1
Final
----
Conformed Copy prepared by
Hengeler Xxxxxxx Xxxxxxx Xxxxxxx Xxxxx
Notarial Deed No. 3564/2000
of the Notary Xx. Xxxxxxx Xxxxxxxxxx
in Dusseldorf/Germany
SHARE PURCHASE AGREEMENT
among
VEBA Electronics GmbH
EBV Verwaltungs GmbH i.L.
Viterra Grundstucke Verwaltungs GmbH
VEBA Electronics LLC
VEBA Electronics Beteiligungs GmbH
VEBA Electronics (UK) Plc
Xxxx Xxxxxxx Electronics Systems Plc
and
E.ON AG
and
Arrow Electronics, Inc.
Avnet, Inc.
Cherrybright Limited
dated August 7, 2000
regarding the sale and purchase of the VEBA electronics distribution group
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Table of Contents Page
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Recitals......................................................................................... 8
Article 1 Sale and Purchase..................................................................... 14
1.1 Agreement to Sell and Purchase............................................ 14
1.2 Transfer.................................................................. 16
1.3 Economic Effective Date; Dividend Rights.................................. 17
Article 2 Purchase Price........................................................................ 17
2.1 Certain Definitions....................................................... 17
2.2 Purchase Price Formula.................................................... 21
2.3 Allocation................................................................ 22
2.4 Payment on the Closing Date............................................... 22
2.5 Effect of Payment; Discharge of VEBA Liabilities.......................... 24
2.6 Settlement Payments after the Closing Date................................ 24
2.7 Sample Calculation........................................................ 25
2.8 No Set-Off/Retention...................................................... 25
Article 3 Effective Date Financial Statements;
Effective Date and Closing Certificates............................................... 25
3.1 Preparation of Effective Date Financial Statements
and Effective Date and Closing Certificates............................... 25
3.2 Accounting Principles..................................................... 26
3.3 Review of Effective Date Financial Statements
and Effective Date and Closing Certificates............................... 27
3.4 Dispute Resolution........................................................ 27
3.5 Access and Information.................................................... 28
Article 4 Closing .......................................................................... 28
4.1 Time and Place of Closing................................................. 28
4.2 Conditions to Closing..................................................... 28
4.3 Regulatory Filings........................................................ 32
4.4 Actions on Closing Date................................................... 35
4.5 Staggered Closing......................................................... 35
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Article 5 Representations and Warranties of Sellers............................................. 38
5.1 Organization of Sellers and the Group..................................... 39
5.2 Ownership of Shares; Shareholdings........................................ 40
5.3 Authorization of Sellers, Non-Contravention............................... 40
5.4 Financial Statements...................................................... 42
5.5 Assets, Encumbrances...................................................... 43
5.6 Intellectual Property Rights.............................................. 45
5.7 Permits; Compliance with Laws............................................. 47
5.8 Environmental Matters..................................................... 47
5.9 Litigation, Disputes...................................................... 48
5.10 Employee and Labour Matters............................................... 49
5.11 Employee Benefits and Pension Obligations................................. 50
5.12 Material Agreements....................................................... 54
5.13 Finders' Fees............................................................. 57
5.14 Intercompany Accounts and Pre-Closing
Non-Recurring Charges..................................................... 57
5.15 Key Suppliers............................................................. 57
5.16 Insurance Coverage........................................................ 58
5.17 No Undisclosed Material Liabilities....................................... 58
5.18 Conduct of Business since December 31, 1999............................... 59
5.19 Certain Anti-trust Undertakings and Orders................................ 61
5.20 Insolvency and Liquidation Proceedings.................................... 61
5.21 Terms of supply........................................................... 62
5.22 IT Systems................................................................ 62
5.23 No Other Representations and Warranties................................... 63
Article 6 Representations and Warranties of Purchasers.......................................... 63
6.1 Authorization of Purchasers, Non-Contravention............................ 64
6.2 Litigation................................................................ 64
6.3 Financial Capability...................................................... 64
6.4 Finders' Fees............................................................. 65
6.5 Purchaser................................................................. 65
Article 7 Covenants; Certain Indemnities........................................................ 65
7.1 Conduct of Business....................................................... 65
7.2 Preparation of Additional Financial Statements;
Access to Information..................................................... 69
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7.3 Inter-Group Debt.......................................................... 71
7.4 Resignations.............................................................. 72
7.5 Covenant not to Compete; Covenant not to Solicit.......................... 72
7.6 Confidentiality........................................................... 74
7.7 Use of Certain Marks and Names............................................ 74
7.8 Release of VEBA Comfort Letters........................................... 74
7.9 Termination of Control and Profit Transfer Agreements..................... 75
7.10 Certain Indemnities....................................................... 75
7.11 Avnet Indemnity........................................................... 77
7.12 Wyle/Avnet Litigation..................................................... 78
7.13 Poing Warehouse........................................................... 79
7.14 Environmental Indemnity................................................... 79
7.15 Further Assurances........................................................ 81
7.16 Certain Assets Owned by the E.ON Group.................................... 82
7.17 Notices under Insurance Policies.......................................... 82
7.18 Employee Bodies........................................................... 82
7.19 APRISA.................................................................... 83
7.20 Satisfaction of Memec Financing Conditions................................ 83
7.21 Memec Acquisitions........................................................ 83
7.22 Hyperion Licence.......................................................... 83
7.23 VEBA Electronics LLC Employees............................................ 84
7.24 Forex and Hedging Contracts............................................... 85
7.25 US 401 (k) Plans.......................................................... 86
Article 8 Indemnification....................................................................... 88
8.1 Indemnification by Sellers................................................ 88
8.2 Indemnification by Purchaser.............................................. 90
8.3 Limitation Periods........................................................ 91
8.4 Indemnification Procedures................................................ 92
8.5 No Additional Rights or Remedies.......................................... 95
Article 9 Taxes .......................................................................... 96
9.1 Definitions............................................................... 96
9.2 Tax Representations....................................................... 97
9.3 Preparation of Tax Returns and Payment of Tax............................. 98
9.4 Tax Refunds and Recoveries................................................ 99
9.5 Tax Covenant.............................................................. 99
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9.6 Third Party Recovery...................................................... 105
9.7 Procedures................................................................ 106
9.8 Certain Tax Matters Relating to Germany................................... 108
9.9 Limitation Period......................................................... 109
9.10 Co-operation on Tax Matters............................................... 110
9.11 UK Tax Matters............................................................ 110
9.12 Certain Tax Matters relating to the U.S................................... 111
9.13 Section 338(h)(10) Election............................................... 112
9.14 Allocation of Purchase Price.............................................. 114
Article 10 Termination........................................................................... 114
10.1 Right to Terminate........................................................ 114
10.2 Consequences of Termination............................................... 115
Article 11 Miscellaneous......................................................................... 116
11.1 Liability of Sellers and Purchaser........................................ 116
11.2 Assumption of Liability by E.ON AG........................................ 117
11.3 Notices................................................................... 117
11.4 Successors and Assigns.................................................... 119
11.5 Third Party Beneficiaries................................................. 120
11.6 Public Disclosure......................................................... 120
11.7 Taxes and Expenses........................................................ 120
11.8 Entire Agreement; Confidentiality Undertaking............................. 121
11.9 Amendments and Waivers.................................................... 121
11.10 Governing Law; Competent Courts........................................... 122
11.11 Interpretation; Exhibits.................................................. 122
11.12 Definitions............................................................... 122
11.13 Severability.............................................................. 126
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EXHIBITS
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Exhibit R-1 Corporate chart of the Group
Exhibit R-2 Description of the companies of the Group
Exhibit 1.1 Assumed Material Agreements of VEBA Electronics LLC
Exhibit 2.3 Allocation
Exhibit 2.4 Estimates of Preliminary Share Purchase Price
Exhibit 2.7 Sample calculation
Exhibit 3.2 Specific accounting principles
Exhibit 4.2 Description of closing conditions under Committed
Credit Facilities
Exhibit 4.3 Regulatory Compliance Schedule
Exhibit 4.4 Actions on Closing Date
Exhibit 5 (a) Disclosure letter
Exhibit 5 (b) Sellers' knowledge (persons whose knowledge is
attributed to Sellers)
Exhibit 5 (c) Sellers' knowledge (inquiry)
Exhibit 5.1 (c) Control and profit transfer agreements
Exhibit 5.1 (d) List of articles of association, by-laws or similar
organisational documents of the Companies
Exhibit 5.2 (a) Third-party rights in shares
Exhibit 5.3 Canada and Mexico Financial Information
Exhibit 5.4 (a) 1999 German GAAP Group Balance Sheet
Exhibit 5.4 (b) 1998 and 1999 US GAAP Group Financial Statements
Exhibit 5.4 (c) March 2000 Group Accounts
Exhibit 5.4 (d) March 2000 Divisional Accounts
Exhibit 5.4 (e) Facts which would require a material change of
financial statements
Exhibit 5.5 (b) Encumbrances and security rights
Exhibit 5.5 (f) Properties and leases
Exhibit 5.6 (a) List of material intellectual property rights
Exhibit 5.8 Environmental issues
Exhibit 5.9 Litigation, disputes
Exhibit 5.10 (a) Collective bargaining agreements, agreements with
workers' councils, certain labour disputes
Exhibit 5.10 (b) List of employment contracts with senior management
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Exhibit 5.10 (c) Stock option plans and redundancy schemes
Exhibit 5.10 (d) Certain changes of terms of employment
Exhibits 5.11 (a) Pension and similar benefits
Exhibit 5.11 (b) Employee benefit plans of U.S. Companies
Exhibit 5.11 (c) EPU Schemes
Exhibit 5.12 Material Agreements
Exhibit 5.14(a) List of intercompany balances as of the Effective Date
and credit lines under VEBA cash management
Exhibit 5.14(b) Memec bank accounts
Exhibit 5.15 Supplier relationships
Exhibit 5.16 Insurance coverage
Exhibit 5.17 Certain material liabilities
Exhibit 5.18 Conduct of business since December 31, 1999
Exhibit 5.20 Insolvency and Liquidation Proceedings
Exhibit 7.1 Conduct of business to the Closing Date
Exhibit 7.3 Terms and conditions for Inter-Group Debt
Exhibit 7.4 Resignations of certain board members
Exhibit 7.5 Existing competing activities of the E.ON Group
Exhibit 7.8 VEBA comfort letters
Exhibit 7.13 Amendments to lease agreements for Poing warehouse
Exhibit 7.23 HQ Employees
Exhibit 8.1 Purchasers' knowledge
Exhibit 9.2 Tax representations
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This Share Purchase Agreement is entered into on this 7th day of August 2000,
by and between (i) VEBA Electronics GmbH, a limited liability company
incorporated under German law, registered in the commercial register of the
local court of Dusseldorf/Germany under no. HRB 33598, (ii) EBV Verwaltungs
GmbH i.L., a limited liability company incorporated under German law,
registered in the commercial register of the local court of Dusseldorf/Germany
under no. HRB 37915 and in the process of (solvent) liquidation, (iii) VEBA
Electronics LLC, a limited liability company incorporated under the laws of
Delaware, USA, (iv) Viterra Grundstucke Verwaltungs GmbH ("VITERRA"), a limited
liability company incorporated under German law, registered in the commercial
register of the local court of Bochum/Germany under no. HRB 6559, (v) VEBA
Electronics Beteiligungs GmbH, a limited liability company incorporated under
German law, registered in the commercial register of the local court of
Dusseldorf/Germany under no. HRB 36645, (vi) VEBA Electronics (U.K.) Plc, a
public limited company incorporated under the laws of England and Wales with
registered no. 01148485, (vii) Xxxx Karcher Electronic Systems Plc, a public
limited company incorporated under the laws of England and Wales with
registered no. 03087431 (VEBA Electronics GmbH, EBV Verwaltungs GmbH i.L., VEBA
Electronics LLC, VEBA Electronics Beteiligungs GmbH, VEBA Electronics (U.K.)
Plc., Xxxx Xxxxxxx Electronic Systems Plc and Viterra collectively hereinafter
referred to as "SELLERS") (viii) Arrow Electronics, Inc., a corporation
incorporated under the laws of the State of New York, ("ARROW") (ix) Avnet,
Inc., a corporation incorporated under the laws of the State of New York
("AVNET") and (x) Cherrybright Limited, a private limited liability company
incorporated under the laws of England and Wales with registered no. 3985629
("MEMEC PURCHASER") (Arrow, Avnet and Memec Purchaser together being referred
to hereinafter as "PURCHASERS" and each of them being a "PURCHASER") and (xi)
E.ON AG, a stock corporation incorporated under German law, registered in the
commercial register of the local court of Dusseldorf/Germany under no. HRB
22315 ("E.ON AG"). The Sellers, the Purchasers and E.ON AG are hereinafter
collectively referred to as the "PARTIES".
RECITALS
1. The Sellers hold and immediately prior to Closing (as defined in Section
4.1 below) will hold directly or indirectly all shares of the companies
of the VEBA electronics distribution group, a distributor of electronic
systems (e.g., monitors and servers) and electronic components (e.g.,
semiconductors), save as expressly set out in Exhibit R-2. The VEBA
electronics distribution group consists of the following seven divisions
(the "DIVISIONS"), whose main operating companies are indicated in
parentheses:
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Electronic systems business:
(1) RKE Systems (Xxxx Karcher Elektronik GmbH, Germany) ("RKE
DIVISION");
(2) Wyle Systems (Wyle Systems LLC, USA) ("WYLE SYSTEMS DIVISION").
Electronic components business:
(3) EBV, Germany (EBV-Elektronik GmbH and WBC GmbH, Germany) ("EBV
DIVISION");
(4) Memec (Memec (Memory and Electronic Components) Plc, UK ("MEMEC
PLC") and Memec LLC, USA) ("MEMEC DIVISION");
(5) Wyle Components (Wyle Electronics, USA) ("WYLE COMPONENTS
DIVISION");
(6) Atlas Europe (Atlas Logistik Services GmbH, Germany) ("ATLAS
EUROPE DIVISION"); and
(7) Atlas US (Atlas Services LLC and Atlas Business Services LLC, USA)
("ATLAS US DIVISION").
The headquarters of the VEBA electronics distribution group (VEBA
Electronics LLC) are located in Santa Clara, California, USA.
2. VEBA Electronics GmbH owns and will immediately prior to Closing own
(a) one fully paid share, free and clear of any encumbrance, in the
nominal amount of DM 100,000 (constituting the entire registered
share capital of DM 100,000) in Xxxx Xxxxxxx Elektronik GmbH,
Nettetal/Germany, a limited liability company incorporated under
German law and registered in the commercial register of the local
court of Nettetal under no. HRB 938;
(b) 999,988 fully paid shares, free and clear of any encumbrance, in
the nominal amount of FF 49,999,400 (constituting 99.9% of the
entire registered share capital of FF 50,036,950) in Memec Sud
Europe SA, Rungis, France, a stock corporation incorporated under
French law and registered in the commercial register (R.C.S.)
Creteil under no. B 632 011 227; of the remaining 751 shares in
the aggregate nominal amount of FF 37,050, three shares are owned
by Xxxxx Xxxxxxxx and 748 shares are owned by other shareholders;
such 748 shares will be transferred on or prior to the Closing
Date to VEBA Electronics GmbH and certain persons associated with
Memec Sud Europe SA, as set out in Exhibit R-2;
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immediately prior to the Closing, VEBA Electronics GmbH will own
1,000,716 shares and certain directors and employees of the Memec
Division (as set out in Exhibit R-2) will own the remaining 23
shares; and
(c) the entire limited partnership interest in the registered nominal
amount of DM 100,000, free and clear of any encumbrance, in Xxxx
Karcher Grundstucke GmbH & Co. Elektronik Immobilien KG ("XXXX
KARCHER IMMOBILIEN"), Essen/ Germany, a limited partnership
incorporated under German law and registered in the commercial
register of the local court of Essen under no. HRA 6295.
Viterra is the sole managing and general partner (without any
capital contribution) of Xxxx Xxxxxxx Immobilien.
3. EBV Verwaltungs GmbH i.L. owns and will immediately prior to Closing own
seven fully paid shares, free and clear of any encumbrance, in the
nominal amount of DM 17,300, DM 14,000, DM 5,200, DM 5,200, DM 5,200, DM
2,800 and DM 2,300 (constituting all of the issued shares in the
aggregate nominal amount of DM 52,000) in EBV-Elektronik GmbH,
Kirchheim/Germany, a limited liability company incorporated under German
law and registered in the commercial register of the local court of
Munich/ Germany under no. HRB 42104. The entire registered capital of
EBV-Elektronik GmbH amounts to DM 500,000. A share in the nominal amount
of DM 448,000 was redeemed (eingezogen) and cancelled in 1994.
4. VEBA Electronics LLC owns and will immediately prior to Closing own:
(a) the entire membership interest, free and clear of any encumbrance,
in Memec LLC, a limited liability company incorporated under the
laws of Delaware, USA, with its business seat in San Diego,
California, USA;
(b) 100 fully paid shares and constituting all of the issued shares,
free and clear of any encumbrance, in EBV Electronics Holdings,
Inc., a corporation established under the laws of Delaware, USA;
(c) the entire membership interest, free and clear of any encumbrance,
in ATLAS Business Services LLC, a limited liability company
incorporated under the laws of Delaware, USA; and
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(d) the entire membership interest, free and clear of any encumbrance,
in ATLAS Services LLC, a limited liability company incorporated
under the laws of Delaware, USA.
5. VEBA Electronics Beteiligungs GmbH owns and will immediately prior to
Closing own:
(a) four fully paid shares, free and clear of any encumbrance, in the
nominal amount of DM 100,000, DM 50,000, DM 50,000 and DM 50,000
(constituting all of the issued shares in the aggregate nominal
amount of DM 250,000) in Memec GmbH, Nettetal/Germany, a limited
liability company incorporated under German law and registered in
the commercial register of the local court of Nettetal under no.
HRB 1004;
(b) 6,400 fully paid shares, free and clear of any encumbrance, in
Memec Belgium NV, a limited liability company incorporated under
Belgian law and registered in the commercial register of Mechelen
under no. 86.900; the remaining 100 shares of the entire
registered share capital being held by Memec GmbH;
(c) 99 fully paid shares and constituting all (but one) of the issued
shares, free and clear of any encumbrance, in Memec AG, a stock
corporation incorporated under Swiss law and registered in the
commercial register of Langenthal-Oberaargau under no.
CH-053.3.003.052-6; the remaining share is owned by Xxxxx Xxxx;
(d) 226,891 fully paid shares and constituting all of the issued
shares, free and clear of any encumbrance, in Memec Nederland BV,
a limited liability company incorporated in the Netherlands and
registered in the commercial register of Oost-Brabrant under no.
17085007;
(e) 4,000 fully paid shares and constituting all of the issued shares,
free and clear of any encumbrance, in Okura Electronics Co.
Limited, a limited liability company incorporated in Japan and
registered under company no. 020066;
(f) 18,152 fully paid shares and constituting all of the issued
shares, free and clear of any encumbrance, in Memec Holding BV, a
limited liability company incorporated in the Netherlands and
registered in the commercial register of Oost-Brabrant under no.
17096269;
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(g) a fully paid share in the nominal amount of DM 100,000
(constituting all of the issued share capital), free and clear of
any encumbrance, in Atlas Logistik Services GmbH, a limited
liability company incorporated under German law and registered in
the commercial register of the local court of Munich under no. HRB
118579; and
(h) a fully paid share in the nominal amount of DM 100,000
(constituting the entire issued share capital), free and clear of
any encumbrance, in Distron Elektronik GmbH, a limited liability
company incorporated under German law and registered in the
commercial register of the local court of Munich under no. HRB
119649.
6. VEBA Electronics (UK) Plc owns and will immediately prior to Closing own
all shares (constituting the entire issued share capital of GBP
2,796,045.40, with the exception of one share in the nominal amount of
GBP 0.10 jointly owned by it and Xxx Xxxxxxxxx), free and clear of any
encumbrance, in Memec (Memory and Electronic Components) Plc, a public
limited company incorporated under the laws of England and Wales and
registered under no. 01507861.
7. Xxxx Karcher Electronic Systems Plc owns and will immediately prior to
Closing own
(a) 1,500 fully paid shares (constituting the entire issued share
capital of GBP 1,500), free and clear of any encumbrance, in RK
Distribution Limited, a limited liability company incorporated
under the laws of England and Wales and registered under no.
00409579;
(b) 3,046 fully paid shares (constituting the entire issued share
capital of GBP 3,046), free and clear of any encumbrance, in
Midwich Limited, a limited liability company incorporated under
the laws of England and Wales and registered under no. 01436289;
(c) 80,000 fully paid shares (constituting the entire issued share
capital of GBP 80,000), free and clear of any encumbrance, in
Transformation Software Limited, a limited liability company
incorporated under the laws of England and Wales and registered
under no. 01745656;
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(d) 123,285 fully paid shares (constituting the entire issued share
capital of GBP 123,285), free and clear of any encumbrance, in
Professional Display Systems Limited, a limited liability company
incorporated under the laws of England and Wales and registered
under no. 02493132.
8. The corporate structure of the VEBA electronics distribution group
including all companies which are part of such group is set forth in the
corporate chart attached as Exhibit R-1 and the list attached as Exhibit
R-2. Except as expressly indicated in Exhibit R-2, all companies which
are part of the Group (as defined in section 9 below) are owned and will
immediately prior to Closing be wholly owned, directly or indirectly, by
one of the companies whose shares are to be sold and purchased pursuant
to Article 1.
9. The companies whose shares are to be sold and acquired pursuant to
Article 1 of this Agreement (including Xxxx Xxxxxxx Immobilien) are
hereinafter collectively referred to as the "COMPANIES". The companies
and other entities of the VEBA electronics distribution group as set
forth in Exhibits R-1 and R-2 other than the Companies and the Sellers
and the holding companies of the Sellers (as outlined in bold in the
chart in Exhibit R-1) are hereinafter collectively referred to as the
"SUBSIDIARIES". The Companies and the Subsidiaries are hereinafter
collectively referred to as the "GROUP COMPANIES" or the "GROUP" and each
of them being referred to as a "GROUP COMPANY". Exhibit R-1 indicates
which Companies and Subsidiaries form part of each of the Divisions.
E.ON AG and all companies or corporations controlled by E.ON AG at the
relevant time (other than the Companies and Subsidiaries) within the
meaning of Section 18 German Stock Corporation Act are referred to herein
as the "E.ON GROUP" or the "VEBA GROUP".
10. Sellers wish to divest themselves of the Group, and Purchasers (or
subsidiaries of any Purchaser nominated by it prior to Closing) wish to
acquire the Group, with each Purchaser (or its nominated subsidiaries)
acquiring the Divisions set opposite its name below:
Arrow Wyle Components Division
Wyle Systems Division
Atlas US Division
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Avnet EBV Division
RKE Division
Atlas Europe Division
Memec Purchaser Memec Division
Now, therefore, subject to and on the terms and conditions set forth herein,
the Parties agree as follows:
ARTICLE 1
SALE AND PURCHASE
1.1 AGREEMENT TO SELL AND PURCHASE
Subject to the terms and conditions set forth herein:
(a) (i) VEBA Electronics GmbH hereby sells to Avnet, and Avnet
hereby purchases from VEBA Electronics GmbH, all the
shares in issue in Xxxx Karcher Elektronik GmbH as well
as the limited partnership interest in Xxxx Xxxxxxx
Immobilien, as set forth in section 2 of the Recitals;
(ii) VEBA Electronics GmbH hereby sells to Memec Purchaser
and Memec Purchaser hereby purchases from VEBA
Electronics GmbH the shares in issue owned by VEBA
Electronics GmbH on the Closing Date (1,000,716 shares)
in Memec Sud Europe S.A., as set forth in section 2 of
the Recitals;
(iii) Viterra hereby sells to Avnet, and Avnet hereby
purchases from Viterra, the general partner interest in
Xxxx Karcher Immobilien, as set forth in section 2 of
the Recitals;
(iv) VEBA Electronics LLC hereby sells to Memec Purchaser and
Memec Purchaser hereby purchases from VEBA Electronics
LLC the entire membership interest in Memec LLC, as set
forth in section 4 of the Recitals;
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(v) VEBA Electronics LLC hereby sells to Arrow and Arrow
hereby purchases from VEBA Electronics LLC all the
shares in issue in EBV Electronic Holdings, Inc. and the
entire membership interests in ATLAS Business Services
LLC and ATLAS Services LLC, each as set forth in section
4 of the Recitals;
(vi) VEBA Electronics Beteiligungs GmbH hereby sells to Memec
Purchaser and Memec Purchaser hereby purchases from VEBA
Electronics Beteiligungs GmbH all the shares in issue
owned by it in Memec GmbH, Memec Belgium NV, Memec AG,
Memec Nederland BV, Okura Electronics Co. Limited and
Memec Holding BV, as set forth in section 5 of the
Recitals;
(vii) VEBA Electronics (UK) Plc hereby sells to Memec
Purchaser, and Memec Purchaser hereby purchases from
VEBA Electronics (UK) Plc, the shares in issue owned by
it in Memec (Memory and Electronic Components) Plc and
its interest in the share jointly owned with Xxx
Xxxxxxxxx, as set forth in section 6 of the Recitals;
(viii) VEBA Electronics Beteiligungs GmbH hereby sells to
Avnet, and Avnet hereby purchases from VEBA Electronics
Beteiligungs GmbH, all shares in issue in Atlas Logistik
Services GmbH and in Distron Elektronik GmbH, as set out
in section 5 of the Recitals;
(ix) EBV Verwaltungs GmbH i.L. hereby sells to Avnet, and
Avnet hereby purchases from EBV Verwaltungs GmbH i.L.,
all the shares in issue in EBV-Elektronik GmbH, as set
forth in section 3 of the Recitals; and
(x) Xxxx Karcher Electronic Systems Plc hereby sells to
Avnet, and Avnet hereby purchases from Xxxx Xxxxxxx
Electronic Systems Plc, all the shares in issue in RK
Distribution Limited, Midwich Limited, Transformation
Software Limited and Professional Display Systems
Limited, as set forth in section 7 of the Recitals.
The shares, membership interests and partnership interests sold
pursuant to this Section 1.1 are hereinafter referred to as the
"SOLD SHARES".
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(b) VEBA Electronics LLC hereby sells to Arrow, and Arrow hereby
purchases from VEBA Electronics LLC, all computer systems,
software and office equipment owned by VEBA Electronics LLC and
located in the offices on the premises of Wyle Electronics in
Santa Xxxxx. Arrow shall, with effect as of the Closing, (i)
assume all agreements (including all rights, obligations and
liabilities thereunder) entered into by VEBA Electronics LLC with
respect to any computer systems, software and office equipment, in
each case leased or licenced by VEBA Electronics LLC and located
in such offices (except for any agreements which would have to be
disclosed in Exhibit 5.12 if VEBA Electronics LLC were a Group
Company and which are not disclosed in Exhibit 1.1) and (ii) be
responsible for the HQ Employees in accordance with Section 7.23
below.
(c) The Sold Shares (and the assets referred to in Section 1.1 (b) to
be purchased by Arrow) shall be transferred free of any mortgage,
charge, pledge, lien, option, restriction, right of first refusal,
right of pre-emption, third party right or interest or any other
encumbrance or security interest of any kind, or another type of
preferential arrangement (including, without limitation, a title
transfer or retention arrangement) having similar effect.
(d) Any Purchaser shall be entitled to nominate one or more of its
subsidiaries to acquire title to any of the Sold Shares and/or any
of the assets referred to in Section 1.1 (b) which such Purchaser
agrees to purchase under this Article 1. Such nomination shall be
made in writing to the Sellers at least five business days prior
to the Closing Date. In the case of Avnet, Avnet has nominated
Avnet EMG GmbH in respect of the Sold Shares described in Sections
1.1 (a) (i), (viii) and (ix) and Avnet Alfapower GmbH in respect
of the Sold Shares described in Section 1.1 (a) (iii), and Avnet
EMG GmbH and Avnet Alfapower GmbH shall have the right to demand
that the relevant Sold Shares shall be transferred to them.
1.2 TRANSFER
The Sellers shall transfer to the relevant company nominated by the
relevant Purchaser in accordance with Section 1.1 (d) (or to the extent
that no such nomination is made, to the relevant Purchaser) the Sold
Shares and the assets and liabilities referred to in Section 1.1 (b) on
the Closing Date (as defined in Section 4.1 below) in accordance with
Section 4.4 (a) below.
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1.3 ECONOMIC EFFECTIVE DATE; DIVIDEND RIGHTS
The Sold Shares shall be sold and transferred to the relevant company
nominated by the relevant Purchaser in accordance with Section 1.1 (d)
(or to the extent that no such nomination is made, to the relevant
Purchaser) with all rights and obligations pertaining thereto at the date
of this Agreement, including the dividend rights for the fiscal year
ended on December 31, 2000, with retroactive economic effect as of March
31, 2000, 24:00 hours/April 1, 2000, 0:00 hours (the "EFFECTIVE DATE").
ARTICLE 2
PURCHASE PRICE
2.1 CERTAIN DEFINITIONS
For the purposes of this Agreement, in particular the purchase price
formula contained in Section 2.2,
"EFFECTIVE DATE CASH" means the aggregate amount, as at the Effective
Date, of any cash, cash equivalents and balances (including all highly
liquid investments with an original maturity of three months or less from
the date of purchase and money market funds) which (i) are freely
remittable without any exchange or other approvals or significant costs
or (ii) if the cash is not so freely remittable, amount to less than $
500,000 in aggregate for all Divisions to be acquired by each Purchaser
(provided that if and to the extent that there is cash which is not so
freely remittable and which exceeds such threshold, the relevant
Purchaser shall cause the Group Companies to assign such cash to Sellers
in the country in which the relevant cash is located, free of any
consideration), but excluding, for the avoidance of doubt, amounts
attributable to cash balances of Group Companies on bank accounts
operated within a pooling arrangement with accounts of any member of the
E.ON Group which have been taken into account in the calculation of
Inter-Group Debt. For the avoidance of doubt, cash and cash balances
shall be determined by reference to the cash books of the Group
Companies.
"EFFECTIVE DATE EXTERNAL DEBT" means the External Debt as at the
Effective Date.
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"EXTERNAL DEBT" means the aggregate of:
(a) all borrowings of any nature of any member of the Group (other
than borrowings from either (i) other members of the Group or (ii)
members of the E.ON Group (as the case may be)), including loans
granted by suppliers, but excluding, for the avoidance of doubt,
(i) deferred payment arrangements with suppliers and other
supplier items, which are in each case included in accounts
payable (as reflected in the Effective Date Financial Statements)
and (ii) accruals for inventory received but not yet invoiced;
(b) all obligations under finance leases (as defined under German
GAAP);
and
(c) (i) all accrued or unpaid interest and charges due in respect of
any of the above and (ii) any prepayment or repayment penalties,
charges or costs which actually arise and become payable on
repayment of any of the above at Closing or within 45 days after
the Closing Date;
in each case, to the extent that any amounts referred to above are in
amounts other than United States Dollars, such amounts shall be exchanged
into United States Dollars at the exchange rates prevailing on the
Closing Date;
"CLOSING DATE INTER-GROUP DEBT" means the Inter-Group Debt as at the
Closing Date, payable in United States Dollars, calculated (in respect of
any Inter-Group Debt incurred in currencies other than United States
Dollars) at the exchange rates as at the Effective Date, except for any
Inter-Group Debt incurred after the Effective Date in accordance with
Section 7.3, to which the exchange rates as at the Closing Date shall
apply;
"EFFECTIVE DATE INTER-GROUP DEBT" means the Inter-Group Debt as at the
Effective Date;
"ESTIMATED CLOSING DATE INTER-GROUP DEBT" means the estimate of the
Closing Date Inter-Group Debt calculated (in respect of any Inter-Group
Debt incurred in currencies other than United States Dollars) at the
exchange rates as at the Effective Date, except for any Inter-Group Debt
incurred after the Effective Date in accordance with Section 7.3, to
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which the exchange rates as at the business day two business days before
the Closing Date shall apply;
"INTER-GROUP DEBT" means the net balance (including any accrued or unpaid
interest thereon in accordance with Section 7.3), as at the relevant
date, of the inter-group liabilities and inter-group receivables under
any (short-term or long-term) borrowings between any of the Group
Companies and any member of the E.ON Group (other than, for the avoidance
of doubt, trade receivables and trade payables arising in the ordinary
course of trading);
"EFFECTIVE DATE WORKING CAPITAL TARGET AMOUNT" means an amount equal to
22.5 per cent of the aggregate amount of the net sales of the Group (net
sales as shown in the profit and loss account included in the Effective
Date Financial Statements) for the period from and including January 1,
2000 up to and including the Effective Date multiplied by four;
"EFFECTIVE DATE WORKING CAPITAL" means the balance of the line item terms
net inventory and trade accounts receivables less trade accounts payables
as at the Effective Date (as determined in accordance with Article 3
below) and does not include, for the avoidance of doubt, any other
working capital items (in particular other assets and other liabilities)
or accruals for inventory received but not yet invoiced;
"EFFECTIVE DATE TAXATION LIABILITY" means the tax liabilities in respect
of income, profits and gains (excluding any deferred tax liabilities and
deferred tax assets) for all periods of the Companies and Subsidiaries
ending on or before the Effective Date (as determined by assuming that
the Effective Date is the end of a fiscal or taxable period);
"POST EFFECTIVE DATE INTER-GROUP INTEREST PORTION" means the aggregate of
(i) 50 per cent of the interest accruing or paid on any Effective Date
Inter-Group Debt (other than interest referred to in (ii) below) at the
rates set out in Exhibit 7.3 from the Effective Date up to and including
the Closing Date or, if Closing occurs after September 30, 2000, up to
and including September 30, 2000, (ii) to the extent that the interest
rates exceed the relevant interest rates set out in Exhibit 7.3 or there
are fees or charges, 100 per cent of any fees and charges and 100 per
cent of any interest in excess of such rates, in each case accrued or
paid on any Inter-Group Debt since the Effective Date and (iii) 100 per
cent of any interest accrued or paid (such amount to be determined on an
after-tax basis, using a flat tax rate of 32.5%) on any Inter-Group Debt
incurred in order to finance or refinance
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any Pre-Closing Distributions to any member of the E.ON Group since the
Effective Date. For the avoidance of doubt, the Post Effective Date
Inter-Group Interest Portion shall not include any interest accruing in
respect of the period up to and including the Effective Date.
"POST EFFECTIVE DATE EXTERNAL INTEREST PORTION" means 50 per cent of any
interest paid or accruing on any External Debt in respect of the period
from the Effective Date up to and including the Closing Date or, if
Closing occurs after September 30, 2000, up to and including September
30, 2000 (excluding, for the avoidance of doubt, any interest accruing on
any External Debt in respect of the period up to and including the
Effective Date);
"PRE-CLOSING DISTRIBUTIONS" means the aggregate amount of any dividends
or distributions of any nature whatsoever (whether of cash or assets) in
respect of any shares of capital stock or shares in the capital of any
Group Company or any repurchase, redemption, repayment or other
acquisition by any Group Company of any of its own shares of capital
stock, issued shares or other securities or withdrawals or repayment of
capital or partnership interests by any Group Company or transfer of
profit by any Group Company (other than any of the foregoing to the
extent it comprises a payment to another Group Company) paid, declared or
agreed to be paid by any Group Company to any member of the E.ON Group
from (but excluding) the Effective Date up to and including the Closing
Date, excluding the dividend of GBP 138 million (paid in cash on July 24,
2000) relating to the proceeds of the sale of VEBA Electronics US Holding
GmbH to VEBA Electronics (U.K.) Plc.
"PRE-CLOSING NON-RECURRING CHARGES" means any charges or liabilities paid
or incurred by any Group Company to any member of the E.ON Group since
the Effective Date to and including the Closing Date, except for those
arising under (i) trading and supply agreements with respect to goods or
utilities in the ordinary course of business on arm's length terms and
(ii) the service agreements and other agreements with the E.ON Group,
which are on arm's length terms and referred to in Exhibit 5.12;
"UNFUNDED PENSION LIABILITY" is a fixed amount equal to $ 18,600,000;
in each case (to the extent relevant) as shown on the Effective Date
Financial Statements and the Effective Date Certificates or the Closing
Certificates (as the case may be), as determined in accordance with
Article 3.
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2.2 PURCHASE PRICE FORMULA
The aggregate purchase price to be paid for the Sold Shares shall be an
amount equal to
(i) $ 2,350,000,000 (in words: US Dollars two billion three hundred
and fifty million) (the "BASE AMOUNT");
(ii) plus an amount equal to the Effective Date Cash;
(iii) minus an amount equal to the Effective Date External Debt;
(iv) minus an amount equal to the Effective Date Inter-Group Debt;
(v) minus an amount (if any) equal to the amount by which the
Effective Date Working Capital Target Amount exceeds the Effective
Date Working Capital;
(vi) minus an amount equal to the Effective Date Taxation Liability;
(vii) minus an amount equal to the Unfunded Pension Liability;
(viii) minus a fixed amount of $ 25,000,000 (equal to a purchase price
reduction agreed between the Parties with respect to payment
obligations of the Group under EPU schemes which may arise as a
result of the transactions contemplated hereby, obligations which
may arise in respect of software consultancy fees and the write
off of aged accounts receivables of Wyle Systems Division);
(ix) minus an amount equal to the aggregate of the Post Effective Date
Inter-Group Interest Portion and the Post Effective Date External
Interest Portion;
(x) minus an amount equal to the aggregate of the Pre-Closing
Distributions and the Pre-Closing Non-Recurring Charges;
(xi) plus an amount equal to 12% of $ 600,000,000 multiplied by the
number of days from and including October 1, 2000 to, but
excluding, the Closing Date divided by 365 (the "ADDITIONAL
AMOUNT").
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The amount of the aggregate purchase price as calculated above is
referred to as the "FINAL SHARE PURCHASE PRICE".
2.3 ALLOCATION
The Base Amount and the purchase price for the Sold Shares shall be
allocated as set out in Exhibit 2.3 (Part I). The Preliminary Share
Purchase Price, Final Share Purchase Price, Inter-Group Debt, External
Debt and any adjustments to be made in accordance with Section 2.6 shall
be determined on a Division by Division basis in accordance with the
basis of allocation set out in Exhibit 2.3 (Part II). Any downward
adjustments (including any adjustments as a result of any payments made
by the Sellers with respect to claims under Articles 7, 8 and 9) to the
Final Share Purchase Price shall be allocated to the relevant Sold
Shares, save that the Final Share Purchase Price in respect of the Sold
Shares of any Group Company shall not be reduced below $ 1 and any excess
adjustment shall be applied in reducing the allocated amount, in the case
of the Memec Purchaser, to the shares in Memec Plc, in the case of Avnet
to the shares in Xxxx Karcher Elektronik GmbH and EBV-Elektronik GmbH in
equal proportions and, in the case of Arrow, to the shares of EBV
Electronic Holdings, Inc. To the extent of any further reduction, the
Sellers shall procure the capitalisation of an equal amount of Closing
Date Inter-Group Debt and any shares arising on such capitalisation shall
be treated as Sold Shares and sold for an aggregate consideration of $ 1.
2.4 PAYMENT ON THE CLOSING DATE
(a) On the Closing Date, the Purchasers shall
(i) procure to be paid to the respective members of the E.ON
Group by or on behalf of the relevant Group Companies
such amounts as are required to satisfy the Inter-Group
Debt Closing Condition as referred to in Section 4.2 (a)
(v); and
(ii) following satisfaction of the Inter-Group Debt Closing
Condition, pay to the Sellers an amount equal to an
estimate of the Final Share Purchase Price, as
determined in accordance with Sections 2.4 (b) or (c)
(as the case may be) (the "PRELIMINARY SHARE PURCHASE
PRICE"),
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such payments to be made or procured to be made by each of the
Purchasers in respect of the Divisions to be acquired by it.
(b) If the Effective Date Financial Statements and the Effective Date
Certificates have been finally determined in accordance with
Article 3 at least ten business days prior to the Closing Date,
the Preliminary Share Purchase Price shall be equal to
(i) the Base Amount,
(ii) plus/minus each of the amounts set out in Sections 2.2
(ii) to (viii), as adjusted by the Effective Date
Financial Statements and Effective Date Certificates,
(iii) minus the amount equal to the estimate provided pursuant
to Section 2.4 (d) below of the aggregate of the Post
Effective Date Inter-Group Interest Portion and the Post
Effective Date External Interest Portion (item (ix) of
Section 2.2) and the Pre-Closing Distributions and the
Pre-Closing Non-Recurring Charges (item (x) of Section
2.2); and
(iv) plus the Additional Amount (item (xi) of Section 2.2).
(c) If the Effective Date Financial Statements have not been finally
determined in accordance with Article 3 at least ten business days
prior to the Closing Date, the Preliminary Share Purchase Price
shall be equal to the amount of the estimate provided pursuant to
Section 2.4 (d) below.
(d) The Sellers shall deliver to the Purchasers their good faith
estimate of the Preliminary Share Purchase Price, the Estimated
Closing Inter-Group Debt (as defined in Section 4.2 (a) (v) below)
and estimates of each of the items specified in (ix) and (x) of
Section 2.2 not later than ten business days prior to the Closing
Date. The Preliminary Share Purchase Price and the Estimated
Closing Date Inter-Group Debt shall be paid, value as of the
Closing Date, by two separate wire transfers (to be made in the
order as set out in Section 2.4 (a)) of immediately available
funds into the bank account no. 0000000 USD with Deutsche Bank AG,
Dusseldorf, bank identification code (BLZ) 300 700 10, and such
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payments shall fully discharge all obligations of the Purchasers
under this Section 2.4 and Section 4.2 (a) (v).
2.5 EFFECT OF PAYMENT; DISCHARGE OF VEBA LIABILITIES
(a) The Sellers agree, and shall procure that the relevant members of
the E.ON Group agree, that the payments by or procured by the
Purchasers under this Article 2 and Section 4.2 (a) (v) shall
fully satisfy all liabilities of any Group Company in respect of
the Closing Date Inter-Group Debt and all other liabilities of or
incurred by any Group Company to any member of the E.ON Group in
respect of the period up to and including the Closing Date, except
for trading or supply agreements with respect to goods or
utilities in the ordinary course of business on arm's length terms
and the lease agreements referred to in Section 7.13. All
agreements between any Group Company and any member of the E.ON
Group (other than trade or supply agreements with respect to goods
or utilities in the ordinary course of business on arm's length
terms and the lease agreements referred to in Section 7.13) shall
terminate on Closing, unless otherwise agreed in writing with the
relevant Purchaser, and the Purchasers and the Group Companies
shall have no liability thereunder for amounts payable in respect
of periods prior to the Closing Date. If required by the
Purchasers, the Sellers shall procure the delivery to the
Purchasers of an acknowledgement, discharge and confirmation of
termination from the relevant member of the E.ON Group in
accordance with the preceding sentences. Nothing in this Section
2.5 shall prejudice any claims in respect of the period prior to
Closing in connection with any insurance arrangements with the
E.ON Group.
(b) The Purchasers agree, and shall procure, that upon payment of the
Closing Date Inter-Group Debt (as finally determined in accordance
with Article 3), no member of the E.ON Group shall have any
liability to any Group Company with respect to any Inter-Group
Debt.
2.6 SETTLEMENT PAYMENTS AFTER THE CLOSING DATE
(a) If the Final Share Purchase Price or the actual amount of the
Closing Date Inter-Group Debt with respect to a Division (as
determined after the Closing Date in accordance with Article 3
below) is higher or lower than the Preliminary Share Purchase
Price or the Estimated Closing Inter-Group Debt paid at Closing,
the
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Sellers and the relevant Purchaser shall settle, or cause the
relevant members of the E.ON Group or the relevant Group Companies
(as the case may be) to settle any differences within ten business
days after which the Effective Date Financial Statements and the
Closing Certificates have been finally determined in accordance
with Article 3, provided that, to the extent relevant, the
payments to be made pursuant to this Section 2.6 (a) with respect
to a Division acquired by the relevant Purchaser shall be set-off
against each other and the balancing payment alone shall be
payable.
(b) The amount of any payment to be made pursuant to this Section 2.6
shall bear interest from and including the Closing Date to but
excluding the date of payment at a rate of 6 per cent per annum.
Such interest shall be payable at the same time as the payment to
which it relates and shall be calculated daily on the basis of a
year of 365 days and the actual number of days elapsed.
2.7 SAMPLE CALCULATION
A sample calculation of the Final Share Purchase Price and the aggregate
amount payable by Purchasers at Closing (including the Closing
Inter-Group Debt) is attached hereto as Exhibit 2.7.
2.8 NO SET-OFF/RETENTION
Subject to the proviso in Section 2.6 (a) neither the Purchasers nor the
Sellers shall have any right of set-off or retention right with respect
to their obligations to pay the purchase price, the Inter-Group Debt or
any adjustment payment under this Article 2.
ARTICLE 3
EFFECTIVE DATE FINANCIAL STATEMENTS; EFFECTIVE DATE AND CLOSING
CERTIFICATES
3.1 PREPARATION OF EFFECTIVE DATE FINANCIAL STATEMENTS AND EFFECTIVE DATE AND
CLOSING CERTIFICATES
(a) Sellers shall prepare, or cause to be prepared, and deliver to
each of Purchasers (i) combined financial statements (comprising a
balance sheet as at the Effective Date and a profit and loss
account for the period from and including January 1,
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2000 to the Effective Date) of the Group and of each Division,
together with an audit report by PricewaterhouseCoopers LLP on the
combined financial statements of the Group and of each Division
(the "EFFECTIVE DATE FINANCIAL STATEMENTS") (provided that the
costs of PricewaterhouseCoopers LLP in the preparation and audit
of all such financial statements (but, for the avoidance of doubt,
not for the resolution of any disputes) shall be borne as to 50%
by the Sellers and as to 50% by the Purchasers), and (ii)
certificates based on such financial statements setting forth
Sellers' calculation of the Effective Date External Debt, the
Effective Date Cash, the Effective Date Inter-Group Debt, the
Effective Date Working Capital and the Effective Date Taxation
Liability (the "EFFECTIVE DATE CERTIFICATES"), in each case on a
consolidated basis for the Group and for each Division. Sellers
shall use their best efforts to ensure that the Effective Date
Financial Statements and the Effective Date Certificates will be
delivered to Purchasers by no later than two months after the date
hereof.
(b) The Purchasers shall cause the Companies to prepare and deliver,
as soon as reasonably practicable, but not later than 60 days
after Closing, to the Sellers (i) a certificate of the Closing
Date Inter-Group Debt for the Group and each Division, (ii) a
certificate of the Pre-Closing Distributions and the Pre-Closing
Non-Recurring Charges and (iii) a certificate of the Post
Effective Date Inter-Group Interest Portion and the Post Effective
Date External Interest Portion for the Group and each Division
(together the "CLOSING CERTIFICATES").
3.2 ACCOUNTING PRINCIPLES
The Effective Date Financial Statements and the Closing Certificates
shall (i) be prepared in accordance with generally accepted accounting
principles as applied in Germany ("GERMAN GAAP") on a basis consistent
with those used in the preparation of the 1999 German GAAP Group Balance
Sheet (as defined in Section 5.4 (a) below) and using the principles set
forth in Exhibit 3.2, provided that in the event of any inconsistency
between the provisions of Exhibit 3.2 and the basis applied in the
preparation of the 1999 German GAAP Group Balance Sheet, the provisions
of Exhibit 3.2 shall prevail, and (ii) include line items consistent with
those in the 1999 German GAAP Group Balance Sheet.
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3.3 REVIEW OF EFFECTIVE DATE FINANCIAL STATEMENTS AND EFFECTIVE DATE AND
CLOSING CERTIFICATES
If the Purchasers believe that any item or amount contained in the
Effective Date Financial Statements or the Effective Date Certificates
(as delivered by Sellers pursuant to Section 3.1) or Sellers believe that
any item or amount contained in the Closing Certificates (as delivered by
Purchasers pursuant to Section 3.1) does not comply with Articles 2 and
3, the Purchasers or Sellers (as the case may be) may, within 45 days
after delivery of the relevant documents referred to in Section 3.1,
deliver a notice to Sellers or Purchasers (as the case may be)
disagreeing with Sellers' or Purchasers' (as the case may be) calculation
and setting forth Purchasers' or Sellers' (as the case may be)
calculation of the relevant items or amounts. Any such notice of
disagreement shall specify those items or amounts as to which the
Purchasers or Sellers (as the case may be) disagree, and Purchasers and
Sellers (as the case may be) shall be deemed to have agreed with all
other items and amounts contained in the Effective Date Financial
Statements, the Effective Date Certificates or the Closing Certificates
(as the case may be).
3.4 DISPUTE RESOLUTION
If the Purchasers or Sellers (as the case may be) have duly delivered a
notice of disagreement in accordance with Section 3.3, the Parties shall,
during the 30 days following such delivery, use their reasonable efforts
to reach agreement on the disputed items or amounts in order to determine
the Final Share Purchase Price or the actual amount of the Closing
Inter-Group Debt. If and to the extent that, at any time after the end of
such period, the Parties are unable to reach such agreement, any Party
may refer the remaining differences to an internationally recognized firm
of international independent public accountants (the "CPA FIRM"). If the
Parties cannot mutually agree upon the CPA Firm within two weeks after
any Party has requested its appointment, the CPA Firm shall be appointed,
upon request of any Party, by the Institute of Chartered Accountants
(Institut der Wirtschaftsprufer) in Dusseldorf. The CPA Firm shall,
acting as an expert (Schiedsgutachter) and not as an arbitrator,
determine on the basis of the standards set forth in Articles 2 and 3,
and only with respect to the remaining differences submitted to it and
within the range in dispute between the Parties, whether and to what
extent the Effective Date Financial Statements, the Effective Date
Certificates or the Closing Date Certificates (as the case may be)
require adjustment. The Parties shall instruct the CPA Firm, before
giving its opinion, to give the Parties a reasonable opportunity to
present their views and to deliver its written opinion to them no later
than
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four weeks after the remaining differences are referred to it. The
decision of the CPA Firm shall be conclusive and binding on the Parties
(within the limits set forth in Section 319 German Civil Code) and shall
not be subject to any appeal. The fees and disbursements of the CPA Firm
shall be borne as to 50 per cent by the Sellers and as to 50 per cent by
the Purchasers.
3.5 ACCESS AND INFORMATION
The Purchasers and Sellers agree that they will, and agree to cause their
respective independent accountants and each Group Company to, cooperate
and assist in the preparation of the Effective Date Financial Statements,
Effective Date Certificates or Closing Certificates (as the case may be)
and in the conduct of the audits and reviews referred to in this Article
3, including without limitation, the making available to each other and
the CPA Firm to the extent necessary of books, records, work papers and
personnel and access, during normal working hours, to the Group's
premises.
ARTICLE 4
CLOSING
4.1 TIME AND PLACE OF CLOSING
The closing of the transactions contemplated by this Agreement (the
"CLOSING") shall take place on the fourteenth business day after the day
on which the conditions set forth in Section 4.2 (a) (i) below are met,
subject to the further conditions set forth in Section 4.2 (a) being
complied with on such day, at 10 a.m. at the offices of Hengeler Xxxxxxx
Xxxxxxx Xxxxx in Dusseldorf or at any other time and place as the Parties
may mutually agree. The date on which the Closing is to be consummated is
referred to herein as the "CLOSING DATE".
4.2 CONDITIONS TO CLOSING
(a) Subject to Section 4.4, the obligations of the Purchasers and
Sellers to consummate the Closing are subject to the satisfaction
(or, with respect to (iii) below, the waiver by the Purchasers) of
the following conditions precedent:
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(i) Subject to Exhibit 4.3, the consummation of the
transaction contemplated hereby shall be permitted
pursuant to applicable merger control laws in the United
States of America and clearance in respect of such
consummation shall have been obtained pursuant to
applicable merger control laws in all relevant
jurisdictions within the European Union (including
pursuant to the EU Merger Regulation) (or any applicable
waiting periods in the relevant jurisdictions referred
to above shall have expired with the effect that the
transaction may be consummated without violation of
applicable merger control laws in any such
jurisdiction); and
(A) in the case of the Divisions to be acquired by
Arrow, the information as set forth in Exhibit 5.3
shall be accurate (save where any inaccuracy in
such information would not result in any approvals
being required under merger control laws in Canada
or Mexico); and
(B) in the case of the Divisions to be acquired by
Avnet, (x) approvals of the consummation of the
acquisitions by Avnet shall have been obtained (or
applicable waiting periods have expired, as
referred to above) under such merger control laws
in the relevant jurisdictions in the European
Union (including pursuant to the EU Merger
Regulation) without the requirement for any
Resolutions (as defined in Exhibit 4.3) being
given by Avnet (or any of its subsidiaries,
together with Avnet the "AVNET GROUP"), the
Divisions to be acquired by Avnet or the Sellers,
or (y) the outstanding approvals under applicable
merger control laws in jurisdictions other than in
the European Union (and other than pursuant to the
EU Merger Regulation) may reasonably be
anticipated to be forthcoming without Resolutions
being given which, when taken together with any
Resolutions already given by the Avnet Group, the
Divisions to be acquired by Avnet or the Sellers,
would have a Material Adverse Effect (as defined
in Exhibit 4.3) or require the Avnet Group
(including the Divisions to be acquired by Avnet)
to incur out-of-pocket costs or expenses equal to
or exceeding $ 75 million in the aggregate.
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The conditions precedent in this subsection (i) will not
be satisfied unless satisfied with respect to at least
two Purchasers. If the conditions precedent contained in
this subsection (i) are satisfied with respect to the
Divisions to be acquired by two Purchasers, subject to
the satisfaction of all other conditions set out in this
Section 4.2 (a) applicable to such Purchasers, the
Closing shall be completed with respect to such
Purchasers in accordance with Section 4.5.
(ii) No enforceable judgement, injunction, order or decree
(an "INJUNCTION") has been issued, made or entered into
by any court or governmental authority in any
jurisdiction which prohibits the consummation of the
Closing, provided that, (A) if any Injunction affects
the ability of a Purchaser to close with respect to a
portion of any of the Divisions to be acquired by such
Purchaser but would not have a Material Adverse Effect
(as defined in the introductory part of Section 5) on
that Division, then the Closing shall be completed by
the Sellers and such Purchaser with respect to all
portions of those Divisions that can be completed
without violating the Injunction and (B) if any
Injunction affects the ability to close with respect to
only one Purchaser, but no Injunction affects the
ability to close with respect to the other Purchasers,
the Parties agree, subject to satisfaction of all other
conditions set out in this Section 4.2 (a) applicable to
such Purchasers, to complete the Closing with respect to
the two Purchasers that can be completed in accordance
with Section 4.5. In such event, the relevant Parties
agree to use their reasonable efforts to have such
Injunction overturned or otherwise resolved so that the
Closing can be completed with respect to the Division
(or any portion of a Division) that has not been
completed.
(iii) The representations and warranties (except for the
representation and warranty in Section 5.3 (b), second
sentence, in respect of which subsection (i) (A)
applies), covenants and other obligations of the Sellers
contained in this Agreement shall, from and including
the date hereof to the Closing Date, not be breached in
a manner which would reasonably be expected to result in
indemnification claims by the Purchasers under this
Agreement in an aggregate amount of more than $ 300
million (before taking account of any limitations under
Article 8). For the avoidance of
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doubt, Closing shall in no way prejudice any Party's
ability to make any claim for breach of this Agreement.
(iv) The facilities to be provided pursuant to the terms of
the committed facility agreements referred to in Part
(A) of Exhibit 4.2 ("COMMITTED FACILITIES") shall have
become unconditionally available for draw down in
accordance with the relevant terms of such agreements
(as attached hereto as Part (B) of Exhibit 4.2) by Memec
Purchaser and/or the relevant Group Companies, provided
that, if this condition precedent is not satisfied on
the day when all conditions set out in this Section 4.2
(a) have been satisfied (A) with respect to Avnet and
Arrow, then the Closing shall be completed with respect
to Avnet and Arrow in accordance with Section 4.5, or
(B) with respect to only either Avnet or Arrow, then the
Sellers may choose, at their discretion, to complete the
Closing with respect to Arrow or Avnet (as the case may
be) or not to complete the Closing unless and until the
closing conditions with respect to at least two
Purchasers have been satisfied. In the event that the
Sellers choose to complete the Closing with respect to
only one Purchaser (Arrow or Avnet), such Closing shall
be conditional upon the Purchasers (other than Memec
Purchaser and any Purchaser in respect of which this
Agreement has been terminated in accordance with Article
10) and the Sellers having agreed mutually acceptable
Transitional and Separation Arrangements (as defined in
Section 4.5 (e) below) without referral to the Expert.
(v) Each Purchaser shall have procured payment to the
respective members of the E.ON Group of an amount equal
to the Estimated Closing Date Inter-Group Debt in
respect of the Divisions to be acquired by it. The
condition set out in this subsection (a) (v) is referred
to herein as the "INTER-GROUP DEBT CLOSING CONDITION".
(b) In connection with the condition set out in Section 4.2 (a) (iv),
Memec Purchaser undertakes:
(i) to use all reasonable endeavours to satisfy any
conditions precedent to draw down under the Committed
Facilities to the extent such matters are within the
reasonable control of it or its subsidiaries, and
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(ii) to enforce its right under the Committed Facilities to
draw down the funds available thereunder.
4.3 REGULATORY FILINGS
(a) Each of the Sellers and the Purchasers agree, as soon as
practicable after the date of this Agreement, to make all
appropriate filings under any applicable merger control laws in
the European Union (including under the EU Merger Regulation) and
any other applicable antitrust laws in any other jurisdictions
(for the avoidance of doubt not including Canada or Mexico) and to
file a Notification and Report Form pursuant to the United States
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(the "HSR ACT") with respect to the transactions contemplated
hereby. The HSR Act and the applicable merger control and
antitrust laws in the European Union and any other jurisdiction as
referred to in the preceding sentence are referred to herein as
the "ANTITRUST LAWS". Each of the Sellers and each relevant
Purchaser agrees to supply to any relevant competent authorities
as promptly as practicable any additional information and
documentary material that may be requested pursuant to any
Antitrust Laws and (subject to Exhibit 4.3) to take all other
actions necessary to obtain all requisite approvals and
authorizations and to cause the expiration or termination of the
applicable waiting periods (or similar requirements) under such
laws as soon as practicable.
(b) Subject to Exhibit 4.3 in order to obtain all requisite approvals
and authorisations for the transactions contemplated by this
Agreement under the merger control laws in the European Union, the
HSR Act and any other Antitrust Law, the relevant Purchaser and
the Sellers shall (i) co-operate in all respects with each other
in connection with any filing or submission and in connection with
any investigation or other inquiry, including any proceeding
initiated by a private party, (ii) keep the Sellers or relevant
Purchaser (as the case may be) informed in all material respects
of any material communication received by such party from, or
given by such party to, any relevant competent authorities and of
any material communication received or given in connection with
any proceeding by a private party, in each case regarding any of
the transactions contemplated hereby and (iii) permit the Sellers
or relevant Purchaser (as the case may be) a reasonable
opportunity to be consulted in advance of any meeting or
conference with any such competent authority or in connection with
any proceeding by a private party.
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(c) If any objections are asserted with respect to the transactions
contemplated hereby under any Antitrust Law or if any suit is
instituted by any competent authority (including the European
Commission) or any private party challenging any of the
transactions contemplated hereby as violative of any Antitrust
Law, then, subject to Exhibit 4.3, the relevant Purchaser and the
Sellers shall be obligated to (i) take all necessary steps to
resolve such objections or challenge as such competent authority
or private party may have to such transactions under such
Antitrust Law so as to permit consummation of the transactions
contemplated by this Agreement and (ii) pursue a resolution with
any competent authority and, if acceptable to any competent
authority, enter into a settlement, consent, decree or other
agreement with such competent authority necessary to permit the
transactions contemplated by this Agreement.
(d) If a competent authority decides to deny its approval, as required
under any applicable Antitrust Law, of the transactions
contemplated hereby or any administrative or judicial action or
proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement as violative of any
Antitrust Law, (subject to Exhibit 4.3) the relevant Purchaser and
the Sellers shall co-operate in all respects with each other and
shall contest any such decision, action or proceeding and take all
necessary steps to have vacated, lifted, reversed or overturned
any decree, judgement, injunction or other order, whether
temporary, preliminary or permanent, that is in effect and that
prohibits, prevents or restricts consummation of the transactions
contemplated by this Agreement under any applicable Antitrust Law,
including, without limitation, defending in litigation on the
merits any claim asserted in any court through a final and
non-appealable judgement.
(e) If the failure to satisfy the requirements of any Antitrust Law in
any jurisdiction, other than in any jurisdiction within the
European Union (including pursuant to the EU Merger Regulation) or
the United States of America, prevents the Closing in respect of
the shares in any Group Company, then (in the case of Arrow
subject to the closing condition in Section 4.2 (a) (i) (A)) the
relevant Purchaser and the Sellers shall be obliged to comply with
their respective obligations on Closing (save to the extent that
such obligations relate to the acquisition of such shares), and
the Purchasers' obligations to pay the full purchase price for the
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portions of the Group acquired by each of them at Closing shall
not be affected thereby, provided that Closing on such basis does
not violate any Antitrust Laws. The relevant Parties shall
endeavour to agree, upon request of any of them, on any
appropriate action or suitable amendment to this Agreement in
order to ensure, as far as practicable, that the Closing does not
so violate any Antitrust Laws. Following Closing, the relevant
Purchaser and the Sellers shall endeavour to obtain any necessary
approval in respect of Antitrust Laws to enable the relevant
shares to be transferred to the relevant Purchaser without payment
of any further consideration and as soon as such approval is
available the Sellers shall complete such transfer. Pending
completion of such transfer the relevant Purchaser and the Sellers
shall enter into such arrangements (subject to compliance with
Antitrust Laws) as give commercial effect to the intent of the
Parties to close the sales of each Group Company to be purchased
by a Purchaser simultaneously. If the approval is not obtained
within six months after Closing with the relevant Purchaser, the
Sellers shall procure the sale of the relevant business or shares
(after consultation with the relevant Purchaser) and shall pay to
the relevant Purchaser any proceeds of sale, net of any taxes and
reasonable expenses.
(f) If (a) either Arrow or Avnet are unable to complete the
acquisition of the relevant Group Companies to be purchased by
them as a result of the conditions in Section 4.2 (a) (i) not
having been satisfied by February 28, 2001 but (b) the acquisition
by the other Purchasers (including Memec Purchaser) of the Group
Companies to be purchased by them shall close on or prior to such
date and (c) either Arrow or Avnet (as the case may be) terminate
this Agreement in respect of either Arrow or Avnet (as the case
may be) in accordance with Article 10 as a result of such failure
of the conditions in Article 4.2 (a) or the Sellers terminate this
Agreement after May 15, 2001 in respect of either Arrow or Avnet
(as the case may be) in accordance with Article 10 as a result of
such failure, (i) each Purchaser that is unable to complete the
acquisition shall pay to the Sellers an amount of $ 25 million in
aggregate as a fee for such termination and each Purchaser that is
able to complete the acquisition of the relevant Group Companies
shall, on Closing of such acquisition or, if Closing has already
occurred, within five business days of being notified in writing,
pay an additional amount of $ 25 million by way of increase in the
Final Share Purchase Price, which shall be allocated, in the case
of Memec Purchaser, to the shares in Memec
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LLC, in the case of Avnet, to the shares in EBV-Elektronik GmbH,
and in the case of Arrow, to the shares in EBV Electronic Holdings
Inc. Notwithstanding any other provisions of this Agreement, the
payments by each Purchaser under this paragraph (f) shall be in
full and final discharge of all liabilities of it in respect of
its obligations under this Article 4.3 and all obligations of such
Purchaser under or in respect of Article 4.3 shall cease upon
termination of this Agreement in respect of such Purchaser in
accordance with Article 10. This paragraph (f) shall not apply if
both Arrow and Avnet are unable to complete the acquisitions
contemplated hereby as a result of the failure to satisfy the
conditions in Section 4.2 (a) (i) on or before the date specified
in Section 10.1 (e), but in this case Purchasers or Sellers may
terminate this Agreement in its entirety in accordance with that
Section.
4.4 ACTIONS ON CLOSING DATE
(a) On the Closing Date, the Parties shall take, or cause to be taken,
the actions set out in Exhibit 4.4, which shall be taken
simultaneously.
(b) No Purchaser and no Seller shall be obliged to close this
Agreement unless:
(i) Sellers and the relevant Purchaser comply with all their
obligations under Section 4.4 in respect of the
Divisions to be acquired by that Purchaser (provided
that, if two Purchasers do not comply with such
obligations, Sellers may, at their discretion, decide
not to close this Agreement in its entirety); and
(ii) subject to Sections 4.2 (a) (ii) (A) and 4.3 (e), the
purchase of all the Sold Shares in respect of the
Divisions to be acquired by that Purchaser is completed
simultaneously,
provided that no Seller or Purchaser shall be entitled to rely on
its own default under Section 4.4 in order to avoid its obligation
to close this Agreement.
4.5 STAGGERED CLOSING
If, pursuant to Sections 4.1 and 4.2, the Closing is completed with only
two Purchasers ("CLOSING I"), the following shall apply:
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(a) Sections 4.1 and 4.4 shall only apply to such Purchasers (the
"COMPLETING PURCHASERS") and not to the Purchaser who is unable to
complete (the "NON-COMPLETING PURCHASER") until the conditions set
out in Section 4.2 are satisfied with respect to such
non-completing Purchaser (subject to Article 10).
(b) Amounts to be paid in accordance with Article 2 shall be
determined in respect of the Divisions to be acquired by each
Completing Purchaser (and, in the event that there is a subsequent
Closing in relation to the Non-Completing Purchaser ("CLOSING
II"), the Non-Completing Purchaser) on the basis of the allocation
set out in Exhibit 2.3 (Part II). In respect of the Divisions to
be acquired by the Completing Purchasers, the Additional Amount
payable (if any) shall be calculated up to, but excluding, the
date of Closing I on the basis of an amount of $200,000,000 for
each Completing Purchaser. In respect of the Non-Completing
Purchaser, the Additional Amount payable (if any) in respect of
the Divisions to be acquired by it shall be calculated up to, but
excluding, the date of Closing II on the basis of an amount of
$200,000,000.
(c) The Final Share Purchase Price for the Sold Shares transferred to
the Completing Purchasers (and the Non-Completing Purchaser at
Closing II, if any) and the Closing Date Inter-Group Debt in
respect of the Divisions acquired by the Completing Purchasers
(and the Non-Completing Purchaser at Closing II, if any) shall be
determined on the basis of the Effective Date Financial Statements
and the Effective Date Certificates (to be prepared in respect of
the Group and all Divisions, as contemplated by Article 3) and the
Closing Date Certificates (to be prepared in respect of the
Divisions acquired by the Completing Purchasers or, in respect of
Closing II, the Non-Completing Purchaser). For the avoidance of
doubt, where relevant, the adjustments shall be determined from
the Effective Date Financial Statements in respect of the Group as
indicated in Exhibit 2.3 (Part II).
(d) Where the context so requires, references to the "Group" shall be
deemed to be made to the Divisions to be transferred to the
relevant Purchasers, and the other Divisions in respect of which
this Agreement has been terminated shall be deemed to be part of
the E.ON Group. Any reference to a time period determined by
reference to "Closing" shall be determined by reference to Closing
I or Closing II as the case may be.
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(e) In accordance with paragraph (f) below, the Purchasers and the
Sellers shall enter into mutually acceptable arrangements (the
"TRANSITIONAL AND SEPARATION ARRANGEMENTS") on arm's length terms
with respect to:
(i) the transitional arrangements to apply in the period
between Closing I and the first to occur of Closing II
and the termination of this Agreement pursuant to
Article 10 in respect of the Non-Completing Purchaser
with respect to the ongoing relationship between the
Divisions transferred to the Completing Purchasers at
Closing I and the other Divisions to be acquired by the
Non-Completing Purchaser; and
(ii) the arrangements (including appropriate service and
separation arrangements) to be put in place between the
E.ON Group (in this case including the Divisions
retained by the Sellers) and the Completing Purchasers
in the event that any of the conditions to Closing set
out in Section 4.2 is not satisfied with respect to the
Non-Completing Purchaser and this Agreement is
terminated by or in respect of such Non-Completing
Purchaser in accordance with Article 10.
(f) The Purchasers shall, as soon as reasonably practicable after the
date hereof, prepare a proposal for the Transitional and
Separation Arrangements based (with any adjustments deemed
appropriate by the Purchasers) on the principles negotiated and
agreed among the Purchasers in respect of the separation of the
Group by the Purchasers after the Closing. As soon as there is
reasonable evidence that the Closing may not be completed in
respect of all three Purchasers simultaneously, Purchasers shall
deliver that proposal to the Sellers, and the Parties shall
negotiate in good faith to finalise the Transitional and
Separation Arrangements on arm's length terms and using the
Purchasers' proposal as a basis for such negotiations. The Parties
shall use all reasonable endeavours to finalise such negotiations
within one month after Closing I has been completed. If the
Transitional and Separation Arrangements have not been finally
agreed within such one month period, the Sellers or the Purchasers
may each refer the remaining differences to an expert arbitrator
(the "EXPERT"). The Expert shall (unless otherwise agreed between
the Parties) be a recently retired person who held a senior
position in the electronics distribution industry. If the Parties
cannot mutually agree upon the Expert within such one month
period, the Expert shall be
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appointed, upon request of any Party, by the Chamber of Commerce
in Frankfurt am Main. The Expert shall first seek to resolve the
remaining differences with the Parties by way of mediation and, if
no mutually acceptable agreement can be reached within a
reasonable time (not to exceed four weeks), determine the
outstanding terms and conditions of the Transitional and
Separation Arrangements as an expert arbitrator
(Schiedsgutachter). The Expert shall decide at its equitable
discretion, on the basis of arm's length principles, but within
the range of the proposals made by the Parties. The terms and
conditions as agreed between the Parties or determined by the
Expert shall apply with retroactive effect as of Closing I or
Closing II (as the case may be). The last three sentences of
Section 3.4 and the provisions contained in Section 3.5 shall
apply with the necessary changes, provided that the four week
period referred to in Section 3.4 shall not begin until the
mediation as referred to above has failed.
(g) Where this Section 4.5 applies, references in this Agreement to
"Purchasers" shall be construed as a reference to all the
Purchasers, the Completing Purchasers or the Non-Completing
Purchasers and any reference to "Closing" shall be construed as a
reference to Closing I or Closing II, in each case as the context
requires.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLERS
The Sellers represent and warrant to each of the Purchasers (and any company
nominated by the relevant Purchaser pursuant to Section 1.1(d)) by way of an
independent guarantee (selbstandiges Garantieversprechen) that, except as set
forth in the disclosure letter attached hereto as Exhibit 5 (a) or in any other
exhibits referred to in this Article 5 (and, in each case, disclosed in respect
of a specific statement set forth in this Article 5 or to the extent it is
reasonably clear that the disclosure is also relevant for any other statement
set forth in this Article 5), the statements set forth in this Article 5 are
true and correct as of the date hereof and will be true and correct as of the
Closing Date, provided, however, that (i) representations and warranties which
are subject to the Sellers' knowledge shall only be true and correct as of the
date hereof and (ii) representations and warranties which are expressly made as
of a specific date shall be true and correct only as of such date. Each
Warranty is to be construed independently and (except where this Agreement
provides otherwise) is not limited by a provision of this Agreement or another
representation and warranty. Except as set forth in Section 8.1 (g), none of
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the representations and warranties shall be treated as qualified by any actual
or constructive knowledge on the part of any Purchaser or any of their agents.
References in this Article 5 to the Sellers' knowledge or awareness are to the
actual knowledge, as of the date hereof, of the persons listed in Exhibit 5
(b), after inquiry with the persons listed in Exhibit 5 (c).
The Sellers covenant that they shall as soon as reasonably practicable inform
the Purchasers of any breach of the representations and warranties of which any
person listed in Exhibit 5 (b) becomes aware in the period between the date
hereof and the Closing Date (provided that they shall have no obligation to
make any inquiry with the Companies' and Subsidiaries' management during that
period).
For the purpose of this Agreement (other than Exhibit 4.3), "MATERIAL ADVERSE
EFFECT" means any change or effect that is materially adverse to the financial
condition, results of operations or business operations of a Division, taken as
a whole.
5.1 ORGANIZATION OF SELLERS AND THE GROUP
(a) Except as disclosed in Exhibits R-1 and R-2, each Seller, each
Company and each Subsidiary is a corporation, limited liability
company or partnership (in each case, as indicated in Exhibits R-1
and R-2), duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has all
corporate powers to carry on its business as now conducted.
(b) All Companies and Subsidiaries and their respective jurisdictions
of incorporation are identified in Exhibit R-2 and no company of
the Group holds any interests in any company or entity other than
as set forth in Exhibit R-2.
(c) Except as set forth in Exhibit 5.1 (c), none of the Companies or
Subsidiaries is a party to any agreement which would permit any
third party (other than the Companies or Subsidiaries) to control
such Company or Subsidiary or obligate it to transfer its profits
or (other than as a result of transactions within the ordinary
course of its business) any part of its assets to any such third
party.
(d) Exhibit 5.1 (d) contains a true and correct list of the articles
of association, by-laws or similar organisational documents of the
Companies as presently in effect.
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True and complete copies of such documents have been delivered to
the Purchasers prior to the execution of this Agreement.
5.2 OWNERSHIP OF SHARES; SHAREHOLDINGS
(a) The ownership of the shares and interests in the Companies and the
Subsidiaries is set forth in the Recitals and in Exhibits R-1 and
R-2. The Sold Shares and the shares or interests in the
Subsidiaries (to the extent such shares or interests are
indirectly sold under this Agreement) are free and clear of any
liens, encumbrances or other rights of third parties, and there
are no pre-emptive rights, rights of first refusal, options or
other rights of any third party (other than any Company or
Subsidiary) to purchase or acquire any of the Sold Shares, except
as disclosed in Exhibit 5.2 (a). Except as otherwise set forth in
Exhibits R-1 or R-2, the Sold Shares and the shares in the other
Companies and Subsidiaries set out in such exhibits represent all
of the issued share capital of the respective Companies and
Subsidiaries, and no options or rights to acquire or subscribe to
any additional shares or convertible securities in respect of
shares of any Company or Subsidiary have been granted to, or
otherwise agreed with, any third party (other than any Company or
Subsidiary).
(b) The Sold Shares are duly authorized, validly issued and are fully
paid. The Sold Shares are non-assessable (i.e. there is no
shareholder obligation to make an additional capital
contribution).
(c) Except as expressly otherwise indicated in Exhibit R-2, the
minority shareholdings in the Companies and Subsidiaries as
referred to in Exhibit R-2 are owned, or will be owned at the
Closing Date, by directors, officers or employees of the Group as
set forth in Exhibit R-2 (or any other persons agreed with the
relevant Purchaser) for the account of the relevant majority
shareholder of such Companies and Subsidiaries, in order to comply
with requirements of local corporate law.
5.3 AUTHORIZATION OF SELLERS, NON-CONTRAVENTION
(a) The execution, delivery and performance by each Seller and by E.ON
AG of this Agreement and the consummation of the transactions
contemplated hereby are within each Seller's and E.ON AG's
corporate powers and have been duly
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authorized by all necessary corporate action on the part of each
Seller and of E.ON AG. This Agreement constitutes a valid and
binding agreement of each Seller and E.ON AG and is enforceable by
each Purchaser, assuming that it has been validly executed on
behalf of such Purchaser.
(b) The execution, delivery and performance by each Seller and by E.ON
AG of this Agreement and the consummation of the transactions
contemplated hereby require no action by any Seller or E.ON AG in
respect of, or filing by any Seller or E.ON AG with, any
governmental body, agency or official other than the compliance
with any applicable requirements under merger control laws as set
forth in Sections 4.2 and 4.3. With respect to Canada and Mexico,
the financial information relating to the Divisions to be acquired
by Arrow and contained in Exhibit 5.3 is accurate (provided that
this representation is only given for the purposes of Purchasers'
evaluation of any antitrust requirements in those countries).
(c) The execution, delivery and performance by each Seller and by E.ON
AG of this Agreement and the consummation of the transactions
contemplated hereby do not and will not:
(i) violate the certificate of incorporation or bylaws of
any Seller, Company, Subsidiary or E.ON AG,
(ii) assuming compliance with any applicable merger control
laws, violate any applicable law, rule, regulation,
judgement, injunction, order or decree to which a Seller
or E.ON AG is subject,
(iii) require any consent or other action by any third party
or constitute a default under any agreement or other
instrument binding upon any Seller or E.ON AG, or
(iv) require, as at the date hereof, any filing or
consultation with or consent from any works council,
economic committee, trade union or employee
representative or body.
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5.4 FINANCIAL STATEMENTS
(a) Exhibit 5.4 (a) contains the combined (German GAAP) balance sheet
of the Group as of December 31, 1999 (the "1999 GERMAN GAAP GROUP
BALANCE SHEET"). Except as disclosed in Exhibit 5.4 (a), the 1999
German GAAP Group Balance Sheet has been prepared in accordance
with German GAAP, as interpreted by the VEBA accounting standards
and the principles set forth in Exhibit 3.2, applied on a
consistent basis, and fairly presents, in accordance with the
above policies and principles, in all material respects the
combined financial position of the Group as at December 31, 1999.
(b) Exhibit 5.4 (b) contains the combined (US GAAP) financial
statements (including notes thereto) of the Group as of and for
the financial years ended December 31, 1998 and 1999
(collectively, the "1998 AND 1999 US GAAP GROUP FINANCIAL
STATEMENTS") together with the audit reports by
PricewaterhouseCoopers LLP on such financial statements. Except as
disclosed in Exhibit 5.4 (b), the 1998 and 1999 US GAAP Group
Financial Statements have been prepared in accordance with US GAAP
and the principles set forth in Exhibit 3.2, applied on a
consistent basis, and fairly present, in accordance with the above
policies and principles, in all material respects the combined
financial condition and the results of the combined operations of
the Group as at and in respect of the financial periods ending on
December 31, 1998 and 1999.
(c) To the Sellers' knowledge, the (unaudited) combined accounts of
the Group consisting of a balance sheet and income statement as at
and for the period from January 1, 2000 to March 31, 2000 as
contained in Exhibit 5.4 (c) (the "MARCH 2000 GROUP ACCOUNTS")
have been prepared in accordance with German GAAP, as interpreted
by VEBA accounting standards, and fairly present, in accordance
with the above policies and principles, in all material respects
the financial position and results of operations of the Group in
respect of the financial period from January 1, 2000 to March 31,
2000.
(d) The divisional accounts as of March 31, 2000, consisting of a
balance sheet for each Division, as set out in Exhibit 5.4 (d)
(the "MARCH 2000 DIVISIONAL ACCOUNTS"), are neither reviewed nor
audited and were not prepared by management for audit purposes.
They were derived from the March 2000 Group Accounts in order to
show the allocation to the Divisions. The Sellers are not
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aware that there are any material misstatements in the March 2000
Divisional Accounts.
(e) Except as disclosed in Exhibit 5.4 (e), none of the Sellers is
aware of any facts which would require a material change to the
1999 German GAAP Group Balance Sheet, the 1998 and 1999 US GAAP
Group Financial Statements, the March 2000 Group Accounts or the
March 2000 Divisional Accounts if such facts had been known at the
time when any of such financial statements (as appropriate) were
adopted.
5.5 ASSETS, ENCUMBRANCES
(a) The Companies and the Subsidiaries have good title to, or in the
case of leased or licensed property and assets have valid
leasehold interests or licenses in, or otherwise legally possess,
hold, or have a legal right to use, all property and assets
(whether real, personal, tangible or intangible) reflected on the
1999 US GAAP Group Financial Statements and all property and
assets acquired after December 31, 1999 or otherwise in use by the
Companies and Subsidiaries, except, in each case, for (i)
properties and assets disposed of since December 31, 1999 in the
ordinary course of business consistent with past practices and
(ii) any assets (other than those owned by VEBA Electronics LLC
and sold to Arrow pursuant to Section 1.1 (b) of this Agreement)
which are owned by any member of the E.ON Group. Each Division
owns, leases, licences or otherwise legally possesses, holds or
has a legal right to use, all fixed or current assets necessary
for the conduct of its business as carried on at the date hereof,
save to the extent that any other Division owns, leases, licences
or otherwise legally possesses, holds or has a legal right to use,
any such assets and provided that this representation shall not
extend to the adequacy of the level of the current assets or
working capital.
(b) The (fixed and current) assets owned by the Companies and
Subsidiaries as referred in Section 5.5 (a) are not encumbered
with any liens, pledges or other rights or encumbrances in favour
of any third party, except for (i) retention of title rights (or
equivalent rights in any jurisdiction) in favour of any supplier
arising in connection with the supply of goods to a Company or
Subsidiary by that person or any of its affiliates, (ii) liens,
pledges or other security rights in favour of a mechanic, xxxxxxx,
carrier or the like arising by operation of law or in the
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ordinary course of business in respect of assets in the possession
of such person, (iii) security rights of any kind granted to banks
and other financial institutions over cash deposited with such
banks and financial institutions in respect of financial debt
shown in the Effective Date Financial Statements, (iv) statutory
liens and other statutory security rights in favour of tax
authorities or other governmental entities in respect of taxes and
other public charges which have not become due and payable and
which do not impair any Division's ability to conduct its business
as currently conducted, (v) customary easements and similar rights
in real property which do not impair any Division's ability to
conduct its business as presently conducted and (vi) the rights
and encumbrances listed in Exhibit 5.5 (b).
(c) All inventories maintained by the Companies and Subsidiaries as of
the date hereof have been acquired or manufactured in the ordinary
course of business, consistent with past practice.
(d) Any trade accounts receivable arising since the Effective Date
have arisen as a result of sales or services made in the ordinary
course of business of the Divisions.
(e) Except as disclosed in Exhibit 5.12, no Company or Subsidiary uses
any material asset owned by the E.ON Group for the conduct of its
business.
(f) The real properties of which particulars appear in Exhibit 5.5 (f)
(the "PROPERTIES") are the only real properties owned, controlled,
used or occupied by the Companies and the Subsidiaries and which
are either (i) freehold or (ii) leasehold with annual lease
obligations of more than $ 100,000 (in respect of each lease). The
relevant Company or Subsidiary specified in Exhibit 5.5 (f) is the
legal and beneficial owner of each freehold Property or has a
valid and enforceable lease in respect of each leasehold Property
and, in either case, is in exclusive occupation of each Property.
In respect of each of the Properties which are freehold, the
relevant Company or Subsidiary has a good and marketable title to
each Property free from encumbrances (other than those permitted
under Section 5.5 (b) (iv) and (v) or disclosed in Exhibit 5.5
(b)) or third party rights of any kind whatsoever.
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(g) There is no covenant, restriction, burden, stipulation or
obligation affecting, in a material manner, the current use of any
Property by the relevant Group Company. No Group Company is in
material breach of any covenant, restriction, stipulation or
obligation affecting the use of any Property or the value of the
freehold. In the case of any outstanding leasehold interest in
respect of any Property, the rent in respect of such leasehold
Property has been paid up to date when due.
(h) There are no disputes to which any Group Company is a party
regarding boundaries, easements, covenants or other matters
relating to any Property or its use.
(i) To the Sellers' knowledge, the current use of each Property is, in
all material respects, the lawful use under the planning or zoning
law applicable and the permissions authorising that use are
unconditional and permanent.
(j) The relevant Company or Subsidiary has not received any notice or
order affecting any Property from any Government department, any
authority or any third party and is not aware of any proposals on
the part of any Government department or any authority which would
in either such case adversely affect the use of the Property or
the value of the freehold or (if any) leasehold interest in
respect of any Property.
(k) No Company or Subsidiary has sold, assigned, surrendered or
transferred any property in respect of which it entered into any
covenant which continues to bind it without having received a full
and effective release or indemnity in respect of its liability
under that covenant, nor is there any subsisting contractual
liability under any provision of any legal agreement in respect of
any property formerly owned or occupied by it.
5.6 INTELLECTUAL PROPERTY RIGHTS
(a) Exhibit 5.6 (a) contains a list of (i) all intellectual property
rights owned or licensed and used or held for use by any Company
or Subsidiary and registered in favour of or filed for
registration by any Company or Subsidiary which constitute all
such registered rights necessary for the conduct of the business
as carried on by the Companies and the Subsidiaries and (ii) all
unregistered intellectual property rights (including, without
limitation, internet domain names, but
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excluding the names VEBA and Xxxx Karcher and licences of, and
similar rights in, application software and know-how) owned or
licensed and used or held for use by any Company or Subsidiary and
which constitute all such rights which are material to the conduct
of the business as carried on by the Companies and the
Subsidiaries (together, the "INTELLECTUAL PROPERTY RIGHTS"),
specifying as to each, as applicable: (i) the nature of such
Intellectual Property Right, (ii) the registered or beneficial
owner or applicant for registration of such Intellectual Property
Right and (iii) the jurisdictions in which such Intellectual
Property Right has been registered or in which an application for
such issuance or registration has been filed and the registration
or application numbers. Each Group Company has all necessary
know-how to carry on its business as carried on at the date
hereof.
Except as disclosed in Exhibit 5.6 (a), the Group Companies have
done everything necessary to validly make or maintain all
registrations with and applications to governmental or regulatory
authorities in respect of the registered Intellectual Property
Rights.
(b) No Intellectual Property Right is subject to any outstanding
judgement, injunction, order, decree or agreement restricting the
use thereof by the Group or restricting the licensing thereof by
the Group to any third party.
(c) To the Sellers' knowledge, the Companies and Subsidiaries do not
currently infringe and have not at any time during the period of
three years prior to the date of this Agreement infringed any
intellectual property rights of any third party.
(d) To the Sellers' knowledge, there is not, and there has not been at
any time during the period of three years prior to the date of
this Agreement, an infringement or unauthorised use of any of the
Intellectual Property Rights.
(e) Except as disclosed in Exhibit 5.6 (a), no Company or Subsidiary
has granted nor is obliged to grant a licence, assignment,
consent, undertaking, security interest or other right in respect
of any of the Intellectual Property Rights.
