Exhibit 10.1.1
MAKE-WHOLE AGREEMENT
AGREEMENT, dated as of October 30, 1997 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 (together
with its permitted assigns, the "Holder").
WHEREAS, at a closing held on the date of this Agreement, the Company has
issued and sold to the Holder 4,883,227 of the Company's Series A Preference
Shares (the "Shares"), each of which (i) represents one-one thousandth of a
share of the Company's 1997 Series A Convertible Non-Voting Preferred Stock, par
value $.001 per share and (ii) is convertible into the Company's common stock,
par value $.01 per share (the "Common Stock") at an initial rate of one share of
Common Stock per Series A Preference Share, subject to adjustment (the Shares,
any additional Series A Preference Shares which in the future are issued and
paid as dividends on the Shares and the securities into which they may be
converted in the future are sometimes hereinafter collectively referred to as
the "Securities"); and
WHEREAS, the Company and the Holder have entered into a memorandum of
understanding, dated the same date as this Agreement, providing for the
formation of a joint venture (the "Joint Venture"); and
WHEREAS, in order to induce the Holder to purchase the Shares, the Company
has agreed to grant to the Holder the rights set forth in this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
Section 1. Make-Whole Right.
(a) At any time after the occurrence of a Triggering Event (as hereinafter
defined), the Holder shall have the right (the "Make-Whole Right"), exercisable
within 30 days after the Triggering Event, to require the Company to take the
action specified in Section 1(b). The Make-Whole Right shall be exercisable by
delivery of a written notice to the Company (the "First Make-Whole Notice").
(b) Upon the exercise of the Make-Whole Right, the Company may elect, at
the Company's sole option, either (i) to purchase all (but not less than all) of
the Securities for the Make-Whole Price (as hereinafter defined) at a closing
(the "Purchase Closing") to be held at a time and place specified by the Holder
in the First Make-Whole Notice or (ii) to comply with any Second Make-Whole
Notice that may be delivered as described in Section 2(a). The Company shall
advise the Holder of its election by delivery of a notice (the "Company Election
Notice") to the Holder not later than the last to occur of (x) 10 days after
delivery of the First Make-Whole Notice and (y) June 1, 1998.
(c) If the Company makes the election described in Section 1(b)(i), then,
at the Purchase Closing (and subject to Section 2), the Company shall purchase
the Securities and the Holder shall convey good and valid title to the
Securities to the Company, free and clear of all liens, security interests and
similar encumbrances (collectively, "Liens") by delivering to the Company
against payment therefor certificates for the Securities, duly endorsed in blank
or with stock powers attached. (d) For purposes of this Agreement:
(i) "Triggering Event" means any of the following: (A) the Company and the
Holder shall have abandoned their negotiations with respect to the Joint
Venture; (B) the definitive documentation with respect to the Joint
Venture shall not have been executed and delivered by December 15, 1997;
(C) the parties shall have been unable after diligent and good faith efforts 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 or conversion of the
Shares into Common Stock without the imposition of materially adverse
conditions; or (D) the formation of the Joint Venture shall not have been
completed, in accordance with the definitive agreements entered into by the
Company and the Holder, by June 30, 1998.
(ii) "Make-Whole Price" means $115,000,000 plus $15,753 multiplied by the
number of days elapsed between December 15, 1997 and the first to occur of (i)
payment in full in cash by the Company of the Make- Whole Price; (ii) delivery
by the Company of the Make-Whole Shares; and (iii) the receipt by Siemens of
sale proceeds as described in Section 2(c).
Section 2. Make-Whole Provision.
(a) If (i) the Company makes the election described in Section 1(b)(ii), or
(ii) the Company fails to furnish the Company Election Notice within the time
specified in Section 1(b), or (iii) the Company shall have failed by the later
of (x) the date that is 10 days after delivery of the First Make-Whole Notice
and (y) June 1, 1998 to establish to the satisfaction of the Holder that the
Company has access to the funds required to purchase the Securities when and as
required by Section 1, and that such purchase will not be prohibited under the
terms of the Company's material contractual obligations, the Holder may elect in
its sole discretion to deliver a notice (a "Second Make Whole Notice") to the
Company to the effect that (x) the Holder has entered into a bona fide
arm's-length agreement with a financial institution to sell the Securities and
the Make-Whole Shares to the institution at a price (the "Sale Price") not less
than (1) if the Securities are sold at a time when a registration statement is
in effect under the Securities Act with respect to those shares and the
Make-Whole Shares (as hereinafter defined), 90% of the last reported sale price
per share of the Common Stock on the New York Stock Exchange on the last trading
day preceding at the date of the Make-Whole Notice or (2) otherwise, 75% of such
last reported sale price; and (y) the number (the "Make-Whole Number") of shares
of Common Stock that will be required to be sold at the Sale Price in order for
the Holder to realize net proceeds from such sale equal to the Make-Whole Price.
(b) Not later than the first to occur of (i) three New York Stock Exchange
trading days after the date of the Second Make-Whole Notice and (ii) July 1,
1998, the Company shall convey to the Holder good and valid title, free and
clear of all Liens, to a number of shares of Common Stock equal to the
Make-Whole Number ( the "Make-Whole Shares").
(c) Nothing in this Agreement shall restrict the right of the Holder to
sell or otherwise dispose of the Securities at any time; subject, however, to
the provision of Section 3(c). If after the delivery of a First Make-Whole
Notice when the Holder disposes of the Securities it realizes net proceeds in
excess of the Make-Whole Price, it will promptly remit the amount of such excess
to the Company.
(d) Siemens will not issue a press release or make any other similar public
announcement regarding any intention to sell or otherwise dispose of any
Securities, except to the extent required by law or on the advice of counsel.
Section 3. Amendment and Modification; Termination.
(a) This Agreement may be amended or modified, or any provision hereof may
be waived, provided that such amendment, modification or waiver is set forth in
writing executed by the Company and the Holder. No course of dealing or course
of conduct between or among any persons having any interest in this Agreement
will be deemed effective to modify, amend or waive any part of this Agreement or
any rights or obligations of any person under or by reason of this Agreement.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
(c) This Agreement shall terminate (i) if at any time prior to the delivery
of a Second Make-Whole Notice the Holder shall sell or otherwise transfer any of
the Securities to any person other than a direct or indirect subsidiary of the
Holder or (ii) if the Holder shall not have delivered a Second Make-Whole Notice
by the later to occur of (x) July 31, 1998 or (y) 45 days after a Triggering
Event.
Section 4. Successors and Assigns; Entire Agreement. Neither party may
assign its rights or delegate its obligations under this Agreement, except that
Siemens Aktiengesellschaft may transfer the Securities, and in connection
therewith assign its rights under this Agreement, to any direct or indirect
subsidiary. Subject to the foregoing, this Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns. This Agreement and the other agreements
referred to herein together set forth the entire agreement and understanding
between the parties as to the subject matter hereof and merges and supersedes
all prior discussions, agreements and understandings of any and every nature
among them.
Section 5. Separability. In the event that any provision of this Agreement
or the application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected.
Section 6. Notices.
(a) All notices provided for or permitted hereunder shall be made in
writing by hand-delivery, telecopier or air courier overnight delivery service
to the other at the following addresses (or at such other address as shall be
specified in a notice given by any party to the others in accordance with this
Section):
If to the Company to:
Breed Technologies, Inc.
0000 Xxx Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxxx, Xx.
and
General Counsel
Telecopier: (000) 000-0000
If to the Holder:
Siemens Aktiengesellschaft
Legal Department ZFR3
Xxxxxx-xxx-Xxxxxxx Xxxxxxx
X-00000 Xxxxxxxx
Xxxxxxx
Telecopier: 011-49-9317-29001
Attention: Counsel for Automotive Systems Group
With a copy to:
Siemens Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
(b) All such notices shall be deemed to have been duly given: when
delivered by hand, if personally delivered; upon receipt, if received prior to
5:00 p.m. local time on a Business Day (and otherwise on the next succeeding
Business Day), if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Section 7. Governing Law; Jurisdiction; Waiver of Jury Trial. (a)The
validity, performance, construction and effect of this Agreement is governed by
and shall be construed in accordance with the internal laws of the State of
Delaware, without giving effect to principles of conflicts of law.
(b) Subject to the provisions of Section 12, each of the Company and the
Holder each 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 6 with respect to any disputes arising out of this Agreement.
(c) Each of the Company, for itself and its affiliates, and the Holder
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 the Holder 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.
Section 8. Headings and Counterparts. The headings in this Agreement are
for convenience of reference only and shall not constitute a part of this
Agreement nor shall they affect its meaning, construction or effect. This
Agreement may be executed in two or more counterparts and by the parties hereto
in separate counterparts, each of which when so executed shall be deemed to be
an original, and all of which taken together shall constitute one and the same
instrument.
Section 9. Further Assurances. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby. Section 10. Remedies. In the event of a breach by any party to this
Agreement of its obligations under this Agreement, any party injured by such
breach, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The parties agree that the provisions of this
Agreement shall be specifically enforceable, it being agreed by the parties that
the remedy at law, including monetary damages, for breach of such provision will
be inadequate compensation for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived. In the
event of any breach of this Agreement by any party hereto, each such breaching
party agrees to indemnify the persons to whom a representation and warranty is
given or an obligation is owed under this Agreement for all damages, costs and
expenses (including reasonable attorneys' fees) actually incurred as a result of
any such breach.
Section 11. Pronouns. Whenever the context may require, any pronouns used
herein shall be deemed also to include the corresponding single, plural, neuter,
masculine or feminine forms.
Section 12. Consent to Jurisdiction. Subject to the provisions of Section
7, each of the Company and the Holder 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 6 with respect to
any disputes arising out of this Agreement.
Section 13. Release of Siemens Aktiengesellschaft. If the Holder assigns
its rights and obligations under this Agreement pursuant to Section 4, so long
as Siemens Corporation is subject to the jurisdiction of the Federal, state or
local courts of the United States relating to claims arising out of, or disputes
relating to, this Agreement or the transaction contemplated hereby, the Company
and its Affiliates hereby irrevocably and unconditionally waive and release all
rights and claims that it or any of them may thereafter have that Holder is or
has been at any time subject to the jurisdiction of the Federal, state or local
courts of the United States relating to claims arising out of, or disputes
relating to, this Agreement or the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
BREED TECHNOLOGIES, INC.
By:
Name:
Title:
SIEMENS AKTIENGESELLSCHAFT
By:
Name:
Title:
By:
Name:
Title:
