EXHIBIT 2.5
NUMBER 2 OF THE DOCUMENT REGISTER FOR 2002
[LION CREST GRAPHIC]
D o n e
at Frankfurt am Main, on January 31, 2002
Before me, the undersigned Notary Public
in the district of the Oberlandesgericht (Court of Appeals) of Frankfurt am Main
DR. MICHAEL THOMA
with offices in Frankfurt am Main
who at the request of the parties had come to the offices of
Mayer, Brown & Platt Gaedertz,
Bockenheimer Landstr. 98 - 100,
D-60323 Frankfurt am Main
appeared today:
23
1. Mr. Michael J.Berthelot,
born on June 19, 1950
residing: One Cedare Ridge Drive,
Warren, NJ 07059, USA,
acting not for himself but exclusively for
1.1 Seeger-Orbis GmbH & Co. OHG
Wiesbadener Stra(beta)e 243
61462 Konigstein im Taunus
registered in the Commercial Register
of the Municipal Court of Konigstein im Taunus
under HR A 2500,
- hereinafter referred to as "SELLER" -
represented by its general partner
TransTechnology Seeger-Orbis GmbH
Wiesbadener Stra(beta)e 243
61462 Konigstein im Taunus
registered in the Commercial Register of the
Municipal Court of Konigstein im Taunus
under HRB 38 65
- hereinafter referred to as "TTSO" -
As proof of his joint authority to represent Seller, the deponent under 1.
submitted the following:
(i) a certified excerpt from the Commercial Register of the Municipal
Court of Konigstein im Taunus - HR A 2500, dated January 28, 2002, a
certified copy of which will be attached to this notarial deed as
EXHIBIT A, showing that TTSO is the sole managing general partner of
Seller,
(ii) a certified excerpt from the Commercial Register of the Municipal
Court of Konigstein im Taunus - HRB 3865 - dated January 4, 2002, a
certified copy of which will be attached as EXHIBIT B, showing that
the deponent under 1. and Mr. Sven-Uwe Wolber, born on December 16,
1943, residing at Am Abtswald 66, 65366 Geisenheim-Johannisberg are
managing directors with joint signing authority of TTSO.
24
1.2 TRANSTECHNOLOGY CORPORATION
a corporation incorporated pursuant to the laws of the
State of Delaware, USA,
with business address at
150 Allen Road,
Liberty Corner, N.J. 07938, USA
- hereinafter referred to as "TTC" -.
By way of proof of his power of representation, the deponent under 1.
submitted a notarially certified power of attorney dated January 25, 2002
of TTC which bears an Apostille and a certified copy of which is attached
to this notarial deed as EXHIBIT C.
By way of proof of the existence of TTC and by way of proof of the power
of representation of the signatory of the power of attorney, the deponent
submitted a Secretary's Certificate of TTC dated January 25, 2002 and a
certified copy of which is attached to this notarial deed as EXHIBIT D.
1.3 TRANSTECHNOLOGY GB LTD.
a corporation incorporated pursuant to the laws of the
United Kingdom,
with business address at
Hayfield Colner Road,
Glasburn, Keighley,
West Yorkshire BD 2 O 8 QP, United Kingdom
- hereinafter referred to as "TTGB" -
By way of proof of his power of representation, the deponent under 1.
submitted a notarially certified copy of a resolution of the Board of
Directors of TTGB approving the execution of the agreements covered by
this notarial deed which bears the Apostille and a certified copy of which
is attached to this notarial deed as EXHIBIT E. 1. An excerpt from the
company's register of TTGB is attached hereto as EXHIBIT E.2.
25
2. Mr. Sven-Uwe Wolber,
born on December 16, 1943,
residing at Am Abtswald 66,
D-65366 Geisenheim-Johannisberg
acting not for himself but exclusively for Seller.
As proof of his joint authority to represent Seller, the deponent under 2.
referred to
EXHIBITS A and B.
3. Mr. Philip A. Goodrich,
born on October 3, 1956,
residing: 138 Northington Drive
Avon, Connecticut 06001, USA.
acting not for himself but exclusively for
3.1 Barnes Group (Germany) GmbH & Co. OHG
statutory seat in Frankfurt am Main
c/o Mayer, Brown & Platt Gaedertz
- hereinafter referred to as "PURCHASER" -
represented by its general partner
"Radom" Neunte Beteiligungsgesellschaft mbH
(to be renamed Barnes Group (Germany) GmbH)
statutory seat in Frankfurt am Main
registered in the Commercial Register of the Municipal
Court of Frankfurt am Main under file No. HRB 53427
- hereinafter referred to as "RADOM" -
in his capacity as Radom's managing director (Geschaftsfuhrer) with single
signing authority.
As proof of his authority to represent Purchaser, the deponent under 3.
submitted
(i) an authenticated copy of an application (Handelsregisteranmeldung) dated
January 29, 2002 (Document Register No. 52/2002 of the Notary Public Dr.
Hans Hofmann
26
in Frankfurt am Main) filed with the Commercial Register of the Municipal
Court of Frankfurt am Main on January 30, 2002, which will be attached to
this notarial deed as EXHIBIT G, showing that Radom is the sole managing
general partner of Purchaser;
(ii) a certified excerpt from the Commercial Register of the Municipal Court of
Frankfurt am Main, HR B 53427, dated January 11, 2002, a copy of which
will be attached to this notarial deed as EXHIBIT H, and
(iii) an authenticated copy of an application (Handelsregisteranmeldung) dated
January 29, 2002 filed with the Commercial Register of the Municipal Court
of Frankfurt am Main for file No. HRB 53427 on January 30, 2002, which
will be attached to this notarial deed as EXHIBIT I, showing that the
deponent under 2. is managing director (Geschaftsfuhrer) with single
signing authority of Radom (Document Register No. 50/2002 of the Notary
Public Dr. Hans Hofmann in Frankfurt am Main).
The deponent promised to supply to the Notary Public certified excerpts
from the Commercial Register of the Municipal Court of Frankfurt am Main
showing Purchaser's registration as general partnership, Radom's
registration as sole managing general partner of Purchaser and the
registration of the deponent under 2. as managing director of Radom; the
Notary Public shall then take copies thereof to his notarial files.
3.2 BARNES GROUP INC.
a corporation incorporated pursuant to the laws of the
State of Delaware, USA,
with business address at 123 Main Street
Bristol, CT 06011-0489, USA
- hereinafter referred to as "BARNES" -.
in his capacity as Senior Vice President, Corporate Development, of
Barnes. By way of proof of the existence of Barnes and by way of proof of
his power of representation the deponent under 3. submitted an Assistant
Secretary's Certificate of
27
Barnes dated January 17, 2002 which bears an Apostille. This Assistant
Secretary's Certificate was issued in the context of a Power of Attorney
dated January 17, 2002 issued by the deponent under 3. on behalf of
Barnes. Certified copies of the Power of Attorney and of the Secretary's
Certificate are attached to this notarial deed as EXHIBITS J AND K,
respectively.
The deponents asked the Notary Public to record the following minutes in the
English language. The Notary Public, who has command of the English language,
ascertained to his satisfaction that the deponents are in command of the English
language. The Notary Public pointed out to the deponents that they can request a
German translation of this notarial deed. However, the deponents stated that
they do not request a German translation of this notarial deed.
The deponent under No. 1 proved his identity by submitting his valid U.S.
passport, No. 112007779.
The deponent under 2. proved his identity by submitting his valid identity card
of the Federal Republic of German No.4190159551.
The deponent under No. 3 proved his identity by submitting his valid U.S.
passport, No. 152163688.
In reference to Section 3 para. 1 No. 7 of BeurkG (Beurkundungsgesetz - Law
Governing Official Recordings), the Notary Public asked the deponents whether he
or any of the persons with whom he is professionally associated had been or
still are involved in a matter which is the subject matter of this notarization.
The deponents responded in the negative. The deponents, acting as indicated,
declared to enter into the following
PURCHASE AGREEMENT REGARDING REAL PROPERTY AND MOVEABLE ASSETS
PREAMBLE:
28
WHEREAS, Seller is a general partnership registered in the Commercial Register
of the Municipal Konigstein im Taunus under HR A 2500, which is engaged in the
"SEEGER-ORBIS BUSINESS" (as hereinafter defined).
WHEREAS, Seller operates its business on the "SEEGER-ORBIS PREMISES" (as
hereinafter defined).
WHEREAS, Purchaser is a general partnership with statutory seat in Frankfurt the
general partners of which are Barnes Group (Delaware) LLC, , a limited liability
company under the laws of the State of Delaware, USA, with statutory seat in
Delaware, USA, and Radom (to be renamed Barnes Group (Germany) GmbH and to be
relocated to Konigstein im Taunus). Purchaser will ultimately be renamed
"Seeger-Orbis GmbH & Co. OHG".
WHEREAS, the ultimate parent of Barnes Group (Delaware) LLC and Radom is Barnes.
WHEREAS, Purchaser intends to acquire the Seeger-Orbis Premises and moveable
assets owned by Seller pertaining to the Seeger-Orbis Business excluding any
liabilities (except as set forth in this Agreement) and Seller intends to sell
its business premises and assets to Purchaser.
WHEREAS, TTGB is a party to this Agreement only for purposes of entering into
the Covenant as provided in Section III.3.
WHEREAS, in addition to the terms defined above, the following definitions shall
apply throughout this Agreement:
29
Affiliated Enterprise - enterprise which is directly or
indirectly affiliated with another
enterprise within the meaning of
Section 15 of the German Stock
Corporation Act (AktG)
Agreement on Release of Security - as defined in Section I.3.2 (b)
AO (Abgabenordnung) - German Fiscal Code
Audited Financial Statements - as defined in Section II.4.7
Bank Guarantee - as defined in Section III.5.1.1
Barnes - Barnes Group Inc.
BetrAVG (Gesetz zur Verbesserung der - German Law for the Improvement of
betrieblichen Altersversorgung) Company Old-Age Pension Arrangements
of December 19, 1974 (as amended)
BGB (Burgerliches Gesetzbuch) - German Civil Code, as amended
effective January 1, 2002 by Law of
November 26, 2001
BHF Account - as defined in Section I.3.4
BHF Bank - BHF-Bank Aktiengesellschaft, Neue
Mainzer Strasse 74-76, D-60311
Frankfurt am Main
BHF Bank Claim - as defined in Section I.3.2 (b)
BHF Bank's Counsel - As defined in Section I.3.2.(b)
30
BHF Bank Counsel's Declaration - As defined in Section I.3.2 (b)
Business Day - all days on which banks are open for
business in Frankfurt am Main, Germany
and New York, New York
Cancellation Consent - as defined in Section I.3.2 (b)
Closing Balance Sheet - as defined in Section II.3.2.5
Closing Date - as defined in Section III.6.2
Competing Products - as defined in Section III.3.1 and
Exhibit III.3.1
Conditions Precedent - as defined in Section III.6.1
Covenant - as defined in Section III.3.1
Current Administrative Charges - as defined in Section I.4.7
Development Dues - as defined in Section I.4.7
Expert Arbitrator - as defined in Section II.3.2.5
Financial Statements - as defined in Section II.4.7
French Sales Office - TransTechnology France, 46, Avenue des
Freres Lumiere, F-78190 Trappes
German Sales - Sales of products and services
(as defined in Section 38 GWB)
invoiced to customers located in
Germany
GWB (Gesetz gegen Wettbe- - German Act against Restraints of
werbsbeschrankungen) Competition
HGB (Handelsgesetzbuch) - German Commercial Code
31
Intellectual Property - as defined in Section II.4.4
Interim Financial Statements - as defined in Section II.4.7
Interim Period - as defined in Section II.4.22
Material Contracts - as defined in Section II.1.1.4
Net Assets - as defined in Section II.3.2.1
Notarial Confirmation - as defined in Section I.3.2
Notary Public - as defined in Section I.3.2
Notification - as defined in Section III.5.1.1
Preliminary Purchase Price II - as defined in Section II.3.1
Purchase Price I - as defined in Section I.3.1
Purchase Price II - as defined in Section II.3.2.2
Purchase Price Adjustment - as defined in Section II.3.4.1
Purchaser - Barnes Group (Germany) GmbH & Co. OHG
Purchaser Claim - as defined in Section III.2.1
Qualifying Claim - as defined in Section III.2.7
Report - the environmental property assessment
report completed by
ETN-Erdbaulaboratorium Trapp, Neff und
Partner, Konigsbergerstrasse 9,
D-35410 Hungen on December 13, 2001,
which both parties received prior to
the Signing Date.
32
Residual Contamination - all soil, soil-air and ground water
contamination as well as pollutants in
and on a building (such as asbestos),
in particular
a) dangerous alterations to the soil
in the sense of Section 2 para. 3
of the Federal Soil Protection Act
(Bundes-Bodenschutzgesetz), and
thereby all impairments to the
functions of the soil which could
cause hazards or material
disadvantages or material
annoyance for the individual or
the general public;
b) residual contamination in the
sense of Section 2 para. 5 of the
Federal Soil Protection Act and
thus both closed waste removal
facilities and other real estate
upon which waste has been treated,
stored or deposited (former
storage), and real estate of
closed facilities and other real
estate upon which environmentally
hazardous materials were handled,
with the exception of facilities,
the shutting down of which
requires approval pursuant to the
Nuclear Energy Act (former
plants), through which hazardous
alterations to the soil or other
dangers for the individual or the
general public are caused, and
33
c) remainders of buildings, technical
installations and military
materials contained in the soil.
Seeger-Orbis Business - the business of Seller insofar as it
is related to the manufacturing,
assembling or selling of circlips,
retaining rings, lockwashers, spring
washers, spring nuts, spring pins and
the associated assembly tooling, but
not including the business of the
Affiliated Enterprises of Seller
located inside or outside of Germany
Seeger-Orbis Premises - the business premises at Wiesbadener
Strasse 243, D-61462 Konigstein im
Taunus
Seller - Seeger-Orbis GmbH & Co. OHG
Service Agreement - as defined in Section III.7.1 (b)
Signing Date - the date of signing of this Agreement
Sold Assets - as defined in Section II.1.1
Sold Property - as defined in Section I.2
Space - as defined in Section II.1.1.2
Supply Agreements - as defined in Section III.6.1(d)
Threshold Amount - as defined in Section III.2.7
34
Taxes - all taxes, ancillary tax charges
within the meaning of Section 3 AO,
customs charges, social security
payments and contributions, charges,
including charges of the German
workers' compensation scheme
(Berufsgenossenschaft), and other
governmental fiscal charges,
contributions, and public levies of
any kind
Territory - as defined in Section III.3.1
Third-Party Claim - as defined in Section III.2.5.2
TTC - TransTechnology Corporation
TTC Group - all of TransTechnology Corporation,
TransTechnology Seeger-Orbis, Inc.,
TransTechnology Seeger-Orbis GmbH,
Seeger-Orbis GmbH & Co. OHG,
Seeger-Orbis Beteiligungsgesellschaft
mbH and TransTechnology GB Ltd.
TTGB - TransTechnology GB Ltd.
TTSO - TransTechnology Seeger-Orbis GmbH
US GAAP - as defined in Section II.3.2.3
NOW, THEREFORE, the parties enter into the following agreements:
35
I.
REAL PROPERTY PURCHASE AGREEMENT
1. Plots of Land:
In the Land Register of Schneidhain of the Municipal Court of Konigstein
im Taunus Seller is registered as the owner of the following parcels of
land; all of the parcels form part of the District of (Gemarkung)
Schneidhain, Cadastral Unit (Flur) 6 and are registered as follows:
1.1 FOLIO (BLATT) 615:
NO. PLOT USAGE, LOCATION ha a m(2)
--- ---- --------------- --- --- ----
22 115/29 Building and vacant land, Wiesbadener Strasse 243 - 247 6 84
23 115/25 Building and vacant land, Wiesbadener Strasse 243 - 247 2 68 99
24 115/28 Building and vacant land, Wiesbadener Strasse 243 - 247 53 52
These plots of land are, according to an authenticated excerpt from the
Land Register dated November 21, 2001, encumbered as follows:
(a) In the SECOND DIVISION of the Land Register the following encumbrances are
registered:
NO. 2, PLOT 115/25
The power company Main-Kraftwerke AG, Frankfurt am Main-Hochst, is
entitled to install, operate and maintain energy supply cables. The owner
of the encumbered plots of land may not undertake or tolerate any measures
which endanger or make impossible the existence or the operation of the
cables. The exercise of this right may be assigned to third parties.
Registered on December 20, 1960.
36
(Plot 115/25 came into existence as a consolidation of the formerly
independent plots 115/9, 115/17, 115/14, 115/18, 115/21, 103/3, 115/6,
115/22 and 115/23. This encumbrance was registered with respect to plots
115/9 and 115/17.)
NO. 5, PLOT 115/28
The power company Main-Kraftwerke AG, Frankfurt am Main-Hochst, is
entitled to install, operate and maintain energy supply cables. The owner
of the encumbered plots of land may not undertake or tolerate any measures
which endanger or make impossible the existence or the operation of the
cables. The exercise of this right may be assigned to third parties.
Registered on December 20, 1960.
(Plot 115/28 came into existence as a result of the splitting of the
original plot 115/19 into plots 115/28 and 115/30).
NO. 9, PLOT 115/25
Limited personal servitude (beschrankte personliche Dienstbarkeit) (right
to maintain an underground energy supply cable) in favor of
Main-Kraftwerke AG in Frankfurt am Main-Hochst. Registered on February 15,
1972.
NO. 10, PLOT 115/25
Limited personal servitude (beschrankte personliche Dienstbarkeit) (right
to maintain a cable) in favor of Main-Kraftwerke AG in Frankfurt am Main.
Registered on March 16, 1961.
(b) In the THIRD DIVISION of the Land Register the following encumbrances are
registered:
THIRD DIVISION NO. 2
37
Land charge (Grundschuld) on plots number 115/29, 115/25 and 115/28 in the
amount of DM 7,000,000 in favor of The First National Bank of Boston,
Frankfurt Branch, 60325 Frankfurt am Main, with an interest rate of 15 %
per annum and one-off ancillary payments of 5%. It is immediately
enforceable according to Section 800 of the German Code of Civil
Procedure. Joint encumbrance (Gesamthaft) Folios 615 and 699. Registered
on July 26, 1996.
1.2 FOLIO (BLATT) 699
NO. PLOT USAGE, LOCATION ha a m(2)
--- ---- --------------- --- --- ----
2 115/15 building site and surrounding area, Wiesbadener 13 99
Strasse 243 - 247
3 115/16 building site and surrounding area, Wiesbadener 27 63
Strasse 243 - 247
19 115/26 building and vacant land, Wiesbadener Strasse 243 - 247 24 45
21 115/27 building and vacant land, Wiesbadener Strasse 243 - 247 1 60
These plots of land are, according to an authenticated excerpt from the
Land Register dated November 21, 2001, encumbered as follows:
(a) In the SECOND DIVISION of the Land Register the following encumbrances are
registered:
NO. 5, PLOT 115/15
Limited personal servitude (beschrankte personliche Dienstbarkeit) (right
to maintain an underground energy supply cable) for Main-Kraftwerke AG in
Frankfurt am Main-Hochst. Registered on February 15, 1972.
(b) In the THIRD DIVISION of the Land Register the following encumbrances are
registered:
38
THIRD DIVISION NO. 1:
Land charge (Grundschuld) on plots number 115/15, 115/16, 115/26 and
115/27 in the amount of DM 7,000,000 in favor of The First National Bank
of Boston, Frankfurt Branch, 60325 Frankfurt am Main, with an interest
rate of 15% per annum and one-off ancillary payments of 5%. It is
immediately enforceable according to Section 800 of the German Code of
Civil Procedure. Joint encumbrance (Gesamthaft) Folios 615 and 699.
Registered on July 26, 1996.
2. SALE AND CONTRACTING PARTIES
Seller hereby sells to Purchaser the plots of land described in further
detail in Sections I.1.1. and I.1.2 of this deed, together with all
rights, obligations and statutory components, and free of any encumbrances
in the Second and Third Divisions of the Land Register, with the exception
of
- the priority notices agreed upon pursuant to Section I.6.2,
- any official restrictions recorded in the meantime (such as
reallocation or development notices), and
- the encumbrances registered in the Second Division of the Land
Register described in Sections I.1.1 (a) and I.1.2 (a).
Purchaser hereby purchases the plots of land thus designated (hereinafter
referred to as the "SOLD PROPERTY").
Seller undertakes to effect the deletion of the encumbrances registered in
the Third Division and herewith APPLIES for the deletion.
3. PURCHASE PRICE
39
3.1 The purchase price for the Sold Property amounts to US$ 6,500,000.00 (in
words: U.S. Dollars six million five hundred thousand). This purchase
price for the Sold Property is hereinafter also referred to as "PURCHASE
PRICE I".
Should the sale and transfer of the Sold Property be subject to
value-added tax, Purchaser shall pay the required amount of value-added
tax to Seller as set forth in Section III.1. of this Agreement.
3.2 Purchase Price I is due and payable on the Closing Date as defined in
Section III.6.2.
(a) One of the Conditions Precedent for the occurrence of the Closing
Date is that Purchaser and Seller have received written confirmation
(hereinafter referred to as "NOTARIAL CONFIRMATION") from the acting
Notary Public (hereinafter referred to as the "NOTARY PUBLIC"), to
the effect that
(i) the title priority notices (Auflassungsvormerkungen) in favor of
Purchaser have been recorded in the Land Register ranking
immediately after the encumbrances referred to in Sections I.1.1 (a)
and (b) and in Section I.1.2 (a) and (b) of this deed and ranking
after any restrictions such as reallocation or development notices,
which were recorded in the Land Register pursuant to public law in
the meantime;
(ii) no pre-emptive rights exist in favor of the competent local
authorities or the competent local authorities have waived their
right to exercise such rights.
(b) Another one of the Conditions Precedent for the occurrence of the
Closing Date is that Purchaser and Seller have received a written
statement from Markus Fisseler
40
or T. Luthra of Freshfields Bruckhaus Deringer, Prannerstrasse 10,
D-80333 Munich, or another partner of said law firm, counsel of
BHF-Bank Aktiengesellschaft. D-60311 Frankfurt am Main (hereinafter
referred to as "BHF BANK") (such counsel hereinafter being referred
to as "BHF BANK'S COUNSEL" and such statement hereinafter being
referred to as "BHF BANK COUNSEL'S DECLARATION") containing the
following:
(i) BHF Bank's Counsel confirm that they have received the following
documents (hereinafter referred to as the "RELEASE DOCUMENTS") from
BHF Bank:
(aa) a consent for the cancellation of the encumbrances in the Third
Division of the Land Register for the Sold Property
(Aufgabeerklarung und Loschungsbewilligung) duly executed by BHF
Bank (together with the land charge certificates(Deutsche
Grundschuldbriefe) numbered Gruppe 02 14221991 and Gruppe 02
14624620) (hereinafter referred to as "CANCELLATION CONSENT");
(bb) an Agreement on Release of Security duly executed on behalf of BHF
Bank and of Seller assigning back to Seller the trade receivables
against Seller's customers which had been assigned to it for
security purposes and retransferring to Seller the moveable property
which had been transferred to it for security purposes pursuant to
the Security Transfer Agreement and the Global Security Assignment
Agreement;
(ii) BHF Bank's Counsel confirm that they have received the irrevocable
instruction from BHF Bank to hand over to Purchaser on the Closing
Date the Release Documents upon
(x) confirmation by BHF Bank in writing that it has received the amount
of US$ 17,000,000.00 (seventeen million U.S. Dollars) (hereinafter
"BHF BANK CLAIM") or
41
(y) proof by Purchaser that the amount of US$ 17,000,000.00 (seventeen
million U.S. Dollars) was credited to the BHF Account (as defined in
Section I.3.4);
(iii) BHF Bank's Counsel confirm in writing that they are prepared to
comply with the instructions of BHF Bank described in the preceding
subparagraph (ii).
The Notarial Confirmation and BHF Bank Counsel's Declaration shall be sent
by registered mail/return receipt requested, or by facsimile transmission
to
- the legal advisor of Purchaser, Andreas Hilfrich, Esq. of Mayer,
Brown & Platt Gaedertz, Bockenheimer Landstrasse 98-100, 60323
Frankfurt am Main, telefax No. 069-7941-100
- with a copy to the legal advisor of Seller, Jurgen Reemers, Esq. of
Jones, Day, Reavis & Pogue, Hochhaus am Park, Gruneburgweg 102,
60323 Frankfurt am Main, telefax No. 069-9726-3993.
Drafts of the Cancellation Consent and of the Agreement on Release of
Security are attached hereto as EXHIBIT I.3.2(b)A and EXHIBIT I.3.2(b)B
3.3 The parties agree that Purchase Price I shall bear interest from the day
on which it falls due at a rate of 5% (five percent) per annum above the
basic interest rate (Basiszinssatz) of the German Federal Bank applicable
at any given time, if it has not been paid when due; a prior reminder
shall not be required before interest accrues.
3.4 Purchase Price I and the Preliminary Purchase Price II shall be in the
aggregate US$ 20,000,000. Purchaser shall pay the Purchase Price I to the
following nostro account of BHF-Bank AG, D-60311 Frankfurt am Main,
thereby discharging its payment obligations vis-a-vis (mit
schuldbefreiender Wirkung gegenuber) Seller with respect to Purchase Price
I:
Bank of New York
ABA # 021/000/18
account holder: BHF-Bank Frankfurt
42
account No.: 803-313-0377
Ref: Seeger-Orbis Sale
in favor of account No. 200870089
(hereinafter referred to as "BHF ACCOUNT").
4. REPRESENTATIONS AND WARRANTIES OF SELLER PERTAINING TO THE SOLD PROPERTY
Seller herewith represents and warrants with respect to the Sold Property
that as of the Closing Date:
4.1. Except as disclosed in EXHIBIT I.4.1.1,
(a) there are no material unfulfilled administrative requirements;
(b) there are no pending, or to Seller's best knowledge threatened,
legal disputes of any sort relating to the Sold Property, and no
administrative orders of any sort relating to the Sold Property have
been issued, or to Seller's best knowledge, are threatened;
(c) to the Seller's best knowledge, the Sold Property is not polluted or
contaminated with any substances hazardous to human health or the
environment nor to the Seller's best knowledge does such pollution
or contamination emanate from the Sold Property, in particular prior
to the Closing Date to the Seller's best knowledge the Sold Property
was not affected by any Residual Contamination; and
(d) in the applicable zoning plan (Flachennutzungsplan) the Sold
Property is shown as an enterprise zone (gewerbliche Bauflache),
this term being defined by Section 1 para. 1 of the Regulation on
the Use of Land for Construction Purposes (BaunutzungsVO);
43
(e) all private and public law requirements and restrictions relating to
drinking water protection zones and the aquifer (Grundwasserspiegel)
underneath the Sold Property have been complied with in all material
respects and the existing water permits are, to the Seller's best
knowledge, current and not subject to any pending or threatened
proceedings.
4.2 The Sold Property constitutes all the real estate used by Seller for the
operation of the Seeger-Orbis Business.
The buildings, structures and installations on the Sold Property have
been, and will be, properly maintained in the ordinary course of business
until the Closing Date and the buildings, structures and installations
have no defects which would materially impair a normal continuation of the
operations of the Seeger-Orbis Business.
There is no water damage, in particular through groundwater or flood
water, fire damage or other material similar forms of damage to the
buildings, structures or installations located on the Sold Property.
In connection with the construction and present use of buildings on the
Sold Property, all material planning, zoning and other applicable
governmental regulations for the use and enjoyment of the Sold Property
have been complied with. In particular,
(a) there are no lease agreements for real estate with third parties;
(b) to the Seller's best knowledge, the construction permits for the
buildings erected on the Sold Property are valid; such permits are
not subject to any pending, or to Seller's best knowledge,
threatened proceedings;
(c) Seller has not concluded any written agreements for the purchase of
land adjacent to the Sold Property; and
44
(d) there is no right of any party to rescind the contract pursuant to
which Seller acquired title to the Sold Property.
4.3 To the Seller's best knowledge, there are no disputes with any adjoining
or neighboring owners, in particular with respect to boundary walls and
fences or with respect to any easement, use, right or means of access to
the Sold Property.
4.4 The Sold Property is not encumbered with construction charges (Baulasten).
4.5 The principal means of access to the Sold Property is over public roads
which are maintained at public expense and, except with respect to such
public roads, no means of access to the Sold Property is shared with any
other party nor subject to the rights of termination by any other party.
The Sold Property enjoys the main services of water, drainage, electricity
and gas; to the Seller's best knowledge, none of the Sold Property is
located in an area or subject to circumstances particularly susceptible to
flooding.
4.6 With the exception of (a) the encumbrances listed in Section I.1.1 (a) and
in Section I.1.2(a) registered in the Second Division of the Land
Register, (b) the priority notices registered in favor of Purchaser, and
(c) any official restrictions recorded in the meantime (such as
reallocation or development notices), Seller represents and warrants that
upon transfer of title of ownership to Purchaser, the Sold Property is
free of any encumbrances or restrictions registered in the Land Register.
To the Seller's best knowledge, no encumbrances or restrictions, including
building restrictions, exist that are not registered in the Land Register.
4.7 There are no Taxes or other current administrative levies or fees on the
Sold Property outstanding for payment (hereinafter referred to as "CURRENT
ADMINISTRATIVE CHARGES"), except those disputed in good faith which will
be adequately reserved for on the Closing Balance Sheet. To the extent
that Seller has made prepayments of Current Administrative Charges for
measures to be effected after the Closing Date that are
45
not reflected on the Closing Balance Sheet Purchaser shall promptly
reimburse Seller for such amounts on a pro rata temporis basis.
All development dues and charges under the Law on Local Government Charges
of the State of Hesse (Gesetz uber kommunale Abgaben) (hereinafter
collectively referred to as "DEVELOPMENT DUES") which came into existence
before and including the Closing Date have been paid or will be paid,
irrespective of the date of receipt of an invoice for such Development
Dues. To the extent that Seller has made prepayments of Development Dues
for measures to be effected after the Closing Date that are not reflected
on the Closing Balance Sheet Purchaser shall promptly reimburse Seller for
such amounts on a pro rata temporis basis.
To the extent that other Current Administrative Charges or Development
Dues are incurred on or after the Closing Date, these shall be borne by
Purchaser as from the Closing Date.
5. TRANSFER OF POSSESSION
5.1 The transfer of possession of the Sold Property from Seller to Purchaser
shall occur on the Closing Date, but not before receipt by or on behalf of
Seller of the Purchase Price I and the Preliminary Purchase Price II
pursuant to Sections I.3.1 and II.3.3.
Purchaser undertakes to accept the transfer of possession of the Sold
Property.
Upon the transfer of possession of the Sold Property, the possession,
right of enjoyment and all expenses and risks, unless otherwise agreed in
this Agreement, shall pass to Purchaser.
Upon the transfer, Seller shall hand over to Purchaser all documents
concerning the Sold Property.
46
Seller undertakes to provide access to the Sold Property to Purchaser by
the Closing Date at the latest, but not before receipt by or on behalf of
Seller of the payments pursuant to Sections I.3.1 and II.3.3. Seller is
only obligated to remove any objects not pertaining to the Seeger-Orbis
Business as listed in EXHIBIT II.1.2.12 which might disrupt the
continuation of said business.
6. CONVEYANCE (AUFLASSUNG) AND TITLE PRIORITY NOTICE
6.1 Seller and Purchaser are in agreement that title of ownership to the Sold
Property is transferred to Purchaser. Seller hereby GRANTS and Purchaser
hereby APPLIES for the registration of the transfer of ownership in the
Land Register.
The parties to the Agreement hereby instruct the Notary Public to issue
executed copies or certified copies of this notarial deed which contain
the transfer of ownership only after the conditions for the application
for change of registration of ownership have occurred (Section IV.4).
Prior to such date, only such executed copies and certified copies of this
notarial deed may be produced which do not contain the transfer of
ownership.
6.2 In order to secure Purchaser's claim to acquire title to the Sold
Property, Seller GRANTS herewith and Purchaser APPLIES herewith for the
registration of a title priority notice in the Land Register of the real
property listed in Section I.1. Purchaser GRANTS and hereby APPLIES for
the cancellation of this priority notice as soon as Purchaser is
registered as the owner of the Sold Property in the Land Register,
provided no other entries in the Land Register shall have been made in the
meantime and/or applied for until such registration without Purchaser's
involvement.
7. IMPLEMENTATION POWER OF ATTORNEY
7.1 Purchaser and Seller hereby grant power of attorney to
47
1. Mrs. Lenamaria Dannenberg-Mletzko, notarial employee,
2. Mrs. Sabine Wei(beta), notarial employee,
both of them having offices at
Bockenheimer Landstra(beta)e 51-53
60325 Frankfurt am Main
and to each of them INDIVIDUALLY,
a) to make all declarations which may still be necessary for the
execution of this Agreement, and to make all applications to the
Land Register necessary for the implementation of the Purchase
Agreement,
b) to repeat the conveyance and to apply for registration of the
transfer of ownership of the Sold Property.
The attorneys-in-fact are hereby exempted from the restrictions of Section
181 BGB.
7.2 Statements made on the basis of the powers of attorney granted in Section
I.7.1 can only be effectively made if made before the Notary Public, or
his representative or successor in office.
48
II.
ASSET PURCHASE AGREEMENT
1. Sale of Assets
1.1 Seller hereby sells to Purchaser the following assets, and Purchaser
hereby purchases the following assets (schuldrechtliche Verpflichtung),
pertaining to the Seeger-Orbis Business (hereinafter also referred to as
the "SOLD ASSETS"):
1.1.1 The following fixed assets of the Seeger-Orbis Business owned by Seller on
the Closing Date:
(a) installations on third party land (Bauten auf fremden Grundstucken);
(b) machinery and equipment (Maschinen und technische Anlagen);
(c) office equipment (Geschaftsausstattung) including data processing
equipment as well as stationery and other office stock, samples,
promotional material, etc.;
(d) transportation equipment;
(e) furniture and fixtures;
(f) construction in progress and prepayments relating thereto (Anlagen
im Bau und geleistete Anzahlungen);
(g) all of the fixed assets of minor value;
(h) assets of Seller located at the French Sales Office; and
(i) assets of Seller (dies and tools) located at the TTGB facility.
To the extent security interests of third parties exist as of the Closing
Date in the moveable fixed assets (retention of title or security
interests) Seller sells and transfers to Purchaser its expectant rights
(Anwartschaftsrechte) as well as future title in case such security
interests of third parties expire.
49
The status of the installations on third party land, machinery and
equipment, office equipment including data processing equipment,
transportation equipment, furniture and fixtures, and construction in
progress and prepayments relating thereto as of the Signing Date as well
as the assets located at the French Sales Office and at the TTGB facility
is reflected in EXHIBIT II.1.1.1 attached hereto, listing the following
data: date of acquisition, acquisition cost, description, location of the
assets and book value as of September 30, 2001.
1.1.2 The following inventory of the Seeger-Orbis Business as of the Closing
Date and as stored on the Sold Property and in the consignment stocks
(hereinafter collectively referred to as "SPACE"):
(a) raw materials, supplies and operating materials (Roh-, Hilfs- und
Betriebsstoffe);
(b) works in progress (unfertige Erzeugnisse);
(c) finished goods and merchandise (fertige Erzeugnisse und Waren); and
(d) rights regarding advances on account of purchases (Rechte betreffend
geleistete Anzahlungen).
To the extent security interests of third parties exist as of the Closing
Date in the inventories, the Seller hereby sells its expectant rights
(Anwartschaftsrechte) as well as future title in case such security
interests of third parties expire.
A list of inventories (including consignment stocks) of the Seeger-Orbis
Business as of September 30, 2001, was handed over by Seller to Purchaser
prior to the Signing Date. By way of acknowledgment of this fact the first
and last page of this list are attached hereto as EXHIBIT II.1.1.2.
1.1.3 The following intangible assets of the Seeger-Orbis Business owned by
Seller as of the Closing Date:
(a) the firm name of Seller;
(b) industrial property rights, including patents, trademarks and
incoming and outgoing licenses of such rights;
50
(c) goodwill, the production and marketing know-how, engineering and
manufacturing drawings, and customer lists;
(d) all computer software rights, including source codes pertaining
thereto;
(e) administrative approvals and licenses, in particular those which
are necessary for the operation of the Seeger-Orbis Business, to
the extent they are transferable;
(f) memberships in trade associations, to the extent they are
transferable; and
(g) domain names.
The intangible assets as per the Signing Date according to the above
items (b) through (g) are completely listed in the list attached hereto
as EXHIBIT II.1.1.3.
1.1.4 All written and oral contracts and contract rights as well as implied
contracts and contracts based on continued business practice, existing on
the Closing Date and pertaining to the Seeger-Orbis Business, but limited
only to the contracts listed in EXHIBITS II.1.1.4A, II.1.1.4B, II.1.1.4C
AND II.1.1.4D:
(a) supply and purchase contracts (including warranty claims against
suppliers and including the legal position arising from
prepayments);
(b) contracts regarding consignment stocks;
(c) consulting agreements;
(d) sale, agency, and distributorship contracts;
(e) rental and leasing contracts;
(f) license contracts, in particular, as licensee or licensor of
industrial property rights and computer software rights, including
the source codes pertaining thereto;
(g) employment contracts with employees of Seller, employment
contracts with Dieter Rottges, Pavel Enc and Josef Abeling;
provided, however, the employment contract with Uwe Gitschtaler
and with Eric Loupy and any employees in the French Sales Office
having received notice of termination prior to the Closing Date
shall not be transferred; and
51
(h) insurance contracts.
EXHIBIT II.1.1.4A conclusively lists all of the material contracts
existing as of the Signing Date and pertaining to the Seeger-Orbis
Business (i) with a duration or a termination or notice period of more
than three (3) months, (ii) with a value in excess of EUR 25,000 each
over the remaining life of the contract (up to the next possible date of
termination), or (iii) constituting lease agreements for real estate or
offices, outgoing and incoming license agreements (as licensor as well as
licensee), cooperation agreements or agreements relating to joint
ventures pertaining to the Seeger-Orbis Business (hereinafter referred to
as "MATERIAL CONTRACTS").
EXHIBIT II.1.1.4B contains a listing of all employment contracts of
Seller pertaining to the Seeger-Orbis Business, all of which will be
assumed by Purchaser pursuant to Section 613a BGB, including the
following data: age of employee, date of commencement of employment,
special status (e.g. disabled, maternity protection, member of or
candidate for Works Council), and annual salary or hourly wage, as the
case may be.
EXHIBIT II.1.1.4C contains a listing of all purchase orders placed prior
to the Closing Date but performable after the Closing Date.
EXHIBIT II.1.1.4D contains a listing of all other written and oral
contracts and contract rights described in Section II.1.1.4, except those
listed on EXHIBITS II.1.1.4A, II.1.1.4B and II.1.1.4C.
1.1.5 The trade accounts receivable (Forderungen aus Lieferungen und
Leistungen) pertaining to the Seeger-Orbis Business as of the Closing
Date.
To the extent that payments are received by Seller after the Closing Date
in respect of trade accounts receivable assigned to Purchaser, Seller
shall be obliged to transfer such amounts to Purchaser within ten (10)
Business Days after receipt by Seller.
52
To the extent that Seller has retained title to any goods delivered
(possibly with an agreement on extended retention of title ("verlangerter
Eigentumsvorbehalt")) by way of security for accounts receivable, the
transfer of the accounts receivable shall also extend to Seller's
retained (or, if an extension agreement has been entered into, future)
security rights, in particular to the goods subject to retention of title
and accounts receivable on the resale by the customer. Instead of the
possession of the goods subject to retention of title being delivered,
Seller assigns to Purchaser, effective the Closing Date, its right to
have the goods subject to retention of title delivered to it and
Purchaser accepts such assignment.
1.1.6 Receivables arising from advances to employees to be assumed pursuant to
Section II.1.1.4.
1.1.7 Other accounts receivable.
1.1.8 The claims regarding outstanding quantity and other discounts and rebates
with respect to deliveries received prior to the Closing Date.
1.1.9 The "Other Assets" (sonstige Vermogensgegenstande) as defined in Section
266 para. 2 B II 4 of the German Commercial Code ("HGB") serving the
Seeger-Orbis Business as of the Closing.
1.1.10 The originals of all of the books, records, correspondence and other
documents, pertaining primarily to the Seeger-Orbis Business, to the
extent Seller is in possession of such documents.
To the extent Seller must retain such books, records, correspondence
and documents for commercial and tax law purposes, Purchaser shall
take care of such safekeeping as of the Closing Date according to the
statutory provisions applicable to Seller and its owner. Purchaser
shall make sure that the auditors, tax consultants and legal counsel
of Seller, as well as the tax and other governmental authorities
will, as re-
53
quired and with reasonable advance notice, have access to such books,
records, correspondence and documents.
1.1.11 All other tangible and intangible assets being necessary for the
operations of the Seeger-Orbis Business as set forth on EXHIBIT
II.1.1.11.
1.1.12 Commercial bank balances sufficient to cover any outstanding checks
issued but not cleared prior to the Closing Date in order to obtain a
reconciled bank balance of zero with respect to the bank accounts set
forth on EXHIBIT II.1.1.12.
Seller shall use best efforts to enable Purchaser to continue these
bank accounts.
1.2 EXCLUDED ASSETS
Excluded from the sale and transfer by Seller are the following
assets:
1.2.1 all financial assets as defined in Section 266 para. 2 A III HGB
including the shares in TransTechnology Brasil Ltda;
1.2.2 Tax refunds for the period prior to the Closing Date except to the
extent booked as Other Receivables or as Prepaid and Other Current
Assets and included on the Closing Balance Sheet;
1.2.3 intercompany receivables, i.e., all amounts owed to Seller by
Affiliated Enterprises and by enterprises in which participations are
held (Forderungen gegen verbundene Unternehmen und gegen Unternehmen,
mit denen ein Beteiligungsverhaltnis besteht);
1.2.4 notes receivable;
1.2.5 securities (Wertpapiere);
54
1.2.6 all assets which are owned by third parties unless such assets are
covered by Section II.1.1.1 penultimate paragraph and Section
II.1.1.2 penultimate paragraph (retention of title and/or security
interests);
1.2.7 all assets of and related to the French Sales Office, except those
included in Section II.1.1.1 (h);
1.2.8 cash and cash equivalents (including, but not limited to bank
receivables) except as specified in Section II.1.1.12;
1.2.9 all rights of Seller to any claims, prepayments, deposits, refunds,
rights of recovery and any rights under any insurance policies
purchased by Seller or on behalf of Seller or any benefits, proceeds
or premium refunds payable or paid thereunder accrued prior to the
Closing Date except as reflected on the Closing Balance Sheet;
1.2.10 any personal belongings of employees located at Wiesbadener Str. 243
in Konigstein;
1.2.11 all other assets owned by Seller which do not relate to the
Seeger-Orbis Business;
1.2.12 such other assets, whether tangible or intangible, if any, as listed
in EXHIBIT II.1.2.12 hereto; and
1.2.13 all deferred taxation assets.
1.3 OBLIGATIONS AND LIABILITIES
Also effective as of the Closing Date, Purchaser hereby assumes from
Seller the following obligations and liabilities, to the extent these
obligations and liabilities pertain to the Seeger-Orbis Business and
to the extent they are adequately accrued on the Closing Balance
Sheet, unless the assumption of such liabilities is specifically
excluded herein:
55
1.3.1 Trade payables (Verbindlichkeiten aus Lieferungen und Leistungen)
1.3.2 Accrued compensation.
1.3.3 Accrued payroll tax.
1.3.4 Other current liabilities (including liabilities relating to payroll
tax and to social security and similar obligation but excluding
liabilities relating to income tax).
1.3.5 Pension obligations existing vis-a-vis the employees to be assumed
pursuant to Section II.1.1.4 as well as vis-a-vis Mr. Josef Abeling.
While the existing service and employment agreements between Seller
and Mr. Sven-Uwe Wolber will not be assumed by Purchaser, Purchaser
has entered into a new Service Contract with Mr. Wolber with effect
as of the Closing Date. Purchaser therefore hereby also assumes the
pension obligations existing vis-a-vis Mr. Sven-Uwe Wolber.
1.3.6 All obligations of Seller due after the Closing Date under any of the
purchase orders, leases, contracts, agreements and commitments
included in Section II.1.1.4.
1.3.7 Except as set forth in Sections II.1.3.1 through II.1.3.6 Purchaser
does not assume any liabilities of Seller. In particular Purchaser
does not assume the following liabilities:
(i) liabilities to banks and other credit institutions
(Verbindlichkeiten gegenuber Banken und sonstigen
Kreditinstituten);
(ii) liabilities on bills accepted and drawn (Verbindlichkeiten
aus der Annahme gezogener Wechsel und der Ausstellung
eigener Wechsel);
(iii) intercompany debt i.e., all amounts owed by Seller to
Affiliated Enterprises (Verbindlichkeiten gegenuber
verbundenen Unternehmen) and to enterprises in which
participations are held (Verbindlichkeiten gegenuber
Unternehmen, mit denen ein Beteiligungsverhaltnis besteht);
56
(iv) warranty liabilities vis-a-vis Seller's customers, other
customer claims and product liability obligations of Seller,
in all cases with respect to deliveries and performances
effected prior to the Closing Date, unless adequately
reserved against in the Closing Balance Sheet;
(v) liabilities from guarantees, indemnities, letters of comfort
or similar undertakings in respect of obligations of third
parties, unless such liabilities were originally assumed by
Seller in connection with contracts being assumed by
Purchaser under this Agreement and are listed on EXHIBITS
II.1.1.4A, 1.1.4.C OR 1.1.4D;
(vi) any and all Tax liabilities for time periods preceding the
Closing Date, in particular Tax liabilities which Purchaser
is deemed to have assumed pursuant to Section 75 AO, unless
adequately reserved against in the Closing Balance Sheet;
(vii) the following obligations vis-a-vis employees, unless
adequately accrued on the Closing Balance Sheet:
- regarding social plan redundancy payments falling due after
the Closing Date but which were caused by termination or
cancellation agreement which became or become effective on
or before the Closing Date; and
- in respect to employees whose employment relationship had
already been effectively terminated on or before the Closing
Date;
- who object to the transfer, pursuant to Section 613a BGB, of
their employment relationship to Purchaser; the costs in
relation to these employees (remuneration and redundancy
costs) shall be shared equally between Seller and Purchaser;
(viii) environmental obligations and liabilities, both vis-a-vis
public authorities and private parties, resulting from the
fact that on the Closing Date the Sold Property is polluted
or contaminated with any substances hazardous to human
health or the environment as well as obligations and
liabilities due to Residual Contamination in connection with
the Seeger-Orbis Business Premises and the operation of the
Seeger-Orbis Business relating to the time up to the Closing
Date;
57
(ix) liabilities arising from contracts not expressly assumed by
Purchaser pursuant to this Agreement;
(x) liabilities arising from or related to the French Sales
Office, including without limitation any costs and expenses
arising from closing the French Sales Office and obligations
vis-a-vis present or former employees of the French Sales
Office who claim that under mandatory French law their
employment relationships are deemed to have been assumed by
the Purchaser;
(xi) liabilities arising from or related to (a) the former PEBRA
division of Seller, (b) the sale of the PEBRA division, (c)
Ellison Rottges & Co. GmbH or (d) any properties ever owned
by Ellison Rottges & Co. GmbH unless such properties are
incorporated into the Seeger-Orbis Business and sold by
Seller to Purchaser pursuant to Section II.1.1 or such
liabilities are listed on EXHIBITS II.1.1.4A, II.1.1.4B,
II.1.1.4C AND II.1.1.4D;
(xii) pension obligations to existing pensioners and deferred
pensioners (ex-employees who left the Seller or its legal
predecessors with vested rights); as to these pension
obligations, see Section III.7.1 (b) below;
(xiii) all obligations of Seller (unless adequately accrued on the
Closing Balance Sheet) due prior to the Closing Date under
any of the purchase orders, leases, contracts, agreements
and commitments included in Section II.1.1.4, other than
obligations and liabilities expressly assumed by Purchaser
pursuant to Section II.1.3;
(xiv) all deferred taxation liabilities.
1.3.8 For the removal of any doubts regarding the identification of assets
to be sold and transferred by Seller to Purchaser and of obligations
and liabilities to be assumed by Purchaser, the parties refer to
Exhibit II.3.2.1 which is based on Seller's balance sheet as
contained in the Interim Financial Statements as per September 30,
2001 and which reflects the parties' respective intentions.
58
1.3.9 The exclusion of the assumption of liabilities of Seller by Purchaser
according to Section II.1.3.7 above shall be reported for
registration with the competent Commercial Registers according to
Section 25 para. 2 HGB on or immediately after the Closing Date
substantially in the form of the draft report letters attached hereto
as EXHIBIT II.1.3.9. Seller undertakes to co-operate in filing the
necessary applications with the Commercial Registers.
2. TRANSFER
2.1 Seller hereby agrees with Purchaser that title and/or the expectant
rights (Anwartschaften) to the assets and rights set forth in Section
II.1.1 and the obligations and liabilities listed in Sections
II.1.3.1 through II.1.3.6 shall, respectively, pass to and be assumed
by Purchaser effective as of the Closing Date, but not before the
payment of Purchase Price I and the Preliminary Purchase Price II
according to Sections I.3.1 and II.3.3.
2.1.1 The transfer of possession of the physical assets sold and
transferred to Purchaser according to Section II.1.1 shall take place
by granting direct possession of the physical assets sold to
Purchaser on the Closing Date, but not before receipt by Seller of
the Purchase Price I and the Preliminary Purchase Price II. This
shall primarily be accomplished by Purchaser on the Closing Date
taking possession of the Seeger-Orbis Premises as provided in Section
I.5.1 of this Agreement.
To the extent that, as of the Closing Date, any physical assets to be
transferred pursuant to this Agreement are in the possession of third
parties, Seller hereby assigns to Purchaser, effective as of the
Closing Date, its claims for surrender with respect to such physical
assets against these third parties.
2.1.2 To the extent that it shall be necessary or appropriate in connection
with the sale and transfer of rights according to Section II.1.1, the
parties obligate themselves promptly to make supplementary
declarations and execute instruments in the form as appropriate in
each given case.
59
In Section III.6.1(b) the parties have agreed that obtaining the
consent of third parties for certain contracts and agreements is a
Condition Precedent to certain obligations of the parties under this
Agreement. In case of rights and obligations requiring third-party
consent that are not referred to in Section III.6.1(b), Seller shall
assist Purchaser, if so requested by Purchaser, to obtain such
consent. If any required third-party consents are not given, the
parties shall handle such agreements as if they had been effectively
assigned to or assumed by Purchaser. In the event a right cannot be
transferred, Seller shall grant Purchaser a power of attorney to
perform and implement such rights in its own name and for its own
account, except in such cases where this would constitute a breach of
the agreements in question in which case Seller will act as agent for
Purchaser in order to obtain for Purchaser the economic benefit
thereunder. In the event an obligation or liability to be assumed by
Purchaser under this Agreement cannot be assumed by Purchaser,
Purchaser will pay or perform such liability or obligation on behalf
of Seller.
2.2 Updated Exhibits
Seller will bring up-to-date on the Closing Date EXHIBITS II.1.1.1 -
II.1.1.12 through the Closing Date.
3. PURCHASE PRICE, TERMS OF PAYMENT
3.1 The purchase price for the Sold Assets shall be US$ 13,500,000.00
(thirteen million five hundred thousand U.S. dollars) (hereinafter
referred to as the "PRELIMINARY PURCHASE PRICE II") which shall be
subject to adjustment pursuant to Section 3.2.2 hereof.
3.2.1 The Purchase Price I and the Preliminary Purchase Price II are based
on the assumption that the value of the Sold Assets plus the value of
the Sold Property minus the sum of the total assumed liabilities as
set forth in Sections II.1.3.1 through II.1.3.6 plus the
indemnification obligation pursuant to Section III.7.1 (b) (hereinaf-
60
ter referred to as "NET ASSETS") of the Seeger-Orbis Business on the
Closing Date as reflected on the Closing Balance Sheet at their
respective book values shall not be lower than EUR 23,063,806.00
(twenty-three million sixty three thousand eight hundred and six
Euros). EXHIBIT II.3.2.1 contains, based on Seller's balance sheet as
contained in the Interim Financial Statements as per September 30,
2001, the calculation method of Net Assets.
3.2.2 If the amount of the Net Assets on the Closing Date as reflected in
the Closing Balance Sheet is higher or lower than the amount provided
for in Section 3.2.1 hereof, the Preliminary Purchase Price II shall
be recomputed accordingly on a Euro-for-Euro basis (such recomputed
cash purchase price hereinafter being referred to as "PURCHASE PRICE
II") and Purchase Price Adjustments shall be effected as described in
Section II.3.4.
3.2.3 For the purpose of Section 3.2.2 hereof, the Net Assets shall be
determined on the basis of the Closing Balance Sheet which shall be
prepared in accordance with generally accepted USA accounting
principles ("US GAAP"), in accordance with past practice of Seller as
reflected in the reporting packages of the German entities of TTC,
which have been prepared by Seller for inclusion into the
consolidated statements of TTC in the United States and which have
been audited by Deloitte & Touche as of March 31, 2000, and March 31,
2001, respectively, for such consolidation purposes and otherwise
pursuant to the provisions set out in EXHIBIT II.3.2.1 hereto. In
determining Net Assets, amortization expense on good will and other
intangible assets and depreciation expense on fixed assets will be
taken into account from September 30, 2001 through the Closing Date.
3.2.4 An audited draft closing balance sheet as of the Closing Date shall
be prepared by the Purchaser's accountants and submitted to Seller
within 120 days after the Closing Date. The draft closing balance
sheet shall be reviewed by Seller's accountants within thirty (30)
days after delivery of the draft closing balance sheet to Seller. For
purposes of such review, Purchaser shall cooperate with Seller by
providing it and its accountants and auditors reasonable access to
Purchaser's
61
facilities and offices during its ordinary business hours, provided,
however that (i) any such access shall be allowed only in such manner
as not to interfere unreasonably with the operations of Purchaser's
business in Purchaser's sole discretion, and (ii) Seller gives
Purchaser reasonable advance notice of such desired access. Further,
Purchaser shall provide reasonable access to Purchaser's books and
records and to Purchaser's auditors. Purchaser will grant its
permission for its accountants to give Seller's accountants access to
Purchaser's accountants' working papers relating to the preparation
of the Closing Balance Sheet.
3.2.5 If Seller, or Seller's accountants, object in writing within the
30-day period referred to in Section 3.2.4 to the audited closing
balance sheet as prepared by Purchaser's accountants, Purchaser and
Seller shall negotiate in good faith for a period of not fewer than
thirty (30) days from the date of the written objection to settle the
dispute. In the event of an objection by Seller (or its accountants)
that cannot be resolved amicably between the parties within such
thirty (30) day period, either Seller or Purchaser may notify the
other party at any time in writing that the dispute shall be
submitted for final settlement to an expert arbitrator
(Schiedsgutachter) mutually agreed to between the parties
(hereinafter referred to as "EXPERT ARBITRATOR") whose decision shall
be binding on the parties involved. If no mutual agreement can be
reached regarding the person of the Expert Arbitrator within ten (10)
days of the written notification, either party may request the
appointment of an Expert Arbitrator by the President of the Institute
of Chartered Accountants in Germany (Institut der Wirtschaftsprufer
in Deutschland e.V., Dusseldorf). The Expert Arbitrator shall be an
independent accountant qualified as a Wirtschaftsprufer in Germany
and shall be a member of a recognized accounting firm with
international standing.
The Expert Arbitrator shall be instructed to, authorized to and
shall, if necessary, adjust the draft closing balance sheet submitted
so as to comply with his decision.
The closing balance sheet, whether as not objected to, as agreed to
between the parties, or as determined by the Expert Arbitrator shall,
for purposes of this Agreement, constitute the "CLOSING BALANCE
SHEET".
62
Upon the Expert Arbitrator's first request, Seller and Purchaser
shall each advance one half of the estimated expenses and fees of the
Expert Arbitrator. Each party to the proceedings shall bear its own
costs and those of its consultants. The Expert Arbitrator shall, in
his equitably exercised discretion, decide on the final apportionment
of his expenses and fees by taking into account to which extent the
respective party prevailed or failed in the expert arbitration
proceedings.
3.3 The Preliminary Purchase Price II shall be paid by Purchaser free of
costs and charges in immediately available funds by wire transfer on
the Closing Date as follows, whereby Purchaser discharges its payment
obligations vi-a-vis Seller as regards Preliminary Purchase Price II:
3.3.1 The Preliminary Purchase Price II, minus any transactional costs and
expenses incurred by Seller in connection with this Agreement, shall
be paid into the identical account as set forth in Section I.3.4.
Purchaser agrees and acknowledges that it shall disburse the
aggregate of Purchase Price I plus the amount set forth in the
preceding sentence as one payment transaction. Purchaser further
agrees to disburse a portion of Preliminary Purchase Price II as
Seller's transactional costs and expenses, in no event to exceed
US$3,000,000, in accordance with such payment instructions as
notified by Seller to Purchaser in writing at least five (5) Business
Days before the transfer of funds is to take place.
3.3.2 [intentionally deleted]
3.3.3 If the Preliminary Purchase Price II is not paid at the Closing Date,
it shall bear interest at the rate specified in Section II.3.4.3 as
from the Closing Date to, but not including, the payment date for the
Preliminary Purchase Price II.
3.4 If on the basis of the Closing Balance Sheet, the Purchase Price II
is higher than the Preliminary Purchase Price II, Purchaser shall pay
to Seller an amount equal to the amount by which the Purchase Price
II exceeds the Preliminary Purchase Price II
63
and, if, on the basis of the Closing Balance Sheet, the Purchase
Price II is lower than the Preliminary Purchase Price II, Seller
shall repay to Purchaser an amount equal to the amount by which the
Preliminary Purchase Price II exceeds the Purchase Price II. Any such
amount to be paid by either Purchaser or Seller (herein "PURCHASE
PRICE ADJUSTMENT") shall be paid as follows:
3.4.1 Any Purchase Price Adjustment owed by Purchaser shall be paid free of
costs and charges in immediately available United States Dollar funds
by wire transfer ten (10) banking days after the Closing Balance
Sheet has become final and binding upon the parties in accordance
with Section II.3.2.5 above to the account designated by Seller to
Purchaser in writing at least five (5) Business Days before the
transfer of funds is to take place.
3.4.2 Any Purchase Price Adjustment owed by Seller shall be paid free of
costs and charges in immediately available United States Dollar funds
by wire transfer ten (10) banking days after the Closing Balance
Sheet has become final and binding upon the parties in accordance
with Section II.3.2.5 above to the account designated by Purchaser to
Seller in writing at least five (5) Business Days before the transfer
of funds is to take place.
3.4.3 Any amount which may have to be paid pursuant to Sections II.3.4.1 or
II.3.4.2 shall be subject to interest from the Closing Date at an
annual rate of 5 % (five per cent) above the basic interest rate
(Basiszinssatz) of the German Federal Bank applicable at any given
time.
3.5 Should the sale and transfer of the Sold Assets be subject to
value-added tax, Purchaser shall pay the required amount of
value-added tax to Seller as set forth in Section III.1. of this
Agreement.
64
4. REPRESENTATIONS AND WARRANTIES OF SELLER PERTAINING TO THE SOLD
ASSETS
Seller represents and warrants in respect to the Sold Assets that as
of the Closing Date:
4.1 On the Closing Date, Seller is the owner of all Sold Assets, except
for customary retentions of title granted to suppliers as security
for trade payables which Purchaser has assumed, and except as set
forth in EXHIBIT II.4.1.A. Seller has the unrestricted right to
dispose of the Sold Assets in the manner prescribed by this Agreement
(except that the assignment of contracts may require prior
third-party consent; cf. Section II.2.1.2, second paragraph).
Except as otherwise set forth in this Agreement, the rights of third
parties to the Sold Property as set forth in Section I.1.1(b) and
I.1.2(b) , and the rights of third parties to the Sold Assets as set
forth in EXHIBIT II.4.1.A shall expire upon payment of Purchase Price
I and of Preliminary Purchase Price II.
4.2 EXHIBIT II.1.1.1 contains a complete and correct list of the
installations on third party land, machinery and equipment, office
equipment including data processing equipment, transportation
equipment, furniture and fixtures, construction in progress and
prepayments relating thereto existing on the Signing Date and
pertaining to the Seeger-Orbis Business.
All Sold Assets have been maintained in accordance with normal
industry practice and are in usable condition and will be so on the
Closing Date. The plant and machinery is in operating condition, has
been maintained in accordance with normal industry practice, and is
suitable for the purpose for which it is presently used by Seller.
Seller has no knowledge of any significant problems with the plant
and machinery.
4.3 All inventories sold and transferred pursuant to Section II.1.1.2 are
in usable condition in line with their determined purpose and will be
so on the Closing Date,
65
in particular the finished goods are free of defects, if and to the
extent no special valuation adjustments have been made in the Closing
Balance Sheet because of defects or obsolescence.
4.4 EXHIBIT II.1.1.3, EXHIBIT II.1.1.4A and EXHIBIT II.1.1.4D contain
complete and correct lists of all patents, utility models, design
patents, marks, copyrights and other industrial property rights owned
by or licensed to Seller, as the case may be, pertaining primarily to
the Seeger-Orbis Business as of the Signing Date (herein
"INTELLECTUAL PROPERTY"). Seller is the owner or licensee, as the
case may be, of the Intellectual Property as well as the technical
and commercial know-how which is necessary for conducting the
Seeger-Orbis Business as presently conducted. To the extent Seller
owns such Intellectual Property and technical and commercial
know-how, it has the right to transfer it; to the extent Seller is
licensee of such Intellectual Property and technical and commercial
know-how, it has the right to assign its rights as licensee.
With the exception of the "Seeger" trademarks owned by Seeger Inc.
which, as provided in Section III.4.1, penultimate paragraph, will be
transferred to Purchaser, there are no trademarks, trade names or
business names owned by any third party which are material to the
Seeger-Orbis Business.
With respect to any Intellectual Property (i) there are no
outstanding claims by Seller against third parties regarding
infringement of Intellectual Property and, to the Seller's best
knowledge, no causes for any such claim exist; (ii) there are no
outstanding claims by third parties against the Seller regarding
infringement of Intellectual Property and no such claims are pending,
or to the Seller's best knowledge, threatened; (iii) except as set
forth on EXHIBIT II.1.1.4A and EXHIBIT II.1.1.4D, there is no
obligation to pay a license fee to a third party for the use of
Intellectual Property; (iv) all fees to the competent patent offices
and any other relevant registers regarding Intellectual Property that
are due and payable on or before the Closing Date have been or will
be paid in full; (v) none of the Intellectual Property is the subject
of any pending or, to the Seller's best knowledge, threatened
66
proceedings for opposition, cancellation or revocation; (vi) all
employee invention claims that are due and payable on or before the
Closing Date have been or will have been paid in full, and (vii) none
of the Intellectual Property has been declared invalid or been
limited in any significant respect by any authority and no such
proceedings are pending or to the Seller's best knowledge threatened.
Seller is entitled, without restriction and unencumbered by rights of
third parties, to use the name elements "Seeger-Orbis" and "Seeger"
to the same extent that Seller uses such names as of the Closing
Date; provided however that (i) as set forth in Section III.4.1, the
name "Seeger" may also be used by TTC's Brazilian Affiliate
TransTechnology Brazil Ltda. but only in the combination of
"Seeger-Reno" and only in South America, and (ii) Seller is not aware
of any restrictions that may be imposed on the use of the names after
the Closing Date. Seller can dispose of the firm name, trade marks
and trade names in the manner prescribed by this Agreement.
To the Seller's best knowledge, Seller has all administrative
approvals and licenses which are necessary to operate and continue
the business unless the failure to have such administrative approvals
and licenses would not have a material adverse effect on the
Seeger-Orbis Business. These approvals, licenses and registrations
have not been withdrawn or recalled. There are no circumstances known
to Seller which would lead to a revocation or material limitation of
these approvals, licenses and registrations or which could justify
the imposition of additional requirements. The Seeger-Orbis business
has been operated and is presently being operated in material
compliance with these approvals and licenses. Notwithstanding
anything to the contrary contained in this Agreement, Seller makes no
representations and warranties regarding the assignability or
transferability of any administrative approvals or licenses. However,
Seller shall, as far as is reasonably practicable, co-operate in the
issuance and transfer to Purchaser of the approvals and licenses set
forth in EXHIBIT II.1.1.3.
Except as set forth in EXHIBIT II.4.4.A herein, Seller is operating
the Seeger-Orbis Business in material compliance with all
administrative security regulations
67
applicable to such business, including requirements imposed by trade
authorities, construction authorities, technical supervisors, the
fire department, and environmental authorities. This representation
and warranty does not extend to any violation which may no longer be
pursued due to the expiration of an applicable statute of
limitations.
4.5 The trade accounts receivable transferred pursuant to Section
II.1.1.5 and reflected in the Financial Statements and to be
reflected in the Closing Balance Sheet have been or will be, as the
case may be, generated in the ordinary course of business, reflect a
valid obligation due to Seller for the payment of goods or services
provided by the Seeger-Orbis Business and, except to the extent a bad
debt reserve will be booked on the Closing Balance Sheet, are
reasonably anticipated to be paid in the normal course without
recourse, defense, deduction, return of goods, counterclaim or offset
on the part of the obligor.
4.6 Exhibit II.1.1.4.A contains a complete and correct list of all
Material Contracts.
The information contained in EXHIBIT II.1.1.4.B regarding employment
contracts, in EXHIBIT II.1.1.4 C regarding purchase orders and in
EXHIBIT II.1.1.4 D regarding all other written and all oral contracts
and contract rights is complete and correct.
Except as listed on EXHIBITS II.1.1.4.A, II.1.1.4.B AND II.1.1.4 D
there are no consulting arrangements or other forms of service
relationships pertaining to the Seeger-Orbis Business.
EXHIBIT II.4.6.A contains a complete and correct list, to the extent
such disclosure does not violate the terms of any agreement or laws
to which Seller is bound, of employment contracts pertaining to the
Seeger-Orbis Business which were terminated between March 31, 1999,
and the Closing Date, including the following data: Name,
68
title, age, date of commencement of employment and date of
termination of employment.
EXHIBIT II.4.6.B contains a complete and correct list of the
employees who participate in the Early-Retirement/Part-Time-Program
("Altersteilzeit") as of September 01, 2001, including the following
data: Name, Active Phase, Passive Phase (Sabbatical), indication of
written application and reoccupation of job vacancy.
EXHIBIT II.4.6.C contains a complete and correct list of any Material
Contracts which entitle the contract partner, in the event of a
change of control occurring with respect to Seller, to terminate the
contract in question with or without being entitled to a termination
indemnity.
4.7 FINANCIAL STATEMENTS
4.7.1 Reporting packs have been prepared for Seller's fiscal years ended on
March 31, 2000 and March 31, 2001, for reporting purposes to the
parent company TTC, reflecting the Seller's business as of these
respective dates; they have been provided to the Purchaser (the
"AUDITED FINANCIAL STATEMENTS"). The reporting packs are based on
monthly management accounts and have been prepared in accordance with
US GAAP for inclusion into the consolidated financial statements of
TTC in the United States; the reporting packs have been audited by
Deloitte & Touche in Germany for consolidation purposes, and fairly
present the net worth, financial condition, the results of the
operations of the Seeger-Orbis Business and changes in the financial
position for the respective time periods. The consolidated financial
statements of TTC have been audited by Deloitte & Touche in the U.S.
as of March 31, 2000, and March 31, 2001.
4.7.2 The unaudited interim financial statements of Seller for the period
of time from April 1, 2001 through September 30, 2001 which have been
provided to the Purchaser ("the INTERIM FINANCIAL STATEMENTS") to the
extent they relate to the Sold
69
Property and the Sold Assets, have been prepared in accordance with
US GAAP applied consistently with past practice (to the extent such
past practice is in compliance with US GAAP) and fairly present the
net worth, financial condition, the results of the operations of the
Seeger-Orbis Business and changes in the financial position for the
period of time from April 1, 2001 through September 30, 2001.
The Audited Financial Statements and the Interim Financial Statements
are herein referred to as the "FINANCIAL STATEMENTS". The reflection
of assets and liabilities in the Financial Statements and their
valuation took place in compliance with US GAAP.
4.8 Seller warrants that the German Sales of the Seeger-Orbis Business in
the fiscal year ended March 31, 2001 amounted to less than DM
50,000,000 (Deutsche Mark fifty million) and that after March 31,
2001 no additional German Sales were generated by acquisitions of
additional undertakings.
4.9 In the Financial Statements sufficient accruals were made in
compliance with US GAAP for the pension liabilities of Seller
vis-a-vis directors or employees or former directors or former
employees or pensioners or vis-a-vis any other third party by
applying a discount rate of 6% and recognized actuarial principles
and by assuming a salary increase rate of 2.1% p.a. and a
post-retirement pension increase of 2.5% p.a.
In the Closing Balance Sheet the accrual for the pension obligations
vis-a-vis the employees to be assumed pursuant to Section II.1.1.4 as
well as vis-a-vis Messrs. Sven-Uwe Wolber and Josef Abeling as well
as for Purchaser's indemnity obligation vis-a-vis Seller pursuant to
Section III.7.1(b) relating to pensioners and deferred pensioners
shall be booked pursuant to the same rules set forth in the preceding
paragraph by adjusting the accrual booked at March 31, 2001 to
account for any new joiners and leavers in the period to Closing
Date, a pro rata allocation of the projected regular pensions cost
(comprising service cost and interest cost) for the
70
year to March 31, 2002, and payments made to pensioners in the period
from April 1, 2001 to the Closing Date.
EXHIBIT II.4.9 contains a complete and correct list of the pension
obligations of Seller as per September 30, 2001 including the names
of the respective director, employee or former director or former
employee or pensioner or any other third party entitled to pension
payments and, in the column "PBO zum 30.9.01", the amount of the
respective pension obligation. Except as listed in EXHIBIT II.4.9,
Seller has no pension obligations vis-a-vis present or former
directors or employees or third parties.
4.10 The Seller is not involved in any collective bargaining dispute or
claim, nor may, to the best of Seller's knowledge, any of the
provisions of this Agreement lead to any such collective bargaining
dispute or claim.
4.11 Except as listed on EXHIBIT II.4.11, no employment agreement between
the Seller and any of its managers and employees provides for any
severance payment to be made upon termination or any other payments
to be made upon a change of control effecting Seller.
4.12 Except as mentioned in EXHIBIT II.4.12, Seller has not entered into
legally binding obligations for any increase in remuneration or
benefits of their employees in the period of six (6) months prior to
the Signing Date.
4.13 EXHIBIT II.4.13 is a true and correct list of all shop agreements
(Betriebsvereinbarungen) and collective bargaining agreements
(Tarifvertrage) applicable at Seller as of the Signing Date.
4.14 Books, correspondence and all other documents pertaining to the
Seeger-Orbis Business have been properly kept and are complete in all
material respects. All material filings with public authorities which
relate primarily to the Seeger-Orbis Business have been effected and
submitted in time.
71
Seller has, in particular, filed all returns and has made all
material declarations with and paid all contributions to the various
social security organizations, including contributions to the
relevant workers' compensation scheme (Berufsgenossenschaft) and
premiums to the Pension Insurance Fund (Pensionssicherungsverein), at
the respective due dates and in accordance with applicable law.
4.15 Except as listed in EXHIBIT II.4.15, Seller is not involved in any
kind of proceedings pending before courts or administrative agencies
or arbitration tribunals and to the best of Seller's knowledge no
such proceedings have been threatened. This is in particular true
with respect to proceedings in trade, Tax, warranty, product
liability, environmental liability, or unfair trade practices
matters, as well as to proceedings arising from industrial property
rights owned by third parties.
4.16 Seller is covered by the insurance policies set forth in EXHIBIT
II.4.16. The insurance policies purchased by Seller for the operation
of the Seeger-Orbis Business provide the coverage that is reasonable
for the business in which the Seeger-Orbis business is engaged.
4.17 To the best of Seller's knowledge there are no circumstances peculiar
to the Seeger-Orbis Business, including claims for damages, that
would have a material adverse effect on the operation of the
Seeger-Orbis Business. In particular, to the best of Seller's
knowledge, there are no circumstances peculiar to the Seeger-Orbis
Business as of the Signing Date that could change or impair, to a
degree that would constitute a material adverse effect on the
Seeger-Orbis Business, the supply of raw materials, maintenance
materials, and production supplies (including the supply of the
products which during the last 12 months were purchased from TTGB),
the purchase and sale of commercial goods as well as the
manufacturing or the marketing of finished goods of the Seeger-Orbis
Business.
4.18 The orders placed by Seller prior to the Closing Date for traded
merchandise and for raw materials, maintenance materials and supplies
to be delivered after the Closing
72
Date are in compliance with normal commercial practice as regards
number, price, payment and other terms.
4.19 Except as listed in EXHIBIT II.4.19 the Sold Property and the Sold
Assets represent all of the assets required for the operation of the
Seeger-Orbis Business in the same fashion as it has been operated
since April 1, 2000. If it turns out that any assets have been used
in the Seeger-Orbis Business since April 1, 2001 and are not being
transferred to Purchaser pursuant to this Agreement, Seller
undertakes to transfer these assets to Purchaser without undue delay
with no additional cost for Purchaser. To the best knowledge of
Seller there are no third party rights of any kind on the Signing
Date which impair the continuation of the operation of the
Seeger-Orbis Business, manufacturing of the present product range,
application of the present production process or use of current trade
marks and trade names, other than as disclosed herein.
4.20 Since September 30, 2001 through the Signing Date, there has not been
any material adverse change to the Seeger-Orbis Business or its
operations, assets, results of operations or condition (financial or
other).
4.21 Seller has not received any governmental grants and subsidies since
March 31, 1999.
4.22 During the period between September 30, 2001 and the Closing Date
("INTERIM PERIOD"): (i) the operations of the Seeger-Orbis Business
by Seller have been and will be conducted in substantially the same
manner as hitherto, in compliance with orderly business practices,
with the care of a prudent businessman and in material compliance
with all applicable laws and regulations; (ii) the assets of Seller
pertaining to the Seeger-Orbis Business have not been and will not be
disposed of, except in the ordinary course of business; (iii) Seller
has not entered into, amended or cancelled any material contracts,
transactions or obligations which are onerous or unusual or are not
or were not made in the ordinary course of business and that would
affect primarily the Seeger-Orbis Business and will not do so prior
to the Closing
73
Date; (iv) Seller has not acquired or ordered current assets except
in the ordinary course of business to an extent normal for the
Seeger-Orbis Business and on normal terms and conditions and will not
do so prior to the Closing Date; (v) Seller has not placed orders
which would relate primarily to the Seeger-Orbis Business for fixed
assets exceeding EUR 50,000.00 (fifty thousand Euros) in each
individual case and/or EUR 250,000.00 (two hundred fifty thousand
Euros) in the aggregate and will not do so prior to the Closing Date;
(vi) except to the extent required by law, collective bargaining
agreements, employment agreements or other agreements to which Seller
is bound on the Closing Date, Seller has not incurred any pension
obligations, made any variation in existing pension obligations, or
incurred other obligations vis-a-vis employees including increases of
remuneration deviating from the usual practice in the past and will
not do so prior to the Closing Date.
4.23 Binding offers or tenders made by or to Seller to or by customers
during the Interim Period and the orders or other commitments placed
or agreed to by or with customers or suppliers during the Interim
Period by customers or suppliers of Seller for finished products
which have not yet been delivered on the Closing Date comply or will
comply in all material respect as regards number, pricing
arrangements, payment terms, delivery dates, etc. with the normal
commercial practices used by Seller during the previous twelve (12)
months and remain in the framework of the credit extension policies
practiced by Seller during the calendar years 1999, 2000 and 2001;
orders and commitments placed or agreed to by or with customers or
suppliers during the Interim Period have been and will be processed
in accordance with the ordinary course of business.
4.24 The Seller has conducted the Seeger-Orbis Business since July 1,1995
in compliance with all applicable laws and the Seller is not in
default or material violation in any respect under any of such laws
applicable to the Seeger-Orbis Business or the Sold Property and Sold
Assets, except where the failure to be in compliance or such default
or violation would not have a material adverse effect on the
Seeger-Orbis Business.
74
4.25 Above and beyond the representations and warranties set out in
Sections I.4.1 through I.4.7 and Sections II.4.1 through II.4.24
above, Seller makes no further representations to and accepts no
further warranties vis-a-vis Purchaser.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND BARNES
Purchaser and Barnes herewith represent and warrant the following as
of the Closing Date:
5.1 This Agreement constitutes the legal, valid and binding obligation of
Purchaser and Barnes, enforceable against Purchaser and Barnes in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights of creditors
generally and except that the remedy of specific performance and
injunctive relief and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought. The Purchaser and Barnes have
the absolute and unrestricted right, power, authority, and capacity
to execute and deliver this Agreement and to perform their
obligations under this Agreement, which actions have been duly
authorized and approved by all necessary corporate action of
Purchaser and Barnes. Purchaser and Barnes are not required to give
any notice to any person or obtain any consent or governmental
authorization in connection with the execution and delivery of this
Agreement by Purchaser and Barnes; there are merely certain reporting
requirements under the German Law on Foreign Trade and Payments
(Aussenwirtschaftsgesetz) and Section 58a paragraph 1 No. 1 of the
German Ordinance on Foreign Trade and Payments
(Aussenwirtschaftsverordnung) non-compliance with which would not
affect the enforceability of the obligations of Purchaser and Barnes
affected. Neither the execution and delivery of this Agreement nor
the consummation or performance of any of the transactions
contemplated thereby will directly or indirectly violate the
certificate of incorporation or by-laws or any contract of Purchaser
and Barnes or
75
violate any applicable law, rule, regulation, judgement, injunction,
order or decree in Germany or any other country where the Purchaser
and Barnes are domiciled.
5.2 Purchaser has, or as of the Closing Date will have, sufficient cash
and available financing to purchase the Seeger-Orbis Business in
accordance with the terms and conditions of this Agreement.
5.3 In the fiscal year of Barnes ending on December 31, 2001, the German
Sales of Barnes amounted to less than DM 50,000,000 (Deutsche Mark
fifty million), and after December 31, 2001 no additional German
Sales were generated by acquisitions of additional undertakings.
5.4 Barnes is a Delaware corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and is duly
qualified or licensed to do business as a foreign corporation, and is
in good standing, in each jurisdiction where the nature of its
business makes such qualification necessary.
III.
GENERAL PROVISIONS
1. VALUE-ADDED TAX
The parties to this Agreement assume that the sale pursuant to the
provisions of this Agreement constitutes the sale of a business as a
whole within the meaning of Section 1 paragraph 1a of the Turnover
Tax Act 1999 (Umsatzsteuergesetz 1999) and is thus not subject to
value-added tax.
If in the future the German tax administration in a decision which
need not be final or in a written statement takes the position that
this transaction does not constitute the sale of a business as a
whole, Purchaser shall owe in addition to the aforemen-
76
tioned purchase price the German statutory value-added tax plus any
interest pursuant to the Fiscal Code.
The statutory value-added tax shall become due for payment promptly
after Seller has issued a corrected invoice and has provided evidence
to Purchaser that the tax administration takes the position that this
transaction is subject to value-added tax. For this event, Purchaser
undertakes to return to Seller the original invoice issued by Seller
for the purpose of correction. The interest assessed pursuant to the
Fiscal Code and any ancillary tax-related charges (steuerliche
Nebenleistungen) shall be borne by Purchaser and shall be due within
three (3) Business Days after Seller has provided evidence that such
interest and ancillary charges have been assessed by the tax
administration.
In the event that value-added tax must be paid, it shall be
discharged by Purchaser assigning to Seller, on account of
performance (erfullungshalber), its claims against the competent
German tax office for refunds of value-added tax to which it is
entitled as a result of the implementation of this transaction, and
Seller hereby accepts such assignment. Purchaser undertakes upon
Seller's request to repeat such assignment without undue delay on an
official form of the tax office. Seller on its part shall make a
further assignment of such claims to the competent tax office for
purposes of effecting a set-off. The parties hereto shall endeavor,
to the extent possible, to settle any claims for the payment and
refund of value-added tax by way of set-off so that no payment
obligation arises. Value-added tax obligations which cannot be
discharged by way of set-off when value-added tax payable by Seller
falls due shall be paid in cash by Purchaser on such due date; in
such event and to that extent, Seller's claim to refund shall be
re-assigned to Purchaser in exchange for cash payment. If Seller has
to pay interest for deferred payment or surcharges for overdue
payment of the value-added tax because, without Seller being
responsible therefor, the set-off of refund claims against
value-added tax obligations is delayed, Purchaser shall reimburse
Seller for such interest and surcharges. If Purchaser's right to a
refund of value-added tax subsequently turns out not to exist, either
in whole or
77
in part, Purchaser shall be obligated to pay an appropriate amount of
value-added tax to Seller in cash.
2. CONSEQUENCES OF INCORRECT REPRESENTATIONS AND WARRANTIES
2.1 In the event of any breach or non-fulfillment by Seller of any of the
representations or warranties or covenants contained in this
Agreement, Seller shall be liable for putting Purchaser into the same
position that Purchaser would have been in (status quo ante) if the
representations and warranties or covenants contained in this
Agreement had been correct or had not been breached
(Naturalrestitution). If the Seller, within 30 calendar days after
having been given notice as provided in Sections III.2.5.1 and
III.2.5.2, has not succeeded in putting Purchaser into such status
quo ante, Seller shall be obligated to pay damages for
non-performance (kleiner Schadenersatz) (herein "PURCHASER Claim").
Such damages include any lost profits (entgangener Gewinn), if such
damages have an adequate causal connection (adaquaten
Kausalzusammenhang) with the fact or act leading to the Purchaser
Claim. Seller shall in no event be liable for consequential damages
(Folgeschaden) and any internal costs and expenses incurred by the
Purchaser.
2.2 Any Purchaser Claim against Seller shall be reduced to the extent
that:
2.2.1 the matter to which the Purchaser Claim relates has been taken into
account in the Closing Balance Sheet by way of a provision
(Ruckstellung), or depreciation (Abschreibung), or exceptional
depreciation (au(beta)erplanma(beta)ige Abschreibung), or
depreciation to reflect lower market values (Abschreibung auf den
niedrigeren beizulegenden Wert);
2.2.2 the amount of the Purchaser Claim is recovered or could have been
recovered, by Purchaser or an Affiliated Enterprise of Purchaser,
from a third party or under an insurance policy of the TTC Group in
force on the Closing Date. If Seller believes that the Purchaser
Claim in whole or in part could be recovered from a third party or
under an insurance policy, Seller shall so notify Purchaser.
Purchaser shall thereupon
78
without undue delay make a good faith effort to attempt the recovery
of the Purchaser Claim from the third party or the insurance company,
as the case may be. If these efforts have not been successful within
a period of three months from the date of Seller's notification,
Purchaser shall be entitled to assert the Purchaser Claim against
Seller. The Purchaser shall in that case be obligated to assign to
Seller the alleged claims against the third party or the insurance
company, Section 255 BGB being applicable mutatis mutandis.
2.2.3 the Purchaser Claim results from a failure of Purchaser to mitigate
damages pursuant to Section 254 BGB;
2.2.4 the Purchaser Claim results from or is increased by the passing of,
or any change in, after the Signing Date, any law, statute,
ordinance, rule, regulation, common law rule or administrative
practice of any government, governmental department, agency or
regulatory body including (without prejudice to the generality of the
foregoing) any increase in the rates of Taxes or any imposition of
Taxes or any withdrawal or relief from Taxes not actually (or
prospectively) in effect on the Signing Date.
2.3 Seller shall not be liable for any Purchaser Claim to the extent
Purchaser, Barnes or an Affiliated Enterprise have caused or have
contributed to the cause of (verursacht oder mitverursacht) such
Purchaser Claim after the Closing Date.
When calculating the amount of the liability of Seller under this
Agreement, all advantages adequately caused by the fact or act
leading to the Purchaser Claim shall be taken into account
(Vorteilsausgleich).
2.4 Any fact disclosed in this Agreement or in any Exhibit to this
Agreement shall be deemed a disclosure only with respect to the
warranties specifically referenced in such disclosure. Any Purchaser
Claim resulting from a fact thus disclosed shall be excluded.
Otherwise, Section 442 BGB shall not be applicable.
2.5 Involvement of Seller in Assertion of Purchaser Claims
79
2.5.1 With respect to any Purchaser Claim (other than a Third Party Claim,
as defined in Section III.2.5.2) contained in this Agreement,
Purchaser shall give Seller notice of such breach or non-fulfillment,
with such notice stating the nature thereof and the amount involved,
to the extent that such amount has been determined at the time when
such notice is given promptly after discovery of such breach or
non-fulfillment. Without prejudice to the validity of the Purchaser
Claim or alleged claim in question, Purchaser shall allow Seller and
their accountants and their other professional advisors to
investigate the matter or circumstance alleged to give rise to such
Purchaser Claim, and whether and to what extent any amount is payable
in respect of such Purchaser Claim and, for such purpose, Purchaser
shall give, subject to it being paid its reasonable out-of-pocket
costs and expenses, such information and assistance, including access
to Purchaser's premises and personnel during normal business hours
and including the right to examine and copy or photograph any assets,
accounts, documents and records, as Seller or its accountants or its
other professional advisors may reasonably request, provided that in
no event shall the normal work flow or process of Purchaser be
disrupted. All information provided to Seller or its accountants or
its other professional advisors shall be handled confidentially by
them and only for purposes of determining whether a Purchaser Claim
exists.
2.5.2 If the Purchaser, Barnes and/or their Affiliated Enterprises are sued
or threatened to be sued by a third party, including without
limitation any government agencies, or if the Purchaser, Barnes
and/or their Affiliated Enterprises are subjected to any audit or
examination by any governmental authority, including any Tax or
environmental authorities (herein "THIRD PARTY CLAIM"), which may
give rise to a Purchaser Claim, Purchaser shall give Seller prompt
notice of such Third Party Claim. Purchaser shall ensure that Seller
shall be provided with all materials, information and assistance
relevant in relation to the Third Party Claim, be given reasonable
opportunity to comment or discuss with Purchaser any measures which
Purchaser proposes to take or to omit in connection with a Third
Party Claim, and in particular
80
Seller shall be given an opportunity to comment on, participate in,
and review any reports and all relevant Tax and social security
audits or other measures and receive without undue delay copies of
all relevant orders (Bescheide) of any authority. No admission of
liability shall be made by or on behalf of the Purchaser, Barnes
and/or their Affiliated Enterprises and the Third Party Claim shall
not be compromised, disposed of or settled without the prior written
consent of the Seller, such consent not to be withheld unreasonably.
Seller shall advise Purchaser, Barnes and/or their Affiliated
Enterprises to take such action as Seller shall deem necessary to
avoid, dispute, deny, defend, resist, appeal, compromise or contest
such Third Party Claim (including making counter claims or other
claims against third parties) in the name of and on behalf of the
Purchaser, Barnes and/or their Affiliated Enterprises. In formulating
such advice, Seller shall take reasonable account of the interests of
Purchaser in protecting its relationships with customers and
suppliers. Purchaser, Barnes and/or their Affiliated Enterprises
shall not unreasonably reject the advice tendered by Seller.
Purchaser, Barnes and/or their Affiliated Enterprises will give to
Seller, subject to them being paid all reasonable out-of-pocket costs
and expenses, all such information and assistance, as described
above, including access to premises and personnel and including the
right to examine and copy or photograph any assets, accounts,
documents and records for the purpose of avoiding, disputing,
denying, defending, resisting, appealing, compromising or contesting
any such claim or liability as Seller or its professional advisors
may reasonably request. Seller agrees to use all such information
confidentially and only for such purpose. If Purchaser, Barnes and/or
their Affiliated Enterprises have followed Seller's reasonable advice
in defense against such Third Party Claim, all costs and expenses
reasonably incurred by Purchaser in defending such Third Party Claim
shall be borne by Seller.
2.5.3 If Purchaser violates any of the obligations set forth in Sections
III.2.5.1 and III.2.5.2, this will not relieve Seller of its
obligations to indemnify, except to the extent such violation
actually harms the Seller or has increased the amount of the damage
for which Seller is to indemnify Purchaser.
81
2.6 In the event that Purchaser has a Purchaser Claim against Seller,
which is undisputed or which has been finally determined
(rechtskraftig festgestellt) by a court of law, this claim may be
offset against claims of Seller against Purchaser. Seller is entitled
to the right of set-off with the same limitations described in the
preceding sentence against claims of Purchaser against Seller.
2.7 Seller's aggregate liability for Purchaser Claims shall not exceed
50% (fifty percent) of the sum of Purchase Price I and Purchase Price
II. No liability shall attach to Seller for Purchaser Claims under
this Agreement unless and until (i) an individual claim exceeds U.S.
$ 15,000.00 (a "QUALIFYING Claim") and (ii) the aggregate of the
Qualifying Claims exceeds U.S. $ 300,000.00 (U.S. Dollars three
hundred thousand) (the "THRESHOLD AMOUNT"). If the Threshold Amount
is exceeded, Purchaser shall be entitled to assert claims for the sum
total of the individual claims. For the avoidance of doubt, Purchaser
shall not be entitled to assert any individual claim below U.S.$
15,000.00.
2.8 In derogation from the statutory provisions, the period during which
Purchaser shall be entitled to make Purchaser Claims against Seller
pursuant to this Agreement with respect to the breach of a
representation and warranty shall expire (verjahren), to the extent
this Agreement does not contain anything to the contrary, eighteen
(18) months from the Closing Date.
The limitation period with respect to Purchaser Claims of Purchaser
resulting from the breach of a representations and warranty related
to Taxes shall expire six (6) months from the date the respective Tax
assessment has become final (bestandskraftig). A Tax assessment is
not deemed to be final if it is subject to review (Steuerfestsetzung
unter dem Vorbehalt der Nachprufung, Section 164 AO) or is stated to
be a preliminary assessment (Vorlaufige Steuerfestsetzung, Section
165 AO), the assessment is amended due to new facts (Aufhebung oder
Anderung von Steuerbescheiden wegen neuer Tatsachen oder
Beweismitteln, (Sections 173 para. 1 No. 1 AO), or the assessment is
amended due to an amendment of a basic assessment (Aufhebung des
Grundlagenbescheids, Section 175 para. 1 No. 1 AO).
82
The periods of limitation referred to in the two preceding paragraphs
for any Purchaser Claims shall (i) be suspended (gehemmt) by
Purchaser commencing judicial proceedings prior to the expiry of the
relevant period set forth in the preceding paragraph, (ii) recommence
(beginnt erneut) upon acknowledgement of the Purchaser Claim
(Anerkenntnis) by the Seller. Otherwise, the suspension and tolling
of limitation periods shall be governed by statutory provisions.
2.9 Any Purchaser Claims shall bear interest from the day the claims are
asserted by Purchaser against Seller in writing as provided in
Section III.2.5 until the day of receipt of payment by Purchaser at
an annual rate of 5% (five per cent) above the basic interest rate
(Basiszinssatz) of the German Federal Bank applicable at any given
time. Interest shall be due for payment together with the respective
payments of principal.
2.10 All of the representations and warranties of Seller in this Agreement
have the meaning of independent guarantees (selbstandige
Garantieversprechen) within the meaning of Section 311 para. 1 BGB.
Purchaser's aforementioned rights and remedies do not require fault
on the part of Seller or its agents. For the avoidance of doubt, the
independent guarantees shall not be construed as being guaranties
(Garantien) within the meaning of Sections 443 para. 1 and 444 BGB.
2.11 Remedies which Purchaser may have against Seller for breach of
warranties, representations or covenants set forth in this Agreement
are solely governed by this Agreement, and the remedies provided for
by this Agreement shall be the exclusive remedies available to
Purchaser. Apart from the rights of Purchaser under this Section
III.2, and Sections III.5 and III.7.2 hereof, any remedies of
Purchaser under statutory warranties (Section 437 BGB) or under other
statutory rights to rescind this Agreement (Rucktritt) or to claim
compensation for damages (Schadensersatz) are hereby expressly
excluded and waived by Purchaser to the extent permitted under German
law. Section 377 HGB (which requires certain purchasers promptly to
inspect goods purchased and to object to defects of the products
acquired within certain time limits) shall also not be applicable.
83
3. COVENANT NOT TO COMPETE
3.1 Seller and TTC undertake for a period of two (2) years from the
Closing Date and TTGB undertakes for a period of one (1) year from
the Closing Date within the territory of the Federal Republic of
Germany ("THE TERRITORY"), whether by themselves or through others,
not to manufacture, to distribute, economically or technically to
assist in manufacturing or distributing or otherwise to support (e.g.
by transfer of know-how or by rendering consultancy services) the
manufacturing or distribution of products or the rendering of
consultancy services which directly or indirectly compete with
products manufactured and/or distributed or consultancy services
rendered by the Seller on the Closing Date and during the 12 months
prior to Closing Date (such products and services are set forth on
EXHIBIT III.3.1 and are hereinafter referred to as "THE COMPETING
PRODUCTS" and such covenant is hereinafter referred to as
"COVENANT").
During the term of the Covenant, Seller, TTC and TTGB shall also
refrain from
(a) acquiring or owning a direct or indirect ownership interest in
enterprises which manufacture or distribute, or otherwise
support the manufacturing or distribution of Competing Products
in the Territory; ownership of listed stock securities
representing less than 5% of the issued stock of the relevant
company being permitted; the 5%-threshold applies to the
aggregate stockholdings of Seller, TTC and TTGB and of their
Affiliated Enterprises in a specific company;
(b) disclosing confidential information relating to Seller's
Seeger-Orbis Business except if and to the extent the
information is or becomes public knowledge, is disclosed to
Seller, TTC or TTGB in good faith from another source, is
discovered by Seller, TTC or TTGB (other than by disclosure from
any current or former employee of Seller or any business unit in
which Seller holds or ever held a
84
majority interest within the five (5) years immediately
preceding the Closing Date) or is required to be disclosed by
Seller, TTC or TTGB to a governmental authority, and from
(c) soliciting any employee to be taken over by Purchaser pursuant
Section II.1.1.4 (other than employees who at the time of such
employment or solicitation do not work for Purchaser or any of
its Affiliated Enterprises) or otherwise offering such employees
benefits for the event that they terminate their employment
relationship with Purchaser.
3.2 Seller, TTC and TTGB shall cause their respective Affiliated
Enterprises to comply with the Covenant.
Nothing in this Agreement shall restrict or limit Seller's, TTC's,
TTGB's or any of their Affiliated Enterprises' right to sell or
transfer any shares or assets held by them to third parties, nor
shall Seller, TTC, TTGB and any of their Affiliated Enterprises be
required to ensure that the recipients of such shares or assets are
subject to the Covenant. This shall not apply in the event that the
shares or assets of TTGB are sold or transferred to a third party. In
the event of such a transaction TTC shall ensure that TTGB or the
purchaser of TTGB's assets in all respects complies with and abides
by the Covenant for the duration of one (1) year from the Closing
Date.
4. Continuance of "Seeger" and "Seeger-Orbis", Use of "TransTechnology"
4.1 With the exception stated in the next succeeding paragraph, the
Purchaser and any of its Affiliated Enterprises shall be entitled to
use worldwide the names "Seeger-Orbis" and "Seeger" as firm names,
trade names, product names or otherwise, with or without an addendum,
to the same extent that Seller uses such names as of the Closing
Date; Seller is not aware of any restrictions that may be imposed on
the use of the names after the Closing Date.
85
In South America the name "Seeger" may also be used by TTC's
Brazilian Affiliate TransTechnology Brazil Ltda., but only in the
combination of "Seeger-Reno".
Promptly after the Signing Date Seller and TTC shall initiate all
necessary steps to change the name of Seller, of TTSO and of Trans
Technology Seeger-Orbis Beteiligungsgesellschaft mbH to names which
no longer contain the name components "Seeger-Orbis" or "Seeger".The
report letters to be filed with the Commercial Register of the
Municipal Court of Konigstein im Taunus for the file numbers HRA
2500, HRB 3865 and HRB 4288, duly signed before a Notary Public by
the persons entitled to represent the three aforementioned companies,
shall be handed over to the legal advisor of Purchaser Andreas
Hilfrich, Esq. at the address mentioned in Section I.1.3.2 last
paragraph, no later than on the Closing Date.
Seller and TTC hereby give their consent to Purchaser, which
provisionally has its seat in Frankfurt am Main, promptly after the
Signing Date, changing its name, while being registered in Frankfurt
am Main, to Seeger-Orbis GmbH & Co.
Promptly after the Closing Date, Seller and TTC shall initiate all
necessary steps to change the name of any other Affiliated Enterprise
of Seller to a name which no longer contains the name components
"Seeger-Orbis" or "Seeger", such steps to be completed no later than
three (3) months after the Closing Date. During the same period of
time (i) Seller and TTC shall cause their Brazilian Affiliate
TransTechnology Brazil Ltda. to use the name "Seeger" only in the
combination of "Seeger-Reno" and only in South America, (ii) TTC
shall cause Seeger Inc. to transfer to Purchaser the "Seeger" trade
marks owned by it.
Except as otherwise expressly set forth in this Section III.4.1,
Seller and TTC covenant that, after the Closing Date, Seller and TTC
shall desist, and shall cause their Affiliated Enterprises to desist,
from continued use of the aforementioned names as firm names, trade
names, product names, domain names or otherwise.
86
4.2 As to any of promotional literature or other documents being acquired
by Purchaser hereunder bearing the name "TransTechnology" or bearing
any trademarks, logos or trade names not being transferred under this
Agreement, Purchaser shall be licensed to use such materials for a
period of six (6) months from the Closing Date and shall thereafter
make no further use of, and destroy, any remaining materials. With
respect to any labeled inventory on hand at closing bearing the name
"TransTechnology" or bearing any trademarks, logos or trade names not
being transferred under this Agreement ("TTC labeled inventory"),
Purchaser shall use reasonable commercial efforts to delete such
reference to TTC from the packaging of the inventory as soon after
the Closing Date as is practicable; in no case shall TTC labeled
inventory be sold or marketed after the expiration of twelve (12)
months after the Closing Date unless extended terms are provided for
in the Supply Agreements with TTGB.
5. RESCISSION
5.1 Purchaser is entitled to rescind this Agreement on or prior to the
Closing Date pursuant to Section 5.1.1 if, prior to the Closing Date:
(i) bankruptcy, insolvency, reorganization or moratorium
proceedings or proceedings under similar laws relating to
or affecting the rights of creditors generally are
initiated with respect to Seller's or TTC's assets or the
opening of such proceedings is rejected due to the lack of
funds sufficient to cover the costs of such proceedings,
or the opening of such proceedings is applied for by
Seller or TTC or by a creditor of Seller or TTC, or
(ii) warranties or representations given in this Agreement turn
out to be incorrect to such a degree as to have a material
adverse effect on the Seeger-Orbis Business, or
(iii) any material adverse change to the Seeger-Orbis Business
or its operations, assets, results of operations or
condition (financial or other) has occurred between the
Signing Date and the Closing Date.
87
5.1.1 If Purchaser intends to exercise the right of rescission pursuant to
Section III.5.1(i), above, it shall promptly, but in any event prior
to the Closing Date, declare its rescission in written form to
Seller.
If Purchaser intends to exercise the right of rescission pursuant to
Sections III.5.1(ii) or (iii) above, it shall promptly, but in any
event prior to the Closing Date, notify Seller of its intention in
writing and give Seller the opportunity, for a period of thirty (30)
Business Days counting from the date of receipt of such notification
(the "NOTIFICATION"),
(i) to cure the breach, or
(ii) to furnish Purchaser with a bank guarantee in the amount
of the ascertained or foreseeable damages (as determined
by Purchaser in its reasonable discretion) resulting from
the breach of the warranty or representation in question
(the "BANK GUARANTEE"), unless in the Notification
Purchaser has advised Seller that in spite of a Bank
Guarantee it can, in its reasonable judgment, not
reasonably be expected to go ahead with the transaction.
Purchaser shall be entitled to exercise, within five (5) Business
Days after the expiration of the thirty-day period referred to in the
preceding sentence, the right of rescission pursuant to Sections
III.5.1(ii) or (iii) above if, within the thirty-day period referred
to in the preceding sentence, (a) Seller has not cured the breach to
a degree that eliminates any material adverse effect of such breach
on the Seeger-Orbis Business or (b) Seller has failed to furnish
Purchaser with a Bank Guarantee as provided in Section III.5.1.1(ii).
5.1.2 If the sum of the aforementioned time periods in Section III.5.1.1 of
thirty (30) Business Days, or of thirty-five (35) Business Days, as
the case may be, extends to a date which is after the Closing Date as
defined in Section III.6.2, the Closing Date shall be postponed to
the fifth (5th) Business Day after the expiration of the relevant
thirty or thirty-five day period.
88
5.2 Seller is entitled to rescind this Agreement on or prior to the
Closing Date, if bankruptcy, insolvency, reorganization or moratorium
proceedings or proceedings under similar laws relating to or
affecting the rights of creditors generally are initiated with
respect to Purchaser's or Barnes' assets or the opening of such
proceedings is rejected due to the lack of funds sufficient to cover
the costs of such proceedings, or the opening of such proceedings is
applied for by Purchaser or Barnes or by a creditor of Purchaser or
Barnes.
5.3 The right to rescind this Agreement can only be exercised by
notifying the other party in writing.
5.4 Rescission of the Agreement shall have the same consequences which
would apply should the Conditions Precedent set forth in Section
III.6.1 not have been fulfilled by FEBRUARY 15, 2002.
6. CONDITIONS PRECEDENT
6.1 The Closing Date will only occur and the transfer of the Sold
Property and Sold Assets (dinglicher Rechtsubergang) and the
obligation to pay Purchase Price I and the Preliminary Purchase Price
II and the assumption of obligations and liabilities will only become
effective if the following conditions precedent (hereinafter referred
to as "CONDITIONS PRECEDENT") have been fulfilled:
(a) Purchaser and Seller have received the Notarial
Confirmation described in Section I.3.2 (a),
(b) Purchaser and Seller have received BHF Bank Counsel's
Declaration described in Section I.3.2 (b),
89
(c) Seller has obtained the consent of the respective
contracting parties for the sale and transfer to Purchaser
of rights and obligations arising from the following
contracts and agreements:
(i) Distribution Agreement with THF,
(ii) Supply Agreement with GETRAG Getriebe- und
Zahnradfabrik Hermann Hagemeier GmbH & Cie.,
(iii) Supply Agreement with GETRAG Ford Transmissions
GmbH,
(iv) Gandini SpA,
(v) GKN; and
(vi) license agreement for MOVEX Software contained
in Attachment 3 of the Agreement between
Seeger-Orbis GmbH and Intentia AB dated May
11/18, 1995;
(vii) Hardware Lease between Seller and IBM dated
December 5/6, 2001 for IBM AS/400 on which the
MOVEX Software runs.
(d) two supply agreements between Purchaser and TTGB have been
entered into and which shall enter into effect as of the
Closing Date (the "SUPPLY AGREEMENTS").
(e) Seller and Mr. Sven-Uwe Wolber have entered into a
Settlement Agreement (Aufhebungsvertrag) terminating their
employment/service relationship, in particular Mr.
Wolber's Employment Contract for Old-Age Part-Time dated
May 2, 2001, as of the Closing Date.
(f) No postponement of the Closing Date as set forth in
Section III.5.1.2 has occurred.
6.2 The Closing Date shall be ten (10) Business Days after the day on
which the last of the Conditions Precedent listed in Section III.6.1
subsections (a), (b), (c)(i) through (vi), (d) and (e) has occurred,
or one Business Day after the Condition Precedent
90
listed in Section III.6.1 (c)(vii) has occurred, whichever date is
later, unless the Closing Date has been postponed pursuant to Section
III.5.1.2., or such other date the parties mutually agree upon after
the last of the Conditions Precedent has occurred (the "CLOSING
DATE").
6.3 If the Conditions Precedent have not occurred by FEBRUARY 15, 2002,
this Agreement shall be deemed not to have been entered into. In such
case,
(i) each party shall bear one-half of the costs of the
notarization of this Agreement and otherwise shall bear its
own costs,
(ii) no party shall have any claims of any nature against the
other, in particular claims on the grounds of an alleged
violation of duties engendered by the conduct of negotiations,
(iii) each party shall immediately return to the other party all
documents, copies thereof or other written material it
obtained regarding such other party, or in the alternative,
destroy all such information and confirm in writing to the
other party that it has destroyed all such information.
Further, any such information obtained about the other party
shall be treated as confidential information, except to the
extent such information is otherwise publicly available.
6.4 As soon as the Conditions Precedent have occurred and the Closing
Date is known, the parties obligate themselves to inform the
officiating Notary Public in a joint written statement; such joint
statement shall be taken to the notarial files.
6.5 On the Closing Date the following shall occur:
(a) Purchaser makes wire transfers from one or more of its bank
accounts with a bank located in the United States in accordance
with Section I.3.4 and Section II.3.3.1.
91
(b) Upon confirmation by BHF Bank that it has received the
amount of US$ 17,000,000.00 or proof by Purchaser that the
amount of US$ 17,000,000.00 was credited to the BHF
Account, BHF Bank's Counsel hands over to Purchaser the
Release Documents;
(c) Seller signs before a notary public the report letters,
drafts of which are attached to this Agreement as Exhibit
II.1.3.9, and instructs the notary public to hand them
over to Purchaser's legal advisor;
(d) Seller hands over to Purchaser's legal advisor the duly
executed report letters regarding the change of name of
the German companies of the TTC Group to be filed with the
Commercial Register of the Municipal Court of Konigstein
im Taunus for the file Nos. HRA 2500, HRB 3865 and HRB
4288 described in Section III.4.1 third paragraph;
(e) Seller and Purchaser sign the joint written statement
described in Section III.6.4 informing the officiating
Notary Public of the Closing Date.
7. INDEMNITIES OTHER THAN FOR PURCHASER CLAIMS
7.1 INDEMNITY BY PURCHASER
(a) Purchaser hereby agrees to indemnify Seller and its
Affiliated Enterprises from and against all damages,
excluding consequential damages, but including lost
profits if such damages have an adequate causal connection
with the fact or act leading to Seller's claim against
Purchaser suffered by Seller or any of its Affiliated
Enterprises arising out of or resulting from
(i) the breach by Purchaser of any representation
and warranty or covenant hereunder;
92
(ii) the operation of the Seeger-Orbis Business by
Purchaser from and after the Closing Date,
unless and to the extent Purchaser has the
right to claim indemnification pursuant to
Section III.2 of this Agreement;
(iii) Purchaser's use of the "TransTechnology" name
after the expiration of the six (6) month
period or twelve (12) month period, as the case
may be, as expressly permitted pursuant to
Section III.4.2. or for the failure to destroy
any remaining materials after the expiration of
the six (6) month period; or for the use of any
trademarks, logos or trade names not being
transferred under this Agreement;
(iv) any and all of Purchaser's activities involving
the bank accounts set forth on EXHIBIT
II.1.1.12; Purchaser shall immediately
reimburse Seller for any bank account balances
in excess of the amount required to cover the
outstanding checks as set forth in Section
II.1.1.12; and
(v) any liabilities assumed by Purchaser pursuant
to Sections II.1.3.1 through 1.3.6 hereof.
The period during which Seller shall be entitled to assert damage
claims against Purchaser pursuant to Section III.7.1(a)(i) hereof
shall expire (verjahren) eighteen (18) months from the Closing Date.
The damage claims against Purchaser pursuant to Section
III.7.1(a)(ii), (iii), (iv) and (v) hereof shall expire upon the
lapse of the maximum statute of limitations period permitted by law.
The right of Seller to be indemnified pursuant to this Section
III.7.1 shall not be affected by disclosures made by Purchaser to
Seller, and shall not be subject to any provisions on Qualifying
Claims, Threshold Amounts and caps (such as Section III.2.7).
(b) Under the provisions of Section 4 of the Law for the
Improvement of Company Old Age Pension Arrangements of
December 19, 1974, as amended (herein
93
"BetrAVG"), and Section 613a BGB pension obligations to
existing pensioners and deferred pensioners cannot be
assumed by Purchaser; they therefore remain obligations of
Seller as provided in Section II.1.3.7 (xii).
In the internal relationship between Purchaser and Seller,
Purchaser hereby nevertheless obligates itself to
indemnify Seller and hold Seller harmless from these
pension obligations and the premium payments to be made to
the Pension Insurance Fund (Pensionssicherungsverein)
allocable to these pension obligations. This
indemnification and hold-harmless obligation does not
encompass any cost and/or obligations Seller may incur in
connection with the transfer of these pension obligations
to and their assumption by an insurance company or other
transferee eligible pursuant to Section 4 BetrAVG or
pursuant to other applicable legislative or administrative
provisions.
The administration and discharge of the pension
obligations to existing pensioners and deferred pensioners
and related payments will be handled by Purchaser on
behalf of Seller at no cost to Seller pursuant to a
Service Agreement between Purchaser and Seller
substantially in the form attached as EXHIBIT III.7.1(B)
(the "Service Agreement"); such Service Agreement shall be
effective as of the Closing Date.
Actuarial reports, personnel files and other
documentations required for the administration and
discharge of the pension obligations and the obligations
vis-a-vis the Pension Insurance Fund will be transferred
to Purchaser as part of the books referred to in Section
II.1.1.10. For the avoidance of doubt the parties confirm
that since, as regards the existing pensioners and the
deferred pensioners, Seller legally remains the employer,
it is the Seller's economic situation and not the
Purchaser's which will have to be taken into consideration
in the course of the review of the pensions which pursuant
to Section 16 BetrAVG will have to be undertaken in three
year intervals.
94
(c) All of the representations and warranties of Purchaser in this
Agreement have the meaning of independent guarantees pursuant to
Section 311 para. 1 BGB. Seller's aforementioned rights and
remedies do not require fault on the part of Purchaser or Barnes
or their agents. Sections III.2.10 and III.2.11 hereof shall
apply mutatis mutandis.
7.2 Indemnity by Seller Other than for Purchaser Claims
Seller hereby obligates itself to indemnify Purchaser and its
Affiliated Enterprises and hold same harmless from all obligations of
Seller which Purchaser did not expressly assume pursuant to this
Agreement and which Purchaser or any of its Affiliated Enterprises
may be confronted with after the Closing Date. Without limiting the
generality of the foregoing, this shall in particular apply to the
following:
(a) warranty liabilities vis-a-vis Seller's customers, other
customer claims and product liability obligations of Seller, in
all cases with respect to deliveries and performances effected
prior to the Closing Date, unless adequately reserved against in
the Closing Balance Sheet;
(b) any and all Tax liabilities for time periods preceding the
Closing Date, in particular Tax liabilities which Purchaser is
deemed to have assumed pursuant to Section 75 AO, unless
adequately reserved against in the Closing Balance Sheet;
(c) environmental obligations and liabilities, both vis-a-vis public
authorities and private parties, resulting from the fact that on
the Closing Date the Sold Property is polluted or contaminated
with any substances hazardous to human health or the environment
as well as obligations and liabilities due to Residual
Contamination in connection with the Seeger-Orbis Premises and
the operation of the Seeger-Orbis Business relating to the time
up to the Closing Date; there is
95
understanding between the parties that any Residual
Contamination revealed in the Report is to be allocated to the
time up to the Closing Date;
(d) obligations vis-a-vis present or former employees of the French
Sales Office who claim that under mandatory French law their
employment relationships are deemed to have been assumed by the
Purchaser;
(e) liabilities which Purchaser is deemed to have assumed pursuant
to Section 25 HGB.
Seller shall in particular indemnify and hold harmless Purchaser, and
its respective Affiliated Enterprises, officers, directors,
shareholders, partners, employees and agents against any and all
liability, loss, damage or injury, together with all reasonable
out-of-pocket costs and expenses relating thereto, including
reasonable legal fees, expenses and disbursements, arising out of,
connected with, or resulting from any claims giving rise to the above
indemnities.
For the removal of doubt,
- Seller's obligation to indemnify Purchaser and its Affiliated
Enterprises and hold same harmless as described in the first
paragraph of this Section III.7.2 does not apply to the pension
liabilities to existing pensioners and deferred pensioners
referred to in Section II.3.7 (xii), which are covered by
Purchaser's indemnity pursuant to Section III.7.1 (b);
- Seller's obligations arising out of or resulting from the breach
by Seller of any of the representations or warranties or
covenants are dealt with in Section III.2. of this Agreement.
7.3 The right of Purchaser to be indemnified pursuant to Section III.7.2
shall
(a) not be subject to the provisions of Section III.2.1;
96
(b) in derogation from the provisions of Section III.2.4 not be
affected by disclosures made by Seller to Purchaser or any
knowledge acquired by Barnes and/or the Purchaser and/or their
employees, representatives or professional advisers as a
consequence of such disclosures;
(c) not be subject to the provisions of Section III.2.7 (Qualifying
Claims, Threshold Amounts and cap provision);
(d) notwithstanding Section III.2.8, not be subject to a time
limitation, except to the extent the claim against the Purchaser
or any of its Affiliates is barred due to the lapse of a
relevant statute of limitations (Verjahrung).
7.4 If and to the extent Seller must indemnify Purchaser pursuant to
Section III.7.2, Purchaser shall assign to Seller or Seller's insurer
all of Purchaser's damage claims or warranty claims against third
parties related to the obligations or liabilities with respect to
which Seller must indemnity Purchaser, Section 255 BGB being
applicable mutatis mutandis.
8. JOINT LIABILITY (HAFTUNG ALS GESAMTSCHULDNER)
8.1 TTC shall be jointly and severally liable, together with Seller, for
the performance and fulfillment of all obligations of Seller under
this Agreement.
8.2 Barnes shall be jointly and severally liable, together with
Purchaser, for the performance and fulfillment of all obligations of
Purchaser under this Agreement.
9. MISCELLANEOUS
9.1 To the extent Seller makes warranties and other statements in this
Agreement "to the best of Seller's knowledge" or in a similarly
qualified manner, there is agreement between the parties that the
knowledge of the managing directors (Geschaftsfuhrer)
97
and procurated officers (Prokuristen) of Seller, TTSO and
Seeger-Orbis Beteiligungsgesellschaft mbH and of the employees as
listed on EXHIBIT III.9.1 is imputable to Seller. Seller shall be
deemed to have best knowledge, if any of the foregoing persons either
knew or should have known about the underlying facts and
circumstances giving rise to a breach of representation or warranty
by applying the standards of care of a diligent and prudent business
executive (ordentlicher und gewissenhafter Geschaftsleiter).
9.2 The parties to this Agreement are not entitled to assign to third
parties any rights arising from this Agreement or any claims against
the other party or parties, except that
(a) Purchaser is entitled to assign this Agreement, any rights
arising therefrom or any claims against the respective
counter-party to any of its Affiliated Enterprises; provided,
however, that the assigning party shall remain responsible for
all obligations thereunder if its permitted assignee shall fail
to perform thereunder, and
(b) Seller is entitled to assign its claim under the indemnity
provision of Section III.7.1 (b) to an insurance company or
other transferee eligible pursuant to Section 4 BetrAVG (or
pursuant to other applicable legislative or administrative
provisions) to which Seller has transferred the pension
obligations described in Section II.1.3.7 (xii).
Notwithstanding the foregoing,
- to secure the release by BHF-Bank of the rights to the Sold
Property as set forth in Sections I.1.1(b) and I.1.2(b) and its
rights to the Sold Assets as set forth in EXHIBIT II.4.1.A
Seller hereby assigns to BHF-Bank AG, D-60311 Frankfurt am Main
its claim against Purchaser for the payment of Purchase Price I
set forth in Section I.3.1 and a portion of the Preliminary
Purchase Price II in the amount of US $ 10,500,000.00 i.e.
claims in the total amount of US $ 17,000,000.00,
98
- in the event and at such time that Seller is liquidated,
any and all rights it acquires under the terms and conditions of
this Agreement shall automatically be transferred to TTC.
9.3 Amendments to this Agreement, including this Section III.9.3, are
only valid if they are made in writing or, if required by applicable
law, in notarized form.
9.4 Any amounts contained anywhere in this Agreement
- which are expressed in Deutsche Mark or in Euros shall, to the
extent they become relevant with regard to US-Dollar amounts, be
converted from Deutsche Mark or Euro, whichever the case may be,
into US-Dollars,
- which are expressed in US-Dollars shall, to the extent they
become relevant with regard to Deutsche Mark or Euro amounts, be
converted from US-Dollars to Deutsche Mark or Euro, whichever
the case may be
at the Foreign Exchange Reference Rate determined by the European
Central Bank in Frankfurt on the day that is three (3) Business Days
prior to the Closing Date.
9.5 Neither party shall make any public announcement of the transactions
contemplated herein except at a time and in a manner agreed by all
parties in writing or required under the applicable laws and
regulations or as required by any stock exchange.
9.6 To the extent that any one or several provisions of this Agreement
should be or become invalid, unenforceable, void or illegal this
shall have no effect on the remainder of the Agreement. In place of
the invalid, unenforceable, void or illegal provision the parties
shall be deemed to have agreed upon such valid, enforceable and legal
provision which accomplishes, to the nearest extent possible, the
same economic purpose as the invalid, illegal, void or unenforceable
provision unless the parties agree otherwise. The same applies
mutatis mutandis if a gap is found which requires a regulation.
99
9.7 Seller shall bear the costs of the deletion of the encumbrances of
the Sold Property registered in the Third Division No. 1 of the Land
Register and of the release of the Sold Assets from any security
rights of third parties.
Purchaser shall bear
- all notarial costs related to or arising in connection with the
notarization and implementation of this Agreement,
- any German real property transfer tax (Grunderwerbsteuer)
arising from this Agreement and its implementation,
- the fees of any regulatory authority having jurisdiction over
the transactions contemplated in this Agreement.
The costs of the Expert Arbitrator acting pursuant to this Agreement
shall be borne by Seller on the one hand and Purchaser on the other
hand as per the determination in the Expert Arbitrator's opinion (cf.
Section II.3.2.5). If the Expert Arbitrator finds himself incapable
of making such determination, Seller and Purchaser shall each bear
half the costs.
The provisions of Sections III.5.4 and III.6.3 shall remain
unaffected by this Section III.9.7.
In all other respects, each party will bear its own costs, in
particular the costs of its own advisers.
9.8. Until termination of this Agreement or Closing pursuant to the terms
hereof, Seller will permit representatives of the Purchaser to have
full access during normal business hours and upon reasonable notice
to all premises, properties, personnel, books, records (including Tax
records), contracts and documents of or pertaining to
100
the Seeger-Orbis Business; provided however, that any such access
shall be allowed only in such manner as not to interfere unreasonably
with the operations of Seller's business.
9.9 This Agreement shall be subject to the laws of Germany with the
exception of the German conflict of laws rules.
9.10 The exclusive place of jurisdiction is Frankfurt am Main.
9.11 The English version of this Agreement shall govern, regardless of any
translation of this Agreement into German that may be prepared;
provided, however, where German terms are provided in parentheses in
this governing English version or where Exhibits have been prepared
only in the German language as attached hereto, the German terms
shall govern.
10. MAILING ADDRESSES
10.1 Notices which are directed to Seller or TTC are to be sent in writing
to the following address:
Gerald C. Harvey, Esq.
General Counsel
TransTechnology Corporation
150 Allen Road
Liberty Corner, New Jersey 07938
USA
cc: Jurgen Reemers, Esq.
Jones, Day, Reavis & Pogue
Hochhaus am Park
Gruneburgweg 102
D-60323 Frankfurt am Main
Germany
101
10.2 Notices which are directed to Purchaser or Barnes are to be sent in
writing to the following address:
Mr. Philip A. Goodrich
Senior Vice President, Corporate Development
Barnes Group Inc.
123 Main Street
Bristol, CT 06011-0489
USA
cc: Signe S. Gates, Esq.
Senior Vice President, General Counsel and Secretary
Barnes Group Inc.
123 Main Street
Bristol, CT 06011-0489
USA
cc: Andreas Hilfrich, Esq.
Mayer, Brown & Platt Gaedertz
Bockenheimer Landstrasse 98-100
D-60323 Frankfurt am Main
10.3 Each party to this Agreement may at any time change its address by
giving notice in writing to the other party.
IV
THEREUPON APPEARED IN ADDITION
Mr. Jorg Rehder
Born March 27, 1962
Residing at Ingolstadter Stra(beta)e 26
60316 Frankfurt am Main
Identifying himself by submitting his valid German Identity Card No. 4010824656
Acting not for himself but exclusively for TTC under the power of attorney
attached hereto as EXHIBIT C.
102
Dr. Bodo Schlosshan
born May 22, 1929
residing at Wilhelm-Beer-Weg 30, 60599 Frankfurt am Main
personally known to the Notary Public
Acting not for himself but exclusively for Purchaser under notarially certified
power of attorney dated January 29, 2002 a certified copy of which is attached
hereto as EXHIBIT L.
The deponent Mr. Sven-Uwe Wolber is hereinafter also acting for Seller under
authorization dated January 31, 2002.
The deponents requested that the exhibits listed hereinafter be attached to this
notarial deed because they are the Exhibits referred to above under I through
III. The Exhibits have been prepared in the German language (with the exception
of a number of exhibits prepared in the English language). The deponents Rehder,
Schlosshan and Wolber, in addition to having command of the German language,
have sufficient command of the English language of which the Notary Public
assured himself. The Notary Public pointed out to these deponents that they can
request a German translation of the English language Exhibits. However, the
deponents stated that they do not request a German translation of the English
language Exhibits.
103
LIST OF EXHIBITS OF PURCHASE AGREEMENT
Exhibit I.3.2(b)A Draft of the Cancellation Consent (German)
Exhibit I.3.2(b)B Draft of the Agreement on Release of Security (English)
Exhibit I.4.1: Unfulfilled administrative requirements, legal disputes
etc. relating to the Sold Property (English)
Exhibit II.1.1.1: Status of the moveable fixed assets of the Seeger-Orbis
Business as of September 30, 2001 (List, German)
Exhibit II.1.1.2: List of inventories pertaining to the Seeger-Orbis
Business as of September 30, 2001 (German/English)
Exhibit II.1.1.3: Intangible assets pertaining to the Seeger-Orbis
Business as per the Signing Date (German, partially
English)
Exhibit II.1.1.4A: Material contracts pertaining to the Seeger-Orbis
Business existing at the Signing Date (List, English)
Exhibit II.1.1.4B: List of all Employment Contracts (English)
Exhibit II.1.1.4C: Listing of all purchase orders performable after the
Closing Date. (English)
Exhibit II.1.1.4D: Listing of all other written and oral contracts and
contract rights existing on the Closing Date which are
not already listed on Exhibits II.1.1.4A, II.1.1.4B and
II.1.1.4C. (English)
Exhibit II.1.1.11: List of Other Tangible or Intangible Assets to be
transferred to Purchaser (None)
Exhibit II.1.1.12: List of Seller's Bank Accounts (English)
Exhibit II.1.2.12: List of tangible or intangible assets to be excluded
from the transfer to Purchaser (None)
Exhibit II.1.3.9: Drafts of report letters addressed to the competent
Commercial Registers to report for registration the
exclusion of the assumption by Purchaser of certain
liabilities of Seller (German)
Exhibit II.3.2.1: Calculation method for determining Net Assets (List,
English)
Exhibit II.4.1A: List of Sold Assets not Owned by Seller (English)
Exhibit II.4.4A: Infringed Administrative Security Regulations (None)
Exhibit II.4.6A: List of Employment Contracts which were terminated
between March 31, 2001 and the Closing Date, including
the following
104
data: Name, title, age, date of commencement of
employment and date of termination of employment.
(German)
Exhibit II.4.6B: List of employees who participate in the
Early-Retirement/Part-Time-Programme
("Altersteilzeit"), including the following data: Name,
Active Phase, Passive Phase (Sabbatical), indication of
written application and reoccupation of job vacancy.
(German)
Exhibit II.4.6C: List of contracts which entitle the contract partner,
in the event of a change of control occurring with
respect to Seller, to terminate the contract in
question. (English)
Exhibit II.4.9: List of the Pension Obligations of Seller as per
September 30, 2001. (German)
Exhibit II.4.11: List of employment agreements of Seller with managers
and employees providing for any severance payment to be
made upon termination. (English)
Exhibit II.4.12: Increases of remuneration etc. of Seeger-Orbis
employees in the period of six (6) months prior to the
Signing Date. (List, English)
Exhibit II.4.13: List of all shop agreements and collective bargaining
agreements as of the Signing Date. (English)
Exhibit II.4.15: List of litigation matters pending at the Signing Date.
(English)
Exhibit II.4.16: List of insurance contracts. (German)
Exhibit II.4.19: List of assets which are not sold to the Purchaser but
which were used for the operation of the Seeger-Orbis
Business in the same fashion as it has been operated
since April 1, 2000. (None)
Exhibit III.3.1: List of Competing Products and Services. (English)
Exhibit III.7.1(b): Form of Service Agreement regarding pensions.
Exhibit III.9.1: List of persons, whose knowledge is imputable to
Seller. (English)
105
V
Instructions and Concluding Provisions
1 The Notary Public has duly explained that the change in title in the
Land Register regarding the Sold Property can only be registered
provided that
1.1 an advance payment towards the costs of the Land Register has been
made,
1.2 the tax authority has issued the clearance certificate pursuant to the
Real Property Transfer Tax Act,
1.3 all necessary official approvals have been received,
1.4 the City of Konigstein has declared that it is not entitled to a
statutory right of pre-emption regarding the Sold Property or that it
will not exercise its statutory right of pre-emption.
2 The notary further advised the parties that:
2.1 the transfer of title to Purchaser will occur only upon Purchaser's
entry as the new owner in the Land Register; provided, however, that no
application for entry shall be filed before the Closing Date and the
receipt by Seller of the payments pursuant to Sections I.3.1 and II.3.3
2.2 pursuant to the law, irrespective of deviating agreements between the
parties, the contracting parties are jointly and severally liable for
costs and real property transfer tax with regard to the Sold Property
as well as for notarial fees arising from the recording of this
Agreement,
2.3 the respective property owner is liable for the municipal and service
fee assessments which are served upon him, and the property is liable
for all outstanding public charges - irrespective of deviating
agreements between the parties,
106
2.4 it is necessary to incorporate in this Agreement all other related
agreements because otherwise this Agreement could be null and void,
2.5 it is advisable to inspect the Register of Construction Charges
(Baulastenverzeichnis), to have a separate tax consultation for the
contracting parties and to obtain a certificate from the City of
Konigstein regarding outstanding administrative charges or costs for
the provision of public services.
3. The Notary Public is instructed to implement this Agreement, to
procure any necessary private and official approvals and to make all
applications to the Land Register. The declarations shall be deemed
to be received by all parties upon receipt by the Notary Public
unless these contain conditions or qualifications. In that event,
they shall be forwarded directly to the parties and the Notary Public
shall be provided with a copy.
The Notary Public is further instructed and authorized to amend and
modify the Land Register declarations contained in this notarial deed
so as to remedy any formal complaints of the Land Register.
4. Purchaser and Seller instruct the Notary Public to file the
application for the entry in the Land Register of Purchaser as the
owner of the Sold Property, provided that (a) it is certain that
statutory rights of pre-emption do not exist or that such rights will
not be exercised, (b) the Notary Public has received all necessary
official approvals and the clearance certificate from the tax
authorities pursuant to the Real Property Transfer Tax Act, and (c)
Seller has confirmed to the Notary Public in writing or Purchaser has
demonstrated to the Notary Public that US$ 17,000,000 have been
received by BHF Bank, the bank being released from its duty of
confidentiality by Seller for this purpose.
All applications to the Land Register shall be exclusively made by
the Notary Public; the parties waive the right to personally make
applications.
107
5. Where this Agreement provides for declarations to be made before or
by the Notary Public, his representative or successor in office shall
be deemed to be legally one and the same as the Notary Public.
The Land Register was not inspected by the Notary Public. The Notary Public had
at hand a certified excerpt from the Land Register for Schneidhain of the
Municipal Court of Konigstein im Taunus, folios 615 and 699, dated November 21,
2001. Its content was discussed with the deponents. After having been advised of
their respective rights and the risks involved the parties nevertheless insisted
on the recording of this Agreement to be effected today.
The Register of Construction Charges (Baulastenverzeichnis) was not inspected by
the Notary Public. The Notary Public advised the parties of the risks involved.
The parties nevertheless insisted on the recording of this Agreement to be
effected today.
The German language Exhibits II.1.1.1, II.1.1.2, II.1.1.3 (partially),
II.1.1.4.B, II.4.6.A, II.4.6.B, II.4.9 and II.4.16 were presented to the
deponents Rehder, Schlosshan and Wolber and reference was made to them; the
deponents Rehder, Schlosshan and Wolber read these Exhibits and took cognizance
of their contents and thereupon signed these attachments privately page by page.
After having been informed by the Notary Public of their right to have these
Exhibits read to them, they waived this right.
The English language Exhibits II.1.1.3, II.1.1.4 a), II1.1.4 B, II.1.1.4 C,
II.1.1.4 D, II.1.1.12, II.3.2.1, II.4.6.C, II.4.12, II.4.13 and III.9.1 were
presented to all deponents and reference was made to them; the deponents read
these Exhibits and took cognizance of their contents and thereupon signed these
attachments privately page by page. After having been informed by the Notary
Public of their right to have these Exhibits read to them, they waived this
right.
The German language Exhibits I.3.2 b) A, II.1.1.3 and II.1.3.9 were read aloud
in German to the deponents Rehder, Schlosshan and Wolber and approved by them.
The minutes which are in the English language and the English language Exhibits
I.3.2 b) B, I.4.1.1, II.4.1.A, II.4.11, II.4.15 and III.3.1 were read aloud in
English to all deponents and approved by them (except for Part I through III of
the minutes which were not read aloud to the deponents Rehder, Schlosshan and
Wolber).
108
All deponents have signed these minutes in their own hands, in the presence of
the Notary Public, as follows:
109