(f) Neither the Company nor any Subsidiary is, or has received any
notice that it is in default (or with the giving of notice or
lapse of time or both, would be in default) under any agreement to
use the Intellectual Property Rights.
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5.7 PERMITS; COMPLIANCE WITH LAWS
(a) Each of the Companies and Subsidiaries has all governmental and
other legally required permits, licenses, authorizations and
consents which are required by it in order to operate its business
and are material for the conduct of the business of the relevant
Division (the "PERMITS"). No Permit has been revoked from any
Company or Subsidiary and the Sellers are not aware of any facts
which may result in the cancellation or revocation of any Permit.
(b) The business of each of the Companies and Subsidiaries is, and
within a period of three years prior to the date hereof has been,
conducted in all material respects in compliance with all
applicable laws, regulations, rules or orders of government
entities or public authorities ("APPLICABLE LAWS") and all Permits
in each jurisdiction in the European Union and the United States
of America and, to the Sellers' knowledge, in any other
jurisdiction in which the Group operates or has operated. No
Company or Subsidiary has received notice of any failure to comply
with any Applicable Laws.
5.8 ENVIRONMENTAL MATTERS
(a) For the purposes of this Section 5.8, "ENVIRONMENTAL LAWS" means
the U.S. Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 and U.S. Resource Conservation and Recovery
Act of 1976, each as amended, and any other law, regulation,
directive or order applicable in any jurisdiction and relating to
or imposing liability, standards of conduct for the protection of
the environment or the use, handling, generation, manufacturing,
distribution, collection, transportation, storage, disposal,
cleanup or release or threatened release of hazardous materials.
(b) Except as disclosed in Exhibit 5.8, to the knowledge of the
Sellers:
(i) no written notice, request for information, order,
complaint or penalty has been received, and there are no
judicial, administrative or other actions, suits or
proceedings pending or threatened which allege a
violation of or liability under any Environmental Law,
in each case relating to any Company or Subsidiary;
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(ii) each Company and Subsidiary has all permits required
under Environmental Laws necessary for its operations to
comply with all applicable Environmental Laws and is in
compliance with the terms of such permits and with all
other applicable Environmental Laws;
(iii) there has been no written environmental audit conducted
within the past three years by any Seller or Company or
Subsidiary of any property currently owned or leased by
any Company or Subsidiary which has not been delivered
to Purchasers prior to the date hereof; and
(iv) the Companies and the Subsidiaries have not caused any
pollution or contamination of the environment which
requires, under the Environmental Laws as in effect on
the Closing Date, any clean-up or other remedial
measures by the Companies or Subsidiaries.
5.9 LITIGATION, DISPUTES
Except as disclosed in Exhibit 5.9 and, in respect of the Divisions to be
acquired by Arrow and Memec Purchaser, except for debt collection actions
brought by a Group Company in the normal course of business and claims by
related third parties arising in connection therewith, no Company or
Subsidiary is involved in any lawsuit or other proceeding pending against
it before any court, arbitral tribunal or governmental agency involving
an amount in excess of $ 100,000. No such lawsuit or proceeding has been
threatened in writing against any Company or any Subsidiary, and no
Company or Subsidiary is subject to any governmental or court order or
decree that limits its ability to operate its business in the ordinary
course. To the Sellers' knowledge, unless otherwise disclosed in Exhibit
5.9 or, in respect of the Divisions to be acquired by Arrow and Memec
Purchaser, except for debt collection matters (as described above), there
are no facts or circumstances which are likely to result in any lawsuit
or other proceeding initiated against any Company or Subsidiary by any
third party and involving an amount in excess of $ 100,000. There is to
the Sellers' knowledge, no current, pending or threatened governmental or
other judicial or regulatory investigation, enquiry or disciplinary
proceeding concerning any Company or Subsidiary.
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5.10 EMPLOYEE AND LABOUR MATTERS
(a) Exhibit 5.10 (a) contains a true and correct list, as of the date
hereof, of all collective bargaining agreements and all material
agreements with unions, workers' councils and similar
organisations to which any Company or Subsidiary is bound. Except
as disclosed in Exhibit 5.10 (a), as of the date hereof, no
Company and no Subsidiary is experiencing and, to the Sellers'
knowledge, there is no basis to expect any Company or Subsidiary
to experience (i) any strike, slowdown, picketing or work stoppage
by or lockout of its employees or, in the United States of
America, any union organising activity, or (ii) any suit relating
to the alleged violation of any law or order and relating to
labour relations or employment matters (including any charge or
complaint filed by an employee or union with the U.S. National
Labor Relations Board or Equal Employment Opportunity Commission
or any other comparable governmental authority).
(b) Exhibit 5.10 (b) sets forth, as of the date hereof, a true and
complete list of (i) the employment, consultancy or appointment
contracts of all directors and officers of the Companies and
Subsidiaries and all other employees and consultants of each
Company and Subsidiary and each HQ Employee and (ii) all employees
of the Companies and Subsidiaries and HQ Employees whose
employment is based on employment-at-will-letters, in each case
whose annual base salary or base compensation (excluding, for the
avoidance of doubt, performance-related payments and bonuses)
exceeds $ 100,000 as well as of certain other key employees
specified in such exhibit. Copies of (i) such contracts providing
for an annual base salary in excess of more than $ 140,000 in
respect of the Divisions acquired by Memec Purchaser, (ii) all
such contracts (excluding any employment-at-will letters, where
the employment relationship has been established solely on the
basis of such letters) in respect of the Divisions acquired by
Arrow and (iii) all such contracts in respect of the Divisions
acquired by Avnet have been disclosed to the relevant Purchasers.
For the purposes of this paragraph (b), consultancy contracts
shall exclude contracts with companies or professional firms which
are generally in the business of providing consultancy services or
advice to companies and businesses (including companies and
businesses other than the Group).
(c) Exhibit 5.10 (c) sets forth, as of the date hereof, a true and
complete list of (i) all stock option plans of the Companies and
Subsidiaries or applying to any HQ
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Employee to the extent not disclosed in any of the employment
contracts disclosed to Purchasers pursuant to Section 5.10 (b) and
(ii) all redundancy schemes of the Companies and Subsidiaries
which constitute or, in respect of the non-German Companies and
Subsidiaries would constitute, a change of operations
(Betriebsanderung) within the meaning of Sec. 111 Shop
Constitution Act (Betriebsverfassungsgesetz).
(d) Exhibit 5.10 (d) sets forth a true and complete list of all
directors, officers or employees of the Group and all HQ Employees
whose terms of employment or engagement:
(i) include any payment or benefit which will be payable or
arise (directly or indirectly) as a result of the
transactions contemplated by this Agreement; or
(ii) have been varied (either by way of amendment or the
exercise of any discretion) since July 1, 1999 (other
than variations made in the ordinary course of business
and consistent with past practice of the relevant
Company or Subsidiary over the last three years),
provided that the representation in subsection (ii) shall only
apply to directors, officers or employees with an annual base
salary in excess of $ 100,000 and/or in respect of employees whose
terms of employment or engagement have been varied as part of a
scheme applying to 20 employees or more.
Copies of all such terms have been provided to the Purchasers.
5.11 EMPLOYEE BENEFITS AND PENSION OBLIGATIONS
(a) With respect to Xxxx Xxxxxxx Elektronik GmbH, Xxxx Karcher
Immobilien, EBV-Elektronik GmbH and Atlas Logistik Service GmbH,
Distron Elektronik GmbH, Memec (Memory and Electronic Components)
Plc, Memec Sud Europe SA, Memec GmbH, Memec Belgium NV, Memec AG,
Memec Nederland BV, Okura Electronics Co. Ltd., Memec Holding B.V.
and their respective Subsidiaries, and the Group Companies sold by
Xxxx Xxxxxxx Electronics Systems Plc, the following shall apply:
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Except for (i) employer's contributions to statutory pension
schemes, health and unemployment insurance, (ii) benefits provided
by the agreements referred to in Section 5.10 (a) or the
employment contracts of the employees referred to in Exhibit 5.10
(b), (iii) vacation or sick pay, (iv) any funded (defined
contribution) benefit schemes currently providing for annual
commitments by the employer of not more than $ 100,000 per benefit
scheme and (v) the arrangements disclosed in Exhibit 5.11 (a) (the
"ARRANGEMENTS"), none of the Companies or Subsidiaries referred to
above is under any obligation to pay or contribute towards
pensions or any other retirement, death, sickness, medical or
disability benefit to or in respect of any of its employees or
former employees (or any dependent thereof) and has not paid or
contributed towards any pension or any such benefit on a customary
or voluntary basis. All contributions and other payments due from
the participating employers and employees have been paid to the
Arrangements, except for any amounts relating to periods after May
31, 2000 to the extent that those amounts are still in course of
calculation and are not at the date of this Agreement due in
accordance with normal collection procedures for that Arrangement
and in accordance with the law applicable to that Arrangement. The
consummation of the transactions contemplated hereby will not
result in an increase in the amount of any benefit or accelerate
the vesting, timing, funding or payment of any benefit under any
of the Arrangements. Since December 31, 1999, and except as set
forth in any written Arrangement made available to the Purchasers,
no enhancement has been made to any existing benefit schemes in
respect of any Arrangement and no new benefit of the type covered
by this Section 5.11 (a) has been introduced or provided by any
Group Company, excluding the inclusion of any new directors,
officers and employees in any of the Arrangements or enhancements
based on promotions of employees, in each case within the ordinary
course of business, consistent with past practice.
(b) With respect to VEBA Electronics LLC, Wyle Electronics, and Atlas
Services LLC, Atlas Business Services LLC, EBV Electronics
Holdings, Inc., Memec LLC and their respective Subsidiaries
(collectively, the "U.S. Companies") the following shall apply:
Exhibit 5.11 (b) contains a complete and accurate list of all
material employee benefit plans (within the meaning of section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended (together with related regulations) ("ERISA")), including,
without limitation, multiemployer plans within the
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meaning of ERISA section 3 (37)), stock purchase, stock option,
severance, employment, change-in-control, fringe benefit, bonus,
incentive, deferred compensation and all other employee benefit
plans, agreements, programs, policies or other arrangements,
whether or not subject to ERISA (including any funding mechanism
therefor now in effect or required in the future as a result of
the transaction contemplated by this Agreement or otherwise),
whether formal or informal, oral or written under which any of the
U.S. Companies has or could have any present or future liability
or obligation. All such plans, agreements, programs, policies and
arrangements shall be collectively referred to as the "U.S.
COMPANY PLANS". Copies of each U.S. Company Plan, as well as the
most recent summary plan description, annual report (IRS Form 5500
series), summary annual report, financial statements, actuarial
report and IRS favorable determination letter for each Company
Plan listed (to the extent applicable) have been made available to
the Purchasers prior to the date hereof.
(i) Except as disclosed in Exhibit 5.11 (b), in the case of
each U.S. Company Plan listed on Exhibit 5.11 (b):
(A) the plan (and each related trust or insurance
policy) complies in form and in operation in all
respects with the applicable requirements of ERISA
and the Internal Revenue Code, and related
regulations (the "INTERNAL REVENUE CODE" or the
"CODE");
(B) Each plan intended to be qualified within the
meaning of section 401(a) of the Code has received a
favorable determination letter, or is pending or has
time remaining in which to file, an application for
such determination from the Internal Revenue Service
and no reason or condition has occured or exists
that could reasonably be expected to result in the
revocation or refusal to issue any of such letters
or in the disqualification of any such plans;
(C) all required contributions to or premiums or other
payments in respect of the plan have been paid, and
all required reports and descriptions have been
filed with the proper governmental authority or
distributed to participants as appropriate at the
times and in the manner required by ERISA or the
Internal Revenue Code;
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(D) there have been no "reportable events" (as defined
in Section 4043 of ERISA) "accumulated funding
deficiency" (as defined in Section 302 ERISA and
section 412 of the Code), whether or not waived or
"prohibited transactions" (as defined in Section 406
of ERISA and Section 4975 of the Internal Revenue
Code) in respect of the plan; and
(E) no suit in respect of the plan or the investment of
plan assets is pending or, to any Sellers'
knowledge, threatened, and to Sellers' knowledge,
there is no basis for any such suit.
(ii) Except as disclosed in Exhibit 5.11 (b) or required by
Section 4980B of the Internal Revenue Code, no Company and
no U.S. Company Plan provides health or other welfare
benefits to any retired or former employee and is not
obligated to provide health or other welfare benefits to
any active employee following his or her retirement or
other termination of service.
(iii) Except for the Amended and Restated Wyle Electronics
Retirement Plan (the "WYLE ELECTRONICS PENSION PLAN") no
U.S. Company maintains an Employee Benefit Plan that is
subject to Title IV of ERISA.
(iv) No Company contributes to or has ever contributed to or
been required to contribute to any "multiemployer plan" (as
defined in Section 3(37) of ERISA), incurred any
"withdrawal liability" (as defined in Section 4021 of
ERISA) in respect of any multiemployer plan or withdrawn
from any multiemployer plan in a "complete withdrawal" or a
"partial withdrawal" (as respectively defined in Sections
4203 and 4205 of ERISA).
(v) Except for the Wyle Electronics Pension Plan, no U.S.
Company has or could reasonably be expected to have any
liability under Title IV of ERISA with respect to any
benefit plan maintained or previously maintained by any
U.S. Company or any entity which is or has been under
common control, or which is or has been treated as a single
employer, with any U.S. Company under Section 414 of the
Code.
(vi) Except as disclosed in Exhibit 5.10 (d), no U.S. Company
Plan exists that could result in the payment to any present
or former employee of any of
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the U.S. Companies of any money or other property or
accelerate or provide any other rights or benefits to any
present or former employee of any of the U.S. Companies as
a result of the transactions contemplated by this
Agreement, whether or not such payment would constitute a
parachute payment within the meaning of Code section 280G.
(vii) Each U.S. Company Plan may be amended and terminated in
accordance with its terms.
(viii) Without limiting any other provision of this Section 5.11,
no event has occurred and no condition exists, with respect
to any U.S. Company Plan, that has subjected or could
subject any U.S. Company, or any U.S. Company Plan or any
successor thereto, to any tax, lien, penalty or other
liability (other than a liability arising in the normal
course to make contributions or payments, as applicable,
when ordinarily due under a U.S. Company Plan with respect
to employees of any U.S. Company and other than any such
tax, fine, lien, penalty or other liability that is not
material).
(c) Exhibit 5.11 (c) contains a true and correct list, as of the date
hereof, of all Employee Performance Unit schemes or shadow option
schemes implemented or undertaken to be implemented by all
Companies and Subsidiaries or in respect of any HQ Employee
together with a list of all employees who have (or have been
promised) rights thereunder and their entitlements (that is the
number of units granted or promised to them), including any
entitlements arising from the exercise of any discretion under any
such scheme. No promises or other commitments have been made with
respect to any Employee Performance Unit scheme and there exists
no reason why any participant in any such scheme could have any
entitlement to any benefit thereunder, other than as provided in
the scheme and the applicable written award agreement with respect
thereto.
5.12 MATERIAL AGREEMENTS
(a) Exhibit 5.12 contains a true and correct list, as of the date
hereof, of all of the following written or unwritten contracts and
agreements (including all amendments thereto) to which any Company
or Subsidiary is a party and which have not yet been completely
fulfilled (the "MATERIAL AGREEMENTS"):
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(1) agreements relating to the acquisition or sale of interests
in other companies or businesses or business units
providing, in each case, for a consideration of $ 5,000,000
or more; agreements for the sale, lease, licence or other
disposal of any material assets or property, except for
agreements in the ordinary course of business consistent
with past practice;
(2) joint venture, partnership and shareholder agreements
relating to the conduct of a material part of a Division's
business;
(3) rental and lease agreements relating to real estate which,
individually, provide for annual payments of $ 500,000 or
more;
(4) loan agreements (other than intercompany debt towards any
company of the E.ON Group as referred to in Section 5.14),
including loans granted by suppliers (other than extended
payment arrangements); bonds, notes or any other
instruments of debt issued by any of the Companies or
Subsidiaries;
(5) all guarantees, comfort letters or other sureties issued by
any of the Companies or Subsidiaries for any debt,
obligation or liability of any party, other than debt of
another Company or a Subsidiary;
(6) any agreement that limits the freedom of any Company or
Subsidiary to compete in any line of business or with any
third party, excluding (i), for the avoidance of doubt,
territorial restrictions in supplier or reseller agreements
which restrict the ability of the contracting Company or
Subsidiary to distribute the product to which such
agreements relate, (ii) agreements which impose
restrictions exclusively upon the contracting Group Company
(provided that such company is not material to a Division),
but do not otherwise limit the Division's freedom to
operate in the relevant line of business or to compete with
the relevant third party or (iii) agreements which may be
terminated by the relevant Company or Subsidiary within
three months after the Closing Date without any penalty,
cost or expense (other than any compensation claims of
resellers
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under mandatory law) and which are not material to the
business of a Division;
(7) frame or master agreements in respect of the top 10
suppliers of each Division (other than Atlas Europe
Division and Atlas US Division) (based on the aggregate
sales in 1999);
(8) agreements with E.ON AG or any other company of the E.ON
Group other than trading or supply agreements with respect
to goods or utilities made in the ordinary course of the
relevant Group Company's business on arm's length terms;
(9) agreements or commitments not made in the ordinary course
of business;
(10) consultancy agreements with expected annual fees or with an
agreed flat or minimum fee in excess of $ 250,000 or which
are likely to result in annual fees in excess of such
amount;
(11) long-term agreements (Dauerschuldverhaltnisse) that cannot
be terminated by any Company or Subsidiary with less than 6
months notice as from the Closing Date without any
liabilities in excess of $ 500,000 (per agreement),
excluding, however, any type of agreements referred to in
paragraphs (1) to (5), (7), (8) and (10) of this Section
5.12 (a) and customer agreements;
(12) any currency or hedging agreements which cannot be
terminated without liability to any Division of more than $
100,000 in the aggregate in respect of all such agreements.
(b) Except as otherwise indicated in Exhibit 5.12, true and complete
copies of all written Material Agreements have been disclosed to
Purchasers prior to the execution of this Agreement and true and
not misleading summaries of the principal terms of any non-written
Material Agreements are contained in Exhibit 5.12. To the Sellers'
knowledge, unless otherwise disclosed in Exhibit 5.12, each
Material Agreement is in full force and effect and neither the
Companies or Subsidiaries nor any third party are in material
default or material breach under any such agreement. Except as
provided in any written agreement
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disclosed to the Purchasers in accordance with this Section 5.12
(b) or as disclosed in Exhibit 5.12, no third party is entitled to
terminate or materially amend any Material Agreement (other than
the Material Agreements referred to in subsection (a) (8) above,
which shall be terminated in accordance with, and except to the
extent specified in, Section 2.5) as a result of the transactions
contemplated by this Agreement. The agreements referred to in
subsection (a) (8) above were made in the ordinary course of
business on arm's length terms.
5.13 FINDERS' FEES
Except for Xxxxxxx Xxxxx International, whose fees will be paid by the
Sellers, no Seller or Company or Subsidiary has any obligation or
liability to pay any fees or commissions to any broker, finder or agent
with respect to any of the transactions contemplated by this Agreement.
5.14 INTERCOMPANY ACCOUNTS AND PRE-CLOSING NON-RECURRING CHARGES
(a) Exhibit 5.14 (a) contains complete lists of (i) all intercompany
balances (under any borrowings including all Effective Date
Inter-Group Debt) as of the Effective Date between each Company
and Subsidiary (or Division, as indicated in the exhibit), on the
one hand, and E.ON AG and any other company of the E.ON Group, on
the other hand and (ii) all credit lines under the VEBA cash
management system and all other intercompany loans granted to the
Group, as of the date hereof, by E.ON AG and any other company of
the E.ON Group. Since the Effective Date there have been no
Pre-Closing Non-Recurring Charges.
(b) The information included in Exhibit 5.14 (b) on the bank accounts
and balances with respect to the Memec Division was true and
accurate in all material respects as at the date on which the
information was produced as identified in the Exhibit.
5.15 KEY SUPPLIERS
Except as disclosed in Exhibit 5.15, to the Sellers' knowledge, none of
the suppliers listed in Exhibit 5.12 has indicated, as of the date
hereof, to the management of any of the Companies or Subsidiaries in
writing or orally (provided that any such oral indication has been made,
in an express and unambiguous manner, by one or more directors, officers
or duly authorized senior executives of the supplier and is referred to
in any memorandum,
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minutes or other written document prepared by the management of a Company
or Subsidiary for circulation to the CEO of the main operating companies
(as set forth in section 1 of the Recitals) of any Division) that it
intends to terminate or reduce its business dealings with any of the
Divisions as a result of the transactions contemplated by this Agreement.
5.16 INSURANCE COVERAGE
Exhibit 5.16 contains a true and complete list of all material insurance
policies and fidelity bonds relating to the assets, business or
operations of the Companies and the Subsidiaries, indicating any policies
and bonds which will terminate or may be terminated by the insurer as a
result of the consummation of the transaction contemplated by this
Agreement. To the Sellers' knowledge, all such policies and bonds are in
full force and effect, all due premiums in respect thereof have been paid
and there are no material claims by any Company or Subsidiary pending
under any of such policies or bonds. None of these policies and bonds
will terminate, as a result of the transaction contemplated hereby, prior
to the Closing Date.
5.17 NO UNDISCLOSED MATERIAL LIABILITIES
To the Sellers' knowledge, there are no liabilities of any Company or
Subsidiary of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, which (i) would, as of the date
hereof, be required by U.S. GAAP to be disclosed or included on a
combined balance sheet of the Group or (ii) have been incurred outside
the ordinary course of the Companies' or the Subsidiaries' business and,
in either case, individually or in the aggregate, have, or may reasonably
be expected to have, a material adverse effect on the financial position
of any Division (and for these, Wyle Components Division, Wyle Systems
Division and Atlas US Division shall be regarded as one Division), other
than:
(a) liabilities provided for in, or disclosed in the notes to, the
1999 US GAAP Group Financial Statements, 1999 German GAAP Group
Balance Sheet, March 2000 Group Accounts or March 2000 Divisional
Accounts;
(b) liabilities disclosed in Exhibit 5.17;
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(c) other undisclosed liabilities that individually do not exceed
$ 1,000,000 or in the aggregate do not exceed $ 10,000,000; or
(d) liabilities arising in respect of any matter which is the subject
of any other representation or warranty (other than the
representations and warranties set forth in Section 5.4) or of any
indemnity contained in this Agreement.
5.18 CONDUCT OF BUSINESS SINCE DECEMBER 31, 1999
Except as disclosed in Exhibit 5.18 and except for any transactions,
facts or events expressly referred to in this Agreement, in the period
between December 31, 1999 and the date hereof, (i) the business of each
Division has been operated in the ordinary course in a manner consistent
with past practice, (ii) the Group has used its reasonable efforts to
preserve intact its business organizations and relationships with third
parties and to keep available the services of its present officers and
employees, (iii) capital expenditure has been maintained in the ordinary
course of the Group's business (taken as a whole), consistent with past
practice, and (without prejudice to paragraph (h) below) any capital
expenditure necessary to continue to conduct the business of any Division
in the ordinary course has been made and (iv) there have not been (or any
commitment made in respect of):
(a) any damage, destruction or other casualty loss, liability or cost
(whether or not covered by insurance) adversely affecting the
business or assets of any Company or Subsidiary which,
individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock or shares
in the capital of any Company or Subsidiary, or any repurchase,
redemption, repayment or other acquisition by any Company or
Subsidiary of any outstanding shares of capital stock, issued
shares or other securities of any Company or Subsidiary, in each
case, other than any of the foregoing to the extent it relates to
any other Group Company;
(c) any amendment of any term of any outstanding or issued share or
security of any Company or Subsidiary;
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(d) any incurrence, assumption or guarantee by any Company or
Subsidiary of any indebtedness for borrowed money other than (i)
indebtedness incurred under existing credit lines as disclosed in
Exhibit 5.12 or (ii) the Inter-Group Debt;
(e) any creation or other incurrence by any Company or Subsidiary of
any encumbrance on any asset other than in the ordinary course of
trading consistent with past practices;
(f) any making of any loan, advance or capital contributions to or
investment by any Company or Subsidiary in any company, entity or
other person (other than any Company or Subsidiary) exceeding in
respect of any Division $ 100,000 in aggregate;
(g) any change in any method of accounting or accounting practice or
policy by any Company except for any such change required by
reason of a concurrent change in generally accepted accounting
principles and disclosed in Exhibit 3.2 or Exhibit 5.4 (a) - (d);
(h) any capital expenditure, or commitments for capital expenditure,
by additions or improvements to property, plant and equipment, IT
software or hardware in excess of $ 15,000,000 in aggregate (such
amount excluding the costs of the X.X. Xxxxxxx software as
referred to in Exhibit 5.18) for the Divisions to be acquired by
each respective Purchaser;
(i) any change in or any commitment to change (which, for these
purposes, shall include the exercise or agreement to exercise any
discretion) the compensation (including deferred compensation) or
other benefits payable to or the obligations or rights of:
(i) any director or officer of any Company or Subsidiary or any
of the employees referred to in Section 5.10 (b); or
(ii) a significant part of the workforce of a Division,
in each case other than changes made in the ordinary course of
business consistent with past practice;
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(j) any lockouts, strikes, slowdowns, work stoppages or threats
thereof by or with respect to any employees of any Company or
Subsidiary that has, or could reasonably be expected to have, a
Material Adverse Effect;
(k) any redundancies in respect of the Companies and Subsidiaries
which have constituted, or in respect of any non-German Companies
and Subsidiaries would have constituted, a change of operations
(Betriebsanderung) within the meaning of Sec. 111 German Shop
Constitution Act (Betriebsverfassungsgesetz);
(l) any sale, lease, licence or other disposal of any material assets
or property except pursuant to contracts or commitments existing
prior to December 31, 1999 or otherwise in the ordinary course of
business consistent with past practice at December 31, 1999;
(m) any (i) amendment of the certificate or articles of incorporation
or by-laws (or other comparable corporate charter documents) of
any Company or any Subsidiary, (ii) recapitalization,
reorganisation, liquidation, corporate restructuring or
dissolution of any Company or any Subsidiary or (iii) merger or
other business combination involving any Company or any Subsidiary
and any other person; or
(n) any transfer or payment pursuant to any profit transfer agreement
referred to in Section 7.9 below.
5.19 CERTAIN ANTI-TRUST UNDERTAKINGS AND ORDERS
No Company or Subsidiary has given any undertaking to any regulatory
authority and no order has been made against or in relation to any
Company or Subsidiary pursuant to any anti-trust or similar legislation
in any jurisdiction in which they carry on business or have assets or
sales.
5.20 INSOLVENCY AND LIQUIDATION PROCEEDINGS
Except as set forth in Exhibit 5.20,
(a) no liquidator, administrator, receiver or administrative receiver
or other insolvency practitioner (or the equivalent in any
jurisdiction) has been appointed
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in respect of any Company or Subsidiary or in respect of the whole
or any part of the assets or undertaking of any Company or
Subsidiary. No meeting has been convened at which a resolution
shall be proposed, no resolution has been passed, no petition or
order (or the equivalent in any jurisdiction) has been presented
or made for the administration, receivership, winding up or
liquidation of any Company or Subsidiary;
(b) no Company or Subsidiary has stopped or suspended payment of its
debts, become unable to pay its debts or otherwise become
insolvent in any relevant jurisdiction;
(c) no scheme for the benefit of creditors generally has been proposed
or implemented in respect of any Company or Subsidiary, whether or
not under the protection of the court and whether or not involving
a reorganisation or rescheduling of debt; and
(d) no event has occurred which would give rise to any of the events
or circumstances referred to in any of (a) to (c) above.
5.21 TERMS OF SUPPLY
Except as required by law, none of the standard terms of supply of any
Company or Subsidiary provide for any liability in respect of any
defective product sold or delivered by it which liability is more onerous
than those provided by the supplier of the relevant product to the
Company or Subsidiary concerned.
5.22 IT SYSTEMS
(a) The Group owns or uses under current licences all information and
computer systems necessary for it to conduct its business as
carried out at the date of this Agreement and is not in breach of
any such licences in any material respect.
(b) The Group (i) owns or has access to all source codes (but only
with respect to software specifically designed for any member of
the Group which is material for the business of any Division or
main operating company (as referred to in section 1 of the
Recitals)) and (ii) owns, licences or otherwise has a legal right
to
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use all software, in each case required to operate and maintain
the information and computer systems used by it.
(c) Each Division operates and maintains appropriate data storage and
disaster recovery plans designed to enable the Division to carry
on and maintain the conduct of its business in line with normal
prudent commercial practice.
5.23 NO OTHER REPRESENTATIONS AND WARRANTIES
Sellers and E.ON AG make no representations and warranties with respect
to the Group, its business and the transactions contemplated hereby other
than those expressly set forth in this Agreement.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Each of the Purchasers for itself and not on behalf of any of the other
Purchasers severally represents and warrants to each of the Sellers as follows,
in each case as of the date hereof and the Closing Date:
6.1 AUTHORISATION OF PURCHASERS, NON-CONTRAVENTION
(a) Such Purchaser is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction
in which it was incorporated and has all corporate powers and all
material governmental licenses, authorizations, permits, consents
and approvals required to carry on its business as now conducted.
(b) The execution, delivery and performance by such Purchaser of this
Agreement and the consummation of the transactions contemplated
hereby are within the corporate powers of such Purchaser and have
been duly authorized by all necessary corporate action on the part
of such Purchaser. This Agreement constitutes a valid and binding
agreement of such Purchaser.
(c) The execution, delivery and performance by such Purchaser of this
Agreement and the consummation of the transactions contemplated
hereby require no
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material action by such Purchaser in respect of, or material
filing by such Purchaser with, any governmental body, agency or
official other than the compliance with any applicable
requirements under merger control laws as set forth in Sections
4.2 and 4.3.
(d) The execution, delivery and performance by such Purchaser of this
Agreement and the consummation by it of the transactions
contemplated hereby do not and will not (i) violate the
certificate of incorporation or bylaws of such Purchaser, (ii)
assuming compliance with any applicable merger control laws,
violate any applicable law, rule, regulation, judgement,
injunction, order or decree to which the relevant Purchaser is
subject, or (iii) require any consent or other action by any
person under any agreement or other instrument binding upon such
Purchaser.
6.2 LITIGATION
As at the date hereof there is no action, suit, investigation or
proceeding (other than merger control proceedings (if any) in respect of
the transaction contemplated hereby) pending against, or to the actual
knowledge of such Purchaser, threatened against or affecting such
Purchaser before any court or arbitrator or any governmental body, agency
or official which in any manner challenges or seeks to prevent, enjoin,
alter or materially delay the transactions contemplated by this
Agreement.
6.3 FINANCIAL CAPABILITY
Such Purchaser (except Memec Purchaser) has or will at Closing have
sufficient immediately available funds or binding and unconditional
financing commitments to pay the amounts referred to in Section 2.4 to
the extent it relates to the Divisions to be acquired by such Purchaser.
True and complete copies of the Committed Facilities for Memec Purchaser
have been disclosed to Sellers. These agreements have been duly executed
on behalf of Memec Purchaser and so far as Memec Purchaser is aware they
have been duly executed on behalf of the financing banks.
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6.4 FINDERS' FEES
Such Purchaser does not have any obligation or liability to pay any fees
or commissions to any broker, finder or agent with respect to any of the
transactions contemplated by this Agreement for which the Sellers could
become liable.
6.5 PURCHASER
Such Purchaser is purchasing the Sold Shares for investment for its own
account and not with a view to, or for sale in connection with, any
distribution thereof. Such Purchaser (either alone or together with its
advisors) has sufficient knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks
of its investment in the Sold Shares and is capable of bearing the
economic risks of such investment. The Sellers acknowledge that the sole
purpose of this Section 6.5 is to ensure that the sale of the Sold Shares
does not contravene any US securities law and that the representation and
warranty in this Section 6.5 shall in no way limit or restrict the right
of any Purchaser to enforce any rights or recover under this Agreement.
ARTICLE 7
COVENANTS; CERTAIN INDEMNITIES
7.1 CONDUCT OF BUSINESS
From the date hereof until and including the Closing Date, the Sellers
shall cause the Companies and the Subsidiaries to conduct their
businesses in the ordinary course consistent with past practice and to
use their reasonable efforts to preserve intact their business
organizations and relationships with third parties and to keep available
the services of the Group's present officers and employees (it being
understood that subject to the compliance by Sellers with the covenants
in this Section 7.1, the risk of supplier, customer and employee
defections after the date hereof shall be borne by Purchasers). Without
limiting the generality of the foregoing, from the date hereof until and
including the Closing Date, except as disclosed in Exhibit 7.1 or
contemplated by this Agreement, the Sellers will (i) cause each Division
to maintain capital expenditure in the ordinary course of each Division's
business, consistent with past practice, (ii) cause each Division to
maintain all policies of insurance in respect of all risks covered and in
place as at
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December 31, 1999 at levels of coverage equal to or in excess of those
maintained at that date, and (iii) will ensure that no Company or
Subsidiary will:
(a) adopt or propose any change in its certificate of incorporation or
bylaws or pass any other shareholder resolutions (other than in
respect of matters expressly contemplated by this Agreement) or
amend any term of any outstanding or issued share or security of
any Company or Subsidiary;
(b) merge or consolidate with any other person, enter into any
recapitalization, reorganization, corporate restructuring,
liquidation or dissolution, or acquire, lease, license or
otherwise purchase a material amount of assets or property from
any other person (except for inventory purchased in the ordinary
course of trading);
(c) incur, assume or guarantee any indebtedness for borrowed money
other than (i) indebtedness incurred under existing credit lines
as disclosed in Exhibit 5.12 up to a maximum amount equal to the
aggregate of any borrowings under such credit lines as at March
31, 2000 or (ii) the Inter-Group Debt incurred in accordance with
Section 7.3 below;
(d) sell, lease, license or otherwise dispose of any material assets
or property except pursuant to contracts or commitments existing
at the Effective Date or otherwise in the ordinary course of
business consistent with past practice; or create or permit to be
created any encumbrance on any asset other than in the ordinary
course of trading consistent with past practices;
(e) make any loan, advance or capital contribution to or investment in
any company, entity or other person (other than any Company or
Subsidiary) exceeding in respect of any Division $ 100,000 in the
aggregate;
(f) change any method of accounting or accounting practice or policy
except as required by reason of a concurrent change in generally
accepted accounting principles;
(g) reduce or change the existing insurance coverage, except for
normal changes within the ordinary course of business which do not
adversely affect the insurance coverage under a certain policy;
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(h) close the warehouse of Memec Plc at Thame, U.K.;
(i) amend the existing agreements between the Companies and
Subsidiaries and the Atlas Europe Division or the Atlas US
Division, except for non-material adjustments within the ordinary
course, consistent with past practice; or
(j) appoint, employ or elect (or cause to be elected) any new director
or officer or (except for employment engagements which are made to
replace employees or are otherwise necessary or appropriate in
order to continue the business within the ordinary course)
employee who would, if employed or acting in such position at the
date of this Agreement, be listed in Exhibit 5.10 (b) or terminate
the employment or relationship of any such director, officer or
employee (other than for cause, including operational or personal
reasons or bad performance); or change (which, for these purposes,
shall include the exercise or agreement to exercise any
discretion) the compensation (including deferred compensation) or
other benefits payable to or the obligations or rights of:
(i) any director or officer of any Company or Subsidiary or any
of the employees referred to in Section 5.10 (b); or
(ii) a significant part of the workforce of a Division,
in each case other than changes made in the ordinary course of
business consistent with past practice;
(k) increase or reduce the number of employees engaged in any Division
to any material degree or make any redundancies in respect of the
Companies and Subsidiaries which constitute, or in respect of any
non-German Companies and Subsidiaries would constitute, a change
of operations (Betriebsanderung) within the meaning of Sec. 111
German Shop Constitution Act (Betriebsverfassungs-gesetz);
(l) create, allot or issue or grant any option over or other right to
subscribe or purchase, or redeem or purchase, any share of any
Company or Subsidiary or securities convertible into such shares;
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(m) declare, set aside or pay any dividend or other distribution
(including any payments under a profit transfer agreement) with
respect to any shares of capital stock or shares in the capital of
any Company or Subsidiary or issue, sell, purchase, redeem or
repurchase, repay or otherwise acquire any equity securities or
other shares, stock or securities of any of the Companies or
Subsidiaries (in each case other than any of the foregoing to the
extent it relates to any other Group Company);
(n) make any financial or contractual commitment or capital
expenditure in respect of any information or computer system, IT
software or hardware or roll-out any information or computer
system or IT software or hardware, other than in the ordinary
course and subject always to a maximum aggregate amount of
$ 1,000,000 per Division (which amount shall include any costs of
the X.X. Xxxxxxx software as referred to in Exhibit 5.18, except
for any such costs incurred by the Wyle Systems Division and not
exceeding $ 1,000,000 per month);
(o) incur, suffer or make any Pre-Closing Non-Recurring Charge;
(p) make any capital expenditures, by additions or improvements to
property, plant and equipment in excess of $ 15,000,000 in the
aggregate (such amount excluding any amounts paid or incurred
under paragraph (n)) for the Divisions to be acquired by each
respective Purchaser, in each case for the period from the date
hereof up to February 28, 2001 and each subsequent seven month
period;
(q) use cash other than in the ordinary course of business or to
reduce External Debt or Inter-Group Debt;
(r) settle the litigation referred to in section IV. 4 of Exhibit 5.9
(Lemelson);
(s) continue the marketing and roll-out of the Wyle brand under the
contract with the Idea Lab;
(t) grant (i) any bonuses relating to the sale of the Group or stay
bonuses or (ii) any other bonuses (other than in the ordinary
course and consistent with past practice) to directors, officers
or employees of any Group Company or to any HQ Employee;
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(u) agree to any arrangements under which (i) Sig. X. Xxxxxxxx Xxxxxxx
is granted any option, or right to subscribe, or right to
purchase, any shares or other securities in the capital of any
Group Company in the RKE Division or (ii) any Group Company
purchases the shares held by Sig. X. Xxxxxxxx Mirabet in RK
Distribucion de Componentes S.A. for an amount exceeding $ 20,000
in aggregate; or
(v) agree or commit to do any of the foregoing.
The Sellers covenant that promptly after the date hereof they will
instruct the senior management of the Divisions to ensure that the
Companies and Subsidiaries will not, as from the date hereof, permit any
transfer of employment of any employee of any Division to another
Division.
7.2 PREPARATION OF ADDITIONAL FINANCIAL STATEMENTS; ACCESS TO INFORMATION
(a) Sellers shall at the Sellers' cost cause the Companies to prepare,
without undue delay after the date hereof and in any event by no
later than two months after the date hereof, US GAAP financial
statements of each Division for the period ended on December 31,
1999, and cause that they are audited by PricewaterhouseCoopers
LLP. Sellers shall use their best efforts to procure that such
financial statements, together with the audit report by
PricewaterhouseCoopers LLP, will be available by no later than two
months after the date hereof. In addition, upon the Purchasers'
request, the Sellers shall, at the relevant Purchaser's cost,
cause the Companies to prepare, as soon as practicable, and to
cause the same to be audited by PriceWaterhouseCoopers LLP, US
GAAP financial statements with respect to periods prior to 1999.
Any financial statements prepared in accordance with this Section
7.2 (a) shall be prepared in accordance with the accounting
principles used in the preparation of the 1999 US GAAP Group
Financial Statements.
If and to the extent the Closing has not occurred by December 31,
2000, upon the Purchasers' request, Sellers shall instruct the
Companies to prepare, at the relevant Purchaser's cost and as soon
as practicable, US GAAP financial statements of the relevant
Divisions for the period ended on December 31, 2000 and to cause
that they are audited by PricewaterhouseCoopers LLP. These
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financial statements shall be prepared in accordance with the
accounting principles used in the preparation of the relevant
divisional financial statements for the period ended on December
31, 1999, as referred to above.
(b) In the period between the date hereof and the Closing Date, the
Sellers will afford promptly to the Purchasers and their advisers
and representatives reasonable access, upon reasonable advance
notice, to books of account, financial and other records
(including, without limitation, accountant's work papers),
information, employees, facilities and auditors of the Group
Companies including, without limitation, (i) for Purchasers to
review the Effective Date Financial Statements, the Effective Date
Certificates and the financial statements as referred to in
subsection (a) above, (ii) in connection with any Purchaser's
financing arrangements and/or (iii) to assist any Purchaser in the
preparation of an opening balance sheet as at Closing and the
interim unaudited financial statements for the period prior to
Closing; provided that any such access by Purchasers shall be at
Purchasers' cost and shall not unreasonably interfere with the
conduct of the business of Sellers or the Group.
(c) After the Closing Date, each Purchaser and the Sellers (as the
case may be) will afford promptly to the Sellers and each
Purchaser (as the case may be) and their respective advisers and
representatives reasonable access, upon reasonable advance notice,
to books of account, financial and other records (including,
without limitation, accountant's work papers), information,
employees and auditors of the Divisions acquired by the relevant
Purchaser or of the E.ON Group (as the case may be) to the extent
necessary for Sellers and the relevant Purchaser in connection
with any reasonable audit or other regulatory requirement of the
E.ON Group or the relevant Purchaser or the Divisions acquired by
the relevant Purchaser (other than in connection with any dispute
or litigation in respect of any of the transactions contemplated
by this Agreement) and to assist the Purchasers in the preparation
of an opening balance sheet as at Closing and interim unaudited
financial statements for the period prior to Closing; provided
that any such access or assistance shall be at the cost of the
Party being given access or assistance and shall not unreasonably
interfere with the conduct of the business of Sellers or of the
relevant Purchaser or the Divisions acquired by it and provided
further that any such access by Purchaser to books, records,
information, employees and auditors of the E.ON Group shall
include only information to the extent that it relates to the
Group.
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7.3 INTER-GROUP DEBT
(a) During the period between the Effective Date and the Closing Date,
Sellers covenant that they have ensured and shall ensure that the
existing credit lines as referred to in Section 5.14 have been and
will continue to be made available to the Group on the terms and
conditions set out in Exhibit 7.3 and that the E.ON Group has not
and shall not permit any increase in the Inter-Group Debt other
than on the terms and conditions set out in such Exhibit 7.3.
Following the date of this Agreement up to the Closing Date,
Sellers shall procure that the E.ON Group shall make available to
the Divisions additional Inter-Group Debt up to the agreed levels
set out in Exhibit 7.3, provided that the Inter-Group Debt of the
Divisions to be acquired by any Purchaser shall not be increased
beyond the agreed levels set out in Exhibit 7.3. If any
Pre-Closing Distribution is paid, the Sellers shall procure that
the E.ON Group shall, on payment of the Pre-Closing Distribution,
make available to the relevant Group Company Inter-Group Debt
equal to the amount of that Pre-Closing Distribution, and the
amount of such Inter-Group Debt shall not be taken into account in
determining whether the limits referred to in Exhibit 7.3 have
been exceeded.
(b) To the extent Inter-Group Debt at the Closing Date is increased
above the Effective Date Inter-Group Debt in accordance with the
terms and conditions referred to in Section 7.3 (a), the Sellers
(or the relevant members of the E.ON Group) shall be entitled, in
accordance with Section 7.3 (a), to receive interest at the rates
referred to in Exhibit 7.3 (calculated on a daily basis and on the
basis of a 365 day year) on the amount of such increase. Such
interest (to the extent accrued but unpaid at Closing) shall be
included in the calculation of Closing Date Inter-Group Debt.
(c) During the period between the Effective Date and the Closing Date,
the Sellers covenant that no Group Company has increased or will
increase the amount of or will incur any additional External Debt,
save as permitted under Section 7.1 (c), and they will ensure that
no Group Company will make any such increase for the purpose of
repaying Inter-Group Debt.
(d) The Sellers shall procure that as at the Closing Date, the net
debt and cash balances as between any Division and another
Division shall be nil and a Division
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is provided with adequate Inter-Group Debt to facilitate payments
required to ensure that such inter-divisional balances are nil.
7.4 RESIGNATIONS
On the Closing Date, the Sellers will deliver to the Purchasers the
resignations, effective at or prior to the Closing Date, of the board
members of the Companies listed in Exhibit 7.4. Such resignations shall
be achieved at no cost to the Purchasers or the Group.
7.5 COVENANT NOT TO COMPETE; COVENANT NOT TO SOLICIT
(a) For a period of two years after the Closing Date, the Sellers
shall not (and shall cause the other companies of the E.ON Group
from time to time, for so long as they continue to be part of the
E.ON Group, not to) be directly or indirectly engaged or have an
interest in any business which is competitive with the business of
any member of the Group as conducted as of the Closing Date;
provided, however, that
(i) any activities of the E.ON Group which (A) are carried on
at the Closing Date (provided that they are described in
Exhibit 7.5) or (B) consist only of interests in or
securities of any other company or entity which do not
exceed 10% of the equity or votes in such company or
entity, provided that no member of the E.ON Group or any
representative of it has a significant influence on the
management of such company or entity;
(ii) the acquisition (including by way of a merger) of an equity
interest of under 10% in an entity primarily engaged in a
competing business provided that such interest remains
under 10% and no member of the E.ON Group or any
representative of it has a significant influence on the
management of such company or entity;
(iii) the acquisition (including by way of merger) of a
controlling or non-controlling equity interest in an entity
or group not primarily involved in a competing business
(provided that the earnings before interest, taxes,
depreciation and amortization (EBITDA) of the competing
business in the last financial year preceding the
acquisition does not exceed 10% of the
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aggregate EBITDA of the acquired entity or group in such
financial year); and
(iv) any activities of any Division retained by the Sellers (in
the event that and as long as this Agreement is not
consummated in respect of any such Division);
shall be exempt from this covenant not to compete.
(b) Subject to Section 7.23, for a period of two years after the
Closing Date, the Sellers shall not, and shall cause the other
companies of the E.ON Group at the relevant time not to (except in
respect of publicly listed stock corporations comprised in the
E.ON Group (other than E.ON AG) at the relevant time, where the
Sellers shall use their reasonable efforts to cause those other
companies not to) for so long as they continue to be part of the
E.ON Group (i) solicit or contact with a view to his engagement or
employment by another person, any employee of any Group Company or
any HQ Employee or (ii) engage or employ any senior employee of
any Group Company or any HQ Employee employed by any Group Company
or Purchaser or any of its affiliates. This covenant shall not
apply to employees who have been laid off or terminated by any
Group Company (or, if they are employed by any Purchaser or
affiliate of any Purchaser, laid off or terminated by such
Purchaser or affiliate of such Purchaser).
(c) After the Closing Date the Sellers shall not, and shall cause the
other companies of the E.ON Group from time to time, for so long
as they continue to be part of the E.ON Group not to, use or
(insofar as it can reasonably do so) allow to be used any trade
name used by a Company or a Subsidiary at Closing or any other
name intended or likely to be confused with such a trade name
(other than VEBA or Xxxx Xxxxxxx).
(d) References to a member of the Group include its successors in
business.
(e) Each undertaking in this Section 7.5 constitutes an entirely
independent undertaking and if one or more of the undertakings is
held to be against the public interest or unlawful or in any way
an unreasonable restraint of trade the remaining undertakings
shall continue to bind the Sellers.
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(f) If any of the restrictions set out in this Section 7.5 is void but
would be valid if some part of the restrictions were deleted the
restriction in question shall apply with such modification as may
be necessary to make it valid.
(g) The Sellers acknowledge that the above provisions of Section 7.5
are no more extensive than is reasonable to protect the Purchasers
as the purchasers of the Sold Shares.
7.6 CONFIDENTIALITY
From the date hereof and for a period of five years after the Closing
Date, the Sellers and E.ON AG shall (and shall procure that the E.ON
Group from time to time shall) keep confidential and not disclose to any
third party any business or trade secrets of the Group, other than those
which have become publicly known through no fault of the Sellers, E.ON AG
or any other companies of the E.ON Group.
7.7 USE OF CERTAIN MARKS AND NAMES
After the Closing Date, the Purchasers shall not permit the Group to use
the names VEBA and Xxxx Karcher, save that the Purchasers shall be
entitled for a period of six months after Closing to allow any Company or
Subsidiary to use any brochure, sales literature or letterhead or sell
any products which contain or carry such names, to use those names or any
of those marks or names as part of its internet domain and to use those
names in describing the businesses acquired by the Purchasers. E.ON AG
covenants that neither it nor any member of the E.ON Group will object to
the use by Avnet or any of its affiliates or any of the Group Companies
in the Divisions to be purchased by Avnet of the abbreviations "RK" or
"RKE".
7.8 RELEASE OF VEBA COMFORT LETTERS
With effect as of the Closing Date, the relevant Purchaser shall
indemnify and hold harmless all members of the E.ON Group from all
guarantees, comfort letters and other securities of any kind which relate
to the business of the Divisions as transferred to the relevant Purchaser
(or any company nominated by the relevant Purchaser pursuant to Section
1.1(d)) and which have been provided by the E.ON Group in favor of any
Company or Subsidiary in the relevant Divisions acquired by such
Purchaser to banks,
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other financial institutions, suppliers, customers or other third parties
and listed in Exhibit 7.8 (together, the "VEBA COMFORT LETTERS").
With effect as of the Closing Date, E.ON AG shall indemnify and hold
harmless each of the Purchasers (and any company nominated by the
relevant Purchaser pursuant to Section 1.1(d)) and each Company and
Subsidiary in the relevant Divisions acquired by the relevant Purchaser
against all liabilities, costs and expenses arising from any guarantees,
comfort letters or other securities of any kind provided by any such
Company or Subsidiary in respect of any obligations of any member of the
E.ON Group.
7.9 TERMINATION OF CONTROL AND PROFIT TRANSFER AGREEMENTS
VEBA Electronics GmbH or VEBA Electronics Beteiligungs GmbH (as the case
may be) and Avnet or Memec Purchaser (as the case may be) shall ensure
that the control and profit transfer agreements referred to in Exhibit
5.1 (c) will be terminated on and with effect from the Closing Date, for
cause (aus wichtigem Xxxxx) as a result of the change of ownership or by
agreement. If and to the extent that any control and profit transfer
agreement cannot be terminated as from the Closing Date, the relevant
Parties shall terminate such agreement with effect as of the end of the
current fiscal year, but will treat each other as if such agreement had
been terminated as from the Closing Date. With effect from the Closing
Date, each of such Purchasers (as the case may be) shall indemnify and
hold harmless VEBA Electronics GmbH or VEBA Electronics Beteiligungs GmbH
(as the case may be) from (i) any obligation under German law in
connection with the termination of the control and profit transfer
agreements to provide security to creditors of the relevant Group Company
in respect of liabilities related to the time prior to the Closing Date,
except to the extent that Sellers have to indemnify and hold harmless
Purchasers (and any company nominated by the relevant Purchaser pursuant
to Section 1.1(d)) from the underlying obligations and liabilities under
this Agreement, and (ii) any obligation pursuant to Section 302 German
Stock Corporation Act to compensate the relevant Group Companies for any
net loss (as shown on the relevant individual financial statements)
arising in the financial year 2000.
7.10 CERTAIN INDEMNITIES
Sellers shall indemnify and hold harmless each of the Purchasers (and any
company nominated by the relevant Purchaser pursuant to Section 1.1 (d))
and each member of the Group from and against any of the following
liabilities:
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(a) any liability or cost relating to or arising from:
(i) any payments or benefits made or promised to any current or
former director, officer or employee of any Group Company
or any HQ Employee which are or will be payable or arise
directly (excluding payments or benefits which are payable
or arise only in the event that the employment agreement is
terminated, to the extent that such payments or benefits
are, or would not have to be, listed in Exhibit 5.10 (d))
as a result of the transactions contemplated by this
Agreement, except, however, for payments (if any) under the
EPU schemes referred to in Section 5.11 (d); for the
avoidance of doubt, the indemnity in this subsection (i)
shall include the bonuses payable to X. Xxxxxxxxxxx and
referred to in the emails of February 2, 2000 and May 15,
2000 referred to in Exhibit 5.10 (d);
(ii) any bonus payments made or promised after the date of this
Agreement to any current or former director, officer or
employee of any Group Company or any HQ Employee, other
than bonus payments made or promised in the ordinary course
of business and consistent with past practice over the last
three years;
(iii) any payments to any HQ Employees as a result of the
transformation of the variable portion of their salary into
fixed salary, as referred to in the last paragraph of
Exhibit 5.10 (d) VIII; and
(iv) the employment or termination of employment of any of Xx.
Xxxx, Xx. Xxxxxxxx, Xx. Xxxxxx and Xx Xxxxxxxxxxx,
including in respect of any bonus or EPU entitlement of any
such person,
provided that subsection (i) of this indemnity shall not extend to
any stay bonus (being a bonus that has been granted as an
incentive to remain employed, but is not dependent on the change
of control of any member of the Group) that has been granted to
any person before the date of this Agreement;
(b) any losses, liabilities, damages, costs and expenses (including
any claims for taxation) whether current or contingent, which
relate to the disposal of any
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business by any member of the Group prior to the Effective Date
which business does not relate to the distribution of electronic
systems or electronics components;
(c) losses, liabilities or costs which relate to any business of any
member of the E.ON Group other than the businesses carried on by
the Divisions; and
(d) any losses, liabilities, costs and expenses arising out of or
relating to any liability or obligation of VEBA Electronics LLC,
other than those liabilities or obligations assumed by Arrow or
any other Purchaser pursuant to Section 1.1 (b) or Section 7.23.
7.11 AVNET INDEMNITY
(a) Subject to subsection (b) below, the Sellers shall indemnify and
hold harmless Avnet and any company nominated by Avnet pursuant to
Section 1.1(d) and any Group Company to be purchased by Avnet (or
any such nominated company) and any subsidiary of any such Group
Company (other than the RKE Division) (the "AVNET INDEMNIFIED
PARTIES") from all (after-tax) liabilities, damages and reasonable
costs and expenses (excluding, for the avoidance of doubt, lost
profits or consequential damages, other than to the extent that
the lost profits or consequential damages are the subject of a
claim by or liability to a third party) suffered or incurred
before or after Closing in connection with any matter referred to
in Part X of Exhibit 5 (a).
(b) Each of the Purchasers (or any company nominated by the relevant
Purchaser under Section 1.1(d)) shall bear 10% of any liability
under this Section 7.11 and the Sellers shall bear 70% of any such
liability provided that:
(i) the maximum liability of any Purchaser (together with any
such nominated company) under this Section 7.11 shall not
exceed $ 3,500,000 and any excess shall be borne by the
Sellers;
(ii) if this Agreement is terminated in respect of Memec
Purchaser or Arrow, such liability of Memec Purchaser or
Arrow (or any such nominated company) shall not apply to
any such Purchaser who does not complete the Closing of
this Agreement and the percentage of the liability under
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this Section 7.11 borne by each of the Purchasers who
complete the Closing of this Agreement shall increase from
10% to 15%; and
(iii) if a claim is made under this Section 7.11 more than 7
years (but not more than 10 years) after Closing in respect
of Avnet, such liability of Memec Purchaser and Arrow (or
any such nominated company) shall not apply and such
liability shall be borne by the Sellers.
7.12 WYLE/AVNET LITIGATION
(a) In respect of the legal action Avnet Inc. v. Xxxx Xxxxx et al.
(claim reference 13th Jud.Cir., Fla., Div.D., No. 93 4396)
including claims for costs and/or attorney fees (the "WYLE/AVNET
LITIGATION"), the Sellers shall as promptly as practicable after
the date hereof (and using their best efforts to do so within five
business days after the date hereof) cause all relevant members of
the E.ON Group and all relevant Group Companies, and use all
reasonable efforts to cause the individual parties to the
Wyle/Avnet Litigation, and Avnet shall agree to take all actions
necessary to settle all proceedings in respect of the Wyle/Avnet
Litigation and all claims and liabilities in respect of it with no
payment being made by any party to the Wyle/Avnet Litigation to
any other such party in respect thereof.
(b) If any individual party to the Wyle/Avnet Litigation does not
settle (in accordance with subsection (a) above) and any
attorney's fees and expenses are awarded by the competent court
and paid to any such individual by Avnet, the Sellers shall
procure that to the extent that:
(i) any member of the E.ON Group; or
(ii) Wyle Electronics (but only in the event that this Agreement
is terminated in respect of Arrow),
is paid any sum in respect of such amount by or on behalf of any
such individual, such sum shall be paid forthwith to Avnet (or as
it may direct) by the Sellers or by Wyle Electronics, as the case
may be.
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7.13 POING WAREHOUSE
The Sellers and Avnet shall procure on the Closing Date that the existing
lease agreements between Viterra Aktiengesellschaft (previously Xxxx
Xxxxxxx XX) and (i) EBV-Elektronik GmbH (dated October 18/26, 1999) and
(ii) Atlas Logistik Services GmbH (dated May 14/25, 1999) shall be
amended, with effect as of the Closing Date, as set forth in Exhibit
7.13.
7.14 ENVIRONMENTAL INDEMNITY
(a) Subject to the conditions set forth in this Section 7.14, Sellers
hereby agree to indemnify each of the Purchasers (and any company
nominated by the relevant Purchaser pursuant to Section 1.1(d)),
the Companies and the Subsidiaries against (i) any Clean-Up Costs
relating to Environmental Pollution (both as defined below) and
(ii) Non-Compliance Costs (as defined below). The indemnification
obligation of Sellers under this Section 7.14 (a) shall in each
case be limited to 85% of such costs and Purchasers shall bear the
remaining 15%, but only up to a maximum aggregate amount of $ 3
million for all indemnification claims of Purchasers under this
Section 7.14 (a). To the extent such claims exceed $ 3 million in
aggregate, the Sellers shall be liable for the excess. Sellers
shall only be liable for any claims for any Clean-Up Costs or
Non-Compliance Costs if the liability for such costs exceeds, with
respect to each individual matter, an amount of $ 100,000, in
which case the whole of (and not merely the excess over) $ 100,000
shall be recoverable (subject to the cost sharing provision
above). For this purpose, any liability arising out of similar or
related circumstances and related to the same property shall be
aggregated. Except for Sections 8.1 (e), 8.3 (c) and paragraphs
(f), (h), (i) and (j) of this Section 7.14, which shall apply,
none of the limitations in this Agreement shall apply to any
Clean-Up Costs and Non-Compliance Costs related to the matters
disclosed in Exhibit 5.8.
(b) "ENVIRONMENTAL POLLUTION" shall mean any pollution for which any
of the Companies or Subsidiaries is responsible or liable of the
land, buildings, structures or ground or surface water and which
existed or arose on or before the Closing Date.
(c) "CLEAN-UP COSTS" shall be any expenditures and costs of any of the
Companies or Subsidiaries:
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- for investigating, delineating, limiting, containing,
removing or disposing of Environmental Pollution, including
the transportation, storage and treatment of polluted soil
and building materials; and
- which have been incurred after the Effective Date in order
to satisfy or comply with legal requirements, provided
that, in respect of the period after the Closing Date, they
have taken all reasonable steps to keep such expenditures
and costs as low as reasonably practicable.
(d) "NON-COMPLIANCE COSTS" shall be any costs and expenditures
reasonably incurred after the Effective Date by any of the
Companies or Subsidiaries and relating to the failure to comply by
any of the Companies or Subsidiaries with, or any breach by any
Companies or Subsidiaries of, in each case, for periods prior to
the Closing Date, any permits, licences, authorisations, consents,
applicable laws, regulations, orders or decrees relating to the
environment, preservation or reclamation of natural resources, or
to the production, use, storage, labelling, transportation,
management or disposal of hazardous substances to the extent such
costs and expenditures are not Clean-Up Costs (such failure to
comply being "NON-COMPLIANCE"), provided that after the Closing
Date the Purchasers shall use their reasonable endeavours to
mitigate the Non-Compliance Costs.
(e) Sellers shall only be obligated to indemnify the Purchasers (and
any company nominated by the relevant Purchaser pursuant to
Section 1.1(d)), the Companies and the Subsidiaries from any
Clean-Up Costs or Non-Compliance Costs if and to the extent that
(i) the Companies' or Subsidiaries' liability with respect to
Clean-Up Costs or Non-Compliance Costs has been established by an
enforceable decision, order, directive, consent, agreement or
similar action by any court or governmental authority or (ii)
proceedings against a Company or Subsidiary are pending before any
court or governmental authority and there is a reasonable
likelihood that such a decision, order of directive will be
forthcoming. For this purpose, proceedings will be deemed to have
been commenced if any such court or authority has served any
notice or demand in respect of any such costs.
(f) Sellers shall be given verifiable evidence of any costs in
accordance with Sections 7.14 (c) and 7.14 (d). Sellers are
entitled to have the costs checked by their own authorised agent
or by an expert who, on request, shall be allowed
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reasonable access to the relevant properties, documentation and
personnel for the purposes of verification.
(g) If, in case of property leased by a Group Company, there is
reasonable evidence that the Environmental Pollution has not been
caused by a Company or Subsidiary but that any landlord of the
leased property is liable to the Company or the Subsidiary for the
Environmental Pollution, the relevant Purchaser shall first use
all reasonable efforts (including litigation) to recover the
relevant Clean-Up Costs from the landlord, unless such efforts
would not have any reasonable chance of success (e.g. in case of
the landlord's bankruptcy).
(h) The Purchasers shall procure that any Company or Subsidiary that
has any claim against any third party (other than the landlord or
member of the E.ON Group) in respect of Clean-Up Costs shall
assign such claim to the relevant Seller, provided that the
Sellers have reimbursed the Purchasers or relevant Company or
Subsidiary in respect of those Clean-Up Costs and reasonable
external costs in respect of such claim.
(i) The amount of indemnification/reimbursement paid or due by the
Sellers under this Section 7.14 will be repaid or reduced to the
extent of any compensation claims the Companies or Subsidiaries
successfully recover against third parties (net of reasonable
costs of recovery from the third party).
(j) In the event of administrative proceedings or third party claims
relating to Environmental Pollution or Non-Compliance as described
above, the Purchasers shall keep and shall procure that the
Companies and the Subsidiaries keep the Sellers informed about the
status of such proceedings or such third party claims and notify
the Sellers as soon as practicable in writing of the issuance of
any administrative order and any claims made by third parties
relating to Environmental Pollution or Non-Compliance.
7.15 FURTHER ASSURANCES
Subject to the terms and conditions of this Agreement, Purchasers and
Sellers will use their respective reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things
necessary under applicable laws and regulations to consummate the
transactions contemplated by this Agreement. Sellers and Purchasers
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agree, and Sellers, prior to the Closing, and Purchasers, after the
Closing, agree to cause the Group (and Sellers shall cause the E.ON
Group), to execute and deliver such other documents, certificates,
agreements and other writings and to take such other actions as may be
necessary or desirable in order to consummate or implement expeditiously
the transactions contemplated by this Agreement. Sellers shall cause the
Companies and Subsidiaries to cooperate with Purchasers, in the period
between the date hereof and the Closing Date, in order to ensure, to the
extent possible and practicable, continuity in the supplier, customer and
employee relationships of the Group. Nothing in this Section 7.15 shall
apply in connection with any applicable merger control laws or any
requirement of any authority with regard to any merger control process or
proceeding.
7.16 CERTAIN ASSETS OWNED BY THE E.ON GROUP
Except for any assets leased or licenced by any member of the E.ON Group
to any Group Company (provided that the respective lease or licence
agreements are expressly disclosed in this Agreement) and except as
expressly otherwise provided in this Agreement, the Sellers covenant that
to the extent any member of the E.ON Group owns any assets used primarily
by or in connection with the business of any of the Divisions, the
Sellers shall cause the relevant member of the E.ON Group to notify the
relevant Purchaser and shall transfer at or prior to Closing any such
asset to a Group Company nominated by such Purchaser without charge.
7.17 NOTICES UNDER INSURANCE POLICIES
The Sellers shall cause to be given all notices required to be given
under any policy of insurance maintained in respect of the assets,
business or liabilities of any Group Company to ensure that such assets,
business or liabilities continue to be covered under such policies in
respect of claims relating to or arising in the period up to and
including Closing notwithstanding the execution of this Agreement or
Closing.
7.18 EMPLOYEE BODIES
The Sellers shall inform the Purchasers prior to the Closing Date if any
workers' council, economic committee or other employee body at any Group
Company is established between the date hereof and the Closing Date and
shall procure that the relevant Group Company will comply with any legal
requirement to inform, or consult with, any works'
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council, economic committee or other employee body in connection with
this Agreement or the transactions contemplated hereby.
7.19 APRISA
The Sellers shall co-operate with Memec Purchaser in implementing the
arrangements agreed with APRISA, Inc. in relation to the assignment to
Memec LLC of the exclusive marketing and distribution agreement dated
April 12, 2000, between APRISA, Inc. and VEBA Electronics LLC and the
transfer of all of the shares held by VEBA Electronics LLC in APRISA,
Inc. to Memec LLC prior to or at Closing.
7.20 SATISFACTION OF MEMEC FINANCING CONDITIONS
Prior to Closing the Sellers shall co-operate and procure that the
relevant Group Companies shall provide such co-operation to Memec
Purchaser as may be reasonably requested by Memec Purchaser to enable
such Purchaser to satisfy the condition set out in Section 4.3 (a) (iv),
provided, however, that Sellers shall be under no obligation to assume
any liability to Memec Purchaser or the financing banks.
7.21 MEMEC ACQUISITIONS
The Sellers shall not take any action prior to Closing which would
prohibit or otherwise prevent any member of the Memec Division from
entering into any agreement or completing any of the acquisitions
referred to in Exhibit 7.1.
7.22 HYPERION LICENCE
VEBA Electronics LLC shall, and the Sellers shall procure that any
relevant member of the E.ON Group shall, (i) to the extent requested by
the Purchasers, cooperate with the relevant Purchasers in the assumption
by the relevant Purchasers of the Software Licence Agreement, dated
August 10, 1999, between VEBA Electronics LLC and Hyperion Solutions
Corporations and (ii) use commercially reasonable efforts to continue to
provide the relevant Group Companies with access to, and use of, the
systems subject to the Hyperion licence for a period of nine months
following Closing. The relevant Purchasers shall indemnify VEBA
Electronics LLC and any relevant members of the E.ON Group from any
liabilities, losses, damages, costs and expenses incurred by it as a
result of the access to and use of these systems by Group Companies
during this period.
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7.23 VEBA ELECTRONICS LLC EMPLOYEES
(a) Except to the extent indemnified by the Sellers under Section 7.10
(a), as from the Closing Date, Arrow (or any other Purchaser, if
the Purchasers so decide) shall reimburse VEBA Electronics LLC for
all costs of employment (which have been, or would not have to be,
disclosed to Purchasers under Section 5.10 (b)) of the HQ
Employees (as defined in paragraph (d) below) relating to the
period between the Effective Date and the Closing Date, provided,
however, that, if only Arrow or Avnet completes the Closing, such
costs of employment shall be dealt with in the Transitional and
Separation Arrangements to be agreed as a condition of such
Closing without reference to the Expert.
(b) Prior to the Closing Date, Arrow (or any other Purchaser) may
offer to employ any of the HQ Employees, as defined below, with
effect as of the Closing Date. VEBA Electronics LLC shall
co-operate with the Purchasers in the making of any such offers.
From the day of this Agreement until the Closing Date, the Sellers
shall not, and shall procure that no member of the E.ON Group
shall, without the prior written consent of the Purchasers, hold
any discussions with any of the HQ Employees regarding employment
by any member of the E.ON Group.
(c) If, for any reason (including as a result of the Purchasers'
failure to make an offer in accordance with paragraph (b) or the
relevant HQ Employee's rejection of such offer), any of the HQ
Employees are not employed by any Purchaser, then, without
prejudice to the rights of such employees against any party, Arrow
(or, if the transactions contemplated hereby cannot be consummated
in respect of Arrow, any other Purchaser as agreed in the
Transitional and Separation Agreements) shall indemnify VEBA
Electronics LLC from any compensation (including any bonuses,
payments under EPU schemes or benefits) relating to the period
after the Closing Date and any severance benefits and notice pay
with respect to such HQ Employees, in each case under applicable
employment agreements and severance policies of VEBA Electronics
LLC in effect as of the date hereof, provided that such
compensation, severance benefit and notice pay are, or would not
have to be, disclosed in Exhibit 5.10 (b) (save for amounts
referred to in Section 7.10 (a) (i) and (ii)). This paragraph (b)
shall not apply with respect to any HQ Employee who remains in the
employment of any member of the E.ON Group after a period of two
months after the Closing Date, unless
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notice to terminate such employment has been given by the E.ON
Group to the relevant HQ Employee within such period and the
employment is so terminated as soon as possible and in any event
no later than the expiry of the notice period applicable to the
relevant employee.
(d) For purposes of this Agreement, the term "HQ EMPLOYEES" shall mean
those individuals employed by VEBA Electronics LLC as listed in
Exhibit 7.23.
(e) The Sellers shall use their reasonable efforts to procure that,
until the expiry of a period of 3 months from the date on which
the Closing Certificates are determined in accordance with Article
3, (i) Xxxxx Xxxxxxxxxxx shall devote such of her time to the
affairs of the Group (including in respect of the Effective Date
Financial Statements, Effective Date Certificates and the Closing
Certificates) and (ii) the Purchasers shall have access to her, in
each case as the Purchasers shall reasonably request.
(f) For the purposes of this Agreement, references to Arrow or any
other Purchaser offering to employ or employing any HQ Employee
shall include any such offer of employment by any affiliate of
such Purchaser.
7.24 FOREX AND HEDGING CONTRACTS
(a) The Sellers shall indemnify the Purchasers (and any company
nominated by the relevant Purchaser pursuant to Section 1.1(d))
and each of the Group Companies against any losses arising from
any foreign exchange, interest rate hedging or similar
arrangements ("FOREX AND HEDGING CONTRACTS") entered into by any
Group Company prior to the Closing Date.
(b) To the extent that any Group Company makes any gain on any Forex
and Hedging Contract entered into by any Group Company prior to
the Closing Date, the relevant Purchaser (and any company
nominated by the relevant Purchaser pursuant to Section 1.1(d))
shall (or procure that the relevant Group Company shall) make a
payment to the relevant Seller of an amount equal to such gain
(after deduction of any tax and expenses incurred on any such
gain).
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(c) Paragraphs (a) and (b) shall not apply to the extent (determined
by reference to the specific amount) the relevant Forex or Hedging
Contracts were entered into in connection with any matching
contract or arrangement.
7.25 US 401 (k) PLANS
(a) Except as provided below in Section 7.25(c), as soon as
practicable after the Closing Date, (i) Arrow shall establish or
designate an individual account plan (the "ARROW PLAN") and
related trust for the benefit of the current and former employees
(the "VEBA EMPLOYEES") of VEBA Electronics LLC, Wyle Electronics,
Atlas Services LLC, Atlas Business Services LLC, and EBV
Electronics Holdings, Inc. and their respective Subsidiaries who
were participants in the VEBA Electronics LLC 401 (k) Plan (the
"VEBA PLAN") as of the Closing Date (and their beneficiaries) and
(ii) Sellers shall cause the trustee under the VEBA Plan to
transfer to the trust under the Arrow Plan, in the form of cash
(or such other form as may be agreed by the sponsor of the Arrow
Plan), the full account balances of the VEBA Employees under the
VEBA Plan and Arrow shall take all actions necessary to cause the
Arrow Plan and related trust to accept such transfer. As a
condition to the transfer provided herein, if so requested, Arrow
shall provide to Sellers with respect to the Arrow Plan, and
Sellers shall provide Arrow with respect to the VEBA Plan, a copy
of an IRS determination letter (or, in the absence of a current
determination letter, an affidavit stating that to the knowledge
of the plan sponsor no basis exists that would cause the plan to
fail to qualify under the Code). Notwithstanding anything to the
contrary, the requirements of this Section shall be void if the
Sellers and Arrow agree in writing that the transfer provided in
this Section shall not be made (provided that Arrow shall not
unreasonably withhold its agreement to any reasonable request by
Sellers that the transfer not be made). In consideration for the
transfer of assets described herein, Arrow shall, effective as of
the date of such transfer, assume all of the obligations of
Sellers and any of their affiliates in respect of the account
balances accumulated by VEBA Employees under the VEBA Plan.
(b) As soon as practicable after the Closing Date (i) Memec Purchaser
shall establish or designate an individual account plan (the
"MEMEC PLAN") and related trust for the benefit of the current and
former employees (the "MEMEC EMPLOYEES") of Memec LLC and, to the
extent provided in Section 7.25 (c), Atlas Services LLC and Atlas
Business Services LLC and their respective Subsidiaries who were
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participants in the VEBA Plan as of the Closing Date (and their
beneficiaries) and (ii) Sellers shall cause the trustee under the
VEBA Plan to transfer to the trust under the Memec Plan, in the
form of cash (or such other form as may be agreed by the sponsor
of the Memec Plan), the full account balances of the Memec
Employees under the VEBA Plan and the Memec Purchaser shall take
all actions necessary to cause the Memec Plan and related trust to
accept such transfer. As a condition to the transfer provided
herein, if so requested, the Memec Purchaser shall provide to
Sellers with respect to the Memec Plan, and Sellers shall provide
the Memec Purchaser with respect to the VEBA Plan, a copy of an
IRS determination letter (or, in the absence of a current
determination letter, an affidavit stating that to the knowledge
of the plan sponsor no basis exists that would cause the plan to
fail to qualify under the Code). Notwithstanding anything to the
contrary, the requirements of this Section shall be void if the
Sellers and the Memec Purchaser agree in writing that the transfer
provided in this Section shall not be made (provided that the
Memec Purchaser shall not unreasonably withhold their agreement to
any reasonable request by Sellers that the transfer not be made).
In consideration for the transfer of assets described herein, the
Memec Purchaser shall, effective as of the date of such transfer,
assume all of the obligations of Sellers and any of their
affiliates in respect of the account balances accumulated by Memec
Employees under the VEBA Plan.
(c) Notwithstanding anything to the contrary contained in Sections
7.25(a) and (b), with respect to each of the current and former
employees of Atlas Services LLC and Atlas Business Services LLC,
Arrow and the Memec Purchaser shall together determine which of
the Arrow Plan and the Memec Plan should accept the transfer of
such employees' account balances, provided, however, that if Arrow
and the Memec Purchaser do not agree on which of the Arrow Plan
and the Memec Plan will accept the transfer of any such current or
former employee's account, such account shall be transferred to
the Arrow Plan.
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ARTICLE 8
INDEMNIFICATION
8.1 INDEMNIFICATION BY SELLERS
(a) The Sellers shall indemnify and hold harmless each Purchaser, any
company nominated by the relevant Purchaser pursuant to Section
1.1(d) and each member of the Group from and against any
liabilities, damages (including lost profits, but excluding any
unreasonably remote lost profits or any other indirect
consequential damages, such as lost profits or other consequential
damages which are determined on the basis of earnings projections
or price-earnings ratios for any Divisions,) and reasonable costs
and expenses (collectively the "LOSSES"), free of and without any
rights of counterclaim or set-off and without deduction or
withholding on any grounds whatsoever, save to the extent that
they relate to matters expressly provided for in this Article 8 in
respect of the determination of Losses or the procedure for
claiming such Losses, asserted against, suffered or incurred by
any Purchaser, any company nominated by a relevant Purchaser
pursuant to Section 1.1(d) or any member of the Group which arises
out of a breach of any representation, warranty, covenant or
agreement of the Sellers or any of them contained in this
Agreement. The Sellers shall not be liable for any Losses to the
extent that such Losses are reflected in any adjustment of the
purchase price under Article 2.
(b) The Sellers shall only be liable for any Losses (arising from a
breach of any representation and warranty contained in Article 5
or of any covenant contained in Section 7.1 or Tax Losses (arising
under Section 9.5 (a) (iii)), if (i) any such Losses or Tax Losses
with respect to an individual matter exceed an amount of $ 200,000
for Losses under Article 5 (other than in respect of Section 5.18
in respect of the period since the Effective Date) or $ 100,000
for Losses under Section 5.18 in respect of the period since the
Effective Date or under Section 7.1 or Tax Losses under Section
9.5 (a) (iii) (provided that in each such case for this purpose,
Losses or Tax Losses arising out of similar or related
circumstances shall be aggregated) in which case the whole of (and
not merely the excess over) $ 200,000 or $ 100,000 (as the case
may be) shall be recoverable and (ii) to the extent that the
aggregate of all Losses (other than those where liability is
excluded as referred to in (i) above) arising from a breach of the
representations and warranties contained in Article 5 and all Tax
Losses arising under Section 9.5 (a)
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(iii) exceed $ 20,000,000. Section 8.1 (b) (ii) shall not apply to
the Sellers' liability arising from a breach of the
representations and warranties in Section 5.18 in respect of the
period on or after the Effective Date.
(c) If any Tax Losses under any of the indemnities contained in
Article 9 other than Section 9.5 (a) (iii) arise from any Tax
audit or other Tax related proceedings, the Sellers shall only be
liable for such Tax Losses if they exceed in each case $ 100,000
(in which case the entire amount shall be recoverable), provided,
however, that the Sellers shall only be entitled to apply this
threshold to five such Tax audits or Tax related proceedings. This
paragraph (c) shall not apply to Tax Losses with respect to any
Tax payable in Germany, the United Kingdom or the United States of
America, in respect of which no threshold for claims shall apply.
(d) The Sellers' liability for the breach of any representation and
warranty, covenant, indemnity and other agreement contained in
this Agreement and under the indemnities in Section 7.10, except
for any liability under Section 7.5 (Covenant Not to Compete,
Covenant not to Solicit), Section 7.12 (Environmental Indemnity)
and Article 9 (Taxes), shall be limited to an aggregate amount of
$ 750 million.
(e) Subsections (b) and (d) of this Section 8.1 shall not apply to the
Sellers' liability under Section 1 (Agreement to Sell and
Purchase) or arising from a breach of the representations and
warranties contained in Sections 5.1, 5.2 and 5.3 (corporate
organization, share ownership and authorization/non-contravention)
or in respect of the indemnity in Section 7.11 (Avnet Indemnity),
provided, however, that such liability of the Sellers shall be
limited, together with any other liability under this Agreement,
to an aggregate amount equal to the sum of the Final Share
Purchase Price and the Closing Date Inter-Group Debt payable by
Purchasers under Article 2.
(f) None of the limitations contained in subsections (b), (c) and (d)
of this Section 8.1 or in Section 8.3 shall apply to the Sellers'
liability arising under this Agreement in cases of fraud or
deliberate concealment by any Seller or E.ON AG or any of their
respective officers, agents, employees or advisers (excluding, for
the avoidance of doubt, any directors (other than any directors
referred to in Section 7.4), officers or employees of the Group)
who have acted on behalf of
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any Seller or E.ON AG in connection with the negotiation or
conclusion of this Agreement.
(g) The legal concepts set out in sections 460 and 464 of the BGB
shall not apply to this Agreement. Sellers shall, however, not be
liable for the breach of any representation and warranty contained
in Section 5 of this Agreement if and to the extent that any
Purchaser, based on its knowledge of the matter giving rise to the
breach and assuming its knowledge of this Agreement, knew or ought
reasonably to have known at the date of this Agreement that there
was a breach of a representation and warranty relating to any of
the Divisions acquired by such Purchaser. Purchasers' knowledge is
defined as the actual knowledge of the persons listed against such
Purchaser's name in Exhibit 8.1 (Part 1), after inquiry with such
Purchaser's officers, employees, representatives and advisers
listed in Exhibit 8.1 (Part 2). Without limiting the generality of
the foregoing, such Purchaser shall be deemed to have knowledge of
all matters which are disclosed, in reasonably sufficient detail,
in any due diligence report prepared for it by such Purchasers'
employees, representatives or advisers prior to the date hereof.
For the avoidance of doubt, the knowledge of a Purchaser (after
such inquiry) shall not be attributed to any other Purchaser.
(h) Unless expressly otherwise provided in this Agreement, the Losses
to be compensated hereunder shall be determined as provided under
applicable law (including, to the extent provided under such
applicable law, by taking into account any offset of future
advantages or benefits arising as a result of the event or
circumstances causing such Losses).
8.2 INDEMNIFICATION BY PURCHASER
Subject to the provisions contained in Sections 8.3 to 8.5 (inclusive),
each Purchaser shall indemnify and hold harmless the Sellers from and
against any Losses asserted against, suffered or incurred by the Sellers
which arise out of a breach of any representation, warranty, covenant or
agreement by that Purchaser contained in this Agreement. In addition,
Arrow (or the relevant Purchaser with respect to HQ Employees employed by
such Purchaser in accordance with Section 7.23) agrees to indemnify and
hold harmless the Sellers and E.ON AG from and against any Losses
asserted against, suffered or incurred by the Sellers or E.ON AG which
arise out of or in connection with (i) any asset, agreement, obligation
or liability of VEBA Electronics LLC assumed by
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Arrow pursuant to Section 1.1 (b) of this Agreement, and (ii) the
liabilities with respect to any compensation, benefits and severance
payments to any HQ Employees who accept an offer of employment made by
any Purchaser pursuant to Section 7.23 (a) under this Agreement (save for
amounts referred to in Section 7.10 (a) (i) and (ii)), provided that VEBA
Electronics LLC shall assign, or cause to be assigned, to Arrow (or any
other relevant Purchaser (or any company nominated by the relevant
Purchaser pursuant to Section 1.1(d)) any benefits provided under
arrangements which are insured, either through stop-loss coverage or
otherwise.
8.3 LIMITATION PERIODS
The representations and warranties, covenants, indemnities and other
agreements of the Parties (including all claims and remedies with respect
thereto) under this Agreement shall be subject to the following
limitation periods:
(a) Subject to paragraphs (c) and (d) below, all representations and
warranties of the Parties in Articles 5 and 6 and the Sellers'
covenants in Section 7.1 (including all claims and remedies with
respect thereto) shall be time-barred upon expiration of a period
of 18 months after the Closing Date.
(b) The representations and warranties of the Sellers under Section
5.2 (a) (ownership of shares and absence of third-party rights in
shares) and the indemnity in Section 7.11 shall be subject to a
limitation period of ten years after the Closing Date (in the case
of Section 7.11, the Closing Date being in respect of the Closing
with Avnet).
(c) The representations, warranties and indemnities under Article 9
(Taxes) shall be time-barred as set forth in Section 9.9 below.
(d) The representations, warranties and indemnities under Section 5.8
(Environmental Matters) and 7.14 (Environmental Indemnity) shall
be subject to a limitation period of five years after the Closing
Date.
(e) All other covenants, indemnities and agreements hereunder shall be
subject to a limitation period of five years after the Closing
Date.
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Any such limitation period will be interrupted (unterbrochen) (a) in
respect of any claim (other than any claim under any indemnity in Article
7 or 9) in the event that a notice of the claim has been given in
accordance with Section 8.4 below or (b) in respect of any claim under
Article 7 or 9 in the event that notice of the claim has been given to
the Sellers describing the claim in reasonable detail (as available) and,
to the extent then reasonably feasible, setting forth the estimated
amount of such claim. In case of such a notice, a new limitation period
of one year following such notice shall apply in respect of the relevant
claim, which shall expire on the later of (i) the first anniversary
following such notice and (ii) the applicable limitation period set forth
in paragraphs (a) - (e) of this Section 8.3. The new limitation period
can only be interrupted in accordance with applicable law (e.g. by filing
a claim with the competent court).
8.4 INDEMNIFICATION PROCEDURES
(a) In the event of a breach of a representation, warranty or covenant
of a Party (an "INDEMNIFYING PARTY") contained in this Agreement
(other than any indemnity in Article 7 or 9), any person to be
indemnified hereunder (the "INDEMNIFIED PARTY") (or any of the
Purchasers, where a company nominated by the relevant Purchaser
under Section 1.1(d) or a member of the Group is an Indemnified
Party) shall (i) as soon as reasonably practicable after the
Indemnified Party becomes aware of the relevant breach, notify the
Indemnifying Party of such breach, describe its claim in
reasonable detail (as available) and, to the extent then
reasonably feasible, set forth the estimated amount of such claim,
provided that the failure to provide such notification shall not
prevent any claim being made by or on behalf of the Indemnified
Party in respect of such breach, but the Indemnifying Party shall
not be liable in respect of such breach to the extent that its
ability to mitigate the liability shall have been prejudiced by
any delay in providing the notification, and (ii) to the extent
the breach is capable of remedy, give the Indemnifying Party the
opportunity to remedy the breach within a reasonable period of
time not exceeding two weeks. The Indemnified Party shall further
use its reasonable endeavours to mitigate the Losses suffered by
it as a result of the breach in accordance with applicable law.
(b) In the event that any claim or demand for which an Indemnifying
Party is likely to be liable under Article 5 or 6 or any indemnity
under Section 7.10 is asserted by a third party against an
Indemnified Party, the Indemnified Party (or the Purchaser, where
the Indemnified Party is a company nominated under Section
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1.1(d) or a Group Company) shall notify the Indemnifying Party of
such claim or demand in accordance with paragraph (a) (or Section
8.3 in the case of a claim under Section 7.10) and the following
shall apply:
(i) If the Indemnifying Parties acknowledge in writing to the
Indemnified Parties (or the Purchasers, where a company has
been nominated by the relevant Purchaser pursuant to
Section 1.1(d) or a member of the Group is an Indemnified
Party) that they accept liability under the Indemnified
Party's claim under this Agreement within two weeks after
receipt of the notice pursuant to subsection (a) (or
Section 8.3, in the case of a claim under Section 7.10),
the Indemnified Parties shall give the Indemnifying Parties
the opportunity to defend the Indemnified Parties against
such claim at the expense of the Indemnifying Parties and
the following provisions of this sub-clause shall apply.
The Indemnifying Parties shall have the right to defend the
Indemnified Parties by all appropriate proceedings and
shall have the sole power to direct and control such
defence. In particular, but without limitation, the
Indemnifying Parties may participate in and direct all
negotiations and correspondence with the third party,
appoint counsel and request that the claim be litigated or
settled in accordance with the Indemnifying Parties'
instructions. In no event shall the Indemnified Parties be
entitled to acknowledge or settle the claim, or permit any
such acknowledgement or settlement, without the
Indemnifying Parties' written consent. The Indemnified
Parties shall use their respective reasonable endeavours to
cooperate and cause the Group to use its reasonable
endeavours to cooperate with the Indemnifying Parties in
the defence of any third-party claim.
(ii) If sub-clause (i) above applies, the Indemnified Parties
shall in each case provide the Indemnifying Parties'
representatives reasonable access upon reasonable notice,
during normal business hours, to all relevant business
records and documents and permit the Indemnifying Parties
and their representatives a reasonable opportunity to
consult with the directors, employees and representatives
of the Indemnified Parties or the Group (as the case may
be).
(iii) If sub-clause (i) does not apply, the Indemnified Party
shall keep and shall procure that the Companies and the
Subsidiaries keep the Sellers
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informed about the status of any third-party claims and
shall take all reasonable actions in connection with the
defence in order to mitigate the Losses.
(iv) If subsection (i) applies, the Indemnifying Party shall
provide to the Indemnified Parties (or the Purchasers where
a company nominated by the relevant Purchaser pursuant to
Section 1.1(d) or any member of the Group is an Indemnified
Party) copies of all documents and notify them in advance
of all material proposed steps in connection with the
defence or conduct referred to in subsection (i).
(v) The Indemnifying Parties will indemnify and hold harmless
the Indemnified Parties in respect of all costs or expenses
(other than management time of any officer or employee of
any Indemnified Party) reasonably incurred by any of the
Indemnified Parties in connection with any defence, conduct
or cooperation referred to in subsection (i).
(vi) Notwithstanding any other provision of this Section 8.4,
the Indemnifying Party will not consent to the entry of any
judgement or enter into any settlement without the written
consent of the Indemnified Party, unless such judgement or
settlement provides only for the payment of monetary
damages or compensation and for a full release of the
Indemnified Party from all liabilities with respect
thereto.
(c) In the event that any claim or demand for which the Sellers are
likely to be liable under Section 7.11 is asserted by a third
party against Avnet or any Avnet Indemnified Party (as defined in
Section 7.11 (a)), Avnet shall keep and shall procure that the
Avnet Indemnified Parties keep the Sellers informed about the
status of any such third-party claim and shall take all reasonable
actions in connection with the defence of such third-party claim
in order to mitigate the liability or damage in respect thereof
and Avnet shall give the Sellers a reasonable opportunity to be
consulted in respect of the conduct or the claim and shall take
account of the comments of the Sellers in respect of the conduct
to the extent reasonable. If a supplier makes a claim against any
of the Avnet Indemnified Parties in respect of a matter which is
the subject of the indemnity in Section 7.11 and, as a result of
that matter, the supplier terminates its relationship with all the
Group Companies who comprise Avnet Indemnified Parties, Avnet
shall procure
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that such claim shall not be settled without the prior consent of
the Sellers, such consent not to be unreasonably withheld or
delayed.
(d) Avnet shall procure that no senior vice president or more senior
officer of Avnet shall approach (or procure that any approach is
made to) any supplier to discuss any matter referred to in Part X
of Exhibit 5 (a) prior to any claim in respect of any such matter
being made by such supplier, without the prior consent of the
Sellers, such consent not to be unreasonably withheld or delayed.
8.5 NO ADDITIONAL RIGHTS OR REMEDIES
(a) The Parties agree that the rights and remedies which the Sellers
on the one hand and Purchasers (or any company nominated by the
relevant Purchaser pursuant to Section 1.1 (d)) on the other hand
may have in respect of the breach of a representation, warranty,
covenant or agreement contained in this Agreement are limited to
the rights and remedies explicitly contained herein without
prejudice to any claim for specific performance or for any
injunction or court order to enforce any rights set forth in this
Agreement. In particular, without limitation, no Party shall have
a right to rescind, cancel or otherwise terminate this Agreement
or exercise any right or remedy which would have a similar effect,
except for the termination rights set forth in Article 10 below.
(b) Other than the rights and remedies explicitly set forth herein and
without prejudice to any claim for specific performance or for any
injunction or court order to enforce any rights set forth in this
Agreement, Purchasers (and any company nominated by the relevant
Purchaser pursuant to Section 1.1(d)) and Sellers hereby waive any
and all rights and remedies of any nature (contractual,
quasi-contractual, tort or otherwise), including any claims under
statutory representations and claims for negligent
misrepresentation, which they may otherwise have against each
other in connection with this Agreement or the transactions
contemplated hereby, except for any rights and remedies under the
Confidentiality Agreement dated February 3, 2000.
(c) The provisions of this Section 8.5 shall not apply to (i) rights
and remedies which the Sellers may have under applicable law as a
result of any Purchaser's failure to pay the purchase price or any
portion thereof in accordance with this Agreement, (ii) rights and
remedies which the Purchasers (or any company nominated by the
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relevant Purchaser pursuant to Section 1.1(d)) may have under
applicable law arising from Sellers' failure to transfer the Sold
Shares, free and clear of any encumbrances and rights of third
parties, to Purchasers (or any company nominated by the relevant
Purchaser pursuant to Section 1.1(d)) on the Closing Date (iii)
rights and remedies which Avnet (or any company so nominated by
it) may have under applicable law arising from any breach of the
representation, warranty and covenant in Section 11.2, and (iv)
any rights and remedies of any Party for fraud or wilful
misconduct (Vorsatz).
ARTICLE 9
TAXES
9.1 DEFINITIONS
The following terms, as used herein, have the following meanings:
"PRE-CLOSING TAX PERIOD" means any Tax period ending on or before the
close of business on the Closing Date.
"TAX" or "TAXATION" means (i) all taxes, including without limitation,
income, gross receipts, ad valorem, value-added, excise, real property,
personal property, sales, use, transfer, withholding, employment, social
and franchise taxes, together with interest, penalties, surcharges and
additional tax, imposed by any governmental authority (a "TAXING
AUTHORITY") responsible for the imposition of such tax and (ii) any
amounts paid or payable to any person (including a Taxing Authority)
arising out of an indemnity or covenant to pay in respect of Tax.
"TAX ASSET" means any loss, relief, allowance, set off, deduction, right
to repayment or credit or other relief of a similar nature granted by or
available in relation to Tax to the extent that it either arises in
respect of an event occuring after the Effective Date or was taken into
account in the Effective Date Financial Statements as an asset.
"TAX RETURN" means any return, declaration, report, claim for refund,
information return, statement, schedule, notice, form or other document
or information relating to Tax, including any schedule or attachment
thereto, and including any amendment thereof.
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In this Article a reference to "relevant Purchaser", "relevant Seller",
"relevant Company" or "relevant Subsidiary" is a reference to the entity
to which a right or obligation or a liability under this Article or in
respect of Tax relates.
9.2 TAX REPRESENTATIONS
Sellers represent and warrant to Purchasers (or any company nominated by
the relevant Purchaser pursuant to Section 1.1 (d)) as of the date hereof
and as of the Closing Date that, except as otherwise disclosed in Exhibit
9.2,
(a) all material Tax Returns required to be filed with any Taxing
Authority on or prior to the Closing Date by or on behalf of any
of the Companies or Subsidiaries have been filed when due in
accordance with all applicable laws;
(b) as of the time of filing, the Tax Returns were true and complete
in all material respects;
(c) all material Tax due and payable by the Companies or Subsidiaries
has been timely paid, or withheld and remitted, to the appropriate
Taxing Authority;
(d) there has been no formal or informal notice of any claim, action,
suit, proceeding, or investigation now pending against or with
respect to any of the Companies or Subsidiaries in respect of any
material Tax;
(e) no Company or Subsidiary is a member of any consolidated or
unitary group or a party to any arrangement with any third party
(other than any member of the Group or of the VEBA Group) as a
result of which any income, loss, asset or liability of any of the
Companies or Subsidiaries is attributed for Tax purposes to any
such third party or is otherwise taken into account in determining
any Tax payable by any third party, or vice versa;
(f) no Company is a "United States Real Property Holding Corporation"
within the meaning of section 897 (c) (2) of the Internal Revenue
Code;
(g) except as provided in the Effective Date Financial Statements no
Company or Subsidiary is or will be under any obligation to make
or repay any payment for the surrender of losses or other amounts
that may be surrendered;
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(h) no Company or Subsidiary is subject to an adjustment pursuant to
section 481 of the Internal Revenue Code;
(i) no Taxing Authority in a jurisdiction where a Company or
Subsidiary is not paying Tax has made a claim or assertion that
the Company or Subsidiary is or may be subject to Tax by such
jurisdiction, otherwise than by deduction of Tax at source;
(j) all Companies and Subsidiaries that are corporations formed under
US state law being purchased are members of a US consolidated Tax
group of which VEBA Corporation is the consolidated group parent.
9.3 PREPARATION OF TAX RETURNS AND PAYMENT OF TAX
Sellers shall (i) prepare and file, or cause the Companies and the
Subsidiaries to prepare and file, all Tax Returns required to be filed by
or on behalf of the Companies or Subsidiaries on or before the Closing
Date and (ii) Sellers shall prepare and file at the Sellers' expense all
Tax Returns which include the Companies and Subsidiaries and which are to
be filed by the Sellers on a consolidated basis after the Closing Date.
The relevant Purchasers shall procure the Companies and the Subsidiaries
to prepare such information as is required for the purpose of
consolidated Tax Returns to be filed by Sellers at the relevant
Purchaser's expense and the relevant Purchaser shall have the right to
review the portion of such consolidated Tax Returns relating to the
Companies and the Subsidiaries. The relevant Purchaser shall at the
relevant Purchaser's expense prepare and file all Tax Returns required to
be filed by or on behalf of any of the Companies or Subsidiaries after
the Closing Date subject, in the case of any Tax Returns for a Tax period
beginning before the Closing Date, to the review of Sellers and the
relevant Purchaser shall incorporate reasonable comments made by the
Sellers concerning the preparation and filing of such Tax Returns. The
Sellers or relevant Purchaser, as the case may be, shall ensure that any
Tax Return to be reviewed by the other party will be made available to
such other party no later than 30 days prior to the due date for the
filing of such Tax Return and any comments must be given by the other
party within 15 days of receipt. The relevant Purchaser shall pay all
Taxes shown as due on any Tax Return to be filed by the relevant
Purchaser under this Section 9.3 but such payment shall not prejudice any
claims the relevant Purchaser has or may have under Section 9.5. Sellers
shall timely pay or cause to be paid all Tax for which Sellers are liable
with respect to
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any Tax Return to be filed by Sellers under this Section 9.3 subject to
the relevant Purchaser procuring that any of the Companies and the
Subsidiaries included in a Tax Return to be filed on a consolidated basis
shall collectively have paid an amount equal to the Tax liability of all
such Companies and Subsidiaries in respect of such Tax Returns to the
Seller to the extent that such Tax (i) was taken into account in
calculating the amount of the Effective Date Taxation Liability or (ii)
which was incurred in the ordinary course of business and is attributable
to the portion of a Tax period beginning on or after the Effective Date
and ending on the Closing Date (such tax to be computed by treating the
Companies and Subsidiaries as a separate sub-group), in each case not
later than 5 days prior to the date for the filing of the Tax Return.
9.4 TAX REFUNDS AND RECOVERIES
The relevant Purchaser shall pay to the Sellers an amount equal to any
refunds received in cash with respect to Tax of the Companies or
Subsidiaries for Tax periods ending on or before the Effective Date
except for those refunds taken into account as an asset in the Effective
Date Financial Statements.
9.5 TAX COVENANT
(a) Subject to the provisions of Sections 8.1 (b) and 8.1 (c), the
Sellers covenant to pay to each of the relevant Purchaser or a
company nominated by the relevant Purchaser pursuant to Section
1.1(d) an amount equal to any
(i) Tax of any of the Companies or the Subsidiaries (whether or
not they are primarily liable for the same) attributable to
any Tax period or portion thereof ending on or before the
Effective Date;
(ii) Tax of the Companies or the Subsidiaries (whether or not
they are primarily liable for the same) attributable to any
Tax period or portion thereof ending on or before the
Closing Date as the result of any act, transaction or event
outside the ordinary course of business of the Companies or
the Subsidiaries;
(iii) liability for Tax arising from a breach of any Tax
representation or warranty contained in Section 9.2;
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(iv) loss or reduction of any Tax Asset taken into account in
the Effective Date Financial Statements as an asset;
(v) set off of any Tax Asset arising after the Effective Date
against Tax if and to the extent the Purchaser would have
had a claim under Section 9.5 (a) (i), (ii) or (iii) had
such set off not reduced or extinguished such liability to
Tax, provided that the Purchaser shall procure that any
reliefs, deductions or credits other than a Tax Asset are
used, so far as reasonably practicable, to offset any such
liability to Tax;
(vi) Tax attributable to the triggering of a deferred
intercompany gain or excess loss account for U.S. federal
state or local tax purposes as the result of the transfer
of the shares of the Companies from the Sellers to the
Purchasers on the Closing Date;
(vii) liability for Tax arising in consequence of an act,
omission, transaction or event occurring at any time for
which the Company or Subsidiary is not primarily liable but
for which it is liable only as a result of having at any
time on or before the Closing Date been a member of a group
for Tax purposes or by virtue of having been at any time
before the Closing Date controlled by any person;
(viii) any reasonable costs and expenses incurred by the
Purchasers or the Companies or the Subsidiaries in
connection with prosecuting any claim under Article 9 to
the extent to which the Sellers are liable for such claim
(the sum of (i) to (viii) being referred to herein as a
"TAX LOSS" or "TAX LOSSES" which may be adjusted pursuant
to Section 9.5(c)) provided that to the extent that the
Sellers are not liable in respect of such claim the
Purchasers shall reimburse the Sellers for any reasonable
costs and expenses incurred by the Sellers in respect of
defending against such claim.
Notwithstanding any of the foregoing to the contrary, this Section
9.5 shall not apply to any Tax governed by Section 11.7.
(b) For the purposes of this Article 9 the following shall, without
limitation, be considered to be outside the ordinary course of
business:
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(i) the payment of any dividend or the making of any
distribution; or
(ii) the disposal, realisation or acquisition of any asset
(including, without limitation, trading stock) in
circumstances where, and only to the extent that, the
consideration (if any) actually received (or due to be
received) or given (or due to be given) for such disposal,
realisation or acquisition is less than (or in case of an
acquisition, more than) the consideration deemed to be or
have been received or given for Tax purposes; or
(iii) the supply or receipt of any service or business facility
of any kind (including, without limitation, a loan of money
or the letting, hiring, licensing or creation of any
tangible or intangible property or rights) in circumstances
where, and only to the extent that, the consideration
received (or due to be received) or given (or due to be
given) is less than (or in the case of receipt of a
service, more than) the consideration which is deemed to be
received or given for Tax purposes; or
(iv) any act, transaction or event which gives rise to deemed
(as opposed to actual) income, profits or gains; or
(v) any act, omission, transaction or event which results in a
Company or Subsidiary becoming liable to or bear a
liability to Tax directly or primarily chargeable against
or attributable to another person; or
(vi) a Company or Subsidiary ceasing, for Tax purposes to be the
member of any group or associated with any other Company or
Subsidiary or a change of residence of any Company or
Subsidiary for Tax purposes; or
(vii) any disposition of a capital asset in violation of Section
7.1 (d) and any disposition of shares of capital stock of
any corporation; or
(viii) any material restructuring of the handling and ownership of
inventory including, without limitation the centralization
of warehousing and related matters; or
(ix) the entering into, performance of or closing of this
Agreement; or
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(x) any reorganization of the Companies or Subsidiaries
including a change in entity classification; or
(xi) any disallowance of any interest expense deduction in
respect of the Effective Date Inter-Group Debt and
Effective Date External Debt (for the avoidance of doubt,
interest paid or accrued on loans extended by E.ON AG or a
company of the E.ON Group after the Effective Date shall be
considered to be paid in the ordinary course of business);
or
(xii) any gain or other income attributable to the sale of assets
or deemed sale of assets by Sellers to Purchasers pursuant
to this Agreement, it being understood that Incremental Tax
cost, if any, shall be payable by the Purchaser pursuant to
Section 9.13.
(c) Where an amount of Tax paid by the Company or Subsidiary has
resulted in a relief (the "RELEVANT RELIEF") and the Seller has
made a payment to the Purchaser in respect of that Tax in
satisfaction of a claim made under this Section 9.5, the relevant
Purchaser shall where the claim is less than $100,000 pay or
procure that the relevant Company or relevant Subsidiary pays to
the Seller an amount equal to the net present value of the
Relevant Relief within 5 days of the auditors for the time being
of the Company or Subsidiary confirming at the request and expense
of the Seller that such Relevant Relief is actually available to
the Company or Subsidiary and where the claim is in excess of
$100,000 pay to the Seller an amount equal to the amount of Tax
saved within 5 days of the auditors for the time being of the
Company or Subsidiary confirming at the request and expense of the
Seller that such Relevant Relief has actually been utilised.
(d) The covenant contained in Section 9.5 shall not apply to the
extent that:
(i) the Tax was taken into account in calculating the amount of
the Effective Date Taxation Liability which has been taken
into account in determining the Final Share Purchase Price;
(ii) the Tax arises as a result of any change in rates of tax
made after Closing or of any change in law (or a change in
interpretation on the basis of case
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law), regulation, directive or requirement, or the
published practice of any Taxing Authority, occurring after
Closing;
(iii) the Tax would not have arisen except as a direct
consequence of a transaction, action or omission outside
the ordinary course of business carried out or effected by
any of the Purchasers, the Companies or Subsidiaries or any
other person connected with any of them apart from the E.ON
Group, which the Purchasers, the Companies or the
Subsidiaries knew or ought reasonably to have known would
give rise to such liability to Tax at any time after
Closing, except that this exclusion shall not apply where
any such transaction, action or omission is carried out or
effected by the Company or Subsidiary concerned pursuant to
a legally binding commitment created on or before Closing
or pursuant to any change in law (or change in
interpretation on the basis of case law), regulation,
directive or requirement, or the published practice of any
Taxing Authority;
(iv) the Tax arises solely as a result of a change after Closing
in any accounting policy, any tax reporting practice, or
the length of any accounting or financial period for Tax
purposes, of the Company or any Subsidiary except any
changes made to comply with generally accepted accounting
principles in existence at Closing or required by a Taxing
Authority;
(v) such Tax arises solely as a result of the Companies or
Subsidiaries failing to submit the returns and computations
required to be made by them or not submitting such returns
and computations within the appropriate time limits or
submitting such returns and computations otherwise than on
a proper basis, in each case after Closing except to the
extent that such failure is as a result of any act or
omission of the Sellers;
(vi) the Tax would not have arisen but for:
(A) the making of a claim, election, surrender or
disclaimer, the giving of a notice or consent
relating to Tax, in each case after Closing and by
the Purchasers, the Companies, the Subsidiaries or
any person connected with any of them (except the
E.ON Group) other
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than where the making of such claim, election,
surrender or disclaimer is taken into account in the
Effective Date Financial Statements; or
(B) the failure or omission on the part of the Companies
or the Subsidiaries to make any such valid claim,
election, surrender or disclaimer, or to give any
such notice or consent or to do any other such
thing, in circumstances where the making, giving or
doing of which was taken into account in calculating
the amount of the Effective Date Taxation Liability
and which were notified by the Sellers to the
Purchasers, the Company or the Subsidiary not less
than 30 days prior to the last date upon which such
claim election, surrender or disclaimer should take
place;
(vii) the Tax exceeds 50% of the Tax which arises under section
179 of the Taxation of Chargeable Gains Xxx 0000 in respect
of a deemed disposal by any of RK Distributions Limited,
Midwich Limited, Transformation Software Limited and
Professional Display Systems Limited as a consequence of
any of those companies ceasing to be a member of a group
within section 170 of that Act with a company within the
E.ON Group as the principal company in that group;
(viii) the liability relates to a Tax arising under Section 9.5
(a)(iii) which Tax is attributable to a Tax period or
portion thereof beginning or deemed to begin on or after
the Closing Date.
(e) (i) For the purposes of this paragraph a reference to an
"OVERPROVISION" is a reference to:
(A) the understatement of the value of a Tax Asset; and
(B) the overstatement of the Effective Date Taxation
Liability
in the Effective Date Financial Statements except to the
extent that such Overprovision is caused by the utilization
of a Tax Asset arising after the Effective Date and
applying the same accounting policies, principles and
practices adopted in relation to the preparation of the
Effective Date
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Financial Statements and ignoring the effect of any change
in law (or change in interpretation on the basis of case
law), regulation, directive or requirement, or the
published practice of any Taxing Authority or action taken
by the relevant Purchaser or any relevant Company or
relevant Subsidiary after the Closing Date.
(ii) Any Overprovision shall first be set against any payment
then due from the Seller to the relevant Purchaser under
this Article 9. To the extent there is an excess, a refund
shall be made to the Seller by the relevant Purchaser of
any previous payment or payments made by the Seller to the
relevant Purchaser under this Article 9 (and not previously
refunded) up to the amount of the excess. To the extent
that the excess is not thereby exhausted, the remainder of
that excess shall be carried forward and set against any
future payment or payments which become due from the Seller
to the relevant Purchaser under this Article 9 and to the
extent that any excess remains at the end of the limitation
period set out in Section 9.9 such excess shall be paid to
the Seller.
(iii) For this purpose, the Seller, at its request and expense,
may request the auditors for the time being of any Company
or Subsidiary to certify the existence and amount of any
Overprovision and the relevant Purchaser shall provide, or
procure that each Company and Subsidiary shall provide, any
reasonable information or assistance for the purpose of
production by the auditors of a certificate to that effect.
9.6 THIRD PARTY RECOVERY
At the request and expense of the Sellers, the relevant Purchasers, the
relevant Companies and the relevant Subsidiaries will take all reasonable
steps to make a claim in respect of Tax from a person other than the
Sellers, the relevant Purchasers, the relevant Companies or the relevant
Subsidiaries and the relevant Purchaser shall pay or procure that the
relevant Company or the relevant Subsidiary pay to the Seller an amount
equal to the lesser of (i) the amount recovered from the third party and
(ii) the amount paid by the Seller pursuant to a claim under Section 9.5,
in each case, after deducting from the amount recovered from the third
party any Tax incurred or to be incurred by the relevant Purchaser, the
relevant Company or any relevant Subsidiary upon receipt of such
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recovery from the third party, within 5 days of receipt of such amount by
any of the relevant Purchaser, the relevant Companies or the relevant
Subsidiaries.
9.7 PROCEDURES
(a) Subject to at least 14 days prior written notice from the relevant
Purchaser stating that any Tax Loss has been or is to be paid or
suffered by that Purchaser or any Company or Subsidiary and the
amount thereof and of the covenanted payment requested, and for
the avoidance of doubt, a failure to give notice within the period
set out above shall not cause any claim to fail. Any payment to be
made by Sellers pursuant to Section 9.5 shall be made to the
relevant Purchaser not later than 5 days prior to the date upon
which the Tax (or costs and expenses) is due and payable or where
no Tax becomes payable as a result of the loss, reduction or set
off of any Tax Asset
(i) which is a Tax Asset shown as an asset in the Effective
Date Financial Statements seven days after notice given by
the relevant Purchaser to the effect that the Tax Asset
would reasonably have been expected to have been paid in
cash or set-off against payment of a Tax Liability;
(ii) which is a Tax Asset arising after the Effective Date seven
days after the auditors for the time being shall have
certified in writing that the Tax Asset would have been
used to offset a Tax Liability of the relevant Purchaser,
the relevant Companies or relevant Subsidiaries but for the
loss or set off of the Tax Asset.
(b) If, after the relevant Closing Date, any Taxing Authority informs
Sellers, on the one hand, or any of the Purchasers, the Companies,
or Subsidiaries on the other, of any proposed audit, claim,
assessment or other dispute concerning Tax with respect to which
Sellers may incur a liability hereunder, then the Sellers shall
inform the relevant Purchaser or the relevant Purchaser shall as
soon as practicable (and in any event within 30 days) inform the
Sellers, as the case may be, of such matter. Sellers shall not
have any obligation to make a payment to a relevant Purchaser
under Section 9.5 if such Purchaser shall have failed to timely
notify Sellers concerning an audit, claim, assessment or other
dispute which failure has a material adverse effect on the
Sellers' ability to exercise its rights under this Section 9.7 (b)
and Section 8.4 except to the extent that the Purchasers
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can show that the liability would have arisen even if the Sellers
had been able to exercise such rights and in the event that the
Parties dispute whether or not the liability, or the extent to
which the liability, would have arisen but for the failure to
notify, the dispute resolution procedures in Section 3.4 shall
apply to determine the matters. Except to the extent contrary to
or inconsistent with this Section 9.7 (b) the provisions of
Section 8.4 shall apply to this section and subject thereto, the
relevant Purchaser shall as soon as practicable and, at the
Sellers expense (i) give, and shall cause the Companies or
Subsidiaries to give the relevant Sellers the opportunity to
participate in any audits, disputes, administrative, judicial or
other proceedings related to Tax for which the Sellers may be
liable hereunder and (ii) allow the Sellers to challenge and
litigate, or cause the Companies or Subsidiaries to challenge and
litigate, any such audit, claim, assessment or other dispute at
their discretion provided that Sellers shall give reasonable
consideration to comments and suggestions made by the relevant
Purchaser regarding the handling of such contest and provided
further that Sellers shall not settle any such audit, claim,
assessment or other dispute in a manner which is unduly
prejudicial to such relevant Purchaser.
(c) Any payments made hereunder to a Purchaser shall take effect as a
reduction in the Final Share Purchase Price provided for in
Section 2.3 and any payments made hereunder to the Sellers shall
take effect as an increase in the Purchase Price.
(d) For the purposes of this Section 9, in the case of any Tax period
which begins before and ends after the Effective Date, the
Effective Date shall be deemed to be the end of a Tax period.
(e) For the purposes of this Article 9, in the case of any Tax period
which begins before and ends after the Closing Date, the Closing
Date shall be deemed to be the end of a Tax period.
(f) The parties agree that for US federal income tax purposes, the
income of the Companies and the Subsidiaries which are included in
a US consolidated Tax Return shall be determined based on a
closing of the books method in accordance with Treasury Regulation
1.1502-76.
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9.8 CERTAIN TAX MATTERS RELATING TO GERMANY
(a) In the event that any gain resulting from a write-up
(Zuschreibung) of assets (the "1999 ASSETS WRITE-UP") and the
adjusted valuation of liabilities and provisions (the "1999
ADJUSTMENT OF LIABILITIES AND PROVISIONS") due to the German
Steuerentlastungsgesetz 1999 / 2000 / 2002 has to be recorded on
the Tax balance sheet of any of the Companies or Subsidiaries for
the fiscal year 1999, the following shall apply:
(i) Purchasers shall to the extent such a 1999 Assets Write-Up
has been made or must be made with respect to the period
and reserves existing prior to the Effective Date ensure
that in respect of such write up, (A) Tax exempt reserves
(steuerfreie Rucklagen) pursuant to Section 52 (14) and
(16) German Income Tax Act (EStG) shall be included in the
relevant Tax balance sheet up to the maximum amount and
maximum period permitted by law and (B) to the extent
required for Tax purposes, a corresponding special reserve
with equity portion (Sonderposten mit Rucklagenanteil - the
"SPECIAL RESERVE") shall be recorded in the annual
individual statutory accounts of the relevant Company or
Subsidiary.
(ii) The Sellers shall indemnify and hold the Purchasers
(including, for the purpose of this Section 9.8, any
Company nominated by the relevant Purchaser pursuant to
Section 1.1 (d)) harmless from any Tax liability of the
Purchasers, or of any of the Companies or the Subsidiaries
arising from the dissolution or partial dissolution
(Auflosung) of any reserves relating to the 1999 Assets
Write-Up made in accordance with (i) above. The amount to
be indemnified shall be equal to the net present value of
the aggregated future Tax calculated with a discount rate
of 5.5% per annum and by applying a tax rate of 40%. Any
loss carry forward of the Purchasers or any of the
Companies or the Subsidiaries shall not be included in the
calculation of any tax calculated under this provision. In
addition, Sellers shall indemnify Purchasers for the
respective interest payments under Section 233 a German
General Tax Code (Abgabenordnung).
(iii) Any Tax arising after the Effective Date in the fiscal
years starting after December 31, 1999 from the dissolution
of any reserves relating to the
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1999 Adjustment of Liabilities and Provisions shall be
borne by Purchasers. For the avoidance of doubt 75% of any
such Taxes arising for the year 2000 shall be borne by
Purchasers.
(iv) The aggregated amount pursuant to (ii) shall be paid within
14 days of notice from the relevant Purchaser that the
respective Tax for 1999 becomes due. The Sellers shall pay
to the relevant Purchaser the interest pursuant to (ii)
above within 14 days of notice from the relevant Purchaser
that interest becomes due.
(b) In connection with the tax consolidation for trade tax purposes
(gewerbesteuerliche Organschaft) in Germany, E.ON AG and the
Sellers have imposed on certain German companies a group charge
(Konzernumlage) in respect of trade tax, regardless of whether any
trade tax will become payable by E.ON AG for certain Pre-Closing
Tax Periods. The relevant Purchaser agrees to cause (to the extent
permitted by mandatory law) the respective German Group Companies
not to raise against E.ON AG and the Sellers or any other German
company of the E.ON Group any claims (on any legal basis
whatsoever) for any reimbursement of such group charge and the
Purchasers shall indemnify and hold harmless E.ON AG, the Sellers
and any other German company of the E.ON Group from any such claim
raised by any German Group Company. Vice versa E.ON AG and the
Sellers agree not to impose any additional group charge for trade
tax to the Purchasers and the German Group Companies, and E.ON AG
and the Sellers shall indemnify and hold harmless the Purchasers
and the German Group Companies from any such additional group
charges imposed by E.ON AG or the Sellers and from any additional
corporate income tax and solidarity surcharge or corporate income
tax resulting from any such additional group charges.
9.9 LIMITATION PERIOD
The provisions of this Article 9 as it applies to a liability to Tax of
any Company or Subsidiary shall be time-barred upon expiration of the
full limitation period for the relevant Tax (taking as an assumption that
there has been no fraud or wilful non-disclosure), other than in respect
of claims notified in accordance with this Article prior to the end of
such relevant period.
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9.10 CO-OPERATION ON TAX MATTERS
(a) Each of the Purchasers and the Sellers shall fully cooperate with
each other and their representatives in connection with any Tax
matter including the preparation and filing of any Tax return,
provision of any state or federal information relating to
mitigation of any Tax or the conduct of any audit, investigation,
dispute or appeal with respect to Tax. Cooperation between each of
the Purchasers and the Sellers shall include (but shall not be
limited to) providing and making available all books, records and
information, and the assistance of all officers and employees
necessary or useful in connection with any Tax inquiry, audit,
examination, investigation, dispute, litigation or any other tax
matter.
(b) Each of the Companies and Subsidiaries which are included in any
consolidated return to be filed by E.ON AG, VEBA Corporation or
any other company of the VEBA Group (the "VEBA CONSOLIDATED
RETURNS") shall prepare at their own cost pro forma tax returns,
on a "stand alone" basis consistent with the terms of any tax
sharing agreement including the Tax Sharing Agreement as defined
in Section 9.12(a) to which any Company or Subsidiary is a party
and shall provide such returns together with all supporting
schedules, information and documentation necessary to prepare any
consolidated Tax Return including the Companies or the
Subsidiaries to be filed after the Closing Date, within 30 days of
the due date of such return.
9.11 UK TAX MATTERS
(a) The relevant Purchaser hereby covenants with the Seller to pay to
the Seller, by way of adjustment to the Purchase Price, an amount
equivalent to:
(i) any Tax for which the Seller or any other person falling
within section 767 A (2) of the Income and Corporation
Taxes Act 1988 ("the Taxes Act") becomes liable by virtue
of the operation of section 767 A and 767 B of the Taxes
Act in circumstances where the taxpayer company (as
referred to in section 767 A (1)) is any Company or any
Subsidiary;
(ii) any Tax for which the Seller or any other person falling
within section 767 AA (4) of the Taxes Act becomes liable
by virtue of the operation of section 767 AA of the Taxes
Act in circumstances where the
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transferred company (as referred to in section 767 AA (1)
(a)) is any Company or any Subsidiary; and
(iii) any other Tax for which the Seller or any other member of
the VEBA Group becomes liable as a result of the failure by
any Company or any Subsidiary, after the Closing Date,
being primarily liable, to discharge it.
(b) The covenant contained in this Section 9.11 shall:
(i) extend to any reasonable costs incurred by the Seller in
connection with such Tax or a claim under this Section 9.11
to the extent a recovery is made;
(ii) not apply to Tax to the extent that the relevant Purchaser
could claim payment in respect of it under Section 9.5,
except to the extent a payment has been made pursuant to
Section 9.5 and the tax to which it relates was not paid by
the Company or Subsidiary concerned; and
(iii) not apply to tax which has been recovered under section 767
B (2) of the Taxes Act or any other relevant statutory
provision (and the Seller shall procure that no such
recovery is sought to the extent that payment is made
hereunder).
9.12 CERTAIN TAX MATTERS RELATING TO THE U.S.
(a) The Tax sharing agreement dated 25 May 2000 (the "TAX SHARING
AGREEMENT") to which any Company or Subsidiary is a party shall
(i) remain in full force and effect until the Closing Date,
subject to the provisions of this Agreement from the Effective
Date to the Closing Date and (ii) be terminated as to the Company
or Subsidiary as of the Closing Date and no Company or Subsidiary
shall have any further obligations thereunder.
(b) The relevant Sellers shall elect to end all Tax years for all
Companies and Subsidiaries formed under US state law as of the
Closing Date to the extent such an election is available to those
Sellers.
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(c) No Seller or affiliate of a Seller shall make any election under
U.S. Treasury Regulations section 1.1502 - 20 (g).
(d) Sellers represent and warrant to Purchasers as of the date hereof
and as of the Closing Date that,
(i) VEBA Corporation is (i) the sole owner of VEBA Electronics
LLC and (ii) a U.S. person within the meaning of Section
7701 (a) (30) of the Internal Revenue Code;
(ii) VEBA Electronics LLC, Memec LLC, Insight Electronics LLC
and Impact Semiconductor Technologies LLC are classified as
disregarded entities under Treasury Regulations Section
301.7701-1 et seq, the purchases of which will be treated
as asset purchases for U.S. federal income tax purposes;
and
(iii) no consent under Section 341 (f) of the Internal Revenue
Code has been filed with respect to any Company or
Subsidiary.
(e) VEBA Corporation shall provide the relevant Purchasers with a
statement in substantially the form set forth in Treasury
Regulations Section 1.1445 - 2 (b) (2) (iii) that the Seller for
U.S. tax purposes is a U.S. person.
(f) For US state and federal tax purposes, the relevant Purchasers are
expressly assuming all liabilities identified in the preparation
of the relevant Tax Returns of the Companies and Subsidiaries
which are subject to the provisions of section 461(h) of the
Internal Revenue Code and for the avoidance of doubt, Sellers make
no representation or warranty and shall have no liability or
obligation with regard to the foregoing.
9.13 SECTION 338(h)(10) ELECTION
(a) To the extent permissible under applicable Tax and regulations, at
the request of any Purchaser, the relevant Sellers agree to
cooperate with such Purchaser in making or causing to be made (and
in determining the cost of making or causing to be made) a timely
election under Section 338 (h) (10) of the Internal Revenue Code,
and any comparable provision for state income tax purposes (the
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"SECTION 338 (h) (10) ELECTION") with respect to the purchase by
such Purchaser of the relevant Companies and Subsidiaries and to
file such Section 338 (h) (10) Election in the manner required by
applicable U.S. Treasury Regulations, provided that Sellers'
obligation to make a Section 338 (h) (10) Election is subject to
the following conditions:
(i) Prior to the election, the relevant Purchaser shall have
paid to Sellers a reasonable estimated amount of the
Incremental Tax Cost (as defined below); and
(ii) Sellers and the relevant Purchaser shall have negotiated in
good faith and agreed on a mutually acceptable purchase
price allocation based on the fair market value of assets
in accordance with applicable Treasury Regulations.
(b) "INCREMENTAL TAX COST" shall mean any reasonable, out of pocket
post-Closing fees, expenses and costs incurred by the Sellers in
connection with the Section 338 (h) (10) Election (or reasonable
out of pocket post-Closing fees, expenses and costs incurred by
Sellers in connection with a request by the relevant Purchaser for
cooperation pursuant to Section 9.13 (a) even if no Section 338
(h) (10) Election is made) and the excess, if any, of:
(i) the aggregate amount of Tax attributable, directly or
indirectly, to the Section 338 (h) (10) Election, including
but not limited to any such Tax imposed under U.S. Treasury
Regulation Section 1.338 (b) - 3T (h) and any such Tax
attributable to the receipt of any payment by the Sellers
under Section 9.13 over
(ii) the aggregate amount of Tax attributable, directly or
indirectly, to the hypothetical U.S. federal, state and
local income tax liability of the Sellers attributable to
the deemed taxable sale of the relevant Companies for which
a Section 338 (h) (10) Election is made without a Section
338 (h) (10) Election.
(c) The Tax liability referred to in Section 9.13 (b) shall be
determined as if the gain and payment of the Incremental Tax Cost
by the relevant Purchaser were the only items of income or loss on
the relevant Tax returns of the Sellers and assuming
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the relevant Seller's U.S. federal, state and local income tax
rates are the highest rates in effect in the tax year which
includes the Closing Date. The Incremental Tax Cost shall be paid
by Purchaser to Sellers, net of any estimate paid pursuant to
Section 9.13 (a), (or, in the event the estimate paid pursuant to
Section 9.13 (a) exceeds the actual Incremental Tax Cost, the
excess shall be paid by Sellers to Purchaser), within 5 days of
the payment by Sellers of the relevant fee, cost or expense or, in
the case of a Tax, within 5 days of the filing by Sellers of a Tax
Return reflecting the Section 338 (h) (10) Election. The relevant
Purchaser shall have the right to review and Sellers shall make
available to the relevant Purchaser all relevant information
relied on by Sellers to compute the Incremental Tax Cost or an
estimate thereof to be paid pursuant to Section 9.13 and Sellers
shall give reasonable consideration to comments made by the
relevant Purchaser with respect to such computation.
9.14 ALLOCATION OF PURCHASE PRICE
The Parties agree that the allocation of the Final Share Purchase Price
provided for in Article 2.3 (but subject to any adjustment required under
this Agreement or by a Taxing Authority) shall apply for all Tax purposes
and no other values shall be used and the Parties further agree that the
allocation of the Final Share Purchase Price and the liabilities of a
Company subject to a Section 338 (h) (10) Election and its Subsidiaries,
if any, (plus other relevant items) will be allocated to the assets of
the Company and its Subsidiaries for all purposes (including Tax and
financial accounting purposes) in a manner consistent with the fair
market values as finally agreed between the parties within the applicable
US rules and regulations. The relevant Purchaser, the Company and Seller
will file all Tax Returns (including amended returns and claims for
refund) and information reports in a manner consistent with such values.
ARTICLE 10
TERMINATION
10.1 RIGHT TO TERMINATE
This Agreement may be terminated at any time prior to the Closing:
(a) by mutual written agreement of the Sellers and Purchasers;
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(b) by the Purchasers in case of a breach of Sellers' representations
and warranties, covenants or other obligations as set forth in
Section 4.2 (a) (iii);
(c) by the Purchasers, if the Sellers have not complied with their
obligation to effect the Closing on the Closing Date;
(d) by the Sellers, if (i) in a Closing involving two or more
Purchasers, less than two Purchasers comply with their obligations
to effect the Closing on the Closing Date, or (ii) in a Closing
involving one Purchaser, that Purchaser does not comply with its
obligations to effect the Closing on the Closing Date;
(e) by either the Sellers or the Purchasers if the Closing shall not
have been consummated (because of any other reason than set out in
paragraph (c) or (d) above or in Section 4.2 (a) (iii)) on or
before February 28, 2001; or
(f) by either the Sellers or the Purchasers if the consummation of the
transactions contemplated hereby would violate any non-appealable
final order, decree or judgement of any court or governmental body
having competent jurisdiction in any jurisdiction, provided that
such order, decree or judgement has a Material Adverse Effect (as
defined in Article 5).
The Party desiring to terminate this Agreement pursuant to clauses (b) to
(f) above shall give notice of such termination to the other Parties. For
the purpose of this Article 10, the Sellers are deemed to be one Party
and may therefore exercise their termination right only jointly. To the
extent that the matter or circumstance giving rise to a right conferred
on the Purchasers to terminate relates to one or two Purchasers (rather
than all of the Purchasers), such right shall be exercisable by the
Purchaser or Purchasers to which it relates rather than by all the
Purchasers.
10.2 CONSEQUENCES OF TERMINATION
(a) Without prejudice to any agreement between the Purchasers alone,
if (and to the extent that) this Agreement is terminated as
permitted by Section 10.1, such termination shall be without
liability of any Party (or any stockholder, director, officer,
employee, agent, consultant or representative of such Party) to
the other Parties to this Agreement; provided that if such
termination shall result from the
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wilful (i) failure of any Party to fulfil a condition to the
performance of the obligations of any other Party (ii) failure to
perform a covenant of this Agreement or (iii) breach by any Party
hereto of any representation or warranty or agreement contained
herein, or termination results from any Party's failure to close
once the conditions to Closing set out in Section 4.2 have been
satisfied, such Party shall be fully liable for any and all Losses
incurred or suffered by Sellers or the Purchasers (as the case may
be) as a result of such failure or breach. The provisions of this
Section 10.2 and Sections 11.6 (Public Disclosure), 11.7 (Taxes
and Expenses) and 11.10 (Governing Law; Competent Courts) shall
survive any termination hereof pursuant to Section 10.1.
(b) If this Agreement is terminated only in respect of certain (but
not all) Purchasers, the following shall apply:
(i) This Agreement shall remain in full force and effect in
respect of the obligations of the Sellers and of those
Purchasers in respect of which the transactions
contemplated hereby have been consummated or have not been
terminated.
(ii) The Final Share Purchase Price and the actual amount of the
Closing Date Inter-Group Debt to be paid by the Purchasers
referred to in (i) above shall be determined in accordance
with Articles 2 and 3, on the basis of the provisions of
Exhibit 2.3 (Part II).
(iii) The thresholds and maximum liability amounts relating to
the entire Group, as set forth in Sections 4.2 (a) (iii)
and 8.1 (b), (c), (d) and (e) shall remain unchanged.
ARTICLE 11
MISCELLANEOUS
11.1 LIABILITY OF SELLERS AND PURCHASER
Each of the Sellers and Purchasers shall only be severally liable under
this Agreement and the liability of each shall be limited to matters
relating to the shares or companies directly or indirectly sold or
acquired by it hereunder. If any Purchaser designates any
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third party as transferee of any of the Sold Shares, that Purchaser shall
remain fully liable for all of its obligations hereunder with respect to
such shares.
11.2 ASSUMPTION OF LIABILITY BY E.ON AG
E.ON AG hereby assumes by way of co-assumption (Schuldbeitritt), and
shall be jointly and severally liable with the Sellers
(gesamtschuldnerische Mithaft) for, all obligations and liabilities
incurred or assumed by each of the Sellers under this Agreement,
including (without limitation) obligations and liabilities arising in
respect of the representations, covenants, warranties and indemnities set
out in this Agreement. Such joint and several liability of E.ON AG shall
not be affected by the winding up or dissolution of any of the Sellers.
E.ON AG represents and warrants to Avnet (and any company nominated by it
pursuant to Section 1.1(d)) by way of an independent guarantee
(selbstandiges Garantieversprechen) and covenants to Avnet (and any
company nominated by it pursuant to Section 1.1(d)) that the winding up
of EBV Verwaltungs GmbH is and will continue to be on a solvent basis and
the assets of that company exceed its liabilities.
11.3 NOTICES
All notices or other communications hereunder shall be deemed to have
been duly made if they are made in writing and are personally delivered
by registered mail or courier service or sent by telecopier (provided
that the telecopy is promptly confirmed in writing) to the person at the
address set forth below, or such other address as may be designated by
the respective Party to the other Parties in the same manner:
To Sellers and/or E.ON AG:
E.ON XX
Xxxxx Xxxxxxxxxx
Xxxxxxxxxxxxxx 0
X-00000 Xxxxxxxxxx
Fax: x00-000-00 79 610
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with a copy to:
Hengeler Xxxxxxx Xxxxxxx Xxxxx
Attn. Xxxxxxxxxx Xxxxxxxx / Xxxxxxxx Xxxxx-Xxxxxxxxxx
Xxxxxxxxxxxx(xxxx)x 0
X-00000 Xxxxxxxxxx
Fax: x00-000-00 04 170
To Purchasers:
In relation to the Memec Purchaser:
Cherrybright Limited
c/o Clifford Chance Secretaries Limited
000 Xxxxxxxxxx Xxxxxx
XX-Xxxxxx XX0X 0XX
Fax: x00 000 0000000
with a copy to:
SVA Limited
Attn.: Xxx Xxxxxxx
00 Xxxxxxxxxxx Xxxxxx
XX-Xxxxxx XX0X 0XX
Fax: x00 000 000 0000
Xxxxxxxx Chance Limited Liability Partnership
Attn.: Xxxxxxx Xxxxxx / Xxxxx Xxxxx
000 Xxxxxxxxxx Xxxxxx
XX-Xxxxxx XX0X 4 JJ
Fax: x00 000 000 0000
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In relation to Avnet Inc.:
Attn.: Xxxxx Xxxx, Xxx Xxxxxxxx
000 Xxxxx 00xx Xxxxxx
XXX-Xxxxxxx, Xxxxxxx 00000
Fax: x0 000 000 0000
with a copy to:
Xxxxx & Overy
Attn.: Xxx Xxxxxxx
Xxx Xxx Xxxxxx
XX-Xxxxxx, XX0X 0XX
Fax: x00 000 000 0000
In relation to Arrow Electronics, Inc.:
Attn.: Xxxxxx X. Xxxxxxx
00 Xxx Xxxxx
XXX-Xxxxxxxx, Xxx Xxxx 00000
Fax: x0 000 000 0000
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
Attn.: Xxxxxx X. Xxxxxxx
0 Xxxxx Xxxxxxxxx Xxxxx
XXX-Xxx Xxxx, Xxx Xxxx 00000
Fax: x0 000 000 0000
11.4 SUCCESSORS AND ASSIGNS
The provisions of this Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and
assigns; provided that no Party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without
the consent of each other Party hereto, except for (i) any assignment by
any Purchaser to any subsidiary or holding company or any subsidiary of
any such holding company, provided that the relevant Purchaser shall
remain jointly and severally liable hereunder (ii) any assignment of
rights by Memec Purchaser to its financing banks as security for any
financing incurred to finance the transaction contemplated by this
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Agreement, (iii) any assignment or merger which takes place by operation
of law, or (iv) for the avoidance of doubt, any transfer of the Sold
Shares by any Purchaser after the Closing.
11.5 THIRD PARTY BENEFICIARIES
Neither this Agreement nor any provision set forth in this Agreement is
intended to confer any rights or remedies upon any person other than the
Parties, any company nominated by a Purchaser under Section 1.1(d) or any
Group Company. However, neither this Agreement nor any provision set
forth in this Agreement is intended to confer any rights to enforce any
rights or remedies upon any person or entity other than the Parties and,
in respect of the right to demand transfer of any Sold Shares, any
company nominated by a Purchaser under Section 1.1(d). For the avoidance
of doubt, this provision shall not limit the rights of any Purchaser to
enforce any rights to recover or any remedies hereunder (including rights
in respect of any losses, liabilities, damages, costs and expenses
suffered by any Group Company as set forth in this Agreement) on behalf
of (or in the name of) any company nominated by the relevant Purchaser in
accordance with Section 1.1(d).
11.6 PUBLIC DISCLOSURE
No Party shall make any press release or similar public announcement with
respect to this Agreement without the prior written consent of the other
Parties, except as may be required to comply with the requirements of any
applicable laws or the rules and regulations of any stock exchange upon
which the securities of one of the Parties or their respective parent
companies are listed. Notwithstanding the foregoing or any provision of
the Confidentiality Agreement dated February 3, 2000, any of the
Purchasers may make such disclosures as are necessary in connection with
the syndication of any financing incurred to finance the transactions
contemplated by this Agreement or the public offering or private
placement of any shares or debt in connection therewith.
11.7 TAXES AND EXPENSES
All transfer taxes (including, without limitation, all real estate
transfer taxes and US state tax if any), notarial fees, stamp or
registration duties and fees payable to any cartel or competition
authority payable in connection with the execution and implementation of
this Agreement shall be borne by Purchasers. Each of the Sellers and
Purchasers shall
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bear its own expenses, including the fees of its advisers, incurred in
connection with this Agreement. No such expenses shall be charged to any
Company or Subsidiary. The Purchasers and the Sellers agree to cooperate
and provide certificates or other information necessary to alienate,
reduce or otherwise exempt the Purchasers from such taxes so payable in
connection with the execution and implementation of this Agreement,
wherever reasonably practicable and at the expense of the benefiting
Purchasers.
11.8 ENTIRE AGREEMENT; CONFIDENTIALITY UNDERTAKING
This Agreement (including all Exhibits hereto and any documents to be
delivered at Closing) contains the entire agreement between the Parties
with respect to the subject matter hereof and supersedes all prior
agreements and understandings with respect thereto, except for the
Confidentiality Agreement dated February 3, 2000, which will remain in
full force and effect until the Closing Date or, if this Agreement is (in
its entirety or with respect to certain Divisions) terminated pursuant to
Article 10 hereof, beyond the date of such termination. Upon request of
any Purchaser, Sellers will assign, or cause E.ON AG to assign, or, if
such assignment is not possible, enforce, or cause E.ON AG to enforce,
for Purchasers' account and at their expense, any rights of the Sellers
or E.ON AG against any third party for a breach of any confidentiality
undertaking assumed by such third party in connection with the sale of
the Group.
11.9 AMENDMENTS AND WAIVERS
(a) Except as expressly otherwise provided herein, any provision of
this Agreement may be amended or waived if, but only if, such
amendment or waiver is by written instrument executed by all
Parties or their duly authorised representatives and explicitly
referring to this Agreement and notarised if required by law.
(b) Sellers hereby waive any rights and remedies which they may have
against any Company or Subsidiary or any of their directors,
officers or employees or any HQ Employee who becomes an employee
of any Purchaser (or any affiliate of such Purchaser) as
contemplated by Section 7.23, in respect of any misrepresentation,
inaccuracy or omission in or from information provided for the
purpose of assisting the Sellers to make the representations,
warranties and indemnities contained in this Agreement or
preparation of the Exhibits and Disclosure Letter pertaining
thereto.
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11.10 GOVERNING LAW; COMPETENT COURTS
This Agreement shall be governed by, and construed in accordance with,
the laws of Germany. Any dispute arising out of or relating to this
Agreement, or the breach, termination or invalidity thereof, shall be
settled in the courts of Frankfurt am Main, Germany, which shall have
exclusive jurisdiction. The governing language of this Agreement shall be
English, unless otherwise required by mandatory law.
11.11 INTERPRETATION; EXHIBITS
(a) The headings of the Articles and Sections of this Agreement are
for convenience purposes only and do not affect the interpretation
of any of the provisions hereof.
(b) Any reference to $ shall mean United States Dollars. For the
purpose of any disclosure thresholds in the representations and
warranties (Article 5), such reference shall include the
equivalent in any foreign currency at the exchange rate officially
determined in Frankfurt am Main on the date hereof.
(c) For the purpose of this Agreement, a business day shall be any day
other than a Saturday, a Sunday or any other day on which banks in
Dusseldorf or London or New York are generally closed.
(d) Words such as "hereof", "herein" or "hereunder" refer (unless
otherwise required by the context) to this Agreement as whole and
not to a specific provision of this Agreement. The term
"including" shall mean including, without limitation.
(e) The Exhibits of this Agreement are an integral part of this
Agreement and any reference to this Agreement includes this
Agreement and the Exhibits as a whole.
(f) References to a law or process or officer or person under one
jurisdiction shall include equivalents in other jurisdictions.
11.12 DEFINITIONS
In addition to the definitions of Arrow, Avnet, Memec Purchaser, Viterra,
Sellers, Purchaser, E.ON AG and the Parties in the introductory clause of
this Agreement, the
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capitalized terms used in this Agreement are defined in the following
Sections and clauses:
1998 and 1999 U.S. GAAP Group Financial Statements Section 5.4 (b)
1999 Adjustment of Liabilities and Provisions Section 9.8 (a)
1999 Assets Write-Up Section 9.8 (a)
1999 German GAAP Group Balance Sheet Section 5.4 (a)
Additional Amount Section 2.2
Applicable Laws Section 5.7 (b)
Arrangements Section 5.11 (a)
Atlas Europe Division Recitals, item 1
Atlas U.S. Division Recitals, item 1
Anti-Trust Laws Section 4.3 (a)
Arrow Plan Section 7.25 (a)
Avnet Group Section 4.2 (a) (i) (B)
Avnet Indemnified Party Section 7.11
Base Amount Section 2.2
Closing Section 4.1
Closing I Section 4.5
Closing II Section 4.5 (b)
Closing Certificates Section 3.1 (b)
Closing Date Section 4.1
Closing Date Inter-Group Debt Section 2.1
Code Section 5.11 (b)
Committed Facilities Section 4.2 (a) (iv)
Companies Recitals, item 9
Completing Purchasers Section 4.5 (a)
CPA Firm Section 3.4
Clean-Up Costs Section 7.14 (c)
Divisions Recitals, item 1
EBV Division Recitals, item 1
Effective Date Section 1.3
Effective Date Cash Section 2.1
Effective Date Certificates Section 3.1 (a)
Effective Date External Debt Section 2.1
Effective Date Financial Statements Section 3.1 (a)
Effective Date Inter-Group Debt Section 2.1
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Effective Date Working Capital Section 2.1
Effective Date Working Capital Target Amount Section 2.1
Effective Date Taxation Liability Section 2.1
Environmental Laws Section 5.8 (a)
Environmental Pollution Section 7.14 (b)
E.ON AG Section 2.1
E.ON Group Recitals, item 9
ERISA Section 5.11(b)
Estimated Closing Date Inter-Group Debt Section 2.1
Expert Section 4.5
Final Share Purchase Price Section 2.2
Forex and Hedging Contracts Section 7.24 (a)
German GAAP Section 3.2
Group Recitals, item 9
Group Companies Recitals, item 9
HQ Employees Section 7.23 (c)
HSR Act Section 4.3 (a)
Income Tax Section 9.1
Incremental Tax Cost Section 9.13 (b)
Indemnifiable Tax Section 9.1
Indemnified Party Section 8.4 (a)
Indemnifying Party Section 8.4 (a)
Intellectual Property Rights Section 5.6 (a)
Inter-Group Debt Section 2.1
Inter-Group Debt Closing Condition Section 4.2 (a) (v)
Internal Revenue Code Section 5.11 (b) (i)
Losses Section 8.1 (a)
March 2000 Divisional Accounts Section 5.4 (d)
March 2000 Group Accounts Section 5.4 (c)
Material Adverse Effect Section 5 (Introduction)
Material Agreements Section 5.12 (a)
Memec Division Recitals, item 1
Memec Employees Section 7.25 (b)
Memec Plan Section 7.25 (b)
Memec Plc Recitals, item 1
Non-Completing Purchasers Section 4.5 (a)
Non-Compliance Section 7.14 (d)
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Non-Compliance Costs Section 7.14 (d)
Overprovision Section 9.5 (e) (i)
Permits Section 5.7 (a)
Post Effective Date Inter-Group Interest Portion Section 2.1
Post Effective Date External Interest Portion Section 2.1
Pre-Closing Distributions Section 2.1
Pre-Closing Non-Recurring Charges Section 2.1
Pre-Closing Tax Period Section 9.1
Preliminary Share Purchase Price Section 2.4
Properties Section 5.5 (f)
Xxxx Xxxxxxx Immobilien Recitals, item 2
RKE Division Recitals, item 1
Section 338 (h) (10) Election Section 9.13 (a)
Sold Shares Section 1.1 (a)
Subsidiaries Recitals, item 9
Tax Section 9.1
Taxation Section 9.1
Tax Asset Section 9.1
Taxing Authority Section 9.1
Tax Loss Section 9.5 (a) (viii)
Tax Return Section 9.1
Transitional and Separation Arrangements Section 4.5
Unfunded Pension Liability Section 2.1
US Companies Section 5.11 (b)
US Company Plans Section 5.11 (b)
VEBA Comfort Letters Section 7.8
VEBA Consolidated Returns Section 9.10 (b)
VEBA Employees Section 7.25 (a)
VEBA Group Recitals, item 9
VEBA Plan Section 7.25 (a)
Wyle/Avnet Litigation Section 7.12
Wyle Components Division Recitals, item 1
Wyle Electronics Pension Plan Section 5.11 (b)
Wyle Systems Division Recitals, item 1
Terms defined in the singular shall have a comparable meaning when used
in the plural, and vice versa.
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11.13 SEVERABILITY
Should any provision of this Agreement, or any provision incorporated in
the future, be or become invalid or unenforceable, the validity or
enforceability of the other provisions of this Agreement shall not be
affected thereby. The invalid or unenforceable provision shall be deemed
to be substituted by a suitable and equitable provision which, to the
extent legally permissible, comes as close as possible to the intent and
purpose of the invalid or unenforceable provision. The same shall apply
if any provision of this Agreement is invalid because of the stipulated
scope of a time period or if this Agreement contains any omissions.
