Exhibit 2.1
No. of the Roll of Deeds for 2007 K
SALE AND PURCHASE AGREEMENT
Done at Dusseldorf on January 29, 2007. Before me, the undersigned notary Dr.
Marcus Kampfer with official residence at Dusseldorf, appeared identified by
their ID-Cards:
1. Mr. Joachim Hasselbach, born on June 4, 1971 business address: Mainzer
Landstrasse 46, 60325 Frankfurt a. M., acting not in his own name but by virtue
of a power of attorney, the original of which was presented for this
notarization and a copy of which is attached to this deed, as agent for
excluding personal liability Hirschmann Electronics Holding S.A., 7A rue
Stumper, L-2557, Luxembourg (hereinafter referred to as "Seller"),
2. Mr. Christof Alexander Schneider, born on October 19, 1975 business address
Benrather Strasse 18-20, 40213 Dusseldorf, acting not in his own name but by
virtue of powers of attorney, the copies of which were presented for this
notarization and copies of which are attached to this deed, as agent for
excluding personal liability, confirming to submit the originals of such powers
of attorney,
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Belden Europe B.V., Edisonstraat 9, 5928 Venlo, The Netherlands (hereinafter
referred to as "Purchaser")
and
Belden CDT, Inc., 7701 Forsyth Boulevard, Suite 800, St. Louis, MO 63105, USA
(hereinafter referred to as "Purchaser Guarantor")
The acting notary and the persons appearing have sufficient knowledge of the
English language.
The persons appearing requested the notarization of the following:
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SALE AND PURCHASE AGREEMENT
REGARDING ALL THE SHARES
IN HIRSCHMANN INDUSTRIES GMBH
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TABLE OF CONTENTS
Definitions............................................................... 6
Preamble.................................................................. 10
1. Sale and Assignment................................................... 14
2. Repayment of Financial Debt........................................... 15
3. Purchase Price........................................................ 15
4. Seller's Certificate and Final Share Purchase Price................... 18
5. Signing Date, Closing Date, Closing Conditions........................ 20
6. Merger Control Proceedings; Other Regulatory Requirements; Withdrawal
Rights................................................................ 22
7. Seller's Representations and Warranties............................... 24
8. Limitation of Seller's Liability...................................... 30
9. Purchaser's Representations and Warranties; Seller's Waiver and
Purchaser's Indemnity................................................. 32
10. Further Covenants of the Parties...................................... 34
11. Tax Indemnity......................................................... 36
12. Guarantee............................................................. 38
13. Other Specific Indemnities............................................ 38
14. Confidentiality....................................................... 38
15. Miscellaneous......................................................... 39
16. Severability.......................................................... 42
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SALE AND PURCHASE AGREEMENT
between
1. Hirschmann Electronics Holding S.A., 7A rue Stumper, L-2557, Luxembourg
(hereinafter referred to as "SELLER"),
2. Belden Europe B.V., Edisonstraat 9, 5928 Venlo, The Netherlands
(hereinafter referred to as "PURCHASER")
3. Belden CDT, Inc., 7701 Forsyth Boulevard, Suite 800, St. Louis, MO 63105,
USA
(hereinafter referred to as "PURCHASER GUARANTOR")
(Seller and Purchaser hereinafter collectively referred to as "PARTIES", each of
them being a "PARTY")
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DEFINITIONS
"AKTG" shall mean the German Stock Corporation Act (Aktiengesetz);
"BALANCING AMOUNT" shall have the meaning set out in Clause 3.3;
"BANKS" shall have the meaning set out in Preamble (G);
"BENEFICIARIES" shall have the meaning set out in Clause 9.2;
"BEST ESTIMATE STATEMENT" shall have the meaning set out in Clause 3.2;
"BGB" shall mean the German Civil Code (Burgerliches Gesetzbuch);
"BREACH" shall have the meaning set out in Clause 7.2;
"BUSINESS DAY" shall have the meaning set out in Clause 3.6.1;
"CASH" shall have the meaning set out in Clause 3.2(a);
"CLOSING" shall have the meaning set out in Clause 5.2;
"CLOSING ACTIONS" shall have the meaning set out in Clause 5.4;
"CLOSING DATE" shall have the meaning set out in Clause 5.2;
"COMPANY" shall have the meaning set out in Preamble (A);
"COMPETING BUSINESS" shall have the meaning set out in Clause 10.5;
"CONDITIONS PRECEDENT" shall have the meaning set out in Clause 1.3;
"ECONOMIC TRANSFER DATE" shall have the meaning set out in Clause 5.1.3;
"ESCROW ACCOUNT" shall have the meaning set out in the Escrow Agreement;
"ESCROW AGREEMENT" shall have the meaning set out in Preamble (K);
"EXPERT" shall have the meaning set out in Clause 4.4;
"FINANCIAL DEBT" shall have the meaning set out in Clause 3.2(b);
"FINAL PURCHASE PRICE" shall have the meaning set out in Clause 4.5;
"FINANCIAL STATEMENTS" shall have the meaning set out in Clause 7.1.10;
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"GMBHG" shall mean the German Limited Liability Companies Act (GmbH-Gesetz);
"GROUP" shall have the meaning set out in Preamble (D);
"GROUP'S PRO-FORMA BALANCE SHEET" shall have the meaning as set out in Clause
4.1;
"HAC" shall have the meaning as set out in Preamble (B);
"HAC JOINT VENTURE COMPANIES" shall have the meaning as set out in Preamble (D);
"HAC SUBSIDIARIES" shall have the meaning as set out in Preamble (D);
"HCC" shall have the meaning as set out in Preamble (F);
"HCC LUXCO" shall have the meaning set out in Schedule (F);
"HCC PLTA AGREEMENT" shall have the meaning set out in Preamble (L);
"HCC PURCHASE PRICE" shall have the meaning set out in Schedule (F);
"HCC RESTRUCTURING" shall have the meaning set out in Preamble (F);
"HCC SUBSIDIARIES" shall have the meaning as set out in Preamble (F);
"HCC TRANSFER" shall have the meaning as set out in Schedule (F);
"HE" shall have the meaning as set out in Preamble (B);
"HGB" shall mean the German Commercial Code (Handelsgesetzbuch);
"HIRSCHMANN GROUP COMPANIES" shall have the meaning set out in Preamble (D);
"HV" shall have the meaning as set out in Preamble (B);
"KEY EMPLOYEES" shall have the meaning set out in Claus 7.1.9 (g).
"MATERIAL ADVERSE CHANGE" shall have the meaning as set out in Clause 6.6;
"MEZZANINE CREDIT AGREEMENT" shall have the meaning set out in Preamble (G);
"MICROLOG" shall have the meaning as set out in Preamble (C);
"PARTIES" shall have the meaning set out in the deed caption;
"PRELIMINARY PLTA AMOUNT" shall have the meaning set out in Preamble (L);
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"PURCHASE PRICE" shall have the meaning set out in Clause 3.1;
"PURCHASE PRICE INTEREST" shall have the meaning set out in Clause 3.5;
"PURCHASER" and "PURCHASER GUARANTOR" shall have the meaning set out in the deed
caption;
"PURCHASER'S CLAIM" shall have the meaning set out in Clause 8;
"REGULATORY CLEARANCES" shall have the meaning set out in Clause 1.3.1;
"SELLER" shall have the meaning set out in the deed caption;
"SELLER'S ACCOUNT" shall have the meaning set out in Clause 5.4(c);
"SELLER'S BEST KNOWLEDGE" shall mean the actual knowledge as of the Signing Date
of a certain fact or circumstance in relation to Seller's Guarantees contained
in Section 7.1 of the following persons set forth under A. after due inquiry
with the following persons set forth under B.
A: Justin von Simson, Martin Block, Reinhard Sitzmann, Viktor Schicker and Dr
Georg Schneider.
B: The current managing directors (Geschaftsfuhrer) of the Hirschmann Group
Companies as well as Gotz-Rudiger Muller with respect to environmental matters
and Laurence Burns with respect to the HAC Joint Venture Companies.
"SELLER'S FINAL PURCHASE PRICE CALCULATION" shall have the meaning set out in
Clause 4.2;
"SELLER'S GROUP" shall have the meaning set out in Clause 7.1.12.
"SENIOR AND MEZZANINE BANKS" shall have the meaning set out in Preamble (G);
"SENIOR BANKS' ACCOUNT" shall have the meaning set out in Clause 5.4(d);
"SENIOR CREDIT AGREEMENT" shall have the meaning set out in Preamble (G);
"SENIOR CREDIT REPAYMENT AMOUNT" shall have the meaning set out in Clause 2;
"SENIOR FINANCE AND MEZZANINE FINANCE DOCUMENTS" shall have the meaning set out
in Preamble (H);
"SHARE" shall have the meaning as set out in Preamble (E);
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"SHAREHOLDER LOAN" shall have the meaning as set out in Preamble (J);
"SHAREHOLDER LOAN REPAYMENT AMOUNT" shall have the meaning as set out in
Schedule (F);
"SIGNING DATE" shall have the meaning set out in Clause 5.1.1;
"TAXES" shall have the meaning set out in Clause 11.1;
"TRANSACTION" shall have the meaning set out in Clause 1.1;
"VENDOR LOAN NOTE" shall have the meaning set out in Preamble (I);
"VENDOR LOAN NOTE AMOUNT" shall have the meaning set out in Clause 2;
"WORKING CAPITAL" shall have the meaning set out in Clause 3.2(c);
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PREAMBLE
(A) The Seller is the sole shareholder of Hirschmann Industries GmbH, a limited
liability company incorporated under the laws of the Federal Republic of
Germany, registered with the commercial register of the local court of
Stuttgart under HRB 225801, with its corporate seat in Neckartenzlingen and
business address Stuttgarter Strasse 45-51, 72654 Neckartenzlingen
(Germany), (the "COMPANY").
(B) The Company holds 100 % participations in the following companies:
(i) Hirschmann Verwaltungs GmbH, a limited liability company incorporated
under the laws of the Federal Republic of Germany with a registered
share capital of EUR 25,000, registered with the commercial register
of the local court of Stuttgart under HRB 225802 and with its
corporate seat in Neckartenzlingen (Germany) ("HV");
(ii) Hirschmann Electronics GmbH, a limited liability company incorporated
under the laws of the Federal Republic of Germany with a registered
share capital of EUR 25,000 and registered with the commercial
register of the local court of Stuttgart under HRB 225933 and with its
corporate seat in Neckartenzlingen (Germany), ("HE"); and
(iii) Hirschmann Automation and Control GmbH, a limited liability company
incorporated under the laws of the Federal Republic of Germany with a
registered share capital of EUR 30,000 and registered with the
commercial register of the local court of Stuttgart under HRB 225927
with its corporate seat in Neckartenzlingen (Germany) ("HAC").
