Exhibit 10.1
STOCK PURCHASE AGREEMENT
by and between
BREED TECHNOLOGIES, INC.
and
SIEMENS AKTIENGESELLSCHAFT
dated as of October 14, 1997
TABLE OF CONTENTS
Page
Section 1. Definitions and Principles of Construction................ 1
1.01 Defined Terms............................................. 1
1.02 Principles of Construction................................ 5
Section 2. Sale and Purchase of Stock................................ 5
2.01 Sale and Purchase of Stock................................ 5
2.02 Purchase Price; Number of Shares to be Purchased.......... 5
2.03 Closing................................................... 5
Section 3. Representations and Warranties of the Company............. 6
3.01 Organization and Good Standing............................ 6
3.02 Authorization............................................. 6
3.03 Enforceability............................................ 7
3.04 Approvals................................................. 7
3.05 Capitalization............................................ 7
3.06 Subsidiaries.............................................. 7
3.07 Compliance with Laws and Orders........................... 8
3.08 SEC Reports and Financial Statements...................... 8
3.09 Absence of Certain Changes or Events...................... 9
3.10 Absence of Undisclosed Liabilities........................ 9
3.11 Legal Proceedings......................................... 9
3.12 Patents and Trademarks..................................... 9
3.13 Taxes..................................................... 10
3.14 Employee Benefit Plans.................................... 10
3.15 Environmental............................................. 11
3.16 Affiliate Transactions.................................... 11
3.17 AlliedSignal Transaction...................................11
3.18 Disclosure.................................................12
3.19 Brokers....................................................12
Section 4. Representations and Warranties of Purchaser....... 12
4.01 Investment Intent......................................... 12
4.02 No Registration of Securities............................. 12
4.03 Investor Status........................................... 12
4.04 Authority to Execute and Perform Agreement................ 13
4.05 Brokers................................................... 13
4.06 Approvals................................................. 13
Section 5. Covenants of the Company and Purchaser.................... 13
5.01 Company................................................... 13
5.02 Purchaser................................................. 15
Section 6. Conditions Precedent to Obligations of Purchaser.......... 15
Section 7. Conditions Precedent to Obligations of the Company........ 18
Section 8. Notices................................................... 19
Section 9. Survival of Representations and Warranties................ 20
Section 10. Indemnification................................... 20
10.01 Indemnity by the Company.................................. 20
10.02 Purchaser's Indemnity..................................... 21
10.03 Procedure................................................. 21
10.04 Basket and Cap Provisions................................. 23
Section 11. Termination....................................... 23
11.01 Termination............................................... 23
11.02 No Liability.............................................. 24
11.03 Notice.................................................... 24
Section 12. Miscellaneous..................................... 24
12.1 Amendment or Waiver....................................... 24
12.2 Consent to Jurisdiction................................... 24
12.3 Release of Siemens Aktiengesellschaft..................... 24
12.4 Waiver of Jury Trial; Trial Costs......................... 25
12.5 Assignment................................................ 25
12.6 Entire Agreement.......................................... 25
12.7 Expenses.................................................. 25
12.8 Public Announcements...................................... 25
Schedule 3.02 Authorization
Schedule 3.04 Approvals for Company
Schedule 3.05(b) Options
Schedule 3.06 Subsidiaries
Schedule 3.08(a) SEC Filings
Schedule 3.08(b) Treatment of Subsidiaries on Financial Statements
Schedule 3.09 Absence of Changes
Schedule 3.10 Undisclosed Liabilities
Schedule 3.11 Legal Proceedings
Schedule 3.12 Intellectual Property
Schedule 3.14 Employee Benefit Plans
Schedule 3.15 Environmental Matters
Schedule 3.16 Transactions with Affiliates
Schedule 3.17 AlliedSignal Agreement
Schedule 4.06 Approvals for Purchaser
Schedule 6(l) Financing Terms
Exhibit A Form of Certificate of Designations
Exhibit B Form of Make-Whole Agreement
Exhibit C Opinion of Special Counsel to the Company
Exhibit D Form of Registration Rights Agreement
Exhibit E Form of Stockholders Agreement
Exhibit F Opinions of Counsel to Purchaser
This STOCK PURCHASE AGREEMENT, dated as of October 14, 1997, is by and
between Breed Technologies, Inc., a Delaware corporation (the "Company"), and
Siemens Aktiengesellschaft, a company organized under the laws of the Federal
Republic of Germany ("Purchaser").
WHEREAS, the Company has entered into an agreement to acquire the
automotive safety restraints business of AlliedSignal Inc. (the "AlliedSignal
Acquisition");
WHEREAS, Purchaser desires to invest in the Company as a result and in
furtherance of the AlliedSignal Acquisition; and
WHEREAS, the Company and Purchaser (through their respective Affiliates)
intend to form a joint venture for the worldwide research, development and
marketing of motor vehicle occupant safety restraint systems (the "Joint
Venture");
In consideration of the mutual covenants and agreements set forth herein
and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
Section 1. Definitions and Principles of Construction.
1.01 Defined Terms. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Additional Shares" has the meaning set forth in Section 2.02(c).
"Adjustment Period" means the period beginning on the date of this
Agreement and ending six months after the date of the Closing.
"Affiliate" means any Person that directly or indirectly, through one or
more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person, whether by Contract or otherwise. In any
event, and without limitation of the previous sentence, any Person owning more
than fifty (50%) of the voting securities of a second Person shall be deemed to
control that second Person.
"Agreement" means this Agreement, as the same may be amended, supplemented
or modified in accordance with the terms hereof.
"AlliedSignal Acquisition" has the meaning set forth in the forepart of
this Agreement.
"AlliedSignal Agreement" has the meaning set forth in Section 3.17.
"Benefit Plan" has the meaning set forth in Section 3.14.
"Best Price" means the Initial Price Per Share less an amount equal to the
Initial Price multiplied by the Biggest Discount.
"Biggest Discount" means the largest Stock Sale Discount.
"Breed Stockholders" means ▇▇▇▇▇ ▇. Breed, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Breed, A. Breed,
L.P. and J. Breed, L.P.
"Business Day" means any day other than a Saturday or a Sunday or a day
when commercial banks are permitted or required by law to be closed in New York
City.
"Certificate of Designations" means a Certificate of Designations in
substantially the form attached hereto as Exhibit A.
"Charter Amendment" means an amendment to the Company's Certificate of
Incorporation for the purpose of increasing the maximum number of shares of
Common Stock that the Corporation is authorized to issue to 75,000,000.
"Claim Notice" has the meaning set forth in Section 10.03.
"Closing" has the meaning set forth in Section 2.03(a).
"Closing Date" shall mean the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Common Stock of the Company, $.01 par value per
share.
"Company" means Breed Technologies, Inc.
"Company Financial Statements" has the meaning set forth in Section 3.08.
"Company Permits" has the meaning set forth in Section 3.07.
"Company SEC Reports" has the meaning set forth in Section 3.08.
"Damages" has the meaning set forth in Section 10.01.
"ERISA" has the meaning set forth in Section 3.14.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Governmental or Regulatory Authorities" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, the Federal Republic of Germany, any foreign jurisdiction,
the European Community or any political subdivision of any of the foregoing.
"HSR Act" means Section 7A of the ▇▇▇▇▇▇▇ Act (Title II of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended) and the rules
and regulations promulgated thereunder.
"Indemnified Party" and "Indemnifying Party" have the meanings set forth in
Section 10.03.
"Initial Price Per Share" means the Purchase Price divided by the number of
Initial Shares.
"Initial Shares" has the meaning set forth in Section 2.02(b).
"Joint Venture" means the joint venture contemplated by the Memorandum of
Understanding to be formed between the parties hereto (or through their
respective Affiliates) in connection with motor vehicle occupant safety
restraint systems.
"Knowledge" means, as to any specified facts or information, that those
facts or information are within the actual knowledge of any executive officer or
senior vice president of any division, and in addition, as to Section 3.17(b)
only, the actual knowledge of the Company's Director of Corporate Compliance.
"Law" means any law, statute, rule, regulation, ordinance or other
pronouncement having the effect of law in the United States, the Federal
Republic of Germany, the European Community or any political subdivision of the
foregoing.
"Lien" means any lien, pledge, hypothecation, mortgage, security interest,
claim, lease, charge, option, right of first refusal, easement encroachment,
transfer restriction, or other encumbrance of any kind.
"Make-Whole Agreement" means an agreement in substantially the form
attached hereto as Exhibit B.
"Material Adverse Effect" means a material adverse effect upon the
business, assets, condition (financial or otherwise) or operations of the
Company and its Subsidiaries, taken as a whole.
"Memorandum of Understanding" means the memorandum of understanding
(including the related Term Sheet) between the Company and Purchaser, dated the
same date as this Agreement, with respect to a joint venture between the parties
or their affiliates.
"NYSE" means the New York Stock Exchange, Inc.
"Notice Period" has the meaning set forth in Section 10.03(a).
"Order" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority.
"Person" means an individual, partnership, corporation, association, trust,
joint venture, unincorporated organization, and any government, governmental
department or agency or political subdivision thereof.
"Purchase Price" has the meaning set forth in Section 2.02.
"Purchaser" means Siemens Aktiengesellschaft.
"Registration Rights Agreement" means an agreement in the form attached as
Exhibit D.
"Related Agreements" means the Make-Whole Agreement, the Registration
Rights Agreement and the Stockholders Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SEC" means the Securities and Exchange Commission.
"Series A Preference Share" means a share, authorized by the Certificate of
Designations, which represents one one-thousandth (1/1,000) of a share of the
Company's 1997 Series A Convertible Non-Voting Preferred Shares, $.001 par value
per share, is convertible by the holder thereof at any time after issuance into
Common Stock, and has the other rights, qualifications, limitations,
restrictions and preferences set forth in the Certificate of Designations.
"Shares" has the meaning set forth in Section 2.01.
"Stockholders Agreement" means the agreement in substantially the form
attached as Exhibit E.
"Stock Sale Discount" means, with respect to any sale of Common Stock by
the Company, the amount, if any, by which the purchase price per share paid by
the purchaser in such sale is less than the last reported sale price of the
Common Stock on the NYSE on the last Trading Day preceding the date the Company
first became contractually committed to make such sale, expressed as a
percentage of such last reported sale price.
"Subsidiaries" has the meaning set forth in Section 3.06.
"Taxes" means any federal, state, county, local or foreign taxes, charges,
fees, levies, or other assessments, including all net income, gross income,
sales and use, ad valorem, transfer, gains, profits, excise, franchise, real and
personal property, gross receipt, capital stock, production, business and
occupation, disability, employment, payroll, license, estimated, stamp, custom
duties, severance or withholding taxes or charges imposed by any governmental
entity, including any interest and penalties (civil or criminal) on or additions
to any such taxes and any expenses incurred in connection with the
determination, settlement or litigation of any Tax liability.
"Tax Return" means a report, return or other information required to be
supplied to a governmental entity with respect to Taxes including, where
permitted or required, combined or consolidated returns for any group of
entities that include the Company or any Subsidiary.
"Trading Day" means a day on which the NYSE opens for trading.
1.02 Principles of Construction. (a) All references to sections, schedules
and exhibits are to sections, schedules and exhibits in or to this Agreement
unless otherwise specified. The words "hereof," "herein," and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provisions of this Agreement.
(b) All accounting terms used in this Agreement shall be construed in
accordance with generally accepted accounting principles in the United States.
Section 2. Sale and Purchase of Stock.
2.01 Sale and Purchase of Stock. The Company agrees to issue and sell to
Purchaser, and, subject to the terms and conditions hereof and in reliance on
the representations, warranties and covenants set forth or referred to herein,
Purchaser agrees to purchase from the Company, the number of Series A Preference
Shares determined in accordance with Section 2.02 (the "Shares"). The rights,
qualifications, limitations, restrictions and preferences of the Shares shall be
as set forth in the Certificate of Designations.
2.02 Purchase Price; Number of Shares to be Purchased. (a) The aggregate
purchase price for the Shares (the "Purchase Price") shall be $115,000,000.
(b) The number of Shares (the "Initial Shares") to be issued and sold by
the Company at the Closing in consideration of the Purchase Price shall be
4,883,227. If there is a Best Price, then the number of Shares issued and sold
shall equal the Purchase Price divided by the Best Price.
(c) Not later than five days after the end of the Adjustment Period, the
Company shall issue and deliver to Purchaser a number of Shares (the "Additional
Shares") equal to the excess of (i)the number of Shares that is equal to the
Purchase Price divided by the Best Price over (ii) the number of Initial Shares.
2.03 Closing.
(a) Subject to the other provisions of this Agreement, the closing of the
purchase and sale of the Initial Shares (the "Closing") will take place at the
same time and place as the closing of the AlliedSignal Acquisition.
(b) On the Closing Date, Purchaser will pay the Purchase Price in
immediately available funds, by wire transfer to an account designated by the
Company not less than two Business Days prior to the Closing Date or, if the
Company fails to so designate an account within the required time, by delivery
of a certified or official bank check payable to the order of the Company.
(c) Simultaneously with Purchaser's payment of the Purchase Price, the
Company will deliver to Purchaser a certificate representing the Initial Shares.
Section 3 Representations and Warranties of the Company. The Company
represents and warrants to and for the benefit of Purchaser as follows
(Notwithstanding anything in the Agreement to the contrary, except for the
representations and warranties contained in Section 3.17, neither the Company
nor any Subsidiary is making any representation or warranty concerning the
AlliedSignal Agreement, the AlliedSignal Acquisition or the business, assets or
operations being acquired by the Company or any Subsidiary as a result of the
AlliedSignal Acquisition.):
3.01 Organization and Good Standing. Each of the Company and each
Subsidiary (a) is duly organized and existing in good standing in its
jurisdiction of formation, (b) is duly qualified and authorized to do business
in all other jurisdictions in which the nature of its business or property makes
such qualification necessary, except where such failure to qualify would not
have a Material Adverse Effect, and (c) has the power to own its properties and
to carry on its business as now conducted and as proposed to be conducted.
3.02 Authorization. Except as set forth on Schedule 3.02, the execution,
delivery and performance by the Company of this Agreement and the Related
Agreements, the issuance and sale by the Company of the Shares and the issuance
of the Common Stock upon conversion of the Shares, (a) are within the Company's
corporate power and authority, (b) have been duly authorized by all necessary
corporate proceedings, (c) do not and will not conflict with or result in any
breach or violation of any provision of the Certificate of Incorporation or
Bylaws of the Company, (d) do not and will not conflict with or result in any
breach or violation of any provision of any law, regulation, order, judgment,
writ, injunction, license or permit, applicable to the Company or any
Subsidiary, and (e) do not and will not conflict with or result in any breach or
violation of any of the terms or conditions of, or constitute (or with notice or
lapse of time or both constitute) a default under, or give rise to the creation
of any lien upon any of the property or assets of the Company or any Subsidiary,
under any contract, agreement, lease or other instrument to which the Company or
any Subsidiary is a party (including without limitation all agreements and
instruments to be executed and delivered in connection with the financing of the
AlliedSignal Acquisition) or by which any of their respective assets or
properties is bound, the consequences of which, with respect to this clause (e),
could reasonably be expected to result in a Material Adverse Effect.
3.03 Enforceability. Each of this Agreement and the Related Agreements has
been duly executed and delivered by the Company and constitutes the valid and
legally binding obligation of the Company enforceable against it in accordance
with its terms, except to the extent that its enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally and by principles of equity regarding
the availability of remedies.
3.04 Approvals. Except as set forth on Schedule 3.04, the execution,
delivery and performance by the Company of this Agreement and the Related
Agreements, the purchase and sale of the Shares and the issuance of the number
of shares of Common Stock specified in the Certificate of Designations upon
conversion of the Shares, do not and will not require the approval or consent
of, or any filing with, any governmental authority or agency or any other
Person.
