Exhibit 2.2
AMENDMENT NUMBER 1
TO
STOCK PURCHASE AGREEMENT
This Amendment Number 1 to the Stock Purchase Agreement (this
"Amendment") is made and entered this 29th day of December, 1995 by and
between Continental Electronics Corporation, a Nevada corporation located
at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Purchaser"), and
Daimler-Benz Aerospace AG, a German stock corporation located at ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and having commercial registration number HRB98.454
("Seller").
WHEREAS, the Purchaser and the Seller have previously entered
into a Stock Purchase Agreement dated as of September 26, 1995 (the "Stock
Purchase Agreement") relating to the purchase by the Purchaser of all the
outstanding capital of Telefunken Sendertechnik GmbH, a German limited
liability company located at ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and having commercial
registration number HRB31290 ("TFS");
WHEREAS, the Purchaser and the Seller desire to amend the Stock
Purchase Agreement as set forth below;
NOW, THEREFORE, for the mutual covenants and promises set forth
below and other good and valuable consideration, the suffiency of which is
hereby acknowledged, the Seller and the Purchaser hereby agree as follows:
1. Section 1.1 of the Stock Purchase Agreement is hereby
amended in its entirety to read as follows:
1.1. Purchase and Sale of Stock. Subject to and upon the terms
and conditions hereof, Seller sells and Purchaser purchases two shares of
capital stock of TFS, one in the nominal amount of 9,950,000 Deutsche ▇▇▇▇
("DM") and one in the nominal amount of 50,000 DM (collectively, the
"Shares") effective as of 12:00 p.m./00:00 a.m. (Berlin time) on December
31, 1995/January 1, 1996 (the "Effective Closing Time"). Subject to the
fulfillment of the condition precedent set forth in the following sentence,
Seller hereby transfers, and Purchaser hereby accepts the transfer of, the
Shares effective as of the Effective Closing Time. The sale and transfer of
the Shares with effect as of the Effective Closing Time is subject to the
condition precedent that on or prior to December 31, 1995 (the "Closing
Date") the German law firm of PUNDER, VOLHARD, ▇▇▇▇▇ & AXSTER ("PVW&A")
delivers a written notice to Purchaser and Seller that (a) PVW&A have
received written confirmation from Seller that all conditions precedent to
the obligations of Seller have either been fulfilled or waived, (b) PVW&A
have received written confirmation from Purchaser that all conditions
precedent to the obligations of Purchaser have either been fulfilled or
waived,(c) PVW&A have received from Purchaser in a separate trust account
established for the
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benefit of Purchaser (the "Purchaser Escrow Account") an amount of
10,000,000 DM (the "Escrow Cash Amount"), (d) PVW&A have in their
possession a signed written guarantee of Tech-Sym Corporation, a Nevada
corporation ("Tech-Sym"), in the form set forth in Schedule 1.1 attached
hereto (the "Tech-Sym Guarantee"), (e) PVW&A have received written
confirmation from TFS that TFS has received payment in accordance with
Section 2.3 hereof, and (f) PVW&A have received irrevocable orders in
writing from Purchaser to pay the Escrow Cash Amount from the Purchaser
Escrow Account to an account designated by Seller and to deliver the
Tech-Sym Guarantee to Seller upon receipt of written confirmation from TFS
that TFS has received payment of the Adjustment Amount (as defined in
Section 2.2).
2. Section 2.1 of the Stock Purchase Agreement is hereby amended
in its entirety to read as follows:
2.1. Purchase Price. In consideration of the transfer of the
Shares and the other agreements, covenants and undertakings of Seller
hereunder, Purchaser shall pay to Seller a purchase price (the "Purchase
Price") equal to 13,200,000 DM (Thirteen Million Two Hundred Thousand
Deutsche Marks), subject to adjustment as provided in Section 2.2 hereof.
In the event that the Shares are transferred to Purchaser pursuant to
Section 1.1 hereof as of the Effective Closing Time, Purchaser shall be
obligated to pay the remaining 3,200,000 DM (Three Million Two Hundred
Thousand Deutsche Marks) of the Purchase Price (the "Remaining Purchase
Price Amount") no later than January 31, 1997, and Purchaser shall be
obligated to pay interest on the unpaid average principal balance thereof
for each complete calendar quarter until the entire principal amount is
paid at the Frankfurt Interbank Offer Rate, as adjusted from time to time,
plus one percent (1%), with each interest payment due and payable on the
fifteenth (15th) day following the end of each such calendar quarter;
provided that Purchaser shall be entitled to offset any amount otherwise
due and payable pursuant to this sentence (i) in accordance with the
provisions of Section 2.2(f) hereof or (ii) with respect to any Loss (as
defined in the Stock Purchase Agreement) for which Purchaser is entitled to
payment or reimbursement pursuant to Section 7.1 hereof, provided that,
with respect to this clause (ii), such offset shall be made only to the
extent of the amount of Loss that (A) has been agreed to in writing by
Purchaser and Seller or (B) has been determined by arbitration pursuant to
the provisions of Section 7.3 hereof.
3. Subsections (a) and (b) of Section 2.2 of the Stock Purchase
Agreement is hereby amended in its entirety to read as follows:
2.2 Closing Balance Sheet. (a) On or prior to December 22, 1995,
Seller shall cause TFS to provide Purchaser a balance sheet that reflects
Seller's estimate of the assets, liabilities and stockholder's equity of
TFS as of the Effective Closing Time (the "Estimated Closing Balance
Sheet"). Seller shall cause the Estimated Closing Balance Sheet to
specifically reflect (i) a provision equal to Seller's estimate of the full
amount of all TFS Restructuring Costs (as defined in Section 3.1.13(d)
hereof), (ii) a provision equal to Seller's estimate of the full amount of
all reasonably anticipated employee post-retirement costs, including
pension liabilities, for which TFS may be liable or responsible to present
or former employees of TFS or its predecessors (excluding,
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for purposes of this clause (ii), post-retirement costs included in the
provision specified in clause (i) above), specifying the amount of the
provision attributable to post-retirement costs related to persons whose
employment with TFS is terminated prior to the Effective Closing Time,
(iii) a provision equal to Seller's estimate of the full amount of all
liabilities required by German Generally Accepted Accounting Principles to
be reflected in the Estimated Closing Balance Sheet, including liability
for taxes relating to activities or periods prior to the Effective Closing
Time, (iv) the receipt of the AEG License (as defined in Section 5.1.10
hereof) and the payment to AEG Aktiengesellschaft of 1,500,000 DM therefor,
(v) a reduction in the book value of the equipment listed on Schedule
4.4(a) attached hereto in the amount of 120,000 DM, (vi) stockholder's
equity of not less than 20,000,000 DM and (vii) Seller's estimate of the
amount of the financial intercompany account receivable payable by Seller
to TFS as of the Effective Closing Time (as adjusted pursuant to the
Corporate Agreement (as defined in Section 3.1.20 hereof) to take into
account the matters referred to in clauses (i) through (vi) above and any
other matters required to be taken into account pursuant to the Corporate
Agreement with respect to the year ended December 31, 1995). Except as
provided in the preceding sentence, the Estimated Closing Balance Sheet
shall be prepared by Seller on a basis consistent with the Audited
Financial Statements (as that term is defined in Section 3.1.4), in each
case including consistency with the accounting principles and methodology
used in preparing the Audited Financial Statements. (b) Within thirty (30)
days following the Effective Closing Time Purchaser shall cause TFS to
prepare a balance sheet reflecting the assets, liabilities and
stockholder's equity of TFS as of the Effective Closing Time (the "Closing
Balance Sheet"). The Closing Balance Sheet shall specifically reflect (i) a
provision equal to the full amount of all TFS Restructuring Costs, (ii) a
reserve equal to the full amount of all reasonable anticipated
post-retirement costs, including pension liabilities, for which TFS may be
liable or responsible to present or former employees of TFS or its
predecessors (excluding, for purposes of this clause (ii), post-retirement
costs included in the provision specified in clause (i) above), specifying
the amount of the provision attributable to post-retirement costs related
to persons whose employment with TFS terminated prior to the Effective
Closing Time, (iii) a provision equal to the full amount of all liabilities
required by German Generally Accepted Accounting Principles to be reflected
in the Closing Balance Sheet, including liability for taxes relating to
activities or periods prior to the Effective Closing Time, (iv) the actual
inventory of TFS as of the Effective Closing Time pursuant to the taking of
a physical inventory immediately after the Effective Closing Time, (v) the
receipt of the AEG License (as defined in Section 5.1.10 hereof) and the
payment to AEG Aktiengesellschaft of 1,500,000 DM therefor, (vi) a
reduction of the book value of the equipment listed on Schedule 4.4(a)
attached hereto in the amount of 120,000 DM, (vii) stockholder's equity of
not less than 20,000,000 DM and (viii) the amount of the financial
intercompany account receivable payable by Seller as of the Effective
Closing Time (as adjusted to reflect any payment made pursuant to Section
2.3 hereof and as adjusted pursuant to the Corporate Agreement to take into
account the matters referred to in clauses (i) through (vii) above). Except
as provided in the preceding sentence, the Closing Balance Sheet shall be
prepared by TFS on a basis consistent with the Audited Financial
Statements, in each case including consistency with the accounting
principles and methodology used in preparing the Audited Financial
Statements. On or before January 31, 1996, Purchaser shall cause TFS to
deliver a copy of the Closing Balance Sheet
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to Seller, and Seller shall be entitled to discuss the Closing Balance
Sheet with TFS until the time of the delivery of the Audited Closing
Balance Sheet (as defined below). On or before February 15, 1996, Purchaser
shall cause TFS to cause KPMG Deutsche Treuhand-Gessellschaft (the "TFS
Auditors") to audit the Closing Balance Sheet (the audited Closing Balance
Sheet referred to herein as the "Audited Closing Balance Sheet"), with the
costs thereof to be paid by TFS. Seller and Purchaser shall cooperate with
the TFS Auditors to enable such firm to complete its audit within such time
period. Purchaser shall cause TFS to deliver the Audited Closing Balance
Sheet to Seller and Purchaser on or before February 15, 1996.
4. Subsection (d) of Section 3.1.13 of the Stock Purchase
Agreement is hereby amended in its entirety to read as follows: (d) Set
forth as Schedule 3.1.13(d) hereto is (i) is a true and correct copy of the
social plan, dated as of November 21, 1995, adopted by the decision of the
Einigungsstelle committee with respect to the restructuring of the work
force of TFS (the "TFS Restructuring Plan") and (ii) a true and correct
copy of the supplemental restructuring agreement, dated as of November 21,
1995, between the Geschaeftsfuehrung (management) and the Betriebsrat (work
council) of TFS (the "Supplemental Restructuring Agreement"). On or before
December 22, 1995, Seller shall cause TFS to provide Purchaser a
preliminary written estimate of the aggregate amount of all costs and
expenses to be paid or incurred after December 31, 1995 with respect to the
restructuring and employee reductions contemplated by the TFS Restructuring
Plan and the Supplemental Restructuring Agreement (including all wages,
salaries, termination expenses, severance expenses, pension expenses,
expenses of health and benefit plans, legal expenses related to legal
proceedings, payments for unemployment benefits and replenishment fees,
other post-retirement or post-termination costs and any other costs to be
incurred on or after the respective dates of notice of termination of
employees to be terminated in connection therewith, whether or not such
costs related directly or indirectly from such terminations, including,
without limitation, all costs, payments and other expenses paid or incurred
by TFS pursuant to (i) the TFS Restructuring Plan (or any successor social
plan or restructuring plan to which TFS becomes subject following any court
decision that renders ineffective or inoperative the TFS Restructuring
Plan) or (ii) the Supplemental Restructuring Agreement (collectively, the
"TFS Restructuring Costs").
5. Section 4.4 of the Stock Purchase Agreement is hereby amended
in its entirety to read as follows:
4.4. Maintain the Business. Between the date of this Agreement
and the Effective Closing Time, Seller shall use reasonable efforts to
cause TFS to (i) maintain the Business intact and to preserve its goodwill
with its customers, suppliers, employees and others having business
relations with it and (ii) operate the Business in a prudent, businesslike
manner consistent with past practices. Between the date of this Agreement
and the Effective Closing ▇▇▇▇ ▇▇▇▇▇▇ shall cause TFS not to, without the
prior written approval of Purchaser, (a) transfer, sell or lease, or enter
into any agreement to transfer, sell or lease, any of TFS's assets, other
than the sale of Inventory in the
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ordinary course of
business and other than the transfer of assets specifically identified in
Schedule
4.4(a) attached hereto to AQB Arbeitnehmerqualifizierungsgesellschaft
Berlin mbH (the "Qualification Company") pursuant to a transfer document in
substantially the form attached hereto as Schedule 4.4(b); (b) incur any
indebtedness for borrowed money; (c) enter into any lease for any property
for which TFS would become obligated for payments in excess of 10,000 DM
over the term of such lease; (d) make any increases in wages, salaries,
employee benefits or other compensation payable or to become payable to any
employee of TFS or pay or commit to pay any bonuses, except in accordance
with any employment agreement or collective bargaining agreement existing
on the date of this Agreement, or change any provision of any existing
Employee Plan; (e) make or enter into any written employment contract or
any Employee Plan; or (f) enter into any amendment to any Lease or Contract
required to be listed on Schedule 3.1.6(b) or 3.1.12(a) hereof. Between the
date of this Agreement and the Effective Closing Time, Seller shall (i)
notify Purchaser of any material loss of, damage to or disposition of any
of the assets of TFS (other than the sale of Inventory in the ordinary
course of business); (ii) promptly after obtaining knowledge thereof, give
notice to Purchaser of any material claim or litigation, threatened or
instituted, against TFS; (iii) take all actions and make all filings which
are reasonably necessary to lawfully transfer the Shares to Purchaser at
the Effective Closing Time as provided in this Agreement except for routine
filings in connection with approvals or consents of third parties and
Governmental Agencies customarily made or obtained subsequent to transfer
of title; (iv) to the extent within the control of Seller, Seller will
refrain from doing any act or omitting to do any act which would cause any
of the representations or warranties of Seller contained in this Agreement
not to be true and correct in any material respect on the Effective Closing
Time; (v) cause TFS to comply in all material respects with all Laws
applicable to the Business and the assets of TFS; (vi) cause TFS to
maintain its books of accounts and records in the usual, regular and
ordinary manner and consistent with past practice; and (vii) not, without
the consent of Purchaser, permit TFS to enter into any material agreement,
contract, commitment or undertaking applicable to the Business or the
assets of TFS, except in the ordinary course of business and except for a
sublease agreement in substantially the form attached hereto as Schedule
4.4(c) to be entered into between TFS, the Qualification Company and Emotec
AG Elektrik Mechanik Oberflaechentechnik (the "Working Company") providing
for the sublease of the space identified in Schedule 4.4(d) attached hereto
in the building leased by TFS pursuant to the AEG Lease Agreement.
6. Section 4.7 of the Stock Purchase Agreementis hereby amended
in its entirety to read as follows:
4.7 Post-Retirement Benefits. (a) Effective as of December 31,
1996 or such earlier time as TFS completes the restructuring of its
employee work force as contemplated by the TFS Restructuring Plan and the
Supplemental Restructuring Agreement, Seller shall assume the obligations
of TFS for pension, health and other post-retirement benefits, excluding
severance pay and other costs and expenses directly resulting from the TFS
Restructuring Plan or the Supplemental Restructuring Agreement other than
pension, health and other post-retirement benefits, with respect to all
present and former employees of TFS other than those persons whose
employment with TFS will continue after December 31, 1996 or such earlier
date as TFS completes such restructuring of its employee work force, as the
case may be (such obligations referred to herein as the "Former
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Employee Pension Liabilities" or "FEPL") pursuant to a corporate split-off
arrangement permitted by German law Section 123 et. sec. UmwG (or any
similar or successor provision that would permit such a corporate
split-off) that provides for the continuation of TFS as the same legal
entity but without (i) the continuation, as a liability of TFS, of the
FEPL, which FEPL will be transferred to and assumed by Seller (or an
affiliate of Seller as to which Seller has unconditionally and irrevocably
guaranteed the payment of its obligations), and (ii) the continuation, as
an asset of TFS, of the cash amount corresponding to the FEPL shown as a
liability of TFS on the Final Closing Balance Sheet, which amount Purchaser
will cause to be transferred to Seller (or, if an affiliate of Seller will
assume the FEPL, to such entity), in each case as set forth in more detail
in one or more written agreements or resolutions to be executed and adopted
by Seller and TFS in accordance with the provisions of German law Section
123 et. sec. UmwG (or any similar or successor provision that would permit
such a corporate split-off) and, in connection therewith, Seller shall
indemnify TFS from any and all liability related to the FEPL. If Purchaser
and Seller determine by written agreement between them on or before
December 31, 1996 that German law 123 et. sec. UmwG (or any similar or
successor provision that would permit such a corporate split-off) does not
permit the foregoing transactions, then, without any further action on the
part of TFS or Purchaser, Purchaser shall not be obligated to transfer such
cash amount to Seller (or any of its affiliates) and Seller shall not be
obligated to assume the FEPL, provided that, in such event, as of the last
day of each fiscal year of TFS thereafter, commencing December 31, 1996,
the amount of the FEPL will be redetermined by TFS as of each such date
utilizing the same methodology with respect to actuarial assumptions and
the same accounting principles utilized in preparing the Final Closing
Balance Sheet, and to the extent that the redetermined amount of the FEPL
as of such date exceeds the actual amount of the provision for such
liability as of such date, Seller shall make a payment to TFS, by wire
transfer of immediately available funds to an account designated by TFS, of
such excess amount within 60 days after such date.
7. Section 4.10 of the Stock Purchase Agreement is hereby
amended in its entirety to read as follows:
4.10 TFS Restructuring Costs. In the event that the actual
TFS Restructuring Costs (excluding, for purposes of this sentence, any
payment made by TFS, without the prior written approval of Seller, to an
employee of TFS as an inducement for such person to terminate employment
with TFS that is in excess of the amount of the severance payment specified
with respect to such employee in the TFS Restructuring Plan) exceeds the
provision for the TFS Restructuring Costs included in the Final Closing
Balance Sheet, then the Seller shall promptly pay to TFS the difference
between the actual TFS Restructuring Costs and such provision for the TFS
Restructuring Costs included in the Final Closing Balance Sheet. In the
event that (a) the difference obtained by (i) subtracting the amount of the
provision for the remaining TFS Restructuring Costs reflected on the
balance sheet of TFS as of December 31, 1996, as audited by an
internationally recognized accounting firm, from (ii) the amount of the
provision for the TFS Restructuring Costs reflected on the Final Closing
Balance Sheet exceeds (b) the actual amount of the TFS Restructuring Costs
for the year ended December 31, 1996, then Purchaser shall cause TFS to
make a payment to Seller on or before March 31, 1997 in an amount equal to
fifty percent (50%) of such difference.
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8. Section
5.1.7. of the Stock Purchase Agreement is hereby amended in its entirety to
read as follows:
5.1.7. Receipt of Payment of Receivables from Related
Parties. TFS shall have received from Seller, or any of its subsidiaries or
affiliates, in immediately available funds, an amount equal to the
aggregate amount of the financial intercompany account receivable reflected
on the Estimated Closing Balance Sheet as provided in Section 2.3 hereof.
9. Section 5.1.8. of the Stock Purchase Agreement is hereby amended
in its entirety to read as follows:
5.1.8. TFS Restructuring Plan. Purchaser shall have consented
in writing to the TFS Restructuring Plan and the Supplemental
Restructuring Agreement.
10. Subsection (a) of Section 7.1 of the Stock Purchase Agreement
is hereby amended in its entirety to read as follows:
(a) Subject to the conditions and limitations hereinafter
set forth, including the limitations set forth in Section 8.13 hereof, from
and after the Effective Closing ▇▇▇▇ ▇▇▇▇▇▇ shall indemnify and hold
harmless Purchaser and TFS from and against any and all loss, cost, damage,
liability or expense (including court costs and reasonable attorneys' and
other experts' fees and expenses) (collectively, "Loss") to Purchaser or
TFS, as the case may be, whatsoever resulting from or arising out of (i)
any breach of any representation, warranty, covenant or agreement of Seller
contained in Section 3.1 of this Agreement, (ii) the failure of Seller to
perform any of its obligations contained in Section 4.4, Section 4.6,
Section 4.7, Section 4.10 or Section 4.12 of this Agreement, (iii) the
failure of Seller to perform any of its other obligations contained in this
Agreement, (iv) any environmental condition relating to the Business or the
assets of TFS resulting from a Release of any Hazardous Substance, any
violation of any environmental protection Law or Permit or any claims by
third parties against TFS for damages or environmental cleanup or
restoration with respect to the assets of TFS or the Business
(collectively, "Environmental Matters"), (v) any claim against TFS or
Purchaser by any third party relating to any liability or obligation of the
Qualification Company or the Working Company and (vi) any liability or
obligation (excluding, for purposes of this clause (vi), any liability or
obligation specifically referred to in clause (iv) above) resulting from
the ownership of assets of TFS or the operation of the Business by TFS or
any of its predecessors prior to the Effective Closing Time that is not
reflected on the Final Closing Balance Sheet (excluding, for purposes of
this clause (vi), the amounts of the provision reflected on the Final
Closing Balance Sheet for the liabilities and obligations referred to in
clause (iv) above); provided, however, that (x) indemnification payments
made by Seller in the aggregate pursuant to this Agreement shall in no
event exceed the amount of the Purchase Price and (y) with respect to
clause (iv) above, Seller shall not be liable or responsible to TFS or
Purchaser for any Loss relating to any Environmental Matter to the extent,
but only to the extent, of any such Loss that is caused exclusively by TFS
or Purchaser after the Effective Closing Time, it being understood and
agreed that, in order for Seller to avail itself of the limitation of
liability afforded by this clause (y), Seller shall have the
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burden of proving that TFS or Purchaser exclusively caused such Loss after
the Effective Closing Time. IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be signed by their duly authorized representatives
as of the day and year first above written.
SELLER:
DAIMLER-BENZ AEROSPACE AG
By:____________________________________
Name:__________________________________
Title:_________________________________
PURCHASER:
CONTINENTAL ELECTRONICS CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
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