Exhibit 10.4
Joint Venture Agreement
between
Siemens Aktiengesellschaft
and
Breed Technologies, Inc.
concerning
the establishment and operation of the joint venture company
BST Restraint Systems International GmbH & Co. KG
TABLE OF CONTENTS
Preamble
1. Definitions
I. ESTABLISHMENT OF THE COMPANY
2. The COMPANY
3. Contributions
4. CHANGE OF CONTROL
5. Disposal of CAPITAL INTERESTS
II. ORGANIZATION OF THE COMPANY
6. Bodies of the COMPANY
7. PARTNERSHIP MEETING
8. PARTNERS= BOARD
9. MANAGEMENT
10. Staff, Non-Solicitation of Employees
11. Organizational Structure
III. OPERATION OF THE COMPANY
12. Initial Business Plan, Budget
13. Profit and Loss, Financing, Corporate Opportunities
14. Books and Records, FISCAL YEAR, Financial Statements
15. Guidelines for the Operation of the COMPANY
16. Contracts
IV. TERM OF AGREEMENT, DISSOLUTION
17. Term of Agreement
18. Dissolution
V. OTHER PROVISIONS
19. Premerger Control
20. Applicable Law
21. DISPUTE Settlement
22. Confidentiality
23. Miscellaneous
24. Notices
This Agreement is made between
(1) Siemens Aktiengesellschaft, a corporation organized and existing under
the laws of Germany and having its registered seats at Nonnendammallee 101,
D-13599 Berlin and at Wittelsbacher Platz 2, D-80333 Munich, Germany,
hereinafter referred to as "SIEMENS"
(2) Breed Technologies, Inc. a corporation organized and existing under the
laws of Delaware, USA and having its registered seat and head office at 5300 Old
Tampa Highway, Lakeland, Florida 33807-3050, USA hereinafter referred to as
"BREED"
Preamble
Passive Restraint Systems for cars are presently regarded to be stand-alone
components and subsystems such as seatbelt, steering wheel, airbag sensors,
ECU's etc. and they are mainly developed as applications for specific cars. The
airbag successfully achieved high penetration rates (>50% worldwide, >75% in
Europe) and now there are many airbags in the field. It is recognized, that the
airbag saved many people from death or serious injury in accidents. In certain,
but rare occasions, it caused damages to passengers unintentionally.
While all safety components need to be further developed and improved
technically, it is imperative to begin incorporating the components into
integrated, smart systems that detect, monitor and control all related functions
and actions. The critical objectives in offering maximum benefit to the
occupants are adaptive reactions and to avoid malfunctions and misuse of the
system.
The most likely customer and legislative requirements for adaptive future
protection systems shall be to improve e.g. passenger size sensing, passenger
position sensing, adaptive air bag inflation adaptive seat belt pre-tensioning.
To facilitate development of advanced systems which incorporate the appropriate
technologies a joint venture between the PARTIES shall be formed to utilize the
respective capabilities of each company, to meet the evolving technical market
demands and to increase passenger safety as fast as possible.
Through the joint venture it is ensured that all components of a motor
vehicle occupant safety restraint system are indentified, designed and
manufactured in accordance with the automotive safety standards with the
objective to increase the overall quality level of all subcomponents.
This AGREEMENT is being entered into under the following circumstances:
WHEREAS SIEMENS, through its Automotive Systems Group, and its affiliated
companies, are involved in the development, manufacturing and sale of mainly
electronic components for motor vehicle occupant safety restraint systems;
WHEREAS, BREED and its affiliated companies are involved in the
development, manufacturing and sale of mainly mechanical components for motor
vehicle occupant safety restraint systems;
WHEREAS, SIEMENS and BREED are determined to cooperate on a worldwide basis
with respect to the worldwide research, development, engineering and marketing
of motor vehicle occupant safety restraint systems as defined herein; WHEREAS,
SIEMENS and BREED are determined to appoint the joint venture as their reseller
in order to market and sell components of motor vehicle occupant safety
restraint systems;
WHEREAS, the PARTIES, have concluded a Non Binding Memorandum of
Understanding on July, 27 1997 and a Memorandum of Understanding on October, 14
1997;
WHEREAS the PARTIES have decided to carry out such a cooperation through a
joint venture company to be incorporated and organized under German law; and
WHEREAS the PARTIES desire to set forth herein their rights, duties and
responsibilities with respect to the joint venture company;
NOW, THEREFORE, in consideration of these premises and of the mutual
promises, obligations and agreements contained herein, the PARTIES hereto,
intending to be legally bound, subject to any necessary governmental or
corporate approvals, do hereby agree as follows:
1. Definitions
Wherever the following terms are used in this AGREEMENT in capital letters
in the singular or plural form, or in any of its ANNEXES, they shall be
understood as defined below.
"ACCOUNTING FIRM" means: the international independent certified accounting
firm KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprhfungsgesellschaft, located in Frankfurt/ Main, Germany, if the
PARTIES fail to agree on KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprhfungsgesellschaft in special cases the accounting firm shall be
appointed by the president of the Chamber of Commerce of Munich, Germany;
"AUDITOR" means: the auditor of the COMPANY and of the VERWALTUNGS-GMBH
designated by unanimous vote of the PARTNERSHIP MEETING according to SECTION 7.2
(F) and unanimous resolution of the SHAREHOLDERS'= MEETING;
"AFFILIATE" means: related companies within the meaning of Secs. 15 et seq.
of the German Stock Corporation Act ("Aktiengesetz"), in which either of the
PARTIES has more than 50 % of all voting rights, directly or indirectly owned;
"AGREEMENT" means: this Agreement and its ANNEXES;
"ANNEX" means: an annex to this AGREEMENT;
"ARTICLES OF LIMITED PARTNERSHIP" means: the articles of organization of
the COMPANY as a limited partnership;
BREED-FAMILY means: Allen K. Breed and Johnnie Cordell Breed including
their heirs and legal sucessors;
"CAPITAL INTEREST" means: the capital interest in the COMPANY and/or the
VERWALTUNGS-GMBH as the case may be;
"CEO" means: Chief Executive Officer ("Vorsitzender der Gesch@ftsfhhrung")
of the COMPANY;
"CFO" means: Chief Financial Officer ("Kaufm@nnischer Gesch@ftsfhhrer") of
the COMPANY;
2
"CHANGE OF CONTROL" means: (A) for SIEMENS that any person or entity other
than SIEMENS or its AFFILIATES acquires directly or indirectly fifty percent
(50%) or more of shareholders' voting rights in the SIEMENS Automotive Systems
Group; (B) (i) for BREED that (i) any person or entity other than the
BREED-FAMILIY acquires beneficial ownership (as defined in Rule 13d-3 under the
US Security Exchange Act of 1934) of fifty percent (50%) or more of the
outstanding common stock of BREED; or (ii) any company which is a competitor of
SIEMENS in the automotive field or a competitor of the COMPANY or its
SUBSIDIARIES either: (a) becomes the largest single shareholder in BREED; or (b)
makes a tender offer resulting in the ownership of fifty percent (50 %) or more
of the shares of outstanding common stock of BREED
"CLOSING" means: the consummation of all transactions which have to occur
under this AGREEMENT after the EFFECTIVE DATE including all governmental
authorizations and approvals of any nature necessary for the effectiveness of
this transactions;
"CLOSING DATE" means: the earliest date on which the CLOSING will occur,
provided that such date may not be later than June, 6.1998 unless otherwise
agreed by the PARTIES;
"COMPANY" means: the joint-venture company under the laws of Germany in the
legal form of a limited partnership ("Kommanditgesellschaft") with the
VERWALTUNGS-GMBH as general partner and with SIEMENS and BREED or an AFFILIATE
of SIEMENS or an AFFILIATE of BREED each as limited partners ("GmbH & Co. KG"),
to be established in accordance with this AGREEMENT;
"COMPONENTS"A means: components of SRS-SYSTEMS as listed in ANNEX 1;
"CONTRIBUTION AGREEMENT" means: the contribution agreement regarding the
contribution of shares in PARS to be contributed by SIEMENS or an AFFILIATE of
SIEMENS to the COMPANY and the contribution agreement regarding the contribution
of interests in the US-PARTNERSHIP to be contributed by BREED or an AFFILIATE of
BREED to the COMPANY and to the VERWALTUNGS-GMBH;
"DEADLOCK"" means: a situation of impasse where a decision which is
required for the continuing operations of the COMPANY as a going-business
concern cannot be taken because of a failure to agree upon a common course of
action among the MANAGEMENT, the PARTNERS' BOARD, the PARTNERSHIP MEETING or the
SHAREHOLDERS MEETING or the PARTIES;
"DISPUTE" means: any claims, differences or disputes, arising out of or in
connection with this AGREEMENT, including any question regarding its existence,
validity, termination or its performance, or in connection with arrangements
regarding the perfor mance of this AGREEMENT;
"EFFECTIVE DATE" means: the date on which this AGREEMENT becomes effective
according to SECTION 19. hereof;
"FISCAL YEAR" means: the fiscal year of the COMPANY and of the
VERWALTUNGS-GMBH, as provided for in this AGREEMENT.
"MANAGEMENT" means: the management of the VERWALTUNGS-GMBH and/or the
COMPANY as the case may be, consisting of a CEO and a CFO, as provided for in
this AGREEMENT;
"OFFER" means: the offer to be made under the procedure described in the
case of disposal of CAPITAL INTEREST as per SECTION 5 hereof;
"OFFEREE" means: the offeree in the procedure described in the case of
disposal of CAPITAL INTEREST as per SECTION 5 hereof;
"OFFEROR" means: the offeror under the procedure described in the case of
disposal of CAPITAL INTEREST as per SECTION 5 hereof;
"PARS" means: PARS Passive Rhckhaltesysteme GmbH, a limited liability
corporation organized and existing under the laws of Germany and having its
registered seats at Carl-Zeiss-Strasse 9, D-63755 Alzenau, Germany, of which the
shares are to be contributed to the COMPANY by SIEMENS or an AFFILIATE of
SIEMENS according to this AGREEMENT;
"PARTNER" means: a limited partner ("Kommanditist") in the COMPANY, i.e.
SIEMENS or BREED or an AFFILIATE of SIEMENS or BREED, as the case may be;
"PARTNERSHIP MEETING" means: the partnership meeting for the COMPANY as
provided for in this AGREEMENT;
"PARTY" means: SIEMENS or BREED;
"PARTNERS' BOARD" means: the partners' board for the COMPANY as provided
for in this AGREEMENT;
"SECTION" means: a section of this AGREEMENT;
"SHAREHOLDERS' MEETING" means: the shareholders' meeting for the
VERWALTUNGS-GMBH as provided for in this AGREEMENT;
"SIGNATURE A means: the date on which the AGREEMENT is signed by both
PARTIES;
"SRS-BACKGROUND-TECHNOLOGY" means: the technology with respect to
SRS-SYSTEMS and COMPONENTS available on the CLOSING DATE, whether in written or
oral form and whether under statutory protection such as patent applications,
patents, utility models, or not, at SIEMENS in its Automotive Systems Group
subdivision safety and chassis systems location Regensburg, Germany and
available at BREED, and which technology o is needed by the COMPANY and its
SUBSIDIARIES for the development, integration and application of SRS-SYSTEMS,
and o either PARTY is legally entitled to license to the other PARTY and/or the
COMPANY and its
SUBSIDIARIES;
"SRS-FOREGROUND-TECHNOLOGY" means: the technology with respect to
SRS-SYSTEMS and COMPONENTS available after the CLOSING DATE, whether in written
or oral form and whether under statutory protection such as patent applications,
patents, utility models, or not,
o at SIEMENS in its Automotive Systems Group subdivision sayety and
chaissis systems location Regensburg, Germany and at BREED, and which technology
is needed by the COMPANY and its SUBSIDIARIES for the development, integration
and application of SRS-SYSTEMS, or
o at the COMPANY and/or at its SUBSIDIARIES
and which technology either PARTY or the COMPANY or its SUBSIDIARIES,
respectively, is legally entitled to license as laid down in this AGREEMENT.
"SRS-SYSTEM" means: a motor vehicle occupant safety restraint system as
described in ANNEX 1.
"STATUTES" means: the articles of organization of the VERWALTUNGS-GMBH as
provided for in this AGREEMENT;
"SUBSECTION" means: a subsection of this AGREEMENT;
"SUBSIDIARY A means: any legal entity, in which the COMPANY or the
VERWALTUNGS-GMBH, as the case may be, has more than 50 % of all voting rights,
directly or indirectly owned, such as but not limited to the US-PARTNERSHIP and
the PARS;
"US-PARTNERSHIP" means: the legal entity in the form of a limited
partnership organized and existing under the laws of the State of Delaware, USA,
which is to be founded by BREED and an AFFILIATE of BREED and of which the
interests are to be contributed to the COMPANY and the VERWALTUNGS-GMBH by BREED
and an AFFILIATE of BREED under this AGREEMENT;
"VERWALTUNGS-GMBH" means: a legal entity in the form of a limited liability
company (GmbH) under the laws of Germany which assumes personal liability and
the management of the COMPANY as general partner, to be established in
accordance with this AGREEMENT;
I. ESTABLISHMENT OF THE COMPANY
2. The COMPANY
2.1 The PARTIES or AFFILIATES designated by the respective PARTY shall
establish the COMPANY with ARTICLES OF LIMITED PARTNERSHIP set forth in ANNEX
2.1 A and the VERWALTUNGS-GMBH with STATUTES set forth in ANNEX 2.1 B. The
COMPANY shall be established for an indefinite period of time subject to the
right of either PARTY to terminate this Agreement as per SECTION 17 hereof.
2.2 The name of the COMPANY shall be: "BST Restraint Systems International
GmbH & Co. KG" The name of the VERWALTUNGS-GMBH shall be: "BST Restraint Systems
Verwaltungs-GmbH" On its corporate stationary the COMPANY may add to its name
the words: "A joint venture of Siemens and Breed"
2.3 The COMPANY and the VERWALTUNGS-GMBH shall have their registered seats
and administrative head offices at Alzenau, Germany.
2.4 The scope of the COMPANY shall be: the worldwide research, development,
engineering, assembly, marketing and sale of SRS-SYSTEMS, and the purchase,
marketing and sale of COMPONENTS, and the holding of participations in companies
which are engaged in businesses as described in SUBSECTION 2.4.1 and 2.4.2
hereof.
2.5 It is understood, that the COMPANY and the SUBSIDIARIES shall exercise
the worldwide research, development and engineering of SRS-SYSTEMS on a
contractual basis. The COMPANY may perform by itself or through its SUBSIDIARIES
on a worldwide basis all activities related to this scope, including but not
limited to the representation, administration or acquisition of other
enterprises of the same or a similar nature and participation in such
enterprises. Furthermore, the COMPANY may establish branches and/or SUBSIDIARIES
worldwide. The scope of the COMPANY may be extended by unanimous resolution of
the PARTNERSHIP MEETING.
2.6 It is understood, that any SUBSIDIARY established by the COMPANY or the
VERWALTUNGS-GMBH shall be found in the most beneficial way in respect of
taxation and liability. All shares of SUBSIDIARIES in the form of a corporation
with its registered seat outside Germany shall be solely owned by the
VERWALTUNGS-GMBH or any other legal entity agreed upon by the PARTIES.
2.7 The COMPANY shall have a registered liability capital ("Haftkapital")
to be registered in the companies' register ("Handelsregister") in an aggregate
amount of DM 10.000.000 (Deutsche Mark ten million) divided into one (1) CAPITAL
INTEREST of DM 5.020.000 (Deutsche Mark five million twenty thousand) held by
SIEMENS or an AFFILIATE designated by SIEMENS and into one (1) CAPITAL INTEREST
of DM 4.980.000 (Deutsche Mark four million ninety eight thousand) held by BREED
or an AFFILIATE designated by BREED.
2.8 The scope of the VERWALTUNGS-GMBH as general partner ("Komplement@r")
in the COMPANY shall be the assumption of the personal liability for and the
management of the COMPANY. The VERWALTUNGS- GMBH will not hold any interest in
the COMPANY'S capital. Its aggregate share capital shall be DM 50,000 (Deutsche
Mark fifty thousand) divided into one (1) CAPITAL INTEREST of DM 25.100
(Deutsche Mark twenty five thousand one hundred) held by SIEMENS, or an
AFFILIATE designated by SIEMENS, and one (1) CAPITAL INTEREST of, DM 24.900
(Deutsche Mark twenty four thousand nine hundred) held by BREED, or an AFFILIATE
designated by BREED.
2.9 As of the CLOSING DATE, the CAPITAL INTERESTS in the COMPANY and the
CAPITAL INTERESTS in the VERWALTUNGS-GMBH shall be fully paid in as provided for
in SECTION 3 hereof and the ratio of shareholding of SIEMENS, or an AFFILIATE
designated by SIEMENS, shall be 50,2 % and the ratio of shareholding of BREED or
an AFFILIATE designated by BREED, shall be 49,8 % in the COMPANY and the
VERWALTUNGS- GMBH, as provided for in SECTION 2.7 and 2.8 hereof.
2.10 The CAPITAL INTERESTS in the COMPANY and the CAPITAL INTERESTS in the
VERWALTUNGS-GMBH may only be transferred together and to the same extent.
Therefore, to the extent that in this AGREEMENT or the ARTICLES OF LIMITED
PARTNERSHIP any provisions have been agreed for a voluntary or involuntary
transfer of CAPITAL INTERESTS in the COMPANY, such provisions, in particular
SECTION 5., shall apply
mutatis mutandis to a transfer of CAPITAL INTERESTS in the VERWALTUNGS-GMBH
subject to the hereof condition that any such transfer shall occur
simultaneously. The same shall apply to any other disposal or encumbrance of the
CAPITAL INTERESTS.
3. Contributions
3.1 Immediately after the EFFECTIVE DATE, SIEMENS, or an AFFILIATE
designated by SIEMENS, and BREED, or an AFFILIATE designated by BREED, shall
jointly form the VERWALTUNGS-GMBH and shall make their contributions to the
aggregate share capital in cash in order to receive in return their respective
CAPITAL INTERESTS, as provided for in SUBSECTION 2.8 hereof.
3.2. After the incorporation of the VERWALTUNGS-GMBH, the VERWALTUNGS-GMBH
as general partner ("Komplementar"), SIEMENS, or an AFFILIATE designated by
SIEMENS, and BREED, or an AFFILIATE designated by BREED, as limited partners
("Kommanditisten") shall jointly form the COMPANY and SIEMENS, or an AFFILIATE
designated by SIEMENS, as well as BREED, or an AFFILIATE designated by BREED,
shall make their contributions to the aggregate share capital of the COMPANY in
kind as provided for in SUBSECTION 3.2.1, 3.2.2 and 3.2.3 hereof in order to
receive in return their respective CAPITAL INTERESTS as provided for in
SUBSECTION 2.7 hereof:
3.2.1 SIEMENS, or an AFFILIATE designated by SIEMENS, shall according to
SECTION 3.2 contribute all of the shares of PARS to the COMPANY with economic
effect as of the EFFECTIVE DATE.The value of the shares of PARS is DM
9.318.000,-- (Deutsche Mark nine million threehundred eighteen thousand) as of
September 30, 1997.
3.2.2 Prior to the EFFECTIVE DATE BREED, and an AFFILIATE designated by
BREED, shall form the US- PARTNERSHIP as a limited partnership and transfer the
tangible assets with respect to development, research and testing of SRS-SYSTEMS
as described in ANNEX 3.2.2 into the US-PARTNERSHIP. Any licenses or transfer of
SRS- BACKGROUND-TECHNOLOGY shall be solely provided according to SECTION 15.
BREED shall be the limited partner in the US-PARTNERSHIP with capital interests
of 99% and the AFFILIATE designated by BREED shall be the general partner in the
US-PARTNERSHIP with capital interest of 1 %. BREED shall according to SECTION
3.2 contribute all its interests as a limited partner of the US-PARTNERSHIP to
the COMPANY and the AFFILIATE designated by BREED shall according to SECTION 3.2
transfer all its interests as a general partner of the US- PARTNERSHIP to the
VERWALTUNGS-GMBH with economic effect as of the EFFECTIVE DATE.The value of the
assets to be transfered by BREED, and an AFFILIATE designated by BREED, into the
US-PARTNERSHIP and accordingly the value of the interests of the US-PARTNERSHIP
are DM 9.318.000,-- (Deutsche Mark Mark nine million threehundred eighteen
thousand) as of the EFFECTIVE DATE.
3.2.3 The shares of PARS and interests in the US-PARTNERSHIP contributed by
the respective PARTNER shall be entered in the registered liability contribution
of the contributing PARTNER in the COMPANY up to an amount of DM 5.020.000
(Deutsche Mark five million twenty thousand) for SIEMENS or an AFFILIATE
designated by SIEMENS and up to an amount of DM 4.980.00 (Deutsche Mark four
million ninety eight thousand) for BREED or an AFFILIATE designated by BREED.
The exceeding amount of DM 8.636.000 (Deutsche Mark eight million sixhundred
thirty-six thousand) shall be entered in the joint capital reserve of the
COMPANY.
3.2.4 The shares in PARS shall be contributed by SIEMENS or an AFFILIATE
designated by SIEMENS, to the COMPANY under the condition that any and all risks
resulting from product liability or liability for infringement of proprietary
rights or any other liabilities for any products produced or developed or
services rendered before the CLOSING DATE shall remain with SIEMENS who shall
hold the COMPANY harmless from any and all claims of third parties resulting
therefrom. The interests in the US-PARTNERSHIP shall be contributed by BREED and
an AFFILIATE designated by BREED, to the COMPANY and the VERWALTUNGS-GMBH under
the condition that any and all risks
resulting from product liability or liability for infringement of
proprietary rights or any other liabilities for any products produced or
developed or services rendered before the CLOSING DATE shall remain with BREED
and the AFFILIATE designated by BREED who shall hold the COMPANY and the
VERWALTUNGS-GMBH harmless from any and all claims of third parties resulting
therefrom.
3.2.5 The CONTRIBUTION AGREEMENTS shall each contain adequate
representations and warranties substantially in the form as stated in ANNEX
3.2.5.
3.3 With the exception of costs and expenses for counsel and auditors to be
borne solely by each PARTY, SIEMENS and BREED shall jointly bear all costs and
expenses related to the formation of the VERWALTUNGS-GMBH and the COMPANY unless
the ARTICLES OF LIMITED PARTNERSHIP or the STATUTES stipulate that the costs and
expenses, such as for the notarized application to and the registration in the
companies' register ("Handelsregister") as well as the publication costs, shall
be borne directly by the VERWALTUNGS-GMBH or the COMPANY. SIEMENS shall solely
bear all cost and expenses ,including any and all duties and taxes, related to
the contribution of the shares in PARS to the COMPANY as per SUBSECTIONS 3.2.1.
and BREED shall solely bear all cost and expenses, including any and all duties
and taxes, related to the contribution of the interests in the US-PARTNERSHIP to
the COMPANY and the VERWALTUNGS-GMBH as per SUBSECTION 3.2.2. BREED shall solely
bear all costs and expenses, including any and all duties and taxes, related to
the formation of the US-PARTNERSHIP and the transfer of the assets thereto as
per SUBSECTION 3.2.2.
3.4 Third parties shall only be permitted to join the VERWALTUNGS-GMBH and
the COMPANY if all PARTIES approve.
3.5 After the implementation of the contribution according to SUBSECTION
3.2.1 and 3.2.2 the corporate names of the SUBSIDIARIES shall be changed as far
as legally possible
3.5.1 PARS in "BST Restraint Systems-GmbH
3.5.2 US-PARTNERSHIP in BST Restraint Systems-LP Any other SUBSIDIARY of
the COMPANY or the VERWALTUNGS-GMBH shall be named with a similar name as far as
legally possible.
4. CHANGE OF CONTROL
4.1 If, after the incorporation of the COMPANY and/or the VERWALTUNGS-
GMBH, a CHANGE OF CONTROL occurs in respect of a PARTY, this PARTY shall notify
this to the other PARTY without undue delay and shall sell all or part of its
CAPITAL INTERESTS in the COMPANY and the VERWALTUNGS-GMBH to the other PARTY if
and to the extent so requested by the other PARTY. Such a request shall be made
in writing not later than three (3) months after the notification. The price for
the CAPITAL INTERESTS shall be agreed upon by the PARTIES and, failing such
agreement, shall be determined by an ACCOUNTING FIRM jointly appointed by the
PARTIES. The opinion of the ACCOUNTING FIRM as to the price of the CAPITAL
INTERESTS shall be based on a generally accepted valuation method being in
common use at the time of appointment of the ACCOUNTING FIRM and shall result in
a reasonable, arm's-length price on the basis of a willing buyer and a willing
seller of the relevant CAPITAL INTERESTS. The cost of the opinion of the
ACCOUNTING FIRM shall be paid by the selling PARTY.
4.2 Insofar as the conditions as set out in sentence 1 of SUBSECTION 4.1
already exist and have been disclosed in writing at the time of SIGNATURE, this
shall not be deemed to be CHANGE OF CONTROL within the meaning of this
provision.
4.3 An AFFILIATE of a PARTY shall be deemed not to be a third party within
the meaning of this provision, but only as long as it remains an AFFILIATE.
5. Disposal of CAPITAL INTERESTS
5.1 For a time period of six (6) years commencing at the CLOSING DATE, the
transfer of any CAPITAL INTERESTS by a PARTY to a third party or any other
disposal or encumbrance thereof shall not be permitted and after such six (6)
years time period shall require the prior written consent of the other PARTY,
such consent to be given if and when the following conditions are fulfilled:
(A) If a PARTY (the "OFFEROR") wishes to transfer its CAPITAL INTERESTS in
the COMPANY, it shall first offer such CAPITAL INTERESTS in writing (the
"OFFER") to the other PARTY (the "OFFEREE").
(B) If within one (1) months from receipt of the OFFER the OFFEREE
indicates in writing that he is not interested in purchasing the CAPITAL
INTERESTS or does not reply to the OFFER, the OFFEROR shall have the right to
offer its CAPITAL INTERESTS to a third party of whose identity the OFFEROR has
immediately informed the OFFEREE. In such a case, the OFFEREE may withhold its
approval only for cause which must relate to the potential third party
purchaser. Such cause shall be deemed to be constituted without limitation if
such third party purchaser is a direct competitor of the OFFEREE.
(C) If within one (1) months from receipt of the OFFER the OFFEREE
indicates in writing that he is interested in purchasing the CAPITAL INTERESTS,
the PARTIES shall seek to agree on a reasonable purchase price on an arm's
length basis.
(D) If the PARTIES fail to agree on the purchase price within two (2)
months from the time the OFFER was received by the OFFEREE, they shall, within a
period of one (1) month commencing after the elapse of the aforementioned
two-month period, ask an ACCOUNTING FIRM, jointly appointed by the PARTIES, to
prepare an opinion on the price to be paid for the CAPITAL INTERESTS. The
opinion of the ACCOUNTING FIRM as to the price of the CAPITAL INTERESTS shall be
based on a generally accepted valuation method being in common use at the time
of appointment of the ACCOUNTING FIRM and shall result in a reasonable,
arm's-length price on the basis of a willing buyer and a willing seller of the
relevant CAPITAL INTERESTS. The cost of the opinion of the ACCOUNTING FIRM shall
be shared by the OFFEROR and the OFFEREE in proportion to their then respective
CAPITAL INTERESTS.
(E) The OFFEROR shall inform the OFFEREE within one (1) month from
receiving the opinion of the ACCOUNTING FIRM on the price whether he is prepared
to sell his CAPITAL INTERESTS at the price stated in the opinion. If the OFFEROR
refuses to sell his CAPITAL INTERESTS at that price or if he does not inform the
OFFEREE within that one (1) month period, he shall not be entitled to sell his
CAPITAL INTERESTS to such third party.
(F) The OFFEREE shall inform the OFFEROR within one (1) month after the
OFFEROR has indicated his willingness to sell whether he is prepared to purchase
the CAPITAL INTERESTS at the given price pursuant to SUBSECTION (E) hereof. If
the OFFEREE refuses to purchase the CAPITAL INTERESTS at this price or if he
does not within the period of one (1) month inform the OFFEROR, the OFFEROR
shall have the right to offer his CAPITAL INTERESTS for sale to a third party of
whose identity the OFFEROR has immediately informed the OFFEREE. In such a case,
the OFFEREE may withhold its approval only for cause which must relate to the
potential third party purchaser. Such cause shall be deemed to be constituted
without limitation if such third party purchaser is a direct competitor of the
OFFEREE.
5.2 Before the transfer of CAPITAL INTERESTS to a third party is executed,
the OFFEREE shall have the right to require the offered CAPITAL INTERESTS to be
sold to him on the same terms and conditions as offered to the
third party. Such right of first refusal shall be exercised in writing
within a period of three (3) weeks after the OFFEROR has informed the OFFEREE in
writing of the name and the address of the third party and of the terms of the
transfer agreement.
5.3 The restrictions on transfer contained in SECTIONS 5.1 and 5.2 hereof
shall not apply to a transfer of CAPITAL INTERESTS in the COMPANY to an
AFFILIATE or from an AFFILIATE to the respective PARTY. The transfer shall only
be made on the condition that the AFFILIATE shall be bound by the terms of this
AGREEMENT, the ARTICLES OF LIMITED PARTNERSHIP and the STATUTES and, if so
required by the PARTIES, if applicable, will not permit the AFFILIATE to cease
to be an AFFILIATE without first procuring the transfer of the CAPITAL INTERESTS
in the COMPANY owned by that AFFILIATE either to the other PARTY or to one of
its AFFILIATES.
5.4 If so required by the OFFEREE, the OFFEROR, when selling its CAPITAL
INTERESTS to a third party, shall undertake that, prior to and as a precondition
to such transfer, the third party shall have entered into an agreement with the
OFFEROR, whereby the third party shall be bound by the terms of this AGREEMENT,
the ARTICLES OF LIMITED PARTNERSHIP and the STATUTES in every way as if the
third party were a party to this AGREEMENT and had been such a party from the
date when this AGREEMENT came into force.
5.5 Should one of the PARTIES be prevented from accepting the OFFER or from
exercising the pre-emptive right according to SUBSECTION 5.1 or 5.2 hereof due
to the laws in force in Germany or the US or due to the compliance with any
order or regulation of governmental authorities in Germany or the US or of the
authorities of the European Union, such PARTY shall then be entitled to assign
such rights to a third party to which the respective change in law, order or
regulation does not apply.
5.6 Except as otherwise provided in SUBSECTION 5.5 none of the PARTIES
shall assign all or part of its rights or obligations under this AGREEMENT to
any other company or person without obtaining the prior written consent of the
other PARTY. Such consent is however not necessary in connection with a transfer
of CAPITAL INTERESTS to an AFFILIATE or from an AFFILIATE to the respective
PARTY in accordance with SUBSECTION 5.3 hereof.
5.7 Notwithstanding SUBSECTION 5.1 to 5.6 each PARTY shall inform the other
PARTY prior to any execution of transfer of CAPITAL INTERESTS in writing.
II. ORGANIZATION OF THE COMPANY
6. Bodies of the COMPANY
6.1 The corporate bodies of the COMPANY are
- the PARTNERSHIP MEETING;
- the PARTNERS' BOARD.
- the MANAGEMENT
6.2 The corporate bodies of the VERWALTUNGS-GMBH are - the
SHAREHOLDERS' MEETING; - the MANAGEMENT.
7. PARTNERSHIP MEETING
7.1 The PARTNERSHIP MEETING is the supreme authority of the COMPANY. It
shall pass and ratify
resolutions with regard to all activities and business actions to which it
is entitled. Its resolutions shall be binding upon all other bodies of the
COMPANY.
7.2 The PARTNERSHIP MEETING shall resolve upon
(A) amendments of the ARTICLES OF LIMITED PARTNERSHIP, including but not
limited to, changes of the scope of the COMPANY, the increase or decrease of the
partnership capital, the increase or decrease of PARTNERS interests in the
COMPANY, the sale of PARTNERS interests to third parties;
(B) merger with or demerger from or management contracts with any other
company;
(C) dissolution of the COMPANY and disposition of the COMPANY'S property in
case of its dissolution;
(D) sale of all or substantially all of the assets of the COMPANY;
(E) determination of the annual financial statements and allocation of the
financial result (such as dividends and distributions);
(F) designation of the AUDITOR;
(G) appointment and dismissal of the MANAGEMENT pursuant to the procedures
in SUBSECTION 9.3;
(H) all other matters if so required by mandatory law.
The resolution as listed in SUBSECTION 7.2 letter A to H require an
unanimous vote of the PARTNERS.
7.3 PARTNERS resolutions shall regularly be adopted at PARTNERSHIP
MEETINGS. Unless mandatory law requires otherwise, resolutions may, however,
also be adopted in writing or by telefax if all PARTNERS concerned agree thereto
in writing or by telefax. A PARTNERSHIP MEETING may also be held by video
conference if all PARTNERS agree. A PARTNERSHIP MEETING need not to be held if
all PARTNERS agree in writing with the resolution to be taken. In such a case,
the MANAGEMENT shall immediately after receipt of the written vote inform all
PARTNERS about the result thereof.
7.4 Decisions of the PARTNERSHIP MEETING shall be taken by unanimous vote
of the liability capital according to SUBSECTION 2.7, unless otherwise required
by this AGREEMENT, in accordance with the ARTICELS OF LIMITED PARTNERSHIP or by
strictly binding law. Every Deutsche Mark one thousand (DM 1,000.00) of a
PARTNERS CAPITAL INTEREST in the COMPANY shall confer one (1) vote. The
VERWALTUNGS-GMBH as general partner shall have no right to vote.
7.5 Each of the PARTIES shall at all times exercise its powers and votes in
the COMPANY towards procuring that the COMPANY will comply with all obligations
under this AGREEMENT, the ARTICLES OF LIMITED PARTNERSHIP and that all key
personnel of the COMPANY and any representative of either PARTY will implement
the provisions of this AGREEMENT in relation to the COMPANY and any other PARTY.
7.6 A PARTNERSHIP MEETING may be called by the MANAGEMENT or by any
PARTNER. The PARTNERSHIP MEETING shall be called by giving four (4) weeks prior
notice in writing or by telefax, indicating the agenda, the place and the date
of the PARTNERSHIP MEETING. PARTNERSHIP MEETINGS shall generally take place at
the head office of the COMPANY if not otherwise agreed upon by all PARTNERS.
7.7 For the purpose of resolutions to be adopted by the PARTNERSHIP MEETING
each PARTNER may be represented by written proxy given to a member of its
Company authorized to represent the same or to an attorney at law, an auditor or
a tax-advisor.
7.8 A quorum shall exist in a PARTNERSHIP MEETING if all PARTNERS are
represented therein. If no quorum exists in a PARTNERSHIP MEETING, then a second
meeting having the same agenda shall be called within one (1) week and a quorum
shall be deemed to exist in such second meeting regardless of the liability
capital represented therein; reference to this provision shall be included in
the notice for such PARTNERSHIP MEETING.
7.9 The ordinary PARTNERSHIP MEETING shall be held within the first six (6)
months of the running FISCAL YEAR. It shall resolve on the approval of the
annual financial statement and the employment of the annual profit, the approval
of the acts of the MANAGEMENT for the previous FISCAL YEAR and the appointment
of the AUDITORS for the running FISCAL YEAR.
7.10 Unless a notarial recording is required, the course of the PARTNERSHIP
MEETING shall be recorded in minutes reflecting the place and date of the
PARTNERSHIP MEETING, the participants therein, the items of the agenda, the
material contents of negotiations and the resolutions adopted by the PARTNERS.
The minutes shall be signed by the chairman and by the keeper of the minutes and
a copy shall be furnished to each of the PARTNERS and to the general partner.
7.11 Any action challenging the validity of a PARTNERS' resolution shall be
excluded unless it is filed within one (1) month after receipt of the minutes
pertaining thereto.
7.12 If a DEADLOCK occurs in the PARTNERSHIP MEETING, then each PARTNER has
the right to request a new voting on the same item. Such new voting shall occur
within one (1) month counting from the date of the last voting.
7.13 If in the second voting pursuant to SUBSECTION 7.12 hereof unanimity
cannot be reached the respective upper management of each PARTY, i.e. the
chairman of BREED and the chairman of SIEMENS' Automotive Systems Group, shall
be asked for a final decision.
7.14 If the upper management of the PARTIES cannot reach an unanimous final
decision within forty-five (45) days after the second voting pursuant to
SUBSECTION 7.13 hereof the PARTIES shall immediately consult each other as to
whether one of them wishes to purchase the entire CAPITAL INTERESTS held by the
other PARTY or its AFFILIATE. If none of the PARTIES is willing to purchase then
each PARTY shall have the right to demand the dissolution of the COMPANY
according to SECTION 18 hereof. If one of the PARTIES is willing to purchase the
other PARTY shall be obligated to sell. The purchase price shall be determined
in accordance with SUBSECTION 5.1 letter D hereof, provided, however, that the
opinion of the ACCOUNTING FIRM shall be final and binding upon both PARTIES. If
both PARTIES wish to purchase, then each PARTY shall submit to the respective
other PARTY a sealed envelope containing the purchase price at which it is
prepared to purchase the CAPITAL INTERESTS of the other PARTY and at which it is
prepared to sell its own CAPITAL INTERESTS to the other PARTY. The purchase
price offer submitted by sealed envelope constitutes an irrevocable offer to
purchase the CAPITAL INTERESTS of the other PARTY at the purchase price stated
therein. The PARTY whose purchase price offer is higher shall automatically be
entitled to purchase, and the other PARTY shall be obligated to sell the CAPITAL
INTERESTS at such higher purchase price. The transactions to sell and purchase
according to this SUBSECTION 7.14 shall be completed without undue delay.
7.15 The provisions of this SECTION 7 shall apply mutatis mutandis for the
SHAREHOLDERS MEETING of the VERWALTUNGS-GMBH.
8. PARTNERS' BOARD
8.1 A PARTNERS' BOARD shall be formed for the COMPANY, consisting of six
(6) members. Three (3) members of the PARTNERS' BOARD shall be appointed by
SIEMENS. Three (3) members of the PARTNERS' BOARD shall be appointed by BREED.
The members of the PARTNERS' BOARD may represent each other mutually on the
basis of written or telexed/telefaxed power of attorney. The PARTNERS' BOARD
shall elect from among its members a chairman and a vice chairman, it being
understood that the chairman of the PARTNERS' BOARD shall be nominated by the
PARTNER not nominating the CEO and that the vice chairman of the PARTNERS' BOARD
shall be nominated by the PARTNER nominating the CEO, as provided for herein.
8.2 The task of the PARTNERS' BOARD shall be to establish the principles of
business policy and ensuring adherence thereto. The PARTNERS' BOARD shall
supervise the MANAGEMENT and shall be entitled to issue directions to the
MANAGEMENT.
8.3 The PARTNERS BOARD shall decide on all matters which require approval
of the PARTNERS BOARD according to this AGREEMENT, the ARTICELS OF LIMITED
PARTNERSHIP or the rules of procedure for the PARTNERS' BOARD. Further details
shall be governed by the ARTICELS OF LIMITED PARTNERSHIP and the rules of
procedure for the PARTNERS' BOARD to be adopted by the PARTNERSHIP MEETING in
accordance with ANNEX 8.3.
8.4 The PARTNERS BOARD shall at least meet four (4) times a year.
8.5 If a DEADLOCK occurs in the PARTNERS' BOARD, the members of the
PARTNERS' BOARD shall submit the item for decision to the PARTNERSHIP MEETING.
8.6 A supervisory board shall not be formed for the COMPANY and/or the
VERWALTUNGS-GMBH unless required by strictly binding law.
9. MANAGEMENT
9.1 The MANAGEMENT of the COMPANY shall be assumed by the VERWALTUNGS-GMBH.
9.2 The VERWALTUNGS-GMBH shall act through the two (2) members of its own
MANAGEMENT, a CEO and a CFO. The VERWALTUNGS-GMBH itself and its MANAGEMENT
shall be exempt from the restrictions of Section 181 of the German Civil Code
("Buhrgerliches Gesetzbuch") to the extent that transactions between the COMPANY
and the VERWALTUNGS-GMBH are concerned. Any further exemptions shall require a
resolution of the shareholders of the VERWALTUNGS-GMBH according to a proposal
to be decided upon by the PARTNERS BOARD.
9.3 Each PARTY has the right to nominate one (1) member to the MANAGEMENT
of the VERWALTUNGS-GMBH according to the following procedure.
9.3.1 The initial CEO of the VERWALTUNGS-GMBH will be nominated by SIEMENS
and is subject to BREEDS approval, such approval not to be unreasonably
withheld. The CEO will be given a three-year term.
9.3.2 The initial CFO of the VERWALTUNGS-GMBH will be nominated by BREED
and is subject to SIEMENS' approval, such approval not to be unreasonably
withheld. The CFO will be given a term which shall end on the same date as the
term of the CEO.
9.3.3 If the CEO or the CFO is removed for any reason during his respective
term, then the PARTY which
nominated such officer shall nominate his replacement, subject to the other
PARTY'S approval, such approval not to be unreasonably withheld. Such
replacement officer's term shall end on the same date as the term of the officer
which he is replacing.
9.3.4 At the end of the initial three-year term, if the PARTNERS' BOARD
agrees to renew the term of the CEO, then the CEO shall be given an additional
term of three years. In that event, at BREED'S election, the CFO shall either:
(i) be given an additional term ending on the same date as the CEO's new term;
or (ii) replaced by a new CFO nominated by BREED, subject to SIEMENS' approval,
such approval not to be unreasonably withheld: Such replacement CFO to be given
a term contract which shall end on the same date as the CEO's new term.
9.3.5 At the end of the initial three year term, if the PARTNERS' BOARD
does not agree to renew the CEO's employment, then the replacement CEO of the
VERWALTUNGS-GMBH will be nominated by BREED and is subject to SIEMENS' approval,
such approval not to be unreasonably withheld. The replacement CEO will be given
a three-year term. Likewise, if the CFO's employment will not be renewed, the
replacement CFO will be nominated by SIEMENS, subject to BREED'S approval, such
approval not to be unreasonably withheld. The replacement CFO will be given a
term which shall end on the same date as the term of the replacement CEO. If
either of these replacement officers is removed, they shall be replaced in
accordance with the procedure described in SUBSECTION 9.3.3.
9.3.6 Thereafter, each time that the PARTNERS' BOARD does not agree to
renew the CEO's employment, a new CEO will be nominated by the PARTY which did
not nominate such non-renewed CEO and a new CFO will be nominated by the other
PARTY.
9.4 The CEO and the CFO shall jointly represent the VERWALTUNGS-GMBH and
consistently the COMPANY. As long as there is only one manager on duty he is
entitled to represent the VERWALTUNGS-GMBH and consistently the COMPANY alone.
9.5 The MANAGEMENT shall have the broadest powers to manage and supervise
the business and the affairs of the COMPANY and to supervise the business and
the affairs of its SUBSIDIARIES and, being the head of the executive
organization of the COMPANY, shall have full authority to manage and direct its
business and affairs with the exception of those matters which are explicitly
reserved to the PARTNERSHIP MEETING or to the PARTNERS' BOARD by this AGREEMENT
or by the ARTICLES OF LIMITED PARTNERSHIP or by decision of the PARTNERSHIP
MEETING or by the STATUTES or by mandatory law.
9.6 The MANAGEMENT shall, in addition to other duties, with respect to the
COMPANY and the VERWALTUNGS-GMBH
- be responsible for the proper conduct of the business; - be responsible
for the efficient organization; - be responsible for all their activities
and all the personnel; - keep the PARTNERSHIP MEETING, the PARTNERS' BOARD
and the SHAREHOLDERS'
MEETING informed about all major business activities;
- prepare all business plans and budgets;
- prepare the annual report, the balance sheet and the profit and loss
statement;
9.7 The following actions of the MANAGEMENT with respect to the COMPANY
including its SUBSIDIARIES and/or the VERWALTUNGS-GMBH including its
SUBSIDIARIES shall be submitted for consideration to the PARTNERS' BOARD and no
action may be taken on such matters without the prior approval of the PARTNERS'
BOARD:
(A) all business plans and amendments thereto including, but not limited
to, the operating, financial and
investment budgets and the headcount and sales plans;
(B) substantial deviations from the approved business plans;
(C) principles concerning general terms of employment and specification
thereof, including without limitation the hiring and terms of employment of the
management of the SUBSIDIARIES;
(D) conclusion, specification or termination of employment contracts if the
annual salary exceeds limits of 125.000 $ (onehundred and twenty-five thousand
US Dollar) if the salary is defined in US Dollar or 200.000 DM (two hundred
thousand Deutsche Mark) if the salary is defined in Deutsche Mark or, in case of
a termination, if a compensation including benefits of more than 125.000 $
(onehundred and twenty-five thousand US Dollar ) if defined in US Dollar or
200.000 DM (two hundred thousand Deutsche Mark) if defined in Deutsche Mark
shall be granted;
(E) capital expenditures and investments (including capitalized leases) not
included in the annual business plan and exceeding in individual instance
500.000 $ ( fivehundred thousand US Dollar), except the use of surplus cash for
short-time financial investments in highly rated securities for a period not
exceeding one year;
(F) acquisition and sale of investment in any other enterprises, or merging
or consolidating with any other enterprise or entering into or terminating any
joint venture or strategic alliance with other enterprises;
(G) establishment of new business sites and closing of existing ones, or
the purchase, sale or other disposition of real estate;
(H) establishment of SUBSIDIARIES beyond PARS and US-PARTNERSHIP;
(I) sale or disposal of fixed assets or other material assets other than in
the ordinary course of business;
(J) issuing of debt securities, borrowing money or otherwise incurring
indebtedness other than in the ordinary course of its business, the mortgaging,
pledging or encumbering of assets to secure any indebtedness, or the incurring
of any other long-term (more than 12 months) obligations;
(K) conclusion or termination of agreements regarding intellectual property
rights and know-how related to COMPONENTS and SRS-SYSTEMS;
(L) conclusion or termination of agency and distribution agreements
(M) conclusion of lease agreements with a term exceeding three (3) years or
with an aggregate annual payment exceeding an aggregate annual limit of 250.000
$ (twohundred and fifty thousand US Dollar );
(N) establishment or change of any significant accounting principles and
practices;
(O) startup of new or discontinuation of active product lines;
(P) product and marketing strategy, including pricing policy, and marketing
the products of any third party;
(Q) fundamental change in the scope or character of business of the COMPANY
and/or its SUBSIDIARIES or actions outside the scope of the COMPANY previously
defined in SUBSECTION 2.4.;
(R) substantial changes in the organizational structure of the COMPANY;
(S) initiating any legal or arbitral actions or settling any claims, causes
of action or rights against any third parties (with the exception of collecting
outstanding accounts receivables) or commencing bankruptcy or insolvency
proceedings;
(T) conclusion or termination of agreements between either of the PARTIES
and the COMPANY and/or its SUBSIDIARIES except as otherwise stated in this
AGREEMENT;
(U) the promise or granting of any employment benefits, pension commitments
or special annual payments exceeding the normal salary (including without
limitation Christmas bonuses) or any modifications thereof;
(V) the granting of commercial power of representation
("Handlungsvollmacht") and commercial power of attorney ("Prokura");
(W) all other matters exceeding the ordinary course of business of the
COMPANY or the SUBSIDIARIES.
9.8 Decisions of the MANAGEMENT shall be taken by unanimous vote of its
members. In case unanimity cannot be reached, the PARTRNERS' BOARD shall decide.
9.9 Rules of procedure for the members of the MANAGEMENT shall be adopted
by the SHAREHOLDERS' MEETING in accordance with ANNEX 9.9.
10. Staff, Non-Solicitation of Employees
10.1. Before hiring new employees for the COMPANY and/or its SUBSIDIARIES,
the COMPANY and/or the VERWALTUNGS-GMBH shall examine whether employees with the
necessary qualification are available from the PARTIES or their AFFILIATES.
10.2 Neither SIEMENS or BREED shall solicit or hire the employees of either
corporation or the COMPANY. However, the PARTIES remain free to run general
advertisements for employment.
11. Organizational Structure
The COMPANY and its initial SUBSIDIARIES, i.e. PARS and US-PARTNERSHIP,
shall have the initial organizational structure as set forth in ANNEX 11 and as
amended from time to time by resolution of the PARTNERS' BOARD.
III. OPERATION OF THE COMPANY
12. Initial Business Plan, Budget
12.1 The initial business plan as per ANNEX 12.1 shall be submitted by the
MANAGEMENT to the PARTNERS' BOARD for approval at its first meeting.
12.2 The COMPANY shall operate pursuant to an operating budget approved by
the PARTNERS' BOARD at its inaugural meeting and subject to annual review.
13. Profit and Loss, Financing, Corporate Opportunities
13.1 The PARTNERSHIP MEETING for the COMPANY and the SHAREHOLDERS' MEETING
for the VERWALTUNGS-GMBH shall take the resolution on the allocation of the
financial results as per SUBSECTION 7.2 letter (E) hereof.
13.2 In case that any profit of the COMPANY and/or the VERWALTUNGS-GMBH is
allocated to the PARTIES, this profit shall be distributed among the PARTIES in
proportion to the value of their respective CAPITAL INTERESTS.
13.3 The COMPANY and the VERWALTUNGS-GMBH shall meet their financial
requirements by their own means or by loans raised locally from banks or other
third parties unless the PARTNERS' BOARD otherwise decides upon. The PARTIES are
not obliged to make further contributions in addition to their contribution as
per SECTION 3 hereof, unless otherwise provided for in this AGREEMENT.
13.4 SIEMENS and BREED shall provide funding to the extent revenues and
external funding sources (such as but not limited to loans raised from banks or
other third parties) are inadequate to cover budgeted operating expenses and
capital expenditures. Neither PARTY can be compelled to provide funding for
expenses and capital expenditures above budgeted amounts, except that each PARTY
must fund up to 500.000 $ (fivehundred thousand US Dollar), each FISCAL YEAR, if
required, to prevent insolvency of the COMPANY for German statutory purposes or
to enable the PARTIES to transfer losses of the COMPANY under Sect. 15a of the
German Income Tax Code ("Einkommensteuergesetz"), as decided upon by the
PARTNERS' BOARD.
13.5 If a research and development opportunity with respect to new
SRS-SYSTEMS or COMPONENTS therefor are presented to either PARTY, such PARTY
shall present such opportunity to the COMPANY. If the other PARTY refuses to
fund it in the COMPANY and/or its SUBSIDIARIES, the presenting PARTY will be
permitted to take and exploit the opportunity for its own account.
14. Books and Records, FISCAL YEAR, Financial Statements
14.1 Full and accurate books of account, financial records and annual
financial statements shall be made according to German accounting practices
showing the condition of the business and finances of the COMPANY and the
VERWALTUNGS-GMBH and the ownership of each PARTY and shall be kept at the
principal office of the COMPANY and the VERWALTUNGS-GMBH. Each PARTY, or its
designated representatives, shall have access to and may inspect and copy any
part thereof. In addition, the COMPANY and the VERWALTUNGS-GMBH shall forward
monthly financial reports to each PARTY, which reports shall be presented in
such format and shall contain such information as the PARTNERS' BOARD shall
agree. The financial records and annual financial statements of the SUBSIDIARIES
shall be made according to the generally accepted accounting principles at their
registered seat.
14.2 The COMPANY and the VERWALTUNGS-GMBH shall also furnish to each PARTY
such additional financial information and statements as such PARTY may
reasonably request for its internal reporting procedures and for the preparation
of its consolidated financial statements for any FISCAL YEAR in which the
COMPANY and/or the VERWALTUNGS-GMBH are included in its tax consolidation. The
COMPANY and the VERWALTUNGS-GMBH shall provide BREED at August 1. each year with
the reconciliation of the net-earning statement of the COMPANY and the
VERWALTUNGS-GMBH from German-GAAP to US-GAAP for the period commencing from July
1 to June 30 of the consecutive year.
14.3 The FISCAL YEAR of the COMPANY and of the VERWALTUNGS-GMBH shall run
from October 1 to September 30 of the consecutive year. At the end of each
FISCAL YEAR, an audit of the COMPANY'S and the
VERWALTUNGS-GMBH'S financial statements shall be performed by the AUDITOR.
14.4 The MANAGEMENT shall, within the first three (3) months of each FISCAL
YEAR prepare the annual financial statements (balance sheet, profit and loss
account including notes and a statement of cash flow) plus an annual FISCAL YEAR
report for the previous FISCAL YEAR, for the COMPANY and the VERWALTUNGS-GMBH
observing the respective provisions on corporations as per Secs. 264 et seq. of
the German Commercial Code ("Handelgesetzbuch"). The annual financial statements
record shall, without undue delay, be submitted to the AUDITOR for auditing. The
audit shall be performed by observing Secs. 316 et seq. of the German Commercial
Code.
14.5 The MANAGEMENT shall submit the audited financial statements together
with the audit report immediately after their completion to each of the
PARTNERS. The PARTNERSHIP MEETING shall resolve within the first six (6) months
of the running FISCAL YEAR on the approval of the annual financial statement and
the employment of the annual profit, the approval of the acts of the MANAGEMENT
for the previous FISCAL YEAR and the appointment of the auditors for the running
FISCAL YEAR, according to SUBSECTION 7.2 letter F hereof.
15. Guidelines for the Operation of the COMPANY
15.1 Concerning the scope of the COMPANY as defined in SUBSECTION 2.4.1
hereof, the PARTIES agree to work exclusively together through the COMPANY
and/or the SUBSIDIARIES, insofar as legally possible and insofar as the
customers do not wish to place an order with only one of the PARTIES or their
AFFILIATES, alone or together with another Party. The PARTIES shall immediately
notify each other if any inquiries concerning the scope of the COMPANY become
known to them.
15.2 If a customer of the COMPANY or the SUBSIDIARIES request the use of
components of third parties, the COMPANY or the SUBSIDIARY shall be permitted to
purchase such component from such third parties. Under such circumstances
neither PARTY shall be obliged to provide technical support for such components.
Any technical information generated by the COMPANY or the SUBSIDIARIES as a
result of the use of such third parties components shall be considered
SRS-FORGROUND TECHNOLOGY.
15.3 The COMPANY and/or its SUBSIDIARIES will act as a reseller for the
PARTIES on a non-exclusive basis in order to market and sell COMPONENTS
worldwide. Customers will be invoiced by the COMPANY or the SUBSIDIARIES and
SIEMENS and BREED will then invoice the COMPANY or the SUBSIDIARIES. The
external and internal pricing, sales and invoicing of COMPONENTS shall be
handled according to the principles laid down in ANNEX 15.3.
15.4 Each of the PARTIES agrees that it shall not sell COMPONENTS, either
directly or indirectly, to third parties which compete with the COMPANY or the
SUBSIDIARIES in the sale of SRS-SYSTEMS and COMPONENTS, unless such PARTY
receives the prior written permission of the PARTNERS' BOARD.
15.5 The preferred suppliers of the COMPANY shall be the PARTIES and their
AFFILLIATES under supply contracts if and to the extent that price, quality,
technology and volume are at least comparable to those obtainable by the
PARTIES' competitors on the market.
15.6 The SRS-BACKGROUND TECHNOLOGY of either BREED or SIEMENS in its
Automotive Systems Group subdivision safety and chassis systems location
Regensburg, Germany shall be licensed on an arms length, non exclusive basis
under technology transfer contracts to the other PARTY as well as to the COMPANY
and its SUBSIDIARIES as of the CLOSING DATE to be used exclusively for the
purposes as described in SUBSECTION 2.4.1. Upon termination of this AGREEMENT
all such licenses shall immediately terminate except for the use of the
fulfillment of existing contractual commitments, provided, however, that upon
termination of this AGREEMENT as per
SUBSECTION 17.6 (A), the licenses granted to the PARTY terminating this
AGREEMENT and to the COMPANY and its SUBSIDIARIES shall remain in full force and
effect. At any time, no assignment or sublicensing of SRS- BACKGROUND TECHNOLOGY
shall be permitted without the prior written approval of the PARTY owning such
SRS- BACKGROUND TECHNOLOGY.
15.7 Except as otherwise agreed in development contracts between one PARTY
and the COMPANY or the SUBSIDIARIES SRS-FOREGROUND-TECHNOLOGY generated by the
COMPANY or the SUBSIDIARIES on the basis of development or research agreements
with both PARTIES shall be owned jointly by SIEMENS and BREED and those
ownership rights shall continue following termination of this AGREEMENT. Either
PARTY shall be entitled to assign or sublicense such SRS-FOREGROUND-TECHNOLOGY
to third parties with the other PARTY'S consent, which shall not be unreasonably
withheld, during the term of this AGREEMENT and without the other PARTY'S
consent following termination of this AGREEMENT or dissolution of the COMPANY
and the VERWALTUNGS-GMBH.
15.8 SRS-FOREGROUND-TECHNOLOGY generated by either SIEMENS in its
Automotive Systems Group subdivision safety and chassis systems location
Regensburg, Germany and BREED outside the COMPANY shall remain with the
generating PARTY but shall be licensed on an arms length, non exclusive basis
under technology transfer contracts to the other PARTY as well as to the COMPANY
and its SUBSIDIARIES to be used exclusively for the purposes as described in
SUBSECTION 2.4.1. Upon termination of this AGREEMENT all such licenses shall
immediately terminate except for the use of the fulfillment of existing
contractual commitments, provided, however, that upon termination of this
AGREEMENT as per SUBSECTION 17.6 (A), the licenses granted to the PARTY
terminating this AGREEMENT and to the COMPANY and its SUBSIDIARIES shall remain
in full force and effect. At any time, no assignment or sublicensing of such
SRS-FOREGROUND TECHNOLOGY shall be permitted without the prior written approval
of the PARTY owning such SRS-FOREROUND TECHNOLOGY.
15.9 The sole obligation of the PARTY, COMPANY and the SUBSIDIARY which is
a licensor in accordance with this SECTION 15 under any SRS-BACKGROUND
TECHNOLOGY as well as SRS-FOREGROUND TECHNOLOGY shall be to forward same on an
"as available basis" to the relevant licensee as provided in the applicable
technology transfer agreement, and, to correct errors that might have occurred
in the relevant information without undue delay after such errors become known
to the relevant licensor.
THE WARRANTIES SET FORTH IN THIS SUBSECTION 15.10 APPLY TO ALL SRS-
BACKGROUND TECHNOLOGY AND SRS-FOREGROUND TECHNOLOGY LICENSED OR KNOWINGLY
DISCLOSED HEREUNDER AND ARE IN LIEU OF ALL WARRANTIES EXPRESS OR IMPLIED
INCLUDING WITHOUT LIMITATION THE WARRANTIES THAT SRS-BACKGROUND TECHNOLOGY AND
SRS- FOREGROUND TECHNOLOGY CAN BE USED WITHOUT INFRINGING STATUTORY AND OTHER
RIGHTS OF THIRD PARTIES.
No licensor shall be liable for any indirect or consequential damages of
its licensee, including loss of profit or interest, under any legal cause
whatsoever and on account of whatsoever reason, except where such liability is
mandatory by applicable law.
Nothing in this AGREEMENT shall obligate either PARTY, COMPANY or the
SUBSIDIARIES to apply for, take out, maintain or acquire any statutory
protection, in any country.
15.10 Either PARTY shall be responsible for warranty and liability,
including recall actions, arising from its COMPONENTS marketed by the COMPANY or
the SUBSIDIARIES to customers, and shall indemnify the COMPANY or the
SUBSIDIARIES and the other PARTY and hold them harmless from third parties'
claims. The responsibility for all other cases of warranty and liability,
including recall actions, which cannot be clearly allocated to a PARTY or to the
COMPANY or the SUBSIDIARIES, shall be deemed to be allocated to the COMPANY or
the SUBSIDIARIES, which exercises the respective business, unless the PARTNERS'
BOARD otherwise decides on a case by case basis. The
COMPANY or the SUBSIDIARIES shall cover such risks with sufficient
insurances.
15.11 Insofar as necessary for the proper operation of the COMPANY, the
VERWALTUNGS-GMBH and their SUBSIDIARIES, SIEMENS and BREED shall provide
administrative, financial, legal, consultancy and other services of similar kind
to the COMPANY and the VERWALTUNGS-GMBH including their SUBSIDIARIES as
requested by the COMPANY or the VERWALTUNGS-GMBH under service contracts on
arm's length basis.
16. Contracts
The PARTIES shall take the necessary steps to ensure that the contracts as
provided for in this AGREEMENT shall be concluded between themselves and/or with
the COMPANY or the SUBSIDIARIES as of the CLOSING DATE:
- research and development contracts
- license agreements
- supply contracts
- reseller basic
-contracts
- service contracts
IV. TERM OF AGREEMENT, DISSOLUTION
17. Term of AGREEMENT
17.1 Except as otherwise stipulated in SUBSECTION 17.2, this AGREEMENT
including its ANNEXES, if not a later date is agreed upon for the ANNEXES, shall
not become binding until the EFFECTIVE DATE.
17.2 Notwithstanding SUBSECTION 17.1 SUBSECTION 17.2, 19.2, 19.3, 20, 21,
22 and 23.9 shall become binding upon SIGNATURE.
17.3 Except as provided otherwise in this AGREEMENT, this AGREEMENT shall
only terminate upon either PARTY disposing of its entire CAPITAL INTERESTS in
the COMPANY and the VERWALTUNGS-GMBH in accordance with the provisions under
SECTIONS 4, 5 and SUBSECTION 7.14 of this AGREEMENT or in accordance with the
ARTICLES OF LIMITED PARTNERSHIP or the STATUTES. The same shall apply if the
COMPANY and the VERWALTUNGS-GMBH are dissolved and liquidated for any reason
whatsoever.
17.4 This AGREEMENT may be ordinarily terminated by either PARTY giving six
(6) months written notice to the other PARTY prior to the end of a FISCAL YEAR
of the COMPANY, but not before the end of the sixth (6) FISCAL YEAR.
17.5 Any notice of termination of this AGREEMENT shall automatically extend
to the COMPANY and the VERWALTUNGS-GMBH. The consequence of termination shall be
the dissolution of the COMPANY and the VERWALTUNGS-GMBH. SECTION 18 shall apply
mutatis mutandis.
17.6 The right to terminate this AGREEMENT extraordinarily without prior
written notice for important cause shall remain unaffected thereby. Important
cause shall be constituted without limitation if:
(A) this AGREEMENT or the ARTICLES OF LIMITED PARTNERSHIP or the STATUTES
or any of the related agreements provided for herein and necessary for the
proper operation of the COMPANY and its SUBSIDIARIES has been materially
breached by the other PARTY and despite prior written notice by the terminating
PARTY and an adequate opportunity to cure the breach, the other PARTY has failed
to cure the breach;
(B) the other PARTY is permanently or for an unforeseeable period of time
prevented from fulfilling its obligations under this AGREEMENT or the ARTICLES
OF LIMITED PARTNERSHIP or the STATUTES or any of the related agreements provided
for herein and necessary for the proper operation of the COMPANY and its
SUBSIDIARIES;
(C) the other PARTY undergoes bankruptcy, reorganization proceedings or any
other insolvency proceedings opened against it by a court or another public
authority or has voluntarily filed a respective petition or has involuntarily
filed against it a respective petition which is not dismissed within sixty (60)
days;
(D) the other PARTY has become insolvent or faces a substantial
deterioration, actual or imminent, in its assets without an appropriate plan to
avoid such deterioration;
(E) the other PARTY has an order entered against it either appointing a
receiver or trustee for, or issuing a levy attachment against, a substantial
portion of its assets, without such order being vacated, set aside or stayed
within sixty (60) days;
(F) the other PARTY has its CAPITAL INTERESTS in the COMPANY seized by a
creditor based on an executory title which is not only provisionally enforceable
or makes an assignment for the benefit of its creditors;
(G) The other Party is dissolved.
17.7 SECTION 20 and 21 shall survive the termination of this AGREEMENT for
whatever reasons.
18. Dissolution
18.1 The COMPANY and the VERWALTUNGS-GMBH shall be dissolved if so decided
unanimously by the PARTNERSHIP MEETING and the SHAREHOLDERS' MEETING or
according to a respective provision of this AGREEMENT.
18.2 Following any decision about the dissolution of the COMPANY and the
VERWALTUNGS-GMBH the PARTIES shall commence an liquidation procedure according
to the mandatory law. The liquidation shall be carried out as follows:
18.2.1 The assets of the COMPANY and the VERWALTUNGS-GMBH without the
interests in the SUBSIDIARIES held by the COMPANY shall be distributed among the
PARTIES taking into consideration the respective scope of business. If the
assets, including any intellectual property rights like patents or other
know-how developed during the existence of the COMPANY, can be allocated clearly
to one of the PARTIES, this PARTY shall have the right to take over these
assets.
18.2.2 The interests in the SUBSIDIARIES held by the COMPANY shall be
retransfered to the PARTY, which has contributed such interests to the COMPANY
or the VERWALTUNGS-GMBH according to SUBSECTION 3.2.1 and 3.2.2. Each PARTY
shall bear all costs and expenses, including any and all duties and taxes,
related to such retransfer of the shares and interests in the SUBSIDIARIES to
the respective PARTY.
18.2.3 It is hereby understood that the allocation and take-over of assets
as well as the retransfer of shares by one PARTY shall be compensated to the
other PARTY if it results in a shift of value distributed among the PARTIES. The
value of the assets and the interest in the SUBSIDIARIES shall be determined by
an ACCOUNTING FIRM jointly appointed by the PARTIES. The opinion of the
ACCOUNTING FIRM as to the value of the assets and the interests in the
SUBSIDIARIES shall be based on a generally accepted valuation method being in
common use at the time of appointment of the ACCOUNTING FIRM, however the
opinion of the chartered ACCOUNTING FIRM shall be final and binding upon both
PARTIES.
18.2.4 It is hereby understood, that all employees which were employed by
either PARTY at the CLOSING DATE and transfered to the COMPANY or the
SUBSIDIARIES shall, as far as legally possible, return to the respective PARTY.
18.3. The dissolution of the COMPANY and the VERWALTUNGS-GMBH shall be
carried out in a manner that is most tax efficient for both PARTIES.
18.4 The dissolution may be averted by a PARTY buying the entire CAPITAL
INTERESTS of the other PARTY in the COMPANY and the VERWALTUNGS-GMBH.
18.4.1 The PARTY unwilling to buy the other PARTY'S CAPITAL INTERESTS is
obliged to sell its CAPITAL INTEREST, to the other PARTY. The purchase price
shall be agreed upon by the PARTIES and, failing such agreement, shall be
determined by an ACCOUNTING FIRM jointly appointed by the PARTIES. The opinion
of the ACCOUNTING FIRM as to the price of the CAPITAL INTERESTS shall be based
on a generally accepted valuation method being in common use at the time of
appointment of the ACCOUNTING FIRM and shall result in a reasonable,
arm's-length price on the basis of a willing buyer and a willing seller of the
relevant CAPITAL INTEREST; however, that the opinion of the chartered ACCOUNTING
FIRM shall be final and binding upon both PARTIES. The cost of the opinion of
the ACCOUNTING FIRM shall be paid by the PARTY obliged to sell.
18.4.2 If both PARTIES are willing to purchase, SUBSECTION 7.14 sentences 5
to 7 shall apply mutatis mandis. The transaction to sell and purchase according
to SUBSECTION 18.5.1 shall be completed without undue delay.
18.4.3 If neither PARTY is willing to buy the entire CAPITAL INTEREST in
the COMPANY and in the VERWALTUNGS-GMBH and consent cannot be reached within two
(2) months after receipt of the termination notice or after occurrence of any
other cause upon which this AGREEMENT ends, the COMPANY and the VERWALTUNGS-
GMBH have to be dissolved.
V. OTHER PROVISIONS
19. EFFECTIVE DATE, Premerger Control
19.1 The EFFECTIVE DATE shall be the date on which each of the following
conditions is fulfilled:
19.1.1 Signature of both PARTIES;
19.1.2 Approval of the Corporate Executive Board ("Zentralvorstand") of
SIEMENS and the Board of Directors of BREED;
19.1.3 Obtaining of all the permissions or clearances, which the PARTIES
jointly indentify to be relevant to the transaction under premerger control, or
of any other competent antitrust authorities;
19.1.4 Expiration of any required premerger notification waiting period;
19.1.5 Submittal of the application for antitrust clearance under Art. 85
EEC Treaty. to the European Commission
19.2 Immediately after SIGNATURE, the PARTIES shall jointly file the
relevant antitrust notifications and applications to any competent antitrust
authority. The PARTIES shall assist each other with respect to the preparation
of such notifications and applications and provide each other with all
information requested by the competent antitrust authority.
19.3 Except as otherwise provided for in the Stock Purchase Agreement dated
October, 14. 1997 including its annexes and the Make Whole Agreement dated
November, 07. 1997 the PARTIES shall have no claims, of whatever kind, against
each other in case that the creation of the COMPANY should not be approved in
the premerger control procedure(s) or the antitrust clearance under Art. 85 EEC
Treaty should not be given.
20. Applicable Law
The substantive law applicable to this AGREEMENT and its ANNEXES, unless
otherwise agreed upon in an ANNEX, is the law in force in Germany.
21. DISPUTE Settlement
21.1 DISPUTES in technical matters shall be referred to a single expert
chosen by the PARTNERS' BOARD. Such expert's opinion shall be binding upon the
PARTIES and/or the COMPANY. The expert's costs shall be borne by the COMPANY.
21.2 Any DISPUTE shall at first be settled by an amicable effort on the
part of the PARTIES affected. An attempt to arrive at a settlement shall be
deemed to have failed as soon as one of the PARTIES so notifies the other PARTY
in writing.
21.3 If an attempt at settlement has failed, the DISPUTE shall be finally
and binding settled under the commercial arbitration rules of the United Nations
Commission on International Trade Law (the "Rules"). Each PARTY shall appoint an
arbitrator, and then the two PARTY-appointed arbitrators shall appoint a third
arbitrator, or failing agreement on such choice, such third arbitrator shall be
appointed by the President of the International Chamber of Commerce in Paris.
The third arbitrator shall have the qualifications to hold a judgeship.
21.4 The seat of arbitration shall be The Hague, The Netherlands. The
procedural law of this place shall apply where the Rules are silent.
21.5 The language to be used in the arbitration proceedings shall be
English.
21.6 The arbitral award shall be substantiated in writing. The arbitral
tribunal shall decide on the matter of costs of the arbitration and on the
allocation of expenditure among the respective PARTIES to the arbitration
proceedings. The PARTY in whose favor a final arbitral award is rendered shall
be entitled to be reimbursed its reasonable costs and reasonable attorneys fees
by the other PARTY.
22. Confidentiality
22.1 Either PARTY shall use all business and technical information received
from the other PARTY or the COMPANY and/or the VERWALTUNGS-GMBH in connection
with this AGREEMENT and its performance and which the other PARTY expressly
states to be confidential, or the confidential nature of which can be assumed on
the basis of the circumstances of its disclosure, solely for the purposes for
which it was provided, and shall treat it in the same way as its own business
secrets and not make it available to any third party, unless the business or
technical information in question:
(A) is generally available from public sources or in the public domain; or
(B) is received at any time from any third party without nondisclosure
obligation to the disclosing PARTY; or
(C) is shown to have been developed independently by the receiving PARTY
without reliance on the disclosing PARTY'S confidential information or to have
been known to the receiving PARTY prior to its disclosure by the disclosing
PARTY; or
(D) must be disclosed to a third party for the purpose of
performing this AGREEMENT, if the third party is or becomes subject to an
equivalent confidentiality obligation.
22.2 Through this SECTION 22 neither PARTY shall be prevented from making
available its technology others than SRS-BACKGROUND TECHNOLOGY or SRS-FOREGROUND
TECHNOLOGY developed independently by one PARTY to third parties if this
technology is derived in part from the cooperation under this AGREEMENT, but is
inseparably connected with that PARTY'S own know-how.
22.3 The obligations imposed by this SECTION 22 shall continue for a period
of five (5) years after termination of this AGREEMENT.
22.4 The PARTIES shall cause the COMPANY AND THE SUBSIDIARIES to be bound
by the same confidentiality obligations as imposed by this SECTION 22 with
respect to the business and technical information which the COMPANY or the
SUBSIDARIES will receive from either PARTY.
22.5 The conclusion of this AGREEMENT, as well as its content, is to be
treated confidential by the PARTIES according to SUBSECTION 22.1. Any reference
to business links between the PARTIES to the AGREEMENT must not be made in
advertising literature until written approval has been received from the other
PARTY which shall not be unreasonably withheld.
23. Miscellaneous
23.1 This AGREEMENT shall not be modified except by a written instrument
executed by duly authorized representatives of the PARTIES hereto.
23.2 The governing language between the PARTIES shall be English. All
reports, statements, balance sheets and the like to be prepared and issued under
operation of the COMPANY as well as any auditing shall, in addition to
requirements under the German law, also be done in the English language, if
reasonably requested by a PARTY. The same applies for any kind of communication
in and between the corporate bodies of the COMPANY and/or the VERWALTUNGS-GMBH
and between the COMPANY and/or the VERWALTUNGS-GMBH and the PARTIES, unless
otherwise decided by the PARTNERS' BOARD.
23.3 In the event that any provision herein shall be held to be invalid or
unenforceable, the remaining provisions herein shall not be affected thereby.
Should an individual provision of this AGREEMENT be or become
ineffective or unenforceable for reasons beyond the PARTIES' control the
PARTIES shall attempt to arrive amicably at a new provision on a favorable
economic effect corresponding to the ineffective or unenforceable provision it
is replacing.
23.4 Each PARTY hereto may request additional audits performed by an
auditor of its choice who must be certified in Germany. The cost of the
additional audit shall be borne by the PARTY requesting the audit.
23.5 The PARTIES hereto shall ensure that their representatives or nominees
within the COMPANY and the VERWALTUNGS-GMBH, in executing their respective
functions, will comply with the provisions of this AGREEMENT, the ARTICLES OF
LIMITED PARTNERSHIP and the STATUTES as well as with any other agreements
concluded or to be concluded between the PARTIES with respect to the COMPANY
and/or the VERWALTUNGS-GMBH or any of their activities.
23.6 The following ANNEXES form an integral part of this AGREEMENT:
ANNEX 1: COMPONENTS/SRS-SYSTEM
ANNEX 2.1A: ARTICLES OF LIMITED PARTNERSHIP of the COMPANY
ANNEX 2.1B: STATUTES of the VERWALTUNGS-GMBH
ANNEX 3.2.2:Assets to be contributed by BREED to US-PARTNERSHIP
ANNEX 3.2.5:Representations and Warranties of the CONTRIBUTION AGREEMENTS
ANNEX 8.3: Rules of Procedure for the PARTNERS' BOARD
ANNEX 9.9: Rules of Procedure for the MANAGEMENT
ANNEX 11: Initial Organizational Structure of the COMPANY and its SUBSIDIARIES
ANNEX 12.1: Business Plan
ANNEX 15.3: Principles for pricing, sales and invoicing of components of SRS-
SYSTEMS
In the event of any ambiguity or conflict arising between the provisions of
this AGREEMENT and those of the ANNEXES this AGREEMENT shall prevail.
23.7 In the event of any conflict between the provisions of this AGREEMENT
and ARTICLES OF LIMITED PARTNERSHIP and the STATUTES or other corporate
documents of the COMPANY and/or the VERWALTUNGS- GMBH, the provisions of this
AGREEMENT shall prevail and the PARTIES shall exercise all voting and other
rights and powers available to them so as to give effect to the provisions of
this AGREEMENT and shall further procure any required amendment to the ARTICLES
OF LIMITED PARTNERSHIP and/or the STATUTES and/or other constitutional documents
of the COMPANY and/or the VERWALTUNGS-GMBH, as may be necessary.
23.8 This AGREEMENT, including its ANNEXES, entirely replaces and
supersedes between the PARTIES the Non-Binding Memorandum of Understanding dated
July, 22. 1997 entered into by the PARTIES and the Memorandum of Understanding
including the Joint Venture Term Sheet dated October, 14. 1997 entered into by
the PARTIES.
23.9 Either PARTY shall bear its own expenses, including those of counsel
and auditors, in connection with this AGREEMENT and the COMPANY contemplated
herein, unless otherwise provided for in this AGREEMENT or the ARTICLES OF
LIMITED PARTNERSHIP or the STATUTES. The administrative fees for the pre-merger
control procedure(s) as per SUBSECTION 19.1.3 as well as any expenses for
outside counsels related to such premerge controll procedures and the filing
procedure for the clearance under Art. 85 EEC Treaty shall be shared equally by
the PARTIES.
24. Notices
All communications and notices to be given under this AGREEMENT shall be
delivered:
if addressed to SIEMENS to:
Siemens Aktiengesellschaft
Rechtsabteilung
Werner-von-Siemens-Str. 50
D-91050 Erlangen, Germany
Telephone: ++49-9131-7-43592
Telefax: ++49-9131-7-29001
and if addressed to BREED to:
Breed Technologies, Inc.
Legal Department
5300 Old Tampa Highway
Lakeland Florida 33807-3050, USA
Telephone: ++1-941-688-6473
Telefax: ++1-941-688-6016
or any other address and/or telephone or telefax number designated in
writing.
IN WITNESS WHEREOF, the PARTIES have duly executed this AGREEMENT
in Regensburg, Germany on [.....] [.......................].
Siemens Aktiengesellschaft Breed Technologies, Inc.
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