Exhibit 2
A.Prot. 1999/320
Notary ▇▇▇▇▇▇▇ ▇▇▇▇▇
Basel/Switzerland
December 7/8, 1999
SIEMENS AKTIENGESELLSCHAFT (SELLER)
and
CORNING INCORPORATED (PURCHASER)
THE MASTER SALE AND PURCHASE AGREEMENT
relating to
the sale and purchase of Seller's worldwide
(i) optical fiber communications cable and related operations,
(ii) copper data communication cable and related operations,
(iii) cable related hardware and equipment operations and
(iv) optical fiber operations.
CONTENTS
PREAMBLE.......................................................................3
1. DEFINITIONS..............................................................3
2. SALE OF SHARES, INTERESTS AND ASSETS.....................................7
2.1 Sale of Shares and Interests.........................................7
A. Germany (without German Siecor Companies)...........................7
(a) Sale of Shares...................................................7
(b) Sale of Interests................................................8
B. Other Wholly-Owned Companies.......................................9
C. Siecor Companies...................................................9
a. Siecor GmbH.......................................................9
b. Siecor GmbH & Co KG...............................................9
c Siecor Corporation ...............................................10
D. Non-Wholly Owned Companies........................................10
2.2 Sale of Assets /Assumption of Liabilities..........................10
A. Argentine Assets..................................................10
B. Australian Assets ...............................................10
C. U.S. Assets ......................................................11
2.3 Transfer Deeds/Agreements..........................................11
A. Germany (without German Siecor Companies) .......................11
B. Other Wholly Owned Companies ....................................12
C. Siecor Companies ................................................12
D. Non-Wholly Owned Companies ......................................12
E. Assets ..........................................................12
3. PURCHASE PRICE.............................................................13
3.1 Preliminary Purchase Price.........................................13
3.2 Adjustments to Preliminary Purchase Price..........................14
A. Audited Financial Statements for the Fiscal Year Ended
September 30, 1999 .............................................. 14
B. Effective Date Balance Sheet ....................................15
C. Agreed Procedures ................................................15
D. Adjustments to Preliminary Purchase Price ........................16
E. Adjustments for Non-Wholly Owned Companies other than SOFC ......16
F. Adjustments for SOFC .............................................16
G. Post April 1, 2000 Interim Financial Statement ...................17
3.3 Contingent Consideration...........................................17
3.4 Method of Payment...................................................17
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4. EFFECTIVE DATE............................................................18
5. CLOSING CONDITIONS........................................................18
5.1 Conditions Precedent for Closing...................................18
5.2 Non-Satisfaction...................................................20
5.3 German Merger Control Process......................................20
5.3 Conditions Precedent to National Closings..........................21
6. ACTIONS PENDING CLOSING OR NATIONAL CLOSING...............................22
6.1 Cooperation........................................................22
6.2 Restrictions on Relevant Sellers...................................22
6.3 Dividends..........................................................24
6.4 Cash Pooling.......................................................24
7. CLOSINGS..................................................................24
7.1 Closing............................................................24
A. Date and Place....................................................24
B. [intentionally left blank]........................................25
C. Payment of Preliminary Purchase Price; Transfer of Shares, etc....25
7.2 .National Closings.................................................25
8. REPRESENTATIONS AND WARRANTIES............................................26
8.1 Representations and Warranties of Purchaser........................26
8.2 Representations and Warranties of Seller...........................27
A. with respect to Seller............................................27
Authority and Capacity...............................................27
B. with respect to Siecor Corporation................................28
Authority and Capacity...............................................28
C. with respect to Siecor GmbH and Siecor GmbH & Co KG (the
"German Siecor Companies").........................................28
a. Authority and Capacity...........................................28
b. Litigation.......................................................28
c. Compliance with Laws.............................................29
d. Activities in Ordinary Course....................................29
e. Taxation.........................................................29
D. With respect to Non Wholly Owned Companies........................30
a. Authority and Capacity.........................................30
b) Returns and Information........................................30
c) Audits and Proceedings.........................................30
E. With respect to Wholly Owned Companies............................31
a. Authority and Capacity...........................................31
b. Accounting and Other Records.....................................31
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c. Changes since Balance Sheet Date.................................31
d. Legal Matters....................................................32
e. Insolvency; Inability to Conduct Business........................33
f. Trading and Contract Agreements..................................33
g. Employees........................................................34
h. Taxation.........................................................37
i. Intellectual Property............................................38
j. Suppliers........................................................40
k. Regulatory and Operating Conditions..............................40
l. Property.........................................................41
m. Y2K..............................................................42
F. With respect to Assets............................................43
a. Title............................................................43
b. Working Order....................................................43
c. Licenses.........................................................43
d. Employees........................................................43
e. Taxation.........................................................44
f. Certain Undischarged Liabilities.................................44
8.3 Seller's Knowledge.................................................44
8.4 Remedies...........................................................45
9. LIMITATION OF LIABILITY AND CONDUCT OF CLAIMS.............................45
9.1 Limitation of Liability............................................45
9.1.1 Time Limits...................................................46
9.1.2 Individual Minimum Claims.....................................46
9.1.3 Aggregate Minimum Claims......................................46
9.1.4 Maximum Claims................................................47
9.1.5 Pro Rata Limitation...........................................47
9 1.6 Provisions in the Effective Date Balance Sheet................47
9.1.7 Taxation Effects..............................................47
9.1.8 Insurance.....................................................47
9.1.9 Changes in Legislation........................................47
9.2 Claims against Third Parties.......................................48
9.3 Double Claims......................................................48
9.4 Effect of Closings.................................................48
9.5 Disclosed to Purchaser.............................................48
9.6 Following the Closing..............................................49
9.7 Teleco Subsidies...................................................49
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9.8 Relevant Purchaser/Relevant Seller.................................49
9.9 Conduct of Claims..................................................49
10. INDEMNITIES..............................................................51
10.1 Seller Indemnities.................................................51
A. Tax and Investment Grants.........................................51
1. Scope ...........................................................51
2. Procedure .......................................................51
B. Environment.......................................................52
(a) General.........................................................52
(b) Time Period.....................................................52
(c) Establishment of Obligation to Indemnify........................53
(d) Scope of Obligation.............................................53
(e) Limitations.....................................................53
(f) Change of Law...................................................54
(g) Consultation/Procedure..........................................54
(h) Arbitral Expert.................................................54
(i) Definitions.....................................................55
(j) Sale to Third Parties...........................................55
▇. ▇▇▇▇▇▇ Project ..................................................56
D. Purchaser Avoiding Indemnified Losses..............................56
10.2 Purchaser's Indemnities...........................................56
11. CONTRACTS................................................................56
11.1 Relating to Asset Sellers.........................................56
11.2 Material Contracts, Assigning/Novating.............................57
12. COVENANTS................................................................57
A. SOFC..............................................................57
B. Repayment of Indebtedness.........................................57
C. Employees; Employee Benefit Arrangements..........................58
a. General..........................................................58
b. Employees........................................................58
c. Seller Obligations...............................................59
d. Employee Records.................................................59
e. Stock Options and Other Deferred Compensation....................60
f. Employee Stock...................................................60
g. Additional Possible Employment Offers............................60
D. Non Competition...................................................61
▇. ▇▇▇▇▇ and Guarantees..............................................62
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13. FURTHER OBLIGATIONS......................................................62
A. Seller's General Obligations......................................62
B. Covenants Relating to Industrial Property Rights..................63
C. General Services and Supply Agreement.............................64
D. Insurance Policies................................................65
E. Intercompany Agreements...........................................65
▇. ▇▇▇▇▇▇▇▇..........................................................65
G. Inspection of Books...............................................66
H. Facility Rearrangement............................................66
14. MISCELLANEOUS............................................................66
A. Announcements.....................................................66
B. Confidential Information..........................................66
C. Entire Agreement..................................................67
D. Amendments; Amended Schedules.....................................67
E. Costs.............................................................68
F. Interest..........................................................68
G. Notices...........................................................68
▇. ▇▇▇▇▇▇▇▇▇/Waiver..................................................69
I. Inconsistent Provisions...........................................70
J. Governing Law and Disputes........................................70
K. List of Schedules.................................................71
SCHEDULE 2...........................................................71
Part 1............................................................71
Part 2............................................................71
SCHEDULE 2.A.........................................................71
SCHEDULE 2.1.A.......................................................71
SCHEDULE 2.2.A.1.....................................................72
SCHEDULE 2.2.A.2.....................................................72
SCHEDULE 2.2.B.1.....................................................72
SCHEDULE 2.2.B.2.....................................................72
SCHEDULE 2.2.C. 1....................................................72
SCHEDULE 2.2.C.2.....................................................72
SCHEDULE 2.3.A.......................................................72
SCHEDULE 2.3.B.......................................................72
SCHEDULE 2.3.C(a)....................................................72
SCHEDULE 2.3.C(b)....................................................72
SCHEDULE 2.3.E.......................................................73
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SCHEDULE 3.1.........................................................73
SCHEDULE 3.2.A.......................................................73
SCHEDULE 3.2.B.......................................................73
SCHEDULE 3.2.C.......................................................73
SCHEDULE 3.2.D.......................................................73
SCHEDULE 3.3.A.......................................................73
SCHEDULE 3.3.B.......................................................73
SCHEDULE 8.2.C.b.....................................................73
SCHEDULE 8.2.C.d.....................................................73
SCHEDULE 8.2.E.a.....................................................74
SCHEDULE 8.2.E.c.....................................................74
SCHEDULE 8.2.E.d.iii.................................................74
SCHEDULE 8.2.▇.▇.▇▇..................................................74
SCHEDULE 8.2.E.f.iii.................................................74
SCHEDULE 8.2.E.g.....................................................74
SCHEDULE 8 2.E.g.ii..................................................74
SCHEDULE 8.2.E.g.iv..................................................74
SCHEDULE ▇.▇.▇.▇.▇▇..................................................74
SCHEDULE 8.2.E.g.vii.................................................74
SCHEDULE 8.2.E.g.viii................................................75
SCHEDULE 8.2.▇.▇.▇▇..................................................75
SCHEDULE 8.2.E.i.....................................................75
SCHEDULE 8.2.E.l.....................................................75
SCHEDULE ▇.▇.▇.▇.▇▇..................................................75
SCHEDULE 8.2.E.m.....................................................75
SCHEDULE 8.2.F.c.....................................................75
SCHEDULE 8.2.F.d.....................................................75
SCHEDULE 8.3.........................................................75
SCHEDULE 10.1.C......................................................75
SCHEDULE 12.A........................................................76
SCHEDULE 12.B........................................................76
SCHEDULE 12.D........................................................76
SCHEDULE 12.E........................................................76
SCHEDULE 13.D........................................................76
SCHEDULE 13.E (a)....................................................76
SCHEDULE 13.H........................................................76
SCHEDULE 14.B........................................................76
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Supplements..........................................................76
A.Prot. 1999/320
NOTARIAL DEED
THE MASTER SALE AND PURCHASE AGREEMENT
Recorded in Basle, Switzerland this 7th (seventh) and 8th (eighth) day of
December, 1999 (nineteen hundred and ninety-nine)
Before me, the undersigned Notary Public in the City of Basle,
▇▇▇▇▇▇▇ ▇▇▇▇▇
appeared today:
1. ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, born November 14, 1964, German citizen, domiciled at
▇-▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇(▇▇▇▇)▇▇▇▇▇▇ Stra(beta)e 89, identified by his
German Personalausweis,
hereinafter not acting in his own name, but, waiving any personal
liability, according to his declaration for and on behalf of
Siemens Aktiengesellschaft, a company incorporated and existing under the
laws of Germany, registered in the commercial register of the Lower Court
in Munich under HRB no. 12300, with its seat in D-80333 Munich,
Wittelsbacherplatz 2
- "Seller" -
on the basis of a power of attorney dated December 6, 1999, the original
of which was presented to the notary before the recording and a copy of
which is attached hereto, and on the basis of the attached substitute
power of attorney as of today, signed in the presence of the Notary by ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, born December 16, 1946, citizen of the United States of
America, holder of US-passport ▇▇▇▇▇▇▇▇▇, issued March 15, 1995,
2. ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇, born March 30, 1968, German citizen, domiciled at
D-14057 Berlin, Neue Kantstra(beta)e 25, identified by her German
Personalausweis,
2
hereinafter not acting in her own name, but, waiving any personal
liability, according to her declaration for and on behalf of
Corning Incorporated, a company incorporated and existing under the laws
of New York, with its principal place of business in ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇,
- "Purchaser" -
on the basis of a power of attorney dated December 1, 1999, and a
Secretary's Certificate dated December 3, 1999, the originals thereof were
presented to the notary before recording and copies thereof are attached
hereto, and on the basis of the attached substitute power of attorney as
of today, signed in the presence of the Notary by ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, born
April 13, 1947, citizen of the United States of America, holder of
US-passport ▇▇▇▇▇▇▇▇▇, issued February 5, 1998.
The acting notary asked the persons appearing prior to the notarization whether
he or any of his partners acts or acted in the matter to be recorded for any of
the parties of this deed outside his or, as the case may be, their notarial
function (Section 3 para. 1 No. 7 German Recording Act (Beurkundungsgesetz)).
The answer was negative.
The persons appearing requested this Deed including its Schedules and
Supplements to be recorded in the English language. The acting Notary Public who
is in sufficient command of the English language ascertained that the persons
appearing are also in command of the English language. After having been
instructed by the acting Notary, the persons appearing waived the right to
obtain the assistance of a sworn interpreter and to obtain a certified
translation of this Deed including the Schedules and Supplements hereto.
The persons appearing, acting as indicated, requested the recording of the
following
3
MASTER SALE AND PURCHASE AGREEMENT
relating to
the sale and purchase of Seller's worldwide
(i) optical fiber communications cable and related operations,
(ii) copper data communication cable and related operations,
(iii) cable related hardware and equipment operations and
(iv) optical fiber operations.
Preamble
The Seller is a stock corporation organized under the laws of Germany and the
parent company of the Siemens Group. The Siemens Group is engaged inter alia in
several business activities regarding the production, distribution and marketing
of electrical engineering products including communication products and related
activities.
In particular, part of the Siemens Group's business is the optical fiber, the
optical fiber communications cable, copper data communications cable and cable
related hardware and equipment business. This business is conducted within the
framework of several corporations and partnerships in various jurisdictions and
within certain business units of Siemens Group's local companies in Argentina,
Australia and the U.S.A.
The Seller and the Purchaser have agreed that the shares, interests and assets
held by Siemens Group Companies in such corporations, partnerships and business
units shall be sold, assigned and transferred to the Purchaser or its
subsidiaries as designated by the Purchaser pursuant to the provisions of this
agreement ("Agreement").
1. Definitions
Assets means the assets of the Asset Sellers which are primarily
attributable to the Operations as more specifically described hereinafter
and are listed in Schedules 2.2.A.2, 2.2.B.2 and 2.2.C.2 as amended in
line with Clauses 2.2.A, 2.2.B and 2.2.C;
Asset Seller means Siemens S.A. (Argentina), Siemens Ltd. (Australia)
and/or NSW Corp. (USA);
Business Day means a day on which banks are open for business in Munich,
Frankfurt and New York City;
4
Closing means the consummation of the sale and purchase of the Shares and
Interests (other than for the Non-Wholly Owned Companies) and the Assets
as more specifically described hereinafter;
Companies means the companies whose Shares or Interests are owned by a
Relevant Seller as listed in Schedule 2;
Contingent Deferred Closing means the closing as defined in Clause 7.1 .A;
Effective Date means the date of the economic effect of the transaction
(except for the Non-Wholly Owned Companies) as set out in Clause 4;
Effective Date Balance Sheet means the balance sheet as defined in Clause
3.2.B;
Employees means individuals employed in the Operations;
Employee Benefit Arrangement means any agreement, scheme, policy, plan or
arrangement operated by any of the Wholly Owned Companies, Relevant
Sellers or in which any Relevant Seller participates in or contributes to
respect of any grouping of Employees providing for (i) deferred
compensation, profit sharing, bonus or incentive compensation plan, stock
options, medical, dental or other health insurance plan, life or
disability or other insurance plan, long service award or (ii) benefit
payable on retirement, death, disability or voluntary withdrawal from, or
involuntary termination of, employment (other than state or statutory or
other government mandatory agreements in any relevant Jurisdiction
providing social security, unemployment insurance, workers' compensation
and other benefits payable on retirement, death, disability or voluntary
withdrawal from, or involuntary termination of, employment);
Intellectual Property means all trade marks, service marks, trade names,
logos, patents, design rights, copyrights, (including domain names and
internet page contents), semi-conductor topography rights, computer
software and source codes and all other similar proprietary rights which
may subsist in any part of the world (but excluding Know-how) and which
are owned by the Companies or Asset Sellers (for the latter limited to
those used or useable exclusively or primarily in the Operations)
including, where such rights are obtained or enhanced by registration, any
registration of such rights and applications and rights to apply for such
registrations, identified in Schedule 8.2.E.i;
5
Interests means the limited partnership interests in those German
Companies referred to in Column 1 of part 1 of Schedule 2;
Jurisdiction(s) means Argentina, Australia, Egypt, France, Germany,
Greece, Indonesia, Italy, P.R. China, Turkey, United Kingdom, the United
States of America and Vietnam;
Know-how means all confidential and/or proprietary industrial, commercial
and/or financial information and techniques (i) in any form (including
paper, electronically stored data, magnetic media, film and microfilm)
including (without limiting the foregoing) drawings, formulae, test
results, reports, project reports and testing procedures, shop practices,
instruction and training manuals, tables of operating conditions, market
forecasts, specifications, quotations, tables, lists and particulars of
customers and suppliers, marketing methods and procedures and advertising
copy and (ii) owned by the Companies or Asset Sellers and used or usable
in connection with the Operations) even if not reduced to any tangible
form in accordance with (i);
Liability means any duty or obligation whether deriving from contract,
statute or otherwise, whether present or future, actual or contingent (as
it relates to amount);
License Agreement means each agreement related to any aspect of the
Intellectual Property and/or Know-how entered into as licensor or licensee
prior to Closing by or on behalf of any of the Relevant Sellers or
Companies.
Material Contract is a contract to which a Wholly Owned Company is a party
which is of two years or more duration and involves expenditures or
revenues in excess of EURO one million per year;
National Closing means the consummation of the sale and purchase of the
Shares of the Non Wholly Owned Companies as more specifically described
hereinafter;
Non Wholly Owned Companies means Siemens Fibre Optic Cable Co. Ltd.
(China), Fibre Optic Cables & Accessories (FOCAL) (Vietnam), Egytech
Telephone Cables Co. (Egypt), PT Siemens Kabel Optik Indonesia and
Telecables S.A. (Greece));
Operations means the optical fibre communication cable, copper data
communication cable, optical fibre and cable related hardware and
equipment businesses as currently carried on by each of the Companies and
the Assets Sellers
6
(for the latter only relating to the Assets sold hereunder), located in
each of the Jurisdictions, as described in Schedule 2.A;
Property means any Company owned or leased real property used in
connection with the Operations;
Relevant Purchaser means each of the companies listed in column (3) of
part 1 of Schedule 2, excluding Purchaser which is purchasing Shares or
Interests from Seller or a Relevant Seller under this Agreement and each
of the purchasers listed in Schedule 2 part 1 purchasing Assets from any
of the Asset Sellers;
Relevant Seller means each of the companies listed in column 2 of Part 1
of Schedule 2, excluding Seller which is selling Shares, Interests or
Assets to Purchaser or Relevant Purchaser under this Agreement;
Shares means the shares in the capital of each of the Companies owned by
the Seller or Relevant Seller and sold hereunder;
Siecor Companies means Siecor Corporation, Siecor Gesellschaft fur
Lichtwellenleiter mbH and Siecor Fertigungsgescllschaft fur
Lichtwellenleiter mbH & Co. KG;
Siemens Group means Seller and its affiliates pursuant to Sec. 15 of the
German Stock Corporation Act;
Taxation or Tax means any tax, duty, fee, withholding or other levy
imposed by any public office (including payroll taxes and social security
contributions) as well as any penalty, interest or other surcharge related
thereto;
Transfer Agreements or Transfer Deeds means those transfer deeds and
transfer agreements to be entered into between the Seller or Relevant
Seller and the Purchaser or Relevant Purchaser to give effect to the
transactions contemplated by this Agreement, substantially in the form of
or as outlined in the drafts attached hereto as Schedules;
Wholly Owned Company means any Company as set out in Schedule 2 all of
whose Shares are owned directly or indirectly by Seller (which by way of
clarification includes Teleco Cavi S.p.A.).
7
2. Sale of Shares, Interests and Assets
Schedule 2 contains a listing of the Companies, Seller, Relevant Sellers, Asset
Sellers, Purchaser and Relevant Purchasers. Schedule 2.A contains a description
of the Operations.
2.1 Sale of Shares and Interests
A. Germany (without German Siecor Companies)
(a) Sale of Shares
Seller sells (subject to the terms and conditions set forth in this
Agreement) to Purchaser accepting such sale in the name and on
behalf of the Relevant Purchaser(s) the Shares, including all
ancillary rights, which shall include all profits
(Gewinnausschkuttungsanspruche) for the current fiscal year, in:
(i) RXS Kabelgarnituren Verwaltungsgesellschaft mbH (present name:
Kyros 16 Beteiligungsgesellschaft mbH) with its registered
office in Munich/Germany and registered in the Commercial
Register of the Lower Court in Munich under no. HRB 128073,
consisting of one share in the nominal amount of EURO 25,000;
(ii) NSW Seekabelwerke Verwaltungsgesellschaft mbH (present name:
Kyros 17 Beteiligungsgesellschaft mbH) with its registered
office in Munich/Germany and registered in the Commercial
Register of the Lower Court in Munich under no. HRB 128074,
consisting of one share in the nominal amount of EURO 25,000;
and
(iii) SCC Special Communication Cables Verwaltungsgesellschaft mbH
with its registered office in Munich/Germany and registered in
the Commercial Register of the Lower Court in Munich under HRB
128070, consisting of one share in the nominal amount of EURO
25,000.
No further consents are required under any relevant shareholder
agreement or articles of association for the sale and transfer of
the Shares of any of the above Companies.
8
(b) Sale of Interests
Seller (for (iii) below) and in the name and on behalf of the
Relevant Seller (for (i) and (ii) below) sells (subject to the terms
and conditions as set forth in this Agreement) to Purchaser
accepting such sale in the name and on behalf of the Relevant
Purchaser by way of special contractual transfer
(Sonderrechtsnachfolge) the Interests in:
(i) RXS Kabelgarnituren GmbH & Co. KG ("RXS KG") with its
principal place of business in ▇▇▇▇▇ and to be registered in
the Commercial Register of the Lower Court in ▇▇▇▇▇;
(ii) NSW Seekabelwerke GmbH & Co. KG ("NSW KG") with its principal
place of business in Nordenham and to be registered in the
Commercial Register of the Lower Court in Nordenham; and
(iii) SCC Special Communication Cables GmbH & Co. KG (" SCC KG")
with its principal place of business in Munich and to be
registered in the Commercial Register of the Lower Court in
Munich;
each of which sale includes Seller's or Relevant Seller's entire
interest in the respective partnership. Any positive or negative
balances of all partnership accounts of the relevant limited
partnership (i.e., all capital accounts (Kapitalkonten) I, II and
III)) of Seller or Relevant Seller are included in the sale of each
Interest, whereas any variable private account (Verrechnungskonto)
as clearing account shall be excluded from such sale and shall
therefore remain with Seller or Relevant Seller.
The draft documentation to establish the Companies in (i), (ii) and
(iii) above and to contribute the relevant parts of the Operations
to such Companies is contained in Schedule 2.1.A. Seller agrees to
finalize such documents prior to the Closing, it being understood
that all amendments and supplements to such draft require the prior
written consent of Purchaser, not unreasonably to be withheld,
unless the amendment or supplement is non-substantive.
Seller shall prior to Closing at its expense take all appropriate
steps to have the registered offices of the German Companies
referenced under A. a. (i), (ii), transferred to ▇▇▇▇▇ and Nordenham
respectively and to have the names of the German Companies
referenced under A.a. (i) and (ii) changed as set out above
9
under A. a. (i) and (ii) and take all appropriate steps to have the
limited partnerships under A. b. (i), (ii) and (iii) registered in
▇▇▇▇▇, Nordenham and Munich respectively.
B. Other Wholly-Owned Companies
Seller sells in the name of and on behalf of the Relevant Seller (subject
to the terms and conditions as set forth in this Agreement) to Purchaser,
accepting such sale in the name and on behalf of the Relevant Purchaser,
the Shares in RXS ▇▇▇▇▇ Accessories de Cables S.A. (France), Siemens Fiber
Optik Kablolari (Turkey) and Teleco Cavi SpA (Italy), subject to and as of
the later of Closing or Effective Date.
C. Siecor Companies
a. Siecor GmbH
Seller sells (subject to the terms and conditions set forth in this
Agreement) to Purchaser accepting such sale in the name and on
behalf of the Relevant Purchaser the Shares (including all ancillary
rights, which shall include all profits
(Gewinnausschuttungsanspruch) for the current fiscal year in Siecor
GmbH with its registered office in Neustadt b. Coburg, and
registered in the Commercial Register of the Lower Court in Coburg,
under no. HRB 1369, consisting of two shares in the aggregate
nominal amount of DEM 50,000.
b. Siecor GmbH & Co KG
Seller sells (subject to the terms and conditions as set forth in
this Agreement) to Purchaser accepting such sale in the name and on
behalf of the Relevant Purchaser by way of special contractual
transfer (Sonderrechtsnachfolge) the Interest in Siecor
Fertigungsgesellschaft fur Lichtwellenleiter mbH & Co. KG with its
registered office in Neustadt b. Coburg and registered in the
Commercial Register of the Lower Court in Coburg under no. HRA 2999,
which sale includes Seller's entire interest in the respective
partnership. Any positive or negative balances of all partnership
accounts of the relevant limited partnership (i.e., all capital
accounts (Kapitalkonten I and II)) of Seller are included in the
sale of the Interest; whereas the variable private account
(Verrechnungskonto) as clearing account shall be excluded from such
sale and shall therefore remain with Seller.
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c. Siecor Corporation
Seller sells in the name of and on behalf of the Relevant Seller
(and subject to the terms and conditions of this Agreement) to
Purchaser, accepting such sale, the Shares in Siecor Corporation as
of the later of Closing or Effective Date.
D. Non-Wholly Owned Companies
Seller, in the name of and on behalf of Relevant Seller, sells
subject to the occurrence of the Closing (and subject to the terms
and conditions set forth in this Agreement) to Purchaser accepting
such sale in the name of and on behalf of the Relevant Purchasers,
the Shares in the Non-Wholly Owned Companies subject to and as of
the relevant National Closing.
2.2 Sale of Assets / Assumption of Liabilities
A. Argentine Assets
Seller sells, in the name of and on behalf of Siemens S.A., Argentina to
Purchaser, accepting such sale in the name of and on behalf of the
Relevant Purchaser (subject to the terms and conditions as set forth
herein) the entire business, its movable and immovable, tangible and
intangible property, goodwill, contracts as well as supplier and customer
relations, Liabilities exclusively or primarily pertaining to the
Operations within Siemens S.A., Argentina as of the later of Closing or
Effective Date. A general description of these Assets is attached as
Schedule 2.2.A.1. Furthermore, a specific list of Assets prepared as of
September 30, 1999 containing tangible Assets, Intellectual Property,
Know-how, material contracts, and Liabilities of Siemens S.A., Argentina
is attached as Schedule 2.2.A.2. Such preliminary list as of September 30,
1999 will be updated as of the later of Closing or Effective Date.
B. Australian Assets
Seller sells, in the name of and on behalf of Siemens Ltd., Australia to
Purchaser, accepting such sale, also in the name of and on behalf of the
Relevant Purchaser (subject to the terms and conditions as set forth
herein) the entire business, its movable and immovable, tangible and
intangible property, goodwill, contracts as well as supplier and customer
relations, Liabilities exclusively or primarily pertaining to the
Operations of Siemens Ltd., Australia as of the later of Closing or
11
Effective Date. A general description of these Assets is attached as
Schedule 2.2.B.1. Furthermore, a specific list of Assets prepared as of
September 30, 1999 containing tangible Assets, Intellectual Property,
Know-How, material contracts and Liabilities of Siemens Ltd., Australia,
is attached as Schedule 2.2.B.2. Such preliminary list as of September 30,
1999 will be updated as of the later of Closing or Effective Date.
C. U.S. Assets
Seller sells, in the name of and on behalf of NSW Corp. to Purchaser,
accepting such sale, also in the name of and on behalf of the Relevant
Purchaser (terms and conditions as set forth herein) the entire business,
its movable and immovable, tangible and intangible property, goodwill,
contracts as well as supplier and customer relations and Liabilities
exclusively or primarily pertaining to the Operations of NSW Corp. as of
the later of Closing or Effective Date. A general description of these
Assets is attached as Schedule 2.2.C.1. Furthermore, a specific list of
Assets prepared as of September 30, 1999 containing tangible assets,
Intellectual Property, Know-how, material contracts and Liabilities of NSW
Corp. is attached as Schedule 2.2.C.2. Such preliminary list as of
September 30. 1999 will be updated as of the later of Closing or Effective
Date.
2.3 Transfer Deeds/Agreements
A. Germany (without German Siecor Companies)
With respect to the Shares in the Companies listed under Clause 2.1.A.(a)
and the Interests in the German limited partnerships set out in Clause
2.1.A.(b), the Seller or the Relevant Seller and the Relevant Purchaser
shall on Closing issue and sign the Transfer Deeds in due form,
substantially in the form of the drafts attached hereto as Schedule 2.3.A,
to effect the assignment of such Shares and Interests as of the later of
Closing or Effective Date and in accordance with the provisions and
conditions as set forth in this Agreement and in such Transfer Deeds,
provided that the assignment of such Interests shall be subject
(aufschiebend bedingt) to the registration of such special contractual
transfer (Sonderrechtsnachfolge) in the relevant commercial register
pertaining to such Interests.
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B. Other Wholly Owned Companies
With respect to the Shares in each of the Non-German Wholly Owned
Companies sold pursuant to Clause 2.1.B, the Relevant Seller and Relevant
Purchaser shall on Closing enter into the relevant Transfer Agreements
substantially in the form of the drafts attached hereto as Schedule 2.3.B
to effect the assignment of such Shares as of the later of Closing or
Effective Date in accordance with the provisions and conditions as set
forth in this Agreement and such relevant Transfer Agreement.
C. Siecor Companies
With respect to the Shares in Siecor Corporation and in Siecor GmbH and
the Interest in Siecor GmbH & Co KG sold pursuant to Clause 2.1.C, the
Seller, respectively the Relevant Seller, and the Purchaser, respectively
the Relevant Purchaser, shall on Closing enter into the relevant Transfer
Agreements substantially in the form of the drafts attached hereto as
Schedule 2.3.C.(a) and (b), to effect the assignment of such Shares and
Interests as of the later of Closing or Effective Date in accordance with
the provisions and conditions as set forth in this Agreement and such
Transfer Agreements.
Any agreements between Seller and Purchaser relating in any way to the
German Siecor Companies are no longer valid as of the Closing, except for
ongoing product supply arrangements.
D. Non-Wholly Owned Companies
With respect to the Shares in each of the Non-Wholly Owned Companies sold
pursuant to Clause 2.1.D, the Seller, respectively the Relevant Seller,
and Purchaser, respectively the Relevant Purchaser, shall on each National
Closing enter into the relevant Transfer Agreements to effect the
assignment of such Shares as of the National Closing and in accordance
with the provisions and conditions as set forth in this Agreement and such
Transfer Agreements.
E. Assets
With respect to the Assets sold and the Liabilities to be assumed pursuant
to Clause 2.2, the Relevant Seller and Relevant Purchaser shall on Closing
enter into the relevant Transfer Agreements for NSW Corp. substantially in
the form of the draft
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attached hereto as Schedule 2.3.E, and for the Assets in Argentina and
Australia in a form of Transfer Agreements to be agreed upon incorporating
the legal requirements in the relevant Jurisdiction, in each case , to
effect the assignment of such Assets and Liabilities as of the later of
Closing or Effective Date in accordance with the provisions and conditions
as set forth in this Agreement and such relevant Transfer Agreements.
3. Purchase Price
3.1 Preliminary Purchase Price
A. The Purchaser shall pay to the Seller on Closing by way of "performance
upon tender of counterperformance" (Zug um Zug) the Preliminary Purchase
Price, which is the sum of the following:
a. US $455,000,000 (US dollars four hundred fifty five million) for
Relevant Seller's Shares in Siecor Corporation;
b. EUROS 199,400,000 (EUROS one hundred ninety nine million four
hundred thousand) for Sellers or Relevant Seller's Shares and
Interests in the German Siecor Companies;
c. EUROS 244,500,000 (EUROS two hundred forty four million five hundred
thousand) plus/minus the net debt/cash amount on the September 30,
1999, balance sheet referenced in Clause 3.2.A. for the Shares and
Interests in the Wholly Owned Companies;
d. US$ 4,000,000.00 (US dollars four million) for the Assets in
Schedule 2.2.C.2. and EURO 18,600,000.00 (EUROS eighteen million six
hundred thousand) for the Assets listed in Schedules 2.2.A.2. and
2.2.B.2.;
e. US$ 75,000,000 (U.S. dollars seventy five million) as allocated
payments for the non-competition covenant in Clause 12.D; and
f EUROS 72,100,000 (EUROS seventy two million one hundred thousand)
for Seller's Intellectual Property and Know-how relating to SCC KG
as listed in Schedule 8.2.i.
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B. In addition to the amounts under paragraph A., at the relevant National
Closing, Purchaser shall pay to Seller by way of "performance upon tender
of counterperformance" (Zug um Zug) (i) for the Shares owned by Seller or
Relevant Seller in the Non-Wholly Owned Companies other than SOFC the
relevant portion of the aggregate of US $10,300,000 (U.S. dollars ten
million three hundred thousand) and subject to adjustment under Clause
3.2.E. and (ii) for Seller's Shares in SOFC US$ 20,000,000 (US dollars
twenty million) plus/minus the agreed upon net debt/cash position at
September 30, 1999 in proportion to the Seller's ownership percentage
subject to adjustment in accordance with paragraph 3.2.F..
C. The allocation of the amounts under A. and B. among the Shares, Interests,
Assets and other items is set forth in Schedule 3.1.
3.2 Adjustments to Preliminary Purchase Price
A. Audited Financial Statements for the Fiscal Year Ended September 30, 1999
As soon as possible, but in any event no later than January 15, 2000,
Seller at its cost shall prepare and deliver to Purchaser audited
pro-forma combined financial statements prepared on the basis of German
GAAP consistent with the principles set forth in Schedule 3.2.A. (which
shall consist of a balance sheet dated as of September 30, 1999, and an
income statement for the year ending September 30, 1999) of the Operations
(excluding the Siecor Companies and SOFC, and including SFOK and the
Non-Wholly Owned Companies as investments (Beteiligungen) only) for the
fiscal year ended September 30, 1999 on a basis consistent with the
principles set forth in Schedule 3.2.A. Not later than February 15, 2000
Seller at its cost shall prepare and deliver to Purchaser the audited
pro-forma combined financial statements of the Operations for the fiscal
year ended September 30, 1999 which have been reconciled to US GAAP in
accordance with the principles set forth in Schedule 3.2.A. Seller will
procure that its auditor KPMG will provide (1) an audit opinion concerning
the German GAAP financial statements and (2) a statement attesting that
the German GAAP financial statements have been reconciled to US GAAP in
accordance with the principles set forth in Schedule 3.2.A. Purchaser has
agreed that KPMG's firm's policies and language for letters to be included
in filings with the US SEC are acceptable.
Seller will facilitate Purchaser's review of all such audited statements
on a timely basis, which review will include Purchaser's independent
accountants meeting with
15
Seller's independent accountants and reviewing such Seller accountant's
work papers. The workpapers will include schedules (copies of which will
be provided to Purchaser) consistent in form and content with those used
by KPMG and provided to Purchaser in the KPMG prepared document as of
September 30, 1998 ("Project Blue Horizon -- Report on agreed upon
procedures on the combined balance sheets and income statements of the
Optical Fiber business").
B. Effective Date Balance Sheet
Within 90 days after the Effective Date, Seller will prepare with
Purchaser's cooperation and deliver to Purchaser a pro-forma combined
balance sheet of the Operations as of the Effective Date prepared on the
basis of German GAAP and the principles set forth in Schedule 3.2.A.
Within 120 days after the Effective Date, Seller will provide Purchaser
with a reconciliation to US GAAP of such pro-forma combined balance sheet
in accordance with the principles set forth in Schedule 3.2.A. Both such
pro-forma combined balance sheets will be prepared with assistance from
Purchaser so as to reduce potential areas of disagreement relating to such
balance sheet. Seller will use its best efforts in engaging KPMG, Seller's
independent accountants, on the basis that they will (i) express an audit
opinion and confirm that the accounting policies used in the preparation
of both pro-forma combined balance sheets are consistent with those used
in the preparation and reconciliation to US GAAP of the audited pro-forma
combined financial statements for the fiscal year ended September 30, 1999
and (ii) provide Purchaser and its independent accountants access to its
workpapers, the form and content of which will be consistent with those as
of September 30, 1999.
The procedures for finalizing the Effective Date Balance Sheet (including
procedures to resolve disputes) are contained in Schedule 3.2.B.
C. Agreed Procedures
Purchaser and Seller will cooperate in the completion by KPMG of certain
agreed upon procedures (as defined in Schedule 3.2.C.). KPMG will provide
Purchaser and its accountants access to the work papers relating to the
agreed upon procedures on a timely basis. These procedures will be
performed on both the September 30, 1999 balance sheet and the Effective
Date Balance Sheet.
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D. Adjustments to Preliminary Purchase Price
(a) Upon acceptance of the Effective Date Balance Sheet as provided by
Schedule 3.2.B, Seller will calculate Net Assets (as defined in
Schedule 3.2.D) from the Effective Date Balance Sheet and compare
such amount with the Net Assets calculated from the audited
pro-forma combined balance sheet as of September 30, 1999 in each
case on a reconciled US GAAP basis. If the US GAAP Net Assets in the
Effective Date Balance Sheet have increased compared to those in the
September 30, 1999 balance sheet, the Preliminary Purchase Price
will be increased by the amount of such increase. If the Net Assets
have decreased, the Preliminary Purchase Price will be reduced by
the amount of such decrease.
(b) The Preliminary Purchase Price plus/minus the adjustment calculated
pursuant to (a) above shall be the Purchase Price.
(c) Within 10 Business Days after the calculation of the Purchase Price,
Purchaser or Seller (as the case may be) will pay the other party
the amount resulting from such adjustment pursuant to (a) and
interest from the Effective Date until date of payment, at the per
annum EURIBOR 30 day rate.
E. Adjustments for Non-Wholly Owned Companies other than SOFC
At each National Closing the Preliminary Purchase Price will be adjusted
up or down based on the Siemens Group proportion of the actual net
debt/cash position of each Non-Wholly Owned Company as of its most recent
audited financial statements.
F. Adjustments for SOFC
The Preliminary Purchase Price for SOFC will be adjusted as follows:
(a) as soon as possible, but in no event later than 45 days after
Closing, the Purchase Price for SOFC shall be adjusted by the
increase or decrease in Seller's proportion of the Net Assets of
SOFC between September 30, 1999 and the Effective Date.
(b) At the SOFC National Closing, Purchaser or Seller (as the case may
be) will pay the other party the amount resulting from such
calculation under (a).
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G. Post April 1, 2000 Interim Financial Statement
If the Closing takes place after April 1, 2000 and before July 1, 2000, to
facilitate Purchaser's SEC filing requirements in the U.S.A. the Seller
shall deliver no later than 30 days after Closing interim financial
statements for and as of the quarter ended December 31,1999 in accordance
with the principles set forth in Schedule 3.2.A., including reconciliation
to U.S. GAAP. Such interim statements shall be consistent in format with
those provided pursuant to Clause 3.2.A., but may be unaudited.
3.3 Contingent Consideration
A. Purchaser shall pay Seller an amount up to EUROS 96,100,000 (in words
ninety-six million one hundred thousand EUROS) to ensure migration of
customers currently served through existing Siemens' sales channels. This
contingent consideration will be paid pursuant to Schedule 3.3.A.
B. Purchaser shall pay to Seller an amount up to EUROS 43,200,000 (in words
forty-three million two hundred thousand EUROS) pursuant to the Undersea
Cable Contingent Payment agreement attached hereto as Schedule 3.3.B.
3.4 Method of Payment
A. The Preliminary Purchase Price, any adjustments and any interest thereon
(as provided by this Agreement) shall be paid by the Purchaser on behalf
of itself and the Relevant Purchasers to the Seller on behalf of itself
and the Relevant Sellers subject to any mandatory legal requirements
under any of the Transfer Agreements or Transfer Deeds for any direct
payments in the relevant Jurisdiction, which for the avoidance of doubt
shall not increase or reduce the Preliminary Purchase Price or the
Purchase Price.
B. At least two weeks prior to Closing, Contingent Deferred Closing and each
National Closing, Seller will provide Purchaser with payment instructions
setting out in reasonable detail the following information: bank account,
method of payment, transit/Swift number, etc. to which Purchaser will make
payment.
C. Any retention right (Zuruckbehaltungsrecht) and set-off right
(Aufrechnungsrecht) of the Purchaser with respect to the Preliminary
Purchase Price and any adjustments shall be excluded except as explicitly
stated in this Agreement.
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D. If not explicitly stated otherwise in Clause 3, wherever in this Agreement
or any Transfer Agreement provision is made for any payment by one party
(the payor) to another (the payee), such payment shall be made by
telegraphic or other electronic means of transfer in immediately available
funds in the currencies and to the account(s) specified by the payee as
necessary to effect payment. Payment of such sum shall be a good discharge
to the payor (and those on whose behalf such payment is made) of its
obligation to make such payment and the payor (and those on whose behalf
such payment is made) shall not be obligated to see to the application of
the consideration as between the Relevant Sellers, in the case of a
payment to the Seller, or as between the Relevant Purchasers, in the case
of a payment to the Purchaser.
4. Effective Date
Effective Date shall be the first day (0:00 h) of the month immediately
following Closing, except if the Effective Date is April 1, 2000 the
Closing shall be April 3, 2000.
Seller and Purchaser agree also in the name and on behalf of Relevant
Seller and Relevant Purchaser that subject to Closing they will
economically put each other into a position as if the Operations had been
transferred in a way as if the Operations had been conducted on the
account of Purchaser or Relevant Purchaser effective as at the Effective
Date, irrespective of when the legal transfer occurs.
5. Closing Conditions
5.1 Conditions Precedent for Closing
5.1.1 Subject to Clause 5.1.2 Closing is conditional upon:
A. the ability of Purchaser (under possibly relevant merger
control rules) to consummate the purchase of Seller's Shares
in Siecor GmbH and Interests in Siecor GmbH & Co KG;
B. German merger control approval having been obtained as follows
for each of the relevant Operations:
(a) either the Seller or the Purchaser has received a
written confirmation from the German Federal Cartel
Office (Bundeskartellamt) that the transaction relating
to the relevant
19
Operations does not fulfill the conditions for
prohibition pursuant to ss.36 of the German GWB; or
(b) the period of one month pursuant to ss. 40 para. 1
sentence 1 GWB has expired without either the Seller or
the Purchaser having received a notification in writing
from the Bundeskartellamt that it has commenced an
investigation in respect of the transaction relating to
such relevant Operations; or
(c) the period of four months pursuant to ss. 40 para. 2
sentence 2 GWB or any extended period pursuant to ss. 40
para. 2 sentence 3 GWB has expired without either the
Seller or the Purchaser having received an order from
the Bundeskartellamt prohibiting the transaction
relating to such relevant Operations.
5.1.2 In case all conditions mentioned under paras. A and B of Clause
5.1.1 have been met, except for an approval of the transfer of the
Shares and Interests in SCC KG (and therefore possibly NSW KG and
Teleco Cavi S.p.A.) by the Bundeskartellamt the Closing shall take
place with respect to the non-pending parts of the transaction
(except for the Non-Wholly Owned Companies). In such situation the
receipt of the notification in writing from the Bundeskartellamt
that it has commenced an investigation for the second phase with
respect to SCC KG (and therefore possibly NSW KG and Teleco Cavi
S.p.A.) shall be deemed as fulfillment of all - for the purposes of
Clause 7.1.A. as to such non-pending parts of the transaction -
conditions precedent. The Purchaser shall upon Closing of the
non-pending parts of the transaction pay into a separate Seller
account, details to be provided by Seller, 25% of the Preliminary
Purchase Price attributable to the part of the transaction closing
of which is pending due to the second phase investigation of the
Bundeskartellamt. The balance of the Preliminary Purchase Price
attributable to the Operations included in such second phase shall
not be paid at Closing but rather only in accordance with Clause
5.1.3.
5.1.3 In case Closing takes place under Clause 5.1.2 for the non-pending
parts of the transaction, the terms and conditions of this Agreement
shall apply only to such non-pending parts.
20
With respect to the pending parts of the transaction according to
Clause 5.1.2, the closing ("Contingent Deferred Closing") shall take
place when the German merger control approval under Clause 5.1.2
above has been obtained. With respect to such Contingent Deferred
Closing the terms and conditions as set out in this Agreement shall
apply accordingly.
5.2 Non-Satisfaction
5.2.1 This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing by Seller
or Purchaser, if the Closing (not the National Closings) has not
occurred nine (9) months after the date hereof.
5.2.2 In case a Closing pursuant to Clause 5.1.2 has taken place, but the
Bundeskartellamt has not approved the transfer of the Shares and
Interests in SCC KG (and, if applicable, NSW KG and Teleco Cavi
S.p.A.) on or before nine (9) months after the date hereof, the
amount in the separate account referenced in Clause 5.1.2 shall be
retained by Seller, and Seller may terminate this Agreement with
respect to the non-approved Companies, whereby only the transactions
with regard to such Companies are abandoned.
5.3 German Merger Control Process
A. The Seller and Purchaser will (as promptly as possible after the date
hereof) file the necessary applications with regard to the German
acquisitions contemplated by this Agreement with the Bundeskartellamt
under Clause 5.1.1.B, to the extent that such filings have not yet been
effected. The parties shall furnish complete and correct information and
details due to be given to the Bundeskartellamt. To the extent that third
parties are involved on behalf of Seller or Purchaser in the process of
filing or giving information, Seller and/or Purchaser shall be liable for
the third parties involved on their behalf to effect the filing and to
give complete and correct information and all details in a timely fashion.
B. The Purchaser and the Seller shall promptly inform and keep the other
informed of all material communications with the Bundeskartellamt referred
to in Clause 5.1.1.B.
C. The Seller and the Purchaser shall each give notice to the other of the
satisfaction of each of its respective conditions set out in Clause
5.1.1.B. as promptly as possible.
21
D. In the event that an order of prohibition is issued and/or can only be
averted by giving certain commitments, Seller and Purchaser undertake to
make reasonable efforts to comply with all requests of the
Bundeskartellamt in order to lift the conditions of prohibition to the
satisfaction of the Bundeskartellamt by way of giving appropriate
undertakings.
E. If the Bundeskartellamt conditions its approval for the transfer of any
of the Operations subject to the Contingent Deferred Closing to the sale
of a part of the Operations to a third party, Seller and Purchaser shall
cooperate for such sale and upon such sale and the resulting Contingent
Deferred Closing, Clause 5.1.3 will apply and the respective part of the
Purchase Price allocated for such Company will be paid to Seller, if the
proceeds from such sale belong to the relevant Company; however, to the
extent the proceeds from such sale are paid to Seller, then such amount
will be deducted from the Purchase Price allocated for such Company.
5.3 Conditions Precedent to National Closings
A. The conditions that have to be fulfilled before a National Closing can
take place, in addition to the Closing, vary from country to country and
from Company to Company ("National Closing Conditions"). They may include
inter alia:
- antitrust approvals,
- government approvals,
- approvals by the other shareholder(s)/partner(s), shareholder
meeting, partner meeting, management or supervisory/advisory board
or any member thereof, etc. of a Company,
- waiver or refusal of rights of first offer and/or preemptive rights
of other shareholder(s)/partner(s), etc. of a Company.
A further National Closing Condition is that upon any National Closing the
relevant Non-Wholly Owned Company is not insolvent under the relevant laws
of the relevant Jurisdiction.
B. If the National Closing Conditions have not been fulfilled by December 31,
2000 for any Non-Wholly Owned Company, or in the case of SOFC before
December 31, 2001, either party shall be entitled to declare to the other
party in writing termination
22
of this Agreement in respect only to such Non-Wholly Owned Company, so
that by this termination the purchase and sale of the Shares in such
Non-Wholly Owned Company is abandoned.
6. Actions Pending Closing or National Closing
6.1 Cooperation
a) Subject to applicable laws and/or legal and other contractual
restrictions, Seller permits and undertakes to procure that the Relevant
Sellers shall permit Purchaser and its representatives (which term shall
be deemed to include their independent accountants and counsel) nominated
by the Purchaser in writing to have reasonable access during normal
business hours, upon reasonable notice and in such manner as will not
unreasonably interfere with the conduct of the Operations, to all of their
financial books and records, as far as those are exclusively attributable
to the Operations, as the Purchaser may from time to time request and as
far as needed by it to prepare for Closing, and to the extent necessary to
be adequately informed about the Operations to ascertain the fulfillment
of the obligations as set out under Clause 6.2 below.
b) Seller shall provide Purchaser before Closing with information on the
activities of the employees listed in Schedule 8.2.E.g.(vii) in Singapore
and Malaysia to assist Purchaser in the transition of such operations.
6.2 Restrictions on Relevant Sellers
A. Seller, in the name and on behalf of the Relevant Seller, undertakes to
exercise (to the extent legally possible) from the date of this Agreement
until the Closing or the National Closing the shareholders' and partners'
rights in the Companies and any rights of a corresponding influence on the
Assets in the Asset Sellers in accordance with the terms and conditions of
this Agreement, in particular to assure that -- except for those agreed
herein or otherwise in writing - no steps will be taken outside the
ordinary course of business. In addition, with respect to the Wholly Owned
Companies, no investments or sales or dispositions will be made beyond the
current budget of the relevant Wholly Owned Company without the prior
written consent of the Purchaser. In particular with respect to the Wholly
Owned Companies, Seller, also in the name and on behalf of the Relevant
Seller, unless legally required, shall:
23
(i) except in the ordinary course of business, not renegotiate, amend or
terminate (except by the terms thereof) any Material Contract or
Employee Benefit Arrangement without prior consultation with the
Purchaser if such renegotiation, amendment or termination would have
a material adverse effect on the Operations;
(ii) use reasonable efforts to renew or preserve any governmental permits
or environmental permits relating to the Operations, except where
the failure to hold any such permit or environmental permit would
not interfere with the conduct of the Operations as currently
conducted;
(iii) consult with Purchaser - except in the ordinary course of business
(including modifications consistent with past practice) - in the
relevant human resource policies of the Operations; and
(iv) procure that up to the later of the Effective Date or the Closing
contracts are carried out and (if applicable based on the relevant
contract's schedule of performance) completed, and that in any event
the obligations of any of the Relevant Sellers or Companies under
each of the contracts are performed in the ordinary course in a
proper and workmanlike manner and in accordance with their
respective terms.
B. Any dividends received by Seller or Relevant Seller from any of the
Non-Wholly Owned Companies between Effective Date and the relevant
National Closing shall reduce the Purchase Price on a Dollar for Dollar
basis.
Seller shall consult with Purchaser before it or Relevant Seller makes any
capital contribution to any of the Non-Wholly Owned Companies between
Effective Date and the relevant National Closing. If the Seller or
Relevant Seller decides, after having consulted the Purchaser, to go
forward with such capital contribution, the amount contributed by the
Seller or Relevant Seller shall increase the Purchase Price on a Dollar
for Dollar basis, unless (i) Purchaser disagrees in writing to such
capital contribution, (ii) without such contribution the respective
Non-Wholly Owned Company would be insolvent at the time of the
contribution under the laws of the respective Jurisdiction and (iii) the
other shareholder of the Non-Wholly Owned Company decides to contribute
its part to such capital contribution. Such capital contribution does not
constitute a breach of this Clause 6 or other provisions of this
Agreement.
24
C. If there is any breach of any of the above covenants, Purchaser shall have
the rights and claims as set out under Clauses 8.4 and 9. Any actions of
Seller or Relevant Sellers specifically permitted by this Clause 6 shall
be deemed to be in the ordinary course of business between the date hereof
and Closing or National Closing.
6.3 Dividends
Relevant Seller has received a dividend from Teleco Cavi S.p.A. for the
business year 1998/1999 in November 1999 and this does not constitute a
violation of Clause 6.2.
6.4 Cash Pooling
The cash pooling of the German Wholly Owned Companies and the German
Siecor Companies will be terminated by Seller and respective Relevant
Sellers no later than January 15, 2000, and new separate account(s) will
be established by Seller for and in the name of each such Company at
Deutsche Bank AG or any other major bank acceptable to Purchaser, such
acceptance not to be unreasonably withheld, into which accounts such
Companies will deposit and from which such Companies will withdraw in the
ordinary course of business all cash flows from the relevant Operations.
7. Closings
7.1 Closing
A. Date and Place
Subject to Clause 5.1, Closing shall take place either on January 31, 2000
or, if later, on the last business day of the month in which the last of
the Clause 5.1 conditions precedent have been met (unless otherwise agreed
by the parties in writing). In addition to the preceding sentence, if
there is a part of the transaction pending in accordance with Clause
5.1.2, the Contingent Deferred Closing for that part shall take place five
Business Days after the conditions set out in Clause 5.1.2 have been met.
The Closing shall take place on the same date as to all parts of the
Operations, except for those which occur at the Contingent Deferred
Closing or each National Closing, in whole or in part at the offices of
the recording notary in Basle, Switzerland, and -
25
if legally required - at the relevant locations in each Jurisdiction, or
such other locations as may be agreed to in writing by the parties.
B. [intentionally left blank]
C. Payment of Preliminary Purchase Price; Transfer of Shares, etc.
The Preliminary Purchase Price (or the relevant portion thereof for those
Operations for which Closing can occur) to be paid under Clause 3 on
Closing shall be paid to Seller consistently with Clause 3.4, and the
Shares, Interests and Assets and any documents indicating ownership
thereof shall be transferred to Purchaser or Relevant Purchaser by way of
"performance upon tender of counterperformance". With respect to payments
for Siecor Corporation and the German Siecor Companies, interest will be
added from January 1, 2000 through the Effective Date at the per annum
EURIBOR 30 day rate.
7.2 National Closings
A. As had been stipulated for the Closing under Clause 7.1.A, each National
Closing shall take place, at a location to be agreed upon between the
parties in writing, 15 Business Days after the last of the Clause 5.4
conditions precedent have been met for that Non Wholly Owned Company
(unless otherwise agreed by the parties in writing). At such National
Closing, by the Relevant Seller signing in the appropriate form the
respective Transfer Agreement/Transfer Deed title to the Shares in such
Company shall pass to the Relevant Purchaser according to the Transfer
Agreement/Transfer Deed.
B. Upon the satisfaction of the Clause 5.4 conditions precedent for each such
Company and concurrently with the transfer of the Relevant Seller's Shares
in each such Company by such Seller to the Relevant Purchaser, Purchaser
shall pay to Seller (pursuant to the payment instructions given by Seller
under Clause 3.4.B) the amount indicated for each such Company on Schedule
3.1. Interest will be added to any such payment from Effective Date
through respective National Closing at the per annum EURIBOR 30 day rate.
26
8. Representations and Warranties
8.1 Representations and Warranties of Purchaser
Purchaser represents and warrants by way of an independent guaranty undertaking
(unabhangiges Garantieversprechen), subject to the terms and conditions of this
Agreement to Seller as follows:
A. The Purchaser is and each Relevant Purchaser is a company duly
incorporated and validly existing under its respective laws of
incorporation.
B. The Purchaser has and each Relevant Purchaser has, the legal right and
full power and authority to enter into and perform this Agreement and any
other agreement entered into pursuant to this Agreement and each such
agreement when executed will constitute valid, binding and enforceable
obligations on the Purchaser, and/or each Relevant Purchaser (as the case
may be) in accordance with its respective terms.
C. The execution and delivery of, and the performance by the Purchaser and/or
each Relevant Purchaser (as the case may be) of their respective
obligations under, this Agreement and any other agreement entered into
pursuant to this Agreement will not:
a. result in a breach of any provision of the constitutional documents
of the Purchaser and/or each Relevant Purchaser (as the case may
be); or
b. result in a breach of any agreement, license or other instrument,
order, judgment or decree of any court, governmental agency or
regulatory body to which the Purchaser and/or each Relevant
Purchaser (as the case may be) is a party or by which the Purchaser
and/or each Relevant Purchaser (as the case may be) is bound.
D. All corporate action required by the Purchaser and/or each Relevant
Purchaser (as the case may be) validly and duly to authorize the execution
and delivery of, and to exercise its rights and perform its obligations
under, this Agreement and any other agreement entered into pursuant to
this Agreement has been duly taken.
E. Purchaser and each Relevant Purchaser owning Shares and Interests in the
Siecor Companies have consented in the appropriate form to the transfer of
such Shares and Interests.
27
Each of the above Representations and Warranties made by the Purchaser will be
fulfilled down to and will be true and accurate at the later of Closing or the
Effective Date as if they had been given again at the later of Closing or the
Effective Date.
8.2 Representations and Warranties of Seller
Seller represents and warrants by way of an independent guaranty undertaking
(unabhangiges Garantieversprechen) subject to the terms and conditions of this
Agreement to Purchaser as follows. Except as provided in the next sentence each
Representation and Warranty made by Seller under this Clause 8.2 will be
fulfilled down to and will be true and accurate at the later of Closing or the
Effective Date as if they had been given at Closing or Effective Date. The
Schedules, except as more specifically provided in Clause 14.D, will be updated
or new Schedules added by Seller at Closing to reflect changes since the date
hereof or as agreed by the parties in this Agreement.
A. with respect to Seller
Authority and Capacity
a. The Seller is a company duly incorporated and validly existing under
the laws of Germany.
b. The Seller has the legal right and full power and authority to enter
into and perform this Agreement and any other agreement entered into
pursuant to this Agreement, and this Agreement and each such
agreement when executed will constitute valid, binding and
enforceable obligations of the Seller and each Relevant Seller in
accordance with its respective terms.
c. The execution and delivery of, and the performance by the Seller and
each Relevant Seller of its obligations under, this Agreement and
any other agreement entered into pursuant to this Agreement will not
result in (i) a breach of any provision of the constitutional
documents of the Seller, (ii) a breach of any order of any
governmental authority or court in any Jurisdiction applicable to
Seller, any Relevant Seller or Company or (iii) the imposition of
any encumbrance upon any Assets of any Company.
d. All corporate action required by the Seller validly and duly to
authorize the execution and delivery of, and to exercise its rights
and perform its obligations
28
under, this Agreement and any other agreement entered into pursuant
to this Agreement has been duly taken.
B. with respect to Siecor Corporation
Authority and Capacity
The Relevant Seller has good title to its Shares in Siecor Corporation,
free and clear of any encumbrances, with the full right and power to sell,
transfer and deliver its Shares in Siecor Corporation as contemplated in
this Agreement and the relevant Transfer Agreement, without any third
party consent, except antitrust approvals (if and as required).
C. with respect to Siecor GmbH and Siecor GmbH & Co KG (the "German Siecor
Companies")
a. Authority and Capacity
Seller has good title to its Shares in Siecor GmbH and its Interests
in Siecor GmbH & Co. KG, free and clear of any encumbrances, with
the full right and power to sell, transfer and deliver its Shares
and Interests in the German Siecor Companies as contemplated in this
Agreement and the relevant Transfer Agreement, without any third
party consent, except for antitrust approvals (if and as required).
Seller's share capital (Stammeinlage) in Siecor GmbH and fixed
limited partner capital (Kommandithafteinlage) in Siecor GmbH & Co.
KG have been contributed in full and no actual or constructive
repayments from the funds required to maintain the share capital nor
any actual or constructive repayments of the limited partner capital
have been made to Seller.
b. Litigation
Except as listed in Schedule 8.2.C.b. the German Siecor Companies
are not involved, whether as defendant or plaintiff or other named
party, in any claim, legal proceeding, litigation, prosecution or
arbitration (other than as plaintiff in the collection of debts
arising in the ordinary course of business), the value at stake
(Streitwert) of which exceeds EURO 50,000 per individual claim, and
Seller is not aware that any such claim, legal proceeding,
litigation, prosecution or arbitration (other than as plaintiff in
the collection of debts arising in the
29
ordinary course of business), as defined here above, is expected or
has been threatened by or against any German Siecor Company.
c. Compliance with Laws
To Seller's knowledge, the German Siecor Companies have complied
with all laws, regulations, rules, orders, judgments, decrees and
other requirements imposed by any governmental authority or court
applicable to it, the noncompliance with which would have a material
adverse effect on the Operations.
d Activities in Ordinary Course
Except as listed in Schedule 8.2.C.d., since September 30, 1999, the
Operations of the German Siecor Companies have been conducted in the
ordinary course of business and there has not been any: (i)
destruction of, damage to, disposition of or loss of any assets
(whether or not covered by insurance) that materially adversely
affects the financial condition, business or prospects of such
Operations; (ii) material change in accounting methods or practices
(including, without limitation, any change in depreciation or
amortization policies or rates); or (iii) amendment or termination
of any material contract to which any German Siecor Company is or
was a party.
e. Taxation
i. Returns and Information
To Seller's knowledge, all returns, computations, notices,
information under the applicable mandatory laws and records
which are or have been required to be maintained, filed, made
or given by or with respect to each German Siecor Company or
for any Taxation purpose, have been made, filed or given
within the requisite periods on a proper basis and are
up-to-date and correct.
ii. Audits/Proceedings
There are no pending or, to the best knowledge of Seller or
German Siecor Company, in any event to the extent relating to
the Operations, threatened proceedings for the assessment or
collection of Taxes against
30
Seller or any such German Siecor Company, and there are no
liens for Taxation on any of the assets of a German Siecor
Company or Seller.
iii. Liability for Taxes of Other Persons; Tax Sharing Agreement
No German Siecor Company is liable under any provision of law,
or is a party to or liable under any Tax sharing agreement or
other agreement or otherwise, for Taxes payable by any other
person excluding wage Tax and other statutory withholdings. At
Closing no German Siecor Company has any outstanding payment
obligations under any such agreement.
D. With respect to Non Wholly Owned Companies
a. Authority and Capacity
The Shares in the Non Wholly Owned Companies are owned by Seller or
Relevant Seller as set out in Schedule 2 and are free of any
encumbrances and rights of third parties, except for preemption
rights, rights of first refusal or similar rights of the other
shareholder(s). Seller or Relevant Seller has, except for
governmental approvals or other legally mandatory restrictions, and
will on the National Closing have the full right and power to sell,
convey, assign, transfer and deliver its Shares in each Non Wholly
Owned Company as contemplated in this Agreement and the relevant
Transfer Agreement. The Seller's or Relevant Seller's Shares in each
such Non-Wholly Owned Company have been validly issued and are fully
paid for.
b) Returns and Information
To Seller's knowledge, all returns, computations, notices,
information under the applicable mandatory laws and records which
are or have been required to be maintained, filed, made or given by
or with respect to each Non-Wholly Owned Company, except for those
in Egypt and Greece, or for any Taxation purpose, have been made,
filed or given within the requisite periods on a proper basis and
are up-to-date and correct.
c) Audits and Proceedings
There are no pending or, to the best knowledge of Seller or
Non-Wholly Owned Companies, except for those in Egypt and Greece, in
any event to the
31
extent relating to the Operations, threatened proceedings for the
assessment or collection of Taxes against Seller or any such
Non-Wholly Owned Company, except for those in Egypt and Greece, and
there are no liens for Taxation on any of the assets of a Non-Wholly
Company, except for those in Egypt and Greece or Seller.
E. With respect to Wholly Owned Companies
a. Authority and Capacity
The Seller or Relevant Seller has good title to its Shares and
Interests in each Wholly Owned Company, free and clear of any
encumbrances, with the full right and power to sell, transfer and
deliver its Shares in each Wholly Owned Company as contemplated by
this Agreement and the relevant Transfer Agreement or Deed without
any third party consent, except for antitrust approvals (if and as
required). The Relevant Seller's Shares in each such Company have
been validly issued and are fully paid for.
Except as set out in Schedule 8.2.E.a. no person has any present or
contingent right to call for any conversion, issuance or sale of any
Shares of any Wholly Owned Company under any option or other
agreement (including conversion rights and rights of preemption).
b. Accounting and Other Records
The statutory books and books of account and other records of
whatsoever kind (Handelsbucher) relating to each of the Operations
of the Wholly Owned Companies are up-to-date and maintained in
accordance with all applicable mandatory legal requirements and
Siemens Group prudent corporate practice consistently applied. All
such books and records are in the possession (or under the control)
of such Relevant Seller or Company.
c. Changes since Balance Sheet Date
Since September 30, 1999 no Wholly Owned Company has engaged in any
activities that are not in the ordinary course of business, except
as approved by Purchaser in writing. The "ordinary course" shall be
deemed also to include items in the relevant Company's 1999-2000
budget, any measures described in Schedule 8.2.E.c. or otherwise
specifically authorized by this Agreement, the
32
contribution of the CC business into SCC KG, the contribution of the
RXS GmbH business into RXS KG and the contribution of the NSW GmbH
business into NSW KG. In particular, without limiting the generality
of the foregoing, no Wholly Owned Company outside the ordinary
course of business has
(i) committed to new capital expenditures in excess of EURO
500,000 in the aggregate;
(ii) mortgaged, pledged or subjected to encumbrance any of its
assets;
(iii) sold or purchased, assigned or transferred any of its assets
or canceled any debts or claims; or
(iv) engaged in any activity by commission or omission leading to
any destruction, disposition, damage or loss of any of its
assets in excess of EURO 500,000 in the aggregate.
Since September 30, 1999 there has been no event or condition of any
character that has had or - in Seller's reasonable judgment will
have - a material adverse effect on the Operations of any Wholly
Owned Company, except for events and conditions disclosed to
Purchaser in writing or electronic form before signing and except
for changes of law.
d. Legal Matters
i. Legal Compliance
During the time that a Relevant Seller has owned all the
Shares in a Wholly Owned Company, or such Company's
predecessors, there have not been and are not any breaches by
any such Company of any of its bylaws or other constitutional
documents, which would have a material adverse effect upon the
Operations.
ii. Permits and Consents
All licenses (excluding licenses of Intellectual Property),
permits, consents, authorizations, orders, warrants,
confirmations, permissions, certificates, approvals and
authorities necessary for carrying on the Operations as
presently conducted, the lack of which would materially
33
adversely affect the Operations, in each of the Wholly Owned
Companies have been obtained, are in full force and effect and
are being complied with and Seller is not aware why any of
them should be suspended, threatened or revoked.
iii. Litigation; Claims
Except as listed in Schedule 8.2.E.d.iii or in another
Schedule to this Agreement, no Wholly Owned Company is
involved (whether as plaintiff or defendant or other named
party) in any claim, legal proceeding, litigation, prosecution
or arbitration (other than as plaintiff in the collection of
debts arising in the ordinary course of business), the value
at stake (Streitwert) of which exceeds EURO 50,000 per
individual claim and neither Seller nor any Relevant Seller is
aware that such claim, legal proceeding, litigation,
prosecution or arbitration is expected or has been threatened
by or against any Wholly Owned Company.
e. Insolvency; Inability to Conduct Business
No Wholly Owned Company is obligated to file for insolvency
proceedings under the laws of the applicable Jurisdiction.
f. Trading and Contract Agreements
(i) Contracts
None of the Wholly Owned Companies is party to any contract
which is not in the ordinary course of business or which is
not on an arm's length basis and which is incapable of
termination without compensation or penalty by the relevant
Wholly Owned Company on three months' notice or less and which
has a material adverse effect on such Wholly Owned Company.
(ii) Material Contracts
Schedule 8.2.▇.▇.▇▇ is a complete list of all Material
Contracts. By Closing such list shall identify those Material
Contracts which contain change of control provisions.
34
To Seller's best knowledge no party to a Material Contract is
in breach or default of such Material Contract, which breach
or default has or would have a significant adverse impact on
the performance of such Material Contract. No party to a
Material Contract has grounds for a suspension, avoidance,
rescission or repudiation of any Material Contract based on
the acts or omissions of the other party. Each Material
Contract is valid, binding and in full force and effect as to
its terms. As to the performance of the other party to such
Material Contract the statements in the two immediately
preceding sentences are given only to Seller's best knowledge.
(iii) Distributor, Agency Agreements
Except as disclosed in Schedule 8.2.E.f.(iii), as of the
Closing, none of the Wholly Owned Companies is party to any
agency, distributorship or manufacturing agreement, any of
which restricts its freedom to carry on its business as
currently carried on in any part of the world, which could be
expected to have a material adverse effect on the relevant
Operations.
g. Employees
(i) General
Schedule 8.2.E.g. as of the date of this Agreement contains a
list of all Employees in any of the Wholly Owned Companies in
Germany, Italy and France as of the month end preceding the
date hereof, which Schedule shall be updated at the Closing to
reflect changes in the German, Italian and French Operations.
There will be at Closing no persons employed in any of the
German, Italian and French Wholly Owned Companies other than
the Employees listed on Schedule 8.2.E.g., as so updated at
the Closing. Schedule 8.2.E.g shall separately indicate those
Employees who are not actively employed at Closing (e.g. on
maternity leave, national service, early retirement or old age
part-time (Vorruhestand or Altersteilzeit), sabbatical) and to
indicate the number of employees on long term sickness leave.
35
(ii) Employment Rights Agreements and Employee Benefit
Arrangements.
Employment Rights Agreement for purposes of this subclause (g)
means any agreement between Seller or any Relevant Seller or
Company on the one hand and any union or other labor
organization or works council (or other Operations specific
labor group) on the other hand (or any agreement or written or
unwritten rules or customs to which any Relevant Seller or
Company is bound or adheres to) relating to any terms and
conditions of Employees' employment with Seller or any
Relevant Seller or Company, including but not limited to
collective bargaining agreements and works council agreements
(for the German Operations - Betriebsvereinbarungen).
Seller has provided to Purchaser a complete and accurate list
of each of the Employee Benefit Arrangements and Employment
Rights Agreements (including those currently in negotiation at
the Wholly Owned Company or factory level) and a description
of employment terms and conditions for Employees excluding
Siemens Fiber Optik Kablolari in Turkey. A copy thereof is
attached hereto for identification purposes as Schedule 8.2
E.g (ii).
There has been no notification to any Relevant Seller or
Company by any governmental entity questioning or challenging
any legal compliance of any nature of any Employee Benefit
Arrangement; nor so far as any Relevant Seller or Company is
aware, is any threatened, pending or expected.
All payments for salary and other compensation or benefits
(and all employer and employee contributions (including but
not limited to social charges and premiums)) required in
respect of each Employee Benefit Arrangement have been paid
when due or, if applicable, fully and properly accrued
(including for pension liabilities) on the Effective Date
Balance Sheet.
(iii) Material Changes
Since September 30, 1999, (a) there have been no material
changes to the terms of employment of any of the Employees
employed in relation to the Operations on an annual cash
salary or fee (on the basis of full time
36
employment) in excess of EURO 50,000 or local equivalent per
Employee; and (b) no Relevant Seller or Company is a party to
any collective arrangement or understanding to make any
material changes to remuneration (other than in accordance
with normal payrounds with increases, the avenge of which is
up to 3.5 percent per annum) or to other benefits or other
terms of employment or to establish any new or amend any
existing bonus arrangements for any of the Employees.
(iv) Individuals
Schedule 8.2.E.g.(iv) is a complete and accurate list of all
individuals either working for or performing services for any
Company (part or all of whose costs are paid by that Company)
but who are not Employees. The preceding does not apply to
Siemens Group employees performing services for a Company as
part of their overall responsibilities.
(v) Legal Compliance
Seller and each Relevant Seller and Company is in material
compliance with all applicable employment laws. Any violation
of Section 16 of the German Company Pensions Act is a breach
of the material compliance representation in the preceding
sentence. No Company is in material breach (taking into
consideration local practice and customs) of any of the
collective bargaining agreements, union recognition agreements
and works council agreements (including national collective
bargaining agreements or industry wide collective bargaining
agreements) listed in Schedule 8.2.E.g.(ii) or lacks any such
agreement required by law.
(vi) Mass Termination of Employment
Except as listed in Schedule 8.2.E.g.(vi), within the period
of one year preceding the date hereof no Relevant Seller with
respect to a Wholly Owned Company, and no Wholly Owned Company
has been obliged by law to give any notice or to make any
filing with any governmental or social security office
concerning any intended mass termination of a significant
number of employees (Massenentlassung in Germany or its
equivalent in other Jurisdictions) or has started
consultations with any employee representative body (including
but not limited to a works council), relating to any such mass
termination.
37
(vii) Reinstatement
No individual previously employed by a Relevant Seller or by a
Wholly Owned Company has a right to return to work or any
right to be reinstated or re-engaged by a Wholly Owned
Company, whether under statute or otherwise, except for those
individuals listed in Schedule 8.2.E.g.(vii).
(viii) Collective Bargaining
Except as disclosed on Schedule 8.2.E.g(viii), there is not
(nor has there been at any time after January 1, 1999), nor to
the knowledge of any Relevant Seller or Company is there now
threatened, any strike, organized work slowdown or
interruption in which any Employees are participating or have
participated or have threatened to participate which is
material to any of the Operations. There is no current (nor
has there been after January 1, 1999) any labor grievance or
labor litigation relating to any Wholly Owned Company which is
material to such Wholly Owned Company.
h. Taxation
(i) Returns and Information
To Seller's knowledge, all returns, computations, notices,
information under the applicable mandatory laws and records
which are or have been required to be maintained, filed, made
or given by or with respect to each Wholly Owned Company or
for any Taxation purpose have been made, filed or given within
the requisite periods and on a proper basis and are up-to-date
and correct.
(ii) Audits/Proceedings
Except as disclosed in Schedule 8.2.E.h.(ii), there are no
pending or, to the best knowledge of each Relevant Seller or
Wholly Owned Company, threatened proceedings, in any event to
the extent relating to the Operations, for the assessment or
collection of Taxes against Relevant Seller or any Wholly
Owned Company, and there are no liens for Taxation on any of
the assets of a Wholly Owned Company or Relevant
38
Seller. There are no proposed reassessments by Taxation
authorities of any real property relating to the Operations
owned by a German Wholly Owned Company or Relevant Seller of
such German Wholly Owned Company. There are no outstanding
waivers or other agreements extending the statute of
limitations for any period with respect to the assessment or
collection of Tax relating to the Operations to which a Wholly
Owned Company or a Relevant Seller may be subject.
(iii) Liability for Taxes of Other Persons; Tax Sharing Agreement
No Wholly Owned Company is liable under any provision of law,
or is a party to or liable under any tax sharing agreement or
other agreement or otherwise, for taxes payable by any other
person excluding wage Tax and other statutory withholdings. At
Closing no Wholly Owned Company has any outstanding payment
obligations under any such agreement.
i. Intellectual Property
i. All Intellectual Property and Know-how presently required by
any of the Wholly Owned Companies to continue the Operations,
are being at the later of Effective Date or Closing either
owned by the Wholly Owned Companies, or licensed to them.
Furthermore, Seller shall sublicense its rights under the 1988
Siemens/AT&T Agreement to Seller's identifiable divested
business covered by the transactions contemplated herein,
which sublicense will be agreed by the parties between the
date hereof and Closing.
ii. So far as the Relevant Seller or Company is aware, all
Know-how of such Relevant Seller or Company (insofar as it
relates to the Operations) has consistently been treated as
confidential and, to the best of such Seller's or Company's
knowledge, there has been no unauthorized disclosure of any
such Know-how to any third party.
iii. All licenses of Intellectual Property or Know-how required for
the Operations of the Wholly Owned Companies (the lack of
which would materially adversely affect such Operations), as
carried on from September 30, 1999 through Closing, are in
hill force and effect and have been and are being complied
with in all material respects and the Seller
39
(or any Relevant Seller or Company) is not aware of any reason
why any of them should be suspended, threatened or terminated,
unless stated on Schedule 8.2.E.i..
(iv) Intellectual Property transferred to or owned by the Wholly
Owned Companies is listed in Schedule 8.2.E.i..
(v) All Intellectual Property is legally and beneficially owned by
the Seller, the Relevant Seller or Company free from any
encumbrances except for those as (i) set out in the
contribution agreements and the annexes thereto (Schedule
2.1.A to this Agreement) or (ii) set out in the cross patent
license agreements, the license agreements or the joint
invention agreements all of which are either set out in the
annexes to such contribution agreements or in Schedule
8.2.E.i. or (iii) that may arise from technology cooperation
agreements which are non conclusively listed in Schedule
8.2.E.i.;
(vi) all registration, application, maintenance and renewal (and
any other required) fees regarding the Intellectual Property
listed in Schedule 8.2.E.i. due and payable before the later
of Closing or Effective Date will be paid in full;
(vii) Seller is not aware that as of the date of this Agreement any
Intellectual Property is invalid or is threatened to become
invalid through any challenge, claim or other proceeding under
relevant laws (including interference, reexaminations,
appeals, oppositions) unless those are disclosed in Schedule
8.2.E.i.
(viii) The Intellectual Property can to Seller's knowledge be
transferred, licensed and sold without requiring a third party
consent, unless disclosed in Schedule 8.2.E.i.
(ix) Know-how transferred to or owned by the Wholly Owned
Companies:
(A) is legally and beneficially owned by the Seller, the
Relevant Seller or the Wholly Owned Company free from
any encumbrances except for those as (i) set out in the
contribution agreements and the annexes thereto
(Schedule 2.1.A to this Agreement) or (ii) set out in
the license agreements all of which are either set out
in the
40
annexes to such contribution agreements or in Schedule
8.2.E.i. or (iii) that may arise from technology
cooperation agreements which are non-conclusively listed
in Schedule 8.2.E.i.
(B) can to Seller's knowledge be transferred, licensed and
sold without requiring any third party consent, unless
disclosed in Schedule 8.2.E.i.
j. Suppliers
Since October 1, 1998 no material supplier has given written notice
to any Wholly Owned Company of the discontinuation or substantial
adverse change in the terms or conditions of present or future
purchases of such supplies other than increases in prices and
changes in terms and conditions of supply which have been generally
adopted by such suppliers in the market over the relevant period of
time.
k. Regulatory and Operating Conditions
i. No governmental authority regulating the marketing, testing or
advertising of any of the products of the Wholly Owned
Companies has requested that any such product presently on the
market be removed from the market or be materially altered,
that substantial new product testing be undertaken as a
condition to continued marketing of any such product or that
the labeling or advertising for any such product be modified
in a way likely to have a substantial adverse effect on the
sale of such product.
ii. So far as the Seller is aware, there are no studies or
apparent conditions which indicate the presence of any
occupational health (arbeitsmedizinisch) or safety problem
relating to any part of the Operations of any Wholly Owned
Company and having a material adverse affect to such
Operations. No governmental authority has alleged or requested
a correction of any such condition.
41
l. Property
i. Description
The Property owned or used by any Wholly Owned Company is
described in Schedule 8.2.▇.▇.▇, also indicating which
Property is owned, leased (as lessor or lessee) and subleased
by the Wholly Owned Companies, and the particulars contained
therein are correct.
ii. Title
All indications relating to title, encumbrances (including
easements) and mortgages are listed in Schedule 8.2.▇.▇.▇ for
Property owned by any German Wholly Owned Company, and all
such indications are complete and accurate. For the Property
owned by any Italian or French Wholly Owned Company, the
preceding sentence is qualified to Seller's knowledge based on
the Italian letter and the French land registry excerpt
provided to Purchaser and attached hereto for identification
purposes only as part of Schedule 8.2.▇.▇.▇. Except as stated
in Schedule 8.2.▇.▇.▇, none of the encumbrances, easements or
mortgages relating to any such Property affect the existing
use of any Property.
iii. No Wholly Owned Company has received any written notice of any
potential rezoning relating to any Property.
iv. Leases
Copies of the lease agreements for the facilities of the
Operations at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ and Speyer have
been provided to Purchaser and are attached hereto for
identification purposes only as part of Schedule 8.2.▇.▇.▇.
Seller is not aware of any breach of any of the terms in
either of the two above mentioned leases or in any lease
agreement for the Turkish Wholly Owned Company Siemens Fiber
Optik Kablolari; in any event which breach does or is likely
to adversely affect the Operations carried out at the relevant
Property or the Property's use.
v. Environmental
By way of clarification, there are no Seller representations,
warranties or independent guarantee undertakings under this
Clause 8 relating to the
42
Environment. All Seller obligations relating to the
Environment are contained in the Seller's indemnities, Clause
10.1.B.
vi. NSW Property
Seller will continue the process required to clarify and
document the user right for NSW GmbH & Co. KG relating to the
pier and dike (in particular as referenced in the letter
attached as Schedule ▇.▇.▇.▇.▇▇) located in Nordenham,
Germany. The parties agree that such clarification will occur
as promptly as possible after Closing.
vii. Building Defects
So far as Seller is aware, there is no physical defect in any
building on any of the Property owned by the Wholly Owned
Companies listed in Schedule 8.2.E.I.i, which - if left
unremedied through the 1999-2000 Seller fiscal year - would
have a material adverse effect on the current running of the
Operations and the correction of which would require
unbudgeted expenditure under the relevant Wholly Owned
Company's 1999-2000 budget in excess of EURO 100,000 per
building.
m. Y2K
Seller provided to Purchaser in the form as attached hereto for
identification purposes only as Schedule 8.2.E.m the Seller's Year
2000 action plan (the Seller's standard procedure for the avoidance
of risks due to the millennium change) in relation to the
Operations; all of which have been or will be carried out in
relation to the Operations in accordance with the programs outlined
in such Schedule. The Companies (except for the Non-Wholly Owned
Companies) have been included in such action plan. To the best of
Seller's knowledge, in the course of implementing this action plan,
nothing has arisen which could materially impair the smooth
continuation of the Operations after December 31, 1999.
43
F. With respect to Assets
a. Title
The Asset Sellers have full and unrestricted title to the Assets
material for the relevant Operation, except for tangible Assets
which are leased from third parties in the ordinary course of
business, and except for liens and encumbrances (i) arising by
operation of law or (ii) granted in the ordinary course of business,
and subject to usual reservation of title. Any such liens and
encumbrances material to the relevant Operation are separately
marked on the respective Schedules 2.2.A.2, 2.2.8.2 and 2.2.C.2.
Such Schedules shall be completed at Closing to ▇▇▇▇ those Assets
which are leased.
b. Working Order
Each Asset Seller's owned plant and machinery which is part of the
Assets and which is material to such Asset Seller's Operations is
(subject to fair wear and tear and having regard to their age) in
satisfactory working order, has been properly maintained and is in
the direct or indirect possession of the respective Asset Seller.
c. Licenses
The license agreements or other right of use agreements currently
existing between any company within the Siemens Group as grantor and
any Asset Seller as grantee relating to Intellectual Property and/or
Know-how currently used by such Asset Seller in the Operations as
exclusively listed in Schedule 8.2.F.c will be assigned or otherwise
transferred from the Asset Seller to the Relevant Purchaser as of
the later of the Closing or the Effective Date.
d Employees
Schedule 8.2.F.d as of the date of this Agreement contains a list of
all Employees of the Asset Sellers exclusively or primarily
attributable to the Operations as of the month end preceding the
date hereof, which Schedule shall be updated at the Closing to
reflect changes in the Operations.
44
e. Taxation
(i) Returns and Information
To Seller's knowledge, all returns, computations, notices,
information under the applicable mandatory laws and records
which are or have been required to be maintained, filed, made
or given by or with respect to the Operations of the Asset
Sellers have been made, filed or given within the requisite
periods and on a proper basis and are up-to-date and correct.
(ii) Audits/Proceedings
There are no pending or, to the best knowledge of each
relevant Asset Seller threatened proceedings to the extent
relating to the Operations for the assessment or collection of
Taxes against such Asset Seller Operations, and there are no
liens for Taxation on any of the Assets. There are no
outstanding waivers or other agreements extending the statute
of limitations for any period with respect to the assessment
or collection of Tax to which an Asset Seller with respect to
its Operations may be subject.
f Certain Undischarged Liabilities
No Liability has been incurred with respect to the NSW Corp. Assets
(or to NSW Corp.'s best knowledge is threatened) which remains
undischarged for breach of any contract of service or for
termination payments or for compensation for dismissal, equal pay,
sex, race, disability or other discrimination or failure to comply
with any order for the reinstatement or reengagement of any of the
employees relating to such Assets.
g. Since September 30, 1999 no Asset Seller has engaged in any
activities relating to the Operations that are not in the ordinary
course of business.
8.3 Seller's Knowledge
Any statement qualified by the expression "to the (best) knowledge of the
Seller" or "so far as the Seller is aware" or similar statement shall, for each
Jurisdiction and/or specialist area (as appropriate), be deemed to refer to the
knowledge of those persons employed by the Seller or respectively the Relevant
Seller or Company identified in
45
respect of such Jurisdiction and/or specialist area (as appropriate) in Schedule
8.3, having used the due care of a reasonable businessman.
8.4 Remedies
A. In the event of any representation or warranty or independent guaranty
undertaking (herein collectively "Representation") given by Seller or
Purchaser not being fully complete and accurate as of the time it is
given, the other party hereto relying on such Representation, i.e., each
such Relevant Seller or Relevant Purchaser, shall, at such other party's
option, be put in the same position by Seller or Purchaser as such relying
party would have been had such Representation, been fully complete and
accurate (Naturalrestitution) within 90 days from written notification
thereof by the other party or, failing such cure within such period or
having opted for this, by means of monetary damages (Schadenersatz), i.e.
compensation by payment of the amount in cash which corresponds to the
damages caused to the Relevant Seller or Relevant Purchaser, as the case
may be, due to such failure, each subject to the limitations set out
hereinafter.
B. Any rights and claims on whatever legal basis the Purchaser and the
Relevant Purchasers or Seller and Relevant Sellers may have (including but
not limited to any rights of rescission - e.g. for non-fulfillment (in
part), repudiation, diminution and any claims based on any precontractual
breach of duty ("cic") vis-a-vis the other party hereto, relating to the
Representations other than those provided for in this Agreement, are - to
the extent legally permissible according to mandatory law - excluded. All
claims relating to the Representations either party may have for indirect
or consequential damages, including lost profits or interruption of
business, vis-a-vis the other party, the Companies and/or the Relevant
Sellers or Relevant Purchasers, as appropriate, shall be excluded
herewith.
9. Limitation of Liability and Conduct of Claims
9.1 Limitation of Liability
The Purchaser's claims under Clause 8 shall be subject to the following
limitations:
46
9.1.1 Time Limits
In respect of any claim written notice of such claim shall be given
by the Purchaser to the Seller setting out reasonable details of the
specific matter in respect of which the claim is made including an
estimate of the amount of such claim if practicable, within the
following time limits:
(i) in the case of legal defects (Rechtsmangel) as to any Shares
and Interests sold and purchased hereunder - within 8 years
following Closing or the relevant National Closing; and
(ii) in the case of any other claim under this Agreement within
twenty four (24) months following Closing or within eighteen
(18) months after the relevant National Closing. If any claim
is made within the above time frame, Seller and Purchaser
shall negotiate in good faith for a period not to exceed six
(6) months after such 24 month or 18 month period, as
applicable. If the parties do not reach resolution of such
claim by the end of such six month period, then Purchaser's
claim would be time barred unless Purchaser by the end of such
six months initiates arbitration pursuant to Clause 14.J based
on such claim.
Purchaser shall not be barred from bringing a claim under Clause 8.2
in respect of any Liability which is contingent as to amount ("der
Hohe nach"), but not as to principle ("dem Grunde nach") payable if
the requisite details of the underlying cause of action have been
delivered to the Seller before the expiration of the 24/18 months
period under Clause 9.1.1.(ii);
9.1.2 Individual Minimum Claims
In respect of any claim (except under Clause 8.2.E.g(v) second
sentence, for which there is no individual limit) arising from any
single circumstance if the amount of the claim against Seller does
not exceed 100,000 EUROS (claims relating to a series of connected
matters shall be aggregated for this purpose);
9.1.3 Aggregate Minimum Claims
In respect of any claim (except under Clause 8.2.E.g(v) second
sentence, for which there is no aggregate limit) unless the
aggregate amount of all claims for which Seller would otherwise have
been held liable under this Agreement exceeds 500,000 EUROS;
47
9.1.4 Maximum Claims
In respect of any claim to the extent that the aggregate amount of
the liability of the Seller for all claims made under this Clause
9.1 exceeds 100,000,000 EUROS;
9.1.5 Pro Rata Limitation
In case the Closing under this Agreement does not include certain
Operations, the amounts in Clauses 9.1.2, 9.1.3 and 9.1.4 shall be
reduced pro rata compared to the percentage of the allocated
Schedule 3.1 portion for the non closed Operations of the aggregate
Preliminary Purchase Price;
9.1.6 Provisions in the Effective Date Balance Sheet
In respect of any claim if and to the extent that a specific
deduction or provision is made in the Effective Date Balance Sheet
for the matter giving rise to the claim;
9.1.7 Taxation Effects
In respect of any Representation relating to Tax matters to the
extent that the inaccurateness or incompleteness of the
Representation leads to Tax increases that are directly linked to
similar Tax reductions accruing to Purchaser or Relevant Purchaser
or Company in future fiscal periods, in which case any Purchaser
claims hereunder relating to such Tax matter shall be reduced by
such expected benefits to be calculated on a discounted present
value basis;
9.1.8 Insurance
In respect of any claim to the extent actually recovered by
Purchaser under a policy of insurance in force on the later of the
Closing or the Effective Date;
9.1.9 Changes in Legislation
To the extent such claim results from, or is increased by, any
post-Closing change of any applicable law or regulation.
48
9.2 Claims against Third Parties
If the Seller or any Relevant Seller pays an amount in discharge of any
Representation claim under this Agreement, Purchaser shall assign or shall
procure that Relevant purchaser or Wholly Owned Company assigns to Seller any
claim against a third party corresponding to such claim.
9.3 Double Claims
The Purchaser shall not be entitled to recover an amount from the Seller or any
Relevant Seller under this Agreement more than once in respect of the same loss
suffered.
9.4 Effect of Closings
The Representations shall not be extinguished or affected by the Closing,
Contingent Deferred Closing or any National Closing.
9.5 Disclosed to Purchaser
The Purchaser shall not be entitled to bring a claim against the Seller pursuant
to a Representation under Clause 8 if and to the extent Seller proves that the
matter to which the claim relates is a Disclosed Matter as defined in this
Clause 9.5.
Matters of which Purchaser's or Relevant Purchasers' officers, employees or
consultants relating to this Agreement at the date of this Agreement had
knowledge are a "Disclosed Matter".
For purposes of clarification, the material in writing either in the data room
at the Deutsches Museum from August 2 through August 12, 1999 or in responses to
Purchaser's written questions given to Seller in such data room during such time
period and the Schedules to this Agreement, shall be a Disclosed Matter.
However, nothing in the "clean room" (created by Seller for this Agreement in
August 1999) shall be considered as Disclosed Matter, except for the two written
reports provided to Purchaser (and known to Seller) by Bruckhaus ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ dated August 17, 1999 and PricewaterhouseCoopers dated August 23, 1999,
but only to the extent directly and explicitly contained therein.
49
9.6 Following the Closing
The Purchaser shall ensure that reasonable steps are taken to avoid a Liability
being incurred and to mitigate the amount of such Liability. When calculating
the amount of damages, advantages in connection with the relevant matter shall
be taken into account (Vorteilsausgleichung), irrespective of whose benefit (the
Purchaser, any Relevant Purchaser or Wholly Owned Company) such advantage
actually arises.
9.7 Teleco Subsidies
Teleco Cavi S.p.A. expects to receive subsidies of approximately EURO 1,000,000
which due to Italian accounting rules cannot and will not be entered into the
accounts of the Company.
To the extent such subsidies are received by Teleco Cavi S.p.A. within
twenty-four (24) months following Closing and do not require any further
financial action or the retention of the business, 50% of such payments shall be
deducted from any claims Purchaser may have against Seller due to a claim based
on a Representation or indemnity (only during such 24 months period), to the
extent relating to Teleco Cavi S.p.A. contained in this Agreement.
9.8 Relevant Purchaser/Relevant Seller
Any claim under this Agreement which a Relevant Purchaser, Company or Relevant
Seller would have may only be asserted by the Purchaser or Seller respectively;
and Purchaser and Seller will procure that no Relevant Purchaser or Relevant
Seller or Company shall assert a claim for any reason under this Agreement or
the Transfer Deeds or Transfer Agreements in its own name.
9.9 Conduct of Claims
The procedures for conducting any claims under Clause 8.2 are as follows:
A. If Purchaser, any Relevant Purchaser or any Company becomes aware that any
matter gives rise to any claim against the Seller under Clause 8.2, the
Purchaser shall procure that notice of that fact shall be given to the
Seller without undue delay.
B. In relation to any claim against the Seller under Clause 8.2 and without
prejudice to the validity of the claim or alleged claim in question, the
Purchaser shall allow, and
50
shall procure that the Relevant Purchaser or Company allows, the Seller or
any Relevant Seller and their accountants and professional advisers to
reasonably investigate as promptly as possible the matter or circumstance
alleged to give rise to such claim and for such purpose the Purchaser
shall give, and shall procure that the Relevant Purchaser or Company
gives, subject to their being paid reasonable out-of-pocket expenses, such
reasonable information and assistance, including access to premises and
personnel, and the right to examine and copy or photograph any assets,
accounts, documents and records relating solely to such claim, as the
Seller or any Relevant Seller or their accountants or professional
advisers may reasonably request. Nothing in this Clause shall oblige the
Purchaser or any Relevant Purchaser to disclose any information which
would prejudice any claim by Purchaser against Seller pursuant to this
Agreement. The Seller agrees to keep and shall procure that any Relevant
Seller agrees to keep all such information confidential and only to use it
for such purpose.
C. If the claim in question is a result of or in connection with a claim by
or liability to a third party then:
(a) the Purchaser and the Seller shall procure that no binding admission
of liability shall be made by or on behalf of any Purchaser,
Relevant Purchaser or any Company or Seller or any Relevant Seller
(as the case may be) and the claim shall not be compromised,
disposed of or settled in a binding manner without the written
consent of the Seller or the Purchaser (as the case may be) (such
consent not to be unreasonably withheld or delayed); and
(b) if the Seller and Purchaser agree that the Seller or Relevant Seller
shall conduct the claim as a consequence of the Seller and Purchaser
agreeing as between themselves that the Seller should take
responsibility for the claim, the Seller or any Relevant Seller
shall be entitled at its own expense in its absolute discretion to
take such action as it shall deem necessary to avoid, dispute, deny,
defend, resist, appeal, compromise or contest such claim or
liability (including, without limitation, making counterclaims or
other claims against third parties) in the name of and on behalf of
the Relevant Purchaser or the Company concerned and to conduct any
related proceedings, negotiations or appeals.
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10. Indemnities
10.1 Seller Indemnities
The Seller shall indemnify and keep indemnified on an ongoing basis after the
later of the Closing or the Effective Date the Purchaser against:
A. Tax and Investment Grants
1. Scope
With respect to Wholly Owned Companies, German Siecor Companies and
Asset Sellers against:
(a) any Tax amount not paid but incurred by Seller or any Relevant
Seller relating to the Operations if and to the extent it is
attributable to any time prior to the Effective Date (by way
of clarification, including those resulting from a German Tax
audit and in violation of any over stated accruals or any
fiscal unity/consolidation requirements) and is not provided
for in the Effective Date Balance Sheet, and
(b) any obligation to repay and any loss of continued enjoyment
relating to any grant, subsidy, dispensation from performance,
payments or other obligations, or other benefit, if and to the
extent attributable to any action or failure to act on the
part of any member of the Siemens Group during any time up to
the Effective Date.
2. Procedure
The Companies, the Purchaser and the Relevant Purchasers may only
discuss with and issue declarations to Tax authorities which in
either case are to Seller's material prejudice relating to the Tax
indemnities under Clause l0.A.1. or the Tax Representations with
Seller's prior written consent.
If the Purchaser becomes aware of any circumstances which might give
rise to a claim of the Purchaser under Tax indemnities under Clause
l0.A.l or the Tax Representations, the Purchaser shall inform the
Seller thereof without undue delay. The Seller shall be given access
at its own expense and during ordinary business hours to the
relevant Tax related books and records of the Company
52
and/or the Relevant Purchaser concerned, to the extent that such
access is reasonable to avoid such claim. The Purchaser shall ensure
that for as long as the Seller may be held liable under such claim,
copies of all documents relating to such claim will be kept
available for inspection by the Seller.
The Purchaser shall use reasonable endeavours to ensure that the
Seller is given opportunity to defend or avoid such claim. In
particular, the Seller shall be given an opportunity to comment on,
participate in and review any reports on all relevant external Tax
audits and the Purchaser shall ensure that the Seller receives
without undue delay copies of all relevant Tax assessments. The
Purchaser shall ensure that, upon the request of the Seller,
objections are filed and legal proceedings instituted and conducted
against any such Tax assessments in accordance with Seller's
directions and at Seller's expense.
Any material violation of the foregoing by the Purchaser shall limit
the respective claim of Purchaser against Seller unless and to the
extent Purchaser proves that such claim would not have been avoided
had Purchaser fully complied with its obligations under this Clause.
The provisions of Clause 9.1.7 shall apply mutatis mutandis to any
Tax indemnity under this Clause l0.A.l.
B. Environment
(a) General
Seller shall indemnify, defend and hold harmless Purchaser, any
Relevant Purchaser and any Wholly Owned Company against any
Environmental Liability and any Environmental Loss resulting
therefrom (including already identified environmental problems),
subject to the limitations and procedures set out hereafter.
(b) Time Period
Any claim for indemnification against any Environmental Loss has to
be submitted in writing by Purchaser to Seller on or before the
third anniversary of the later of Closing or Effective Date. If
there is a pending claim at the end of such three years, Purchaser
must initiate the arbitral expert proceedings
53
under subclause (h) hereof relating thereto within 90 days after such three
years or such claim is time barred.
(c) Establishment of Obligation to Indemnify
If there is a disputed claim under subclause (b) hereof, Seller's
obligation to indemnify in principle shall be established by (i) an
agreement between Seller and Purchaser or (ii) an arbitral expert's
determination under subclause (h) hereof.s
(d) Scope of Obligation
The scope of Seller's obligation to indemnify shall be limited to
whatever is reasonably required under the Environmental Laws of the
Jurisdiction where the Environmental Liability occurred to comply
with such Environmental Laws, taking into account the use of the
Properties for the Operations.
(e) Limitations
In case of an Environmental Loss Purchaser shall and shall cause
Relevant Purchaser or Wholly Owned Company, as the case may be, to
claim payments under applicable statutorily required insurance
contracts and to use in full any reserves provided for in the
Effective Date Financial Statements with respect to such
Environmental Loss. To the extent the aggregate of the Environmental
Losses under this indemnity exceeds such statutory insurance
payments received by Purchaser and such reserves, the Purchaser
shall bear the first (EUROS) 500,000 thereof. If such aggregate of
the Environmental Losses after deduction of the aforementioned
insurance payments and reserves is (i) higher than (EUROS) 500,000
but does not exceed (EUROS) 5,000,000, the Seller shall bear 80% and
the Purchaser 20% from (EUROS) 500,000 to (EUROS) 5,000,000 and if
it is (ii) higher than (EUROS)5,000,000, but does not exceed (EUROS)
15,000,000, the portion above (EUROS) 5,000,000 shall be split 50:50
between Seller and Purchaser. Seller shall not be obliged to
indemnify Purchaser against Environmental Losses to the extent
exceeding (EUROS) 15,000,000.
54
(f) Change of Law
The indemnity hereunder shall not include that portion of an
Environmental Liability which is caused or increased by a change of
the applicable Environmental Law after the later of Closing or
Effective Date.
(g) Consultation/Procedure
Neither the Purchaser nor the Relevant Purchaser nor any Wholly
Owned Company shall initiate or cause any public authorities, courts
or third parties to initiate any procedures in relation to any
Environmental Liability, or respond to any proceedings initiated by
a third party against Purchaser, Relevant Purchaser or a Wholly
Owned Company, without prior consultation with Seller. Such prior
consultation shall not be required if Purchaser, Relevant Purchaser
or relevant Wholly Owned Company is obliged to initiate such
procedures under Environmental Law.
If the Purchaser (including the employees and management of the
Relevant Purchaser and the Wholly Owned Companies) becomes aware of
any actual or imminent administrative or court procedures,
preparatory steps or comparable measures which are destined to or
could lead to an obligation of a Wholly Owned Company or Relevant
Purchaser in relation to an Environmental Liability, the Purchaser
shall inform Seller without undue delay of such imminent or actual
procedures, steps or measures including all available evidence
relating thereto.
(h) Arbitral Expert
If Seller and Purchaser, within ninety (90) days after Purchaser
notifying Seller of a possible Environmental Liability, have not
reached an agreement as to Seller's obligation to indemnify under
this subclause D, each party shall be entitled to appoint ERM
▇▇▇▇▇▇▇▇ or - if ERM ▇▇▇▇▇▇▇▇ refuses the appointment - another
internationally recognized environmental consulting firm agreed by
the parties (within 30 days after such refusal to act as the
arbitral expert) to determine such Environmental Liability and
resulting Environmental Loss. Such expert shall also be instructed
to decide on the costs of the arbitration procedure in analogy to
Secs. 91 et seq. German Code of Civil Procedure. Upon commencement
of such procedure if the arbitral expert
55
requires a prepayment of its reasonable fees and expenses, such
shall be paid equally by the parties (subject to the final
allocation pursuant to the preceding sentence).
(i) Definitions
Environmental Liability means any liability arising as a result of
any violation of an Environmental Law (whether criminal, civil or
regulatory) (i) out of the Operations of any Wholly Owned Company
before the later of Closing or Effective Date or (ii) out of the
occupation of any Property or any part thereof by Seller, Relevant
Seller or a Wholly Owned Company or any previous occupier before the
later of Closing or Effective Date.
Environmental Law means all applicable mandatory laws, statutes and
regulations of the relevant Jurisdiction which relate to pollution
or protection of the Environment.
Environment means ecological systems including air, water and land
(including effects upon subsurface building parts).
Environmental Loss means any loss, damage (including third party
claims), direct cost and expense (including fines, penalties, the
cost of remedial action and reasonable testing (including the plan
currently being developed to remedy identified Environmental
Liabilities) and other professional fees, but excluding legal fees
and consequential loss unless claimed by a third party against
Purchaser, Relevant Purchaser or Wholly Owned Company) which is
reasonably incurred by Purchaser, Relevant Purchaser or Wholly Owned
Company in respect of any Environmental Liability.
j) Sale to Third Parties
If before the end of the three year period under subclause (b),
Purchaser or any Relevant Purchaser sells all Shares or Interests in
a Wholly Owned Company or if any Wholly Owned Company sells a
Property to a third party, Seller's obligation to indemnify shall
survive until the end of the three year period with respect to such
Wholly Owned Company or Property as if it would still be owned by
Purchaser, Relevant Purchaser or Wholly Owned Company, as
appropriate; it being understood that any claims under such
Indemnity shall
56
only be made by Purchaser against Seller without the third party
having any rights or claims hereunder.
▇. ▇▇▇▇▇▇ Project
Losses resulting from the Seller's Jordan project as provided in Schedule
l0.1.C.
D. Purchaser Avoiding Indemnified Losses
any Losses which the Purchaser, any Relevant Purchaser and/or any Company
may suffer by reason of the Purchaser, any Relevant Purchaser and/or any
Company taking any reasonable action to avoid, resist or defend against
any indemnified Liability referred to in parts (A) - (C) above.
10.2 Purchaser's Indemnities
The Purchaser shall, and shall procure that each Relevant Purchaser shall
indemnify and keep indemnified on an ongoing basis after the earlier of the
Closing or the Effective Date Seller and each Relevant Seller against
Liabilities relating to bonds, guarantees, comfort letters and similar
instruments to the extent provided in Clause 12.E.
11. Contracts
11.1 Relating to Asset Sellers
If and to the extent that the legally effective transfer of any contract of an
Asset Seller relating to the Operation is subject to acts of third parties (e.g.
consents or approvals) the parties and the Relevant Asset Sellers (which Seller
shall instruct accordingly) shall use their best efforts to achieve such
required acts as soon as possible after the date hereof. In the event that the
required acts are not performed or the parties and the Relevant Asset Seller
mutually consider it to be impractical to request the aforesaid, the parties and
the Relevant Asset Seller (which Seller shall instruct upon) will put each other
- to the extent legally permissible - in a position as if the respective third
party had performed the required act. This shall in particular mean the
following: The Purchaser shall cause the Relevant Purchaser to fulfill the
obligations set forth in the contracts in question in the name and on behalf of
the Relevant Asset Seller but on its own account. In that case, the Purchaser or
Relevant Purchaser is entitled to any payments made in consideration for
Obligations fulfilled by the Purchaser or Relevant Purchaser. No further claims
arising
57
from such payments may be asserted or raised against the Seller or the Relevant
Asset Seller. The Purchaser will indemnify and keep indemnified the Relevant
Asset Sellers against all obligations for which the Purchaser assumes
responsibility under this Clause 11.1.
11.2 Material Contracts, Assigning/Novating
A. If and to the extent any Material Contract is subject to a change of
control provision, subclause 11.1 shall apply mutatis mutandis.
B. In case a Material Contract or a License Agreement with a Wholly Owned
Company as licensee (excluding software licenses) contains a change of
control clause which applies when Purchaser or Relevant Purchaser takes
over control of such Company, Seller shall in cooperation with Purchaser
try to convince the other contract party or the licensor not to invoke
such change of control clause. Purchaser and Seller shall equally share
any reasonable costs incurred inconnection with the assignment or novation
of such Contract or Agreement, whereby Seller's Liability under this
provision shall be limited to EUROS 500.000 in the aggregate.
12. Covenants
A. SOFC
The understanding between the parties as it relates to the Relevant Purchaser's
purchase of Seller's equity interest in SOFC is contained in Schedule 12.A, and
the parties will use their best efforts to include in the documentation for such
Relevant Purchaser's purchase of such SOFC equity the contents of Schedule 12.A.
B. Repayment of Indebtedness
(a) All financing amounts owed by any Wholly Owned Company to Seller or any
Seller affiliate (ZF Konto) shall be converted by Seller or Relevant
Seller to equity prior to the earlier of the Effective Date or Closing.
All third party interest bearing debt (excluding trade payables) of Wholly
Owned Companies is reported on Schedule 12.B, which will be updated as of
Closing.
(b) With respect to the Non-Wholly Owned Companies, all third party and
intercompany debt (amounts owed by any Non Wholly Owned Company to the
Seller or any
58
affiliate of the Seller) will be reported on Schedule 12.B, such Schedule
also indicating which of the debt is guaranteed by Seller or Siemens
Group. Intercompany debt will become third party debt as of the relevant
National Closing and repaid in accordance with its existing terms and
conditions.
(c) After Closing, Purchaser will cause the Companies or the Relevant
Purchaser to pay all intercompany accounts payable that are on the
Effective Date Balance Sheet in respect to services or goods provided by
Seller or members of the Siemens Group to such Companies and/or to a
Relevant Purchaser with respect to Assets acquired hereunder as they
become payable in accordance with their terms or - in lack of such terms -
consistent with past practice.
C. Employees; Employee Benefit Arrangements
a. General
The Seller shall and shall procure that each Relevant Seller and/or
relevant Company shall where and to the extent required by the relevant
local law (i) inform and consult with recognized trade unions, works
councils (and, where relevant, their non-German equivalent) or other
employee representatives about the sale of the Shares, Interests or Assets
(as relevant), the transfer of German Employees to each German Wholly
Owned Company and where relevant a separation of the establishment
(Betriebsspaltung) before Closing, and/or (ii) fulfill any obligations to
notify any statutory or other authority whatsoever about the sale of the
Shares, Interests or Assets. In order better to effectuate the preceding
sentence, Purchaser and Seller shall cooperate as needed between the date
hereof and Closing in order to obtain necessary cooperation from works
councils (and their non-German equivalents).
b. Employees
In the event any employees not listed in the Schedule 8.2.E.g. shall claim
prior to or after the Effective Date that such employee has, by operation
of law or based upon contract (not specifically approved by Purchaser),
transferred to or with the Operations acquired by Purchaser hereunder, the
parties shall use their best efforts to cooperate to convince such
employee to remain with Seller or Relevant Seller (in particular where
applicable that the employee is not allocable to the Operations and that
therefore the employment relationship has not transferred).
59
Purchaser at any time after the Closing, consistent with applicable law,
shall have the right to approach and hire any employee, associated with
the Operations on or after October 1, 1998, but who is not on Schedule
8.2.E.g.
After Closing, Seller and the Siemens Group will not actively solicit for
employment any Employee on Schedule 8.2.E.g. (provided that nothing in
this sentence shall prevent Seller or Siemens Group from making
generalized employment searches, by advertisements or by engaging firms to
conduct searches, which are not focused on the Operations or individual
Operations' employees).
Any individuals employed by Seller or Relevant Seller except (i) those who
are listed on Schedule 8.2.E.g at Closing or (ii) those who by operation
of law have to be transferred to Relevant Purchaser or Company as
appropriate, shall remain with Seller or Relevant Seller and hence Seller
or Relevant Seller shall retain all obligations of any nature relating to
such individuals (including but not limited to any indemnities and other
payments which may be payable to such individuals).
c. Seller Obligations
Seller will procure that each Relevant Seller and each Company will
perform all obligations in respect of each Employee due to be performed
prior to the later of the Effective Date and the Closing.
d. Employee Records
At any time within twelve (12) months after Closing, upon Purchaser's
request the Seller shall deliver to the Purchaser (on behalf of the
Relevant Purchaser) either originals or copies (if originals no longer
exist or are not under the Seller's custody or control) of all such
Employee records and/or Employee Benefit Arrangement documents, which in
any event are not in the possession of the Operation, provided that:
(i) to the extent legally permitted, the Seller shall be entitled to
retain a copy of any such record or document where the original is
delivered to the Purchaser (on behalf of the Relevant Purchaser) or
(if legally required to retain the original) to retain the original
of any such record or document where a copy is delivered to the
Purchaser (on behalf of the Relevant Purchaser);
60
(ii) in the event the Seller or any Relevant Seller is a party to any
claim by or against any Employee arising on or after Closing, the
Purchaser shall, or shall procure that the Relevant Purchaser shall,
allow the Seller or Relevant Seller access to any and all records
and documents in its possession which are or might be relevant to
such claim (subject to any legal restrictions limiting the
disclosure of such records or documents) provided always that the
Seller or Relevant Seller shall take such reasonable steps as are
necessary to preserve the confidentiality of such records and
documents (it being agreed that the use of such documents and
disclosure thereof in the course of handling such claim, complying
with the confidentiality provisions hereof while doing so, shall not
amount to a breach of such provisions).
e. Stock Options and Other Deferred Compensation
Notwithstanding any law to the contrary, Seller will remain responsible
for Seller's Liabilities relating to any stock option, stock acquisition
right, phantom stock rights or any other contingent payment to any
Employee based on any class of the equity of Seller. any Relevant Seller
or any affiliate of Seller (collectively "Stock Option"), granted to any
Employee prior to Closing (whether or not such Stock Option has vested
prior to the later of the Effective Date and Closing).
f. Employee Stock
If Closing occurs before ▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ will on February 28, 2000
deliver to the Employees of the German Wholly Owned Companies such
employee shares (Mitarbeiteraktien) which were ordered by the Employees in
accordance with the employee share offer made in November/December 1999.
In order to deliver such shares to such Employees, Purchaser may purchase
such employee shares at EUROS 85 per share from Seller.
g. Additional Possible Employment Offers
Seller and Purchaser shall decide before Closing which of the individuals
on Schedule 8.2.E.g.(iv) will be offered employment by Purchaser or
Relevant Purchaser.
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D. Non Competition
For a term of five (5) years after the Effective Date, or in case of Clause
5.1.2 after the closing of the last transaction pursuant to such Clause, the
Seller and all members of the Siemens Group (as long as they are members of the
Siemens Group) will not engage in or carry out any research or development,
production or distribution of products of types which belong to the product
groups listed in Schedule 12.D. However, these obligations do not extend to such
products in Schedule 12.D. that any member of the Siemens Group (as long as it
is such a member) purchases and sells as an integral part of other Siemens Group
products or in combination with other Siemens Group products (collectively:
"Combination Products"). Furthermore these obligations do not extend to such
Schedule 12.D. products (i) that are purchased by Seller or Siemens Group for
resale, or (ii) that are spare parts to Combination Products, or (iii) Siemens
Group annual worldwide sales of which (by product group) do not exceed EURO
250,000 (hereinafter referred to as "Competitive Activities").
The restrictions set out in the first sentence of the preceding paragraph shall
apply to Competitive Activities or participations acquired after the date of
this Agreement on a worldwide basis, except for participations held or acquired
by financial investment companies of the Siemens Group for financial investment
purposes.
If Seller or any member of Siemens Group acquires more than 50% of the voting
shares of a Company which engages in any of the Competitive Activities, Seller
shall undertake for the time period specified in the first sentence of the first
paragraph.
(i) to offer those Competitive Activities for sale to the Purchaser, if
legally permissible, or
(ii) to divest the Competitive Activities on reasonable terms if the Purchaser
does not submit a binding offer on reasonable terms within six weeks after
receipt of the Seller's written offer and divestiture being legally
permissible (the agreement to divest to be signed, on a reasonable efforts
basis, within six months after such Purchaser rejection), and on no better
terms to such third party that Purchaser had rejected
provided, however, that Seller pursuant to the rights pertaining to such
participation is in a position to undertake such actions as described in lit.
(i) and (ii) above. The provision in the preceding sentences shall not apply if
the Seller has precluded itself from taking such action.
62
Any compensation for the adherence to the restrictions contained in this Clause
12.D. is deemed discharged with receipt of the Purchase Price.
▇. ▇▇▇▇▇ and Guarantees
(a) The Purchaser on behalf of itself and the Relevant Purchasers agrees to
use reasonable efforts with the Relevant Sellers' assistance to procure,
effective from the Effective Date, the release of the Seller and the
Relevant Sellers and all Siemens Group companies from the bonds,
guarantees, letters of comfort and similar instruments (for which the
Seller or Relevant Sellers are the obligor) entered into in the ordinary
course of the Operations and issued by any of them or by banks and/or
other governmental and non-governmental financial institutions on behalf
of any of them in respect of the Operations (relating to a contract at the
Effective Date not yet completely performed by the relevant Company,
including the applicable warranty period under that contract) as shown in
Schedule 12.E.
(b) After the Effective Date but prior to such release the Purchaser on behalf
of itself and the Relevant Purchasers undertakes to the Seller to keep the
Relevant Seller, Seller and all Siemens Group Companies affected
indemnified against liabilities relating to bonds, guarantees, letters of
comfort or similar instruments on Schedule 12.E.
(c) Subclauses (a) and (b) above apply analogously to guarantees, comfort
letters or similar instruments issued by Seller, Relevant Seller or
Siemens Group companies securing interest bearing third party debt in
respect to Operations as listed on Schedule 12.E.
13. Further Obligations
A. Seller's General Obligations
(a) If at any time after the Effective Date any Relevant Seller receives any
monies in respect of any claim or in respect of any receivable relating to
any of the Operations, then the Seller shall procure that the Relevant
Seller shall pay to the Purchaser or Relevant Purchaser as soon as
reasonably practicable the amount recovered.
(b) Notwithstanding Closing, both parties shall execute such documents and do
such acts and things as the other party may reasonably require for the
purpose of giving it the full benefit of all the provisions of this
Agreement.
63
e. Covenants Relating to Industrial Property Rights
(a) Seller retains the right to the firm name (Firma) and the trademark
"SIEMENS". However, Seller herewith grants the Companies the right to use
the "Siemens" part of their current firm names in unaltered form free of
charge in the way and to the extent as used in the ordinary course of
business at Closing and as customary within Seller's Group to lawfully
identify their business operations. Upon the Closing or National Closing
any use of the firm name "SIEMENS" by the Purchaser, the Relevant
Purchaser and the Companies is to be discontinued without delay. The
Purchaser and the Relevant Purchaser and the Companies with ongoing
cooperation by Seller have to ensure by way of corresponding timely
measures that the above obligation is duly complied with by the
implementation of corresponding firm name changes. For this purpose. the
Purchaser has to provide Seller with the new firm names for and on behalf
of the Companies within six weeks after signing this Agreement. Should
Purchaser fail to provide Seller with such name, Seller shall be entitled
to change the firm names for the Companies within its absolute discretion.
As long as the firm names cannot be changed for reasons beyond Purchaser's
or Seller's control the respective Company can continue to use the SIEMENS
name part. Purchaser undertakes to have the Siecor Companies (i) use the
firm name and trademark "Siecor" in a manner and color to be clearly
distinguished from the firm name and trademark "SIEMENS" (the way Siecor's
firm names and trademarks are used as of the date hereof are consistent
with this subclause (i)), and (ii) not to hold themselves out (in an
active sense in order to gain commercial advantage) as a former joint
venture partner of Siemens.
(b) As regards inventory with the "SIEMENS" name on it, Purchaser is granted
the right to use up such inventory within 12 months of the Closing. After
such date, inventory bearing the "SIEMENS" name may no longer be sold by
Purchaser, Relevant Purchaser and the Companies. As regards publicity
materials (excluding factory signs) checks, letterheads and invoices,
Purchaser is granted the right to use up such publicity materials within 3
months of the Closing.
(c) As of Closing or Effective Date -- whatever is later - Purchaser grants
also in the name of the Relevant Purchaser to Seller and all members of
Siemens Group (as long as they are members) a non-exclusive,
non-transferable, worldwide, royalty free right and license under the
single-use patents listed in Schedule 8.2.E.i.l and the dual use patents
listed in Schedule 8.2.E.i.1 both for applications outside the scope of
the Operations only. The license under the dual use patents shall include
the right to
64
sublicense such patents to third parties and to assert such patents
against third parties in either event only for applications outside the
scope of the Operations. Purchaser is obliged to maintain the dual use
patents at its expense and to offer them on reasonable terms and
conditions to Seller in case Purchaser and/or a Relevant Purchaser decides
to discontinue such patents. Seller and Purchaser shall cooperate in good
faith in case third parties challenge the validity of any of the dual-use
patents.
Seller undertakes not to assert any of its patents, which are designed for
other products, but which may also be used for products pertaining to the
Operations, against Purchaser and/or any of its majority owned or
controlled subsidiaries. Purchaser undertakes also in the name of the
Relevant Purchasers to license the dual use patents to third parties
outside the scope Purchaser's telecommunications segment as defined in
Purchaser's Form 10K only with the prior written consent of Seller which
shall not be unreasonably withheld. Seller shall respond to Purchaser
under the preceding sentence within 6 weeks after its receipt of
Purchaser's request, or Seller's consent shall be deemed to have been
given. Purchaser or Relevant Purchaser may sell or otherwise transfer any
such dual use patents as part of a sale of any portion of a business and
such requirement for Seller's prior written consent shall not apply.
(d) Seller shall try to obtain a license for SCC KG under certain patents
co-invented by employees of Seller's SCC business and previously owned by
Seller, which were contributed to Infineon AG, for use by SCC KG outside
the scope of Infineon's business.
C. General Services and Supply Agreement
Seller and Relevant Sellers shall supply (at the cost reflected in the financial
statements for the Operations provided to Purchaser) to Purchaser and Relevant
Purchasers to be agreed upon services that can legally be provided (including
finance and information technology related) required by Purchaser, for to be
agreed upon periods of time of up to 12 months after the later of Effective Date
or Closing. Purchaser and Seller shall negotiate in good faith before Closing
the terms and conditions of a respective services and supply agreement. If such
agreement cannot be concluded by Closing, this shall not hold up Closing. But
the parties shall continue to negotiate to conclude such agreement.
65
D. Insurance Policies
Insurance policies of the Companies on a corporate level -- except for the
Siecor Companies-, expire upon such Companies ceasing to be part of the Seller's
Group, i.e. upon the later of Closing or Effective Date. Seller has provided to
Purchaser a summary description of certain existing insurance coverage, a copy
thereof is attached hereto for identification purposes only as Schedule 13.D.
Upon the written request of the Purchaser (which shall only be made after
Purchaser has made all reasonable efforts to secure such insurance coverage on
its own) given before Closing, the Seller shall use its reasonable endeavors to
procure (to the extent legally possible and to the extent the relevant insurer
agrees) that certain of its corporate insurance policies relating to the
Operations shall be extended for a reasonable period of time after Closing (not
longer than 30 days). The pro rated insurance charges as well as deductibles
consistent with past practice (without additional amounts for Seller insurance
oversight) of such extension (as it relates to the Operations) shall be borne by
the relevant Purchaser. In case a claim is made under such extended policies
Purchaser will give all needed assistance to Seller who will remain in control
of the claim.
Effective at the later of Effective Date or Closing the Purchaser and/or the
Relevant Purchaser(s) shall extend its product liability insurance to cover
products manufactured by any of the Operations before the Effective Date and
sold thereafter by Purchaser or Relevant Purchaser.
E. Intercompany Agreements
a) The supply agreement for fusion splicers between Seller as supplier and
RXS GmbH & Co. KG will be reviewed and possibly amended before Closing,
the key points are set out in Schedule 13.E.a).
(b) Purchaser for a period of not to exceed 90 days after Closing has the
right to renegotiate any Seller intercompany agreement relating to the
Operations which is not at arm's length or not in the ordinary course of
business.
▇. ▇▇▇▇▇▇▇▇
Purchaser undertakes to Seller to maintain optical and data cable manufacturing,
connectorized cable manufacturing, optical fiber manufacturing and required
related Services at Neustadt/Coburg, Germany for three years after the later of
Closing or Effective
66
Date. However, the preceding sentence shall not prevent Purchaser from
implementing any restructuring, including redundancies, which are necessitated
by market conditions.
G. Inspection of Books
The Purchaser will grant Seller and its authorized representatives a right to
inspect all books and records of the Operations concerning the period of time up
until the Closing Date or the respective National Closing Date and even
thereafter, provided that such a right to inspection is asserted for Tax
reasons, for reasons of defending claims, for the fulfillment of contractual or
legal obligations or for other good reasons. Seller is entitled to retain copies
of such books and records for the above-mentioned purposes and - to the extent
that Seller requires original documents - the Purchaser will forward such books
and records to Seller.
H. Facility Rearrangement
The parties' agreement regarding the rearrangement of the facilities in Neustadt
is laid out in Schedule 13.H.
14. Miscellaneous
A. Announcements
Any communication which the Purchaser or the Seller may make concerning this
Agreement or any Transfer Agreement shall, subject to the requirements of law or
any regulatory body or the rules and regulations of any recognized stock
exchange, be consistent with the formal announcement or circular relating to
this Agreement, released by the parties (in agreement with each other) as of the
date hereof.
B. Confidential Information
(i) The terms of the confidentiality agreement dated 20 August 1998, as
amended, attached as Schedule 14.B, between the Seller and Purchaser sets
out the relevant confidentiality restrictions between the parties to this
Agreement through Closing. If Closing does not take place, the Purchaser
shall as promptly as possible return to Seller all confidential
information received, pursuant to Schedule 14.B.
67
(ii) The Seller on behalf of itself and each Relevant Seller and the Purchaser
on behalf of itself and each Relevant Purchaser agree they will not
disclose this Agreement or any part thereof on and after Closing to any
third party (except pursuant to Clause 14.A) without obtaining the prior
written consent of the other, unless required to disclose by law or by any
regulatory body or the rules and regulations of any stock exchange. The
preceding will not prohibit Seller from advising the other shareholder(s)
in each of the Non Wholly Owned Companies about this Agreement, as it
relates to such Company.
(iii) Purchaser (upon Seller's request) shall promptly return to Seller any
Confidential Information (as defined in Schedule 14.B) which relates to
Siemens' businesses other than the Operations and which was received by
Purchaser after August 20, 1998 through the date hereof as part of the
negotiations of this Agreement.
C. Entire Agreement
This Agreement (including all Schedules and Supplements 1 and 2 attached
hereto), the agreements referred to in Subclause B hereof, the Transfer
Agreements, Transfer Deeds and all documents entered into pursuant to this
Agreement (in any event referred to herein) contain the whole agreement among
the parties relating to the subject matter of this Agreement.
D. Amendments; Amended Schedules
No amendment or variation of this Agreement (including an amendment to this
Clause) shall be effective unless in writing (or such stricter form as may be
required by law) and signed by an authorized representative of each of the
parties to this Agreement and such written document refers to this Clause and
the intention to amend/vary this Agreement.
The Schedules listed in Clause 14.K hereafter which are marked with one or two
asterisks in such list are likely to be subject to updating as of the Closing.
Schedules marked with one asterisk may be updated by Seller unilaterally, those
marked with two asterisks shall only be updated by mutual agreement of both
parties hereto. Schedules not marked with any asterisk are not expected to
require updating and thus any amendment of such Schedule shall only be possible
in accordance with the first subparagraph above. It being understood, that the
Seller may not take out any items from Schedule 8.2.E.i or reallocate between
dual use or single use.
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E. Costs
The Seller shall bear all legal, accountancy, brokers and other third party
costs and expenses incurred by it and all Relevant Sellers in connection with
the preparation and negotiation of this Agreement and the Transfer Agreements
and the sale of the Operations. The Purchaser shall bear all such costs and
expenses incurred by it and any other Relevant Purchaser.
The Purchaser shall be responsible, except as set forth in the following
sentence, for all notary, filing and registration fees and transfer taxes
incurred directly in connection with this Agreement. Seller and Purchaser shall
share equally all out of pocket costs (including but not limited to transfer
taxes, notarial and recording fees) incurred in relation to the SCC KG, the RXS
GmbH and the NSW GmbH reorganizations, all referred to in Schedule 2.1.A. While
the Purchaser is responsible for real estate transfer taxes in connection with
the transfer of real property to SCC KG, RXS KG and NSW KG, the fulfillment of
this responsibility may be achieved either directly or, to the extent such real
estate turnover taxes are included on the Effective Date Balance Sheet, via an
adjustment to the Preliminary Purchase Price. If a particular real estate
transfer tax is assessed more than once, Purchaser shall only be responsible for
one such occurrence.
F. Interest
If any Relevant Seller or any Relevant Purchaser defaults in the payment when
due of any sum payable under this Agreement or the Transfer Agreements, the
Seller or the Purchaser, as the case may be, shall be liable to pay interest on
such sum from the date of such default until the date of actual payment (as well
after as before judgment) at a rate per annum of 2 percent above one month
EURIBOR rate. Such interest shall accrue from day to day but shall not be
compounded.
G. Notices
(a) Any notice or other communication required to be given or served in
connection with this Agreement shall be made in English and in writing and
shall be delivered or sent:
69
In the case of any of the Seller and Relevant Sellers to such party in
care of:
Siemens AG
M & A Department
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Fax: ▇▇-▇▇-▇▇▇-▇▇▇▇▇
Attention: Vice President
Mergers & Acquisitions (ZFG)
In legal matters with a copy to:
Siemens AG
Legal department (ZFR)
Munich, Germany
Fax: ▇▇-▇▇-▇▇▇-▇▇▇▇▇
In the case of any Relevant Purchaser to such party in care of:
Corning Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇
Fax: ▇-▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
(b) Any such notice or other communication shall be delivered by hand or sent
by courier, fax or first class post. If sent by fax, such notice or
communication shall be deemed to have been given or served on the Business
Day following the Business Day of dispatch and, in the case of a notice
sent by courier, on the third Business Day following the Business Day of
dispatch.
▇. ▇▇▇▇▇▇▇▇▇/Waiver
(a) If any term or provision of this Agreement is held or shall become invalid
or illegal or unenforceable, in whole or in part, such term or provision
or part shall to that extent be deemed not to form part (if not modified
jointly by the parties to remove such illegality or unenforceability) of
this Agreement; but the validity and enforceability of the remainder of
this Agreement shall not be affected. The term or
70
provision held to be illegal or unenforceable shall be replaced by another
provision with the closest economic results of such illegal or
unenforceable provision. The same shall apply in case of an omission.
(b) No failure or delay of the parties to exercise any right or remedy in
connection with this Agreement will operate as a waiver thereof, nor will
any single or partial exercise of any right or remedy preclude any other
or further exercise of such right or remedy or the exercise of any other
right or remedy. Any express waiver of any breach of this Agreement shall
not be deemed to be a waiver of any subsequent breach.
I. Inconsistent Provisions
To the extent that provisions of the Schedules (but not of the Supplements) to
this Agreement contradict the provisions of the body of this Agreement, the
provisions of the body of this Agreement shall prevail and the Seller and the
Purchaser shall procure that the provisions of the relevant Schedule are
adjusted to the extent necessary to give effect to the provisions of the body of
this Agreement and/or that the Seller, respectively the Relevant Seller and the
Purchaser, respectively the Relevant Purchaser comply with the provisions of the
body of this Agreement as though they were bound by such provisions in place of
the provisions of the relevant Schedule.
J. Governing Law and Disputes
(a) This Agreement and the Transfer Agreements and the documents to be entered
into pursuant to them shall be exclusively interpreted and governed by
German law with the exception of the UN-Convention on the International
Sale of Goods. Any conflict of law provisions that would lead to the
application of substantive law other than German law shall be excluded,
except as they mandatorily require the application of foreign law to legal
acts and transfers in rem.
(b) All disputes which may arise out of or in connection with this Agreement,
any of the Transfer Agreements and any document to be entered into
pursuant to this Agreement or any Transfer Agreement or any Transfer Deed,
save as expressly otherwise stated therein, shall be settled by an
amicable resolution effort of the Seller and the Purchaser. If this
attempt does not result in the dispute being resolved within 21 days of
written notification thereof, the dispute may be referred by either
Purchaser or Seller to arbitration in London, England pursuant to the
rules of the
71
International Chamber of Commerce ("ICC"). The arbitration shall be
conducted in the English language, in accordance with such ICC procedural
rules. There shall be three arbitrators; one appointed by the Seller, one
appointed by the Purchaser and the third promptly appointed by the two
appointed arbitrators, failing which the president of the ICC shall
appoint a third arbitrator within 60 days after the first two arbitrators
are first asked to appoint such arbitrator. If there are two or more
defendants, any nomination of an arbitrator by or on behalf of such
defendant must be made by joint agreement between them. If such defendants
fail within the time limit fixed by the International Court of Arbitration
to agree on such joint nomination, the proceedings against each of them
must be separated. The decision of the arbitrators shall be final and
binding. The arbitration court shall also decide on the liability for
costs, including the reimbursement for reasonable attorney fees.
K. List of Schedules
The following Schedules and Supplements are attached to this Agreement and,
unless mentioned to the contrary, form integral part of this Notarial Deed:
SCHEDULE 2
Part I
Companies whose Shares, Interests or Relevant Assets are being sold;
Relevant Sellers; Relevant Purchasers
Part 2
Further particulars of the Companies, whose Shares, Interests or relevant
Assets are to be transferred pursuant to this Agreement
SCHEDULE 2.A.
Operations
SCHEDULE 2.1.A
German Contribution Agreements
72
SCHEDULE 2.2.A.1
Siemens S.A. PCFO Assets -- General Description
SCHEDULE 2.2.A.2
List of Siemens S.A. PCFO Assets**
SCHEDULE 2.2.B.1
Siemens Ltd. Assets -- General Description
SCHEDULE 2.2.B.2
List of Siemens Ltd. Assets**
SCHEDULE 2.2.C.1
NSW Corp. Assets -- General Description
SCHEDULE 2.2.C.2
List of NSW Corp. Assets**
SCHEDULE 2.3.A
German Share and Interest Transfer Deeds
SCHEDULE 2.3.B
Transfer Agreements for Non-German Wholly Owned Companies**
SCHEDULE 2.3.C(a)
Transfer Agreement for Shares in Siecor Corp.**
SCHEDULE 2.3.C(b)
Transfer Agreement for Shares in Siecor GmbH and for Interest in Siecor GmbH &
Co. KG**
73
SCHEDULE 2.3.E
Transfer Agreement for Assets
SCHEDULE 3.1
Allocation of Consideration
SCHEDULE 3.2.A
Principles for Financial Statements
SCHEDULE 3.2.B
Procedures for Finalizing the Effective Date Balance Sheet
SCHEDULE 3.2.C
Agreed Procedures
SCHEDULE 3.2.D
Net Assets
SCHEDULE 3.3.A
Contingent Consideration Contract
SCHEDULE 3.3.B
Undersea Cable Contingent Consideration
SCHEDULE 8.2.C.b
Exception to German Siecor Companies' Litigation Warranty*
SCHEDULE 8.2.C.d
Exception to German Siecor Companies' Ordinary Course Warranty*
74
SCHEDULE 8.2.E.a
Teleco Cavi Saving Shareholder Information
SCHEDULE 8.2.E.c
Changes since September 30, 1999**
SCHEDULE 8.2.E.d.iii
Wholly Owned Company Litigation*
SCHEDULE 8.2.▇.▇.▇▇
Wholly Owned Company Material Contracts*
SCHEDULE 8.2.E.f.iii
Exceptions to Agency, Distributorship or Management Agreements*
SCHEDULE 8.2.E.g
Employees in Wholly Owned Companies*
SCHEDULE 8.2.E.g.ii
Employee Benefit Arrangements and Employment Rights Agreements* (for
identification purposes only)
SCHEDULE 8.2.E.g.iv
Non-Employee Workers for Companies*
SCHEDULE ▇.▇.▇.▇.▇▇
Mass Termination of Employment*
SCHEDULE 8.2.E.g.vii
Seconded Employees*
75
SCHEDULE 8.2.E.g.viii
Strikes; Works Slowdowns*
SCHEDULE 8.2.▇.▇.▇▇
Exceptions to Audits/Proceedings*
SCHEDULE 8.2.E.i.
Seller's Intellectual Property*
SCHEDULE 8.2.E.l.
Seller's Properties/Encumbrances/German Leases (parts thereof attached for
identification purposes only)
SCHEDULE ▇.▇.▇.▇.▇▇
NSW Property Letter
SCHEDULE 8.2.E.m
Seller's year 2000 Plan for Operations (for identification purposes only)
SCHEDULE 8.2.F.c
Asset Seller Intellectual Property Licenses*
SCHEDULE 8.2.F.d
Asset Seller Employees*
SCHEDULE 8.3
Seller's Knowledge**
SCHEDULE 10.1.C
Jordan Project
76
SCHEDULE 12.A
SOFC
SCHEDULE 12.B
Third Party and Intercompany Debt*
SCHEDULE 12.D
Non-compete Product Types and Group
SCHEDULE 12.E
Bonds or Guarantees**
SCHEDULE 13.D
Insurance Policies (for identification purposes only)
SCHEDULE 13.E (a)
Fusion Splicers Renegotiation Issues
SCHEDULE 13.H
Neustadt, Coburg, Facility rearrangement
SCHEDULE 14.B
Confidentiality Agreement
Supplements
Supplement 1
Supplement 2
Supplement 3
(continued on next page)
IN WITNESS THEREOF this Notarial Deed including the Schedules and Supplements
hereto
with the exception of the Schedules or part of Schedules attached for
identification purposes only, whose content does not form part of this Deed,
and with the further exception of certain balance sheets and lists of items,
titles, rights and obligations contained in certain Schedules, in respect
thereof the persons appearing waived the right to have them read aloud and which
instead have been presented to the persons appearing, were acknowledged and
signed on each page by the persons appearing,
has been read aloud to the persons appeared and was confirmed and approved by
the persons appeared. The persons appeared then signed this Deed. All this was
done at the days herebelow written in the presence of me, the Notary Public, who
also signed this Deed and affixed my official Seal.
Basel, this 7th (seventh) and 8th (eighth) day of December 1999 (nineteen
hundred and ninety-nine)
[SEAL]
▇▇▇▇▇▇▇ ▇▇▇▇▇
ADVOKAT UND NOTAR
The schedules and supplements listed at the end of the Master Sale and Purchase
Agreement have been omitted from this Current Report on Form 8-K.