3.05 Capitalization. (a) The authorized capital stock of the Company
consists solely of (i)50,000,000 shares of Common Stock, $.01 par value per
share, and (ii) 5,000,000 shares of preferred stock of the Company, $.001 par
value per share. All of the outstanding shares of capital stock of the Company
are duly authorized, validly issued, fully paid and nonassessable. Upon issuance
and sale to Purchaser in accordance with this Agreement the Shares will be, and
the Common Stock issuable upon conversion of the Shares will upon issuance be,
duly authorized, validly issued, fully paid and nonassessable and free and clear
of all Liens.
(b) Except for the Make-Whole Agreement and as otherwise set forth on
Schedule 3.05(b), neither the Company nor any Subsidiary has outstanding any
rights (either pre-emptive or other) or options to subscribe for or purchase
from the Company or such Subsidiary or any warrants or other agreements
providing for or requiring the issuance or purchase or other acquisition by or
on behalf of the Company or such Subsidiary of, any capital stock or other
equity interests or any securities convertible into or exchangeable for the
Company's or such Subsidiary's capital stock or other equity interests. Except
as set forth on Schedule 3.05(b), there are no voting trusts or other agreements
or understandings with respect to the voting of the capital stock or other
equity interests of the Company or such Subsidiary nor any restrictions on the
transferability or sale of such shares or other equity interests except as
provided under the Securities Act, state "blue sky" or securities laws, this
Agreement and the Related Agreements. Neither the Company nor any Subsidiary is
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire, redeem or retire any shares of capital stock or other equity interests
of the Company or such Subsidiary or any securities convertible into or
exchangeable for any such capital stock or other equity interests.
3.06. Subsidiaries. Schedule 3.06 sets forth the name, jurisdiction of
organization, and amount of the Company's and each other record owner's equity
interest in each corporation or other entity in which the Company directly or
indirectly owns or has the power to vote shares of any capital stock or other
ownership interests having ordinary voting power to elect a majority of the
directors of such corporation, or other persons performing similar functions for
such entity, as the case may be, and each partnership and limited liability
company in which such corporation or entity is a general partner or manager or
member, as the case may be (the "Subsidiaries"). Except for ownership by the
Company of the Subsidiaries as set forth on Schedule 3.06 or as otherwise set
forth on Schedule 3.06 neither the Company nor any Subsidiary directly or
indirectly owns any capital stock of, or other equity interest in, any person or
participates in any joint venture or similar arrangement with any person. Except
as set forth on Schedule 3.06, all of the outstanding shares of capital stock of
each Subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable, and are owned, beneficially and of record, directly or
indirectly, by the Company free and clear of all Liens.
3.07 Compliance with Laws and Orders. The Company and its Subsidiaries hold
all permits, licenses, variances, exemptions, orders and approvals of all
Governmental and Regulatory Authorities necessary for the lawful conduct of
their respective businesses (the "Company Permits"), except for failures to hold
such permits, licenses, variances, exemptions, orders and approvals which,
individually or in the aggregate, are not having and could not be reasonably
expected to have a Material Adverse Effect. The Company and its Subsidiaries are
in compliance with the terms of the Company Permits, except failures so to
comply which, individually or in the aggregate, are not having and could not be
reasonably expected to have a Material Adverse Effect. Except as disclosed in
the Company SEC Reports (as defined in Section 3.08) filed prior to the date of
this Agreement, the Company and its Subsidiaries are not in violation of or
default under any Law or Order of any Governmental or Regulatory Authority,
except for violations which, individually or in the aggregate, are not having
and could not be reasonably expected to have a Material Adverse Effect.
3.08 SEC Reports and Financial Statements. The Company delivered to
Purchaser prior to the execution of this Agreement a true and complete copy of
each form, report, schedule, registration statement and other document (together
with all amendments thereof and supplements thereto) filed by the Company or any
of its Subsidiaries with the SEC since December 31, 1996 (as such documents have
since the time of their filing been amended or supplemented, the "Company SEC
Reports"), which, except as disclosed on Schedule 3.08(a), are all the documents
(other than preliminary material) that the Company and its Subsidiaries were
required to file with the SEC since such date. Except as disclosed in Schedule
3.08(a), and in the cases where the Company SEC Reports have been amended, as of
their respective dates,
the Company SEC Reports (i) complied as to form in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and (ii) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Except as disclosed in Schedule 3.08(b), the audited
consolidated financial statements and unaudited interim consolidated financial
statements (including, in each case, the notes, if any, thereto) included in the
Company SEC Reports (the "Company Financial Statements") complied as to form in
all material respects with the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may be indicated therein or in the notes thereto and except with respect to
unaudited statements as permitted by Form 10-Q of the SEC) and fairly present in
all material respects (subject, in the case of the unaudited interim financial
statements, to normal, recurring year-end audit adjustments which are not
expected to be, individually or in the aggregate, materially adverse to the
Company and its Subsidiaries taken as a whole) the consolidated financial
position of the Company and its consolidated subsidiaries as at the respective
dates thereof and the consolidated results of their operations and cash flows
for the respective periods then ended. Except as set forth in Schedule 3.08(b),
each Subsidiary of the Company is treated as a consolidated subsidiary of the
Company in the Company Financial Statements for all periods covered thereby.
3.09 Absence of Certain Changes or Events. Except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement or as disclosed on
Schedule 3.09, (a) since June 30, 1997 there has not been any change, event or
development having, or that could be reasonably expected to have, individually
or in the aggregate, a Material Adverse Effect and (b) between such date and the
date hereof the Company and its Subsidiaries have conducted their respective
businesses only in the ordinary course consistent with past practice.
3.10 Absence of Undisclosed Liabilities. Except for matters reflected or
reserved against in the balance sheet for the period ended June 30, 1997
included in the Company Financial Statements or as disclosed in Schedule 3.10,
neither the Company nor any of its Subsidiaries had at such date, or has
incurred since that date, any liabilities or obligations (whether absolute,
accrued, contingent, fixed or otherwise, or whether due or to become due) of any
nature that would be required by generally accepted accounting principles,
applied on a basis consistent with prior practice, to be reflected on a
consolidated balance sheet of the Company and its consolidated subsidiaries
(including the notes thereto), except liabilities or obligations (i) which were
incurred in the ordinary course of business consistent with past practice; (ii)
which have not, and could not reasonably be expected to have, individually or in
the aggregate, a Materially Adverse Effect.
3.11 Legal Proceedings. Except as disclosed in the Company SEC Reports
filed prior to the date of this Agreement or in Schedule 3.11, (i) there are no
actions, suits, arbitrations or proceedings pending or, to the Knowledge of the
Company, threatened against, relating to or affecting, nor to the Knowledge of
the Company are there any Governmental or Regulatory Authority investigations or
audits pending or threatened against, relating to or affecting, the Company or
any of its Subsidiaries or any of their respective assets and properties which,
if determined adversely to the Company or any of its Subsidiaries, individually
or in the aggregate, could be reasonably expected to have a Material Adverse
Effect, or a material adverse effect on the Company's ability to consummate the
transactions contemplated by this Agreement or the Related Agreements and (ii)
neither the Company nor any of its Subsidiaries is subject to any Order of any
Governmental or Regulatory Authority which, individually or in the aggregate, is
having or could be reasonably expected to have a Material Adverse Effect or a
material adverse effect on the Company's ability to consummate the transactions
contemplated by this Agreement or the Related Agreements.
3.12 Patents and Trademarks. Each of the Company and each Subsidiary owns
or possesses sufficient legal rights to all patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses, information, proprietary
rights, know-how and processes necessary for its business as now conducted. To
the Knowledge of the Company, no material activity of the Company or any
Subsidiary materially conflicts with or infringes on the intellectual property
rights of any other Person. Except as disclosed on Schedule 3.12, there are no
outstanding options, licenses, or agreements of any kind
relating to the foregoing, nor is the Company or any Subsidiary bound by or
a party to any options, licenses or agreements of any kind with respect of the
patents, trademarks, service marks, trade names copyrights, trade secrets,
licenses, information, proprietary rights and processes of any other person or
entity.
3.13 Taxes. Each of the Company and, to the Company's Knowledge, each
Subsidiary has filed all Tax Returns required to be filed. All Tax Returns were
in all material respects true, complete and correct and have been filed on a
timely basis. Each of the Company and each Subsidiary have paid, in the time and
manner prescribed by law, all Taxes that are due and payable. Except for the
liens of property taxes being disputed in good faith, there are no Tax liens on
any property of the Company or any Subsidiary. Each of the Company and each
Subsidiary has complied in all material respects with the provisions of Code
Sections 1441-1464, 3401-3406, 6041 and 6049 (and similar provisions under any
other laws) and have, in the time and manner prescribed by law, withheld from
employee wages and have paid to the proper governmental authorities all amounts
required. Each of the Company and each Subsidiary has established on their books
and records reserves adequate to pay all Taxes not yet due and payable. There
are no agreements, waivers or other arrangements providing for an extension of
time with respect to the filing of any returns or the assessment of any Tax or
deficiency against the Company or any of the Subsidiaries nor are there any
known actions, suits, proceedings, investigations or claims pending against the
Company or any of the Subsidiaries in respect of any Tax, assessment or
governmental charge, or any other matters under discussion between the Company
or any of the Subsidiaries and any federal, state or local authority relating to
any Tax assessments, or governmental charges or any known claims against the
Company or any of the Subsidiaries for additional Taxes, assessments, or any
governmental charges asserted by any such authority.
3.14 Employee Benefit Plans. The plans listed in Schedule 3.14 are the only
employee benefit plans (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), and plans, programs,
policies, practices arrangements or contracts (whether group or individual)
providing for payments, benefits or reimbursements to employees of the Company
or any Subsidiary, former employees, their beneficiaries and dependents, under
which such employees, former employees, their beneficiaries and dependents, are
covered through an employment relationship with the Company or any entity
required to be aggregated in a controlled group or affiliated service group with
the Company for purposes of ERISA or the Code (including without limitation,
under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA, at
any relevant time ("Benefit Plans"). With respect to each Benefit Plan, to the
extent applicable: (i) such Benefit Plan has been maintained and operated in
material compliance with its terms and with the applicable provisions of ERISA,
the Code and all other applicable governmental laws and regulations; each such
Benefit Plan intended to qualify under Section 401(a) of the Code is the subject
of a favorable unrevoked determination letter issued by the Internal Revenue
Service as to its tax-qualified status under the Code, (ii) there is no material
suit, action, dispute, claim, arbitration or legal, administrative or other
proceeding or governmental investigation pending, or threatened, alleging any
breach of the terms of any such Benefit Plan or of any fiduciary duties
thereunder or violation of any applicable statue, law, rule or regulation with
respect to any Benefit Plan, and (iii) neither Purchaser nor any plan maintained
by Purchaser or any of its Affiliates shall be subject to any tax, fine, penalty
or other liability of any kind whatsoever, that would not have been incurred by
Purchaser or any of its Affiliates but for the transactions contemplated hereby.
3.15 Environmental. Except as set forth on Schedule 3.15:
(a) To the Company's Knowledge, there has not been, as of the date hereof,
any "release" (as defined in 42 U.S.C. ss. 9601(22)) of any "hazardous waste"
(as defined in 42 U.S.C. ss. 9601(14)) or oil on or about any of the real
property currently or previously owned, leased or operated by the Company).
(b) To the Company's Knowledge, the Company has not by contract, agreement
or otherwise arranged for disposal or treatment, or arranged with a transporter
for the transport for disposal or treatment, of hazardous waste at any
"facility" (as defined in 42 U.S.C. ss. 9601(9)) owned or operated by another
person or entity.
(c) To the Company's Knowledge, the Company has not accepted any hazardous
waste for transport to disposal or treatment facilities or sites selected by the
Company.
(d) To the Company's Knowledge, as of the date hereof, the Company and its
use of its real property is in compliance with all applicable laws, rules and
regulations of any federal, state or local governmental authority relating to
environmental protection, underground storage tanks, toxic waste, hazardous
waste, oil or hazardous substance handling, treatment, storage, disposal or
transportation or arranging therefor, products or materials previously or now
located on, delivered to, transmitted from, or in transit to or from, such real
property.
(e) To the Company's Knowledge, all of the Company's past disposal
practices relating to hazardous waste have been accomplished in accordance in
all material respects with applicable laws, rules, regulations and ordinances.
(f) To the Company's Knowledge, the Company has not been notified of any
potential liability of the Company with respect to the clean-up of any waste
disposal site and has no information to the effect that any site at which it has
disposed of hazardous waste or oil has been or is under investigation by any
federal, state or local governmental body, authority or agency.
3.16 Affiliate Transactions. As of the date of this Agreement, except as
disclosed on Schedule 3.16 and except for bona-fide intercompany obligations
among the Company and its Subsidiaries, (i) there are no outstanding amounts of
indebtedness in excess of $250,000, and (ii) there are no contracts or
agreements, between the Company and the Subsidiaries, or the Company and any
officer, director or Affiliate of the Company.
3.17 AlliedSignal Transaction. ( a) A true, complete and correct copy of
the Purchase Agreement, dated as of August 27, 1997, among AlliedSignal Inc.,
the other sellers named therein and the Company (the "AlliedSignal Agreement"),
including all exhibits, schedules and appendices thereto, has been furnished to
Purchaser. The AlliedSignal Agreement is in full force and effect and (except
for an amendment dated October 3, 1997, a true, complete and correct copy of
which has been furnished to Purchaser) has not been modified or amended.
(b) To the Knowledge of the Company, except as disclosed on Schedule 3.17,
none of the representations or warranties contained in the AlliedSignal
Agreement is false or inaccurate in any material respect.
3.18 Disclosure. No representation, warranty or statement made by the
Company or any Subsidiary in this Agreement or the Related Agreements, or in any
agreement, certificate, statement or document required to be delivered pursuant
hereto, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained in this
Agreement or the Related Agreements or in such other agreement, certificate,
statement or document not misleading in light of the circumstances in which they
were made.
3.19 Brokers. All negotiations relative to this Agreement or the Related
Agreements and the transactions contemplated hereby have been carried out by the
Company directly with Purchaser without the intervention of any Person on behalf
of the Company in such manner as to give rise to any valid claim by any Person
against any Purchaser or its Affiliates for a finder's fee, brokerage commission
or similar payment.
Section 4. Representations and Warranties of Purchaser. Purchaser
represents and warrants to and for the benefit of the Company as follows:
4.01 Investment Intent. Purchaser is acquiring the Shares for investment,
and not with a view to selling or otherwise distributing the Shares.
4.02 No Registration of Securities. Purchaser is aware that the Shares have
not been registered under the Securities Act or under state securities or blue
sky laws in reliance upon certain exemptions from such registration, and may not
be
transferred except pursuant to an effective registration under the
Securities Act and under state securities or blue sky laws or in a transaction
exempt from such registration.
4.03 Investor Status. (a) Purchaser is able to bear the economic risk of
the investment of Purchaser in the Shares and has such knowledge and experience
in financial and business matters, so as to be capable of evaluating the merits
and risks of the prospective investment in the Shares.
(b) Purchaser is aware that no Federal or state agency has (i) made any
finding or determination as to the fairness of any aspect of the investment in
the Shares or (ii) passed on or endorsed the merits of the offering of the
Shares.
(c) Purchaser is an "accredited investor," as that term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act.
4.04 Authority to Execute and Perform Agreement. Purchaser has the legal
right and power and all authority required to enter into, execute and deliver
this Agreement. Each of this Agreement and the Related Agreements has been duly
executed and delivered and is the valid and binding obligation of such Purchaser
enforceable in accordance with its terms, except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally and by principles of equity regarding the availability of remedies.
The execution, delivery and performance by Purchaser of this Agreement and the
Related Agreements, and the purchase by Purchaser of the Shares hereunder, (a)
are within Purchaser's corporate power and authority, (b) have been duly
authorized by all necessary corporate proceedings of Purchaser, (c) do not
conflict with or result in any breach or violation of any provision of the
Certificate of Incorporation (or similar organizational documents) or Bylaws (or
similar governing documents) of such Purchaser, (d) do not conflict with or
result in any breach or violation of any provision of any law, regulation,
order, judgment, writ, injunction, license or permit, applicable to such
Purchaser, or (e) conflict with or result in any breach or violation of any of
the terms or conditions of, or constitute (or with notice or lapse of time or
both constitute) a default under, or give rise to the creation of any lien upon
any of the property or assets of Purchaser, under any contract, agreement, lease
or other instrument to which Purchaser is a party or by which any of its
respective assets or properties is bound, the consequences of which, with
respect to this clause (e), could reasonably be expected to have a material
adverse effect on the validity or enforceability of this Agreement or the
Related Agreements or on the ability of Purchaser to perform its obligations
under any of such agreements.
4.05 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby, including, but not limited to, the Joint
Venture, have been carried out by Purchaser directly with the Company without
the intervention of any Person on behalf of Purchaser in such manner as to give
rise to any valid claim by any Person against the Company or any Subsidiary for
a finder's fee, brokerage commission or similar payment.
4.06 Approvals. Except as set forth on Schedule 4.06, the execution,
delivery and performance by Purchaser of this Agreement and the Related
Agreements, and the purchase and sale of the Shares, do not require the approval
or consent of, or any filing with, any governmental authority or agency or any
other Person.
Section 5. Covenants of the Company and Purchaser.
5.01 Company. The Company covenants and agrees that, except with the
written consent of Purchaser (which consent shall not unreasonably be withheld),
it shall:
(i) Conduct of Business. From the date hereof to the Closing Date, except
as disclosed to Purchaser, operate its business and the business of each of its
subsidiaries in a manner consistent with the manner in which it is being
operated at the date of this Agreement.
(ii) Best Efforts. Use its best efforts to cause all of the conditions set
forth in Section 6 to be fulfilled as promptly as practicable after the date of
this Agreement.
(iii) Antitrust, Competition Law Requirements. Take promptly (and in any
event within five days after the Closing) all actions necessary to make the
filings required of the Company or its Affiliates with any Governmental or
Regulatory Authorities in connection with Purchaser's acquisition of Common
Stock upon conversion of the Shares, including without limitation those required
under the HSR Act and European Community and German competition Laws, comply at
the earliest practicable date with any request for additional information
received by the Company or its Affiliates from any Governmental or Regulatory
Authority in respect of such filing and cooperate with Purchaser in connection
with any similar or comparable filing required to be made by Purchaser and in
connection with resolving any investigation or other inquiry concerning the
transactions contemplated by this Agreement commenced by any Governmental or
Regulatory Authority.
(iv) Investigation by Purchaser. The Company will, and will cause the
Subsidiaries to, (A) provide Purchaser and its officers, directors, employees,
agents, counsel, accountants, financial advisors, consultants and other
representatives with full access, upon reasonable prior notice and during normal
business hours, to all officers, employees, agents and accountants of the
Company and the Subsidiaries and their assets, properties, books and records,
and (B) furnish Purchaser and such other Persons with all such information and
data concerning the business and operations of the Company and the Subsidiaries,
and (to the extent possible without causing unreasonable disruption) the
business and assets to be acquired in the AlliedSignal Acquisition as Purchaser
or any of such other Persons reasonably may request in connection with such
investigation.
(v) Notice of Events. Promptly give Purchaser notice of (A) any event,
condition or circumstance occurring from the date hereof through the Closing
Date that would constitute a material violation or breach of this Agreement or
(B) any event, occurrence, transaction or other item which would have been
required to have been disclosed on any Schedule or statement delivered
hereunder, had such event, occurrence, transaction or item existed on the date
hereof other than items arising in the ordinary course of business which would
not render any representation or warranty of such parties materially misleading.
(vi) Equality of Rights. Grant to Purchaser (in addition to rights already
held by Purchaser) rights substantially equivalent to those obtained by any
other equity holder who acquires from the Company or any Affiliate thereof an
equal or smaller percentage of voting interest in the Company than Purchaser.
(vii) Joint Venture. Use its best efforts (i) to cause the execution and
delivery of the definitive documentation with respect to the Joint Venture to be
executed and delivered by December 15, 1997, (ii) to obtain the requisite
governmental clearances, approvals or terminations of waiting periods required
or applicable (including under antitrust or competition laws) with respect to
the formation of the Joint Venture and the conversion of the Shares into Common
Stock (provided, however, that the foregoing shall not require the Company to
consent to the imposition of any conditions deemed by it to be unduly onerous)
and (iii) to cause the formation of the Joint Venture based on the terms
contained in the Memorandum of Understanding prior to June 30, 1998.
5.02 Purchaser. Purchaser covenants and agrees that, except with the
written consent of the Company (which consent shall not unreasonably be
withheld), it shall:
(a) Best Efforts. Use its best efforts to cause all of the conditions set
forth in Section 7 to be fulfilled as promptly as practicable after the date of
this Agreement. Without limiting the generality of the foregoing, Purchaser will
(i) take promptly (and in any event within five Business Days after the Closing)
all actions necessary to make the filings required of Purchaser or its
Affiliates with any Governmental or Regulatory Authorities, including without
limitation those required under the HSR Act and European Community and German
competition Laws, (ii) comply at the earliest practicable date with any request
for additional information received by Purchaser or its Affiliates from any
Governmental or Regulatory Authority in respect of such filing and (iii)
cooperate with the Company in connection with any similar or comparable filing
required to be made by the Company and in connection with resolving any
investigation or other regulatory inquiry concerning the transactions
contemplated by this Agreement commenced by any Governmental or Regulatory
Authority.
(b) Joint Venture. Use its best efforts (i) to cause the execution and
delivery of the definitive documentation with respect to the Joint Venture to be
executed and delivered by December 15, 1997, (ii) to obtain the requisite
governmental clearances, approvals or terminations of waiting periods required
or applicable (including under antitrust or competition laws) with respect to
the formation of the Joint Venture and the conversion of the Shares into Common
Stock and (iii) to cause the formation of the Joint Venture based on the terms
contained in the Memorandum of Understanding prior to June 30, 1998.
Section 6. Conditions Precedent to Obligations of Purchaser. Purchaser's
obligation to purchase the Shares at the Closing pursuant to this Agreement is
subject to compliance by the Company with its agreements herein contained and to
the satisfaction, on or prior to the Closing Date with respect to Purchaser's
obligation to consummate the Closing, of the following conditions:
(a) Charter Documents; Good Standing Certificate. Purchaser shall have
received from the Company (i) a certificate from a duly authorized officer
thereof dated as of the Closing Date certifying as to (A) the absence of any
amendment to the Certificate of Incorporation since the date of the Secretary of
State's certificate referred to in clause (ii) below, and (B) the completeness
and accuracy of the By-Laws of the Company as in effect on the Closing Date,
(ii) a long-form certificate, dated not more than ten days prior to the Closing
Date, of the Secretary of State of Delaware listing the Certificate of
Incorporation and each amendment thereto on file in his office and certifying
that (A) the attached copy of the Certificate of Incorporation and each
amendment thereto is a true and correct copy thereof, (B) such amendments are
the only amendments on file in his office, (C) that the Company has paid all
franchise taxes to the date of such certificate and (D) that the Company is duly
incorporated and in good standing under the laws of the State of Delaware. (b)
Proof of Corporate Action. Purchaser shall have received from the Company
copies, certified by a duly authorized officer thereof to be true and complete
as of the Closing Date, of the resolutions of the Board of Directors and (to the
extent required under applicable Law or the requirements of the NYSE) the
stockholders of the Company authorizing the Charter Amendment, the Certificate
of Designations and the execution, delivery and performance of this Agreement,
the Stockholders Agreement and the Make-Whole Agreement. (It is understood that,
following the Closing, the Company may seek further approvals of its
stockholders, but the results of any such proceeding will not in any event
affect the validity of the corporate approvals referred to in this paragraph
(b), all of which will have been obtained prior to the Closing.)
(c) Incumbency Certificate. Purchaser shall have received from the Company
an incumbency certificate, dated the Closing Date, signed by a duly authorized
officer thereof, and giving the name and bearing a specimen signature of each
individual who shall be authorized to sign, in the name and on behalf of the
Company, this Agreement and to give notices and to take other action on behalf
of the Company under this Agreement.
(d) Legal Opinion. Purchaser shall have received from ▇▇▇▇ & ▇▇▇▇ LLP
special counsel to the Company, at the Closing their opinion, dated the Closing
Date, substantially in the form of Exhibit C hereto.
(e) Representations and Warranties; Officers' Certificates. The
representations and warranties of the Company contained herein shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties were made on and
as of such date (except for representations and warranties which by their terms
are made expressly as of an earlier date, which shall be true and correct as of
such earlier date) and the Company shall have performed and complied in all
material respects with all conditions, covenants and agreements required to be
performed or complied with by it prior to the Closing Date; and Purchaser shall
have received on the Closing Date a certificate to this effect signed by an
authorized officer of the
Company.
(f) Legality; Authorization; Consents. The purchase of the Shares shall not
be prohibited by any Law or Order. All necessary consents, approvals, licenses,
permits, orders and authorizations of, or registrations, declarations and
filings with, any Governmental or Regulatory Authority or of or with any other
Person, with respect to any of the transactions contemplated by this Agreement
shall have been fully obtained or made and shall be in full force and effect and
any waiting period imposed under any applicable Law shall have expired or been
terminated.
(g) Litigation, Etc. No suit, action, investigation, inquiry or other
proceeding (including, without limitation, the enactment or promulgation of a
statute or rule) by or before any arbitrator or any governmental injunction or
order by a state or federal court shall have been entered (i) as of the Closing
Date in connection with this Agreement, the Related Agreements or any of the
transactions contemplated hereby or (ii) which would have a Material Adverse
Effect or a material adverse effect on the consummation of the transactions
contemplated by this Agreement or the Related Agreements, including, without
limitation, the acquisition of the Shares, contemplated hereby.
(h) Make-Whole Agreement. The Company shall have executed and delivered the
Make-Whole Agreement to Purchaser.
(i) Registration Rights Agreement. The Company shall have executed and
delivered the Registration Rights Agreement to Purchaser. (j) Stockholders
Agreement; Board Representative. The Company, ▇▇▇▇▇ ▇. Breed, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Breed and each other Breed Stockholder shall have executed and delivered the
Stockholders Agreement.
(k) Completion of AlliedSignal Acquisition. All of the conditions precedent
to the AlliedSignal Acquisition shall have been satisfied and the Company shall
have delivered to Purchaser fully executed copies of all documents relating
thereto (including any related financing documents).
(l) Satisfaction with Capital Structure. Purchaser shall have confirmed to
its satisfaction that the terms of the Company's financing arrangements in
connection with the AlliedSignal Acquisition are consistent with the terms
described in the commitment letters or term sheets attached hereto as Schedule
6(l) and will include the consent of any pledgee of Common Stock to a right of
first refusal in favor of Purchaser on terms reasonably satisfactory to
Purchaser.
(m) Certificate of Designations. The Company shall have duly executed and
filed the Certificate of Designations in accordance with the applicable
requirements of Delaware law and shall have furnished Purchaser with a
certificate of the Delaware Secretary of State to that effect.
(n) NYSE Requirements. The NYSE shall (i) have approved for listing on the
NYSE, subject to notice of issuance, the shares of Common Stock issuable upon
conversion of the Shares and (ii) issued to the Company a letter confirming that
(A) the obligations to be undertaken by the Company under the Stockholders
Agreement (including without limitation the right of first refusal to be granted
thereunder by the Company in favor of Purchaser) will satisfy the requirements
of the NYSE, provided the right of first refusal is first approved by a majority
vote of the holders of the Company's Common Stock, and (B) no further approval
of the Company's stockholders will be required under the NYSE's rules or
policies in connection with the Company's performance of its obligations under
the Stockholders Agreement.
(o) General. All instruments and legal, governmental, administrative and
corporate proceedings in connection with the transactions contemplated by this
Agreement shall be reasonably satisfactory in form and substance to Purchaser,
and Purchaser shall have received copies of all documents, including, without
limitation, records of corporate or other proceedings, opinions of counsel,
consents, licenses, approvals, permits and orders which Purchaser may have
reasonably requested in connection therewith.
Section 7. Conditions Precedent to Obligations of the Company. The
Company's obligation to issue and sell the Shares pursuant to this Agreement is
subject to compliance by Purchaser with the agreements herein contained, and to
the satisfaction, on or prior to the Closing Date with respect to its obligation
to consummate the Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties of
Purchaser contained herein shall be true and correct in all material respects on
and as of the Closing Date with the same force and effect as though such
representations and warranties were made on and as of such date (except for
representations and warranties which by their terms are made expressly as of an
earlier date, which shall be true and correct as of such earlier date) and
Purchaser shall have performed and complied with all conditions, covenants and
agreements required to be performed or complied in all material respects with by
it prior to the Closing Date; and the Company shall have received on the Closing
Date a certificate to this effect signed by an authorized officer of Purchaser
with respect to the certificate to be issued on the Closing Date. (b) Legality;
Authorization; Consents. The issuance and sale of the Shares shall not be
prohibited by any Law or Order, and shall not subject the Company to any
penalty, special tax or other onerous condition. All necessary consents,
approvals, licenses, permits, orders and authorizations of, or registrations,
declarations and filings with, any Governmental or Regulatory Authority or of or
with any other Person, with respect to any of the transactions contemplated by
this Agreement shall have been fully obtained or made and shall be in full force
and effect and any waiting period under any applicable Law shall have expired or
been terminated.
(c) Stockholders Agreement. Purchaser shall have executed and delivered the
Stockholders Agreement.
(d) Legal Opinion. The Company shall have received from counsel for
Purchaser their legal opinions, dated the Closing Date, as to the matters
described in Exhibit F.
(e) Completion of AlliedSignal Acquisition. All of the conditions precedent
to the AlliedSignal Acquisition shall have been satisfied.
(f) Incumbency Certificate. The Company shall have received from Purchaser
an incumbency certificate, dated the Closing Date, signed by a duly authorized
officer thereof, and giving the name and bearing a specimen signature of each
individual who shall be authorized to sign, in the name and on behalf of
Purchaser, this Agreement and to give notices and to take other action on behalf
of Purchaser under this Agreement.
(g) Litigation, Etc. No suit, action, investigation, inquiry or other
proceeding (including, without limitation, the enactment or promulgation of a
statute or rule) by or before any arbitrator or any governmental injunction or
order by a state or federal court shall have been entered (i) as of the Closing
Date in connection with this Agreement, the Related Agreements or any of the
transactions contemplated hereby or (ii) which would have a Material Adverse
Effect or a material adverse effect on the consummation of the transactions
contemplated by this Agreement or the Related Agreements, including, without
limitation, the sale of the Shares, contemplated hereby.
(h) General. All instruments and legal, governmental, administrative and
corporate proceedings in connection with the transactions contemplated by this
Agreement shall be reasonably satisfactory in form and substance to the Company
and the Company shall have received copies of all documents, including, without
limitation, records of corporate or other proceedings, opinions of counsel,
consents, licenses, approvals, permits and orders which the Company may have
reasonably requested in connection therewith.
Section 8. Notices. Any notice or other communication in connection with
this Agreement shall be deemed to be delivered if in writing (or in the form of
a telecopy) addressed as provided below and if either (a) actually delivered or
telecopied to said address or (b) in the case of a letter, three Business Days
shall have elapsed after the same shall have been deposited in the United States
mail, postage prepaid and registered or certified:
If to the Company:
Breed Technologies, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
and
General Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
Siemens Aktiengesellschaft
Legal Department ZFR3
▇▇▇▇▇▇-▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Attention: Counsel for Automotive Systems Group
Telecopier: 011-49-9131-729001
With a copy to:
Siemens Corporation
Legal Department
1301 Avenue of the Americas
New York, New York
Attention: General Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9. Survival of Representations and Warranties. All agreements,
representations and warranties made herein or in any certificate or other
document required to be delivered to Purchaser pursuant hereto shall be deemed
to have been relied on by Purchaser, notwithstanding any investigation made by
Purchaser or on Purchaser's behalf, and shall survive (i) with respect to
representations and warranties contained herein, until the first to occur of (x)
the date which is 18 months after the Closing Date or (y) the date of delivery
of the Make-Whole Notice as defined in the Put Agreement, and (ii) with respect
to each other covenant and agreement contained herein until the last date on
which such covenant or agreement specifies it is to be performed, or, if no such
date is specified, indefinitely.
Section 10. Indemnification.
10.01 Indemnity by the Company. Subject to the provisions of this Section
10, the Company from and after the Closing Date shall indemnify and hold
Purchaser and its respective officers, directors, stockholders, managers,
agents, employees, representatives, affiliates, successors and assigns, harmless
from and against any and all damage, loss (including loss of value), cost,
obligation, claims, demands, assessments, settlements, judgments or liability
(whether based on contract, tort, product liability, strict liability or
otherwise), including Taxes, and all expenses (including interest, penalties and
attorneys' and accountants' fees and disbursements) (collectively referred to
herein as "Damages") incurred in litigation or otherwise, and any investigation
relating thereto, by any of the above-named persons, directly or indirectly,
arising from or in connection with: the inaccuracy, untruth or incompleteness,
as of the date made or deemed made, of any representation or warranty by the
Company in this Agreement or in any other agreement, certificate (including
without limitation the certificates delivered by the Company pursuant to Section
6), schedule, exhibit or writing required to be delivered to Purchaser pursuant
to this Agreement; provided, however, that if any such
representation or warranty is qualified in any respect by materiality or in
any similar respect, for purposes of this Section such qualification will be in
all respects ignored; and any breach of or failure to perform any covenant or
agreement made by the Company in this Agreement.
10.02 Purchaser's Indemnity. Subject to the provisions of this Section 10,
Purchaser, from and after the Closing Date, shall indemnify and hold the
Company, and its respective officers, directors, stockholders, agents,
employees, representatives, affiliates, successors and assigns, harmless from
and against any Damages incurred in litigation or otherwise, and any
investigation related thereto, by the Company, directly or indirectly, arising
from or in connection with: the inaccuracy, untruth or incompleteness, as of the
date made or deemed made, of any representation or warranty by Purchaser in this
Agreement or in any other agreement, certificate (including without limitation
the certificates delivered by Purchaser pursuant to Section 7), schedule,
exhibit or writing delivered to the Company pursuant to this Agreement;
provided, however, that if any such representation or warranty is qualified in
any respect by materiality or in any similar respect, for purposes of this
Section such qualification will be in all respects ignored; and any breach of or
failure to perform any covenant or agreement made by Purchaser in this
Agreement.
10.03 Procedure. No claim for indemnification shall be valid unless made
prior to the expiration (pursuant to Section 9) of the applicable
representation, warranty or covenant on which it is based. All claims for
indemnification by a party under this Section 10 (the party claiming
indemnification and the party against whom such claims are asserted being
hereinafter called the "Indemnified Party" and the "Indemnifying Party,"
respectively) shall be asserted and resolved as follows:
(a) In the event that any claim or demand for which an Indemnifying Party
would be liable to an Indemnified Party hereunder is asserted against or sought
to be collected from such Indemnified Party by a third party, such Indemnified
Party shall with reasonable promptness give notice (the "Claim Notice") to the
Indemnifying Party of such claim or demand, specifying the nature of and
specific basis for such claim or demand and the amount or the estimated amount
thereof to the extent then feasible (which estimate shall not be conclusive of
the final amount of such claim and demand); provided, however, that no failure
to give, or delay in giving, any such Claim Notice shall excuse or diminish the
Indemnifying Party's obligations to the Indemnified Party under this Section 10,
unless such failure or delay is prejudicial to Indemnifying Party. The
Indemnifying Party shall have ten days from the date the Claim Notice is given
in accordance with Section 8 of this Agreement (the "Notice Period") to notify
the Indemnified Party (i) whether or not it disputes the liability of the
Indemnifying Party to the Indemnified Party hereunder with respect to such claim
or demand, and (ii) whether or not it desires, at the cost and expense of the
Indemnifying Party, to defend the Indemnified Party against such claim or
demand; provided, however, that any Indemnified Party is hereby authorized, but
is not obligated, prior to and during the Notice Period, to file any motion,
answer or other pleading that it shall deem necessary or appropriate to protect
its interests or those of the Indemnifying Party. If the Indemnifying Party
notifies the Indemnified Party within the Notice Period that it desires to
defend the Indemnified Party against such claim or demand, the Indemnifying
Party shall, subject to the last sentence of this paragraph, have the right to
control the defense against the claim by all appropriate proceedings, and any
settlement negotiations. If the Indemnifying Party assumes the defense of a
proceeding, (i) no compromise or settlement of such claims may be effected by
the Indemnifying Party without the Indemnified Party's consent (such consent not
to be unreasonably withheld or delayed) unless the sole relief provided is
monetary damages that are paid in full by the Indemnifying Party; and (ii) the
Indemnified Party will have no liability with respect to any compromise or
settlement of such claims effected without its consent. If the Indemnified Party
desires to participate in, but not control, any such defense, it may do so at
its sole cost and expense. If the Indemnifying Party fails to respond to the
Indemnified Party within the Notice Period or otherwise elects not to defend the
Indemnified Party, or after electing to defend fails to commence or diligently
pursue such defense, then the Indemnified Party shall have the right, but not
the obligation, to undertake or continue such defense and to compromise or
settle (exercising reasonable business judgment) the claim or other matter, all
on behalf, for the account and at the risk of the Indemnifying Party.
Notwithstanding the foregoing, if the basis of the proceeding relates to a
condition of operations which existed or were conducted both prior to and after
the Closing Date, or if the Indemnified Party would otherwise be adversely
affected as a result of an adverse decision of such proceeding, then each party
shall have the same right to participate in
the proceeding at its own expense and at its own risk without either party
having the right of control.
(b) If requested by the Indemnifying Party, the Indemnified Party agrees,
at the Indemnifying Party's expense and upon presentation of adequate security
for the payment of such expenses, to cooperate with the Indemnifying Party and
its counsel in contesting any claim or demand which the Indemnifying Party
elects to contest, or, if appropriate and related to the claim in question, in
making any counterclaim against any person asserting the third- party claim or
demand, or any cross-complaint against any person. No claim as to which
indemnification is sought under this Agreement may be settled without the
consent of the Indemnifying Party.
(c) If any Indemnified Party should have a claim against the Indemnifying
Party hereunder which does not involve a claim or demand being asserted against
or sought to be collected from it by a third party, the Indemnified Party shall
send a Claim Notice with respect to such claim to the Indemnifying Party. If the
Indemnifying Party disputes such claim, such dispute shall be resolved by
litigation in an appropriate court of competent jurisdiction described in
Section 12.2. If the Indemnifying Party does not dispute such claim, then the
Indemnifying Party shall pay to the Indemnified Party the amount of such claim
within thirty days after receipt of such Claim Notice.
(d) In connection with the matters for which indemnification is sought
hereunder (i) the Company agrees to give Purchaser and its representatives
reasonable access during regular business hours and upon five days' prior
written notice to the Company, to the books, records and employees of the
Company to the extent such reasonably relate to the matters to which the Claim
Notice relates and (ii) Purchaser agrees to give the Company and its
representatives reasonable access, during regular business hours and upon five
days' prior written notice to Purchaser, to the books, records and employees of
Purchaser to the extent they reasonably relate to the matters to which the Claim
Notice relates.
10.04 Basket and Cap Provisions. Notwithstanding any other provision of
this Agreement:
(a) (i) no amount shall be payable by the Company to Purchaser as
indemnification pursuant to this Section 10 unless and until the aggregate
amount of all Damages suffered by Purchaser exceeds $1,500,000, in which event
the Company shall be liable only for the amount of such Damages in excess of
$1,500,000; and
(ii) the aggregate liability of the Company for indemnification under this
Section 10 shall not exceed $30,000,000.
(b) (i) no amount shall be payable by Purchaser to the Company as
indemnification pursuant to this Section 10 unless and until the aggregate
amount of all damages suffered by the Company exceeds $1,500,000, in which event
Purchaser shall be liable only for the amount of such Damages in excess of
$1,500,000; and
(ii) the aggregate liability of Purchaser for indemnification under this
Section 10 shall not exceed $30,000,000.
(c) Except for claims based on fraud, the rights of Purchaser and the
Company under this Section 10 shall be the exclusive remedy with respect to
claims resulting from or relating to any misrepresentation, breach of warranty
or a failure to perform any covenant or agreement of the other party contained
in this Agreement or in any certificate or other document (other than a Related
Agreement) delivered to the other party pursuant hereto.
Section 11. Termination.
11.01 Termination. This Agreement may be terminated at any time prior to
the Closing:
(a) By mutual agreement of the Company and Purchaser;
(b) By either Purchaser or the Company if the Closing has not taken place
on or before November 7, 1997 and the failure to consummate the Closing is not
caused by a breach of this Agreement by a terminating party;
(c) By the Company or Purchaser, as the case may be, (i) if any of the
conditions precedent to the performance of the obligations of the party giving
notice of termination shall not have been fulfilled and cannot be fulfilled on
or prior to the Closing and shall not have been waived in writing by such party,
or (ii) if a material default shall be made by the other party in the due and
timely performance of any of the covenants and agreements herein contained that
cannot be cured on or prior to the Closing and shall not have been waived in
writing by the non-defaulting parties; provided, however, that a party may not
terminate this Agreement pursuant to this paragraph (e) on the basis of an act,
omission, occurrence, event or state of affairs that has been disclosed in
writing to such party unless such party exercises such right of termination
within 30 days of such disclosure; and
(d) At the option of the Company or Purchaser, if any action or proceeding
shall have been instituted and remain pending before any Governmental or
Regulatory Authorities to restrain or prohibit the consummation of the
transactions contemplated by this Agreement, or if the Federal Trade Commission,
the Department of Justice or any other Governmental or Regulatory Authority,
including without limitation the European Community or the Federal Republic of
Germany, or any political subdivision or agency thereof, shall have taken any
action to restrain or otherwise enjoin the consummation of the transactions
contemplated hereby, provided that neither the Company nor Purchaser shall have
the option to terminate this Agreement as provided herein after any such action
or notice by any federal, state or local government or governmental agency or
other person shall be withdrawn or after any action by the Federal Trade
Commission, the Department of Justice or any other governmental action shall be
settled.
11.02 No Liability. In the event of a termination of this Agreement
pursuant to paragraph 11.01(a) or paragraph 11.01(d), there shall be no
liability on the parties hereto or any of their respective directors, officers,
shareholders, members, managers, or affiliates as a result of such termination
of this Agreement. A termination under paragraph 11.01(b) or 11.01(c) shall not
prejudice any claim for damages which any party may have hereunder or in law or
in equity as a consequence of any breach by any other party of this Agreement.
11.03 Notice. Any party hereto may exercise its right of termination of
this Agreement only by delivering written notice to that effect to the other
parties hereto, provided that such notice is received by the latter party prior
to the Closing.
Section 12. Miscellaneous.
12.1 Amendment or Waiver. Neither this Agreement nor any terms hereof may
be changed, waived, discharged or terminated unless such change, waiver,
discharge or termination is in writing signed by the Company and Purchaser.
12.2 Consent to Jurisdiction. Subject to the provisions of Section 12.3,
each of the Company and Purchaser hereby agrees to submit to the exclusive
jurisdiction of the U.S. Federal courts in the Southern District of the State of
New York, and consents that service of process with respect to all such courts
may be made by registered mail to such Person at the address of such Person set
forth in Section 8 with respect to any disputes arising out of this Agreement.
12.3 Release of Siemens Aktiengesellschaft. If Purchaser assigns its rights
and obligations under this Agreement pursuant to Section 12.5, so long as
Siemens Corporation is subject to the jurisdiction of the Federal, state or
local courts of the United States with respect to claims or disputes relating to
this Agreement, the Related Agreements or the transactions contemplated hereby
or thereby, the Company for itself and its Affiliates hereby irrevocably and
unconditionally waive and release all rights and claims that it or any of them
may thereafter have that Purchaser is or has been at any time subject to the
jurisdiction of the Federal, state or local courts of the United States arising
out of claims or disputes relating to this Agreement, the Related Agreements or
the transactions contemplated hereby or thereby.
12.4 Waiver of Jury Trial; Trial Costs. Each of the Company, for itself and
its Affiliates, and Purchaser hereby irrevocably waives all right to trial by
jury in any action, proceeding or counterclaim (whether based on contract, tort
or otherwise) arising out of or relating to the actions of the Company and
Purchaser or its Affiliates pursuant to this Agreement in the negotiation,
administration, performance or enforcement thereof. The party in whose favor a
final judgment is rendered shall be entitled to reasonable costs and reasonable
attorneys' fees.
12.5 Assignment. This Agreement is not assignable except by operation of
law or as each of the parties hereto may agree in writing and any attempted
assignment in violation of this provision shall be null and void.
Notwithstanding the foregoing, Purchaser may assign this Agreement to any of its
wholly-owned subsidiaries or Affiliates who have the economic resources to
fulfill Purchaser's obligations under this Agreement agree in writing to be
bound by the terms hereof.
12.6 Entire Agreement. This Agreement (including the Exhibits and
Schedules) sets forth the entire understanding of the parties hereto with
respect to the transactions contemplated hereby and supersede any prior written
or oral understandings with respect thereto including without limitation any
letters of intent. The invalidity or unenforceability of any terms or provisions
hereof shall not affect the validity or enforceability of any other term or
provision hereof. The headings in this Agreement are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof. This
Agreement may be executed in any number of counterparts which together shall
constitute one instrument and shall be governed by and construed in accordance
with laws of the State of Delaware without giving regard to the principles of
conflicts of law, and shall bind and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
12.7 Expenses. Except as otherwise expressly provided in this Agreement,
the Company agrees to pay, without right of reimbursement from Purchaser, the
costs incurred by the Company, and Purchaser agrees to pay, without right of
reimbursement from the Company, the costs incurred by Purchaser, incident to the
preparation and execution of this Agreement and the Related Agreements and
performance of their respective obligations hereunder, whether or not the
transactions contemplated by this Agreement and the Related Agreements shall be
consummated, including, without limitation, the fees and disbursements or legal
counsel, accountants and consultants employed by the respective parties in
connection with the transactions contemplated by this Agreement and the Related
Agreements.
12.8 Public Announcements. At all times at or before the Closing, except as
required by law or on the advice of counsel, the Company and Purchaser will not
issue or make any release to the press or other public disclosure with respect
to this Agreement or the transactions contemplated hereby without the consent of
the other party, will not make any statement to any customer or supplier of the
Company with respect to this Agreement or the transactions contemplated hereby.
The Company and Purchaser will also obtain the other party's prior approval of
any press release to be issued immediately following the Closing announcing the
consummation of the transactions contemplated by this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
BREED TECHNOLOGIES, INC.
By:
Name:
Title:
19
SIEMENS AKTIENGESELLSCHAFT
By:
Name:
Title:
By:
Name:
Title: