyer a true and accurate list, dated
September 28, 1996, of all Tangible Personal Property owned by the Company or a
Subsidiary having a value in excess of DM 75,000. All such Owned Real Property
and Tangible Personal Property are owned by the Company free and clear of all
liens, charges, equitable interests, options, rights of first refusal,
encumbrances, claims, security interests, mortgages or pledges of any nature,
other than:
(a) liens arising as a consequence of any
Indebtedness;
(b) easements that could not be reasonably expected to
materially adversely affect the full use and enjoyment of the Owned
Real Property or the purposes for which it is currently used and/or
materially detract from its value;
(c) imperfections of title and encumbrances, if any, which, in
the aggregate, are not material to any of the Company or the
Subsidiaries, do not materially detract from the marketability or value
of the properties subject thereto, and could not be reasonably expected
to materially impair the operations of the owner thereof; and
(d) liens for taxes not yet due and payable.
-16-
22
4.8 REAL PROPERTY.
(a) OWNED. Schedule 4.8(a) contains a description of all Owned
Real Property having a value in excess of DM 75,000. True, correct and
complete copies of (i) certified land register excerpts and surveys of
the Owned Real Property and (ii) all documents evidencing any liens,
charges, equitable interests, options, rights of first refusal,
encumbrances, claims, security interests, mortgages or pledges of any
nature upon the Owned Real Property are contained in Delivered
Document 4.8(a). None of the liens, charges, equitable interests,
options, rights of first refusal, encumbrances, claims, security
interests, mortgages or pledges of any nature upon the Owned Real
Property secure obligations other than those of the Company or the
Subsidiaries. There are no liens, charges, equitable interests,
options, rights of first refusal, encumbrances, claims, security
interests, mortgages or pledges of any nature upon the Owned Real
Property which are not registered in the applicable land register.
None of the Seller or the Company or the Subsidiaries has received any
notice of any appropriation, condemnation or like proceeding, or of
any violation of any applicable zoning law, regulation or other law,
order, regulation or requirement relating to or affecting any Owned
Real Property. To the best knowledge of the Seller, there are no
material physical, structural or mechanical defects in any material
improvements on any of the Owned Real Property.
(b) LEASED. Schedule 4.8(b) and Delivered Document 4.8(b)
contains a description of all Real Property Leases to which the
Company or any Subsidiary is a party (the "Real Property Leases").
Each of the Real Property Leases is valid, binding and enforceable in
accordance with its terms (except that enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting creditors'
rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing) and is in full force and effect and there have
been no defaults thereunder. None of the Seller or the Company or the
Subsidiaries have received any notice of any appropriation,
condemnation or like proceeding, or of any violation of any applicable
zoning law, regulation or other law, order, regulation or requirement
relating to or affecting any Leased Real Property. To the best
knowledge of the Seller, there are no material physical, structural or
mechanical defects in any material improvements on any of Leased Real
Property. Except as disclosed on Schedule 4.8(b), the sale of the
Shares and/or the Other Shares will not, with respect to any such Real
Property Lease, (i) permit the landlord to accelerate the rent or
cause any material lease terms to be renegotiated, (ii) constitute a
material default
-17-
23
thereunder, or (iii) except for the Required Consents, require the
consent of the landlord or any third party.
4.9 CONTRACTS. Schedules 4.9 (a)-(e) list all Material
Contracts. Copies of Material Contracts listed in Schedule 4.9 (e) are contained
in Delivered Document 4.9 (e). Each of the Material Contracts is valid, binding
and enforceable against the Company or the Subsidiary party thereto in
accordance with its terms (except that enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing) and is in full force and effect
and there have been no breaches or defaults thereunder. Except as disclosed on
Schedule 4.9, none of the sale of the Shares, the sale of the Other Shares, the
execution, delivery or performance of this Agreement or any Seller Ancillary
Document or the consummation of the transactions contemplated herein or therein
will, with respect to any Material Contract, (i) constitute a default
thereunder, (ii) require notice to or the consent of any person or party, except
for the Required Consents, or (iii) affect the continuation, validity and
effectiveness thereof or the terms thereof, except for such defaults, consents
and effects as do not and will not in the aggregate have a Material Adverse
Effect.
4.10 INTELLECTUAL PROPERTY. All of the following which is
owned by, issued to or licensed to either the Company or a Subsidiary is
"Intellectual Property": patents, patent applications, patent disclosures and
inventions (whether or not patentable and whether or not reduced to practice)
and any reissue, continuation, continuation-in-part, revision, extension or
reexamination thereof; trademarks, service marks, trade dress, logos, trade
names and corporate names together with all goodwill associated therewith, and
all translations, adaptations, derivations and combinations of the foregoing;
copyrights and copyrightable works; and all registrations, applications and
renewals for any of the foregoing; trade secrets and confidential information
(including, without limitation, formulae, know-how, manufacturing and production
processes and techniques, research and development information, drawings,
specifications, designs, plans, proposals, technical data, and customer and
supplier lists and related information); computer software (including, without
limitation, data and related documentation); other proprietary rights; and all
copies and tangible embodiments of the foregoing (in whatever form or medium),
in each case including the items claimed by employees of the Company or the
Subsidiaries and including, and all rights associated therewith.
(a) Schedule 4.10 sets forth a complete and correct list of all:
(i) patented or registered Intellectual Property or for which
applications or other applications for such registrations are pending;
(ii) all trade names and unregistered trademarks and service marks
owned or used by the
-18-
24
Company or a Subsidiary; and (iii) all licenses or similar agreements
or arrangements for the Intellectual Property to which the Company or
a Subsidiary is a party, either as licensee or licensor (including any
intracompany licensing arrangements) other than, in each case,
Intellectual Property that is not material to the Company or any
Subsidiary. None of the Non-Wholly Owned Subsidiaries owns or licenses
Intellectual Property which is material to the business of any
Non-Wholly Owned Subsidiary.
(b) Except as set forth in Schedule 4.10: (i) either the Company
or a Subsidiary owns and possesses all right, title and interest in
and to, or has a valid and enforceable license to use, the
Intellectual Property free and clear of all liens, licenses, security
interests, encumbrances and other restrictions; (ii) no claim by any
third party contesting the validity, enforceability, use or ownership
of any of the Intellectual Property has been made, is currently
outstanding or is threatened, and there are no grounds for the same;
(iii) neither the Company nor any Subsidiary has received any notices
of, and is not aware of any facts which indicate a likelihood of, any
infringement or misappropriation by, or conflict with, any third party
with respect to the Intellectual Property (including, without
limitation, any demand or request that the Company or a Subsidiary
license any rights from a third party); and (iv) to the best knowledge
of the Company, neither the Company nor any Subsidiary has infringed,
misappropriated or otherwise conflicted with any intellectual property
rights or other rights of any third parties other than, in the case of
clauses (ii), (iii) and (iv), those claims, infringements,
misappropriations and conflicts which could not reasonably be expected
to have a Material Adverse Effect.
4.11 LITIGATION. Except as set forth in Schedule 4.11, (i)
there are no claims, actions, suits, inquiries, hearings or investigations
pending or, to the best knowledge of Seller, threatened against the Company, or
any Subsidiary, (ii) to the best knowledge of Seller, there are no claims,
suits, inquiries, hearings or investigations pending or threatened against any
Non-Wholly Owned Subsidiary, except those which could not reasonably be
expected to have a Material Adverse Effect on any such Non-Wholly Owned
Subsidiary or (iii) which seeks to restrain or enjoin the consummation of the
transactions contemplated by this Agreement or any of the Seller Ancillary
Documents.
4.12 TAXES.
(a) The Company and each Subsidiary has paid and discharged, or
has reserved on the Financial Statements or its books and records, all
Taxes required to be paid and currently due as of the Closing Date in
respect of the business and operations of the Company and the
Subsidiaries and the Company and each Subsidiary has filed all Tax
Returns required in
-19-
25
connection therewith to be filed. Neither the Company nor any
Subsidiary has executed or filed with the German tax authorities or
any other taxing authority, domestic or foreign, any extension or
agreement extending the period for the assessment or collection of any
Taxes, except for permitted statutory extensions. Neither the Company
nor any Subsidiary is a party to any pending action or proceeding and
neither the Company nor any Subsidiary has received written notice of
any audit or review of any Tax Return or report of the Company or any
Subsidiary which would result in the imposition of any Tax upon the
Company or any Subsidiary. In respect to Taxes for which the
applicable statute of limitations has not expired, there have not been
any concealed dividend distributions (verdeckte Gewinnausschuttungen)
by the Company or any of the Subsidiaries to any of its respective
shareholders.
(b) Schedule 4.12(b) sets forth the taxable years of Company and
each Subsidiary as to which the respective statutes of limitations
with respect to Taxes have not expired.
4.13 ENVIRONMENTAL PROTECTION.
(a) Except as set forth on Schedule 4.13, neither of the Company
nor any of the Subsidiaries has received any notice of violation,
alleged violation, noncompliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws.
To the Seller's knowledge, neither the Company nor any of the
Subsidiaries is subject to any ongoing investigation relating to or
arising out of any environmental matter.
(b) Except as set forth on Schedule 4.13, to the knowledge of the
Seller, neither the Company nor any Subsidiary has transported or
arranged for the transport of any Hazardous Materials (i) to any site
or location listed or proposed to be listed on the National Priorities
List as of September 1, 1996 or any other similar state list; or (ii)
to a location which could reasonably be expected to give rise to
liability under Environmental Laws.
(c) Except as set forth on Schedule 4.13, there is no condition
relative to the Company, or either of the Subsidiaries or their
respective operations or owned or used properties, including, but not
limited to, any contractual relationship, that could reasonably be
expected to result in any material violation of, or liability under,
applicable Environmental Laws or Environmental Permits (as defined
below) or, to the knowledge of the Seller, the Company or any of the
Subsidiaries, could interfere with continued material compliance with
applicable Environmental Laws in the future.
-20-
26
(d) Each of the Company and the Subsidiaries has obtained, or has
filed, all required applications for, all permits, licenses,
registrations, consents and other authorizations required under any
Environmental Law through the date hereof with respect to the
operation of the Company and the Subsidiaries ("Environmental
Permits"), except where the failure to have such permits or to file
such applications does not have a Material Adverse Effect, and all
such Environmental Permits are, and have continuously been, in full
force and effect.
(e) Except as set forth on Schedule 4.13, to the knowledge of the
Seller, no above or below ground storage tanks have ever been used for
the storage of Hazardous Materials on or at (i) the Owned Real
Property; (ii) the Leased Real Property; or (iii) any previously owned
or leased real property of the Company or the Subsidiaries.
(f) Except as set forth on Schedule 4.13, to the knowledge of the
Seller, there has never been a release (as defined in CERCLA) of
Hazardous Materials at, on, under or from any of the Owned Real
Property or Leased Real Property, or any previously owned or leased
real property of the Company or the Subsidiaries.
4.14 LABOR AND EMPLOYMENT MATTERS. With respect to
employment matters:
(a) On the Closing Date the Company and the Subsidiaries will
employ no more than 1,500 employees. After the execution of this
Agreement, the amendment or termination by the Company or any
Subsidiary of existing employment agreements with any of their
respective managing directors (Geschaftsfuhrer), officers, directors
or employees will require the express written approval of the Buyer
except in the ordinary course of business consistent with past
practice.
(b) Except as disclosed on Schedule 4.14, no collective
bargaining agreements apply to the Company or any Subsidiary. Copies
of all voluntary shops agreements (Betriebsvereinbarungen) are
contained in Delivered Document 4.14.
(c) There is no labor strike, dispute, slowdown, stoppage or
similar labor difficulty pending or threatened against or affecting
the Company or any of the Subsidiaries.
(d) There is no unfair labor practice charge or other complaint
pending or, to the best knowledge of the Seller, threatened against or
otherwise affecting the Company or any Subsidiary.
(e) The Company and Subsidiaries are in compliance with their
obligations pursuant to all notification and bargaining
-21-
27
obligations arising under any collective bargaining agreement, statute
or otherwise, respecting their employees.
4.15 EMPLOYEE BENEFIT PLANS. Schedule 4.15(a) contains a list
of, and Delivered Document 4.15 contains copies of, all Plans contributed to,
maintained or sponsored by the Company or the Subsidiaries to which any of them
are obligated to contribute, or with respect to which any of them has any
liability or potential liability.
(a) Except as disclosed in Schedule 4.15(a), neither the Company
nor any of the Subsidiaries contributes to, has any obligation to
contribute to or otherwise has any liability or potential liability
with respect to any voluntary Plan which provides health, life
insurance, accident or other "welfare-type" benefits to current or
future retirees or current or former employees, their spouses or
dependents.
(b) Each Plan of the Company and the Subsidiaries has been
maintained, operated, and administered in compliance with its terms
and any related documents or agreements and in compliance with all
applicable laws.
(c) Seller has previously delivered to Buyer true, complete and
correct copies of each of the Plans set forth on Schedule 4.15(a),
including all amendments thereto, and any other documents, forms, or
other instruments relating thereto reasonably requested by Buyer's
counsel.
(d) Except for routine claims for benefits, there is no pending
or threatened assessment, complaint, proceeding, audit, or
investigation of any kind in any court or Governmental Authority with
respect to any Plan of the Company and the Subsidiaries, nor to the
Seller's knowledge is there any basis for one.
(e) With respect to any insurance policy providing funding for
benefits under any Plan, (i) there is no liability of the Company or
the Subsidiaries in the nature of a retroactive or retrospective rate
adjustment, loss sharing arrangement, or other actual or contingent
liability, nor would there be any such liability if such insurance
policy were terminated on the date hereof, and (ii) no insurance
company issuing such policy is in receivership, conservatorship,
liquidation, or similar proceeding and, to the best of the Seller's
knowledge, no such proceedings with respect to any insurer are
imminent.
(f) The Company and the Subsidiaries have reserved all rights
necessary to amend or terminate each of the Plans of the Company and
the Subsidiaries without the consent of any other Person, except (i)
to the extent such rights are limited by any applicable collective
bargaining agreement or law, and (ii) with respect to claims under any
such Plan that are
-22-
28
accrued but unpaid as of the date of such amendment or termination.
Neither the Company nor the Subsidiaries has agreed or committed to
make any amendments to any of the Plans of the Company and the
Subsidiaries.
(g) Except as disclosed in Schedule 4.15(g), neither the Company
nor any Subsidiary maintains any plans or programs or is a party to
any agreement that could result in the payment of severance pay or
similar compensation prior to the Closing, at the time of the Closing
or during the one-year period commencing on the Closing Date.
Aggregate payments under any such plan, program, or arrangement during
the one-year period commencing on the Closing Date will not exceed DM
150,000.
(h) In the Financial Statements, the Company and the Subsidiaries
have included adequate reserves for existing obligations under any
Plan on the basis of actuarial opinions (versicherungsmathematische
Gutachten) in accordance with Section 6a of the Income Tax Act. Except
as disclosed on Schedule 4.15(h), the Company and the Subsidiaries do
not have obligations under any Plan for which reserves have not been
included in the Financial Statements.
4.16 ABSENCE OF CERTAIN CHANGES. Except as described in
Schedule 4.16, since the Balance Sheet Date, the operations of the Company and
the Subsidiaries have been conducted only in the ordinary course and in a manner
consistent with past practice, and the Company and the Subsidiaries have not:
(a) suffered any uninsured damage, destruction, theft or loss to
any asset of the Company or the Subsidiaries of a value in excess of
DM 500,000 in the aggregate;
(b) sold, transferred, distributed or otherwise disposed of any
assets used in the operation of the Company or the Subsidiaries, or
returned to any customers or otherwise disposed of, any tooling owned
by such customer and in the possession of the Company or any
Subsidiary, except for (i) assets consumed or disposed of in the
ordinary course of business; (ii) assets disposed of in connection
with the acquisition of replacement property of equivalent kind and
value; or (iii) assets which were returned in the ordinary course of
business or that are no longer used or useful in the business or
operations of the Company or the Subsidiaries;
(c) made, authorized, entered into, or permitted to go into
effect any general wage or salary increase for its employees as a
group, other than in the ordinary course of business consistent with
past practice;
(d) amended or terminated, or authorized the amendment or
termination of, any Material Contract or Real Property
-23-
29
Lease, other than in the ordinary course of business consistent with
past practice;
(e) incurred any material obligation or liability except normal
trade or business obligations incurred in the ordinary course of
business consistent with past practice, except for expenses relating
to the transactions contemplated hereby not to exceed DM 750,000;
(f) experienced or learned of any change or event which could
reasonably be expected to have a Material Adverse Effect; or
(g) agreed or committed, whether in writing or otherwise, to take
any action described in this Section.
4.17 INSURANCE. The insurable properties owned or leased by
the Company or any Subsidiary are, and until the Closing Date will be,
adequately insured by financially sound and reputable insurers at levels of
coverage reasonable and customary in the powder metal industry. All such
policies are in full force and effect and will continue to be in full force and
effect upon the consummation of the transactions contemplated herein and by the
Seller Ancillary Documents. Buyer has been provided with true, correct and
complete copies of all insurance policies relating to or affecting the Owned
Real Property, Real Property Leases or any Material Contract.
4.18 CAPITAL PROJECTS. Schedule 4.18 sets forth each
unfinished capital project with a total cost in excess of DM 75,000 relating to
the business of each of the Company and the Subsidiaries, the Company's
reasonable estimate of the capital expenditures that will be required subsequent
to the Closing Date to complete such projects and the expected date of
completion of such projects. The required capital contributions of the Non-
Wholly Owned Subsidiaries do not, in the aggregate, have a total cost in excess
of 500,000 DM.
4.19 CONDITION OF PROPERTIES AND EQUIPMENT. Except for
equipment not currently used in the operation of the business of the Company or
Subsidiaries and except for the equipment set forth in Schedule 4.19, the assets
and equipment of each of the Company and the Subsidiaries required for the
normal operation of their respective business are in good condition, normal wear
and tear excepted.
4.20 NO UNDISCLOSED LIABILITIES. Each of the Company and the
Subsidiaries has no liabilities or obligations of any nature (absolute, accrued,
contingent or otherwise) that are not fully reflected or reserved against in the
Financial Statements, except for liabilities that may have arisen in the
ordinary and usual course of business and consistent with past practice and
which are disclosed on Schedule 4.20.
-24-
30
4.21 ENTIRETY OF BUSINESS. The Company and Subsidiaries and
the Owned Real Property, Tangible Personal Property, Leased Real Property and
Intellectual Property constitute all of the companies, businesses, rights,
assets and arrangements necessary to conduct the business of each of the Company
and Subsidiaries as presently conducted, and there are no other companies,
businesses, assets, rights or arrangements necessary to conduct the business of
the Company as presently conducted.
4.22 COMPLIANCE WITH LAWS. Except as set forth in Schedule
4.22, each of the Company and the Subsidiaries (a) is in material compliance
with all laws, regulations, reporting and licensing requirements and orders
applicable to its business or employees conducting its business, the breach or
violation of which could reasonably be expected to have a Material Adverse
Effect; and (b) has received no notification or communication from any
Governmental Authority (i) asserting that the Company or the Subsidiaries are
not in compliance with any of the statutes, treaties, regulations or ordinances
that such Governmental Authority enforces, which noncompliance could reasonably
be expected to have a Material Adverse Effect or (ii) threatening to revoke any
license, franchise, permit or authorization of any Governmental Authority would
have a Material Adverse Effect.
4.23 COMPLETENESS OF WARRANTIES. To the Seller's best
knowledge, the representations made by the Seller on behalf of itself or the
Company or the Subsidiaries in this Agreement (including the Schedules and
Exhibits hereto) and other materials provided to the Buyer by the Seller or the
Company as set forth on Schedule 4.23 do not contain any untrue statement of a
material fact or omit any material fact necessary to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading.
4.24 INVENTORY. All of the finished goods inventory of the
Company and the Subsidiaries will at the Closing consist of goods useable or
saleable in the ordinary course of the business of the Company and the
Subsidiaries except for such amount of inventory that can be reasonably expected
to be written off in the ordinary course of their businesses determined by
reference to past practice. The Company and the Subsidiaries currently have and
on the Closing Date will have, inventory and work-in-progress in an amount which
is not in excess of the amount of inventory that can reasonably be expected to
be sold in the ordinary course of their business determined by reference to past
practice, except for such amount of inventory that can be reasonably expected to
be written off in the ordinary course of their businesses determined by
reference to past practice.
4.25 RECEIVABLES. All receivables of the Company and the
Subsidiaries which are reflected on the balance sheet of the Company at June 30,
1996 and which are reflected on the books of the Company and the Subsidiaries as
of the Closing Date represent actual, bona fide obligations owing to the Company
or the
-25-
31
Subsidiaries in the ordinary course of business and are carried at their net
realizable value. At the Closing, such receivables will be free and clear of any
liens, charges, equitable interests, options, rights of first refusal,
encumbrances, claims, security interests, mortgages or pledges of any nature. No
reserve allowance in excess of the recorded reserve is required to be
established in accordance with German GAAP with respect to such receivables
which are reflected on the Balance Sheet of the Company at June 30, 1996, and no
allowance will be required to be established in accordance with German GAAP with
respect to such receivables which will be reflected on the books of the Company
and the Subsidiaries as of the Closing Date. None of such receivables are, or on
the Closing Date, will be past due for a period of more than 90 days.
4.26 CUSTOMERS AND SUPPLIERS. Schedule 4.26 contains a
complete and correct list of (a) the 10 largest customers of and the 10 largest
suppliers to the Company and the Subsidiaries in the aggregate, and any
sole-source suppliers of significant goods or services to the Company and the
Subsidiaries with respect to which alternative sources of supply are not readily
available on comparable terms and conditions, in the case of the customers,
during the 7-month period ended July 31, 1996, and in the case of the suppliers,
during the 6-month period ended June 30, 1996, setting forth the sales by or to
the Company and the Subsidiaries for each such customer or supplier during such
period. The Company has not received written or oral notice that any such
customer or supplier will or may substantially reduce the extent of such
relationship, at any time prior to or after the Closing Date. The Company has
not received written or oral notice of (a) any other existing or contemplated
material modification or change in the business relationship of the Company and
the Subsidiaries with such customers or suppliers, or (b) any existing condition
or state of facts or circumstances, in either case which has, or will materially
adversely affect any such business relationship with any such customer or
supplier.
4.27 INDEBTEDNESS. Schedule 4.27 contains a complete and
correct description of all Indebtedness, including name of creditor, amount
outstanding per September 30, 1996 and amortization and repayment schedule.
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer represents and warrants to the Seller in the form of
an independent guarantee (selbstandiges Garantieversprechen) as follows:
5.1 ORGANIZATION AND GOOD STANDING. The Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware.
-26-
32
5.2 AUTHORITY. The Buyer has all requisite power and authority
to execute and deliver this Agreement and to perform the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
have been duly and validly authorized by all necessary corporate and shareholder
action on the part of the Buyer. This Agreement has been duly executed and
delivered by the Buyer and constitutes a valid and binding obligation of the
Buyer, enforceable against the Buyer in accordance with its terms, except that
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing or other applicable law or other similar laws affecting creditors'
rights generally and by principles of equity regarding the availability of
remedies.
5.3 NO CONFLICT OR BREACH. The execution, delivery and
performance of this Agreement and any Buyer Ancillary Document do not and will
not:
(a) conflict with or constitute a violation of the Certificate of
Incorporation or Bylaws or other governing instrument of Buyer;
(b) assuming compliance with the requirements of the GWB Act
(and, if required, the HSR Act), conflict with or constitute a
violation of any Requirement of Law applicable to or relating to
Buyer; or in any manner that would have a Material Adverse Effect; or
(c) conflict with, constitute a default under, result in a breach
or acceleration of or require notice to or the consent of any third
party under any contract, agreement, commitment, mortgage, note,
license or other instrument or obligation to which Buyer is party or
by which it is bound; or in any manner that would have a Material
Adverse Effect.
5.4 CONSENTS AND APPROVALS. No (a) consent, approval,
authorization, registration, permit, notice, or filing with any federal, state
or local judicial or Governmental Authority or administrative agency, other than
as required under the GWB Act (and, if required, the HSR Act), or (b) each
consent, approval, authorization of or notice to any other third party, is
required in connection with the valid execution and delivery by Buyer of this
Agreement or any Buyer Ancillary Document the consummation by Buyer of the
transactions contemplated herein or therein except, in either case, such
consents, approvals, authorizations and notices as the failure to obtain or give
would not have a Material Adverse Effect.
5.5 INTENTIONALLY LEFT BLANK.
-27-
33
5.6 FINANCIAL ADVISORS. Except for Salomon Brothers Inc, for
whose fees the Buyer shall be solely responsible, the Buyer has not retained any
finder, broker, agent or other intermediary to act for it or on its behalf, has
acted for or on behalf of Buyer in connection with the negotiation or
consummation of this Agreement, and no party has made any claim for any
brokerage commission, finder's fee or similar payment due from Buyer.
5.7 FINANCING. Buyer has secured binding commitments for all
financing (the "Financing") that will be required for it to consummate the
purchase of the Shares and the Other Shares, which are set forth on Schedule 5.7
hereto.
ARTICLE VI COVENANTS OF SELLER
Seller covenants and agrees with Buyer as follows:
6.1 CONDUCT OF BUSINESS. From the date hereof to the Closing
Date, except as provided by this Agreement or as Buyer shall otherwise consent
in writing, Seller shall cause the Company and each Subsidiary to:
(a) continue to carry on its business, maintain its facilities
and equipment, and keep its books of account, records and files in
substantially the same manner as heretofore carried on and maintained;
(b) maintain in full force and effect through the Closing Date
property damage, liability and other insurance with respect to the
assets of the Company and the Subsidiaries at levels of coverage
reasonable and customary and consistent with past practice;
(c) refrain from selling or otherwise transferring or
disposing of assets having an aggregate value in excess of DM 300,000,
except for (i) assets consumed or disposed of in the ordinary course of
business, (ii) assets which are no longer used or, in Seller's
reasonable judgment, useful in the business or operations of the
Subsidiaries or (iii) in connection with the acquisition of replacement
property of equivalent kind or value;
(d) not make any distribution of assets of the Company or any
Subsidiary or declare, pay or set aside for payment any dividend (of
any kind or nature) or distribution with respect to the Shares or the
Other Shares;
(e) not alter the terms of any existing Material Contract
except where such alteration would not have a Material Adverse Effect,
nor enter into any new agreement which, if entered into, would be a
Material Contract except
-28-
34
for those set forth on Schedule 6.1(e) and those which will have been
provided to Buyer for its comments, at least 5 business days prior to
their execution;
(f) refrain from issuing, selling, delivering, or agreeing to
issue, sell or deliver, any capital stock, warrants, options or
similar rights or other corporate securities of the Company or any
Subsidiary and granting or issuing, or agreeing to grant or issue, any
options, warrants, incentive awards or similar rights calling for the
issuance of such securities;
(g) refrain from repurchasing, redeeming and making a
distribution with respect to, any shares of capital stock of the
Company or any Subsidiary, except as otherwise provided in this
Agreement;
(h) refrain from effecting any recapitalization of stated capital
(Stammkapital) of the Company or any Subsidiary and making any
amendment, whether by merger, consolidation or otherwise, to the
Articles of Association (Gesellschaftsvertrag) of Company or any
Subsidiary;
(i) refrain from (i) merging or consolidating with or into, or
transforming into, any other corporation or entity, (ii) conveying,
selling, leasing or otherwise disposing of in any transaction or
related series of transactions all or substantially all of the
property, business or assets of the Company and the Subsidiaries
(including, without limitation, the capital stock or assets of the
Company and the Subsidiaries), and (iii) acquiring by purchase the
business, assets or stock of any business;
(j) use reasonable efforts to preserve intact the business
organization of the Company and each Subsidiary and to keep available
the services of their present officers and key employees, and use
reasonable efforts to preserve the goodwill of those having business
relationships with the Company and each Subsidiary;
(k) refrain from (i) granting any increase in the compensation of
officers or employees currently receiving total compensation in excess
of DM 100,000 (including any such increase pursuant to any bonus,
pension, profit-sharing or other plan or commitment), except as set
forth on Schedule 6.1(k) and except for reasonable increases in the
ordinary course of business and consistent with past practice, not to
exceed, individually or in the aggregate, 5% of the current base
compensation level; (ii) assuming or incurring any lien in respect to
the property of the Company or any Subsidiary, other than liens made
in the ordinary course of business; (iii) factoring, selling,
transferring or otherwise disposing of any Receivable other than
factors, sales, transfers or dispositions of Receivables in the
ordinary
-29-
35
course of business; or (iv) entering into any agreement that is
material to the Company and its Subsidiaries taken as a whole, except
in the ordinary course of business;
(l) refrain from taking any action that would have the effect of
deferring any Tax liability of the Company or any Subsidiary from any
taxable period ending at or before the Closing Date in a manner that
is inconsistent with past practice;
(m) refrain from renewing, extending or otherwise amending any of
the agreements listed on Schedule 4.15(a) except as required by law;
(n) refrain from making any capital expenditure other than
payments made pursuant to those capital projects set forth on Schedule
4.18; and
(o) refrain from agreeing, whether in writing or otherwise, to do
any of the foregoing;
in each case, except where failure to do any of the foregoing would not have a
Material Adverse Effect and PROVIDED that nothing contained in this Section
shall require Seller, the Company or any Subsidiary to incur any extraordinary
cost or make any extraordinary payment.
6.2 ACCESS AND INFORMATION.
(a) During the period commencing on the date hereof and ending on
the Closing Date, Seller shall permit Buyer and its counsel,
accountants, advisors, providers of financing, and other
representatives reasonable access during normal business hours to all
the properties, assets, employees, books, records, agreements and
other documents of the Company and the Subsidiaries; PROVIDED that,
Buyer will obtain the approval of Hans ▇▇▇▇▇ ▇▇▇▇▇▇, or any
representative of ▇▇▇▇▇ & Co. or European Investors Corporate Finance,
Inc. prior to each visit to any Company or Subsidiary premises, whose
approval shall not be withheld. Any investigation by Buyer pursuant to
this Section shall be conducted in such manner as not to interfere
unreasonably with the normal operation of the Subsidiaries. Buyer and
its representatives shall be accompanied on any visits to the premises
of the Subsidiaries by representatives of Seller.
(b) The Seller shall, within 15 business days after the date of
this Agreement, provide to Buyer a list of all contracts, commitments,
agreements (including agreements for the borrowing of money or the
extension of credit), leases, licenses, guarantees, understandings and
obligations, whether written or oral, to which the Company or either
of the Subsidiaries are party and which involve a payment by or to the
Company or a Subsidiary exceeding DM 150,000, in the case
-30-
36
of employment or similar agreements, or DM 75,000 in all other
cases, in any twelve-month period.
6.3 NO SOLICITATION. From the date hereof to the Closing Date,
neither Seller, the Company, the Subsidiaries nor any representatives
(including, without limitation, attorneys, investment bankers and accountants)
of Seller, the Company or the Subsidiaries will directly or indirectly, through
any partner, managing director, officer, director, employee, agent, affiliate or
otherwise (a) solicit, initiate or encourage, directly or indirectly, the
submission of inquiries, proposals or offers from any Person relating to any
acquisition or purchase of assets or capital stock of the Company or any
Subsidiary or any other transaction that would result in the transfer of control
of the Company, any Subsidiary or an investment by any Person in the Company or
any Subsidiary (each an "Acquisition Proposal") or (b) participate in any
discussions or negotiations regarding an Acquisition Proposal or any of the
foregoing or furnish to any Person any information concerning the Company or any
Subsidiary or any of the foregoing, or (c) otherwise cooperate in any way with,
or assist or participate in, facilitate or encourage, any effort or attempt by
any other Person to do or seek any of the foregoing.
6.4 CONFIDENTIALITY. Following the Closing, Seller agrees to
retain in confidence, and to require its directors, managing directors,
officers, employees, consultants, professional representatives and agents
(collectively, "Seller Representatives") to retain in confidence all information
concerning the Company and the Subsidiaries and further agrees that, following
the Closing, it will not use for its own benefit and will not use or disclose to
any third party, or permit the use or disclosure to any third party of, any such
information, except that Seller may disclose the information to those of the
Seller Representatives who need the information for the proper performance of
their assigned duties with respect to the consummation of the transactions
contemplated hereby and the preparation of appropriate Tax Returns. In making
such information available to its Representatives, Seller shall take any and all
precautions necessary to ensure that the Seller Representatives use the
information only as permitted hereby. Notwithstanding the foregoing, such
information may be disclosed (a) if it is required by court order or decree or
applicable law or in connection with the preparation of Tax Returns, (b) if it
is ascertainable or obtained from public or published information, or (c) if it
is received from a third party not known to the recipient to be under an
obligation to keep such information confidential. If Seller shall be required to
make disclosure of any such information by operation of law (other than in
connection with the preparation of Tax Returns), Seller shall give Buyer prior
notice of the making of such disclosure and shall use all reasonable efforts to
afford Buyer an opportunity to contest the making of such disclosure.
6.5 REPAYMENT OF INDEBTEDNESS. At the Closing, the Buyer shall
determine which Indebtedness of the Company and the
-31-
37
Subsidiaries shall be paid at the Closing (which Indebtedness shall include the
Indebtedness referenced in clause (i) of Section 9.15), and the Buyer shall, as
directed by and on behalf of the Seller, cause such Indebtedness (including all
accrued but unpaid interest thereon) to be paid out of the Aggregate
Consideration at the Closing.
6.6 INTENTIONALLY LEFT BLANK.
6.7 OTHER ACTIONS. The Seller shall not, and shall not permit
the Company or any of its Subsidiaries to, take any action that would, or that
could reasonably be expected to, result in (i) any of the representations and
warranties of the Seller or the Company and the Subsidiaries set forth in this
Agreement that are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in any
material respect, or (iii) any of the conditions set forth in Section 9.1 not
being satisfied.
6.8 INTENTIONALLY LEFT BLANK.
6.9 WORKING CAPITAL. The Company and each of its Subsidiaries
will not (i) delay payment of any accounts payable beyond normal and customary
terms, (ii) fail to maintain adequate inventory or replenish inventory
consistent with past practice, or (iii) accelerate payment of any accounts
receivable other than in the ordinary course.
6.10 DIRECTOR RESIGNATIONS. The Seller shall, after
consultation with the Buyer and with its express approval, cause all
Seller-appointed members of the Company's or any Subsidiary's supervisory board
(Aufsichtsrat), advisory committee (Beirat/Verwaltungsrat) or any other
governing body, if any, to resign effective as of the Closing.
6.11 INTELLECTUAL PROPERTY. Except for the licenses set forth
in Schedule 6.11, after the Closing the Seller shall refrain from using, and
shall ensure that its Affiliates will not use, directly or indirectly, any
Intellectual Property.
6.12 OTHER ASSISTANCE. To the extent requested by the Buyer,
the Seller shall reasonably cooperate with and assist the Buyer in the
preparation of a registration statement or similar offering document relating to
a proposed issuance of securities of the Buyer. In connection therewith, the
Seller shall make available to the Buyer and its representatives and agents the
officers and employees of the Company and the Subsidiaries and the legal
accounting and other professional advisors to the Seller, the Company and the
Subsidiaries at reasonable times and locations. All reasonable out-of-pocket
expenses incurred by the Seller, the Company or the Subsidiaries in connection
with such cooperation and assistance shall be promptly paid by the Buyer.
-32-
38
6.13 CONSENTS. Prior to the Closing Date, the Seller shall use
its best efforts to obtain or cause to be obtained all Required Consents,
including, without limitation, paying reasonable consideration necessary to
obtain such consent.
ARTICLE VII COVENANTS OF BUYER
Buyer covenants and agree with Seller as follows:
7.1 CONFIDENTIALITY. In consideration of the confidential
nature of certain of the information which will be provided to Buyer by Seller,
the Company and the Subsidiaries prior to the Closing, Buyer agrees to retain in
confidence, prior to the Closing, and to require its directors, officers,
employees, consultants, professional representatives and agents (collectively,
its "Representatives") to retain in confidence all information transmitted or
disclosed to it by Seller, the Company and the Subsidiaries, and further agrees
that, prior to the Closing, it will not use for its own benefit and will not use
or disclose to any third party, or permit the use or disclosure to any third
party of, any information so obtained or revealed, except that Buyer may
disclose the information to (i) those of its Representatives who need the
information for the proper performance of their assigned duties with respect to
the consummation of the transactions contemplated hereby, (ii) the parties from
which Buyer seeks financing and their representatives and (iii) in a
registration statement or similar offering document relating to a proposed
issuance of securities by Buyer. In making such information available to its
Representatives, Buyer shall take any and all precautions necessary to ensure
that its Representatives use the information only as permitted hereby.
Notwithstanding anything to the contrary in the foregoing provisions, such
information may be disclosed (a) where it is necessary to any regulation
authorities or governmental agencies, (b) if it is required by court order or
decree or applicable law, (c) if it is ascertainable or obtained from public or
published information, or (d) if it is received from a third party not known to
the recipient to be under an obligation to keep such information confidential.
If Buyer shall be required to make disclosure of any such information by
operation of law, Buyer shall give Seller prior notice of the making of such
disclosure and shall use all reasonable efforts to afford Seller an opportunity
to contest the making of such disclosure. In the event that the Closing shall
not occur, Buyer shall immediately deliver, or cause to be delivered, to Seller
(without retaining any copies thereof) any and all documents, statements or
other written information obtained from Seller, the Company or any Subsidiary
that contain confidential information of Seller.
7.2 DISCLOSURE TO SELLER. The Buyer will notify the Seller if
the Buyer knows or learns of the existence of any facts which cause any of the
representations and warranties contained in Article III or IV to be or become
untrue, PROVIDED, HOWEVER, that
-33-
39
such disclosure shall not affect any of the Buyer's rights or remedies pursuant
to this Agreement.
7.3 MANAGEMENT NOTIFICATION. After the Closing, Buyer shall
notify the management of the Company of the change in the ownership of the
Shares, as required by Section 16 of the Company Act.
ARTICLE VIII MUTUAL COVENANTS
8.1 GWB FILINGS. Buyer and Seller shall, as promptly as
practicable following the execution of this Agreement, and in cooperation with
each other, file with (if required under the HSR Act) the Department of Justice
and the Federal Trade Commission (if required under the HSR Act), and the German
Federal Cartel Office (Bundes-kartellamt, the "Cartel Office") premerger
notification pursuant to Section 24a of the GWB Act, and each shall use its
reasonable efforts to obtain earliest termination of all waiting periods under
the GWB Act and (if required), the HSR Act. Buyer shall be responsible for and
shall pay all fees assessed in connection with the filing of such forms and
documents.
8.2 CASUALTY OR LOSS. The risk of any loss, damage or
impairment, confiscation or condemnation of any of the assets of the
Subsidiaries from any cause whatsoever shall be borne by Seller at all times
prior to the completion of the Closing. In the event of any loss, damage or
impairment, confiscation or condemnation of any such assets prior to the
completion of the Closing, Seller shall have the option, but shall not be
required, to expend such funds and take such other actions as are necessary to
repair, replace or restore such assets to their prior condition. If Seller has
commenced but not completed the restoration or replacement of such assets before
the Closing Date, the Closing Date shall be postponed during such period not to
extend beyond the date specified in subsection 14.1(e) to permit completion of
the repair or replacement of the damage or loss. If such assets have not been
restored or replaced by such date, Buyer may then take the action specified in
subsection 14.1(c). Alternatively, Buyer may, at its option, proceed to Closing
as of such date and complete the restoration and replacement of such damaged
assets after the Closing Date, in which event Seller shall assign to Buyer the
right to receive all insurance proceeds payable in connection with such damage
to or destruction of the assets.
8.3 FURTHER ACTIONS.
(a) Seller and Buyer will notify each other immediately of any
litigation, arbitration or administrative proceeding pending or to
its/their knowledge, threatened against either of them, the Company or
any Subsidiary which challenges the transactions contemplated in this
Agreement.
-34-
40
(b) Subject to the terms and conditions of this Agreement,
Seller and Buyer each agree to use commercially reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done,
all things necessary, proper or advisable to consummate and make
effective the transactions contemplated in this Agreement and to
satisfy the conditions hereto.
(c) The Seller and the Buyer agree (i) to furnish upon request
to each other such further information, (ii) to execute and deliver to
each other such other documents, and (iii) to do such other acts and
things, all as the other party may reasonably request for the purpose
of carrying out the content of this Agreement, the Seller Ancillary
Documents, the Buyer Ancillary Documents and the documents referred to
herein and therein.
(d) Prior to the Closing or the termination of this Agreement
pursuant to Section 14(e), the Seller and Buyer will notify each other
immediately orally and in writing if the satisfaction of any condition
to the Closing is or becomes impossible.
ARTICLE IX CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligation of the Buyer to consummate the transactions
contemplated by this Agreement, including the Buyer's obligations pursuant to
Section 12.2 hereunder, and excluding the obligations contained in Articles VI,
VII, VIII and XVI of this Agreement, is subject to the satisfaction of the
following conditions on or before the Closing Date, unless specifically waived
(mit schuldrechtlicher und dinglicher Wirkung) in writing by the Buyer on or
prior to the Closing Date (such waiver shall not constitute a waiver of Buyer's
rights pursuant to Section 12.1 hereof):
9.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller contained in this Agreement (other than in Section 4.19)
(i) shall have been true and correct in all material respects on the date of
this Agreement (except the representations and warranties which relate to the
Other Shares but only insofar as such representations and warranties relate to
the Other Shares) and (ii) shall be true and correct in all material respects
(except that those representations which expressly contain a materiality
qualifier each shall be true and correct in all respects, giving effect to each
such qualifier) on the Closing Date as though made on and as of the Closing
Date. Buyer shall have received a certificate executed by an officer of the
Seller dated as of the Closing Date, certifying the satisfaction of the
conditions in this Section 9.1.
9.2 COMPLIANCE WITH COVENANTS. Seller shall have duly
performed and complied in all material respects with all covenants,
-35-
41
agreements and obligations required by this Agreement to be performed or
complied with by it on or prior to the Closing. Buyer shall have received a
certificate executed by an officer of Seller dated as of the Closing Date,
certifying the satisfaction of the conditions in this Section 9.2.
9.3 ABSENCE OF LITIGATION. No action or proceeding shall be
pending by or before any court or other governmental body or agency seeking to
(a) restrain, prohibit or invalidate the transactions contemplated by this
Agreement in whole or material part or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the transactions
contemplated by this Agreement or the Seller Ancillary Documents or the Buyer
Ancillary Documents, or (b) impose material limitations on the Buyer's freedom
of action with respect to the Company and its Subsidiaries or any material
portion thereof or all or a material portion of the assets or businesses of the
Buyer.
9.4 ANTITRUST FILINGS.
(a) The Cartel Office
(i) shall not have notified the parties within
one month from the filing of the premerger
notification that it will investigate the
transactions contemplated by this Agreement,
or
(ii) after having made the notification pursuant
to proviso (i) of this Section 9.4, the
Cartel Office shall not have prohibited the
transactions contemplated by this Agreement
within four months from the filing of the
premerger notification, or
(iii) the Cartel Office shall have informed the
parties prior to the expiration of the time
periods referred to in provisos (i) and (ii)
of this Section 9.4 that it will not
investigate the transactions contemplated by
this Agreement.
(b) All applicable waiting periods under the HSR Act
shall have expired or been terminated.
9.5 REQUIRED CONSENTS. All Required Consents and the consents
listed on Schedule 3.4 shall have been obtained by Seller, the Company or the
Subsidiaries, as the case may be, except where failure to have such consent
would not have a Material Adverse Effect.
9.6 NO INJUNCTION, ETC. No preliminary or permanent injunction
or other order, decision or decree issued by any court
-36-
42
of competent jurisdiction in the United States or the Federal Republic of
Germany or by any United States or German federal or state, foreign or
provincial, governmental or regulatory body nor any statute, rule, regulation or
executive order promulgated or enacted by any United States or German federal or
state, foreign or provincial, governmental authority which restrains, enjoins or
otherwise prohibits the transactions contemplated hereby shall be in effect.
9.7 ACQUISITION OF OTHER SHARES. Seller shall have (i)
purchased, for good and valuable consideration, and (ii) acquired good title to
each and all of the Other Shares free and clear of all liens, security
interests, charges, community property interests, equitable interests, options,
pledges, rights of first refusal or encumbrances of any kind, including any
restrictions on use, transfer, voting, receipt of income or other
attribute of ownership.
9.8 LEGAL OPINION. Buyer shall have received from Seller's
Counsel an opinion, dated the Closing Date, that the Seller, the Company and the
Subsidiaries are duly organized and validly existing under the laws of their
respective jurisdiction of organization as well as the jurisdiction of their
respective headquarters, that the Seller has all requisite power and authority
to execute and deliver this Agreement and the transactions contemplated thereby,
that the Agreement constitutes a valid and binding obligation of the Seller,
that the Seller has, at the time of the Closing, full legal and equitable title
to the Shares and the Other Shares, that at the Closing good and marketable
title to the Shares and the Other Shares, free and clear of any claims, liens,
equities or encumbrances, will pass to the Buyer and that the Company has,
directly or indirectly full legal and equitable title to the Subsidiary Shares.
9.9 FINANCING. The Buyer shall have received proceeds of the
Financing.
9.10 POWDER METAL HOLDING, INC. SALE. The transactions
contemplated by the Purchase Agreement, dated the date hereof, between the Buyer
and the Seller relating to the sale of Powder Metal Holding, Inc. and its
subsidiaries (the "Powder Metal Agreement") shall have occurred simultaneously
with the Closing.
9.11 INTENTIONALLY LEFT BLANK.
9.12 INDEMNITY ESCROW AGREEMENT. The Indemnity Escrow
Agreement shall have been executed by the parties and the amounts required
thereunder shall have been funded or instruments deposited as provided in
Section 2.4.
9.13 INTENTIONALLY LEFT BLANK.
9.14 RELEASE OR TERMINATION OF LIENS. Other than any liens
created by the Buyer or liens relating to Indebtedness which
-37-
43
the Buyer has agreed to assume, all liens, security interests, charges,
community property interests, equitable interests, options, pledges, rights of
first refusal or restriction or encumbrance of any kind, including any
restrictions on use, transfer, voting, receipt of income or other attribute of
ownership, on any of (i) the Shares, (ii) the Other Shares or (iii) the assets
or properties of the Seller, the Company or the Subsidiaries shall have been
terminated, and the Buyer shall have received written evidence of such releases.
9.15 PAYMENT OF INDEBTEDNESS. To the extent Buyer has not
agreed to assume, the following shall be paid in full (i) the unpaid principal
amount owing by the Company to ▇▇▇▇ Overseas International N.V. Curacao,
together with any and all accrued but unpaid interest thereon computed through
the day preceding the Closing Date, (ii) the unpaid principal amount owing to
the Company's banks together with any and all accrued but unpaid interest
thereon computed through the day preceding the Closing Date and (iii) loans from
former and existing shareholders together with any and all accrued but unpaid
interest thereon computed through the day preceding the Closing Date (such loan
agreements, the "Loan Agreements") and (iii) all other Indebtedness of the
Company and the Subsidiaries outstanding as of the Closing Date, together with
any accrued but unpaid interest thereon through the Closing Date.
9.16 U.S. REAL PROPERTY HOLDING COMPANY. The Seller shall
certify to Buyer that neither the Company nor any of the Subsidiaries is a
United States Real Property Holding Company as such term is defined under the
United States Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder.
9.17 SWISS OPINION. Buyer shall have received from a Swiss law
firm acceptable to Buyer an opinion, dated the Closing Date, that the Shares,
the Other Shares, and the Shares as defined under the Powder Metal Agreement
together do not constitute all or substantially all the assets of the Seller for
purposes of Article 181 of the Swiss Code of Obligations (Obligationenrecht),
dated March 30, 1911, as amended.
ARTICLE X CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
The obligations of Seller to consummate the transaction
contemplated by this Agreement (including the Seller's obligations pursuant to
Section 12.1 hereunder), and excluding the obligations contained in Articles VI,
VII, VIII and XVI of this Agreement, are subject to the satisfaction of each of
the following conditions on or before the Closing Date, unless specifically
waived (mit schuldrechtlicher und dinglicher Wirkung) in writing by Seller prior
to the Closing (such waiver shall not constitute a waiver of Seller's rights
pursuant to Section 12.2 hereof):
-38-
44
10.1 REPRESENTATIONS AND WARRANTIES. Notwithstanding any
notice provided pursuant to Section 7.3, the representations and warranties of
Buyer contained in this Agreement shall have been true and correct on the date
of this Agreement and shall be true and correct in all material respects (except
that those representations which expressly contain a materially qualifier each
shall be true and correct in all respects, giving effect to each such qualifier)
on the Closing Date as through made on and as of the Closing Date. Seller shall
have received a certificate executed by an officer of Buyer dated as of the
Closing Date, certifying the satisfaction of the conditions in this Section.
10.2 COMPLIANCE WITH COVENANTS. Buyer shall have duly
performed and complied with in all material respects all covenants, agreements
and obligations required by this Agreement to be performed or complied with by
it on or before the Closing Date. Seller shall have received a certificate
executed by an officer of Buyer dated as of the Closing Date, certifying the
satisfaction of the conditions in this Section.
10.3 ABSENCE OF LITIGATION. No action or proceeding against
Buyer shall be pending by or before any court or other Governmental Authority
seeking to restrain, prohibit or invalidate the transactions contemplated by
this Agreement.
10.4 ANTITRUST FILINGS.
(a) The Cartel Office
(i) shall not have notified the parties within one month
from the filing of the premerger notification that it
will investigate the transactions contemplated by this
Agreement, or
(ii) after having made the notification pursuant to proviso
(i) of this Section 9.4, the Cartel Office shall not
have prohibited the transactions contemplated by this
Agreement within four months from the filing of the
premerger notification, or
(iii) the Cartel Office shall have informed the parties
prior to the expiration of the time periods referred to
in provisos (i) and (ii) of this Section 9.4 that it
will not investigate the transactions contemplated by
this Agreement.
(b) All applicable waiting periods under the HSR Act
shall have expired or been terminated.
-39-
45
10.5 NO INJUNCTION, ETC. No preliminary or permanent
injunction or other order, decision or decree issued by any court of competent
jurisdiction in the Federal Republic of Germany or by any German federal or
state, foreign or provincial governmental or regulatory body nor any statute,
rule, regulation or executive order promulgated or enacted by any German federal
or state, foreign or provincial governmental authority which restrains, enjoins
or otherwise prohibits the transactions contemplated hereby shall be in effect.
10.6 LEGAL OPINION. Seller shall have received from Buyer's
Counsel an opinion, dated the Closing Date, that the Buyer is duly organized and
validly existing under the laws of its jurisdiction of organization, that the
Buyer has all requisite power and authority to execute and deliver this
Agreement and the transactions contemplated thereby, and that the Agreement
constitutes a valid and binding obligation of the Buyer.
ARTICLE XI CLOSING
11.1 CLOSING. The closing of the sale by Seller of the Shares
and the Other Shares to Buyer (the "Closing") shall take place at the offices of
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ in New York, New York or such other place as
agreed to by Seller and Buyer at 6:00 a.m., local time, on the later to occur of
(i) December 10, 1996 or (ii) fifth business day after the date on which the
conditions contained in Sections 9.4 and 10.4 are met; PROVIDED, HOWEVER, as
follows: (a) if one or more conditions to this Agreement is not satisfied by
such date, the party benefiting from such condition may elect, in its sole
discretion, one or more postponements of the Closing for the purpose of enabling
such condition to be satisfied; and (b) upon agreement of the parties hereto,
the Closing may be postponed to a future date, PROVIDED that, notwithstanding
the provisions of the preceding subparagraphs (a) and (b), in no event may the
Closing be postponed beyond January 31, 1997. The date of the Closing is
referred to as the "Closing Date." The Closing when completed shall be deemed to
have occurred at 12:01 a.m., local time, on the Closing Date (the "Effective
Time").
11.2 DELIVERIES BY SELLER. At the Closing, Seller
shall deliver or cause to be delivered to Buyer the following:
(a) A certificate of an officer of Seller confirming the
satisfaction of the conditions set forth in Sections 9.1 and 9.2.
-40-
46
(b) A copy of all corporate resolutions authorizing the
execution, delivery and performance of this Agreement and the Seller
Ancillary Documents, and the consummation of the transactions
contemplated herein or therein.
(c) The legal opinions referred to in Section 9.8 and 9.17, the
Indemnity Escrow Agreement and the lien releases and terminations
referred to in Section 9.14.
(d) A certificate certifying as to the matters referred to in
Section 9.15.
(e) A written statement by both the Seller and the Buyer stating
that the conditions precedent contained in Articles IX and X of this
Agreement have been met, such statement to be signed by Buyer and
Seller before a notary public and subsequently furnished with an
apostille, and to be delivered subsequent to the Closing to Notary ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ or such other
notary as Buyer and Seller may agree.
(f) Satisfactory evidence, in Buyer's reasonable judgment, that
all Indebtedness (other than that Indebtedness Buyer has agreed to
assume) has been repaid or discharged.
(g) The termination agreements (Aufhebungsvertrage) regarding any
consulting and support agreement (Beratungsvertrag) or similar
agreement amongst the Seller and the Company or any Subsidiary.
(h) Such other documents, certificates and information as Buyer
may reasonably request.
11.3 DELIVERIES BY BUYER. At the Closing, Buyer shall deliver
or cause to be delivered to Seller the following:
(a) A certificate of an officer of Buyer confirming the
satisfaction of the conditions set forth in Sections 10.1 and 10.2 as
to representations, warranties and covenants.
(b) A copy of all corporate resolutions authorizing the
execution, delivery and performance of this Agreement and the Buyer
Ancillary Documents, and the consummation of the transactions
contemplated herein or therein.
(c) The legal opinion referred to in Section 10.5 and the
Indemnity Agreement.
(d) The Purchase Price, paid by a wire transfer of immediately
available funds in accordance with the terms of Section 2.3.
(e) A written statement by both the Seller and the Buyer stating
that the conditions precedent contained in Articles IX
-41-
47
and X of this Agreement have been met, such statement to be signed by
Buyer and Seller before a notary public and subsequently furnished
with an apostille, and to be delivered subsequent to the Closing to
Notary ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ or
such other notary as Buyer and Seller may agree.
(f) Such other documents, certificates and information as Seller
may reasonably request.
ARTICLE XII INDEMNIFICATION
12.1 INDEMNIFICATION BY SELLER. Subject to the provisions of
Sections 2.4, 12.5 and 12.6, the Seller shall indemnify, defend and hold
harmless Buyer and its officers, directors, employees, agents and Affiliates
from, against and with respect to any and all loss, damage, claim, obligation,
liability, cost and expense (including, without limitation, reasonable
attorneys' fees and costs and expenses incurred in investigating, preparing,
defending against or prosecuting any litigation, claim, proceeding or demand),
of any kind or character (a "Loss") arising out of or in connection with any of
the following:
(a) any breach of any of the representations or warranties of
Seller contained in this Agreement (other than those contained in
Sections 4.18 and 4.24 or the first three sentences of Section 4.25);
(b) any failure by Seller to perform or observe, or to have
performed or observed any covenant or agreement to be performed or
observed by it pursuant to this Agreement;
(c) all liability for Taxes in excess of DM 15,000, or payable by
or with respect to, the Company and the Subsidiary for any period
ending on or before the end of the day immediately preceding the
Closing Date and that portion of a Straddle Period up to and including
the Closing Date ("Pre-Closing Tax Period");
(d) any debt or liability of any Company or Subsidiary to the
extent not disclosed on the balance sheet included in the Financial
Statements, on any Schedule hereto, or not otherwise expressly assumed
by Buyer hereunder; or
(e) any matter set forth on Schedule 4.5, 4.10(b) (ii), (iii) and
(iv), 4.11, 4.13, 4.16(e), 4.20, and 4.22 to the extent Losses
relating thereto exceed, in the aggregate together with Losses arising
in connection with any matter set forth on Schedule 4.5, 4.10, 4.11,
4.13, 4.16(e), 4.20 and 4.22 of the Powder Metal Agreement, $1.5
million.
12.2 INDEMNIFICATION BY BUYER. Buyer shall indemnify, defend
and hold harmless each of the Seller, the Company and the
-42-
48
Subsidiaries and their respective officers, directors, employees, agents and
Affiliates from, against and with respect to any Loss arising out of or in
connection with any of the following:
(a) any breach of any of the representations and warranties of
Buyer contained in this Agreement;
(b) any failure by Buyer to perform or observe, or to have
performed or observed any covenant or agreement to be performed or
observed by it pursuant to this Agreement;
(c) Buyer's operation of the Company and the Subsidiaries on and
after the Effective Time;
(d) all liability for Taxes of any Company or Subsidiary for any
taxable period ending after the Closing Date (except to the extent
such taxable period is a Straddle Period in which case Buyer's
indemnity will cover only that portion of such Taxes that are not
attributable to the Pre-Closing Tax Period).
12.3 NOTICE OF CLAIM. If any third party shall notify any
party (the "Indemnified Party") with respect to any matter (a "Third Party
Claim") which may give rise to a claim for indemnification against the other
party (the "Indemnity Obligor") under this Article XII, then the Indemnified
Party shall, within 30 days following receipt of such Third Party Claim,
promptly notify the Indemnity Obligor in writing of any claim for recovery,
specifying in reasonable detail the nature of the Loss and the amount of the
liability estimated to arise therefrom. If the Indemnified Party does not so
notify the Indemnity Obligor within 30 days of its discovery of a claim for
recovery, such claim shall be barred only to the extent that the Indemnity
Obligor is prejudiced by such failure to notify. The Indemnified Party shall
provide to the Indemnity Obligor as promptly as practicable thereafter all
information and documentation reasonably requested by the Indemnity Obligor to
verify the claim asserted.
12.4 DEFENSE. If the facts relating to a Loss arise out of the
claim of any third party, or if there is any claim against a third party
available by virtue of the circumstances of the Loss, the Indemnity Obligor may,
by giving written notice to the Indemnified Party within 15 days following its
receipt of the notice of such claim, elect to assume the defense or the
prosecution thereof, including the employment of counsel or accountants at its
cost and expense; PROVIDED, HOWEVER, that during the interim the Indemnified
Party shall use its commercially reasonable efforts to take all action (not
including settlement) reasonably necessary to protect against further damage or
loss with respect to the Loss. The Indemnified Party shall have the right to
employ counsel separate from counsel employed by the Indemnity Obligor in any
such action and to participate therein, but the fees and expenses of such
counsel shall be at the Indemnified Party's own expense, unless (i) the
employment thereof has been
-43-
49
specifically authorized by the Indemnity Obligor, (ii) such Indemnified Party
will have been advised by counsel reasonably satisfactory to the Indemnity
Obligor that there may be one or more legal defenses available to it which are
different from or additional to those available to the Indemnity Obligor and in
the reasonable judgment of such counsel it is advisable for such Indemnified
Party to employ separate counsel, or (iii) the Indemnity Obligor has failed to
assume the defense of such action and employ counsel reasonably satisfactory to
the Indemnified Party. Whether or not the Indemnity Obligor chooses so to defend
or prosecute such claim, all the parties hereto shall cooperate in the defense
or prosecution thereof and shall furnish such records, information and testimony
and shall attend such conferences, discovery proceedings and trials as may be
reasonably requested in connection therewith. The Indemnity Obligor shall not be
liable for any settlement of any such claim effected without its prior written
consent. In the event of payment by the Indemnity Obligor to the Indemnified
Party in connection with any Loss arising out of a third party claim, the
Indemnity Obligor shall be subrogated to and shall stand in the place of the
Indemnified Party as to any events or circumstances in respect of which the
Indemnified Party may have any right or claim against such third party relating
to such Indemnified Matter. The Indemnified Party shall cooperate with the
Indemnity Obligor in prosecuting any subrogated claim. The Indemnity Obligor
will take no action in connection with any claim that would adversely affect the
Indemnified Party without the consent of the Indemnified Party.
12.5 TIME FOR CLAIMS (Verjahrung). Any claim asserted with
respect to Sections 12.1(a) or (b) (other than in respect of Section 6.4) or
12.2(a) or (b) (other than in respect of Section 7.1) must be submitted to the
Indemnity Obligor in writing, or invoked in official proceedings, by April 15,
1998 (the "Survival Date"), other than claims with respect to (i) Sections 4.12
and 4.15, which may be submitted until sixty (60) days following the expiration
of the longest applicable statute of limitations, (ii) Section 4.13, which may
be submitted until the third anniversary of the Closing Date, and (iii) Sections
3.5 and 4.3 (solely with respect to the ownership of the Subsidiary Shares),
which may be submitted at any time without limitation.
12.6 LIMITATION. Notwithstanding the provisions of Section
12.1, neither Seller nor the Buyer shall have any indemnification obligation
under this Agreement
(a) (i) with respect to the Seller, in excess of DM 30,000,000
and (ii) with respect to both Buyer and Seller unless and until and to
the extent that the aggregate amount of the Losses of the Indemnified
Party exceeds DM 375,000 in the aggregate provided, that Losses arising
from an indemnification obligation under Section 12.1(c) or resulting
from a breach of a representation or warranty contained in this clause
(ii) and shall also be applied toward the
-44-
50
aggregate of Losses when determining whether such threshold of DM
375,000 shall have been met;
(b) with respect to an indemnification obligation resulting from
a breach of the representation and warranty contained in the last
sentence of Section 4.25, in excess of the amount of such receivable
giving rise to such breach, net of any recorded reserve on the books
of the Company and the Subsidiaries at the time of the Closing with
respect to such receivable. Buyer agrees to assign to Seller any such
receivable for which Buyer has received an indemnification payment
pursuant to this Article XII.
12.7 CHARACTERIZATION. Any payments pursuant to this Article
XII shall be treated by the parties as adjustments to the Purchase Price for tax
purposes, unless otherwise required by law.
12.8 INDEMNITY AMOUNTS. If the Buyer shall incur any Losses
(whether pursuant to a Third Party Claim or otherwise) or determine that it is
likely to incur any Losses and shall consider that it is entitled to be
indemnified against such Losses, the Buyer shall deliver a certificate signed by
an officer thereof (an "Officer's Certificate"), to the Seller which Officer's
Certificate shall (i) state that the Buyer has incurred Losses, or anticipates
that it will incur Losses for which the Buyer is entitled to indemnification
pursuant to Section 12.1 and (ii) specify in reasonable detail each individual
Loss included in the amount so stated, the date such Loss was incurred, the
basis for any anticipated Loss and the nature of the misrepresentation or breach
of warranty or agreement to which each such Loss is related and the computation
of the amount to which the Buyer claims to be entitled hereunder. In the event
that the Seller shall object to the indemnification of the Buyer in respect of
any Loss specified in an Officer's Certificate, the Seller shall, within 30 days
of receiving such Officer's Certificate, deliver to the Buyer a written notice
to such effect and the Seller and the Buyer shall, within the 30-day period
beginning on the date of receipt by the Buyer of such written objection, attempt
in good faith to agree upon the rights of the respective parties with respect to
each of such claims to which the Seller shall have so objected. If the Buyer and
the Seller shall succeed in reaching agreement on their respective rights with
respect to any of such claims, the Buyer and the Seller shall promptly prepare
and sign a memorandum setting forth such agreement. If no agreement is reached,
the Buyer may commence a cause of action in any court having competent
jurisdiction with respect to the Indemnity Escrow Account. The amounts set forth
in (A) claims specified in any Officer's Certificate to which the Seller shall
not object in writing within 30 days after its receipt of such Officer's
Certificate, (B) claims covered by a memorandum of agreement of the nature
described in this Section 12.8 and (C) claims the validity and amount of which
shall have been determined by a final judgment are hereinafter referred to,
collectively, as the "Indemnity Amounts."
-45-
51
ARTICLE XIII TAX MATTERS
13.1 STRADDLE PERIODS. In the case of any taxable
period that includes (but does not end on) the Closing Date (a
"Straddle Period"):
(a) real, personal and intangible property Taxes ("Property
Taxes") of the Company and the Subsidiaries for the Pre-Closing Tax
period shall include the amount of such property Taxes for the entire
Straddle Period multiplied by a fraction, the numerator of which is
the number of days during the Straddle Period that are in the
Pre-Closing Tax Period and the denominator of which is the number of
days in the Straddle Period; and
(b) the Taxes of the Company and the Subsidiaries (other than
Property Taxes) attributable to the Pre-Closing Tax Period shall be
computed as if such taxable period ended at the end of the day on the
Closing Date and the amount of Taxes attributable to such period shall
be based upon a closing of the books of the applicable Company and
Subsidiary at the end of the day on the Closing Date.
13.2 CARRYBACKS. Buyer shall not be entitled to carryback any
Losses, credits or other Tax benefit items of the Company or the Subsidiaries
that arises in a taxable period (or portion thereof) ending after the Closing
Date to a Pre-Closing Tax Period of Company, Seller, the Company or the
Subsidiaries.
ARTICLE XIV TERMINATION
14.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(a) by the mutual written consent of Seller and Buyer;
(b) by Seller (if Seller is not then in breach of any term of
this Agreement), if Buyer shall (i) fail to perform in any material
respect its agreements contained herein to be performed on or prior to
the Closing Date, or (ii) materially breach any of its representations
or warranties contained herein, which failure or breach is not cured
within ten days after Seller has notified Buyer of its intent to
terminate this Agreement pursuant to this subparagraph;
(c) by Buyer (if Buyer is not then in breach of any term of this
Agreement), if Seller shall (i) fail to perform in any material
respect its agreements contained herein required to be performed on or
prior to the Closing Date, or (ii) materially breach any of its
representations or warranties contained herein, which failure or
breach is not cured within
-46-
52
ten days after Buyer has notified Seller of its intent to terminate
this Agreement pursuant to this subparagraph;
(d) by either Seller or Buyer, if there shall be any
nonappealable or final order, writ, injunction or decree of any court
or governmental or regulatory agency binding on Seller or Buyer which
prohibits or restrains Seller or Buyer from consummating the
transactions contemplated hereby (other than temporary injunctions);
(e) by Buyer, if any of the conditions in Article IX has not been
satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Buyer to comply with its obligations under this Agreement) and Buyer
has not waived such condition on or before the Closing Date; or (ii)
by Seller, if any of the conditions in Article X has not been
satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Seller to comply with its obligations under this Agreement) and Seller
has not waived such condition on or before the Closing Date; or
(f) by either the Seller or the Buyer, if the Closing has not
occurred by January 31, 1997, for any reason other than delay or
nonperformance of the party seeking such termination.
14.2 EFFECT ON OBLIGATIONS. Termination of this Agreement
pursuant to this Article shall terminate all obligations of the parties
hereunder, except for the obligations under Sections 16.3 (with respect to
expenses), 16.4 (with respect to publicity) and 7.1 (with respect to
confidentiality); PROVIDED, HOWEVER, that termination pursuant to subparagraphs
(b) or (c) of Section 14.1 shall not relieve the defaulting or breaching party
from any liability to the other party hereto.
-47-
53
ARTICLE XV EMPLOYEES
It is the Buyer's present intention to cause the Company and
the Subsidiaries to continue to provide, immediately following the Closing
compensation levels and employee benefit programs the same as or reasonably
comparable to the compensation levels and employee benefit programs provided by
the Company and the Subsidiaries prior to the Closing, and to continue to credit
service under the employee benefit programs of the Company and the Subsidiaries
following the Closing in a manner consistent with the manner in which service
has been credited under such programs prior to the Closing. Notwithstanding the
foregoing, however, the parties recognize that the Company and the Subsidiaries
may, subject to the requirements of applicable law, any applicable voluntary
shop agreement (Betriebsvereinbarung) and any applicable collective bargaining
agreement, change the compensation levels or benefit programs provided by the
Company and the Subsidiaries following the Closing in ways that either the
Company or any Subsidiary determines to be necessary or appropriate for the
operation of its business.
ARTICLE XVI MISCELLANEOUS
16.1 ACCESS AFTER THE CLOSING DATE. After the Closing Date,
the Buyer shall provide the Seller with reasonable access during normal business
hours to copies of all of the books and records of the Company and the
Subsidiaries whenever requested by the Seller, and the Buyer shall retain such
books and records for the later of the end of the normal document retention
period of the Buyer; PROVIDED that the Buyer shall retain all required Tax books
and records until 60 days following the expiration of the applicable statute of
limitations. At the request and expense of the Seller, the Buyer shall deliver
copies of any such books and records to the Seller. At the Seller's out of
pocket expense, the Buyer shall use reasonable efforts to cause any of the
employees of the Company or any Subsidiary or the Buyer who were previously
employed by the Company or any Subsidiary to meet with the Seller and its
representatives and agents (including counsel and accountants) at such times and
places as the Seller may reasonably request in order to provide the Seller with
information concerning the operation of the Company and the Subsidiaries and the
conduct of their business by the Company or such Subsidiary prior to the Closing
Date.
16.2 PAYMENT OF EXPENSES.
(a) Except as provided in Sections 8.1 and 8.2, all costs of
transferring the Shares and the Other Shares to Buyer in accordance
with this Agreement, including recordation, notarial, registration,
stamp, transfer and documentary taxes and fees, and any federal, state
or local excise, sales or use taxes, and any filings or grant fees
imposed by any
-48-
54
governmental authority, shall be paid one-half by Seller and one-half
by Buyer.
(b) All costs, including recordation, notarial, registration,
stamp, transfer and documentary taxes and fees, and any federal, state
or local excise, sales or use taxes, and any filings or grant fees
imposed by any governmental authority caused by, or arising from, any
liquidation, merger, sale or transfer by or of the Company or any
Subsidiary or assets of the Company or any Subsidiary which occurs
after the Closing shall be paid by Buyer.
(c) Except as otherwise expressly provided in this Agreement,
each of the parties shall bear its own expenses, including the fees of
any attorneys and accountants engaged by such party, in connection
with this Agreement, the Seller Ancillary Documents and the Buyer
Ancillary Documents and the consummation of the transactions
contemplated herein or therein.
16.3 PUBLICITY. Seller and Buyer agree that they will not make
any press releases or other announcements prior to the Closing with respect to
the transactions contemplated hereby, except as required by applicable law,
without the prior approval of all other parties. The Seller acknowledges that
the Buyer is required to make certain public disclosures and filings pursuant to
the Exchange Act with respect to the transactions contemplated hereby.
16.4 COMMERCIALLY REASONABLE EFFORTS. Each party hereto agrees
to use commercially reasonable efforts to effect the Closing set forth in this
Agreement and otherwise to consummate the transactions contemplated by this
Agreement. Specifically, but without limiting the generality of the foregoing,
each of Buyer and Seller shall use commercially reasonable efforts to make or
obtain all consents, approvals, authorizations, registrations and filings with
all federal, state, provincial or local judicial or governmental authorities or
administrative agencies as are required in connection with the consummation of
the transactions contemplated by this Agreement.
16.5 NOTICES. All notices, demands and other communications
made hereunder shall be in writing and shall be given either by personal
delivery, by nationally recognized overnight courier (with charges prepaid) or
by telecopy (with telephone confirmation), and shall be deemed to have been
given or made when personally delivered, the day following the date deposited
with such overnight courier service or when transmitted to telecopy machine and
confirmed by telephone, addressed to the respective parties at the following
addresses (or such other address for a party as shall be specified by like
notice):
-49-
55
If to Seller:
Maag Holding AG
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ CH-8023
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇-▇-▇▇▇-▇▇▇▇
Telecopy: 011-41-1-271-9204
With a copy (which shall not constitute notice) to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer:
Sinter Metals, Inc.
Terminal Tower
50 Public Square/Suite 3200
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute notice) to:
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
North Point
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
16.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Federal Republic of Germany,
without regard to conflict of laws principles.
16.7 GERMAN STATUTORY LAW. Sections 460 and 464 of the German
Civil Code (BGB) and Section 377 of the German Commercial Code (HGB) shall not
apply to this Agreement. Section 460 of the German Civil Code (BGB) provides
that a seller shall not be liable to the buyer for the breach of a
representation or warranty, if the buyer has knowledge of such breach prior to
the consummation of the sale. The exclusion of Section 460 from this Agreement
shall not entitle the Buyer to indemnification pursuant to this Agreement in
respect to matters which were disclosed by the Seller in any Schedule (including
such Delivered Documents, which are incorporated by reference in any Schedule to
this Agreement), with
-50-
56
the exception of the Schedules listed in Section 12.1 (e) hereof. The mere
listing of agreements in any Schedule, however, shall not be regarded as a
disclosure of a matter for purposes of the preceding sentence. For the purposes
of clarification with respect to Schedules 4.9(a), (b), (e) and 4.10, 4.15(a)
the Parties hereto acknowledge that the preceding sentence shall not increase
the Seller's liability with respect to the matters set forth in Section 4.9,
4.10 and 4.15.
16.8 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16.9 ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights, interest or
obligations hereunder shall be assigned by either of the parties hereto without
the prior written consent of the other party hereto, and any purported
assignment without such consent shall be void; PROVIDED, HOWEVER, that the Buyer
may, without the consent of the Seller, (i) grant a security interest in its
rights under this Agreement to a lender as security for Buyer's obligations to
such lender and (ii) assign its rights hereunder to one or more wholly-owned
subsidiaries of the Buyer, but no such grant of security interest or assignment
shall release the Buyer from its obligations hereunder.
16.10 THIRD PARTY BENEFICIARIES. None of the provisions of
this Agreement or any document contemplated hereby is intended to grant any
right or benefit to any person or entity which is not a party to this Agreement.
16.11 HEADINGS; REFERENCES. The article and section headings
contained in this Agreement are solely for the purpose of reference, are not
part of this Agreement and shall not in any way affect the meaning or
interpretation of this Agreement. When a reference is made in this Agreement to
a clause Section, subsection or Article, such reference shall be to such clause,
Section, subsection or Article of this Agreement unless otherwise indicated.
16.12 AMENDMENTS; WAIVER. Any waiver, amendment, modification
or supplement of or to any term or condition of this Agreement shall be
effective only if in writing and signed by both parties hereto, and the parties
hereto waive the right to amend the provisions of this Section orally. No waiver
by any party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and executed by the party so waiving. The waiver
by any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any other or subsequent breach. No
failure on the part of either party hereto to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof. The remedies
herein are cumulative and not exclusive of any remedies provided by law.
-51-
57
16.13 KNOWLEDGE. Whenever used herein with respect to the
Seller the Company and its Subsidiaries, the term "knowledge" or "best
knowledge" shall mean the actual knowledge of ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. Notwithstanding any notice provided
pursuant to Section 7.3, the Seller acknowledges and agrees that the Buyer's
right to rely on the representations and warranties of the Seller with respect
to itself and the Company and its Subsidiaries shall not be affected in any way
by any investigation conducted by the Buyer.
16.14 SEVERABILITY. In the event that any provision in this
Agreement shall be determined to be invalid, illegal or unenforceable in any
respect, the remaining provisions of this Agreement shall not be in any way
impaired, and the illegal, invalid or unenforceable provision shall be fully
severed from this Agreement and there shall be automatically added in lieu
thereof a provision as similar in terms and intent to such severed provision as
may be legal, valid and enforceable.
16.15 ENTIRE AGREEMENT. This Agreement and the Schedules
hereto together with the Seller Ancillary Documents and the Buyer Ancillary
Documents, constitute the entire contract between the parties hereto pertaining
to the subject matter hereof, and supersede all prior agreements and
understandings between the parties with respect to such subject matter (except
with respect to that certain Confidentiality Agreement by and between Buyer and
Seller which shall not be superseded hereby in the event of a termination of
this Agreement for any reason before Closing).
16.16 ARBITRATION; SUBMISSION TO JURISDICTION.
(a) Any dispute relating to this Agreement or the Seller
Ancillary Documents or the Buyer Ancillary Documents or the performance
by the parties of their respective obligations hereunder, which is not
resolved after the parties' attempt at amicable negotiations, shall be
finally settled by arbitration. If such a dispute arises, either party
may initiate arbitration proceedings by filing a demand for arbitration
with the other party and the New York, New York, office of the American
Arbitration Association (the "AAA"). In making the selection of the
arbitrators, each party will select one arbitrator and the two
arbitrators selected will mutually agree upon the third arbitrator in
accordance with the Commercial Rules of Arbitration of the AAA. If the
two selected arbitrators are unable to agree on the third arbitrator,
then the third arbitrator will be selected in accordance with the
Commercial Rules of Arbitration of the AAA. All arbitration proceedings
shall be held in New York, New York. The arbitrator's award resulting
from such arbitration may be confirmed and entered as a final judgment
in any court of competent jurisdiction and enforced accordingly.
-52-
58
(b) The enforcement of any arbitration award or any legal action
or proceeding relating in any way to any matter concerning any
arbitration proceedings pursuant to Section 16.5(a) above may be
brought and enforced in the federal courts of the United States for
the Southern District of New York, and (i) the Seller accepts for
itself, the Company and the Subsidiaries and in respect of its
property, and (ii) the Buyer accepts for itself and in respect of its
property, each generally, irrevocably and unconditionally, the
jurisdiction of each such court in respect of any such action or
proceeding; PROVIDED, THAT if for whatever reason the federal courts
of the United States for the Southern District of New York will not or
cannot hear such action or proceeding, it may be brought and enforced
in the courts of the State of New York in The City of New York,
Borough of Manhattan. The Seller and the Buyer each agree that a
judgment, after exhaustion of all available appeals, in any such
action or proceeding shall be conclusive and binding upon, and may be
enforced in any other jurisdiction, by a suit upon such judgment, a
certified copy of which shall be conclusive evidence of the judgment.
The Seller and the Buyer each irrevocably designate, appoint and
empower CT Corporation System, with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its designee, appointee and agent to receive
service of any and all legal process, summons, notices and documents
which may be served in any such action or proceeding and agree that
the failure of any such agent to give any advice of service of process
to it shall not impair or affect the validity of such service or of
any such judgment based thereon. If for any reason such designee,
appointee and agent shall cease to be available to act as such, the
Seller and the Buyer each agree to designate a new designee, appointee
and agent in New York City on the terms and for the purposes of this
provision reasonably satisfactory to the other party. The Seller and
the Buyer each further irrevocably consent to the service of process
out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to such party, at its address set forth in
Section 16.6, such service to become effective 30 days after such
mailing. Nothing herein shall affect the right of the Seller or the
Buyer to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Seller or
the Buyer in any other jurisdiction.
(c) The Seller and the Buyer each hereby irrevocably waive any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with any matter concerning any arbitration proceedings
pursuant to Section 16.5(a) above or in the courts referred to in
clause (b) above, and hereby further irrevocably waive and agree not
to plead or claim in any such court that any such action or proceeding
brought in
-53-
59
any such court has been brought in an inconvenient or improper forum.
16.17 GOVERNING LANGUAGE. The English version of this
Agreement shall govern any interpretation of its provisions. To the extent
German terms are provided in the governing English version of this Agreement,
such German wording shall prevail for purposes of interpretation.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
-54-
60
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed by its duly authorized officer as of the date first above
written.
▇▇▇▇ HOLDING AG
By:
------------------------------
Name:
Title:
SINTER METALS, INC.
By:
------------------------------
Name:
Title:
