Exhibit 4.1
DAIMLERCHRYSLER LUFT - UND RAUMFAHRT HOLDING AG
AND
DAIMLERCHRYSLER AEROSPACE AG
AND
LAGARDERE SCA
AND
SOGEPA
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BUSINESS COMBINATION AGREEMENT
RELATING TO THE MERGER OF DAIMLERCHRYSLER
AEROSPACE AG AND AEROSPATIALE MATRA
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CONTENTS
CLAUSE PAGE
1. Interpretation..........................................................2
2. Preliminary Actions.....................................................8
3. Conditions Precedent....................................................9
4. Conduct Of Business Up To Closing......................................11
5. Closing................................................................16
6. Indemnities............................................................18
7. Regulatory Matters.....................................................19
8. Representations And Warranties.........................................19
9. Tax....................................................................29
10. Confidentiality........................................................30
11. Settlement Of Disputes.................................................31
12. Status Of Parties......................................................32
13. Guarantees.............................................................32
14. Costs..................................................................34
15. General................................................................34
16. Notices................................................................35
17. Counterparts...........................................................36
18. Governing Law..........................................................37
Schedule 1 AEROSPATIALE MATRA.................................................41
Schedule 2 DELTA GROUP........................................................40
Schedule 3 ESTABLISHMENT OF NEW DELTA AND TRANSFER OF DELTA BUSINESS..........41
Schedule 4 HOLDINGS CV........................................................42
Schedule 5 LISTCO.............................................................43
Schedule 6 CLOSING: NEW DELTA................................................44
Schedule 7 CLOSING: AEROSPATIALE MATRA BIS...................................45
Schedule 8 DISTRIBUTION ON WINDING UP IN KIND BY AEROSPATIALE MATRA...........46
Schedule 9 TAX CLEARANCES.....................................................47
Schedule 10 NET CASH..........................................................49
Schedule 11 CASH EXTRACTION...................................................51
Schedule 12 VALUATION EXAMPLE.................................................52
Schedule 13 PERMITTED ADVISORS................................................53
T H I S A G R E E M E N T is made on 14th October 1999
B E T W E E N:
(1) DAIMLERCHRYSLER LUFT - UND RAUMFAHRT HOLDING AG, a German stock
corporation (Aktiengesellschaft) registered at the commercial registry
of the local court in Munich under number HRB 91671 ("DC Sub"); and
(2) DAIMLERCHRYSLER AEROSPACE AG, a German stock corporation
(Aktiengesellschaft) registered at the commercial registry of the local
court in Munich under number HRB 99454 ("Delta"); and
(3) LAGARDERE SCA, registered in France in the Paris company and commercial
registry (with registered number B 320 366 446) and having its
registered office at 4 rue de Presbourg, 75116 Paris, France
("Lagardere"); and
(4) SOCIETE DE GESTION DE PARTICIPATIONS AERONAUTIQUES - SOGEPA, a societe
anonyme incorporated under the laws of France registered at the Paris
companies registry (with registered number B318186756) and having its
registered office at 56, rue de Lille, 75007, Paris, France ("Sogepa").
WHEREAS:
(A) On 9 December 1997, the European Heads of State and Government called
upon the major European industrialists in aeronautics, space and defence
to undertake a process of consolidation.
The formation of Aerospatiale Matra was based on the industrial
agreement dated 3 March 1999, one express aim of which was to seek
industrial and strategic cooperation with major European aerospace and
defence companies.
Aerospatiale Matra and Dasa have maintained a close relationship for a
long time and are at the roots of the European successes of Ariane and
Airbus, in which they hold 75.8% of the shares. They have already worked
closely together at the heart of joint companies relating to their
helicopter activities (Eurocopter) and in the field of space activities.
All of the activities of Aerospatiale Matra and Dasa are aimed at world
markets and their consortiums, joint ventures, partnerships and joint
companies such as Airbus, Eurocopter, Arianespace and Matra BAe Dynamics
are already ranked amongst the best in the world.
This is why the decision was logically taken to merge the activities of
Aerospatiale Matra and Dasa into a single European company in the field
of aeronautics, space and defence activities in order to create the
European leader in this sector, capable of competing with other world
companies.
In the context, this European company will, inter alia, pursue the
following objectives:
o to develop the synergies in order to create the industrial
conditions for the growth of the new company
o to create the European leader in the field of aeronautics, space
and defence activities. This will lead to the continuation of
negotiations on the consolidation of the sector with other
European companies, on the scale relevant on a world level
o in the same spirit to further develop the numerous cooperation
agreements or ventures in all these fields of the new company
with a view to making them world leaders in their activities
o specifically to make quick progress towards the creation of an
integrated Airbus company.
(B) The purpose of this Agreement is to set out the parties' rights and
obligations in connection with the formation of Holdings CV and Listco
including the arrangements for:
(i) the establishment of Holdings CV as a limited partnership
constituted under Dutch law between the Managing Partner as the
general partner and each of the Principals (or permitted
designees) as limited partners;
(ii) the establishment of Listco as the entity in which Holdings CV
will hold shares;
(iii) the establishment of Aerospatiale Matra Bis;
(iv) the transfer to Aerospatiale Matra Bis of the Aerospatiale Matra
Business;
(v) the establishment of New Delta;
(vi) the transfer to Listco of New Delta and of Aerospatiale Matra
Bis;
(vii) the distribution (by Aerospatiale Matra to Aerospatiale Matra's
shareholders) of Aerospatiale Matra's shares in Listco by the
liquidation of Aerospatiale Matra;
(viii) the dissolution of Aerospatiale Matra;
(ix) the establishment of Topco by, inter alia, Lagardere and Sogepa;
and
(x) the transfer to Topco by Lagardere and Sogepa of part of their
respective shareholdings in Listco.
NOW THEREFORE IT IS AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires, the following
terms shall have the following meanings:
"AEROSPATIALE MATRA BIS" the French company to be established
pursuant to Clause 2.4 to which the
business, assets and liabilities of
Aerospatiale Matra are to be
transferred in accordance with
Schedule 1;
"AEROSPATIALE MATRA BUSINESS" the business described in Schedule
1;
"AEROSPATIALE MATRA GROUP" Aerospatiale Matra and its
Subsidiaries from time to time;
"AEROSPATIALE MATRA SHAREHOLDERS the agreement amongst certain
AGREEMENT" shareholders of Aerospatiale Matra
in force at the date hereof;
"AEROSPATIALE MATRA SHARES" the shares in Aerospatiale Matra
allotted to Lagardere on 4 June
1999;
"AEROSPATIALE MATRA WARRANTED ACCOUNTS" the financial statements as at 31
December 1998 relating to the
Aerospatiale Matra Group annexed
hereto as Annex A;
"BUDGET" the summary business plan for the
Aerospatiale Matra Group or, as
appropriate, the Delta Group, in the
agreed form;
"BUSINESS DAY" a day on which banks generally are
open in Paris, Amsterdam and
Frankfurt for a full range of
business;
"CLOSING" closing of this Agreement in
accordance with the terms of Clause
5;
"CLOSING DATE" the date on which Closing takes
place;
"COMPANY" a body corporate formed under the
laws of any country;
"CONDITIONS PRECEDENT" the conditions set out in Clause
3.1;
"DC" DC, a German stock corporation
(Aktiengesellschaft) registered at
the commercial registry of the local
court in Stuttgart under number
19360 with its seat at Stuttgart,
Germany;
"DC GROUP" DC and its Subsidiaries from time to
time;
"DELTA BUSINESS" the business described in Schedule
2;
"DELTA GROUP" Delta and its Subsidiaries until
such time as New Delta is
established in accordance with
Schedule 3 and, thereafter, New
Delta and its Subsidiaries;
"DELTA SHARES" the entire issued share capital of
New Delta;
"DELTA WARRANTED ACCOUNTS" the financial statements as at 31
December 1998 relating to the Delta
Group annexed hereto as Annex B;
"DISPOSE" sell, transfer, assign, grant
options over, create licences in
respect of, create or permit any
Encumbrance to exist over, or
otherwise dispose of, or enter into
any legally binding commitment to do
any of the foregoing, and related
expressions shall be construed
accordingly;
"ENCUMBRANCE" any mortgage, charge (whether fixed
or floating), lien, hypothecation,
pledge, right of usufruct,
encumbrance, security interest or
other third party right or interest
over or in respect of a particular
asset other than liens arising by
operation of law in the ordinary
course of business;
"FRANKFURT STOCK EXCHANGE" Frankfurter Wertpapierborse,
operated by Deutsche Borse AG;
"FRENCH GAAP" generally accepted accounting
standards and principles in France;
"FS AND LISTCO PRINCIPLES" the statement of principles in the
agreed form to form the basis of an
agreement to be entered into between
the French State and Listco relating
to ballistic missiles;
"GUARANTEE" the guarantee from DC to Lagardere
and Aerospatiale Matra and their
respective Groups, of even date
herewith;
"GERMAN GAAP" generally accepted accounting
standards and principles in Germany;
"GROUP" all or any of the DC Group, the
Lagardere Group, the Aerospatiale
Matra Group, the Delta Group, the
Sogepa Group or the Listco Group as
the case may be;
"HOLDINGS CV" the limited partnership to be
established pursuant to Clause 2.3;
"HSR ACT" Hart-Scott-Rodino Antitrust
Improvements Act 1976;
"LAGARDERE GROUP" Lagardere and its Subsidiaries from
time to time;
"LISTCO" the company to be established
pursuant to Clause 2.4;
"LISTCO GROUP" Listco and its Subsidiaries from
time to time;
"LISTCO SHARES" ordinary shares in the capital of
Listco;
"MANAGING PARTNER" the managing partner of Holdings
C.V.;
"MERGER DOCUMENTS" this Agreement, the Participation
Agreement, the Guarantee and those
documents, agreements and
arrangements which are Schedules or
Exhibits to this Agreement or the
Participation Agreement or which are
referred to in this Agreement or the
Participation Agreement or any such
Schedules or Exhibits as documents
in the agreed form;
"NET CASH" has the meaning applicable in
accordance with Schedule 10;
"NEW DELTA" the company to be established
pursuant to Clause 5.2.1;
"NOTIONAL AGREED VALUATION" EUR 18,022 million based on the
financial information contained in
the Budgets and assuming Net Cash of
EUR 570 million for Aerospatiale
Matra and Net Cash of EUR 967
million for New Delta (this notional
agreed valuation is only for the
purpose of calculating the effect of
cash extraction on the equalised
value);
"PARIS BOURSE" ParisBourseSBF SA;
"PARTICIPATION AGREEMENT" the Participation Agreement in the
agreed form to be entered into
between DC, Topco, Sogepa and
Lagardere at Closing;
"PERMITTED DIVIDEND" the dividend by Aerospatiale Matra
and the profit transfer by Delta to
DC referred to in Clause 4.4;
"PRINCIPAL" DC Sub or Lagardere (as the case may
be);
"REGULATORY ACTION" any order of a court of competent
jurisdiction or any order, decision
or conclusive view made, given or
expressed by a competent
governmental or regulatory authority
or agency or an enactment of a
legislative body:
(a) which prohibits or
materially restricts the
transactions contemplated
hereby or requires them to
be materially delayed; or
(b) which would prohibit or
materially restrict the
carrying on of the business
of the Listco Group as
contemplated by the Merger
Documents; or
(c) which prohibits or
materially restricts or
would prohibit or
materially restrict the
carrying on of the business
of any member of the DC
Group or the Lagardere
Group or imposes or would
impose any material
conditions as to the
carrying on of any such
business; or
(d) in consequence of which any
member of the DC Group, the
Lagardere Group, the
Aerospatiale Matra Group,
the Delta Group or the
Listco Group would incur
material fines or a
material liability in
damages were the Merger
Document or the matters
contemplated therein to be
performed in accordance
with their respective
terms;
"RELEVANT COMPANY" has the meaning given to it in
Clause 4.1;
"RELIEF" any loss, relief, allowance,
exemption, set-off, deduction, right
to repayment or credit or other
relief of a similar nature granted
or available in relation to tax
pursuant to any legislation or
otherwise;
"75% SUBSIDIARY" in relation to an undertaking (the
"holding undertaking"), any other
undertaking in which the holding
undertaking (or persons acting on
its or their behalf) for the time
being directly or indirectly holds
or controls seventy five per cent.
or more of both the shares (or
securities or other interests) in
the other undertaking and the voting
rights exercisable at general
meetings of the shareholders or
members of the other undertaking
deciding on all, or substantially
all, matters, and any undertaking
which is a 75% Subsidiary of another
undertaking shall also be a 75%
Subsidiary of any further
undertaking of which that other is a
75% Subsidiary;
"SOGEPA GROUP" Sogepa and its Subsidiaries from
time to time;
"SOGEPA SHARES" the shares in Aerospatiale Matra to
be held by Sogepa at Closing in
respect of the 15% of Listco Shares
to be contributed to Holdings CV;
"SUBSIDIARY" in relation to an undertaking ("the
holding undertaking"), any other
undertaking in which the holding
undertaking (or persons acting on
its behalf) for the time being
directly or indirectly holds or
controls either:
(i) a majority of the voting
rights exercisable at
general meetings of the
members of that undertaking
on all, or substantially
all, matters; or
(ii) the right to appoint or
remove directors having a
majority of the voting
rights exercisable at
meetings of the board of
directors or equivalent
body of that undertaking on
all, or substantially all,
matters;
and any undertaking which is a
Subsidiary of another undertaking
shall also be a Subsidiary of any
further undertaking of which that
other is a Subsidiary;
"TAX" AND "TAXATION" includes any and all forms of taxes,
levies, imposts, duties, charges and
contributions of whatever nature
(including but not limited to taxes
on income, profits and gains,
customs duties, value added taxes,
excise duties, stamp duty, document
tax and social security
contributions) and all withholding
or deductions in respect of each or
any of the foregoing of whatever
nature, imposed whatsoever by a
Taxation Authority together with any
(actual or contingent) refund,
reclaim or reimbursement claim
relating to any State, regional or
local authority subsidy granted or
paid, and whether directly or
primarily chargeable against,
recoverable from or attributable to
a company or any other entity,
unincorporated association or person
or persons and all fines, penalties,
charges and interest relating to any
of the foregoing or to any claim for
any of the foregoing but excluding
any GRUNDSTEUER, IMPOTS LOCAUX, and
any equivalent tax under the laws of
any jurisdiction;
"TAXATION AUTHORITY" any governmental, state, provincial,
local or municipal authority or
agency, or other body having
competent authority, of or in any
country having applicable
jurisdiction in respect of tax;
"TOPCO" a SOCIETE PAR ACTIONS SIMPLIFIEE to
be formed in accordance with the
Topco Shareholders Agreement;
"TOPCO SHAREHOLDERS AGREEMENT" the Topco Shareholders Agreement in
the agreed form to be entered into
between, inter alia, Lagardere and
Sogepa at Closing;
"UNDERTAKING" a body corporate or partnership or
any unincorporated association
situated in any jurisdiction
carrying on a trade or business with
or without a view to profit,
(including, for the avoidance of
doubt, but not limited to, a societe
en commandite par actions, a
groupement d'interet economique
("GIE"), a GmbH & Co., KG and an
OHG) (and, in relation to an
undertaking which is not a company,
expressions in this Agreement
appropriate to companies shall be
construed as references to the
corresponding persons, officers,
documents or organs (as the case may
be) appropriate to undertakings of
that description;
"US GAAP" generally accepted accounting
standards and principles in the
United States of America; and
"WARRANTIES" the warranties contained in Clause
8.1, 8.2 or, as appropriate, Clause
8.3.
1.2 Clause and paragraph headings in this Agreement and its Schedules are
included for convenience only and shall not affect the interpretation of
this Agreement.
1.3 The Recitals and Schedules to this Agreement shall form part of this
Agreement and shall have the same force and effect as if set out in the
body of this Agreement. Accordingly, references to this Agreement shall
include references to its Recitals and Schedules.
1.4 In this Agreement, unless the context otherwise requires:
(a) the singular shall include the plural and vice versa;
(b) references to persons shall include individuals, companies,
undertakings and governmental, supranational and state
agencies and regulatory bodies; and
(c) references to Recitals, Clauses and Schedules and parts
thereof are to Recitals, Clauses and Schedules of and to this
Agreement and parts thereof respectively.
1.5 Any reference in this Agreement to another document being in "the agreed
form" or "the agreed terms" is to such a document either:
(a) in a form agreed between the Principals and initialled for and
on behalf of the Principals for the purpose of
identification; or
(b) in such other form as may be agreed in writing by the
Principals in substitution therefor.
1.6 References to any statute or statutory provision or EC Directive include
a reference to that statute or statutory provision or EC Directive as
amended, extended, re-enacted, consolidated or replaced from time to
time (whether before or after the date of this Agreement) and shall
include any order, regulation, instrument or other subordinate
legislation made under that statute, statutory provision or EC
Directive.
1.7 Any reference in this Agreement to any entity, act or event or any
right, action, remedy, method of judicial proceeding, legal document,
legal status, court official or any legal concept or thing in respect of
any jurisdiction other than the Netherlands shall be deemed to include a
reference to the closest analogous equivalent thereto in that
jurisdiction.
2. PRELIMINARY ACTIONS
2.1 DC Sub and Delta shall procure the establishment of New Delta in
accordance with Schedule 3. DC Sub shall extract cash of EUR 700 million
and to the extent that tax is borne by New Delta, by reason of that
extraction, the amount of that tax shall be included in calculating the
amount of cash extracted for the purpose of determining whether those
limits have been respected from the Delta Group in accordance with
Schedule 11 prior to Closing. DC Sub shall also extract additional cash
from the Delta Group of no more than EUR 2,933,700,000 and no less than
EUR 2,133,600,000, and to the extent that tax is borne by New Delta, by
reason of that extraction, the amount of that tax shall be included in
calculating the amount of cash extracted for the purpose of determining
whether those limits have been respected also in accordance with
Schedule 11 and prior to Closing (such extraction, and the amount, to be
notified to Lagardere not fewer than 10 Business Days before extraction
together with all other information relating thereto as Lagardere may
reasonably request). DC Sub shall not extract more (nor less) cash than
that notified to Lagardere under this Clause 2.1, save in respect of the
Permitted Dividend.
2.2 Lagardere and Sogepa shall procure the establishment of Topco.
2.3 DC Sub and Lagardere shall procure the establishment of Holdings CV and
the Managing Partner in accordance with Schedule 4.
2.4 DC Sub, Lagardere and Sogepa shall procure the establishment of Listco
in accordance with Schedule 5.
2.5 Lagardere and Sogepa shall procure the establishment of Aerospatiale
Matra Bis.
2.6 The parties agree as soon as possible after the date hereof to enter
into good faith negotiations to combine the electronic defence
activities of Listco and Thomson CSF. It is acknowledged that Lagardere
and the French State do not intend to accept change in the status of
Alcatel as first private shareholder of Thomson CSF.
2.7 The parties acknowledge that CASA is a potential strategic partner of
Listco and agree to enter into negotiations with CASA's shareholders
with a view to CASA's business being contributed to Listco and its
shareholders thereby owning shares in the capital of Listco, on
substantially similar terms to those envisaged in the memorandum of
understanding signed on 11 June 1999 between DC and SEPI.
3. CONDITIONS PRECEDENT
3.1 Closing shall be conditional upon each of the following conditions
having first been satisfied:
(a) Holdings CV, the Managing Partner, Listco and Topco each
having been established, pursuant to Clause 2;
(b) Aerospatiale Matra Bis having been established pursuant to
Clause 2 and the Aerospatiale Matra Business having been
transferred to Aerospatiale Matra Bis in accordance with
Schedule 1;
(c) either or both of:
(i) the Commission of the European Communities (the
"European Commission") having issued a decision pursuant
to Article 6(1)(b) or Article 8(2) of European Community
Council Regulation 4064/89 ("Regulation 4064/89") and,
if such decision is given subject to conditions or
obligations, such conditions or obligations being
reasonably satisfactory to the Principals; or the
competent authorities of any EC Member State concerned,
pursuant to either Article 21(3), or a decision of the
European Commission under Article 9(1), of Regulation
4064/89, having granted their consent, approval or
clearance and, if such decision is given subject to
conditions or obligations, such conditions or
obligations being reasonably satisfactory to the
Principals; and/or
(ii) an EC Member State having invoked Article 296(1) of the
EC Treaty (as amended by the Treaty of Amsterdam) and
requesting the Principals not to notify the merger under
Regulation 4064/89 and, if such request is given subject
to conditions or obligations imposed on the Principals,
such conditions or obligations being reasonably
satisfactory to the Principals, and no EC Member State
having validly taken any Regulatory Action (or action,
proceeding or proposal which if successfully pursued by
the person initiating the same would result in a
Regulatory Action);
(d) pursuant to the HSR Act the Federal Trade Commission or the
Anti-trust Division of the Department of Justice of the United
States of America and, if applicable, Committee for Foreign
Investment in the United States of America, having given all
such consents or approvals as may be required or necessary in
form and substance reasonably satisfactory to the Principals;
(e) all such consents or approvals as may be necessary having been
obtained from the Commission des Participations et de
Transferts of France for the matters contemplated by the
Merger Documents;
(f) the tax clearances described in Schedule 9 being obtained in
form and substance reasonably satisfactory to the Principals;
(g) Lagardere and Aerospatiale Matra having obtained from the
French Ministere de la Defense, pursuant to an application in
form and substance reasonably satisfactory to the Principals,
approval of the principle that there will be no limitation for
German nationals working for Listco except in respect of
French regulations (of general application) to non-French
nationals) applying generally for the protection of military
secrets;
(h) Lagardere, Aerospatiale Matra, DC Sub and Delta having
obtained from the French Ministere de l'Economie et des
Finances approval in form and substance reasonably
satisfactory to the Principals of the transactions
contemplated by the Merger Documents, pursuant to the French
Laws 86-793 dated July 2, 1986; 86-912 dated August 6, 1986
(as amended by the law dated July 19, 1993); 89-465 dated July
10, 1989 and the "arrete" dated December 24, 1992;
(i) no Regulatory Action (or action, proceeding or proposal which
if successfully pursued by the person initiating the same
would result in a Regulatory Action) having been taken, which
has not been revoked, annulled, withdrawn, discontinued,
abandoned, repealed, discharged or otherwise ceased to have
effect prior to Closing;
(j) no Change of Control or Event of Default having occurred (as
those terms are respectively defined in the Participation
Agreement) in relation to DC Sub, Lagardere, Sogepa and Topco
or any member of their respective Groups to which the
provisions of Clause 20 of the Participation Agreement would
apply if it were in force;
(k) the termination of the Aerospatiale Matra Shareholders
Agreement in terms reasonably satisfactory to the Principals;
and
(l) the Paris Bourse and Frankfurt Stock Exchange admitting the
Listco Shares to trading on their respective official lists of
traded securities.
3.2 The Principals and Sogepa shall use all reasonable endeavours to ensure,
and shall co-operate with each other in ensuring, that each of the
Conditions Precedent is satisfied as soon as possible. If the required
ruling regarding (i) the book value continuation in relation to the
contribution of Listco Shares into Holdings CV and/or (ii) the tax
exemption of dividend payments and distribution of profits as set out in
Schedule 9 is not obtained in form and substance reasonably
satisfactory to the Principals then, provided that the alternative tax
clearance on avoiding German capital gains tax on the contribution of
New Delta to Listco is obtained in form and substance reasonably
satisfactory to the Principals, as set out in Schedule 9, the condition
precedent contained in Clause 3.1(f) shall be waived by the Principals
in respect of such clearance and the Principals shall, instead,
constitute a limited liability company in the form of a Dutch BV
("HOLDCO") in place of Holdings CV having, mutatis mutandis, the
characteristics of Holdings CV and the Managing Partner, whereupon all
references to Holdings CV and the Managing Partner in this Agreement
shall be replaced by references to Holdco, mutatis mutandis. Further,
the parties shall co-operate to agree all such other changes as may be
required to be made to the revised structure and to the Merger
Documents. The Dutch capital duty arising from the contributions of
Listco Shares to Holdings CV shall be borne equally between the
Principals.
3.3 Save as otherwise agreed by the Principals in writing if any of the
Conditions Precedent shall not have been satisfied or waived in writing
by the appropriate party or parties referred to in Clause 3.5 by 12:00
midnight, Netherlands time, on 30 June 2000 (or such later time and/or
date as the Principals may agree in writing), this Agreement shall lapse
and (subject to Clause 3.4) shall cease to have any further force or
effect.
3.4 The lapse of this Agreement in accordance with Clause 3.3 shall be
without prejudice to any accrued rights of the parties in respect of
prior breaches of this Agreement, but none of the parties shall have any
further obligation or liability to the others, save that the provisions
of Clauses 10 to 18 inclusive shall continue in full force and effect.
3.5 DC Sub shall be solely entitled to waive satisfaction of the Condition
Precedent contained in sub-paragraph (j) of Clause 3.1, to the extent
that it applies to the Lagardere Group or the Aerospatiale Matra Group
and Topco shall be solely entitled to waive satisfaction of the
Condition Precedent contained in sub-paragraph (j) of Clause 3.1, to the
extent that it applies to the DC Group or the Delta Group. Any waiver of
the Conditions Precedent contained in the remaining sub-paragraphs of
Clause 3.1 shall only be by both Principals.
4. CONDUCT OF BUSINESS UP TO CLOSING
4.1 In this Clause 4 a "Relevant Company" means any and each of the members
of the Aerospatiale Matra Group and of the Delta Group respectively.
4.2 Each of DC Sub and Lagardere shall ensure that from the date of this
Agreement up to and including Closing the Aerospatiale Matra Business
and the Delta Business (as the case may be) is conducted prudently in
the ordinary and usual course and that all reasonable measures are taken
to protect and preserve the assets comprised therein. Without prejudice
to the generality of the foregoing and save as (i) expressly provided in
any of the Merger Documents or (ii) as required pursuant to applicable
law or regulation or (iii) as required pursuant to a contractual
obligation which is existing prior to the date of this Agreement and
either (a) entered into in the ordinary and usual course or (b)
disclosed to the other Principal prior to the date hereof, none of the
following actions shall, unless in the ordinary and usual course (which
exception shall not apply to Clause 4.2(a)), be taken prior to or at
Closing without the prior written consent of both of the Principals:
(a) the making of any change in (or variation of the rights
attaching to) the authorised or issued share or loan capital
of any Relevant Company involving any person other than
another Relevant Company in the same Group whether by way of
the issue of (or grant of any option or Encumbrance over) any
shares, stock, debentures or other transferable or
exchangeable securities, or the reduction, consolidation or
sub-division of share capital, purchase of own shares or
redemption of shares, debentures or other transferable
securities;
(b) the recommendation, declaration, payment or making of any
dividends or any other form of distribution to its
shareholders (other than any other Relevant Company in the
same Group) by any Relevant Company;
(c) the entry into, renewal or modification, variation or waiver
by any Relevant Company of the terms and conditions of any
contract, transaction or arrangement which:
(i) is between any member of the DC Group or the Lagardere
Group and any Relevant Company and which is outside the
ordinary and proper course of the Delta Business or, as
the case may be, the Aerospatiale Matra Business or is
not on arm's length terms;
(ii) would involve any guarantee, surety, indemnity or other
obligation (including any form of Encumbrance to deliver
the whole or part of the assets, undertaking or
property) being given or assumed or created by any
Relevant Company for the benefit, or to secure the
liability or obligations, of any member of the DC Group
or the Lagardere Group; or
(iii) involves any loan or advance or any credit (other than
normal trade credit) to any member of the DC Group or
the Lagardere Group;
(d) the assumption or undertaking of any borrowing which would cause
aggregate borrowings of the Aerospatiale Matra Business or, as
the case may be, the Delta Business to exceed the amount
allocated to borrowing in the Aerospatiale Matra Budget and
Delta Budget, respectively, for the period between the date of
this Agreement and Closing;
(e) the creation of any Encumbrance over the whole or any part of
the undertaking, property or assets of any Relevant Company
(other than to secure borrowings permitted under Clause 4.2(d)
of that company or any other Relevant Company in the same
Group);
(f) the disposal of the whole or any part of the undertaking,
property or assets of the Aerospatiale Matra Business or, as the
case may be, the Delta Business (or any interest therein), or
the acquisition by any Relevant Company in respect of the
Aerospatiale Matra Business or, as the case may be, the Delta
Business of any assets or business or the entry into of any
contract for such disposal or acquisition where either the
consideration for, or the aggregate value of, such
business, undertaking, property or assets exceeds any specific
provision therefor contained in the Aerospatiale Matra Budget
or, as appropriate, Delta Budget, by more than 10% in aggregate;
(g) the acquisition, purchase, subscription for, pledging, disposal
of or transfer of any shares, debentures, stock, partnership,
mortgages or other interests or securities (or any interest
therein) in any undertaking (other than in a Relevant Company in
the same Group) or the making of any agreement to do so by any
Relevant Company;
(h) the giving, extension or renewal by any Relevant Company of any
guarantee, indemnity, surety, covenant, letters of comfort or
support (irrespective of whether or not the same may be legally
binding) to secure the liabilities or obligations of any person
(other than a Relevant Company in the same Group);
(i) the entry into, termination, variation or disposal by any
Relevant Company of any interest in any partnership, joint
venture, teaming agreement, collaboration agreement with any
person (including, for the avoidance of doubt, by way of a GIE
("Groupement, d'Interet Economique") or profit sharing agreement
with any person or any alliance with any person (other than any
other Relevant Company in the same Group)) which is material in
the context of the business of the Aerospatiale Matra Business
or as the case may be the Delta Business or the making of any
agreement to do so;
(j) the entry into, termination (by the employing company) or
material variation of any employment agreement or
employment-related agreement with any director or senior
employee having a current aggregate remuneration entitlement of
EUR 140,000 or more engaged in the Aerospatiale Matra Business
or the Delta Business (other than the renewal of any existing
agreements or arrangements and promotions and increases in
salary awarded in the normal course of their employment);
(k) the entry into of any agreement or arrangement with or making of
any loan or provision of any credit or financial facilities or
other benefits to any person who will become a director or
senior employee of any member of the Listco Group or any
relative of such person or any undertaking acting as nominee of,
or controlled by, any such person, save (in the case of any such
loan or facilities or benefits) for those available under the
standard terms and conditions of employment in respect of such
individual;
(l) the amendment or variation of the accounting principles of any
Relevant Company (other than any change to German GAAP disclosed
in writing by DC or DC Sub to Lagardere prior to the date hereof
and required for purposes of producing the certified accounts of
the Delta Group required for the extraction of cash described in
Schedule 11);
(m) the entry into of any contract, arrangement or commitment
involving expenditure on capital account which would cause
aggregate capital
expenditure of the Aerospatiale Matra Business or, as the case
may be, the Delta Business to exceed the amount allocated to
capital expenditure for such period in the Aerospatiale Matra
Budget or, as appropriate, the Delta Budget, by 10% or in
relation to any one project, by 10%. For the purpose of this
paragraph the aggregate amount payable under any agreement for
hire, hire purchase or purchase on credit sale or conditional
sale terms shall be deemed to be capital expenditure incurred in
the period in which such agreement is entered into;
(n) the making of any material change in the level or terms of the
insurance cover maintained in respect of the Aerospatiale Matra
Business or the Delta Business; and
(o) the acceptance of any obligation or the acquisition of any
asset, interest or right by Holdings CV or Listco.
4.3 Without prejudice to Clause 4.2, each of DC Sub and Lagardere (as the
case may be) shall ensure that from the date of this Agreement up to
Closing each Relevant Company:
(a) shall consult fully with the other in relation to any matters
which may have a material effect upon the Aerospatiale Matra
Business or the Delta Business (as the case may be); and
(b) without the prior written consent of the other shall not enter
into any contract or commitment (or make a bid which may lead to
any contract or commitment) which is outside the ordinary and
usual course of business and:
(i) has a value or is likely to involve expenditure in
excess of EUR 2,500,000; or
(ii) is likely to result in any material change in the nature
of the operations and activities of the Aerospatiale
Matra Business or, as the case may be, the Delta
Business; or
(iii) is estimated to make a loss.
4.4 For the avoidance of doubt Clause 4.2 and Clause 4.3 shall not apply to
any steps taken by DC Sub, Lagardere or Aerospatiale Matra (or any
member of their respective Groups) in relation to (i) the transaction
known as Project Astrium to the extent such steps are taken pursuant to
agreements between Lagardere (or any member of the Lagardere Group) and
DC (or any member of the DC Group), (ii) the cash extraction process
described in Schedule 11; (iii) the payment of a dividend by
Aerospatiale Matra from distributable profits applicable to the
financial period ending 31 December 1999; (iv) the transfer of
distributable profits of Delta, from the financial period ending 31
December 1999, by Delta to DC in accordance with the terms of the
existing applicable profit transfer agreement; (v) the off-setting of
distributable profits against capital reserves by Aerospatiale Matra; or
(vi) the distribution by Delta to DC Sub of an amount up to, but not
exceeding, EUR 200 million, from distributable profits of
Delta for the accounting period ending 30 November 1999 by which time DC
will have used its best efforts to have completed the cash extraction
pursuant to Clause 2.1 at a rate of 6% per annum (being the rate
consistent with the rate earned, on the basis of past performance, by
members of the DC Group on cash deposited as part of the DC Group's
ordinary treasury arrangements) until the completion of the cash
extraction process on the amount of cash extracted pursuant to paragraph
(ii) above. For the avoidance of doubt it is expressly acknowledged that
following completion of the cash extraction process any interest arising
on the cash extracted shall be for the account of DC. Any dividend or
profit transfer permitted by (iii) and (iv) above shall only be in such
amounts as reflect and preserve the Resulting Equity Ownership reflected
in Schedule 12 (after the cash extraction referred to in paragraph (ii)
above).
4.5 From the date hereof DC Sub and Lagardere shall have 21 days to prepare
for the review process described in Clauses 4.5 to 4.8 (inclusive). From
the date falling 21 days from the date hereof until the date falling 21
days thereafter each of DC Sub and Lagardere shall make available to the
other and to each of their advisers listed in Schedule 13 the
information applicable to them or, in the case of Lagardere, applicable
to the Aerospatiale Matra Group or, in the case of DC Sub, applicable to
the Delta Group in accordance with lists of information, such lists to
be agreed between DC Sub and Lagardere but substantially in the form of
the list in the agreed form (such list to apply equally to the Delta
Group and to the Aerospatiale Matra Group). The period of 21 days from
the date hereof (but not the period of 21 days for review) referred to
in this clause 4.5 may be varied by agreement between, and the
information and materials shall be provided at such place as is
specified by, DC Sub and Lagardere (and no other party's agreement shall
be required for that purpose).
4.6 Each of DC Sub and Lagardere (and their respective advisers) shall
review information made available to them pursuant to Clause 4.5 in an
orderly and timely manner.
4.7 Lagardere shall periodically report to and consult with Sogepa on the
matters reviewed by it as part of the process described in Clause 4.5 to
4.8 (inclusive) and shall report and consult on any facts giving rise to
a potential claim under Clause 8 or Clause 9. Lagardere shall take no
action under Clause 4.8 without the consent of Sogepa.
4.8 Should either of DC Sub, Sogepa or Lagardere discover any matter during
the investigation process referred to in Clause 4.6 which may reasonably
be expected to have the effect of reducing the Notional Agreed Valuation
of the Listco Group by EUR 2 billion or more DC Sub and Lagardere shall:
(a) notify the other of their discovery, the basis for it and the
reason for their interpretation of it as being materially and
adversely different from the bases and assumptions referred to
above;
(b) attempt, through discussion with the other and, where
appropriate, respective advisers to resolve their differences;
and
(c) at any time by the date falling 14 days after the 42 days
referred to in Clause 4.5 be entitled (by notice in writing
served on the other) to terminate this Agreement.
4.9 Upon a termination of this Agreement pursuant to and in accordance with
Clause 4.8(c) this Agreement shall terminate with immediate effect,
whereupon each party's further rights and obligations shall immediately
cease (without prejudice to any accrued rights or obligations at the
time of termination).
5. CLOSING
5.1 Subject to Clause 3.3, Closing shall take place at the office of
Clifford Chance at Apollolaan 171, 1077 AS Amsterdam, Holland or such
other place as is agreed by DC Sub and Lagardere on the seventh Business
Day following the satisfaction of the last Condition Precedent to be
satisfied. At or before Closing the following matters shall be effected.
5.2 New Delta
5.2.1 DC Sub and Delta shall procure the transfer by way of
contribution of New Delta from Delta to Listco in
consideration for the issue to Delta of that number of Listco
Shares representing that proportion, P, of the total issued
share capital of Listco, X + Y, calculated as follows:
P = X x 100
-----
X + Y,
where: X = V - D
Y = EUR 9,649 million;
V = EUR 8,374 million;
D = the amount extracted by any member of the Delta Group to
DC or any member of the DC Group (other than a member of the
Delta Group) pursuant to Clause 2.1, (excluding the EUR 700
million referred to in Clause 2.1 and Schedule 11),
as set out, by way of example, in Schedule 12.
5.2.2 For purposes of Clause 5.2.1 Delta shall transfer by way of
contribution to Listco the entire issued share capital of New
Delta free of any Encumbrance.
5.2.3 For purposes of Clauses 5.2.1 and 5.2.2 the parties shall do
or procure all of those things respectively required of them
in Schedule 6.
5.3 Aerospatiale Matra
5.3.1 Sogepa and Lagardere shall procure the transfer by way of
contribution of Aerospatiale Matra Bis from Aerospatiale Matra
to Listco in consideration for
the issue to Aerospatiale Matra of that number of Listco
Shares, representing that proportion, Q, of the total issued
share capital of Listco, X + Y, calculated as follows:
Q = 100 - P
and as set out, by way of example, in Schedule 12.
5.3.2 For purposes of Clause 5.3.1 Sogepa and Lagardere shall
procure the transfer by Aerospatiale Matra by way of
contribution to Listco of the entire issued share capital of
Aerospatiale Matra Bis free of any Encumbrance.
5.3.3 For purposes of Clauses 5.3.1 and 5.3.2 the parties shall do
or procure all of those things respectively required of them
in Schedule 7.
5.4 Liquidation
5.4.1 Upon completion of the matters described in Clauses 5.2 and
5.3 Lagardere and Sogepa shall exercise such rights as are
available to them to procure the dissolution of Aerospatiale
Matra by doing or procuring all of those things respectively
required of them in Schedule 8 and Lagardere and Sogepa shall
procure the distribution on winding-up of Aerospatiale Matra,
by Aerospatiale Matra to Aerospatiale Matra's shareholders, of
Aerospatiale Matra's Listco Shares.
5.4.2 For purposes of Clause 5.4.1 Sogepa and Lagardere shall
exercise such rights as are available to them to procure that
Aerospatiale Matra shall transfer to its shareholders the
Listco Shares held by Aerospatiale Matra pro rata the number
of Aerospatiale Matra Shares held by Aerospatiale Matra
shareholders.
5.5 DC Sub shall, and Sogepa and Lagardere shall procure that Topco shall,
have their Listco Shares representing (after the issue referred to in
clause 5.7) 30% of the issued share capital of Listco for Topco (on the
one hand) and for DC Sub (on the other hand) managed by the Managing
Partner through the partnership between them (constituted as Holdings
CV) in return for 50% (each) of the partnership interests of Holdings
CV.
5.6 Each of Lagardere and Sogepa shall transfer Listco Shares to Topco in
consideration for the issue to each of Lagardere and Sogepa of interests
of Topco (in both cases in accordance with and as specified in the Topco
Shareholders Agreement).
5.7 DC Sub shall, and Lagardere and Sogepa shall procure that Topco shall,
use its best efforts to procure the issue by Listco of new shares of
Listco in an amount equal to 16.3% (or such other proportion as may be
agreed by the Principals in writing after the date hereof) of the
(pre-issue) issued share capital of Listco. No party, nor any member of
their respective Groups, shall participate in such issue. The parties
shall procure that Holdings CV does not hold Listco Shares representing
less than 60% of the issued share capital of Listco after any issue
referred to in Clause 5.7 and an issue in connection with a transaction
involving CASA.
5.8 DC Sub, Lagardere, and Sogepa shall, and Lagardere and Sogepa shall
procure that Topco shall, enter into the Participation Agreement.
5.9 Sogepa, DC Sub and Lagardere shall exercise such rights as are available
to them to procure that Listco shall, enter into an agreement relating
to ballistic missiles in accordance with the FS and Listco Principles.
5.10 Each of the parties shall procure that all agreed form documents
identified in this Agreement as to be signed and delivered by them at
Closing are so signed and delivered.
5.11 In the event of any conflict between the terms of this Agreement and
those of any document entered into for the purposes of, or in connection
with, the transactions contemplated by the Merger Documents, the terms
of this Agreement shall prevail as between the parties to this Agreement
and, unless expressly provided in any such document to the contrary,
nothing contained in any such document shall have the effect of varying
or waiving any of the obligations of the parties under this Agreement.
6. INDEMNITIES
6.1 DC Sub shall indemnify Lagardere (for itself and on behalf of each
member of the Lagardere Group) and shall keep them indemnified, against
(save in respect of any consequential loss not foreseeable by DC Sub (or
any member of the DC Group)) all or any costs, claims, demands,
expenses, losses or liabilities that they (or any of them) may suffer or
incur from the date hereof as a result of all or any of the shareholders
of Dornier GmbH (a German limited liability company) other than a member
of the Delta Group (together, the "Do Family") obtaining or seeking to
obtain any rights or remedies against Lagardere (or any member of the
Lagardere Group), Holdings CV, the Managing Partner, Delta, New Delta,
Listco or any member of the Listco Group or the Delta Group. The
indemnity contained in this Clause 6.1 shall also extend to Listco to
the extent such protection is not provided for in the transfer of New
Delta to Listco.
6.2 DC Sub may use Excess Shares owned by Delta to satisfy any claim which
the Do Family may obtain or seek to obtain. DC Sub shall use its
reasonable endeavours to procure that any such claim by the Do Family is
satisfied in shares in DC.
6.3 Lagardere shall indemnify DC Sub (for itself and on behalf of each
member of the DC Group) and shall keep them indemnified, against (save
in respect of any consequential loss not foreseeable by Lagardere (or
any member of the Lagardere Group)) all or any costs, claims, demands,
expenses, losses or liabilities that they (or any of them) may suffer or
incur from the date hereof as a result of Dassault Industrie obtaining
or seeking to obtain any rights or remedies under an agreement dated 10
November 1998 against Listco (or any member of the Listco Group) or the
Aerospatiale Matra Group in relation to the shares of Dassault Aviation
owned by Aerospatiale Matra (and only to the extent that the said 10
November 1998 agreement is not terminated in accordance with its terms).
6.4 Lagardere shall indemnify DC Sub (for itself and on behalf of each
member of the DC
Group) and shall keep them indemnified against (save in respect of any
consequential loss not foreseen by Lagardere (or any member of the
Lagardere Group) all or any costs, claims, demands, expenses, losses or
liabilities that they (or any of them) may suffer or incur from the date
hereof as a result of (i) British Aerospace Public Limited Company or
any of its Subsidiaries (ii) Northern Telecom Limited or any of its
Subsidiaries or (iii) Diehl exercising or seeking to exercise any rights
or remedies against Listco (or any member of its Group) or the
Aerospatiale Matra Group in relation to, respectively, (i) Matra BAe
Dynamics S.A.S. (ii) Matra Nortel Communications S.A.S. or (iii) BBV
and/or BGT by reason of the transactions contemplated by the Merger
Documents.
6.5 For the avoidance of doubt Clause 8.4 shall not apply to this Clause 6.
7. REGULATORY MATTERS
7.1 As soon as reasonably practicable after the signing of this Agreement,
DC Sub and Lagardere shall (unless DC Sub and Lagardere otherwise agree)
make a joint notification in form and substance reasonably satisfactory
to each of DC Sub and Lagardere to the European Commission in respect of
the transactions and arrangements contemplated by this Agreement
pursuant to Regulation 4064/89.
7.2 DC Sub and Lagardere shall co-operate with one another to ensure that
all information necessary or desirable for the making of (or responding
to any requests for further information consequent upon) any necessary
or desirable notifications or filings in respect of, or of the
transactions and arrangements contemplated by, the Merger Documents is
supplied to the party dealing with such notifications and filings and
that they are properly, accurately and promptly made.
7.3 If any Regulatory Action is taken or threatened, DC Sub and Lagardere
shall promptly meet to discuss the situation and the action to be taken
as a result, and (if such be the case) whether any modification to the
terms of the Merger Documents (or any other agreement to be entered into
pursuant hereto) shall be made, in order that any requirements (whether
as a condition of giving any approval, exemption, clearance, or consent
or otherwise) of the European Commission or other regulatory authority
may be reconciled with, and within the scope of, the transactions and
arrangements contemplated by this Agreement. DC Sub and Lagardere shall
thereafter co-operate in giving effect to any modifications agreed upon.
7.4 If under relevant European Community or other laws the European
Commission or other regulatory authority (after all appropriate
notifications and hearings have been made and held) take any Regulatory
Action the effect of which is that effect should or may not be given to
the basic principles of the transactions and arrangements between the
parties pursuant to the Merger Documents, then DC Sub and Lagardere
shall promptly meet to decide the appropriate course in the mutual
interests of the parties to give effect to the requirements of the
European Commission and/or other regulatory authority(ies).
8. REPRESENTATIONS AND WARRANTIES
8.1 DC Sub hereby represents and warrants to (a) Lagardere and (b) Sogepa at
the date of this Agreement that:
8.1.1 Each of DC, DC Sub, Delta, New Delta and all other members of
the Delta Group is a corporation duly organised and
incorporated and validly existing under the laws of its
jurisdiction of incorporation and has now and has had at all
relevant times full corporate power and authority to carry on
and operate its respective businesses conducted by it from
time to time and as it will be conducted upon Closing.
8.1.2 Each of DC, DC Sub, Delta, New Delta and all other members of
the Delta Group has now and has had at all relevant times full
corporate power and capacity and authority to enter into the
Merger Documents to which it is expressed to be a party
including, without limitation, the Participation Agreement and
the execution and delivery of the same and the consummation of
the transactions contemplated thereby have been or will by
Closing have been duly authorised by all necessary corporate
action on the part of DC, DC Sub, Delta, New Delta and all other
members of the Delta Group. The Merger Documents will constitute
upon their execution and delivery, the legal, valid and binding
obligation of DC, DC Sub, Delta, New Delta and all other members
of the Delta Group as the case may be, enforceable against it in
accordance with their terms, except as a Court may refuse to
grant specific performance.
8.1.3 The execution, delivery and performance of the Merger Documents
will not:
(a) violate (or, as the case may be, did not violate) any of
the provisions of the statutes of DC, DC Sub, Delta, New
Delta and all other members of the Delta Group; and
(b) save as expressly contemplated in the Merger Documents,
will not conflict with or result in a breach of or give
rise to a right of termination of or cancellation of or
result in the creation of any Encumbrance or accelerate
the performance required by the terms of any judgement,
law or regulation or court order or any agreement or
instrument to which DC, DC Sub, Delta, New Delta and all
other members of the Delta Group is a party or to which
it or its property is subject, or constitute a default
thereunder and has not done so.
8.1.4 Except as set out in Clauses 3, 5 and 7, or as otherwise
disclosed in writing by (or on behalf of) DC (or DC Sub) to
Lagardere (or its advisers), no filing with, and no consent,
waiver, approval or authorisation of, any governmental
authority or any third party is or was required in connection
with the execution, performance and delivery by DC, DC Sub,
Delta, New Delta (and all other members of the Delta Group) of
the Merger Documents or the
performance by DC, DC Sub, Delta, New Delta (and all other
members of the Delta Group) of any of the transactions
contemplated thereby.
8.1.5 The information provided by or on behalf of DC, DC Sub or
Delta to, or on behalf of, Lagardere or Aerospatiale Matra
for, or in connection with, the transaction contemplated by
the Merger Documents was prepared and so provided in good
faith.
8.1.6 Delta is the sole legal and beneficial owner of the Delta
Shares and has no other assets. The Delta Shares comprise the
whole of the allotted and issued share capital of New Delta,
have been properly allotted and issued and are fully paid or
credited as fully paid. There is no Encumbrance, and there is
no agreement, arrangement or obligation to create or give an
Encumbrance, in relation to any of the Delta Shares or
unissued shares in the capital of New Delta. Other than any
Merger Document there is no agreement, arrangement or
obligation requiring the creation, allotment, issue, transfer,
redemption or repayment of, or the grant to a person of the
right (conditional or not) to require the allotment, issue,
transfer, redemption or repayment of, a share in the capital
of New Delta. New Delta does not have a Subsidiary other than
the companies referred to in Schedule 2 (the "Delta
Subsidiaries"). Delta has no interest in, and has not agreed
to acquire an interest in, anybody other than the Delta
Subsidiaries. Each allotted and issued share in the capital of
each Delta Subsidiary is legally and beneficially owned by
Delta alone, has been properly allotted and issued and is
fully paid or credited as fully paid. There is no Encumbrance,
and no agreement, arrangement or obligation to create or give
an Encumbrance, in relation to a share or unissued share in
the capital of each Delta Subsidiary.
8.1.7 The Delta Warranted Accounts have been prepared on a proper
and consistent basis in accordance with the applicable law and
US GAAP. Those accounts show a true and fair view of the
assets, liabilities and state of affairs of the Delta Group as
at 31 December 1998 and of the profits and losses of the Delta
Group for the financial year ended on 31 December 1998.
8.1.8 The Delta Warranted Accounts reserve or provide in accordance
with US GAAP for all tax liable to be assessed on New Delta or
any member of the Delta Group or for which it is or may become
accountable, for all periods starting on or before 31 December
1998. The Delta Warranted Accounts reserve (in accordance with
US GAAP) for all contingent or deferred liabilities to tax and
pensions commitments for all periods starting on or before 31
December 1998 and no tax shall arise in respect of the period
from 31 December 1998 until Closing other than tax on profits
arising in the ordinary and usual course of business except in
respect of any tax cost specifically indicated in Schedule 3
or Schedule 11.
8.1.9 Neither the execution nor the performance of any Merger
Document will result in losing the benefit of an asset, grant,
subsidy, right or privilege which
New Delta or any member of the Delta Group enjoys at the date
of this Agreement or will conflict with, result in a breach
of, give rise to an event of default under, require the
consent of a person under, enable a person to terminate or
relieve a person from an obligation under any agreement or
arrangement to which Delta or any member of the Delta Group is
a party or any legal or administrative requirement by which
New Delta or any member of the Delta Group is bound.
8.1.10 New Delta (or any relevant member of the Delta Group) has
obtained, and has complied with, the terms and conditions of,
each Permit. Each Permit is valid, in force and unconditional
or subject only to a condition that has been satisfied. No
Permit will be revoked, suspended, cancelled, varied or not
renewed as a result of the execution or performance of any
Merger Document. For these purposes "Permit" means a permit,
licence, consent, approval, certificate, qualification or
other authorisation required for the effective operation of
the business of any member of the Delta Group or for its
ownership, possession, occupation and use of an asset.
8.1.11 Save to the extent provided for in the Delta Warranted
Accounts no member of the Delta Group is involved in a civil,
criminal, arbitration, administrative or other proceedings in
respect of which the potential loss or liability may exceed
EUR 2.5 million. No civil, criminal, arbitration,
administrative or other proceeding is pending or threatened by
or against any member of the Delta Group. No fact or
circumstance exists which might give rise to a civil,
criminal, arbitration, administration or other proceeding
involving any member of the Delta Group. There is no
outstanding judgement, order, decree, arbitral award or
decision of a court, tribunal, arbitrator or governmental
agency against any member of the Delta Group.
8.1.12 Since 31 December 1998 and excluding matters required for the
implementation of the transaction contemplated by the Merger
Documents (or as otherwise disclosed in writing between the
Principals), the extraction of cash from the business of the
Delta Group has been in accordance with the ordinary and
normal course of business of the Delta Group.
8.2 Lagardere hereby represents and warrants to (a) DC Sub and (b) Sogepa at
the date of this Agreement that:
8.2.1 Each of Lagardere, Aerospatiale Matra and other members of the
Lagardere Group is a corporation (or, as appropriate,
partnership) duly incorporated (or constituted) and validly
existing under the laws of its jurisdiction of incorporation
(or constitution) and has now and has had at all relevant
times full power and authority to carry on and operate its
respective businesses conducted by it from time to time and as
it will be conducted upon Closing.
8.2.2 Each of Lagardere, Aerospatiale Matra and other relevant
members of the Lagardere Group has now and has had at all
relevant times full power and capacity and authority to enter
into the Merger Documents to which it is
expressed to be a party including, without limitation, the
Participation Agreement and the execution and delivery of the
same and the consummation of the transactions contemplated
thereby have been or will by Closing have been duly authorised
by all necessary action on the part of Lagardere, Aerospatiale
Matra and other relevant members of the Lagardere Group. The
Merger Documents will constitute, upon their execution and
delivery, the legal, valid and binding obligation of
Lagardere, Aerospatiale Matra and other relevant members of
the Lagardere Group as the case may be, enforceable against it
in accordance with their terms, except as a Court may refuse
to grant specific performance.
8.2.3 The execution, delivery and performance of the Merger
Documents will not:
(a) violate (or, as the case may be, did not violate) any of
the provisions of the Bye-laws of Lagardere,
Aerospatiale Matra and other relevant members of the
Lagardere Group;
(b) save as expressly contemplated in the Merger Documents
conflict with or result in a breach of or give rise to a
right of termination of or cancellation of or result in
the creation of any Encumbrance or accelerate the
performance required by the terms of any judgement, law
or regulation or court order or any agreement or
instrument to which Lagardere, Aerospatiale Matra and
other relevant members of the Lagardere Group is a party
or to which it or its property is subject, or constitute
a default thereunder and has not done so.
8.2.4 Except as set out in Clauses 3, 5 and 7, or as otherwise
disclosed in writing by (or on behalf of) Lagardere to DC or
DC Sub (or their advisers) no filing with, and no consent,
waiver, approval or authorisation of, any governmental
authority or any third party is or was required in connection
with the execution, performance and delivery by Lagardere,
Aerospatiale Matra (and other relevant members of the
Lagardere Group) of the Merger Documents contemplated hereby
or the performance by Lagardere, Aerospatiale Matra (and other
relevant members of the Lagardere Group) or any of the
transactions contemplated thereby.
Lagardere hereby represents and warrants to DC Sub at the date of this
Agreement that:
8.2.5 The information provided by or on behalf of Lagardere to, or
on behalf of, DC or DC Sub, for, or in connection with, the
transaction contemplated by the Merger Documents was prepared
and so provided in good faith.
8.2.6 Lagardere is the sole legal and beneficial owner of the
Aerospatiale Matra Shares. The Aerospatiale Matra Shares
comprise approximately 33% of the whole of the allotted and
issued share capital of Aerospatiale Matra, have been properly
allotted and issued and are fully paid or credited as fully
paid. There is no Encumbrance, and there is no agreement,
arrangement or obligation to
create or give an Encumbrance, in relation to any of the
Aerospatiale Matra Shares. Other than any Merger Document
there is no agreement, arrangement or obligation requiring the
transfer, redemption or repayment of, or the grant to a person
of the right (conditional or not), to require the transfer,
redemption or repayment of the Aerospatiale Matra Shares.
Aerospatiale Matra does not have a Subsidiary other than the
companies referred to as Aerospatiale Matra Subsidiaries in
Schedule 1 (the "Aerospatiale Matra Subsidiaries").
Aerospatiale Matra has no interest in, and has not agreed to
acquire an interest in, anybody other than the Aerospatiale
Matra Subsidiaries and Aerospatiale Matra Bis. Each allotted
and issued share in the capital of each Aerospatiale Matra
Subsidiary is legally and beneficially owned by Aerospatiale
Matra alone, has been properly allotted and issued and is
fully paid or credited as fully paid. There is no Encumbrance,
and no agreement, arrangement or obligation to create or give
an Encumbrance, in relation to a share or unissued share in
the capital of each Aerospatiale Matra Subsidiary.
Lagardere and Sogepa hereby severally represent and warrant to DC Sub at
the date of this Agreement that:
8.2.7 The Aerospatiale Matra Warranted Accounts have been prepared
on a proper and consistent basis in accordance with the
applicable law and French GAAP. Those accounts show a true and
fair view of the assets, liabilities and state of affairs of
the Aerospatiale Matra Group as at 31 December 1998 and of the
profits and losses of the Aerospatiale Matra Group for the
financial year ended on 31 December 1998.
8.2.8 The Aerospatiale Matra Warranted Accounts reserve or provide
in accordance with French GAAP for all tax liable to be
assessed on Aerospatiale Matra or any member of the
Aerospatiale Matra Group or for which it is or may become
accountable, for all periods starting on or before 31 December
1998. The Aerospatiale Matra Warranted Accounts reserve (in
accordance with French GAAP) for all contingent or deferred
liabilities to tax for all periods starting on or before 31
December 1998 and no tax shall arise in respect of the period
from 31 December 1998 until Closing other than tax on profits
arising in the ordinary and usual course of business and tax
of Aerospatiale Matra (on its own account) arising exclusively
in connection with the transaction contemplated by the Merger
Documents.
8.2.9 Neither the execution nor the performance of any Merger
Document will result in losing the benefit of an asset, grant,
subsidy, right or privilege which Aerospatiale Matra or any
member of the Aerospatiale Matra Group enjoys at the date of
this Agreement or will conflict with, result in a breach of,
give rise to an event of default under, require the consent of
a person under, enable a person to terminate or relieve a
person from an obligation under any agreement or arrangement
to which Aerospatiale Matra or any member of the Aerospatiale
Matra Group is a party or any legal or administrative
requirement by which Aerospatiale Matra or any member of the
Aerospatiale Matra Group is bound.
8.2.10 Aerospatiale Matra (or any relevant member of the Aerospatiale
Matra Group) has obtained, and has complied with, the terms
and conditions of, each Permit. Each Permit is valid, in force
and unconditional or subject only to a condition that has been
satisfied. No Permit will be revoked, suspended, cancelled,
varied or not renewed as a result of the execution or
performance of any Merger Document. For these purposes
"Permit" means a permit, licence, consent, approval,
certificate, qualification or other authorisation required for
the effective operation of the business of any member of the
Aerospatiale Matra Group or for its ownership, possession,
occupation and use of an asset.
8.2.11 Save to the extent provided for in the Aerospatiale Matra
Warranted Accounts no member of the Aerospatiale Matra Group
is involved in a civil, criminal, arbitration, administrative
or other proceedings in respect of which the potential loss or
liability may exceed EUR 2.5 million. No civil, criminal,
arbitration, administrative or other proceeding is pending or
threatened by or against any member of the Aerospatiale Matra
Group. No fact or circumstance exists which might give rise to
a civil, criminal, arbitration, administration or other
proceeding involving any member of the Aerospatiale Matra
Group. There is no outstanding judgement, order, decree,
arbitral award or decision of a court, tribunal, arbitrator or
governmental agency against any member of the Aerospatiale
Matra Group.
8.2.12 Since 31 December 1998 and excluding matters required for the
implementation of the transaction contemplated by the Merger
Documents (or as otherwise disclosed in writing between the
Principals), the extraction of cash from the business of the
Aerospatiale Matra Group has been in accordance with the
ordinary and normal course of business of the Aerospatiale
Matra Group.
8.3 Sogepa hereby represents and warrants to DC Sub and Lagardere at the
date of this Agreement that:
8.3.1 It has now and has had at all relevant times full power and
capacity and authority to enter into the Merger Documents to
which it is expressed to be a party and the execution and
delivery of the same and the consummation of the transactions
contemplated thereby have been or will by Closing have been
duly authorised by all necessary corporate action on its part.
The Merger Documents will constitute upon their execution and
delivery the legal, valid and binding obligation of Sogepa
enforceable against it in accordance with their terms, except
as a Court may refuse to grant specific performance.
8.3.2 The execution, delivery and performance of the Merger
Documents will not:
(a) violate (or, as the case may be, did not violate) any of
the provisions of the constitutional documents of
Sogepa; and
(b) save as expressly contemplated in the Merger Documents,
will not conflict with or result in a breach of or give
rise to a right of termination of or cancellation of or
result in the creation of any Encumbrance or accelerate
the performance required by the terms of any judgement,
law or regulation or court order or any agreement or
instrument to which the French State or Sogepa is a
party or to which it or its property is subject, or
constitute a default thereunder and has not done so.
8.3.3 Except as disclosed in writing by (or on behalf of) Sogepa (or
its advisers) or as envisaged by the Merger Documents, no
filing with, and no consent, waiver, approval or authorisation
of, any governmental authority or any third party is or was
required in connection with the execution, performance and
delivery by Sogepa of the Merger Documents or the performance
by Sogepa of any of the transactions contemplated thereby.
8.3.4. Sogepa will at Closing be the sole legal and beneficial owner
of the Sogepa Shares, which have been properly allotted and
issued and are fully paid or credited as fully paid. There is
no Encumbrance, and there is no agreement, arrangement or
obligation to create or give an Encumbrance, in relation to
any of the Sogepa Shares. Other than any Merger Document there
is no agreement, arrangement or obligation requiring the
transfer, redemption or repayment of, or the grant to a person
of the right (conditional or not) to require the transfer,
redemption or repayment of the Sogepa Shares.
8.4 Remedies
8.4.1 In respect of a breach of the Warranties:
(a) the sole recourse shall be an action for damages against
the relevant entity giving the Warranty (and, for these
purposes, any Warranty given by Lagardere and Sogepa
under Clause 8.2.7 to 8.2.12 (inclusive) shall be deemed
to be given by one entity only) (the "Debtor") from the
other (or others) (the "Claimant");
(b) the limitations set out in Clause 8.5 shall apply (other
than in respect of Clauses 8.1.1 to 8.1.4 (inclusive),
Clauses 8.2.1 to 8.2.4. (inclusive) and Clauses 8.3.1 to
8.3.3. (inclusive)); and
(c) for the avoidance of doubt any liability for a breach of
the Warranties shall not be grossed-up to include any
tax payable thereon by the Claimant.
8.4.2 Save to the extent otherwise provided herein the Parties waive
all or any rights they may have to rescission or restitution.
8.5 Limitations
8.5.1 A Debtor shall not be liable to a Claimant for any claim under
Clause 8.4 (a "Claim"):
(a) unless it receives from the Claimant written notice
containing details of the Claim including the Claimant's
estimate of the amount of the Claim:
(i) on or before the date of approval by the board of
Aerospatiale Matra or, as appropriate, Listco of
financial statements for that company relating to
the first complete accounting period falling after
the Closing Date, in the case of a Claim for
breach of any of the Warranties other than a Claim
covered by paragraph (ii) below;
(ii) in respect of any Claim relating to taxation or
social security contributions, on or before the
expiry of thirty 30 days after the expiry of the
legal prescription period applicable to the
subject matter of the Claim;
(b) unless the liability of the Debtor after application of
the provisions of this Clause 8.5 other than this
sub-clause 8.5.1 in respect of that individual Claim
would exceed EUR 2.5 million in which case the Claimant
shall be entitled to claim the entire amount of the
Claim, subject to the provisions of Clause 8.5.1(c);
(c) unless the aggregate amount of the liability of the
Debtor following application of the provisions of this
Clause 8.5 other than this sub-clause 8.5.1 for all
Claims would exceed EUR 25 million, in which case the
Debtor shall be liable to the Claimant only in respect
of the losses exceeding EUR 25 million.
8.5.2 The aggregate amount of the liability of the Debtor for all
Claims shall not exceed EUR 2.5 billion.
8.5.3 The Debtor shall not be liable for any Claim:
(a) if and to the extent that the fact, matter, event or
circumstance giving rise to such Claim was fairly and
reasonably disclosed by the Debtor to the Claimant prior
to the signature of this Agreement; or
(b) if and to the extent that the matter is specifically
disclosed or is specifically provided or reserved for in
the relevant Aerospatiale Matra Warranted Accounts or,
as appropriate, the Delta Warranted Accounts.
8.5.4 If the Claimant becomes aware that any claim has been made or
is threatened by a third party after Closing (a "Third Party
Claim") which, following the application of the provisions of
this Clause 8.5, is likely to result in the Claimant being
entitled to make a Claim against the Debtor:
(a) the Claimant shall give notice of such Third Party Claim
to the Debtor as soon as reasonably practicable and in
any event within seven (7) days of becoming aware of it
and, in any event, at least seven (7) days prior
to the expiry of the period allowed by law for
responding to such Third Party Claim and shall give the
Debtor and its professional advisors all reasonable
information and facilities to investigate any such Third
Party Claim: Failure by the Claimant in respect of its
obligations under this Clause 8.5.4 (a) shall absolve
the Debtor from liability in respect of the Third Party
Claim, to the extent that such failure causes or
increases the Debtor's liability in respect of a Claim;
(b) the Debtor shall not make or permit any admission of
liability, agreement or compromise in respect of such
Third Party Claim without prior consultation with and
prior written consent of the Claimant (not to be
unreasonably withheld or delayed);
(c) the Debtor may for 6 months from the date of receipt of
the notice referred to in Clause 8.5.4(a), take all such
reasonable steps or proceedings as it may consider
necessary to avoid, resist, defend, appeal or compromise
any such Third Party Claim to the extent only that such
acts or omissions do not cause or increase a Claim.
8.5.5 Any Claim shall (if not previously satisfied, settled or
withdrawn) be deemed to have been withdrawn (and no new Claim
may be made in respect of the matter giving rise to such
withdrawn Claim) unless legal proceedings in respect of it
have been commenced within 6 months of notification to the
Debtor pursuant to Clause 8.5.1.
8.5.6 In calculating the liability of the Debtor in respect of any
Claim such Claim shall be reduced by:
(a) the aggregate of:
(i) any amount by which any asset shall have been
under-stated; and
(ii) any amount by which any liability shall have been
overstated;
in the Aerospatiale Matra Warranted Accounts or, as
appropriate, the Delta Warranted Accounts, less the
aggregate of:
(iii) any amount by which any other liabilities shall
have been under-stated therein; and
(iv) any amount by which any assets shall have been
over-stated therein;
(b) the amount by which any provision or reserve (including
any provision or reserve taken into account in
calculating the net value of an asset) in the
Aerospatiale Matra Warranted Accounts or, as
appropriate, the Delta Warranted Accounts, has been
established to have been unnecessary or excessive;
(c) any amount recovered in respect of any debt written off
in the Aerospatiale Matra Warranted Accounts or, as
appropriate, the Delta Warranted Accounts; and
(d) the extent that any liability is discharged or satisfied
below the amount attributed thereto in the Aerospatiale
Matra Warranted Accounts or, as appropriate, the Delta
Warranted Accounts;
provided that no amount shall be taken into account more than
once pursuant to this Clause 8.5.6.
8.5.7 If any matter referred to in Clause 8.5.6 is established after
payment has been made by the Debtor to the Claimant pursuant
to one or more Claims, the Claimant shall forthwith refund to
the Debtor an amount equivalent to the amount by which such
matter would have reduced such payment if it had been
established before the date of the Claim.
8.5.8 No liability shall attach to the Debtor in respect of any
Claim to the extent that any taxation liability for which any
company or entity contributed by that Debtor, directly or
indirectly, to Listco, is reduced or extinguished as a result
of the loss subject to the Claim.
8.5.9 The Debtor shall have no liability in respect of any Claim in
respect of any tax audit which merely modifies the tax period
during which a deductible charge or amortisation may be taken,
or in which income or gain may be realised (except to the
extent that either such modification results in any Relief
(otherwise useable within the same tax period) being lost or
to the extent of penalties, interest and cost of funds).
8.5.10 The Debtor shall not be liable in respect of any Claim to the
extent that such Claim is attributable to, or is increased as
a result of, any legislation not in force at the date hereof
or to any change of law or administrative practice which takes
effect retrospectively or occurs as a result of any change in
the basis or method of calculation of, or any increase in the
rates of, taxation in force at the date hereof.
8.5.11 Where the Claimant is entitled to recover from a third party
any sum which is the subject of an actual or potential Claim,
the Claimant shall promptly notify the Debtor and, if so
required by the Debtor, the Claimant shall, before seeking to
recover any amount from the Debtor under this Agreement, first
take all steps as the Debtor may reasonably require to enforce
such recovery and thereafter any Claim shall be limited (in
addition to the limitations on the liability of the Debtor
referred to in this Clause) to the amount by which the loss or
damage (including the costs of recovery) shall exceed the
amount so recovered.
8.5.12 If the Debtor pays to the Claimant an amount in discharge of a
Claim and the Claimant subsequently recovers from a third
party a sum which is referable to
the Claim (including without limitation by way of insurance),
the Claimant shall forthwith repay to the Debtor:
(a) an amount equal to the sum recovered less any reasonable
out-of-pocket costs and expenses incurred in recovering
the same; or
(b) if the figure resulting under paragraph (a) above is
greater than the amount paid by the Debtor in respect of
the relevant Claim, such lesser amount as shall have
been so paid by the Debtor.
8.6 In relation to Warranties given by Lagardere and Sogepa in Clause 8.2.7
to 8.2.12 (inclusive) and those given to Lagardere and Sogepa in Clause
8.1.5 to Clause 8.1.12 (inclusive) Lagardere and Sogepa may substitute
Topco as the giver or, as appropriate, recipient of such Warranties in
place of and to the exclusion of themselves, including in relation to
accrued or then current claims or liabilities.
9. TAX
9.1 DC Sub, Delta and Lagardere shall, and shall cause their respective
Subsidiaries and (so far as each of them is able) members of the Listco
Group to, and Lagardere and Sogepa shall exercise such rights as are
available to them to cause Aerospatiale Matra to, co-operate in
connection with the making of any claims or elections for taxation
purposes requested:
(a) by DC or DC Sub in respect of the steps taken by DC or DC Sub
to create New Delta, transfer New Delta to Listco, transfer
Listco Shares to Holdings CV and create and issue a
convertible security over certain of the Listco Shares issued
to Delta under Clause 5.2.1 and by Lagardere or Aerospatiale
Matra in respect of the transfer of the Aerospatiale Matra
Business to Listco and the transfer of Listco Shares to
Holdings CV or the distribution of the Listco Shares to
Aerospatiale Matra shareholders on winding up of Aerospatiale
Matra, or any other matter necessary or desirable for the
implementation of Closing; and/or
(b) by DC or DC Sub in connection with the taxation affairs of DC,
DC Sub, Delta, New Delta or any of their respective
Subsidiaries or by Lagardere or Aerospatiale Matra in
connection with the taxation affairs of Lagardere or
Aerospatiale Matra, or any of their respective Subsidiaries,
in either case in respect of any period beginning on or before
Closing,
provided that nothing in this Clause 9.1 shall entitle any party to
require to be done anything which would or might (a) give rise to any
liability or additional liability on the part of any of the parties or
Holdings CV or Listco whether immediate, contingent or deferred or (b)
reduce any Relief available to the parties or Holdings CV or Listco.
9.2 Each of DC Sub, Delta and Lagardere shall, and Lagardere and Sogepa
shall exercise such rights as are available to them to procure that
Aerospatiale Matra shall co-operate, and undertakes to procure (or, as
appropriate, exercise such rights as are available to them to procure)
that their respective Subsidiaries shall co-operate, to ensure that the
others of them and the members of their respective Groups, are, where
relevant, provided with sufficient information to enable it to submit,
and to deal with any matters arising out of, any returns, notices,
claims for Relief or allowances, or computations, to any relevant
taxation or excise authorities in respect of any period beginning on or
before Closing.
9.3 Each of the parties shall, and Lagardere and Sogepa shall exercise such
rights as are available to them to procure that Aerospatiale Matra
shall, co-operate, and undertakes to procure (or, as appropriate,
exercise such rights as are available to them to procure) that their
respective Subsidiaries shall co-operate, to facilitate the issue of
dividend access shares in such manner, within the Listco Group, as may
reasonably be practicable including without limitation equalisation
arrangements relating to French and German source income within the
Listco Group.
9.4 To the extent that (i) the transfer of New Delta from Delta to Listco
gives rise to German real estate transfer tax, or (ii) the dissolution
of Aerospatiale Matra gives rise to droit de partage or other tax, such
tax shall be borne or paid by Listco. To the extent that any transaction
contemplated in Schedule 3 gives rise to German real estate transfer
tax, that tax shall be borne by DC Sub or Delta.
10. CONFIDENTIALITY
10.1 Each of the parties undertakes to each of the others that it shall keep
confidential and not (without the prior written consent of the others)
disclose to any person or use or exploit commercially for its own
purposes the existence and terms of this Agreement. In performing its
obligations under this Clause 10, each of the parties shall apply such
standards of confidentiality as it applies generally in relation to its
own confidential information.
10.2 Each of the parties further undertakes to procure that members of its
Group observe the provisions of this Clause 10 as fully as if they were
parties hereto in lieu of that party and to use all reasonable
endeavours to ensure that its employees and agents observe such
confidentiality.
10.3 Clauses 10.1 and 10.2 shall not apply to:
(a) the disclosure of information to a company which is another
member of the DC Group, the Aerospatiale Matra Group or the
Lagardere Group (as the case may be) where such disclosure is
for a purpose reasonably incidental to this Agreement; or
(b) information acquired from a third party with the right to
divulge the same; or
(c) information required to be disclosed by operation of law or
any stock exchange regulations or any binding judgement or
order or by any requirement of any competent authority; or
(d) disclosure in confidence to a party's professional advisers of
information reasonably required to be disclosed for use in
connection with transactions and matters contemplated hereby
or related hereto; or
(e) information which is or becomes within the public domain
(otherwise than through the default of the recipient of that
information).
10.4 Subject to Clause 10.5, no announcement or press release in connection
with the signature or subject matter of this Agreement shall be made or
issued by or on behalf of any party or any of its Subsidiaries without
the prior written approval of the other parties (such approval not to be
unreasonably withheld or delayed).
10.5 If a party has an obligation to make or issue any announcement required
by law or by any stock exchange or by any governmental authority in
connection with this Agreement, that party shall give the other parties
every reasonable opportunity to comment on any such announcement or
release before it is made or issued and the approval of the other
parties shall be required to any specific references therein to
themselves, their business or to Holdings CV (provided always that this
shall not have the effect of preventing the party making the
announcement or release from complying with its legal and stock exchange
obligations.)
11. SETTLEMENT OF DISPUTES
11.1 If there shall be any dispute, controversy or claim ("Dispute") between
any of the parties arising out of or in connection with this Agreement,
including the breach, lapse, termination, or invalidity of this
Agreement, the relevant parties shall use their best endeavours to
resolve the matter on an amicable basis. If one party serves written
notice on another party or parties that a Dispute has arisen and such
parties are unable to resolve such Dispute within a period of thirty
(30) days from the service of such notice, then the matter shall be
referred to a panel consisting of the Chief Executives (or equivalent)
for the time being of each of Lagardere and DC (the "Panel"). No
recourse to arbitration under this Agreement shall take place unless and
until such procedure has been followed.
11.2 If the Panel shall have been unable to resolve the Dispute within a
period of forty-five (45) days following its reference to it, it shall
be referred by any of the parties in dispute (for purposes of this
Clause 11, the "Claimant(s)") to and finally resolved by arbitration
pursuant to the Rules of Arbitrations of the International Chamber of
Commerce ("I.C.C") then in force and in accordance with the following
provisions of this Clause 11.
11.3 The Tribunal should consist of three arbitrators. If there is more than
one Claimant and/or more than one Respondent, then the Claimant parties
and/or the Respondent parties shall jointly nominate an arbitrator. If
they cannot agree, such arbitrator(s) shall be selected by the I.C.C.
11.4 The two arbitrators thus nominated shall within thirty (30) days
nominate a third arbitrator who shall not be a national of France or
Germany. If they cannot agree, then the Chairman shall be selected by
the I.C.C.
11.5 The seat of arbitration shall be the Hague, the Netherlands. The
arbitration shall be conducted in the English language.
11.6 In arriving at their award, the arbitrators shall apply the terms and
conditions of this Agreement. The award of the arbitrators shall be
final and binding on the parties to the Dispute. Neither the Claimant(s)
nor the Respondent(s) shall seek recourse to a court of law or other
authorities to appeal against the award of the arbitrators on matters of
fact or law. Reasonable costs of the arbitration shall be awarded to the
successful party(ies) as the arbitrators shall determine.
11.7 If any Dispute raises issues which are substantially the same as or
connected with issues raised in a Dispute which has already been
referred to arbitration under this Agreement or the Participation
Agreement (an "Existing Dispute"), or arises out of substantially the
same facts as are the subject of an Existing Dispute (a "Related
Dispute"), the Tribunal appointed or to be appointed in respect of any
such Existing Dispute shall also be appointed in respect of any Related
Dispute.
11.8 The Tribunal, upon the request of a party to a Dispute or a party to
this Agreement which itself wishes to be joined in any reference to
arbitration proceedings in relation to a Dispute, may join any party to
this Agreement to any reference to arbitration proceedings in relation
to that Dispute and may make a single, final award determining all
Disputes between them. Each of the parties to this Agreement hereby
consents to be joined to any reference to arbitration proceedings in
relation to any Dispute at the request of a party to that Dispute.
11.9 Where, pursuant to the above provisions, the same Tribunal has been
appointed in relation to two or more Disputes, the Tribunal may, with
the agreement of all parties concerned or upon the application of one of
the parties, being a party to each of the Disputes, order that the whole
or part of the matters at issue shall be heard together upon such terms
or conditions as the Tribunal thinks fit. The Tribunal shall have power
to make such directions and any interim or partial award as it considers
just and desirable.
11.10 Nothing in these dispute resolution provisions shall be construed as
preventing either party from seeking conservatory relief in any court of
competent jurisdiction.
11.11 If there is any conflict between the Rules of Arbitration of the I.C.C.
and this Clause 11, this Clause 11 shall govern.
12. STATUS OF PARTIES
12.1 Nothing in this Agreement shall operate to create any agency or
partnership between the parties or between Listco or, as the case may
be, Holdings CV, the Managing Partner and any of them.
12.2 None of the parties nor any member of their respective Groups shall have
any authority to act for, or to make any commitment or incur any
liability or obligation for, or on behalf of, each other or Listco or,
as the case may be, Holdings CV, the Managing Partner (or any of their
respective Subsidiaries) except as specifically authorised so to
do in this Agreement or any of the Merger Documents or by separate
written authorisation.
13. GUARANTEES
13.1.1 Lagardere hereby (as a primary obligor and not as a surety
only) irrevocably and unconditionally guarantees (as an
independent guarantee) to each of DC Sub, Sogepa and Delta
(each a "DC/Sogepa Beneficiary") and indemnifies each
DC/Sogepa Beneficiary in respect of the due and punctual
performance of the obligations binding on relevant Lagardere
Group companies who are required to perform obligations under
any of the Merger Documents (a "Lagardere Obligor") and
contained in the Merger Documents. In the case of default by a
Lagardere Obligor of its obligations under any of the Merger
Documents, Lagardere agrees on demand to make good to the
relevant DC/Sogepa Beneficiary all losses, damages, costs and
expenses arising out of such default or breach and will if so
required to do by notice in writing from DC Sub or, as the
case may be, Delta immediately observe and perform such
obligations as if Lagardere were substituted for that
Lagardere Obligor as primary obligor.
13.1.2 DC Sub hereby (as a primary obligor and not as a surety only)
irrevocably and unconditionally guarantees (as an independent
guarantee) to each of Lagardere, Sogepa and Aerospatiale Matra
(each a "Lagardere/Sogepa Beneficiary") and indemnifies each
Lagardere/Sogepa Beneficiary in respect of the due and
punctual performance of the obligations binding on each of
Delta and relevant DC Group companies who are required to
perform obligations under any of the Merger Documents (a "DC"
Obligor") and contained in the Merger Documents. In the case
of default by a DC Obligor of its obligations under any of the
Merger Documents, DC agrees on demand to make good to the
relevant Lagardere/Sogepa Beneficiary all losses, damages,
costs and expenses arising out of such default or breach and
will if so required to do by notice in writing from Lagardere
or, as in the case may be, Aerospatiale Matra immediately
observe and perform such obligations as if DC Sub were
substituted for that DC Obligor as primary obligor.
13.2 The guarantees contained in this Clause will not be discharged or
affected by:
(a) any granting of time or other indulgence or without limitation
any extension, renewal, acceptance, forbearance or release in
respect of any of the obligations or liabilities of any party
under any of the Merger Documents;
(b) any waiver or release of any right or option of any party
under any of the Merger Documents;
(c) any modification or variation of the terms of any of the
Merger Documents;
(d) any irregularity defect or informality in any of the Merger
Documents or any legal limitation, disability or incapacity of
any party or want of authority of
any director or officer appearing to be acting for or on
behalf of any party to any of the Merger Documents;
(e) any transfer or assignment of rights or obligations by any
party under any of the Merger Documents;
(f) any corporate reorganisation, reconstruction, amalgamation,
dissolution, merger, acquisition of or by or other alteration
in the corporation existence or structure of any party to the
Merger Documents or any other person;
(g) any composition or arrangement by any party to the Merger
Documents or any other person; and
(h) any other act or omission of any kind by any party to the
Merger Documents or any other person or any other
circumstances whatsoever which might constitute a legal or
equitable discharge of the guarantees entered into;
it being the intention of the parties that the guarantees and
indemnities set out in this Clause shall be absolute and unconditional
in any and all circumstances so that the guarantees and indemnities may
be enforced by the relevant parties as often as the need may arise.
13.3 The guarantees herein contained shall remain in full force and effect
until final performance in full by the parties to the Merger Documents
of all their obligations thereunder and notwithstanding the insolvency
of Holdings CV, the Managing Partner or Listco or any other event unless
specifically provided for in the Merger Documents.
14. COSTS
14.1 Save as otherwise expressly provided in this Agreement and the Merger
Documents, all costs, charges and expenses, including taxes, incurred in
connection with the steps taken to implement the preliminary
reorganisation, Closing and subsequent distribution by, and liquidation
of, Aerospatiale Matra and the obtaining of any necessary third party
consents or approvals, shall be borne by DC Sub or Delta in the case of
the matters to be carried out by DC Sub or Delta (including the matters
contemplated in Schedules 2, 3, 6 and 11) and by Lagardere or, as
appropriate, Lagardere and Sogepa shall procure that Aerospatiale Matra,
in the case of the matters to be carried out by Lagardere or, as
appropriate, Aerospatiale Matra (including the matters contemplated in
Schedules 1, 5 and 7), shall pay those costs.
14.2 All costs, charges and expenses incurred in connection with the
incorporation of (a) Holdings CV or the Managing Partner shall be borne
by the Managing Partner; and (b) Topco shall be borne by Topco.
14.3 Save as provided in Clauses 14.1 and 14.2 each party shall bear and pay
its own costs, charges and expenses (including the fees of its advisers)
incurred in the negotiation, preparation and implementation of this
Agreement (and the transactions referred to herein or contemplated
hereby).
15. GENERAL
15.1 This Agreement and any documents referred to in this Agreement
constitute the entire agreement, and supersede any previous agreements
between any of the parties relating to the subject matter of this
Agreement.
15.2 Each of the parties shall (at its own expense) execute, or procure the
execution of, all such other documents and do, or procure the doing of,
all such other acts and things as may be reasonably required on its part
or on the part of any member of its respective Group for the purpose of
giving full effect to this Agreement.
15.3 None of the parties shall, except with the prior written consent of the
others assign or transfer or purport to assign or transfer any of its
rights or obligations under this Agreement.
15.4 This Agreement may not be varied except by an agreement in writing
executed by each of the parties.
15.5 No waiver by a party of a failure or failures by another party to
perform any provision of this Agreement shall operate or be construed as
a waiver in respect of any other or further failure whether of a like or
different character.
15.6 It is agreed that:
15.6.1 no party has entered into this Agreement in reliance upon any
representation, warranty or undertaking of any other party
which is not expressly set out or referred to in this
Agreement;
15.6.2 a party shall have no claim or remedy in respect of
misrepresentation (whether negligent or otherwise) or untrue
statement made by any other party;
15.6.3 this clause shall not exclude liability for fraudulent
misrepresentation.
15.7 Neither DC Sub, Delta nor any member of the DC Group shall, without the
prior written consent of Lagardere, sell, transfer, dispose or grant an
option, right or interest over or purchase, acquire or take an option,
right or interest over or otherwise deal, in any way whatsoever, in any
shares or debentures or any interest in any share (including, without
limitation, depository receipt) or debenture in the capital of
Aerospatiale Matra, or purport to do any of the foregoing or procure,
encourage or incite any person to do any of the foregoing. DC Sub, Delta
(or any member of the DC Group) may enter into a transaction as a result
of which it (or any member of the DC Group) acquires Aerospatiale Matra
Shares provided that the principal purpose of that transaction is not
the acquisition of those Aerospatiale Matra Shares.
16. NOTICES
16.1 Any notice or other communication to be given hereunder shall either be
delivered by hand or sent by facsimile transmission (provided that, in
the case of facsimile transmission, the notice is confirmed by being
delivered by hand or sent by pre-paid registered post with
acknowledgement of receipt at the same time) as follows:-
(a) DAIMLERCHRYSLER LUFT - UND RAUMFAHRT HOLDING AG
Address: Postfach 801109, 81663 Muenchen, Germany
Fax No: +4989-607- 34306
Addressed for the personal attention of:
The Chairman of the Board
(b) LAGARDERE SCA
Address: 4 rue de Presbourg, 75116 Paris, France
Fax No: +33 1 40 69 20 01
Addressed for the personal attention of:
The Secretaire General
(c) DAIMLERCHRYSLER AEROSPACE AG
Address: Postfach 801109, 81663 Muenchen, Germany
Fax No: +4989-607-34306
Addressed for the personal attention of:
The Chairman of the Board
(d) SOGEPA
Address: 56 rue de Lille, 75007 Paris, France
Fax No: +33 1 53 18 95 66
Addressed for the personal attention of:
The Secretaire General
16.2 A party may change the address, fax number or the name of the person for
whose attention notices are to be addressed by serving a notice on the
other parties hereto in accordance with this Clause 16.
16.3 All notices given in accordance with this Clause 16 are effective as
follows:
(a) if delivered by hand, at the time of delivery; and
(b) if communicated by facsimile, at the time of transmission
recorded on a transmission report showing transmission of all
parts of the notice,
PROVIDED that where delivery by hand or transmission by facsimile occurs
after 6pm on a Business Day or on a day which is not a Business Day, the
notice shall be effective as from 9am on the next following Business
Day. References to time in this clause 16.3 are to local time in the
country of the addressee.
16.4 In proving such service it shall be sufficient to prove that the
envelope containing such notice was properly addressed and delivered
either to the address shown thereon (or, in the case of confirmation of
a notice sent by facsimile transmission, into the custody of the postal
authorities as a pre-paid letter), or that the facsimile transmission
was made after obtaining in person or by telephone appropriate evidence
of the capacity of the addressee to receive the same, as the case may
be.
16.5 All notices or communications under or in connection with this Agreement
shall be in the English language or, if in any other language,
accompanied by a translation into English. In the event of any conflict
between the English text and the text in any other language the English
text shall prevail.
17. COUNTERPARTS
This Agreement may be executed in any number of counterparts, and shall
be as valid and effective so executed as if executed in a single
document.
18. GOVERNING LAW
This Agreement is to be governed by and construed in accordance with the
laws of the Netherlands.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
SCHEDULE 1
AEROSPATIALE MATRA
AEROSPATIALE MATRA BUSINESS
The entire business, assets and liabilities of Aerospatiale Matra as at the date
hereof and as carried on in the normal and ordinary course prior to transfer of
Aerospatiale Matra Bis including, without limitation, the Aerospatiale Matra
Group.
AEROSPATIALE MATRA INVESTMENTS
INTEREST COMPANY HEAD OFFICE BUSINESS SECTOR
%
37.90 Airbus Industrie Blagnac
37.90 Avsa SARL Blagnac
37.90 Societe Commerciale A-300-SOCA Blagnac
37.90 Airbus Simulators Services Blagnac
37.90 Aina Holdings Inc. Herndon, Virginia, USA Aircraft
37.90 Airbus Transport International Blagnac
50 GIE ATR Toulouse
50 GIE Satic Colomiers
37.90 Airbus Finance Co Dublin, Ireland
37.90 Airbus Ind Fin. Serv Dublin, Ireland
60 Eurocopter Holding Paris
70 Eurocopter Marignane
70 Eurocopter Deutschland Munich
70 American Eurocopter Corp Dallas, Texas, USA Helicopters
70 Eurocopter Canada Ltd Ontario, Canada
49.08 Samaero Singapore
53.50 Helibras Brazil
90 Sodern Limeil-Brevannes Space & Defense
50 GIE Euromissile Fontenay-aux-Roses Missiles
50 Ceberg Le Plessis-Robinson
98.31 Sogerma Merignac
98.31 Seca Le Bourget
98.31 Barfield Miami, USA
68.81 Revima Roissy-Charles de Gaulle Maintenance
49.32 Composites Aquitaine St-Medard-en-Jalles
98.31 Hermet Exploration Colomiers
98.31 Maroc Aviation Casablanca
98.31 Noise Reduction Engineering Washington DC, USA
100 Socata Le Bourget General Aviation
45.76 Dassault Aviation Paris
45.76 Dassault International France Vaucresson
45.76 Dassault Falcon Jet & subsidiaries Teterboro, New Jersey, USA
INTEREST COMPANY HEAD OFFICE BUSINESS SECTOR
%
45.76 Sognee Industries Sursnes Military Aircraft
& Business Aircraft
45.76 Dassault Aero Service
45.76 Dassault Assurances Courtage
45.76 Dassault International Inc. Paramus, New Jersey, USA
45.76 Societe Toulouse Colomiers
21.26 Office General de l'Air (OGA) Paris
21.90 Sofema Paris Other
50 Aerospatiale Thomson Electronique de Vol Velizy
(ATEV)
TRANSFER TO AEROSPATIALE MATRA BIS
- - Approval by Aerospatiale Matra shareholders at an extraordinary general
meeting (see Schedule 5).
- - Report by an independent auditor on all Aerospatiale Matra assets and
liabilities as transferred to Aerospatiale Matra Bis.
SCHEDULE 2
DELTA GROUP
New Delta, Eurocopter Holding S.A., Dornier GmbH, DC Aerospace Airbus GmbH,
Bayern Chemie GmbH, TDA Armements SAS, Dornier Satellitensysteme GmbH, Nortel
Dasa Network Systems GmbH & Co, KG, Airbus Industrie G.I.E.,
LFK-Lenkflugkorpersysteme GmbH, Delta Flugzeugwerft GmbH, Dornier Luftfahrt
GmbH, Dornier Medizintechnik GmbH.
SCHEDULE 3
ESTABLISHMENT OF NEW DELTA AND TRANSFER OF DELTA BUSINESS
1. Delta and its sole shareholder DC Sub shall establish DADC Luft-und
Raumfahrt-Beteiligungs AG (DADC). Delta contributes its 57.55%
participation in Dornier Satellitensysteme ("DO"). GmbH in consideration
for 75% of the shares in DADC. DC Sub contributes cash in consideration
for 25% of the shares in DADC. The cash contribution will be equivalent
to 1/3 of the market value of the DO. GmbH participation contributed by
Delta.
2. Delta hives down its Delta business (including the shares in DADC but
excluding the shares in MTU-M) into a wholly owned subsidiary (New
Delta) (AUSGLIEDERUNG according to sec. 123 subs. 3 Transformation
Act).
3. The Delta business shall exclude claims and past liabilities relating to
Fokker Holding BV and any contingent liabilities relating to Dornier
Luftfahrt GmbH.
SCHEDULE 4
HOLDINGS CV
Holdings CV shall be established as a limited partnership (COMMANDITAIRE
VENNOOTSCHAP) under Dutch law pursuant to a limited partnership agreement
between the Managing Partner acting as the general partner (BEHEREND VENNOOR)
and each of DC and Topco (or permitted alternatives) as limited partners
(COMMANDITAIRE VENNOTEN).
Each of the limited partners shall contribute to Holdings CV the Listco Shares
that are issued to them at Closing. The Managing Partner shall be entitled to a
de minimis (to be agreed) proportion of Holdings CV's profits subject to a
maximum amount of EUR 1,000 per year. Each of the limited partners shall be
entitled to 50% of the remaining profits of Holdings CV.
MANAGING PARTNER
The Managing Partner shall be incorporated as a private limited liability
company (BESLOTEN VENNOOTSCHAP MET BEPERKTE AANSPRAKELIJKHEID) under Dutch law
with an issued share capital of EUR 20,000 and having articles of association in
a form to be agreed. DC and Topco shall each hold 50% of the issued and
outstanding shares in the Managing Partner and shall each be entitled to
nominate 50% of the members of the Board of the Managing Partner.
SCHEDULE 5
LISTCO
(a) Aerospatiale Matra Shareholders approval by 2/3 majority to:
- Contribute, in exchange for Listco Shares, the entire issued
share capital of Aerospatiale Matra Bis, per statutory auditor
report.
- Wind-up Aerospatiale Matra.
- Distribute to Aerospatiale Matra shareholders, as a
liquidation dividend, the Listco Shares received in exchange
for the Aerospatiale Matra Bis shares contributed.
(b) Approval (by Listco shareholders) of Aerospatiale Matra Bis shares
contribution, in accordance with the independent auditor report.
(c) Waiver from CMF of obligation to make an "Offre publique de retrait".
SCHEDULE 6
CLOSING: NEW DELTA
Steps required to close transfer described in Clause 5.2, to include:
- - approval by general meeting of Delta;
- - signature of share transfer agreement;
- - updating Delta statutory books;
- - board/secretary/accountants/registered office/bank mandates/accounting
reference date changes, as appropriate;
- - issue and allotment of Listco Shares to Delta transferor, delivery of
applicable share certificates, updating Listco allotments register.
SCHEDULE 7
CLOSING: AEROSPATIALE MATRA BIS
Steps required to close transfer described in Clause 5.3, to include:
- - delivery of transfer form for Aerospatiale Matra Bis share capital;
- - delivery of all applicable share certificates;
- - updating of applicable statutory books;
- - board/secretary/accountants/registered office/bank mandates/account
reference date changes, as appropriate;
- - all other deliverables not comprising shares;
- - issue and allotment of Listco Shares to Aerospatiale Matra, delivery of
applicable share certificates, updating Listco allotments register.
SCHEDULE 8
DISTRIBUTION ON WINDING UP IN KIND BY AEROSPATIALE MATRA
Approval of a distribution (on winding up of Aerospatiale Matra) of Listco
Shares to shareholders of Aerospatiale Matra by resolution of the shareholders
of Aerospatiale Matra.
SCHEDULE 9
TAX CLEARANCES
FRANCE
1. Ruling securing application of article 210A of the French Tax Code (Code
General des Impots) in respect of contribution of Aerospatiale Matra
Business by Aerospatiale Matra to Aerospatiale Matrabis.
2. Ruling securing application of article 210A of the French Tax Code in
respect of the contribution of Aerospatiale Matrabis shares by
Aerospatiale Matra to Listco.
3. Rulings securing application of article 115.2 and 210B of the French Tax
Code in respect of the distribution of Listco Shares to Aerospatiale
Matra shareholders upon liquidation of Aerospatiale Matra.
These rulings shall provide that:
- The capital gain on the Listco Shares shall be exempt of
corporate tax and additional contributions
- The distribution of the Listco Shares to Aerospatiale Matra
shareholders shall not be considered as a taxable dividend
- The Listco Shares shall have the same tax value for the
Aerospatiale Matra shareholders as the Aerospatiale Matra shares
- The liquidation of Aerospatiale Matra shall not be considered as
a breach by Lagardere of its commitment to retain the
Aerospatiale Matra shares
4. Ruling securing application of article 210A of the French Tax Code in
respect of (i) contribution of Listco Shares to Topco by SOGEPA and
Lagardere and (ii) contribution of Listco Shares to Holdco by Topco.
These rulings shall be delivered in accordance with the tax authorities usual
practice for this type of reorganisation and will be subject to conditions
enabling the French State to tax the rolled over gains.
GERMANY
1. Ruling confirming that the issue of an exchangeable bond (to be
exchanged for Listco Shares after a minimum holding period of 7 years)
issued by Delta or by a Luxembourg Subsidiary of Delta does not lead to
a profit realisation in Delta (such realisation only taking place once
the bond is converted), such ruling being given in relation to sec. 8b
(2) KStG (German Corporation Income Tax Act). The economic ownership
(sec. 39 AO (German Tax Code)) of the shares in Listco remains with
Delta until the conversion. secs. 23 (4), 20 (1) sentence 2 UmwStG
(German Transformation Tax Act).
2. Ruling confirming the effectiveness of a book value continuation clause
in the contribution of New Delta shares into Listco.
The ruling to confirm that the contribution of shares in New Delta into
Listco by Delta in return for Listco Shares is in all material respects
tax-neutral transaction if Listco continues the book values of the
participation, such ruling being given in relation to sec. 8b (2) KStG
(German Corporation Income Tax Act).
3. Ruling regarding a book value continuation clause in the contribution of
Listco Shares into Holdings CV, as well as with respect to the tax
exemption of dividend payments to Delta.
The ruling to establish that the contribution of Listco Shares into
Holdings CV by Delta upon a continuation of the book value is, in all
material respects a tax-neutral transaction. Furthermore, it should
establish that both dividend payments from Listco to Delta via Holdings
CV as well as profits arising from the sale of Listco Shares held
through Holdings CV by Delta, are exempted from German taxation. This in
particular depends upon Holdings CV being qualified as an asset
management partnership (vermogensverwaltende Personengesellschaft) under
German law and not as a commercial partnership.
A ruling acknowledging that DC would not be liable to German capital
gains tax on the contribution into Listco if DC is to hold part of its
interest in Listco through a Holdco.
THE NETHERLANDS
1. CAPITAL DUTY. Ruling regarding the capital tax exemption on the
contribution of New Delta shares and the shares of Aerospatiale Matra
Bis into Listco and on the contribution of Listco Shares by DC and Topco
to Holdco.
2. WITHHOLDING TAXES. Ruling regarding the absence of dividend withholding
taxes on distributions by Listco through Holdings CV to DC and Topco.
3. Confirmation by the Dutch tax authorities that the Dutch tax
legislation as it currently stands provides for an exemption of
corporation tax on capital gains recognised on any sale of Listco
Shares by the Managing Partner for the account of Topco.
SCHEDULE 10
NET CASH
FOR BOTH AEROSPATIALE MATRA AND DELTA
o consolidated cash and cash equivalents less long and short term
borrowings, as stated in the Delta Warranted Accounts or the
Aerospatiale Matra Warranted Accounts, as appropriate.
o financial investments, to the extent that they are contributed to
Listco, representing investments and loans to non consolidated
affiliated companies as stated in the Delta Warranted Accounts or the
Aerospatiale Matra Warranted Accounts, as appropriate, with the
exception of any qualifying investments for which future income was
included in consolidated EBIT in the Business Plans of the respective
businesses
o the amounts derived above will subsequently be adjusted as follows:
AEROSPATIALE MATRA
o plus the post tax proceeds of the disposal of Aerospatiale Matra's 50%
holding in Sextant Avionique undertaken post 31 December 1998
DELTA
o less the repayment of outstanding Launch Aid obligations undertaken post
31 December 1998
o less the provision for pension liabilities as stated in the Delta
Warranted Accounts.
For illustrative purposes we have set out below the estimation of Net Cash
AEROSPATIALE MATRA MILLION
(EUROS)
- -------------------------------------------------------------------------------
Financial Assets 249
- -------------------------------------------------------------------------------
Net Debt (11)
- -------------------------------------------------------------------------------
Sextant Avionique 332
- -------------------------------------------------------------------------------
570
- -------------------------------------------------------------------------------
DELTA MILLION
(EUROS)
- -------------------------------------------------------------------------------
Net Cash 5,214
- -------------------------------------------------------------------------------
Launch Aid Repayment (895)
- -------------------------------------------------------------------------------
Pension Liability (2,653)
- -------------------------------------------------------------------------------
Agreed EUR 700 million cash extraction (700)
- -------------------------------------------------------------------------------
967
===============================================================================
SCHEDULE 11
CASH EXTRACTION
CURRENTLY CONTEMPLATED
AMOUNT
EURO IN MILLIONS
Delta AG book equity (German GAAP) 12/98 2136
Write-up of Assets under German GAAP
MTU 205
Delta AG 187
Delta Airbus (DA) 228
Dornier 179
Eurocopter 206
Release retained earnings DA 205
Separation Temic, MTU-F, AVG -121
MTU 1. H99
MTU 2. H99
Delta AG 1. H99
Delta AG 2. H99
Separation of DA Cash GmbH 205
TOTAL 3429
SCHEDULE 12
VALUATION EXAMPLE
DELTA AEROSPATIALE SUM
MATRA
(EUROS) (EUROS) (EUROS)
Millions millions millions
IMPLIED VALUE CONTRIBUTION V 9,649 V 9,649 19,297
Non-contribution of MTU - 1,275 Nil
Notional Agreed Valuation 8,464 9,649 18,022
Cash extracted - 2,728 Nil
ACTUAL EQUITY VALUE CONTRIBUTION X 5,646 Y 9,649 15,295
RESULTING EQUITY OWNERSHIP P 36.91% Q 63.09%
SCHEDULE 13
PERMITTED ADVISORS
For Lagardere, Robert Fleming, Arthur Andersen, Cabinet Darrois, Clifford
Chance.
For Delta, Goldman Sachs, Freshfields, Deringer.
For Sogepa, Rothschild & Cie and Jeantet.
SIGNED BY JURGEN E. SCHREMPP )
AND BY ECKHARD CORDES duly )
authorised, for and on behalf of )
DAIMLERCHRYSLER LUFT - )
UND RAUMFAHRT HOLDING AG )
SIGNED BY )
duly authorised, for )
and on behalf of )
DAIMLERCHRYSLER )
AEROSPACE AG )
SIGNED BY )
duly authorised, for )
and on behalf of )
LAGARDERE SCA )
SIGNED BY )
duly authorised, for )
and on behalf of )
SOGEPA )
AGREEMENT
ON THE COMBINATION
OF THE
EADS BUSINESS
AND
CASA BUSINESS
BETWEEN
DAIMLERCHRYSLER LUFT- UND
RAUMFAHRT HOLDING AKTIENGESELLSCHAFT
AND
DAIMLERCHRYSLER AEROSPACE AG
AND
LAGARDERE SCA
AND
SOCIETE DE GESTION DE PARTICIPATIONS AERONAUTIQUES - SOGEPA
AND
AEROSPATIALE MATRA S.A.
AND
SOCIEDAD ESTATAL DE PARTICIPACIONES INDUSTRIALES
DECEMBER 2, 1999
TABLE OF CONTENTS
PREAMBLE .....................................................................2
Article I
Interpretation.......................................................3
Article II
Combination of the Aerospatiale Matra Business, the Dasa Business
and the Casa Business; Casa Cash-out................................11
Article III
Conditions for the Consummation of the Casa Integration;
Termination.........................................................12
Article IV
Due Diligence Review................................................15
Article V
Casa Closing........................................................16
Article VI
Industrial Plan; Covenants; Reports.................................20
Article VII
Covenants and Indemnities...........................................22
Article VIII
Regulatory Matters..................................................24
Article IX
Representations and Warranties......................................25
Article X
Breach of Warranties................................................25
Article XI
Confidentiality.....................................................29
Article XII
Miscellaneous.......................................................31
- ii -
LIST OF SCHEDULES
Schedule 1 ASM-Dasa Business-Combination Agreement and Supplemental Agreement
Schedule 2 Aerospatiale Matra Business
Schedule 3 Aerospatiale Matra Subsidiaries
Schedule 4 Aerospatiale Matra Warranted Accounts
Schedule 5 Casa Business
Schedule 6 Casa Subsidiaries
Schedule 7 Casa Warranted Accounts
Schedule 8 Dasa Business
Schedule 9 Dasa Subsidiaries
Schedule 10 Dasa Warranted Accounts
Schedule 11 Dasa Warranties
Schedule 12 Lagardere Warranties
Schedule 13 Sepi Warranties
Schedule 14 Sogepa Warranties
Schedule 15 Due Diligence Schedule
Schedule 16 Sepi advisers
Schedule 17 Lagardere advisers
Schedule 18 Valuation Example
Schedule 19 Summary of Industrial Plan
Schedule 20 Estimated Resources to achieve objectives of Industrial Plan
Schedule 21 List of Permits
Schedule 22 Description of "Getafe Site"
Schedule 23 Description of "San Pablo Site"
Schedule 24 Dasa Cash Extractions
Schedule 25 Aerospatiale Matra Cash Extractions
Schedule 26 Casa Cash Extractions
BETWEEN
(1) DAIMLERCHRYSLER LUFT- UND RAUMFAHRT HOLDING AKTIENGESELLSCHAFT, a
German stock corporation (AKTIENGESELLSCHAFT) registered at the
commercial registry of the local court in Munich under number HRB 91671
with its seat at Munich, Germany; and
(2) DAIMLERCHRYSLER AEROSPACE AG, a German stock corporation
(AKTIENGESELLSCHAFT ) registered at the commercial registry of the
local court in Munich under number HRB 99454 with its seat at
Munich, Germany; and
(3) LAGARDERE SCA, a SOCIETE EN COMMANDITE PAR ACTIONS incorporated under
the laws of France, registered at the Paris company and commercial
registry (with registered number B 320 366 446) and having its
registered office at 4 rue de Presbourg, 75116 Paris, France; and
(4) SOCIETE DE GESTION DE PARTICIPATIONS AERONAUTIQUES - SOGEPA, a SOCIETE
ANONYME incorporated under the laws of France, registered at the Paris
companies registry (with registered number B 318 186 756) and having
its registered office at 56, rue de Lille, 75007 Paris, France; and
(5) AEROSPATIALE MATRA, a SOCIETE ANONYME, incorporated under the laws of
France, registered at the Paris company and commerciale registry (with
registered number B 572 094 514 RCS Paris) and having its registered
office at 37 boulevard de Montmoreney, 75781 Paris, France; and
(6) SOCIEDAD ESTATAL DE PARTICIPACIONES INDUSTRIALES, an ENTIDAD DE DERECHO
PUBLICO created under the laws of Spain and whose principal office is
at 8, Plaza del Marques de Salamanca, 28006, Madrid, Spain.
(hereinafter referred to as the "Parties" and each a "Party")
- 2 -
PREAMBLE
A. On October 14, 1999, DaimlerChrysler Luft- und Raumfahrt Holding AG
("DCLRH"), DaimlerChrysler Aerospace AG ("Dasa"), Lagardere SCA
("Lagardere") and Societe de Gestion de Participations Aeronautiques -
Sogepa ("Sogepa") entered into an agreement regarding the combination
of the businesses of Aerospatiale Matra S.A. ("Aerospatiale Matra") and
Dasa in [European Aeronautic Defence and Space Company] ("EADS"), a
corporation to be incorporated under Dutch law in order to create a
single European company in the field of aeronautic, space and defense
activities capable of competing with other world companies. A copy of
the Business Combination Agreement is attached as Schedule 1 as amended
by the Supplemental Agreement also attached as Schedule 1 (together the
"Business Combination Agreement").
B. The Business Combination Agreement provides that Casa is a potential
strategic partner of EADS whose business should also be integrated into
the combined entity. Therefore, DCLRH, Dasa, Lagardere, Sogepa and
Sociedad Estatal de Participaciones Industriales ("Sepi") holding
approximately 99.3% of the shares in Casa have agreed that Sepi should
participate in creating the single European aeronautic, space and
defense company as a founding member by contributing all of its shares
in Construcciones Aeronauticas S.A. ("Casa") into EADS in order to
further promote the European consolidation of the aeronautic, space and
defense industry and to strengthen the competitiveness and
profitability of EADS.
C. The integration of Casa's business into EADS will on the basis of the
transactions contemplated in the Business Combination Agreement be
implemented as follows:
Sepi will contribute its entire shareholding in Casa to EADS against
issuance of new shares in EADS. Sepi's shareholding in EADS will be
managed through a contractual partnership to be established under Dutch
law between Sepi, DC and Topco.
D. EADS and its Subsidiaries will be managed as an integrated entity under
a unified group management structure.
- 3 -
NOW THEREFORE, it is agreed as follows:
ARTICLE I
INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires, the following
terms shall have the following meanings:
"Accounts Date" shall have the meaning given to it in Clause
8 of Schedule 13;
"Aerospatiale Matra Bis" the French company to be established
pursuant to Clause 2.5 of the Business
Combination Agreement to which the business,
assets and liabilities of Aerospatiale Matra
are to be transferred;
"Aerospatiale Matra Bis Shares" the entire issued share capital of
Aerospatiale Matra Bis;
"Aerospatiale Matra Business" the business described in Schedule 2;
"Aerospatiale Matra Group" Aerospatiale Matra and its Subsidiaries from
time to time;
"Aerospatiale Matra Shares" the shares in Aerospatiale Matra allotted to
Lagardere on 4 June 1999;
"Aerospatiale Matra Subsidiaries" the direct and indirect Subsidiaries of
Aerospatiale Matra Bis listed in Schedule 3;
"Aerospatiale Matra Warranted the financial statements as at 31 December
Accounts" 1998 relating to the Aerospatiale
Matra Group annexed hereto as Schedule 4;
"ASM-Dasa Closing" closing of the Business Combination
Agreement in accordance with the terms of
Clause 5 thereof;
"Business Combination Agreement" shall have the meaning given to it in
Preamble A;
- 4 -
"Business Day" a day on which banks generally are open in
Paris, Amsterdam, Madrid and Frankfurt for a
full range of business;
"Casa Business" the business described in Schedule 5;
"Casa Closing" closing of this Agreement in accordance with
the terms of Art. V;
"Casa Closing Date" the date on which Casa Closing takes place;
"Casa Group" means Casa and its Subsidiaries from time to
time;
"Casa Subsidiaries" the Subsidiaries of Casa listed in Schedule
6;
"Casa Warranted Accounts" the financial statements as at the Accounts
Date Casa and its Subsidiaries annexed
hereto as Schedule 7;
"Claim" has the meaning as defined in Art. X para.
10.5;
"Claimant" has the meaning as defined in Art. X para.
10.2;
"company" a body corporate formed under the laws of
any country
"Contributed Casa Shares" the shares in Casa held by Sepi constituting
99.285281% of Casa's issued share capital to
be transferred by Sepi to EADS pursuant to
Art. V para. 5.2;
"Contributed Dasa-owned Casa the shares in Casa held by Dasa constituting
Shares" 0.7098% of Casa's issued share capital to be
contributed by Dasa to EADS pursuant to Art.
V para. 5.2;
"Contributed Dasa New Shares" the shares in Dasa New to be contributed to
EADS pursuant to Clause 5.2 of the Business
Combination Agreement;
- 5 -
"DC" DaimlerChrysler AG, a German stock
corporation (AKTIENGESELLSCHAFT) registered
at the commercial registry of the local
court in Stuttgart under number 19360 with
its seat at Stuttgart, Germany;
"DC Group" DC and its Subsidiaries from time to time;
"Dasa Business" the business described in Schedule 8;
"Dasa Group" Dasa and its Subsidiaries until such time as
the hive-down as described in Schedule 3 of
the Business Combination Agreement of the
Dasa Business into Dasa New has been
completed and, thereafter, Dasa New and its
Subsidiaries;
"Dasa New" the company to be established pursuant to
Clause 5.2.1 of the Business Combination
Agreement;
"Dasa Subsidiaries" the direct and indirect Subsidiaries of Dasa
listed in Schedule 9;
"Dasa Warranted Accounts" the financial statements as at 31 December
1998 relating to the Dasa Group annexed
hereto as Schedule 10;
"Dasa Warranties" the Warranties set out in Schedule 11 given
by DCLRH;
"dispose" sell, transfer, assign, grant options over,
create licenses in respect of, create or
permit any Encumbrance to exist over, or
otherwise dispose of, or enter into any
legally binding commitment to do any of the
foregoing, and related expressions shall be
construed accordingly;
"EADS" the company to be established pursuant to
Clause 2.4 of the Business Combination
Agreement;
"EADS Group" EADS and its Subsidiaries from time to time;
- 6 -
"EADS Shares" ordinary shares in the capital of EADS;
"Encumbrance" any mortgage, charge (whether fixed or
floating), lien, hypothecation, pledge,
right of usufruct, encumbrance, security
interest or other third party right or
interest over or in respect of a particular
asset other than liens arising by operation
of law in the ordinary course of business;
"Frankfurt Stock Exchange" Frankfurter Wertpapierborse, operated by
Deutsche Borse AG;
"French GAAP" generally accepted accounting standards and
principles in France;
"German GAAP" generally accepted accounting standards and
principles in Germany;
"Guarantee" the guarantee from DC to (i) Sepi and its
Group and to (ii) Sogepa and (iii) to
Lagardere and Aerospatiale Matra and their
Groups, all of even date herewith;
"Group" with respect to an entity, that entity and
all Subsidiaries of such entity;
"Holdings CP" the contractual partnership to be
established in accordance with the Holdings
CP Partnership Agreement;
"Holdings CP the partnership agreement for Holdings CP
Partnership Agreement" to be entered into between the Managing
Partner, DC, Topco and Sepi, consistent with
the Modified Participation Agreement;
"HSR Act" Hart-Scott-Rodino Antitrust Improvements Act
1976;
"Industrial Plan" has the meaning as defined in Art. VI para.
6.1 sub- para. 6.1.1;
- 7 -
"Lagardere Group" Lagardere and its Subsidiaries from time to
time;
"Lagardere Warranties" the Warranties set out in Schedule 12 given
by Lagardere;
"Managing Partner" the managing partner of Holdings CP;
"Merger Documents" means this Agreement, the Business
Combination Agreement, the Modified
Participation Agreement and the Guarantee
and those documents, agreements and
arrangements which are Schedules or Exhibits
to this Agreement, the Business Combination
Agreement or the Modified Participation
Agreement or which are referred to in this
Agreement, the Business Combination
Agreement, the Modified Participation
Agreement or any such Schedules or Exhibits
as documents in the agreed form;
"Modified Participation the participation agreement in the agreed
Agreement" form to be entered into between DC, Sepi,
Topco, Sogepa and Lagardere at Casa Closing;
"Paris Bourse" ParisBourseSBF SA;
"Principal" DCLRH or Lagardere or Sepi (as the case may
be);
"Regulatory Action" any order of any court of competent
jurisdiction (other than in connection with
suits which are subject to the
indemnifications pursuant to Art. 7 para.
7.3, 7.4 and 7.5) or any order, decision or
conclusive view made, given or expressed by
a competent governmental or regulatory
authority or agency or an enactment of a
legislative body:
(a) which prohibits or materially
restricts the transactions
contemplated hereby or requires
them to be materially delayed; or
- 8 -
(b) which would prohibit or materially
restrict the carrying on of the
business of the EADS Group as
contemplated by the Merger
Documents; or
(c) which prohibits or materially
restricts or would prohibit or
materially restrict the carrying on
of the business of any member of
the DC Group, the Lagardere Group
or the Sepi Group or imposes or
would impose any material
conditions as to the carrying on of
any such business; or
(d) in consequence of which any member
of the DC Group, the Lagardere
Group, the Aerospatiale Matra
Group, the Sepi Group or the EADS
Group would incur material fines or
a material liability in damages
were the Merger Documents or the
matters contemplated therein to be
performed in accordance with their
respective terms;
"Sepi Group" Sepi and its Subsidiaries from time to time;
"Sepi Warranties" the Warranties set out in Schedule 13 given
by Sepi;
"Signing Date" shall mean the date hereof;
"Sogepa Group" Sogepa and its Subsidiaries from time to
time;
"Sogepa Shares" the shares in Aerospatiale Matra to be held
by Sogepa at ASM-Dasa Closing in respect of
the 15% of EADS shares to be contributed to
Holdings CP;
"Sogepa Warranties" the Warranties set out in Schedule 14 given
by Sogepa;
"Subsidiary" in relation to an undertaking ("the holding
undertaking"), any other undertaking in
which the holding undertaking (or persons
acting on its behalf) for the time being
directly or indirectly holds or controls
either:
- 9 -
(i) a majority of the voting rights
exercisable at general meetings of
the members of that undertaking on
all, or substantially all, matters;
(ii) the right to appoint or remove
directors having a majority of the
voting rights exercisable at
meetings of the board of directors
or equivalent body of that
undertaking on all, or
substantially all, matters;
and any undertaking which is a Subsidiary of
another undertaking shall also be a
Subsidiary of any further undertaking of
which that other is a Subsidiary;
"tax" and "taxation" includes any and all forms of taxes, levies,
imposts, duties, charges and contributions
of whatever nature (including but not
limited to taxes on income, profits and
gains, customs duties, value added taxes,
excise duties, stamp duty, document tax and
social security contributions) and all
withholding or deductions in respect of each
or any of the foregoing of whatever nature,
imposed whatsoever by a public body together
with any (actual or contingent) refund,
reclaim or reimbursement claim relating to
any State, regional or local authority
subsidy granted or paid and whether directly
or primarily chargeable against recoverable
from or attributable to a company or any
other entity, unincorporated association or
person or persons and all fines, penalties,
charges and interest relating to any of the
foregoing or to any claim for any of the
foregoing but excluding any GRUNDSTEUER,
IMPOTS LOCAUX, and any equivalent tax under
the laws of any jurisdiction;
"Topco" a SOCIETE PAR ACTIONS SIMPLIFIEE to be
formed in accordance with the Topco
Shareholders Agreement;
- 10 -
"Topco Shareholders Agreement" the Topco Shareholders Agreement in the
agreed form to be entered into between
Lagardere and Sogepa at ASM-Dasa Closing;
"undertaking" a body corporate or partnership or any
unincorporated association situated in any
jurisdiction carrying on a trade or business
with or without a view to profit,
(including, for the avoidance of doubt, but
not limited to, a societe en commandite par
actions, a groupement d'int eret economique
("GIE"), a GmbH & Co., KG and an oHG) (and,
in relation to an undertaking which is not a
company, expressions in this Agreement
appropriate to companies shall be construed
as references to the corresponding persons,
officers, documents or organs (as the case
may be) appropriate to undertakings of that
description);
"US GAAP" generally accepted accounting standards and
principles in the United States of America;
"Warranties" the representations and warranties given by
DCLRH, Lagardere, Sogepa and Sepi,
respectively, contained in Art. IX and
Schedules 11, 12, 13 and 14;
"Warrantor" has the meaning as defined in Art. X para.
10.1.
1.2 Article and paragraph headings in this Agreement and its Schedules are
included for convenience only and shall not affect the interpretation
of this Agreement.
1.3 The Preamble and Schedules to this Agreement shall form part of this
Agreement and shall have the same force and effect as if set out in the
body of this Agreement. Accordingly, references to this Agreement shall
include references to its Preamble and Schedules.
1.4 In this Agreement, unless the context otherwise requires:
(a) the singular shall include the plural and vice versa;
(b) references to persons shall include individuals, companies,
undertakings and governmental, supranational and state
agencies and regulatory bodies;
- 11 -
(c) references to Preamble, Clauses, Schedules, Articles (or
"Art.") and Paragraphs (or "para.") and parts thereof are to
Preamble, Clauses, Schedules, Articles and Paragraphs of and
to this Agreement and parts thereof respectively.
1.5 Any reference in this Agreement to another document being in "the
agreed form" or "the agreed terms" is to such a document either:
(a) in a form agreed between the Principals and initialed for and
on behalf of the Principals for the purpose of identification;
or
(b) in such other form as may be agreed in writing by the
Principals in substitution therefor.
ARTICLE II
COMBINATION OF THE AEROSPATIALE MATRA BUSINESS, THE DASA BUSINESS AND THE CASA
BUSINESS; CASA CASH-OUT
2.1 IMPLEMENTATION OF BUSINESS COMBINATION AGREEMENT
Subject to the satisfaction of the conditions precedent set forth in
the Business Combination Agreement or waiver thereof in accordance with
the provisions of the Business Combination Agreement, DCLRH, Dasa,
Lagardere and Sogepa hereby undertake to Sepi to implement the
combination of the Dasa Business and the Aerospatiale Matra Business in
accordance with their respective obligations under the Business
Combination Agreement and to carry out all actions and measures
contemplated therein in accordance with their respective obligations
thereunder in accordance with its terms as amended hereby.
Nothing in this Agreement will prevent the Parties to the Business
Combination Agreement from implementing the Business Combination
Agreement in accordance with its terms.
- 12 -
2.2 INTEGRATION OF CASA BUSINESS INTO EADS
Subject to the provisions of this Agreement, the Parties agree to
integrate the Casa Business into EADS together with the implementation
of the merger of the Aerospatiale Matra Business and the Dasa Business.
2.3 CASA CASH EXTRACTION AND DIVIDEND
Prior to the contribution of the Contributed Casa Shares to EADS
pursuant to Art. V para 5.2 below, Sepi will extract from Casa:
(a) an amount of [EURO]280,000,000 out of distributable reserves
and a reduction of the registered share capital of Casa, and
(b) the amount of the after-tax profit of Casa for the fiscal year
ending on December 31, 1999, however limited to a maximum
amount of [EURO]60,000,000, as a dividend.
2.4 To the extent that tax is borne by Casa, by reason of the cash
extraction and dividend referred to in sub-paragraphs (a) and (b) of
para. 2.3, the amount of that tax shall be included in calculating the
amount of cash extracted and of the dividend for the purpose of
determining whether the limits in these paragraphs have been respected.
2.5 Sepi acknowledges that the Parties to the Business Combination
Agreement will enter into good faith negotiations to combine the
electronic defense activities of EADS and Thomson CSF.
2.6 Sepi acknowledges having reviewed the Ballistic Missiles Letter.
ARTICLE III
CONDITIONS FOR THE CONSUMMATION OF THE CASA INTEGRATION; TERMINATION
3.1 CONDITIONS PRECEDENT
The Casa Closing pursuant to Art. V shall be conditional upon each of
the following conditions having first been satisfied or waived in
writing by all Parties hereto:
(a) implementation of the preliminary actions set forth in Clauses
2.1-2.5 of the Business Combination Agreement;
- 13 -
(b) satisfaction of all the conditions precedent set forth in
Clause 3 of the Business Combination Agreement or waiver in
accordance with the provisions thereof;
(c) either or both of:
(i) the Commission of the European Communities (the
"European Commission") having issued a decision
pursuant to Article 6 (1) (b) or Article 8 (2) of
European Community Council Regulation 4064/89
("Regulation 4064/89") and, if such decision is given
subject to conditions or obligations, such conditions
or obligations being reasonably satisfactory to the
Principals; or the competent authorities of any EC
Member State concerned, pursuant to either Article 21
(3), or a decision of the European Commission under
Article 9 (1), of Regulation 4064/89, having granted
their consent, approval or clearance and, if such
decision is given subject to conditions or
obligations, such conditions or obligations being
reasonably satisfactory to the Principals; and/or;
(ii) an EC Member State having invoked Article 296 (1) of
the EC Treaty (as amended by the Treaty of Amsterdam)
and requesting the Principals not to notify the
merger under Regulation 4064/89 and, if such request
is given subject to conditions or obligations imposed
on the Principals, such conditions or obligations
being reasonably satisfactory to the Principals, and
no EC Member State having validly taken any
Regulatory Action (or action, proceeding or proposal
which if successfully pursued by the person
initiating the same would result in a Regulatory
Action);
(d) pursuant to the HSR Act, the Federal Trade Commission or the
Anti-trust Division of the Department of Justice of the United
States of America and, if applicable, Committee for Foreign
Investment in the United States of America, having given all
such consents or approvals as may be required or necessary in
form and substance reasonably satisfactory to the Principals;
(e) authorization of the transaction by the Spanish Council of
Ministers (CONSEJO DE MINISTROS) under article 12.5 of the Act
5/1996 of 10 January and other applicable or related
regulations;
(f) authorisation of the foreign investments in Casa by the
Spanish Council of Ministers (CONSEJO DE MINISTROS) under
article 11 of Royal Decree 664/1999 of 23 April and related
regulations;
- 14 -
(g) all such consents or approvals as may be necessary having been
obtained from the COMMISSION DES PARTICIPATIONS ET DES
TRANSFERTS of France for the matters contemplated in the
Business Combination Agreement having regard to the matters
contemplated in this Agreement;
(h) Lagardere and Aerospatiale Matra having obtained from the
French MINISTERE DE LA DEFENSE, pursuant to an application in
form and substance reasonably satisfactory to the Principals,
approval of the principle that there will be no limitation for
German and Spanish nationals working for EADS except in
respect of French regulations (of general application to
non-French nationals) applying generally for the protection of
military secrets;
(i) the parties hereto having obtained from the French MINISTERE
DE L'ECONOMIE ET DES FINANCES approval in form and substance
reasonably satisfactory to the Principals of the transactions
contemplated in the Merger Documents, pursuant to the French
Laws 86-793 dated 2 July 1986, 86-912 dated 6 August 1986 (as
amended by the law dated 9 July 1993), 89-465 dated 10 July
1989 and the ARRETE dated 24 December 1992;
(j) expiration of the periods set forth in Art. IV para. 4.3 (c)
of this Agreement and of Clause 4.8 (c) of the Business
Combination Agreement without any of the Parties hereto or
thereto having exercised its termination right, if any, within
such periods.
3.2 LAPSE OF THIS AGREEMENT
In the event that any of the conditions set forth above have not been
satisfied or waived in writing by the Parties by 12:00 midnight,
Netherlands time, on June 30, 2000 or such later date as the Parties
may agree in writing, this Agreement shall lapse and cease to have any
further force or effect except for the provisions of Art. XI and XII
which shall continue in full force and effect. In such case, any claims
for damages, save in respect of prior breaches of this Agreement, shall
be excluded.
- 15 -
ARTICLE IV
DUE DILIGENCE REVIEW
4.1 REVIEW OF CERTAIN MATTERS RELATING TO AEROSPATIALE MATRA BUSINESS AND
CASA BUSINESS
The Parties have agreed on a schedule for a due diligence review as
attached hereto as Schedule 15. The Parties agree that neither Dasa nor
any other company of the DC Group assumes any responsibility or
liability whatsoever to Lagardere, Aerospatiale Matra, Sogepa or Sepi
in respect of the reports or presentations to be provided by Dasa
pursuant to Schedule 15 or the information contained therein or omitted
therefrom.
If either or both of Lagardere and Sepi wishes to carry out a review
process they shall proceed according to the timetable set out in
Schedule 15. The information regarding the Aerospatiale Matra Business
to be made available by Lagardere to Sepi and its advisors listed in
Schedule 16 and the information regarding the Casa Business to be made
available by Sepi to Lagardere and its advisors listed in Schedule 17
shall in each case be in accordance with lists of information to be
agreed between Lagardere and Sepi. If both Lagardere and Sepi wish to
carry out a review, the list of information shall be agreed on a
reciprocal basis. The information and material shall be provided in
such place as is specified by Lagardere or, as the case may be, by
Sepi.
Each of Sepi and Lagardere (and their respective advisors) shall review
the information made available to them pursuant to the above provisions
in an orderly and timely manner.
4.2 CONSULTATION ETC. WITH SOGEPA
Lagardere shall if Sogepa so wishes (in such case at joint cost) carry
out a review process as mentioned in Clause 4.1 above and periodically
report to and consult with Sogepa on the matters reviewed by it as part
of the process described in para. 4.1 to 4.3 (inclusive) and shall
report and consult on any facts giving rise to a potential claim under
Art. IX and X. Lagardere shall take no action under para. 4.3 without
the consent of Sogepa.
4.3 TERMINATION RIGHT OF LAGARDERE AND SEPI
Should either Lagardere, Sogepa or Sepi discover any matter during the
review process referred to in para. 4.1 above which may reasonably be
expected to have the effect of reducing the aggregate notional value of
the EADS Group, Y+X +S as defined in Art. V
- 16 -
para. 5.2 sub-para 5.2.1 and 5.2.3 below, in case of matters discovered
by Lagardere or Sogepa by [EURO]250 million or more or in case of
matters discovered by Sepi by [EURO]2 billion or more, Lagardere or
Sepi, as the case may be, shall
(a) notify the other, Sogepa and DCLRH of their discovery, the
basis for it and the reason for its interpretation of it as
being materially and adversely different from the bases and
assumptions referred to above;
(b) attempt, through discussions with the other, Sogepa and DCLRH
and, where appropriate, respective advisors, to resolve the
differences; and
(c) at any time on or before 7 January 2000 be entitled (by notice
in writing served on the other, Sogepa and DCLRH) to terminate
this Agreement.
4.4 For the avoidance of doubt, it is hereby acknowledged and agreed that
either Lagardere or Sepi shall be entitled to carry out a review under
this Article and to exercise their termination right (if any) under
this Article regardless of whether or not the other carries out a
review under this Article.
4.5 TERMINATION RIGHTS OF DCLHR AND LAGARDERE
The Parties agree that the termination rights of DCLRH and Lagardere
set forth in Clause 4.8 of the Business Combination Agreement shall
continue to apply and the exercise of a termination right pursuant to
Clause 4.8 of the Business Combination Agreement by DCLRH or Lagardere,
as the case may be, shall also have the effect of terminating this
Agreement vis-a- vis all Parties hereto.
ARTICLE V
CASA CLOSING
5.1 CASA CLOSING
- 17 -
The Casa Closing shall take place on the date of, and simultaneously
with, the ASM-Dasa Closing pursuant to Clause 5 of the Business
Combination Agreement subject to the satisfaction or waiver of the
conditions precedent set forth in Art. III above. If the conditions
precedent set forth in Article III above have not been satisfied or
waived by the date on which the conditions precedent to the ASM-Dasa
Closing are satisfied or waived (other than the condition precedent set
out in Clause 3.1 (i), (j) and (l) of the Business Combination
Agreement) then, subject to Art. III para. 3.2, the Casa Closing will
take place on the date immediately following the satisfaction or waiver
of the conditions precedent set forth in Article III above, unless, in
the reasonable opinion of DCLRH, Lagardere and Sogepa following
consultations with Sepi, the Casa Closing at such date would have a
material disruptive effect on the implementation of the offering
referred to in Clause 5.7 of the Business Combination Agreement, in
which case the Casa Closing shall take place as soon as reasonably
practicable after the listing of the new shares, in any event no later
than 90 days after the ASM-Dasa Closing.
The Casa Closing shall take place at the offices of Clifford Chance in
Amsterdam, Apollolaan 171, 1077 AS Amsterdam, Holland. At the Casa
Closing, the matters set forth in the following provisions (other than
para. 5.4) shall be effected.
5.2 TRANSFER OF CASA SHARES TO EADS; PARTICIPATIONS IN EADS
5.2.1 Transfer of Sepi's Shareholding in Casa
Without prejudice to Art. II para. 2.3, Sepi shall transfer by way of
contribution in kind the Contributed Casa Shares free of any
Encumbrance to EADS against issuance to Sepi of that number of EADS
Shares representing that proportion, U, of the total issued share
capital of EADS, ((Y + V - D) x (1+t)) + S, calculated as follows:
(a)
U = 99.3 x R
------------
100
(b) R = S
------------------------- x 100
((Y + V - D) x (1+t)) + S
where:
- 18 -
R = Ratio for Contributed Casa Shares and Contributed Dasa-owned
Casa Shares after Contribution
S = [EURO]1,027,270,000 (notional value of Casa after the cash
extraction and dividend pursuant to Art. II para. 2.3)
Y = [EURO]9,649,000,000 (notional value of Aerospatiale Matra
after Permitted Dividend as defined in the Business
Combination Agreement)
V = [EURO]8,374,000,000 (notional value of Dasa after
Permitted Dividend as defined in the Business Combination
Agreement)
D = the amount extracted by DC or any member of the DC Group
(other than a member of the Dasa Group) pursuant to Clause 2.1
of the Business Combination Agreement (excluding the
[EURO]700 million referred to in Clause 2.1 of the Business
Combination Agreement and Schedule 10 thereto).
t = the number of shares in EADS issued and subscribed in the
offering referred to in Clause 5.7 of the Business Combination
Agreement divided by the number of shares of EADS prior to
such offering (assuming that the new shares are of the same
nominal amount as the shares outstanding prior to the
offering), provided that "t" shall equal zero (0) if the
contribution of the Contributed Casa Shares and the
contribution of the Contributed Dasa-owned Casa Shares
pursuant to para. 5.2.2 below takes place prior to the
offering referred to in Clause 5.7 of the Business Combination
Agreement.
as set out, by way of example, in Schedule 18.
The notional values set forth above are only for the purpose of
calculating the ratios of the participations, the effect of cash
extraction (D) on the ratios and the dilution of the Sepi shareholding
in case that the contribution of the Contributed Casa Shares and the
Contributed Dasa-owned Casa Shares takes place after the offering
referred to in Clause 5.7 of the Business Combination Agreement. In the
event that the contribution of the Contributed Casa Shares and the
Contributed Dasa-owned Casa Shares takes place after the offering, the
current market valuation of EADS shall not affect the agreed valuation.
5.2.2 Transfer of Dasa's Shareholding in Casa
Dasa shall transfer by way of contribution in kind the Contributed
Dasa-owned Casa Shares free of any Encumbrance to EADS against issuance
to Dasa of that number of
- 19 -
EADS Shares representing that proportion, W, of the total issued share
capital of EADS, ((Y + V - D) x (1+t)) + S, calculated as follows:
W = R - U
5.2.3 Calculation of Dasa's and Aerospatiale Matra's Participation
If, as intended by the parties, the contribution of the Contributed
Casa Shares and the Contributed Dasa-owned Casa Shares pursuant to
para. 5.2.1 and 5.2.2 above occurs together with the contribution of
the Dasa New Shares and the Aerospatiale Matra Bis Shares pursuant to
Clauses 5.2 and 5.3 of the Business Combination Agreement, then, by way
of derogation to Clause 5.2.1 of the Business Combination Agreement,
the proportion, P, of the total issued share capital of EADS to be
issued to Dasa in exchange for the contribution of the shares in Dasa
New to EADS is calculated as follows:
P = X x 100
---------
X + Y + S
where:
X = V - D
Furthermore, by way of derogation to Clause 5.3.1, the proportion, Q,
of the total issued share capital of EADS to be issued to Aerospatiale
Matra shall be calculated as follows:
Q = 100 - P - R.
5.3 MANAGEMENT OF EADS SHARES IN HOLDINGS CP
By way of derogation to Clause 5.5 of the Business Combination
Agreement, Dasa shall, and Lagardere and Sogepa shall procure that
Topco shall transfer legal title to their shares in EADS representing
(after the contribution of Casa pursuant to para. 5.2.1 and 5.2.2
above and the issue referred to in Clause 5.7 of the Business
Combination Agreement) 30 % of the total issued share capital of EADS
for Topco (on the one hand) and for Dasa (on the other hand) to the
Managing Partner whilst retaining the economic ownership of such
shares in accordance with the terms of the Holdings CP Partnership
Agreement.
- 20 -
Subject to para 5.4 below, Sepi shall transfer legal title to all of
its shares in EADS to the Managing Partner whilst retaining the
economic ownership of such shares in accordance with the terms of the
Holdings CP Partnership Agreement.
5.4 PARTICIPATION BY SEPI IN PUBLIC OFFERING
By way of derogation to Clause 5.7 of the Business Combination
Agreement, the issue of new shares in EADS shall be limited to such
proportion that each of the shareholdings in EADS held by the DC Group
and by Topco (after such issue and the contribution of the Contributed
Casa Shares and the Contributed Dasa-owned Casa Shares) is not reduced
to an amount lower than 30% of the issued share capital of EADS.
Sepi agrees that it shall not directly or indirectly participate by
subscribing for new shares in the issue of new EADS shares referred to
in Clause 5.7 of the Business Combination Agreement.
In the preparation of the primary and secondary offering of EADS
shares, Sepi will participate in the working teams and the decision
making process, the final decision always being with DCLRH, Lagardere
and Sogepa. It must be ensured that the shares in EADS held by Sepi
and Dasa directly or through the Managing Partner are registered for
trading at the relevant stock exchanges. Sepi may decide to reduce its
portion of shares in EADS to be managed by the Managing Partner
pursuant to para. 5.3 and, upon consultation with DCLRH, Lagardere and
Sogepa taking into account existing market conditions and subject to
their prior consent, participate to this extent in a secondary
offering of EADS shares.
5.5 MODIFIED PARTICIPATION AGREEMENT
DC, Sepi, Lagardere and Sogepa shall, and Lagardere and Sogepa shall
procure that Topco shall, enter into the Modified Participation
Agreement.
5.6 ACCESSION OF EADS TO THIS AGREEMENT
DCLRH, Lagardere and Sogepa shall procure, and Sepi accepts, that EADS
shall enter into this Agreement (including the undertakings pursuant
to Art. VI para. 6.2) by signing a deed of adherence.
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ARTICLE VI
INDUSTRIAL PLAN; COVENANTS; REPORTS
6.1 INDUSTRIAL PLAN/BUSINESS PLAN
6.1.1 Industrial Plan
The Parties have elaborated an Industrial Plan for Casa which has been
initialled by the Parties, for purposes of identification ("Industrial
Plan"), a summary of which is attached hereto as Schedule 19.
6.1.2 Level of Resources
The level of resources (capital expenditure, R & D and headcount) for
Casa estimated at this stage as necessary by the Parties to achieve the
objectives of the Industrial Plan is attached as Schedule 20.
6.1.3 EADS Business Plan
The business plan for EADS will be adjusted and updated by the
management of EADS according to the course of business by taking into
account the integration of the Casa Business and the implementation of
the Industrial Plan.
6.2 UNDERTAKINGS OF EADS
The Parties acknowledge and agree that the following undertakings are
the undertakings to be given by EADS upon its accession to this
Agreement under Art. V para. 5.6.
6.2.1 Covenants regarding Industrial Plan
EADS hereby undertakes for a period of three years following the Casa
Closing Date (i) to ensure the implementation of the Industrial Plan
(as amended from time to time subject to the provisions of the Modified
Participation Agreement) without deviating from or changing the
Industrial Plan (as amended from time to time subject to the provisions
of the Modified Participation Agreement), (ii) not to dispose of the
shares in Casa held by it from time to time, (iii) not to wind-up the
affairs of Casa and (iv) not to dispose of substantial assets or
activities necessary for the implementation of the In-dustrial Plan (as
amended from time to time subject to the provisions of the Modified
Participation Agreement) without the prior consent of Sepi. DCLRH,
Lagardere and Sogepa shall exercise all rights
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and powers which they are able to exercise in relation to EADS with a
view to ensuring the implementation of the Industrial Plan (as amended
from time to time subject to the provisions of the Modified
Participation Agreement). For the avoidance of doubt, nothing in this
para. 6.2.1 shall require DCLRH, Lagardere or Sogepa to make available
any financing or security.
6.2.2 Implementation Reports
EADS shall render to Sepi semi-annual reports ("Implementation
Reports") on the status of implementation of the Industrial Plan. The
reports shall be delivered to Sepi in writing within two months of the
end of the period which they cover. Each report will cover the period
from 1 January to 30 June or, as the case may be, 1 July to 31
December, except (i) the first report to be delivered shall cover the
period from Casa Closing to 31 December 2000 and (ii) the last report
to be delivered under this para. shall cover the period from the date
to which the previous report was prepared up to the third anniversary
of the Casa Closing. Any reasonable requests by Sepi for additional
information regarding the implementation of the Industrial Plan shall
be answered in writing by EADS without undue delay.
ARTICLE VII
COVENANTS AND INDEMNITIES
7.1 COVENANTS OF SEPI
Sepi shall use its best efforts to procure the following prior to the
Casa Closing Date:
(a) all land, real estate, concessions, buildings, facilities and
other assets owned by Casa or the Casa Companies shall have
been properly recorded in the respective Property and
Cadastral Registry and any other applicable Registries free
and clear of any pledges, mortgages, encumbrances and third
party rights;
(b) Casa and the Casa Companies shall have obtained the licenses,
permits, registrations and authorities listed in Schedule 21;
(c) The boundaries of the 388,305 m2 located in Getafe described
in Schedule 22 owned by the Ministry of Defence and presently
occupied by Casa under authorisation of the Ministry of
Defence (the "Getafe Site") shall have been
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properly determined and the Getafe Site shall have properly
been recorded in the Property and Cadastral Registry.
(d) Casa shall have obtained from Aeropuertos Nacionales y
Navegacion Aerea (AENA) a comprehensive concession regarding
Casa's further use of the entire San Pablo site in Sevilla, as
described in Schedule 23 ("San Pablo Site") and comparable
conditions as the existing ones or AENA shall have confirmed
in writing that such a concession will be issued.
7.2 COVENANTS OF DCLRH AND DASA
DCLRH and Dasa shall use their best effort to procure (with the
co-operation of the other Principals to the extent required) that
within a reasonable time after the Casa Closing Date, Dasa New and DC
shall have entered into an agreement (i) giving Dasa New the beneficial
ownership of the intellectual property rights based on inventions made
by Dasa which have been registered since January 1, 1998 in the name of
DC on a non-exclusive basis or, at DC's discretion (ii) transferring to
Dasa New the legal ownership of such intellectual property rights
(including back and cross licenses) without consideration.
7.3 INDEMNITY
DCLRH shall indemnify Sepi and shall keep Sepi indemnified against
(save in respect of any consequential loss not foreseeable by DCLRH (or
any member of the DC Group)) all or any costs, claims, demands,
expenses, losses or liabilities as Sepi may suffer or incur from the
date hereof as a result of all or any of the shareholders of Dornier
GmbH other than a member of the Dasa Group (together the "Do Family")
obtaining or seeking to obtain any rights or remedies against Sepi,
Holdings CP, the Managing Partner, Dasa, Dasa New, EADS or any member
of the EADS Group or the Dasa Group. The indemnity contained in this
para. 7.3 shall also extend to EADS to the extent such protection is
not provided for in the transfer of Dasa New to EADS.
7.4 Lagardere shall indemnify Sepi and shall keep it indemnified against
(save in respect of any consequential loss not foreseeable by Lagardere
(or any member of the Lagardere Group)) all or any costs, claims,
demands, expenses, losses or liabilities that it may suffer or incur
from the date hereof as a result of Dassault Industrie obtaining or
seeking to obtain any rights or remedies under an agreement dated 10
November 1998 against EADS (or any member of the EADS Group) or the
Aerospatiale Matra Group in relation to the shares of Dassault Aviation
owned by
- 24 -
Aerospatiale Matra (and only to the extent that the said 10 November
1998 agreement is not terminated in accordance with its terms).
7.5 Lagardere shall indemnify Sepi and shall keep it indemnified
against (save in respect of any consequential loss not foreseen by
Lagardere (or any member of the Lagardere Group) all or any costs,
claims, demands, expenses, losses or liabilities that it may suffer or
incur from the date hereof as a result of (i) British Aerospace Public
Limited Company or any of its Subsidiaries (ii) Northern Telecom
Limited or any of its Subsidiaries or (iii) Diehl exercising or seeking
to exercise any rights or remedies against EADS (or any member of its
Group) or the Aerospatiale Matra Group in relation to, respectively,
(i) Matra BAe Dynamics S.A.S. (ii) Matra Nortel Communications S.A.S.
or (iii) BBV and/or BGT by reason of the transactions contemplated by
the Merger Documents.
ARTICLE VIII
REGULATORY MATTERS
As soon as reasonably practicable after the signing of this Agreement,
DCLRH, Lagardere and Sepi shall make a notification in form and
substance reasonably satisfactory to each of DCLRH, Lagardere and Sepi
to the European Commission in respect of the transactions and
arrangements contemplated by this Agreement pursuant to Regulation
4064/89. The Parties will use their best efforts to procure that at the
earliest time possible the notification procedures under the Business
Combination Agreement and under this Agreement are pursued together for
all practical purposes in order to promote a quick and efficient
process.
DCLRH, Lagardere and Sepi shall co-operate with one another to ensure
that all information necessary or desirable for the making of (or
responding to any requests for further information consequent upon) any
necessary or desirable notifications or filings in respect of, or of
the transactions and arrangements contemplated by, the Business
Combination Agreement and this Agreement is supplied to the Party
dealing with such notifications and filings and that they are properly,
accurately and promptly made.
If any Regulatory Action is taken or threatened, DCLRH, Lagardere and
Sepi shall promptly meet to discuss the situation and the action to be
taken as a result, and (if such be the case) whether any modification
to the terms of the transactions and arrangements contemplated by the
Business Combination Agreement or this Agreement shall be made, in
order that any requirements (whether as a condition of giving any
approval, exemption, clearance, or consent or otherwise) of the
European Commission or other regulatory authority may be reconciled
with, and within the scope of, the transactions and arrangements
contemplated by the Business Combination Agreement or this Agreement.
- 25 -
DCLRH, Lagardere and Sepi shall thereafter co-operate in giving effect
to any modifications of this Agreement agreed upon.
It is understood that the Parties to the Business Combination Agreement
are free to agree on any modifications to the Business Combination
Agreement and the transactions contemplated therein for the purpose of
reconciliation with any requirements of the European Commission or
other regulatory authorities. If any modifications agreed between the
Parties to the Business Combination Agreement would have a material
impact on the transactions contemplated in this Agreement, the Parties
hereto will enter into good faith negotiations on the necessary
modifications to the terms hereof with a view to maintaining their
interests in respect of the transactions contemplated herein. If the
Parties cannot agree on such modifications within a period of two
months or such shorter period as may be specified by the relevant
authority, Sepi shall have the right to terminate this Agreement.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
9.1 REPRESENTATIONS AND WARRANTIES OF DCLRH
DCLRH hereby gives the Dasa Warranties to Sepi as of the Signing Date
or as of such other date as stated therein.
9.2 REPRESENTATIONS AND WARRANTIES OF LAGARDERE
Lagardere hereby gives the Lagardere Warranties to Sepi as of the
Signing Date or as of such other date as stated therein.
9.3 REPRESENTATIONS AND WARRANTIES OF SOGEPA
Sogepa hereby gives the Sogepa Warranties to Sepi as of the Signing
Date or as of such other date as dated therein.
9.4 REPRESENTATIONS AND WARRANTIES OF SEPI
Sepi hereby gives the Sepi Warranties to DCLRH, Lagardere and Sogepa as
of the Signing Date or as of such other date as stated therein.
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ARTICLE X
BREACH OF WARRANTIES
10.1 REMEDY
In case of a breach of any of the Warranties, the entity giving such
Warranty (for these purposes, for the avoidance of doubt, any
Warranties given by Lagardere and Sogepa pursuant to Art. IX para. 9.2
and 9.3 shall be deemed to be given severally) (the "Warrantor") may
attempt to remedy such breach within a reasonable period of time not
to exceed thirty (30) Business Days after receipt of a written default
notice by the defaulting Party.
10.2 DAMAGES
If a breach of a Warranty is not remedied by the Warrantor within the
period set forth above, the respective Party (or Parties) to which
such Warranty is given (the "Claimant(s)") may require the Warrantor
to pay damages to the Claimant provided that any liability for a
breach of the Warranties shall not be grossed-up to include any tax
payable thereon by the Claimant.
Save as otherwise provided herein, the Parties waive all or any rights
they may have to rescission or restitution.
10.3 LIMITATIONS
A claim against a Warrantor (except in case of breaches of Clause 13
of the Dasa Warranties (Schedule 11), Clause 14 of the Lagardere
Warranties (Schedule12) and Clauses 7 and 14 of the Sepi Warranties
(Schedule 13)) can only be asserted if and to the extent (i) the
amount of each individual claim is in excess of 250,000 and (ii) the
aggregate amount of all claims in excess of 250,000 is in excess of 2
million. The aggregate amount of all claims against a Warrantor is
limited to a maximum amount of 800,000,000, provided that any
liability for breach of Clause 13 of the Dasa Warranties, Clause 14 of
the Lagardere Warranties and Clause 7 or 14 of the Sepi Warranties
shall not be subject to, or set off against, any limitation of
liability.
10.4 TIME RESTRICTIONS
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A Warrantor shall not be liable to a Claimant for any claim under this
Art. X (a "Claim") unless it receives from the Claimant written notice
containing details of the Claim including the Claimant's estimate of
the amount of the Claim:
(a) on or before the date of approval by the board of EADS of
the financial statements for EADS relating to the first
complete accounting period falling after the Casa Closing,
in the case of a Claim for breach of any of the Warranties
other than a Claim covered by para. (ii) below;
(b) in respect of any Claim relating to taxation or social
security contributions, on or before the expiry of thirty
(30) days after the expiry of the legal prescription period
applicable to the subject matter of the Claim.
Any Claim shall (if not previously satisfied, settled or withdrawn) be
deemed to have been withdrawn (and no new Claim may be made in respect
of the matter giving rise to such withdrawn Claim) unless legal
proceedings in respect of it have been commenced within six (6) months
of notification to the Warrantor pursuant to the foregoing provisions.
10.5 DISCLOSURE OF FACTS
The Warrantor shall not be liable for any Claim:
(a) if and to the extent that the fact, matter, event or
circumstance giving rise to such Claim was fairly and
reasonably disclosed by the Warrantor to the Claimant prior
to the signature of this Agreement; or
(b) if and to the extent that the matter is specifically
disclosed or is specifically provided or reserved for in the
relevant Aerospatiale Matra Warranted Accounts or, as
appropriate, the Dasa Warranted Accounts or, as appropriate,
the Casa Warranted Accounts.
10.6 REDUCTION OF CLAIMS
In calculating the liability of the Warrantor in respect of any Claim
such Claim shall be reduced by:
(a) the aggregate of:
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(i) any amount by which any asset shall have been
under-stated; and
(ii) any amount by which any liability shall have been
overstated;
in the Aerospatiale Matra Warranted Accounts or, as
appropriate, the Dasa Warranted Accounts or, as appropriate,
the Casa Warranted Accounts, less the aggregate of:
(iii) any amount by which any other liabilities shall
have been under-stated therein; and
(iv) any amount by which any assets shall have been
overstated therein;
(b) the amount by which any provision or reserve (including any
provision or reserve taken into account in calculating the
net value of an asset) in the Aerospatiale Matra Warranted
Accounts or, as appropriate, the Dasa Warranted Accounts or,
as appropriate, the Casa Warranted Accounts, has been
established to have been unnecessary or excessive;
(c) any amount recovered in respect of any debt written off in
the Aerospatiale Matra Warranted Accounts or, as
appropriate, the Dasa Warranted Accounts or, as appropriate,
the Casa Warranted Accounts; and
(d) the extent that any liability is discharged or satisfied
below the amount attributed in the Aerospatiale Matra
Warranted Accounts or, as appropriate the Dasa Warranted
Accounts or, as appropriate, the Casa Warranted Accounts;
provided that no amount shall be taken into account more than once
pursuant to this para. 10.6.
10.7 TAX EFFECTS
No liability shall attach to the Warrantor in respect of any Claim to
the extent that any taxation liability for which any company or entity
contributed by that Warrantor, directly or indirectly, to EADS, is
reduced or extinguished as a result of the loss subject to the Claim.
The Warrantor shall have no liability in respect of any Claim in
respect of any tax audit which merely modifies the tax period during
which a deductible charge or amortisation may be taken, or in which
income or gain may be realised (except that either such
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modification results in any relief (otherwise useable within the same
tax period) being lost or to the extent of penalties, interest and
cost of funds).
10.8 CHANGED LEGISLATION
The Warrantor shall not be liable in respect of any Claim to the
extent that such Claim is attributable to, or is increased as a result
of, any legislation not in force at the date hereof or to any change
in law or administrative practice which takes effect retrospectively
or occurs as a result of any change in the basis or method of
calculation of, or any increase in the rates of, taxation in force at
the date hereof.
10.9 RECOVERY FROM THIRD PARTIES
Where the Claimant is entitled to recover from a third party any sum
which is the subject of an actual or potential Claim, the Claimant
shall promptly notify the Warrantor and, if so required by the
Warrantor, the Claimant shall, before seeking to recover any amount
from the Warrantor under this Agreement, first take all steps as the
Warrantor may reasonably require to enforce such recovery and
thereafter any Claim shall be limited (in addition to the limitations
on the liability of the Warrantor referred to in para. 10.3) to the
amount by which the loss or damage (including the costs of recovery)
shall exceed the amount so recovered.
If the Warrantor pays to the Claimant an amount in discharge of a
Claim and the Claimant subsequently recovers from a third party a sum
which is referable to the Claim (including without limitation by way
of insurance), the Claimant shall forthwith repay to the Warrantor:
(a) an amount equal to the sum recovered less any reasonable
out-of-pocket costs and expenses incurred in recovering the
same; or
(b) if the figure resulting under para. (a) above is greater
than the amount paid by the Warrantor in respect of the
relevant Claim, such lesser amount as shall have been so
paid by the Warrantor.
10.10 RIGHT TO SUBSTITUTE TOPCO
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In relation to Warranties given by Lagardere in Clauses 8 to 13 of the
Lagardere Warranties and Sogepa in Clauses 6 to 11 of the Sogepa
Warranties and those given by Sepi to Lagardere and Sogepa in Clauses
1 to 14 of the Sepi Warranties Lagardere and Sogepa may substitute
Topco as the giver or, as appropriate, recipient of such Warranties in
place of and to the exclusion of themselves, including in relation to
accrued or then current claims or liabilities.
ARTICLE XI
CONFIDENTIALITY
11.1 CONFIDENTIALITY OBLIGATIONS
Each of the Parties undertakes to each of the others that it shall
keep confidential and not (without the prior written consent of the
others) disclose to any person or use or exploit commercially for its
own purposes the existence and terms of this Agreement. In performing
its obligations under this Art. XI, each of the Parties shall apply
such standards of confidentiality as it applies generally in relation
to its own confidential information.
11.2 RESPONSIBILITY FOR GROUP MEMBERS
Each of the Parties further undertakes to procure that members of its
Group observe the provisions of this Art. XI as fully as if they were
Parties hereto in lieu of that Party and to use all reasonable
endeavours to ensure that its employees and agents observe such
confidentiality.
11.3 EXCEPTIONS
Para. 11.1 and 11.2 shall not apply to:
(a) the disclosure of information to a company which is another
member of the Group of the respective Party (as the case may
be) where such disclosure is for a purpose reasonably
incidental to this Agreement; or
(b) information acquired from a third party with the right to
divulge the same; or
- 31 -
(c) information required to be disclosed by operation of law or
any stock exchange regulations or any binding judgement or
order or by any requirement of any competent authority; or
(d) disclosure in confidence to a Party's professional advisers
of information reasonably required to be disclosed for use
in connection with transactions and matters contemplated
hereby or related hereto; or
(e) information which is or becomes within the public domain
(otherwise than through the default of the recipients of
that information); or
(f) information to the extent that the disclosure of such
information is required for the satisfaction of the
conditions precedent set forth in Art. III para. 3.1; or
(g) information necessary to monitor the implementation of the
Industrial Plan and which is disclosed to the Spanish
government until the third anniversary of the Casa Closing
Date.
11.4 ANNOUNCEMENTS AND PRESS RELEASES
Subject to para. 11.5, no announcement or press release in connection
with the signature or subject of this Agreement shall be made or
issued by or on behalf of any Party or any of its Subsidiaries without
the prior written approval of the other Parties (such approval not to
be unreasonably withheld or delayed).
11.5 MANDATORY ANNOUNCEMENTS
If a Party has an obligation to make or issue any announcement
required by law or by any stock exchange or by any governmental
authority in connection with this Agreement, that Party shall give the
other Parties every reasonable opportunity to comment on any such
announcement or release before it is made or issued and the approval
of the other Parties shall be required to any specific references
therein to themselves, their business or to Holdings CP (provided
always that this shall not have the effect of preventing the Party
making the announcement or release from complying with its legal and
stock exchange obligations.)
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ARTICLE XII
MISCELLANEOUS
12.1 TERMINATION OF THIS AGREEMENT
In the event any of the Parties hereto exercises its right to
terminate this Agreement in accordance with the provisions of this
Agreement, this Agreement shall lapse and cease to have further force
or effect except for the provisions of Art. XI and XII which shall
continue in full force and effect and any claims for damages, save in
respect of prior breaches of this Agreement, shall be excluded.
12.2 COSTS
Each of the Parties shall bear its costs incurred in connection with
the preparation, the execution and the consummation of this Agreement.
For the avoidance of doubt, each of the Parties shall bear any capital
duty on their respective contributions into EADS. Jointly caused costs
will be borne by the Parties as agreed or, insofar as such costs are
not covered by agreement, in proportion to their (indirect)
shareholding in EADS.
12.3 IMPLEMENTATION
Each of the Parties shall (at its own expense) execute, or procure the
execution of, all such other documents and do, or procure the doing
of, all such other acts and things as may be reasonably required on
its part or any member of its respective Group for the purpose of
implementing and giving full effect to this Agreement.
12.4 SEVERABILITY
If any of the provisions of this Agreement is invalid or
unenforceable, the remaining provisions of this Agreement shall remain
unaffected. The invalid or unenforceable provision shall be replaced
by a valid or enforceable provision, which comes as close as possible
to the economic purpose of the invalid or unenforceable provision.
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12.5 NOTICES AND DECLARATIONS
12.5.1 All declarations and notices under this Agreement shall be made in
writing to:
If DCLRH and/or Dasa:
Address: Postfach 801109, 81663 Muenchen, Germany
Fax: +49 89 607 34306
Addressed for the personal attention of: The Chairman of the Board
If to Lagardere:
Address: 4 rue de Presbourg, 75116 Paris, France
Fax: +33 1 40 69 20 01
Addressed for the personal attention of: The Secretaire General
If to Sogepa:
Address: 56 rue de Lille, 75007 Paris, France
Fax: +33 1 53 18 95 66
Addressed for the personal attention of: The Secretaire General
If to Sepi and/or Casa:
Address: 8 Plaza del Marques de Salamanca, 28006 Madrid, Spain
Fax: +34 91 396 14 28
Addressed for the personal attention of: The Secretary of the Board
If to EADS:
Address:
Fax:
Addressed for the personal attention of:
12.5.2 A Party may change the address, fax number or the name of the person
for whose attention notices are to be addressed by serving a notice on
the other Parties hereto in accordance with this para. 12.5.
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12.5.3 All notices given in accordance with this para 12.5 are effective as
follows:
(a) if delivered by hand, at the time of delivery; and
(b) if communicated by facsimile, at the time of transmission
recorded on a transmission report showing transmission of
all parts of the notice,
Provided that where delivery by hand or transmission by facsimile
occurs after 6 p.m. on a Business Day or on a day which is not a
Business Day, the notice shall be effective as from 9 a.m. on the next
following Business Day. References to time in this Clause 12.5.3 are
to local time in the country of the addressee.
12.5.4 In proving such service it shall be sufficient to prove that the
envelope containing such notice was properly addressed and delivered
either to the address shown thereon (or, in the case of confirmation
of a notice sent by facsimile, into the custody of the postal
authorities as pre-paid letter), or that the facsimile transmission
was made after obtaining in person or by telephone appropriate
evidence of the capacity of the addressee to receive the same, as the
case may be.
12.5.5 All notices or communications under or in connection with this
Agreement shall be in the English language or, if in any other
language, accompanied by a translation into English. In the event of
any conflict between the English text and the text in any other
language the English text shall prevail.
12.6 LANGUAGE
There are Spanish and English versions of this Agreement and its
Schedules. The Spanish version as well as the English version are
executed by the Parties. Since the negotiations have been conducted in
English, in case of a conflict, the English version shall prevail.
12.7 APPLICABLE LAW
This Agreement shall be governed by and be construed in accordance
with the laws of the Netherlands.
12.8 ARBITRATION
12.8.1 If there shall be any dispute, controversy or claim ("Dispute")
between any of the Parties arising out of or in connection with this
Agreement, including the breach, lapse, termination, or invalidity of
this Agreement, the relevant Parties shall use their best
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endeavours to resolve the matter on an amicable basis. If one Party
serves written notice on another Party or Parties that a Dispute has
arisen and such Parties are unable to resolve such Dispute within a
period of thirty (30) days from the service of such notice, then the
matter shall be referred to a panel consisting of the Chief Executives
(or equivalent) for the time being of each of Topco, DC and Sepi as
relevant (the "Panel"). No recourse to arbitration under this
Agreement shall take place unless and until such procedure has been
followed.
12.8.2 If the Panel shall have been unable to resolve the Dispute within a
period of fourty-five (45) days following its reference to it, it
shall be referred by any of the Parties in dispute (for purposes of
this Clause 12.8, the "Claimant(s)") to and finally resolved by
arbitration pursuant to the Rules of Arbitrations of the International
Chamber of Commerce ("I.C.C.") then in force and in accordance with
the following provisions of this Clause 12.8.
12.8.3 Each of the Claimant and the Respondent shall nominate one arbitrator
each. If there is more than one Claimant and/or more than one
Respondent, then the Claimant Parties and/or the Respondent Parties
shall jointly nominate an arbitrator. If they cannot agree, such
arbitrator(s) shall be selected by the I.C.C.
12.8.4 The two arbitrators thus nominated shall within thirty (30) days
nominate an additional arbitrator who shall not be a national of
France, Germany or Spain. If they cannot agree, then the Chairman
shall be selected by the I.C.C.
12.8.5 The seat of arbitration shall be the Hague, the Netherlands. The
arbitration shall be conducted in the English language.
12.8.6 In arriving at their award, the arbitrators shall apply the terms and
conditions of this Agreement. The award of the arbitrators shall be
final and binding on the Parties to the Dispute. Neither the
Claimant(s) nor the Respondent(s) shall seek recourse to a court of
law or other authorities to appeal against the award of the
arbitrators on matters of fact or law. Reasonable costs of the
arbitration shall be awarded to the successful Party(ies) as the
arbitrators shall determine.
12.8.7 If any Dispute raises issues which are substantially the same as or
connected with issues raised in a Dispute which has already been
referred to arbitration under this Agreement or the Business
Combination Agreement or the Modified Participation Agreement or the
Participation Agreement (an "Existing Dispute"), or arises out of
substantially the same facts as are the subject of an Existing Dispute
(a "Related Dispute"), the Tribunal
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appointed or to be appointed in respect of any such Existing Dispute
shall also be appointed in respect of any Related Dispute.
12.8.8 The Tribunal, upon the request of a Party to a Dispute or a Party to
this Agreement which itself wishes to be joined in any reference to
arbitration proceedings in relation to a Dispute, may join any Party
to this Agreement to any reference to arbitration proceedings in
relation to that Dispute and may make a single, final award
determining all Disputes between them. Each of the Parties to this
Agreement hereby consents to be joined to any reference to arbitration
proceedings in relation to any Dispute at the request of a Party to
that Dispute.
12.8.9 Where, pursuant to the above provisions, the same Tribunal has been
appointed in relation to two or more Disputes, the Tribunal may, with
the agreement of all Parties concerned or upon the application of one
of the Parties, being a Party to each of the Disputes, order that the
whole or part of the matter at issue shall be heard together upon such
terms or conditions as the Tribunal thinks fit. The Tribunal shall
have power to make such directions and any interim or partial award as
it considers just and desirable.
12.8.10 Nothing in these dispute resolution provisions shall be construed as
preventing either Party from seeking conservatory or injunctive relief
(summary proceedings) in any court of competent jurisdiction.
12.8.11 If there is any conflict between the Rules of Arbitration of the
I.C.C. and this Clause 12.8, this Clause 12.8 shall govern.
12.9 GENERAL PROVISIONS
12.9.1 None of the Parties shall, except with the prior written consent of
the others assign or transfer or purport to assign or transfer any of
its rights or obligations under this Agreement.
12.9.2 This Agreement may not be varied except by an agreement in writing
executed by each of the Parties.
12.9.3 No waiver by a Party of a failure or failures by another Party to
perform any provision of this Agreement shall operate or be construed
as a waiver in respect of any other or further failure whether of a
like or different character.
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12.9.4 It is agreed that no Party has entered into this Agreement in reliance
upon any representation, warranty or undertaking or any other Party
which is not expressly set out or referred to in this Agreement;
12.9.5 Sepi shall not , and shall procure that Casa shall not, without the
prior written consent of Sogepa and Lagardere, sell, transfer, dispose
or grant an option, right or interest over or purchase, acquire or
take an option, right or interest over or otherwise deal, in any way
whatsoever, in any shares or debentures or any interest in any share
(including, without limitation, depository receipt) or debenture in
the capital of Aerospatiale Matra, or purport to do any of the
foregoing or procure, encourage or incite any person to do any of the
foregoing.
12.10 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement and understanding of
the Parties and supersedes all prior oral or written agreements,
understandings or arrangements between them or any of them relating to
the subject matter of this Agreement, unless this Agreement contains
an express reference to other documents or agreements.
The Parties agree that this Agreement shall be notarized without delay
after its execution.
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SIGNED BY )
duly authorised, for and on behalf of )
DAIMLERCHRYSLER LUFT- )
UND RAUMFAHRT HOLDING AG )
SIGNED BY )
duly authorised, for and on behalf of )
DAIMLERCHRYSLER )
AEROSPACE AG )
SIGNED BY )
duly authorised, for and on behalf of )
LAGARDERE SCA )
SIGNED BY )
duly authorised, for and on behalf of )
SOCIETE DE GESTION DE )
PARTICIPATIONS AERONAUTIQUES )
- - SOGEPA )
SIGNED BY )
duly authorised, for and on behalf of )
AEROSPATIALE MATRA S.A. )
SIGNED BY )
duly authorised, for and on behalf of )
SOCIEDAD ESTATAL DE )
PARTICIPACIONES INDUSTRIALES )