(C) HE holds the following participations:
(i) a participation of 30 % in Microlog Logistische Dienstleistungen GmbH,
a limited liability company incorporated under the laws of the Federal
Republic of Germany with a registered share capital of EUR 52,000 and
registered with the commercial register of the local court of
Stuttgart under HRB 220123 and with its corporate seat in
Neckartenzlingen (Germany) ("MICROLOG"); and
(ii) a participation of approx. 1.2% in Esslinger Wohnungsbau GmbH, a
limited liability company incorporated under laws of Germany with a
registered share capital of EUR 4,606,000 and registered with the
commercial register of the local court of Stuttgart under HRB 210007
and with its corporate seat in Esslingen (Germany).
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(D) HAC holds 100 % participations in the following companies:
(i) Hirschmann Automation and Control B.V., a limited liability company
incorporated under the laws of The Netherlands with a registered share
capital of EUR 620,000 and registered with the chamber of commerce
Gooi- en Eemland under dossier no. 32025053 and with its corporate
seat in Weesp (The Netherlands);
(ii) Hirschmann Automation and Control S.A.S., a simplified stock
corporation incorporated under the laws of France with a registered
share capital of EUR 762,245.09 and registered with the chamber of
commerce and companies Pontoise under identification no. 300 209 129
and with its corporate seat in Domont (France);
(iii) Hirschmann Automation and Control, S.L., a limited liability company
incorporated under the laws of Spain with a registered share capital
of EUR 300,000 and registered with the commercial register of Madrid
under no. B84125574 and with its corporate seat in Madrid (Spain);
(iv) Hirschmann Automation and Control Ltd., a private limited company
incorporated under the laws of the United Kingdom with a registered
share capital of GBP 50,000 and registered with the registrar of
companies for England and Wales under company no. 2448999 and with its
corporate seat in Birmingham (United Kingdom);
(v) Hirschmann Automation and Control Pte. Ltd., a limited private company
incorporated under the laws of Singapore with a registered share
capital of SGD 500,000 and registered with the accounting and
corporate regulatory authority under registration no. 199705010D and
with its corporate seat in Singapore (Singapore);
(vi) Hirschmann Automation and Control (Shanghai) Co. Ltd., a limited
private company incorporated under the laws of the People's Republic
of China with a registered share capital of USD 200,000 and registered
with Shanghai Industrial and Commercial Management Bureau, Pudong New
District Branch under ref. no. 0539373 and with its corporate seat in
Shanghai (People's Republic of China) and
(vii) Hirschmann Automation and Control Inc., a corporation incorporated
under the laws of the State of Delaware (United States of America)
with a registered share capital of USD 700 and registered in Delaware
under registration no. 0850629 and with its corporate seat in
Chambersburg (PA) (United States of America) ((i) to (vii)
collectively referred to as "HAC SUBSIDIARIES").
Furthermore, HAC holds 50 % participations in the following joint venture
companies:
(viii) Xuzhou PAT Control Technology Co. Ltd. a private limited company
incorporated
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under the laws of the People's Republic of China with a registered
share capital of DEM 2,000,000 and registered with Jiangsu Province
Xuzhou Industrial and Commercial Management Bureau, under ref. no.
SuXu 000478 and with its corporate seat in Xuzhou (People's Republic
of China);
(ix) Ningbo Hirschmann Electronics Co. Ltd. a private limited company
incorporated under the laws of the People's Republic of China with a
registered share capital of USD 500,000 and registered with Ningbo
Industrial and Commercial Management Bureau, under ref. no. 0959795
and with its corporate seat in Yuyao (People's Republic of China) and
(x) Xuzhou Hirschmann Electronics Co. Ltd. a private limited company
incorporated under the laws of the People's Republic of China with a
registered share capital of EUR 2,400,000 and registered with Jiangsu
Province Xuzhou Industrial and Commercial Management Bureau, under
ref. no. 1005898 and with its corporate seat in Xuzhou (People's
Republic of China) ((viii) to (x) collectively referred to as "HAC
JOINT VENTURE COMPANIES"; and
(xi) a participation of 90% in PAT-DST (Malaysia) Sdn Bhd. i.L., Jin
Tengah, Malaysia, with an authorised capital of RM 100,000 and
registered with the Malaysian Company's register under company no.
257624-D.
(Company, HV, HE, HAC and HAC Subsidiaries are collectively referred herein
as the "HIRSCHMANN GROUP COMPANIES" or as the "GROUP").
(E) The Company's share capital amounts to EUR 25,000 (in words: twenty five
thousand Euros) and is represented in a single share. The share in the
Company ("SHARE") is held by the Seller.
(F) The Company held a 100 % participation in Hirschmann Car Communication
GmbH, a limited liability company incorporated under the laws of the
Federal Republic of Germany with a registered share capital of EUR 25,000
and registered with the commercial register of the local court of Stuttgart
under HRB 225926 and with its corporate seat in Neckartenzlingen (Germany)
("HCC") which holds 100 % participations in the following companies:
(i) Hirschmann Car Communication S.A.S., a simplified stock corporation
incorporated under the laws of France with a registered share capital
of EUR 40,000 and registered with the chamber of commerce and
companies Pontoise under identification no. 481484210 and with its
corporate seat in Domont (France);
(ii) Hirschmann Car Communication Inc., a corporation incorporated under
the laws of the State of Delaware (United States of America) with a
registered share capital of
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USD 1,000 and registered in Delaware under the registration-number
3936841 and with its corporate seat in Auburn Hills (MI) (United
States of America) and
(iii) Hirschmann Car Communication Kft., a private limited company
incorporated under the laws of Hungary with a registered share capital
of HUF 742,520 and registered with the Registry court of Bekes County
under no. 04-09-007210 and with its corporate seat in Bekescsaba
(Hungary) ((i) to (iii) collectively referred to as "HCC
SUBSIDIARIES").
In the course of a pre-Transaction restructuring, the Company sold and
transferred its 100 % participation in HCC to HCC LuxCo as defined in
SCHEDULE (F) ("HCC RESTRUCTURING"). An overview of the steps of this
pre-Transaction restructuring (including the effective dates of the
different steps) is set out in SCHEDULE (F); the relevant documentation, as
referred to in SCHEDULE (F), has been made available to the Purchaser prior
to the Signing Date.
(G) The Company, other Hirschmann Group Companies, HCC and the HCC Subsidiaries
as borrowers and/or guarantors on the one hand and NIBC Bank N.V. (as
security agent) and other banks and financial institutions (the "SENIOR AND
MEZZANINE BANKS" also collectively referred to as the "BANKS") on the other
hand are parties to a senior credit agreement of 2 February 2004 as amended
from time to time regarding a senior credit initially in the principal
amount of EUR 55,000,000 (the "SENIOR CREDIT AGREEMENT") and a mezzanine
credit agreement, as amended from time to time regarding a mezzanine credit
initially in the principal amount of EUR 5,000,000 (the "MEZZANINE CREDIT
AGREEMENT"). The principal amount plus interest thereon under the Mezzanine
Credit Agreement has been fully repaid to the Mezzanine Banks. It is
intended that Purchaser shall repay on the Closing Date the outstanding
amounts as at the Closing Date under the Senior Credit Agreement.
(H) Under or in connection with the Senior Credit Agreement and the Mezzanine
Credit Agreement, certain Hirschmann Group Companies entered into the
senior finance and mezzanine finance documents (e.g. equity and
intercompany subordination agreement, existing security, assignment
agreements, existing ancillary facilities) the main agreements of which are
listed in SCHEDULE (H) for informational purposes only (the "SENIOR FINANCE
AND MEZZANINE FINANCE DOCUMENTS"), and which will terminate on the Closing.
(I) Company as borrower and Rheinmetall AG as lender are parties to a vendor
note of 2 February 2004 as amended on 11 October 2006 in the principal
amount of EUR 14 million (the "VENDOR LOAN NOTE").
(J) The Seller as lender and Company as borrower are parties to a shareholder
loan agreement of 24 March 2004 as amended on 20 September 2005 regarding a
shareholder loan initially in the principal amount of EUR 20.6 million (the
"SHAREHOLDER LOAN"). Prior to the Closing
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Date (as defined below) and in connection with HCC Restructuring, the
Company will be released from its obligations under the Shareholder Loan,
as set out in more detail in SCHEDULE (F).
(K) The Seller intends to sell its Share and, having carried out a
comprehensive due diligence review of the Group, Purchaser intends to
acquire the Share pursuant to the terms and conditions set out in this
Agreement and the Parties and the Escrow Agent named in such agreement have
in parallel to the execution of this Agreement executed the Escrow
Agreement attached hereto as SCHEDULE (K) (the "ESCROW AGREEMENT").
(L) The Company (as parent company) and HCC (as subsidiary company) had entered
into a profit and loss transfer agreement which was terminated by the
parties with effect of the end of 23 January 2007 (the "HCC PLTA
AGREEMENT"). In order to settle the anticipated loss of HCC for the fiscal
year ending 2006, by resolution dated 23 January 2007 an amount of EUR
15,000,000 (in words: fifteen million Euros) ("PRELIMINARY 2006 PLTA
AMOUNT") has been withdrawn from the capital reserves of HCC and set off
against the compensation claim against the Company for the actual losses
incurred by HCC in the fiscal year 2006.
1. SALE AND ASSIGNMENT
1.1 Upon the terms and subject to the conditions set forth in this Agreement,
Seller hereby sells and assigns to Purchaser the Share with economic effect
as of the Economic Transfer Date; Purchaser hereby accepts such sale and
assignment of the Share (the "TRANSACTION").
1.2 The sale and assignment of the Share shall include all ancillary rights and
benefits arising from the Share after the Economic Transfer Date, including
voting rights, subscription rights and dividend rights.
1.3 The assignment of the Share pursuant to Clause 1.1 is subject to the
fulfilment of each of the following conditions precedent (aufschiebende
Bedingungen) ("CONDITIONS PRECEDENT"), unless a Condition Precedent has
been waived in accordance with Clause 1.4:
1.3.1 approval of the Transaction by all relevant authorities in respect of
the filings or approvals specified in SCHEDULE 1.3.1, and/or expiry of
all relevant waiting periods without the Transaction being prohibited
by the relevant authority ("REGULATORY CLEARANCES");
1.3.2 full (i) receipt by the Seller, or confirmation of such receipt, of
the Purchase Price and the Purchase Price Interest minus the Escrow
Amount in the Seller's Account and (ii) receipt by the Escrow Agent of
the Escrow Amount in the Escrow Account;
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1.3.3 receipt by the Senior Banks of the Senior Credit Repayment Amount on
behalf of the borrowers under the Senior Credit Agreement in
accordance with Clause 2 below;
1.3.4 receipt by Rheinmetall AG of the Vendor Loan Note Amount on behalf of
the Company in accordance with Clause 2 below; and
1.3.5 receipt by HCC of the PLTA Outstanding Loss Compensation Amounts as
defined below, if any.
1.4 To the extent legally permissible by applicable law, the Condition
Precedent set out in Clause 1.3.1 can be waived in whole or in respect of
individual jurisdictions by written agreement between Seller and Purchaser.
1.5 The consent to the assignment of the Share set out above given by the
Seller as shareholder of the Company as required under the Company's
articles of association is attached as SCHEDULE 1.5.
2. REPAYMENT OF FINANCIAL DEBT
On the Closing Date (as defined in Clause 5.2 below) Purchaser shall pay
(i) the outstanding principal plus accrued and unpaid interest as well as
any prepayment and all other charges under the Senior Credit Agreement as
at the Closing Date ("SENIOR CREDIT REPAYMENT AMOUNT") on behalf of the
Company, other Hirschmann Group Companies, HCC and the HCC Subsidiaries
under the Senior Credit Agreement in discharge of all payment obligations
under the Senior Credit Agreement; (ii) the outstanding principal plus
accrued and unpaid interest as well as any other charges under the Vendor
Loan Note (the "VENDOR LOAN NOTE AMOUNT") to Rheinmetall AG on behalf of
the Company; and (iii) the PLTA Outstanding Loss Compensation Amounts to
HCC on behalf of the Company.
3. PURCHASE PRICE
3.1 The purchase price for the Share (the "PURCHASE PRICE") shall become due
and payable on the Closing Date and shall be calculated according to the
following formula:
(a) EUR 196,997,000 (in words: one hundred ninety-six million nine hundred
ninety-seven thousand Euros);
(b) plus Cash;
(c) minus the Financial Debt;
(d) plus the amount by which the Working Capital exceeds the amount of EUR
41,370,000; and
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(e) minus the amount by which the Working Capital falls short of the
amount of EUR 37,430,000.
The amount for each of Cash, Financial Debt and Working Capital set forth
in the Best Estimate Statement shall be used to calculate the Purchase
Price pursuant to this Clause 3.1.
3.2 For the purposes of this Agreement:
(a) "CASH" shall mean (a) the aggregate pro-forma consolidated amount of
cash and cash equivalents within the meaning of IFRS of the Group as
at the Economic Transfer Date excluding (i) items required to be held
on separate accounts, as collateral or in escrow as a result of
corporate, regulatory or contractual requirements after the Closing
Date; and (ii) items located in any country outside Germany which, as
a result of foreign exchange, taxation or other restrictions, cannot
be freely transferred, without any Taxes or governmental charges,
within a period of three months after the Closing Date, to Germany and
(b) the amount which has been paid by HCC to the Company between the
date of this Agreement and the Closing Date in order to settle (i) the
amount by which the Preliminary 2006 PLTA Amount exceeds the loss
generated by HCC in the fiscal year 2006, as shown in the statutory
accounts of HCC as 31 December 2006 and to be compensated by the
Company pursuant to the HCC PLTA Agreement ("TOTAL 2006 PLTA AMOUNT")
and (ii) any profit generated by HCC in the time between 01 January
2007 and 23 January 2007, 24.00 hours, as shown in the interim
accounts of HCC as of 23 January 2007, 24:00 hours (such accounts of
HCC as referred to in the last paragraph of Section 3.2). In the event
that the transfer of any items referred to above would be permitted,
but be subject to taxes or other governmental charges, only an amount
equal to such taxes or charges shall be excluded from Cash.
(b) "FINANCIAL DEBT" shall mean the aggregate amount of the outstanding
principal plus accrued and unpaid interest as well as any prepayment
and other charges, if any, under (i) the Senior Credit Agreement and
(ii) the Vendor Loan Note, (iii) any other interest bearing
liabilities (Darlehen) (including, but not limited to liabilities due
to banks, bonds, commercial papers), (iv) any loans (other than the
Shareholder Loan released in accordance with para. (J) of the
Preamble) granted by the Seller to any of the Hirschmann Group
Companies, (v) financial liabilities from bills payable and finance
leases as listed in SCHEDULE 3.2(B), in case of (i), (ii), (iii), (iv)
and (v) as at the Economic Transfer Date, (vi) the amount of EUR
215,020.32 (in words: two hundred and fifteen thousand and twenty
Euros and thirty two Cents) paid by HAC to HCC after the Economic
Transfer Date but prior to the Signing Date for the transfer of
certain assets relating to measuring devices (Messzentrale), (vii) the
amount by
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which the Total 2006 PLTA Amount exceeds the Preliminary PLTA Amount
and (viii) any loss generated by HCC in the time between 01 January
2007 and 23 January 2007, 24.00 hours, as shown in interim German GAAP
accounts of HCC as of 23 January 2007, 24.00 hours (as referred to in
the last paragraph of Section 3.2) ((vii) and (viii) together the
"PLTA OUTSTANDING LOSS COMPENSATION AMOUNTS").
(c) "WORKING CAPITAL" shall mean the aggregate pro-forma consolidated
amount of all (i) inventory (Vorrate); (ii) plus trade receivables
(Forderungen aus Lieferungen und Leistungen) and (iii) minus trade
payables (Verbindlichkeiten aus Lieferungen und Leistungen) and
prepayments received (erhaltene Anzahlungen) within the meaning of
IFRS as at the Economic Transfer Date.
The Seller shall submit to the Purchaser at least five (5) Business Days
prior to the Closing Date a statement showing a best estimate of the amount
of Cash, Financial Debt and Working Capital (the "BEST ESTIMATE STATEMENT")
together with (i) a statement of the amount of the Purchase Price payable
according to Clause 3.1, (ii) executed release letters of or agreements
with the Senior Banks evidencing the full release or retransfer, as the
case may be, of all security rights granted to the Senior Banks and
Mezzanine Banks in connection with the Senior Credit Agreement and the
Mezzanine Credit Agreement upon receipt of the Senior Credit Repayment
Amount by the Senior Banks, and (iii) executed letter of Rheinmetall AG
confirming the full release of the Company under the Vendor Loan Note upon
receipt of the Vendor Loan Note Amount as well as (iv) the audited
statutory year-end and non-audited interim accounts, respectively, of HCC
as of 31 December 2006 and 24 January 2007. The Best Estimate Statement
shall include reasonable explanations of any deviations from the relevant
amounts as derived from the financial statements referred to in 7.1.10 (B)
below and from the Preliminary 2006 PLTA Amount, respectively. Purchaser
shall have the opportunity to comment on the Best Estimate Statement within
two (2) Business Days after it has been submitted to it, and the Parties
agree to discuss, prior to the Closing Date, in good faith any changes
proposed by Purchaser.
3.3 If upon completion of the procedure set forth in Clause 4 below, there is a
difference between the Purchase Price and the Final Purchase Price, the
difference (the "BALANCING AMOUNT"), together with interest thereon at a
rate of six (6) % per annum (calculated on the basis of 365 days per year)
from and including the Closing Date up to and including the date of actual
payment, shall be due and payable ten (10) Business Days after the Final
Purchase Price shall have become binding on the Parties pursuant to Clause
4 below as follows:
(a) if the Final Purchase Price is higher than the Purchase Price, the
Purchaser shall pay the Balancing Amount plus all interest payable
under this Clause 3.3 to the Seller; and
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(b) if the Final Purchase Price is lower than the Purchase Price, the
Seller shall pay to the Purchaser the Balancing Amount plus interest
thereon calculated in accordance with this Clause 3.3.
3.4 The Purchase Price shall bear interest at a rate of six (6) % per annum as
from and including the Economic Transfer Date until and including the
Closing Date ("PURCHASE PRICE INTEREST"). If the Purchase Price is adjusted
in accordance with this Section 3, such interest shall be adjusted
accordingly (on the basis of the Final Purchase Price) and the adjustment
amount shall become payable with the Balancing Amount.
3.5 All payments under or in connection with this Agreement shall be made by
wire transfer for value as of the Closing Date of immediately available
funds, free of all taxes, bank charges (other than those which may be
charged by the recipient's bank) and other deductions.
3.6 If any payment under or in connection with this Agreement:
3.6.1 falls due on a Saturday, Sunday or public holiday in Luxemburg,
Germany or the United Kingdom such payment shall be payable on the
next day on which the banks in Luxemburg, Germany and the United
Kingdom are open to transact business ("BUSINESS DAY"); and
3.6.2 is not made in full when due, the outstanding amount shall bear
interest at a rate of 12 (twelve) % per annum from and including the
date payment was due until and including to the date of actual
payment.
3.7 Purchaser or Seller shall not be entitled to exercise a right of set-off
(Aufrechnung) or retention (Zuruckbehaltungsrecht) with respect to its
obligations to pay the Purchase Price, the Purchase Price Interest or to
make any other payments under this Agreement, unless the respective Party's
claim on which such Party has based its right of set-off or retention has
been acknowledged by the other Party in writing or has been determined by a
final and non-appealable court judgement or arbitral award, as the case may
be.
4. SELLER'S CERTIFICATE AND FINAL SHARE PURCHASE PRICE
4.1 The Seller shall prepare without undue delay after the Signing Date a
year-end pro-forma consolidated balance sheet (Pro-Forma Konzernbilanz) of
the Group including the income statement (for the avoidance of doubt,
without considering HCC and HCC Subsidiaries) as of 31 December 2006 (the
"GROUP'S PRO-FORMA BALANCE SHEET") which shall be prepared in accordance
with IFRS, applied on a consistent basis and be reviewed by the Company's
auditor.
19
4.2 The Seller shall ensure that the Group's Pro-Forma Balance Sheet is
delivered to Purchaser eight weeks following the Signing Date at the
latest, together with a statement setting out the calculation of the
Purchase Price in accordance with Clause 3.1 and the amount of any
Balancing Amount in accordance with Clause 3.5 (the "SELLER'S FINAL
PURCHASE PRICE CALCULATION").
4.3 During a period of eight weeks after delivery by the Seller of the Group's
Pro-Forma Balance Sheet and the Seller's Final Purchase Price Calculation,
the Purchaser and its accountants shall be entitled to review the Group's
Pro-Forma Balance Sheet and the Seller's Final Purchase Price Calculation
and shall, at its request, be granted access to the working papers of any
accountants instructed by the Seller for these purposes on customary terms
of release. Purchaser shall notify the Seller in writing of any objections
to any items which are relevant for the calculation of the Purchase Price
or any Balancing Amount within six (6) weeks (provided that such notice is
in no event required to be given prior to 16 April 2007) of receipt of the
Group's Pro-Forma Balance Sheet and the Seller's Final Purchase Price
Calculation, specifying the changes it wishes to make and providing summary
justification for its views. If no written objections are received by
Seller in due form within such period, the Group's Pro-Forma Balance Sheet
and Sellers' Final Purchase Price Calculation shall become binding on the
Parties.
4.4 If Purchaser duly notifies the Seller of objections pursuant to Clause 4.3,
then the Seller and Purchaser shall endeavour to determine the disputed
items by mutual agreement. If the Seller and the Purchaser reach agreement,
the Group's Pro-Forma Balance Sheet and the Seller's Final Purchase Price
Calculation, as varied by such agreement, shall become binding on the
Parties. If and to the extent that the Seller and Purchaser fail to reach
agreement within ten (10) Business Days after receipt by Seller of
Purchaser's written objections, each of the Seller and the Purchaser shall
have the right to refer the matter to KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft Wirtschaftsprufungsgesellschaft, Berlin, which, acting
as expert (Schiedsgutachter) (the "EXPERT"), shall determine the items
still in dispute. The Expert must determine any item such that it is not
greater or less than the figures proposed by the Seller and Purchaser. The
Expert shall, taking account of any matters already agreed by the Seller
and Purchaser, also determine the changes (if any) to be made to the
Seller's Final Purchase Price Calculation, as a result of the Expert's
determination of the items in dispute. Such changes will be binding on the
Parties. The Parties shall instruct the Expert to complete its review and
determination within twenty (20) Business Days of referral from the Seller
or the Purchaser, as applicable. The Parties shall be given the opportunity
to present their views in English in writing and at an oral hearing chaired
by the Expert. The costs of the Expert shall be borne pursuant to the
principles set forth in Sections 91 et. seq. German Civil Procedure Code
(Zivilprozessordnung).
20
4.5 The Share Purchase Price for the Share as finally calculated pursuant to
this Clause 4 is referred to as the "FINAL PURCHASE PRICE".
5. SIGNING DATE, CLOSING DATE, CLOSING CONDITIONS
5.1 Definition
Signing Date, Closing Date and Economic Transfer Date shall have the
following meaning in this Agreement:
5.1.1 "SIGNING DATE" shall be the day on which this Agreement has been duly
executed by the Parties before a notary public;
5.1.2 "CLOSING DATE" shall be the day as defined in Clause 5.2 below;
5.1.3 "ECONOMIC TRANSFER DATE" shall be 31 December 2006, 24:00 hours/1
January 2007, 0:00 hours.
5.2 Unless the Parties agree otherwise, the completion of the Transaction
("CLOSING") shall occur on the fifth (5) Business Day after the Condition
Precedent set out in Clause 1.3.1 has been satisfied or waived in
accordance with Clause 1.4 ("CLOSING DATE"), provided that Purchaser shall
in no event be obliged to consummate the Closing less than five (5)
Business Days after Seller has delivered the documents referred to in the
last paragraph of Section 3.2.
5.3 The Closing shall take place at the offices of Clifford Chance at Mainzer
Landstrasse 46, in 60325 Frankfurt am Main, unless otherwise agreed by
the Parties.
5.4 On the Closing Date the Parties shall take, or cause to be taken, the
following actions ("CLOSING ACTIONS") which shall be taken in the order set
forth below and which shall be deemed to have been taken simultaneously
(Zug um Zug):
(a) Seller shall procure the sale, transfer and assignment to Belden
Wire&Cable Company (or another subsidiary to be nominated by Purchaser
Guarantor at the latest 10 Business Days prior to the Closing Date),
with effect as at a time immediately preceding the Closing, the shares
in Hirschmann Automation and Control Inc. (as referred to in (D) (vii)
of the Preamble) in accordance with a share and transfer agreement
substantially in the form of the draft set out in SCHEDULE 5.4 (A);
(b) Purchaser shall pay a portion of the Purchase Price equal to EUR
15,000,000 (in words: fifteen million Euros) in immediately available
funds free of charge, taxes
21
and other deductions (other than those by the escrow agent's bank) by
wire transfer to the Escrow Account as defined in the Escrow
Agreement.
The funds to be paid to the Escrow Account in accordance with the
foregoing shall, subject to Clause 8.3.4 serve as the only security of
any and all claims of the Purchaser against the Seller under and in
connection with this Agreement.
(c) Purchaser shall pay the remaining portion of the Purchase Price (minus
the Escrow Amount) and the Purchase Price Interest in immediately
available funds free of charge, taxes and other deductions (other than
those by Seller's bank) by wire transfer to the following bank account
("SELLER'S ACCOUNT"):
Account number: IBAN LU51 0141 8358 6110 0000 EUR
Account holder: Hirschmann Electronics Holding S.A.
Bank: ING Luxembourg S.A.
Swift Code: CELLLULL
(d) Purchaser shall pay, on behalf of the Company, the Senior Credit
Repayment Amount in immediately available funds free of charge, taxes
and other deductions by wire transfer to the account as set out in the
release letters referred to in Clause 3.2 last paragraph (ii).
(e) Purchaser shall pay, on behalf of the Company, the Vendor Loan Note
Amount in immediately available funds free of charge, taxes and other
deductions by wire transfer to the following bank account of
Rheinmetall AG:
Account number: 02 117 277 00
Account holder: Rheinmetall AG
Bank: Dresdner Bank AG, Dusseldorf
Bank Code: 300 800 00
Swift Code: DRES DE FF 300
IBAN: DE18 3008 0000 0211 7277 00
(f) Purchaser shall pay, on behalf of the Company, the Total PLTA Amounts
(to the extent outstanding) in immediately available funds free of
charge, taxes and other deductions by wire transfer to the following
bank accounts of HCC:
Account number: 7 495 509 597
Account holder: Hirschmann Car Communication GmbH
Bank: Baden-Wurttembergische Bank AG, Karlsruhe
Bank Code: 600 501 01
22
Swift Code: SOLADEST
IBAN: DE58 6005 0101 7495 97
(g) The Parties shall execute a closing memorandum substantially similar
to the form as attached in SCHEDULE 5.4(G) confirming the satisfaction
- or waiver if applicable - of the Conditions Precedent and the
Closing Actions.
6. MERGER CONTROL PROCEEDINGS; OTHER REGULATORY REQUIREMENTS; WITHDRAWAL
RIGHTS
6.1 Purchaser (and Seller, to the extent any filing cannot be made by Purchaser
on behalf of Seller under applicable law or any cooperation by Seller is
required) shall ensure that any filings necessary in connection with any
merger control clearance referred to in Clause 1.3.1 and any other filings
with, or notifications to, any governmental authority required in
connection with this Agreement will be made within two weeks (subject to
any assistance required from Seller) after the Signing Date. Any filings
made by either Party shall require the prior written consent of the other
Party which shall not be unreasonably withheld, conditioned or delayed.
6.2 In order to obtain all requisite approvals for the transactions
contemplated by this Agreement under merger control laws, Purchaser and
Seller shall (i) reasonably cooperate in all respects with each other in
the preparation of any filing or notification and in connection with any
submission, investigation or inquiry, (ii) supply to any competent
authority as promptly as practicable any additional information requested
pursuant to any applicable laws and take all other procedural actions
required in order to obtain any necessary clearance or to cause any
applicable waiting periods to commence and expire, (iii) promptly provide
each other with copies of any material written communication received or
sent (or written summaries of any non-written communication) in connection
with any proceeding and (iv) give each other and their respective advisers
the opportunity to participate in all material meetings and conferences
with any competent authority.
6.3 Purchaser shall upon Seller's request, offer, consent, and comply with, any
obligations or conditions (Auflagen und Bedingungen), commitments (Zusagen)
or other agreements required by any competent merger control authority as a
condition to the clearance of the transactions contemplated hereby unless
this would cause an unreasonable hardship (Unzumutbarkeit) for Purchaser
with respect to the business of the Hirschmann Group Companies and/or the
business currently conducted by Purchaser.
6.4 If and to the extent the Closing is permissible pursuant to Clause 1.3.1,
but the Transaction has, due to still pending merger control proceedings,
not been cleared under the laws of any jurisdiction for which the antitrust
approval has not been made a Condition Precedent, the
23
transfer of the Share to be performed at Closing shall be performed to the
maximum extent legally possible. Purchaser shall agree to all appropriate
measures, including "hold separate" arrangements for individual members of
the Hirschmann Group Companies, so that such companies can be exempted for
the time being (until consummation permitted) from consummation. If the
respective requirements are not met six (6) months after the approvals
pursuant to Clause 1.3.1 have been obtained, Seller as well as Purchaser
may request a sale of the retained companies to a third party which sale
shall be effected for the account of Purchaser and to the extent legally
permissible in accordance with the instructions reasonably given by
Purchaser. The foregoing shall not further delay the Closing Date nor
affect the obligation of Purchaser to pay the full amount of the Purchase
Price and the Purchase Price Interest at Closing.
6.5 Purchaser may not request any adjustment or repayment of the Purchase Price
or Purchase Price Interest or other amendment of this Agreement as a result
of any divestiture or other action pursuant to Clause 6.4, of any legal
consequences caused by the non-compliance with any filing requirements in
countries other than those listed in Clause 1.3.1 or of any decision by a
competent authority after the Closing Date prohibiting any transaction
contemplated hereby, without prejudice to any rights and remedies of
Purchaser explicitly set forth in this Agreement.
6.6 If the Condition Precedent pursuant to Clause 1.3.1 has not been fulfilled
by 30 April 2007, each Party shall be entitled to rescind this Agreement
(zurucktreten) by giving written declaration (Rucktrittserklarung) to the
other Party unless the Party claiming such withdrawal is responsible for
(hat zu vertreten) the non-fulfilment of the Closing Condition pursuant to
Clause 1.3.1. The Seller shall be entitled to rescind this Agreement prior
to the Closing by written declaration hereof to Purchaser if the payment of
the Purchase Price or the Purchase Price Interest is not made in full when
due. The Purchaser shall be entitled to rescind this Agreement prior to the
Closing Date by written declaration hereof to the Seller if a Material
Adverse Change (as defined below) has occurred in the time between the
Economic Transfer Date and the Closing Date. A "MATERIAL ADVERSE CHANGE"
shall mean (a) any material change in the asset, financial or profit
condition (Vermogens-, Finanz- oder Ertragslage) of the Hirschmann Group
Companies taken as a whole or (b) a material breach by the Seller of a
warranty, covenant or an indemnification provided in this Agreement and
except for (i) any changes resulting from matters disclosed in this
Agreement (including its Schedules), (ii) any such event for which the
Purchaser is responsible (zu vertreten hat), (iii) general market
developments (including changes in stock or capital markets, interest
rates, general economic, financial or market conditions) or (iv) changes in
or interpretation of laws, regulations or accounting principles. For the
purposes of this Clause 6.6 (and without prejudice to the meaning of such
term under any other provision of this Agreement) material shall be a loss
(incurred or likely to be expected as of the date when the rescission right
is exercised)
24
of the Hirschmann Group Companies in 2006 or 2007 exceeding an amount of
EUR 15,000,000 (in words fifteen million Euros). For the avoidance of
doubt, any future losses (arising in years after 2007) or multiples of an
actual loss (if any such loss is expected to recur in future years after
2007) shall not be taken into account. Upon termination of this Agreement,
all rights and obligations of all Parties hereunder shall terminate without
any liability of any Party to the other Party (other than for breach of
this Agreement prior to such termination), provided, however, that (i)
Clause 15 of this Agreement shall remain in full force and effect and (ii)
the Confidentiality Agreement between Seller and Purchaser dated 06 October
2006 shall remain in full force and effect as if this Agreement had not
been entered into.
A withdrawal in accordance with this Clause 6.6 shall not limit or
prejudice any claims the withdrawing Party may have relating to the
non-fulfilment of any Closing Condition or non-occurrence of the Closing
and committed prior to such withdrawal.
7. SELLER'S REPRESENTATIONS AND WARRANTIES
7.1 The Parties have intensively discussed and negotiated if and to what extent
the Seller shall be liable for defects relating to the Share or the
business of the Group and have decided to depart from the statutory
warranties regarding a sale (gesetzliche Kaufgewahrleistung). Instead, they
have agreed to replace the statutory system and provide for an independent
catalogue of specific rights of the Purchaser individually agreed as set
forth in this Clause 7. Subject to the limitations of liabilities and the
explicit restrictions of certain legal rights, agreed in this Agreement,
Seller represents and warrants to Purchaser by way of an independent
guarantee (selbstandiges Garantieversprechen) pursuant to Section 311
paragraph 1 BGB, that the statements set out in this Clause 7.1 are true
and correct as of the Signing Date and the Closing Date (unless explicitly
otherwise stated in the respective representation and warranty). The
representations and warranties of the Seller pursuant to this Clause 7.1
shall not constitute guarantees (Garantien) within the meaning of Section
444 BGB, but shall constitute separate, independent obligations of the
Seller and the scope and content of each representation and warranty of the
Seller and any liability of the Seller arising hereunder shall be
exclusively defined by the provisions of this Clause 7 and the remainder of
this Agreement, which provisions form an integral part of the
representations and warranties given by the Seller. The representations and
warranties and Seller's liability thereunder shall apply regardless of
Seller's fault (Verschulden).
7.1.1 The Seller has the full corporate and/or legal power and full
authority (corporate and otherwise) to enter into this Agreement and
to carry out the Transaction and the Transaction has been duly
authorised by all necessary corporate and/or legal action on the part
of the Seller. This Agreement has been duly executed by or on behalf
of
25
the Seller and constitutes its binding obligations.
7.1.2 There is no action, suit, investigation or proceeding pending or
threatened in writing against or affecting the Seller before any court
or arbitrator or any governmental body, agency, official or other
third party which in any manner challenges or seeks to prevent the
Transaction.
7.1.3 The statements in Preamble (A) to (F) are correct and complete.
7.1.4 The Seller is the sole legal and beneficial owner of the Share.
Except as set out in SCHEDULE 7.1.4, the Share is unencumbered and
free from any third parties' rights.
7.1.5 The Company is a limited liability company (Gesellschaft mit
beschrankter Haftung - GmbH), duly incorporated and validly existing
under German law. The Share is fully paid in and has not been repaid,
neither fully nor in part. There are no obligations to make any
additional capital contributions. There are no rights of third parties
(whether absolute or contingent) for granting of any shares in the
Company or to acquire the Share. The Company is not a party to any
enterprise agreement within the meaning of Sections 291, 292 AktG
entered into with any third party (other than a Hirschmann Group
Company), except for the agreements listed in SCHEDULE 7.1.5. There
are no silent partnerships in the Company and no indirect
participations (Unterbeteiligungen) in the Share and no voting trust
arrangements (Stimmbindungsvertrage) or similar arrangements
restricting any rights relating to the Share.
7.1.6 Each of the Hirschmann Group Companies (excluding for the purposes of
this Clause the Company) is duly incorporated and validly existing
under the respective jurisdiction of incorporation or organisation.
The shares in the Hirschmann Group Companies or owned by them (as set
forth in the Preamble) are fully paid in and have not been repaid,
neither fully nor in part. No Hirschmann Group Company is under any
obligation (whether actual or contingent) to make any additional
capital contributions or to provide shareholder loans to any other
Hirschmann Group Company, except as set forth in SCHEDULE 7.1.6. There
are no rights of third parties (whether absolute or contingent) for
granting of any shares or to acquire any shares in a Hirschmann Group
Company (excluding, for the purpose of this Clause 7.1.6, the
Company). There are no indirect participations, profit sharing
agreements or other arrangements granting any third party any rights
in respect of, or restricting any rights under, any such shares in, or
owned by, any such Hirschmann Group Company. Except as disclosed in
SCHEDULE 7.1.6, no Hirschmann Group Company (excluding, for the
purpose of this Clause, the Company) is bound by an enterprise
agreement within the meaning of Sections 291, 292 AktG or similar
agreement under the laws of any jurisdiction other than Germany or
owns any shareholding or interest
26
in any other company or entity, other than as set forth in the
Preamble.
7.1.7 The (i) Company with regard to HV, HE, HAC and (ii) HAC with regard
to the HAC Subsidiaries are in each case the sole legal and beneficial
owner of all the issued shares. HE with regard to Microlog is the
legal and beneficial owner of 30 % of the issued shares; HAC with
regard to the HAC Joint Venture Companies is the legal and beneficial
owner of 50 % of the issued shares, in each case as set forth in the
Preamble. Except as disclosed in SCHEDULE 7.1.7, all such shares held
by Hirschmann Group Companies as referred to above are unencumbered
and free from any third parties' rights other than (i) restrictions
and third party rights, if any, contained in the respective articles
of association (or equivalent corporate documents in other
jurisdictions) of which true and correct copies have been provided to
the Seller prior to the signing of this Agreement or (ii) under
applicable law.
7.1.8 No bankruptcy or insolvency proceedings are pending with respect to
any Hirschmann Group Company. Neither Seller nor to the Seller's Best
Knowledge (i) any Hirschmann Group Company is insolvent or
over-indebted (in the meaning of Section 64 GmbHG), (ii) no insolvency
or similar proceedings have been initiated or opened, or rejected
because of a lack of assets, and (iii) no circumstances exist which
would justify the initiation or opening of such proceedings.
7.1.9 Except as disclosed in SCHEDULE 7.1.9 and except for any transactions
contemplated by or any facts or events disclosed in this Agreement
(including Schedules), in the period between 30 June 2006 and the
Signing Date each Hirschmann Group Company has conducted its business
in the ordinary course (im gewohnlichen Geschaftsbetrieb) consistent
with past practice of the respective Hirschmann Group Company and
there has not been:
(a) any corporate reorganization of any Hirschmann Group Company; any
divestiture by any Hirschmann Group Company of a shareholding or
business to any third party (other than any entity of the
Hirschmann Group);
(b) since 31 December 2006, any declaration or payment of dividends
by any Hirschmann Group Company to the Seller or any payments or
transfers (Leistungen) whatsoever made to any member of the
Seller's Group, other than disclosed in this Agreement;
(c) since 31 December 2006, any incurrence or guarantee by any
Hirschmann Group Company of any indebtedness for borrowed money,
other than indebtedness incurred from any other Hirschmann Group
Company or incurred in
27
the ordinary course of business under existing loan facilities or
credit lines and in amounts and on terms consistent with past
practice;
(d) any entering into any agreement or transaction between a
Hirschmann Group Company and the Seller's Group outside the
ordinary course of business or on non-arm's length terms;
(e) since 31 December 2006, any investment by any Hirschmann Group
Company in, or the making of any loan to, any other company or
entity (other than any entity of the Group) exceeding in each
case EUR 500,000 (five hundred thousand);
(f) any lay-off with respect to a significant part of the workforce
of the Group;
(g) any change in any compensation or benefit of (i) any managing
director of the Hirschmann Group Companies or (ii) any employees
of a Hirschmann Group Company with an annual fixed remuneration
in excess of EUR 100,000 by any Hirschmann Group Company ((i) and
(ii) referred to herein as the "KEY EMPLOYEES") in connection
with this Agreement or the Transaction or otherwise outside the
ordinary course of business; or
(h) any change in any method of accounting or accounting practice or
policy, other than as required by a concurrent change of general
accounting principles.
7.1.10 (A) The special purpose consolidated financial statement as at 31
December 2005 of the Hirschmann Group Companies, as audited by
PricewaterhouseCoopers, as provided to the Purchaser prior to the
Signing Date have been prepared in accordance with IFRS and the
Hirschmann accounting principles and give a true and fair view, in
accordance with such standards and principles, of the consolidated
assets, financial position and results of operations of the Group
(including, for the purpose of this Clause 7.1.10, HCC and HCC
Subsidiaries) as at such date and for the financial year 2005
respectively. The individual annual accounts of the Hirschmann Group
Companies as at 31 December 2005, as audited by PricewaterhouseCoopers
and as provided to the Purchaser prior to the Signing Date, have been
prepared in accordance with the relevant generally accepted accounting
principles in their respective countries of incorporation and give a
true and fair view, in accordance with such principles, of the assets,
financial position and results of operations of the relevant company
as at such date and for the financial year 2005 respectively. The
financial statements referred to in this Section 7.1.10.A are
collectively referred to herein as the "FINANCIAL STATEMENTS".
28
(B) To the Seller's Best Knowledge the pro-forma consolidated
financial statements as at 31 December 2006 (as attached as SCHEDULE
7.1.10) have been prepared in accordance with IFRS, consistently
applied, and the Hirschmann accounting principles and fairly present,
in all material respects and in accordance with such standards and
principles, the consolidated assets position, financial position and
results of operations of the entities included therein as at such date
and for the financial year 2006 respectively, it being understood that
such statements have not been audited.
7.1.11 The Hirschmann Group Companies are the legal and beneficial owners
of all real property and other (fixed or current) assets, whether
tangible or intangible, reflected in the Financial Statements or
acquired by them since 31 December 2005 except for real property sold
or disposed of in the ordinary course of business since 31 December
2005, and such real property and other (fixed or current) assets will,
as of the Closing, be free and clear of any third party encumbrances,
except for (i) common servitudes and similar third party encumbrances
which do not adversely affect the current use of the property, (ii)
retention of title rights, liens in favour of landlords and similar
rights under statutory law or (iii) as set forth in the relevant land
register excerpt as at the Signing Date.
7.1.12 Except as set forth in SCHEDULE 7.1.12, neither the Seller, HCC or
any entity affiliated (verbunden) with any of them or controlled or
advised by Hg Pooled Management Ltd. (other than the Hirschmann Group
Companies) (the "SELLER'S GROUP") nor any of their officers,
directors, (direct or indirect) shareholders, employees or agents owns
or possesses any assets (whether tangible or intangible, including
information technology and know-how) used in any business conducted by
the Hirschmann Group Companies and no Hirschmann Group Company uses or
requires any services from the Seller's Group in order to carry on its
business as currently conducted.
7.1.13 SCHEDULE 7.1.13 lists all proceedings before any court, arbitrator
or authority to which a Hirschmann Group Company is a party as of the
date hereof and which involve a value in dispute in excess of EUR
200,000. To the Seller's Best Knowledge and unless otherwise disclosed
in SCHEDULE 7.1.13, as of the Signing Date no such proceeding has been
threatened to any Hirschmann Group Company in writing and no
Hirschmann Group Company has received any written notice by any third
party or is otherwise aware that any Hirschmann Group Company (i) is
in breach of any material governmental permit or material applicable
law (including any environmental permits or environmental laws), (ii)
has failed to operate, modify or close any pension plan in accordance
with applicable law, (iii) infringes any intellectual property right
of any third party or (iv) is manufacturing or has manufactured (to
the extent claims may still be outstanding) any products that have
serial or design defects.
29
7.1.14 Except as disclosed in SCHEDULE 7.1.14, the Hirschmann Group
Companies are the unrestricted owners of all rights granted to them
under the acquisition agreement, dated 3 February 2004, between the
Company and Rheinmetall AG, subject to the terms of such agreement; in
particular, no rights of the Hirschmann Group Companies under such
agreement have been waived or assigned to any member of the Seller's
Group or any other third party (other than any Hirschmann Group
Company).
7.1.15 No Hirschmann Group Company has any obligation or liability to pay
any fees or commissions or other compensation, bonus or charge or to
reimburse any monies to any broker or finder or any member of the
Seller's Group with respect to the transactions contemplated by this
Agreement.
7.1.16 As at the Closing Date, no shareholder loan between any of the
Hirschmann Group Companies on the one hand and any member of the
Seller's Group on the other hand exists.
7.1.17 To the Seller's Best Knowledge, the HAC Joint Venture Companies are
in material compliance with applicable laws of the People's Republic
of China and no facts are known (positive Kenntnis) requiring a
material write-off (Abschreibung) of the participation in the HAC
Joint Venture Companies by HAC, it being understood that for the
purpose of this Clause 7.1.17 the persons listed in the definition of
"Seller's Best Knowledge" under A have not made inquiries with the
persons listed under B (other than Laurence Burns).
7.2 If any of the statements made by the Seller in Clause 7.1 should be
incorrect in whole or in part (such incorrectness of a guarantee in Clause
7.1 hereinafter referred to as a "BREACH"), the Seller shall, following
receipt of the respective written notice of claim by Purchaser:
7.2.1 restore the position to what it would have been if the Breach had not
occurred (Naturalrestitution) within a reasonable time period, but no
later than six (6) weeks after receipt of the respective notice of
claim. If (i) such restitution is impossible or not reasonably
practical or (ii) the Seller finally refuses (ernsthaft und endgultig
verweigern) to make restitution in kind, Purchaser may claim
compensation in money (Schadensersatz in Geld) under Clause 7.2.2
below before the expiry of the six (6) week period; or
7.2.2 subject to Clause 7.2.1, pay to Purchaser compensation in money
(Schadensersatz in Geld) only for the actual direct damages
(unmittelbare Schaden) suffered by the Purchaser as a result of such
Breach, excluding in particular (i) any potential or actual reduction
(Minderung) in value of the Hirschmann Group Companies or Purchaser,
30
(ii) any consequential damages (Folgeschaden), (iii) any loss of
profits (entgangener Gewinn), (iv) damages/losses to good will or for
lost opportunities (entgangene Geschaftschancen) and (v) any internal
costs and expenses incurred by the Hirschmann Group Companies or
Purchaser. Notwithstanding the above, the following damages shall be
deemed to be actual direct damages: (a) any damages resulting in a
cash expenditure of the Companies or Purchaser or (b) any damages
referred to in (i) - (v) above which are the subject of a third party
claim raised against any Hirschmann Group Company or Purchaser.
7.2.3 If and to the extent damages are paid to any of the Hirschmann Group
Companies, such payments shall be construed and deemed as
contributions (Einlage) made by Purchaser into the respective company
and shall be treated as a reduction of the Purchase Price as between
the Parties. If and to the extent a breach of a Seller's Guarantee
relates to a company in which Seller hold less than 100 % of the total
equity, the amount of damages suffered by such company and to be paid
by Seller hereunder shall be the total amount of damages/losses
incurred by the respective company multiplied by Seller's direct or
indirect shareholding percentage.
8. LIMITATION OF SELLER'S LIABILITY
8.1 All claims of Purchaser against the Seller under Section 7.1 or Section
10.1 (such claims under Sections 7.1 or 10.1 referred to hereinafter as
"PURCHASER'S CLAIMS") shall be time barred twelve (12) months after the
Closing Date but in any event not before 30 April 2008, except for claims
based on Clause 7.1.4 or 7.1.7, which shall be time barred three (3) years
after the Closing Date. Claims under Sections 11 and 13.1 shall be time
barred three (3) years after the Closing Date. These limitation periods
shall be suspended (gehemmt) with regard to a particular claim against the
Seller only upon (i) written acknowledgement (Anerkenntnis) of such claim
by the Seller or (ii) by Purchaser initiating proceedings in accordance
with Clause 15.10 against the Seller within the meaning of Section 204
paragraph 1 No. 11 BGB in respect thereof before the competent arbitral
tribunal or (iii) pursuant to Sections 204 paragraph 1 nos. 5 or 9 BGB.
Section 203 BGB shall not apply.
8.2 Purchaser shall not be entitled to bring a Purchaser's Claim and the Seller
shall not be liable if and to the extent:
8.2.1 Purchaser fails to inform the Seller in writing without undue delay,
however, no later than one month, after becoming aware of any alleged
incorrectness, fails to give the Seller the opportunity to remedy the
incompleteness or incorrectness pursuant to Clause 7.2.1 within the
agreed six (6) weeks' time period, or fails to use all reasonable
efforts to mitigate its loss and any such non-compliance with this
Clause 8.2.1 has resulted in a higher obligation or liability of the
Seller; or
31
8.2.2 the damage results from or is increased by the passing of, or any
change in, after the Closing Date, any law, rule, regulation or
administrative practice of any government, governmental authority,
agency or regulatory body.
For the avoidance of doubt, the Seller's guarantees in Section 7 shall
apply regardless of any knowledge or disclosure of the relevant facts by or
to Purchaser other than any disclosure in this Agreement. Section 442 BGB
shall not apply.
8.3 The liability of the Seller under or in connection with this Agreement
shall be limited as follows:
8.3.1 The Purchaser is entitled to raise a Purchaser's Claim only to the
extent that any individual claim exceeds EUR 50,000 (in words: fifty
thousand Euros) (de minimis threshold) and only (ii) if and to the
extent the sum of all such claims exceeds EUR 1,000,000 (in words: one
million Euros) in which case only the exceeding amount can be claimed
by Purchaser from Seller (Freibetrag). This Clause 8.3.1 shall not
apply to a claim by the Purchaser against the Seller pursuant to
Clauses 7.1.4 to 7.1.7 and a breach by the Seller of (i) Clause 10.1.4
and/or (ii) Clause 10.1.5 to the extent it relates to the Company, HV,
HE or HAC only.
8.3.2 Subject to Clause 8.3.3, for all Purchaser's Claims and claims under
Section 11 and 13.1, the maximum aggregate liability of the Seller is
EUR 15,000,000 (in words: fifteen million Euros), except for any
claims due to a Breach pursuant to Clauses 7.1.4 to 7.1.7 or 10.1.4,
for which the maximum aggregate liability is the amount of the total
Final Purchase Price.
8.3.3 For claims in respect of fraud or wilful misconduct, the statutory
rules shall apply.
8.3.4 Any Purchaser's Claim and any other claim of Purchaser under this
Agreement against the Seller shall be secured under and released in
accordance with the Escrow Agreement in the form attached as SCHEDULE
(K). For the avoidance of doubt, the right to demand payments under
the Escrow Agreement shall be the exclusive remedy for any payment
claims which are Purchaser's Claims or indemnity claims under Sections
11 or 13.1 (including payment claims based on breaches of guarantees,
covenants or indemnity provisions) of the Purchaser against the Seller
under this Agreement and Purchaser shall not be entitled to make any
direct claim against the Seller, provided that this shall not apply
for any claim under Clauses 7.1.4 to 7.1.7 and 10.1.4, if and to the
extent the amount in the Escrow Account is not sufficient to cover
such claim under Clauses 7.1.4 to 7.1.7 and 10.1.4, in which case
Seller's aggregate maximum liability is limited to the Final Purchase
Price.
32
8.4 The Purchaser confirms that it has had access to detailed information from
and about the Hirschmann Group Companies and has satisfactorily completed
an in-depth due diligence review prior to the signing of this Agreement.
Consequently, the representations and warranties given by the Seller are
limited solely to those expressly set out in Clause 7 and no other
representations, warranties, indemnities or guarantees are given, nor any
liability assumed by the Seller whether expressly, impliedly or by law.
8.5 Except for the rescission right provided for under Clause 6.6, any right of
the Purchaser or the Seller to rescind or withdraw from this Agreement
shall be excluded. Any claims and rights of the Purchaser under the
independent guarantees provided for in Clause 7, other than the claims
under Clause 7.2, irrespective of their legal basis, are excluded. Any
claims for specific performance (Vertragserfullung) under this Agreement,
any other claims (including indemnity claims) specifically set forth in
this Agreement and any claims based on wilful misconduct or under Sections
123 and 826 BGB shall not be affected. In addition, any claims of the
Purchaser or the Seller arising from a failure to perform any of the
Closing Actions or the breach of any of the covenants and other agreements
of the Seller or the Purchaser contained in this Agreement and any claims
of the Seller arising from a breach of Purchaser's guarantees shall be
governed by applicable law, unless otherwise provided for and in this
Agreement, in particular with regards to the limitation of liability for
which Section 8.1 to 8.3 shall apply.
8.6 The Parties agree that, except for Clauses 9.2 and 13.2, no provision of
this Agreement constitutes a contract for the benefit of a third party
within the meaning of Section 328 BGB or otherwise (kein Vertrag zugunsten
Dritter oder mit Schutzwirkung fur Dritte).
8.7 Unless certain claims are explicitly provided for or reserved in this
Agreement and to the extent legally permissible, any claims and rights of
Purchaser or Seller of any legal nature whatsoever are hereby excluded, in
particular any further claims based on defects, claims under Section 280
BGB, claims based on breach of pre-contractual obligations (culpa in
contrahendo) or breach of contractual obligations (Pflichtverletzung),
rights to terminate the Agreement because of the lack of essential
qualities, or any claims under Section 313 BGB (Wegfall der
Geschaftsgrundlage) or any other rights to terminate the Agreement or
exercise any right or remedy which would have a similar effect.
9. PURCHASER'S REPRESENTATIONS AND WARRANTIES; SELLER'S WAIVER AND PURCHASER'S
INDEMNITY
9.1 The Purchaser and the Purchaser Guarantor hereby guarantee to the Seller by
way of an independent promise of guarantee (selbststandiges
Garantieversprechen) that the statements set forth in this Clause 9 are
true and correct as of the date hereof and will be true and correct as of
the Closing Date. The representations and warranties in Clause 9.1.1 to
33
Clause 9.1.6 below shall constitute separate, independent obligations of
Purchaser and Purchaser Guarantor the scope and content of each
representation and warranty of each of them and any liability arising
hereunder shall be exclusively defined by the provisions of this Clause 9,
which provisions form an integral part of such representations and
warranties.
9.1.1 Purchaser and Purchaser Guarantor have the full corporate power and
authority to deliver this Agreement and to carry out the transactions
contemplated hereby and such transactions have been duly authorised by
all necessary corporate action on the part of Purchaser and Purchaser
Guarantor. This Agreement has been duly executed on behalf of
Purchaser and Purchaser Guarantor and constitutes their binding
obligations.
9.1.2 There is no action, suit, investigation or proceeding pending
against, or threatened against or affecting Purchaser or Purchaser
Guarantor before any court or arbitrator or any governmental body,
agency, official or other third party which in any manner challenges
or seeks to prevent the transactions contemplated hereby.
9.1.3 The execution and performance by Purchaser and Purchaser Guarantor of
this Agreement and the consummation of the transactions contemplated
hereby require no prior approval by or filing with any governmental
body, public agency or official or other third party, save only for
the Regulatory Clearances.
9.1.4 Purchaser and/or Purchaser Guarantor are not insolvent or
over-indebted and no insolvency proceedings have been initiated or
opened, or rejected because of a lack of assets, and no circumstances
exist which would justify the initiation or opening of such insolvency
proceedings.
9.1.5 Purchaser and Purchaser Guarantor have sufficient unconditional and
immediately available funds to meet their obligations hereunder.
9.1.6 Purchaser and Purchaser Guarantor do not have any obligation or
liability to pay any fees or commissions to any broker or finder with
respect to the transactions contemplated by this Agreement for which
the Seller or any Hirschmann Group Company could become liable.
9.2 Seller hereby waives, and shall cause all members of the Seller's Group to
waive, with effect as of the Closing, any claims (on whatever legal basis)
which any of them may have against any Hirschmann Group Company, other than
(i) those set out in SCHEDULE 9.2, or (ii) to the extent that any such
claims have been included in the calculation of the Cash, Financial Debt or
Working Capital. If after the Closing Date, Seller, any member of the
Seller's Group or any of Seller's or Seller's Group's officers, directors,
shareholders, employees and agents
34
(hereinafter collectively referred to as "BENEFICIARIES") are held liable
for any existing or future (known or unknown, actual or contingent)
liability or obligation of the Group or of the Seller towards the Group or
any liability or obligation arising out of, or in connection with, the
conduct of the business of the Group, then any recourse claim of the
Beneficiaries under applicable law shall remain unaffected (for the
avoidance of doubt, without prejudice to any rights and remedies Purchaser
may have with respect to the relevant matter under this Agreement).
10. FURTHER COVENANTS OF THE PARTIES
10.1 The Seller undertakes to ensure that from the Signing Date until the
Closing Date, without the prior approval of Purchaser (which approval shall
not be unreasonably withheld) and so far as legally permissible, from the
Signing Date until the Closing Date each of the Hirschmann Group Companies
shall, except for any transactions contemplated by or any facts or events
disclosed in this Agreement (including Schedules):
10.1.1 conduct its business in the ordinary course of business consistent
with past practice;
10.1.2 not carry out or effect any material capital expenditures or other
material investments in excess of those amounts already approved in
any relevant budget or capital expenditure plan of the Hirschmann
Group Companies, as disclosed to Purchaser prior to the Signing Date;
continue to make any capital expenditures and investments in
accordance with such budget or capital expenditure plan;
10.1.3 maintain all material insurance protection for the business (as
described in SCHEDULE 10.1.3) of each of the Hirschmann Group
Companies;
10.1.4 not declare, make or pay any dividends or distributions or make any
other payments or transfers (Leistungen) to Seller, other than in
accordance with the terms of existing agreements entered into on arm's
length terms and disclosed in SCHEDULE 10.1.4;
10.1.5 not make or resolve any corporate restructuring; not materially
amend any of their constitutional documents; not issue any shares or
agree upon such issuance or grant any option or encumbrance in respect
of or over shares or any such securities;
10.1.6 not increase any principal amounts under, or change any terms of,
the Senior Credit Agreement or the Vendor Loan Note (for the avoidance
of doubt, any drawings by Hirschmann Group Companies under the
existing credit facilities, e.g. under the working capital line, shall
not be prohibited under this Clause 10.1.6) or incur any other
financial debt (within the meaning of Clause 3.2(b)) in excess of EUR
one (1) million in the aggregate and not incur any debt under
intercompany loans from the Seller's Group;
35
10.1.7 not take or resolve any of the actions referred to in Section 7.1.9
(d); and
10.1.8 not enter into any agreements outside the ordinary course of
business, consistent with past practice (including any agreements
which provide for unusually onerous terms and conditions for a
Hirschmann Group Company); not enter into or amend any agreement with
any member of the Seller's Group or Microlog (or any of its
subsidiaries); consult with the Purchaser prior to entering into (i)
any agreement with any customer providing for sales in excess of EUR 5
(five) million; (ii) any other agreement that provides for a
compensation in excess of EUR 5 (five) million per annum and cannot be
terminated without penalty within 90 days or less or materially amend
any such agreement existing as of the Signing Date.
10.2 Seller and Purchaser, respectively, shall use their best efforts to ensure
that the Conditions Precedent are satisfied as soon as possible after the
Signing Date (in particular that the Regulatory Clearances are obtained
without any conditions or obligations being attached thereto).
10.3 If the Seller or Purchaser becomes aware that it is reasonably likely that
the Conditions Precedent in Clause 1.3 will not be satisfied or that
conditions or obligations may be imposed which could adversely and
materially affect the respective other Party or hinder or delay the Closing
Date, it shall notify the respective other Party forthwith in writing
without undue delay.
10.4 At all times after the Closing Date, Purchaser will grant the Seller and
its advisors and representatives reasonable access to the books, records
and employees of the Company, which the Seller may require for auditing,
tax and other regulatory purposes. At all times after the Signing Date and
prior to the Closing Date, Seller will (i) provide Purchaser and its
advisors and representatives reasonable access to books, records and
employees of the Company, which the Purchaser requires in connection with
the preparation of the consummation of the Transaction including the review
pursuant to Clause 4.3 or the preparation of any financial statements,
reports or other documents in order to fulfil any regulatory requirements
in connection with the Transaction and (ii) further reasonably cooperate,
and cause its advisers and representatives to reasonably cooperate, with
Purchaser in this respect, provided that any out-of-pocket expenses
reasonably incurred by Seller in connection with such cooperation (after
consultation with Purchaser) shall be borne by Purchaser.
10.5 The Seller covenants and shall ensure that for a period of two years after
the Closing Date, neither the Seller nor any other member of the Seller's
Group will directly or indirectly hire as an employee, a company organ or
as an advisor, or solicit in each case either Mr Sitzmann, Mr Schicker or
Dr Schneider in connection with the engagement of any business
36
competing with the business of the Group in the businesses of industrial
ethernet products (hardware and software solutions) (INET), connectivity,
cordsets and fiber interfaces for industrial automations applications
(ICON) and load moment indicators for load carrying equipment and safety
platforms (ECS) ("COMPETING BUSINESS").
10.6 The Seller covenants and shall ensure that for a period of two years after
the Closing Date, neither the Seller nor any other member of the Seller's
Group will solicit for employment any Key Employee.
10.7 Seller shall ensure that, for a period of two years after the Closing Date
or, with respect to technical know-how, for a period of five years after
the Closing Date, the Seller and all other members of the Seller's Group
will keep confidential and not disclose to any third party any business or
trade secrets of the Group, other than those which have become publicly
known through no fault of the Seller's Group or which the Seller's Group is
required to disclose in order to comply with any legal requirements or
stock exchange regulations.
10.8 The Parties agree and Seller shall procure that, with effect as of the
Economic Transfer Date, except as expressly agreed by Purchaser in writing,
there shall be no agreements and arrangements between any Hirschmann Group
Company on the one hand and any member of the Seller's Group on the other
hand, other than the agreements set out in SCHEDULE 10.8. The Seller
undertakes and shall procure that prior to the Closing Date the trademark
license agreement listed in Schedule 10.8 will be amended in a way that the
trademarks licensed therein can only be used by HCC (i) in the business as
conducted by HCC as of the Signing Date (to be specifically defined in the
amendment to the trademark license agreement in a manner to be agreed with
the Purchaser), (ii) in the field of the automotive industry and (iii) in
no event in the field of the Competing Business.
11. TAX INDEMNITY
11.1 Subject to the provisions of this Clause 11, Seller shall indemnify
Purchaser and the Hirschmann Group Companies from all taxes, social
security contributions and other public charges (including any penalties,
interest and other additions thereto) ("TAXES") (a) assessed against or
payable by any of the Hirschmann Group Companies after the Economic
Transfer Date or (b) assessed and payable before the Economic Transfer
Date, but not paid before the Economic Transfer Date, in either event if
and to the extent the Taxes relate to (i) any period after 31 December 2003
and prior to the Economic Transfer Date or (ii) any period prior to 31
December 2003, to the extent that any such Taxes have arisen as a result of
any actions by Seller or entity affiliated with it (including any
Hirschmann Group Company or HCC or HCC Subsidiary) after 31 December 2003
and can, as a result of such action, not be reclaimed from Rheinmetall AG
under the Share Purchase and Transfer Agreement, dated February 3, 2004,
with Rheinmetall AG or (iii) any period after the Economic Transfer Date
37
and prior to the Closing Date, but, in the case of (iii), only to the
extent that such Taxes arise from any transaction with any member of the
Seller's Group to the extent that such transactions are outside the
ordinary course of business of the Hirschmann Group Companies, any failure
to file any Tax return or pay any Tax in accordance with applicable law.
11.2 To the extent that any (net) Tax savings or other advantages of a
Hirschmann Group Company or Purchaser arise, as a result of the Taxes
indemnified by Seller pursuant to Clause 11.1, within a period of three (3)
years after the Closing Date, such Tax savings shall, if obtained by the
relevant Hirschmann Group Company or Purchaser before or at the time when
Purchaser's indemnity claim is due, reduce Seller's indemnity obligation;
otherwise Purchaser shall pay the amount of such Tax savings or other
advantages to Seller within 10 Business Days after they have been so
obtained by the relevant Hirschmann Group Company or Purchaser.
11.3 Seller's indemnification obligations pursuant to Clause 11.1 shall be net
of the aggregate amount of any refunds of Taxes relating to any period
prior to the Economic Transfer Date and received by the Hirschmann Group
Companies after the Economic Transfer Date. Any refunds of Taxes for the
Hirschmann Group Companies received by the Hirschmann Group Companies or
the Purchaser within three (3) years after the Closing Date for periods
prior to the Economic Transfer Date shall be paid to the Seller within 10
(ten) Business Days after the relevant Tax refund has been received from
the competent Taxing Authority or used by Hirschmann Group Companies or the
Purchaser. To the extent that any additional Taxes or other disadvantages
of a Hirschmann Group Company or Purchaser arise, as a result of any such
Tax refunds set off or reimbursed by Seller pursuant to Clause 11.3, within
a period of three (3) years after the Closing Date, such Tax disadvantages
shall, if incurred by the relevant Hirschmann Group Company or the
Purchaser before or at the time when the Seller's reimbursement claim is
due, reduce the Purchaser's reimbursement obligation; otherwise the Seller
shall pay the amount of such Tax disadvantages to the Purchaser within 10
Business Days after they have been so incurred by the relevant Hirschmann
Group Company or Purchaser.
11.4 Any indemnity payment pursuant to Clause 11.1 shall become due within ten
(10) Business Days after Purchaser has notified Seller in writing of the
respective Tax (such notice to include copies of all relevant Tax
assessments), but in no event earlier than five (5) Business Days before
the relevant Tax becomes due and payable to the competent Taxing Authority.
11.5 Seller's aggregate liability under this Clause 11 shall be limited as set
forth in Clause 8.3.2.
11.6 Any claims of Purchaser under Clauses 11.1 shall be time-barred as set
forth in Clause 8.
38
11.7 After the Closing, Purchaser shall notify Seller as promptly as reasonably
practicable of any proposed audit or assessment relating to any Tax with
respect to which Seller may reasonably incur any liability hereunder.
Purchaser shall cause the respective Hirschmann Group Companies to give
Seller and the Seller's advisors bound to professional secrecy the
opportunity to participate in any audits, in their preparation or other
proceedings related to any such Tax. The Purchaser will reasonably
cooperate, upon Seller's request, in any filing of objections against
assessments and commitments of Taxes for the periods until the Economic
Transfer Date. If the Purchaser does not comply with the above obligation
(e.g. cooperate in any filings of objections), any claims of Purchaser
against Seller under this Clause 11 shall be excluded to the extent such
failure has the consequence that the Seller's liability under this Clause
11 is increased by such failure.
12. GUARANTEE
Purchaser Guarantor hereby irrevocably and unconditionally guarantees the
due fulfilment by Purchaser of all of Purchaser's obligations under
Sections 3 and 5 of this Agreement.
13. OTHER SPECIFIC INDEMNITIES
13.1 Seller shall indemnify and hold harmless the Purchaser and the Hirschmann
Group Companies from any liability of any kind (and damages arriving
therefrom) which arise from any shareholding owned by Hirschmann Group
Company in HCC or any HCC Subsidiary or any agreement or arrangement
(including any control or profit transfer agreement or tax consolidation)
with HCC or any HCC Subsidiary or otherwise relate to the shares, assets,
liabilities or business of HCC or the HCC Subsidiaries, except (i) for any
liabilities resulting from existing agreements between Hirschmann Group
Companies and HCC or HCC Subsidiaries referred to in SCHEDULE 10.8 or (ii)
to the extent any such liabilities are included in the calculation of Cash,
Financial Debt or Working Capital.
13.2 Purchaser (i) shall not and (ii) shall procure and take all necessary
actions that the Hirschmann Group Companies shall not make or enforce or
assign any claims against HCC Subsidiaries, HCC and its shareholder (in
each case by way of agreement for the benefit of third parties, Section 328
para. 1 BGB), except for (i) any claims of the Company against HCC
resulting from the termination of the HCC PLTA Agreement and (ii) for any
claims against HCC or HCC Subsidiaries resulting from existing agreements
between Hirschmann Group Companies and HCC or HCC Subsidiaries,
respectively, referred to in SCHEDULE 10.8.
14. CONFIDENTIALITY
14.1 The Parties must keep secret the contents of this Agreement to the extent
that no statutory disclosure obligations exist or the respective other
Party has not consented to the disclosure.
39
The Parties must also keep secret any information they have received about
each other and about the enterprises affiliated with the respective other
Party as defined in Section 15 AktG since they have started talks about the
acquisition of the Share, to the extent that such information is not known
or available to the public, or the respective other Party has not consented
to the disclosure of the information.
14.2 If any disclosure or announcement of confidential matters referred to in
Clause 14.1 is required by law or by any regulation, rule or any
governmental or quasi governmental authority, such disclosure may be made
by the Party which has been addressed but, to the extent possible and
practicable, only upon advice of its legal counsel and after consultation
with the other Party and after taking into account any reasonable steps,
one of the Parties may request to prevent or limit the scope or impact of
such disclosure.
14.3 Notwithstanding the provisions of Clause 14.1 the Seller may disclose the
content of this Agreement to any member of the Seller's Group and the
content of the provisions contained in Clauses 1.3.5, 5.4 (e) and 13 (which
refer to HCC or HCC Subsidiaries) to HCC and any current or future
shareholder of HCC.
15. MISCELLANEOUS
15.1 All notary, court, registration or similar fees, real estate and other
transfer taxes, stamp duties and other public levies, as well as the costs
of any merger control proceedings or other governmental approvals or
filings connected with the execution and implementation of this Agreement,
shall be borne by Purchaser. Apart from this, each Party shall bear its own
costs and taxes and the costs of its advisors.
15.2 This Agreement, including the Schedules, contains the entire agreement of
the Parties with respect to the subject matter hereof. Any supplements or
amendments to or a termination of this Agreement, as well as any
declarations to be made hereunder, shall be valid only if made in writing,
or if required by law, in due notarial form. This shall also apply to any
change to, or cancellation of, this provision.
15.3 Unless provided otherwise in this Agreement, all declarations
(Willenserklarungen) to be made or notices to be given by the Parties under
this Agreement shall be in writing in English and delivered by hand, by
courier or by telefax, in which case they must at the same time be sent by
regular mail to the Person at the address set forth below, or such other
address as may be designated by the respective Party to the other Party in
the same manner:
To the Seller:
Hirschmann Electronics Holding S.A.
Attn. Reinhard Sitzmann/Viktor Schicker
40
7 A rue Stumper, L-2557, Luxembourg
Telefax: +352 26 49 58 43 64
copy to:
Clifford Chance
Attn. Oliver Felsenstein/Burc Hesse
Mainzer Landstrasse 46
60325 Frankfurt am Main
Germany
Telefax: +49 (69) 7199 4000
To the Purchaser:
Kevin Bloomfield
Vice President, Secretary & General Counsel
7701 Forsyth Boulevard
Suite 800
St. Louis, MO 63105
USA
Telefax: +1 (314) 854 8001
copy to:
Hengeler Mueller
Attn. Dr. Wolfgang Meyer-Sparenberg / Dr. Georg Seyfarth
Benrather Str. 18-20
40213 Dusseldorf
Germany
Telefax: +49 (211) 8304 170
15.4 Purchaser hereby appoints the law firm of Hengeler Mueller, Attn. Dr.
Wolfgang Meyer-Sparenberg, and Seller hereby appoints the law firm of
Clifford Chance, Attn. Oliver Felsenstein, as their respective agents for
service of process (Zustellungsbevollmachtigte) for all legal proceedings
involving Purchaser and Seller arising out of or in connection with this
Agreement. This appointment shall only terminate upon the appointment of
another agent for service of process domiciled in Germany, provided that
the agent for service of process is an attorney admitted to the German bar
(in Deutschland zugelassener Rechtsanwalt) and his appointment has been
notified to and approved in writing by Seller (which approval shall not be
unreasonably withheld). Purchaser and Seller shall promptly after the date
hereof and upon the appointment of any new agent for service of process (as
the case my be) issue to the agent a written power of attorney
(Vollmachtsurkunde) and shall
41
irrevocably instruct the agent to submit such deed in connection with any
service of process under this Agreement. A certified copy of the power of
attorney shall be submitted to Seller and to Purchaser, respectively.
15.5 Each Party shall be solely responsible for the fulfilment of all
obligations, if any, vis-a-vis brokers or finders appointed or used by that
Party in respect of the transactions contemplated hereby. Seller shall bear
all transaction bonuses, if any, promised by Seller or any Hirschmann Group
Company and payable to the management of the Hirschmann Group Companies in
connection with this Agreement.
15.6 No Party shall be entitled (a) to set off (aufrechnen) any rights and
claims it may have against any rights or claims any other party may have
under this Agreement or otherwise, or (b) to refuse to perform any
obligation it may have under this Agreement on the grounds that it has a
right of retention (Zuruckbehaltungsrecht) unless the rights or claims of
the relevant party claiming a right to set off (Aufrechnung) or retention
have been acknowledged (anerkannt) in writing by the relevant other
party/parties or have been confirmed by final decision of a competent
arbitral tribunal (Schiedsgericht) or court (Gericht).
15.7 Purchaser may not assign or otherwise transfer any rights or claims under
or in connection with this Agreement to a third party without the prior
written consent of the Seller except for the assignment of rights or claims
under this Agreement by the Purchaser as security to a bank or financial
provider financing this Transaction which assignment, however, shall only
become effective after the Purchase Price has been received by Seller or
the Escrow Agent as the case may be.
Unless otherwise explicitly provided for in this Agreement, neither this
Agreement nor any provisions contained in this Agreement is intended to
confer any rights or remedies upon any person or entity other than the
Parties and the Purchaser Guarantor.
15.8 This Agreement shall be governed by German law. The English language
version shall be determinative (even if a translation is made), provided
that where German expressions are used in brackets, the German expression
shall be determinative.
15.9 In this Agreement:
(a) any German legal term for any action, remedy, method of judicial
proceeding, legal document, legal status, court, official or any legal
concept or thing shall, in respect of any jurisdiction other than
Germany, be deemed to include what most nearly approximates in that
jurisdiction to the German legal term and any reference to any German
statute shall be construed so as to include equivalent or analogous
laws of any other jurisdiction; and
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(b) the headings shall not affect the interpretation of this Agreement.
15.10 All disputes arising in connection with this Agreement or its validity
shall be finally settled in accordance with Arbitration Rules of the German
Institution of Arbitration e. V. (DIS) without recourse to the ordinary
courts of law. The place of arbitration is Frankfurt am Main. The Arbitral
Tribunal consists of three arbitrators. The language of the arbitral
proceedings is English.
16. SEVERABILITY
Should any provision of this Agreement, or any provision incorporated into
this Agreement in the future, be or become invalid or unenforceable, the
validity or enforceability of the other provisions of this Agreement shall
not be affected thereby. The invalid or unenforceable provision shall be
deemed to be substituted by a suitable and equitable provision which, to
the extent legally permissible, comes as close as possible to the intent
and purpose of the invalid or unenforceable provision. The same shall
apply: (i) if the Parties have, unintentionally, failed to address a
certain matter in this Agreement (Regelungslucke); in case a suitable and
equitable provision shall be deemed to have been agreed upon which comes as
close as possible to what the Parties, in the light of the intent and
purpose of this Agreement, would have agreed upon if they had considered
the matter; or (ii) if any provision of this Agreement is invalid because
of the scope of any time period of performance stipulated herein; in this
case a legally permissible time period or performance shall be deemed to
have been agreed which comes as close as possible to the stipulated time
period or performance.
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TABLE OF SCHEDULES
SCHEDULE TITLE
- -------- -----
(F) HCC Restructuring Steps
(H) List of Senior Finance and Mezzanine Finance Documents
(K) Escrow Agreement
1.3.1 Merger Control filing requirements/jurisdictions
1.5 Consent to Assignment of Share
3.2(b) Financial Liabilities
5.4(a) Share Transfer Agreement HAC Inc.
5.4(g) Draft Closing Memorandum
7.1.4 Encumbrances of Share
7.1.5 Enterprise Agreement to which the Company is a party
7.1.6 Other agreements with regard to shares
7.1.7 Encumbrances of shares
7.1.9 Transactions outside the ordinary course of business
7.1.10 Consolidated Pro Forma Financial Statements
7.1.12 Assets and services currently owned or rendered by Seller's Group and
used or required by Hirschmann Group Companies
7.1.13 Legal Proceedings and Claims
7.1.14 Ownership of rights under 2004 SPA
9.2 Seller's and Seller's Group Claims not waived
10.1.3 List of Insurance Policies
10.1.4 Dividends, Distributions and other Payments by Hirschmann Group
Companies to Seller
10.8 Agreements with the Seller's Group after Economic Transfer Date
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This deed with schedules has been read aloud to the appeared persons in the
presence of the notary, authorized by them, and signed by them and the notary as
follows: