1-4801
|
06-0247840
|
||||
(Commission File Number)
|
(I.R.S. Employer Identification No.)
|
||||
123 Main Street, Bristol, Connecticut
|
06010
|
||||
(Address of principal executive offices)
|
(Zip Code)
|
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|
[ ]
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
[ ]
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
[ ]
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
[ ]
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
Dated: October 4, 2013
|
BARNES GROUP INC.
|
||||
(Registrant)
|
|||||
By:
/s/ Christopher J. Stephens, Jr.
|
|||||
Christopher J. Stephens, Jr.
|
|||||
Senior Vice President, Finance and Chief Financial Officer
|
|
Share Purchase Agreement
|
|
Recorded on September 30, 2013 in Munich
|
|
Before the undersigned
|
|
Dr. Henning Schwarz
|
|
notary public in Munich, Maximiliansplatz 10,
|
|
appeared:
|
1.
|
Mr. Hans-Peter
Männer
, acting as member of the board of directors with single of
Otto Männer Holding
Aktiengesellschaft
, registered with the commercial register of the local court of Freiburg i. Br. under HRB 270707 (“
Seller
”), and also acting in his own name as shareholder of Otto Männer Holding Aktiengesellschaft, with business address Reetzestr. 2, 79353 Bahlingen,
|
2.
|
Ms. Claudia
Toussaint
, with business address Barnes Group Inc., 123 Main Street, Bristol, CT 06010
|
|
acting as authorized representative of
|
a)
|
Barnes Group Acquisition GmbH
, registered with the commercial register of the local court of Munich under HRB 206695 (“
Purchaser 1
”) by virtue of a power of attorney dated September 27, 2013, and of
|
b)
|
Barnes Group Inc.
with seat of business in Bristol, CT 06010, U.S.A., 123 Main Street, Bristol, CT 06010 (“
Purchaser 2
” and “
Guarantor
”) by virtue of a power of attorney dated September 27, 2013, and of
|
c)
|
Barnes Group Switzerland GmbH
, registered with the commercial register of the Canton of Appenzell Ausserrhoden under number CH-300.4.015.047-4
(“
Purchaser 3
”) by virtue of a power of attorney dated September 27, 2013.
|
3.
|
Mr. Martin
Männer
, with business address Reetzestr. 2, 79353 Bahlingen,
|
|
and
|
4.
|
Mr. Christian
Männer
, with business address Reetzestr. 2, 79353 Bahlingen,
|
|
(the persons set forth in 1, 3 and 4, the “
Shareholders
”).
|
|
TABLE OF CONTENTS
|
|
List of Exhibits
|
|
Preamble
|
1.
|
Certain Defined Terms and Abbreviations
|
2.
|
Sale of Shares and Assignment
|
3.
|
Purchase Price, Payments
|
|
(1)
|
Purchase Price for Shares
|
|
(2)
|
Purchase Price Allocation to G-Shares, US-Shares and Foreign-Shares and Purchase Price Increases or Decreases
|
|
(3)
|
Intercompany Balance of the Seller
|
|
(4)
|
Distribution of cash an restricted cash
|
|
(5)
|
Good Faith Estimate
|
|
(6)
|
Escrow Account
|
|
(7)
|
Payment of the Preliminary Purchase Price
|
|
(8)
|
Payment of Balance between Final Purchase Price and Preliminary Purchase Price
|
4.
|
Closing Date Financial Schedules
|
|
(1)
|
Delivery of Closing Date Financial Schedules including calculation of Final Purchase Price
|
|
(2)
|
German Commercial Code and German GAAP
|
|
(3)
|
Notice of Disagreement
|
|
(4)
|
Expert Arbitrator
|
|
(5)
|
Access to Data and People
|
5.
|
Closing
|
|
(1)
|
Definition Closing Date
|
|
(2)
|
Conditions Precedent
|
|
(3)
|
No Material Adverse Change
|
|
(4)
|
Written Confirmation of Closing
|
|
(5)
|
Merger Control Filing
|
|
(6)
|
Actions on Closing Date
|
6.
|
Representations and Warranties of the Seller
|
|
(1)
|
Corporate Matters of Group Companies, Shares
|
|
(2)
|
Financial Statements
|
|
(3)
|
Title to Assets
|
|
(4)
|
Properties and Facilities
|
|
(5)
|
Current Assets
|
|
(6)
|
Intellectual Property Rights
|
|
(7)
|
Sufficiency of Assets and Internal Services
|
|
(8)
|
Legal and Regulatory Proceedings
|
|
(9)
|
Permits and Compliance with Laws
|
|
(10)
|
Environment
|
(11)
|
State Aid
|
(12)
|
Employees
|
(13)
|
Material Agreements
|
(14)
|
Insurance Coverage
|
(15)
|
Taxes and Other Public Charges
|
(16)
|
Products
|
|
(17) Undisclosed Liabilities
|
(18)
|
Customers and Suppliers
|
(19)
|
Conduct of Business since December 31, 2012
|
(20)
|
Compliance with Anti-Corruption Laws
|
(21)
|
Other Material Circumstances
|
7.
|
Seller’s Liability
|
|
(1)
|
Damage Claims
|
|
(2)
|
Limitation of Liability
|
|
(3)
|
De Minimis, Threshold, Cap
|
|
(4)
|
Time Limitation
|
|
(5)
|
Third Party Claims
|
|
(6)
|
Exclusion of other Remedies
|
8.
|
Pre-Closing Covenants
|
|
(1)
|
Omissions after Signing
|
|
(2)
|
Obligations
|
|
(3)
|
Access after Signing
|
|
(4)
|
Exclusive Dealing
|
9.
|
Continued Legal Relations between the Seller and the Group Companies and Covenants
|
|
(1)
|
Termination of Profit and Loss Transfer Agreement
|
|
(2)
|
Release of Guarantees
|
|
(3)
|
Termination of Inter-Company Agreements
|
|
(4)
|
Usage of Trademark Männer
|
|
(5)
|
Tail Insurances
|
|
(6)
|
Transfer of Contracts
|
10.
|
Covenants not to Compete, Non-Solicitation, Confidentiality
|
|
(1)
|
Non-Compete
|
|
(2)
|
Non-Solicitation
|
|
(3)
|
Confidentiality
|
|
(4)
|
No-Disparagement
|
11.
|
Indemnification for Taxes
|
(1)
|
Tax Indemnification by Seller
|
(2)
|
Tax Refunds to Seller
|
(3)
|
Purchase Price Adjustments
|
(4)
|
Time Limitation
|
(5)
|
Access
|
(6)
|
Straddle Period
|
12.
|
Specific Indemnities
|
13
|
Termination Rights
|
14.
|
Guarantees of the Guarantor
|
15.
|
Distribution of the purchase price; Guarantees of the Shareholders
|
16.
|
Public Announcements
|
(1)
|
Confidentiality Undertaking
|
(2)
|
Proprietary Information
|
(3)
|
Consented Disclosures
|
(4)
|
Mandatory Disclosures
|
(5)
|
Public Announcements
|
(6)
|
Termination of Obligation
|
17.
|
Notices
|
18.
|
Costs
|
19.
|
Miscellaneous
|
(1)
|
Exhibits
|
(2)
|
Entire Agreement
|
(3)
|
Amendments
|
(4)
|
Interpretation
|
(5)
|
German Language
|
(6)
|
Assignment
|
(7)
|
Release
|
(8)
|
Governing Law and Venue
|
(9)
|
Partial Invalidity
|
20.
|
Copies
|
21.
|
Instructions
|
22.
|
Language
|
23.
|
Act on own account
|
24.
|
Exhibits, Deed of Reference
|
25.
|
Definition „New Horizon“
|
LIST OF EXHIBITS
|
|
Exhibit A
|
Shares in the Companies held by Seller
|
Exhibit B
|
Certain Defined Terms and Abbreviations
|
Exhibit 2 (i)*
|
Deeds of Assignment
|
Exhibit 2 (ii)*
|
Shareholder’s resolution to the sale and transfer of the Group Companies
|
Exhibit 3 (1)*
|
Sample Calculation of Final Purchase Price and Closing Date Net Working Capital / Definition related to purchase price
|
Exhibit 3 (2)*
|
Purchase Price Allocation
|
Exhibit 3 (6) b)*
|
Escrow Agreement
|
Exhibit 3 (7) c)*
|
Seller’s bank account
|
Exhibit 5 (2) d)*
|
Accession Agreement to contracts of Seller
|
Exhibit 5 (2)f)*
|
Lists of Patents transferred by Mr. Otto Männer and Confirmation regarding Patent License and Transfer Agreements by Mr. Otto Männer
|
Exhibit 5 (2) g)*
|
Employees and Assets to be Transferred from Seller to OM GmbH
|
Exhibit 5 (2) h)*
|
Intercompany Rental Agreements
|
Exhibit 5 (2) l)*
|
Service advisory agreement between OM GmbH and Hans-Peter Männer
|
Exhibit 5(6) a)*
|
Confirmation that Conditions Precedent have been met/waived
|
Exhibit 6 (1) b)*
|
Excerpts of Commercial Register and Statutes
|
Exhibit 6 (2) a)*
|
Financial Statements 2010 – 2012
|
Exhibit 6 (2) c)*
|
Consolidated Equity and Equity of the single Group Companies as of December 31, 2012
|
Exhibit 6 (2) d)*
|
Quarterly Reports through June 30, 2013
|
Exhibit 6 (2) e)*
|
Equity of the single Group Companies as of June 30, 2013
|
Exhibit 6 (3)*
|
Security Rights
|
Exhibit 6 (4) a)*
|
List of Properties, Lease Agreements and Third Party Leases
|
Exhibit 6 (6)*
|
Intellectual Property Rights
|
Exhibit 6 (7)*
|
Administrative Functions
|
Exhibit 6 (8)*
|
Court and Governmental Authority Proceedings
|
Exhibit 6 (9) a)*
|
Governmental, regulatory and other permits and consents
|
Exhibit 6 (9) b)*
|
Business in compliance with all applicable laws, regulations and other legally binding rules
|
Exhibit 6 (10) c)*
|
Enviromentals Laws and permits
|
Exhibit 6 (11)*
|
State Aid
|
Exhibit 6 (12) a)*
|
Agreements with Managing Directors and Employees > 75,000.00 EUR
|
Exhibit 6 (12) b)*
|
Anonymous list of Employees and Contractors
|
Exhibit 6 (12) c)*
|
Benefits in connection with this Transaction
|
Exhibit 6 (12) d)*
|
Collective Obligations
|
Exhibit 6 (12) g)*
|
Pension and other Commitments
|
Exhibit 6 (12) h)*
|
US Employee Benefit Plans
|
Exhibit 6 (13)*
|
Material Agreements
|
Exhibit 6 (13) b)*
|
Claims resulting of a breach of Material Agreements
|
Exhibit 6 (14) i)*
|
Insurance Policies
|
Exhibit 6 (14) i)*
|
Pending claims under insurances
|
Exhibit 6 (16)*
|
Alleged claims regarding products defects
|
Exhibit 6 (16) ii)*
|
Injury to person or property
|
Exhibit 6 (16) iii)*
|
Standard terms and conditions
|
Exhibit 6 (18)*
|
Suppliers and Customers
|
Exhibit 6 (18) a)*
|
|
Exhibit 6 (18) b)*
|
Customer claims
|
Exhibit 6 (19)*
|
Actions after December 31, 2012
|
Exhibit 6 (19) b)*
|
Payment or benefit to a shareholder, indirect shareholder, any shareholder affiliate or any persona related any of them
|
Exhibit 6 (21)*
|
Material Adverse Changes prior to Date of Agreement
|
Exhibit 7 (2) d)*
|
Data carrier with contents of data room
|
Exhibit 8 (1)*
|
Actions between Date of this Agreement and Closing Date
|
Exhibit 9 (2)*
|
Guarantees and Comfort Letters
|
Exhibit 9 (3)*
|
Termination of Inter-Company Agreements
|
Exhibit 9 (5)*
|
Tail insurance policy
|
Exhibit 12*
|
Purchasers‘ Claims to Indemnification and Damages
|
Exhibit 17*
|
Addresses of Recipients of Written Notices
|
|
OM I GmbH
:
|
·
|
Otto Männer Immobilien GmbH: 100% (hereinafter “
OM Immo GmbH
”)
|
Section 1
|
Certain Defined Terms and Abbreviations
|
Section 2
|
Sale of Shares and Assignment
|
Section 3
|
Purchase Price, Payments
|
(1)
|
Purchase Price for Shares
|
a)
|
EUR 275,000,000 (in words Euro two hundred seventy five million) (the “
Base Amount
”),
|
b)
|
plus the consolidated
Cash
of the
Group Companies
as of the
Closing Date
as reflected in the
Closing Date
Financial Schedules
(the “
Closing Date Cash
”),
|
c)
|
minus the
Group Companies’ Transaction Costs
, and
|
d)
|
minus the consolidated
Financial Debt
of the
Group Companies
as of the
Closing Date
as reflected in the
Closing Date Financial Schedules
(the “
Closing Date Financial Debt
”), and
|
e)
|
minus or plus any amount (the “
Closing Date Net Working Capital Shortfall or Excess
”), by which the consolidated
Net Working Capital
of the
Group Companies
as of the
Closing Date
as reflected in the
Closing Date Financial Schedules
(the “
Closing Date Net Working Capital
”) falls short or exceeds a range from EUR 10,000,000 to EUR 11,000,000 (in words ten million Euros to eleven million Euros) (the “
Closing Date Net Working Capital Target Range
”).
|
(2)
|
Purchase Price Allocation to G-Shares, US-Shares and Foreign-Shares and Purchase Price Increases or Decreases
|
(3)
|
Intercompany Balances of the Seller
|
(4)
|
Distribution of cash and restricted cash
|
(5)
|
Good Faith Estimate
|
(6)
|
Escrow Account
|
a)
|
The funds in the
Escrow Account
shall serve as collateral for
Purchaser 1, 2 and 3
with respect to
|
(i)
|
any claims of
Purchaser 1, 2 and 3
against
Seller
arising out of or in connection with the determination of the
Final Purchase Price
and
|
(ii)
|
any claims of
Purchaser 1, 2 and 3
against
Seller
arising out of or in connection with this
Agreement
.
|
b)
|
The terms and conditions regarding the
Escrow Account
shall be set forth in an “
Escrow Agreement
” to be executed between
Seller
and
Purchaser 1, 2 and 3
and the escrow agents prior to the
Closing Date
substantially in the form of the draft escrow agreement attached as
Exhibit 3 (6) b)
.
|
c)
|
Interest accrued on the
Escrow Account
shall be added to, and fees and expenses of the bank shall be deducted from the
Escrow Amount
. Each
Party
shall bear the costs of the escrow agent nominated by the respective
Party
.
|
d)
|
The escrow agents shall be instructed to release any funds on the
Escrow Account
only:
|
(i)
|
to
Purchaser 1, 2 and 3
or
Seller
, as the case may be, in accordance with corresponding or joint written instructions from
Seller
and
Purchaser 1, 2 and 3
;
|
(ii)
|
to
Purchaser 1, 2 and 3
in such amount in which payment claims of
Purchaser 1, 2 and 3
against
Seller
under or in connection with this
Agreement
have been adjudicated by final court judgment or arbitral award in each case upon presentation by
Purchaser 1, 2 and 3
of an original of the respective judgment or award;
|
(iii)
|
to the
Purchaser 1, 2 and 3
or
Seller
as the case may be, pursuant to Section 3 (6) e).
|
e)
|
As of the day 18 months after the
Closing Date
the escrow agents shall release to
Seller
the remaining funds in the
Escrow Account
after deduction of
|
(i)
|
the outstanding fees of the bank and
|
(ii)
|
the amounts of any outstanding payment claims that
Purchaser 1, 2 and 3
have asserted against
Seller
by way of a duly filed complaint or request for arbitration (hereinafter referred to as the “
Claims
”) and
|
(iii)
|
the amounts released
to Purchaser 1, 2 and 3
pursuant to Section 3 (6) d) but not yet paid.
|
f)
|
The funds for the claims remaining in the
Escrow Account
after such release shall be released by the escrow agents
|
(i)
|
to
Purchaser 1, 2 and 3
if and to the extent there is in respect of the
Claims
a final court judgment or arbitral award in favor of
Purchaser 1, 2 and 3
, in each case upon presentation by
Purchaser 1, 2 and 3
of an original of the respective judgment or award, or
|
(ii)
|
to
Seller
if and to the extent there is in respect of the
Claims
a final court judgment or arbitral award in favor of
Seller
, in each case upon presentation by
Seller
of an original of the respective judgment or award.
|
(7)
|
Payment of Preliminary Purchase Price
|
a)
|
The
Purchaser 1, 2 and 3
shall pay on the
Closing Date
(with the same value date
)
an amount of EUR 13,750,000 (in words: Euro thirteen million seven hundred fifty thousand) (which is hereinafter referred to as the “
Escrow Amount
”) as partial amount of the
Preliminary Purchase Price
, completely and unconditionally as well as free of any charges and costs by way of a wire transfer to the
Escrow Account
.
|
b)
|
|
(v)
|
In reliance on the representations of
Seller
set forth below in this Section 3 (7) (b) (i), the
BGI Shares
, if any, shall be issued to
Seller
without registration under the U.S. Securities Act of 1933, as amended (the “
Securities Act
”) and accordingly shall not be transferred by the
Seller
except if (aa) the offer and sale of such
BGI Shares
is in compliance with the registration requirements of the
Securities Act
(and the applicable registration statement is effective and current) and applicable U.S. “Blue Sky” laws, and/or (bb) pursuant to and in compliance with an applicable exemption under or from all such United States Federal and State Laws, which exempt transfer, if proposed to occur prior to the end of the six month period commencing on the
Closing Date
(a “
Permitted Exempt Transfer
”), shall require an opinion of counsel reasonably satisfactory to
Purchaser 2
to the effect that such registration is not required.
Purchasers 1, 2 and 3
represent and warrant that the
BGI Shares
shall be freely transferable by
Seller
after the end of the six month period commencing on the
Closing Date
.
Seller
represents that it will receive the
BGI Shares
for investment and not with a view to the resale or distribution thereof and that it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of acquiring
BGI Shares
, has the ability to bear the economic risks of ownership of
BGI Shares
, has reviewed filings made by
Purchaser 2
with the U.S. Securities and Exchange Commission (the “
SEC
”), including its Form 10-K for the fiscal year ended December 31, 2012 and filings made with the SEC subsequent to December 31, 2012 to the date hereof.
|
|
(vi)
|
Any certificates representing
BGI Shares
held by the
Seller
or a transferee acquiring such Shares in a prior
Permitted Exempt Transfer
shall bear the following legend until the end of the six month period commencing on the
Closing Date
, at which time
Purchaser 2
shall cause the certificates representing the
BGI Shares
to be replaced by unlegended certificates:
|
|
(vii)
|
Purchasers 1, 2 and 3
(aa) represent and warrant that, as of the date of this
Agreement
,
Purchaser 2
has filed all required reports under Section 13 and Section 15(d) of the Securities Exchange Act of 1934 and such required reports, the “
Required Exchange Act Reports
”) during the twelve–month period immediately preceding the date of this Agreement; and (bb) covenant that
Purchaser 2
shall, from the date of this
Agreement
until the end of the twelve-month period commencing on the
Closing Date
, file all
Required Exchange Act Reports
.
|
c)
|
The
Purchaser 1, 2 and 3
shall pay the
Preliminary Purchase Price
minus the
Escrow Amount
and minus the amount for the
BGI Shares
on the
Closing Date
(with the same value date) by irrevocable wire transfer to the
Seller’s
account as shown in
Exhibit 3 (7) c)
.
|
(8)
|
Payment of Balance between Final Purchase Price and Preliminary Purchase Price
|
Section 4
|
Closing Date Financial Schedules
|
(1)
|
Delivery of Closing Date Financial Schedules including calculation of Final Purchase Price
|
a)
|
the
Closing Date Financial Debt
|
c)
|
the
Group Companies’ Transaction Costs
|
d)
|
the
Closing Date Net Working Capital
, and
|
e)
|
the
Closing Date Net Working Capital Shortfall or Excess
|
f)
|
the
Final Purchase Price
|
(2)
|
German Commercial Code and German GAAP
|
(3)
|
Notice of Disagreement
|
(4)
|
Expert Arbitrator
|
(5)
|
Access to Data and People
|
Section 5
|
Closing
|
(1)
|
Definition Closing Date
|
(2)
|
Conditions Precedent
|
a)
|
the
Closing
shall be permissible pursuant to Sec. 41 of the German Act against Restraints of Competition and any other applicable merger control laws in any other jurisdictions.
|
b)
|
prior to the
Closing Date
, no enforceable decision prohibiting the
Closing
has been issued against a
Party
.
|
c)
|
for matters occurring after the date hereof but before the
Closing Date
Seller
has updated the representations and warranties made in section 6 and has updated the
Exhibits
disclosed in Section 6.
|
d)
|
OM GmbH
became party to the contracts listed in
Exhibit 5 (2) d)
to which currently
Seller
is a party by signing the attached accession agreement with
Seller
and
Seller
transferred the domains listed in
Exhibit 5 (2) d)
to
OM GmbH.
|
e)
|
[intentionally left blank]
|
f)
|
OM I GmbH
purchased the patents listed in
Exhibit 5 (2) f)
held by Mr. Otto Männer and
Mr. OM
confirmed in writing, substantially in the form as attached in
Exhibit 5 (2) f)
that Mr. Otto Männer has no further claims out of the patent licence agreement dated May 5
th
, 2005 and the patent purchase and assignment agreement dated July 18
th
/19
th
, 2013 or waived any such claims.
|
g)
|
the employees listed in
Exhibit 5 (2) g)
transferred to
OM GmbH
as new employees of
OM GmbH
-this condition is already fulfilled- and
OM GmbH
purchases the assets listed in
Exhibit 5 (2) g)
from
Seller
-this condition is also already fulfilled-.
|
h)
|
OM Immo GmbH
becomes on the
Closing Date
lessor of the buildings, facilities and plots of land which are subject matter to the rental agreements listed in
Exhibit 5 (2) h)
, and the
Purchaser 1
becomes lessee of
OM Immo GmbH
and sub-lessor
of such buildings, facilities and plots of land to the
Group Companies
using the same, i.e. the
Seller
as lessee of
OM Immo GmbH
and as sub-lessor of
Group Companies
has exits the respective rental agreements as of the
Closing Date
and
Purchaser 1
replaces
Seller
on the same terms and conditions as the prior rental agreement of the
Group Companies
. The
Seller
has confirmed in writing, substantially in the form as attached in
Exhibit 5 (2) h)
that it has no open claims or waives any such claims out of the respective rental agreements listed in
Exhibit 5 (2) h)
as of and after the
Closing Date
.
|
i)
|
(i)
Seller
will deliver to
Purchasers
reconciliations of total shareholders’ equity and net income of (A) the fiscal year 2012, which will be audited in accordance with the United States Generally Accepted Auditing Standards (“
US GAAS
”
)
, and (B) of the
Unaudited Interim Period Financial Statements
(as defined in Section 6 (2) a)), which will be reviewed in accordance with Statement of Auditing Standard 116, to United States generally accepted accounting principles (“
US GAAP
”) as required by Item 17 of the
SEC
Form 20-F, (the “
Historical US GAAP Reconciliation
”). The
Historical US GAAP Reconciliation
shall be prepared by Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft and audited by Bansbach Schübel Brösztl & Partner GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft (the “
Auditor
”) at the sole expense of the
Purchasers
.
|
j)
|
the bank loans of Commerzbank AG and Volksbank Freiburg and of the Swiss bank to
OM P AG
and outstanding interest have been paid back in full and the banks have provided consents to delete all mortgage in the land register or have delivered the respective mortgage deeds to
OM Immo GmbH
rsp.
OM P AG
.
|
k)
|
[intentionally left blank]
|
l)
|
OM GmbH
or if the Purchaser to 1 and Mr. Hans-Peter Männer have concluded a service advisory agreement as of
the Closing Date
, substantially in the form as attached as
Exhibit 5 (2) l).
|
m)
|
Purchaser 1, 2 and 3
have conducted a Phase 1 environmental review of all premises, plots of lands and buildings used or owned by the
Group Companies
and such review has not resulted in any material findings, i. e., in an estimate of costs for the Group Companies in excess of EUR 1,000,000.
|
n)
|
Seller
and the
Shareholders
shall have complied in all material respects with their material covenants and agreements contained herein.
|
p)
|
Seller shall deliver a duly executed certificate, dated as of the
Closing Date
and in form and substance required under United States Treasury Regulations issued pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended), of
M USA Inc.
stating that
M USA Inc.
is not a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Internal Revenue Code of 1986, as amended); provided that, notwithstanding anything else to the contrary herein, if
Seller
fails to deliver such certificate and
Purchasers
elect to proceed with the
Closing
,
Purchasers
shall be entitled to withhold, or cause to be withheld, from the consideration payable to
Seller
hereunder all amounts required to be withheld pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended).
|
(3)
|
No Material Adverse Change
|
(i)
|
any events or circumstances which have, or would reasonably be expected to have, individually or as a whole, a material adverse effect on the assets, financial position or results of operations of the
Group Companies
or its ability to continue to conduct their business as currently conducted, and
|
|
except for
|
(ii)
|
general market or price developments not disproportionally affecting the
Group Companies
, compared to other businesses engaged in the same line of business, or
|
(iii)
|
changes in laws or regulations or the application thereof, or
|
(iv)
|
events for which the
Purchaser 1, 2 and 3
or the
Guarantor
are
responsible.
|
(4)
|
Written Confirmation of Closing
|
(5)
|
Merger Control Filing
|
(6)
|
Actions on Closing Date
|
a)
|
joint signing of the statement that all conditions precedent have been met or were waived by the
Parties
, substantially in the form as attached in
Exhibit 5 (6) a)
;
|
b)
|
[intentionally left blank]
|
c)
|
payment of
Escrow Amount
(EUR 13,750,000)
completely and unconditionally as well as free of any costs and charges by way of wire transfer to the
Escrow Account
pursuant to § 3 (6);
|
d)
|
delivery of
BGI Shares
as provided for in Section 3 (7) b);
|
e)
|
delivery of all shares of the
Group Companies
, to the extent applicable,
to
Purchaser 1, 2 and 3
,
delivery of the share register of
OM P AG
, as applicable and delivery of the required resolutions on the consent on the transfer of
Shares
and issuance of all other required statements for the transfer of
Shares
;
|
f)
|
payment by the
Purchaser 1, 2 and 3
of the remaining
Preliminary Purchase Price
(minus
Escrow Amount
(EUR 13,750,000) and minus the amount fulfilled by the delivery of
BGI Shares
(EUR 27,500,000 pursuant to Section 3 (7) b));
|
g)
|
termination of the profit and loss transfer agreement between the
Seller
and the
OM GmbH
in accordance with Section 9 (1); and
|
h)
|
delivery of proper transfer pricing documentation of the
Group Companies
pursuant to Section 8 (2) b) by
Seller
.
|
(7)
|
Delivery of Closing Confirmation to the Notary public
|
Section 6
|
Representations and Warranties of the Seller
|
(1)
|
Corporate Matters of Group Companies, Shares
|
a)
|
The
Seller
is the sole owner of the
Shares
, as set forth in the preamble, fully authorized to dispose of the
Shares
and duly represented when entering into of this
Agreement
. The
Shares
are not encumbered with any third party rights, and there are no sub-participations in respect of the
Shares
and no pre-emptive rights or other rights of third parties to acquire the
Shares
. The
Shares
are fully paid and have not been repaid, neither in whole nor in part.
|
b)
|
The excerpts from the commercial register of the
Group Companies
attached as
Exhibit 6 (1) b)
correctly and completely reflects all facts required to be registered therein. True and correct copies of the articles of association or statutes of the
Group Companies
, as currently in effect and as attached in
Exhibit 6 (1) b)
, have been delivered to the
Purchaser 1, 2 and 3
prior to the date of this
Agreement
.
|
c)
|
No insolvency proceedings are pending and no filing for such proceedings has been made by the
Group Companies
or, to the
Seller’s Best Knowledge
, by any third party, nor is any such filing required with respect to the
Group Companies
. The
Group Companies
do not face imminent illiquidity within the meaning of Sec. 18 of the German Insolvency Code.
|
d)
|
The
Group Companies
do not own any interest in any other entity other than those shown in the preamble, lit. (H). Except for the profit and loss transfer agreement with the
Seller
as referred to in Section 9 (1) and the profit and loss transfer agreement between
OM I GmbH
and
OM Immo GmbH
the
Group Companies
are not a party to any agreement within the meaning of Secs. 291, 292 of the German Stock Corporation Act or any silent partnership agreement.
|
(2)
|
Financial Statements
|
a)
|
The (i) consolidated annual accounts of
Seller
as of December 31, 2010, 2011 and 2012 and the annual accounts of each of the
Group Companies
as of December 31, 2010, 2011 and 2012 with the auditor’s report thereon (the
“
Financial Statements 2010-2012
”), and (ii) the consolidated unaudited interim financial statements of
Seller
for the six month periods ended June 30, 2012 and 2013 (the “
Unaudited Interim Period Financial Statements
”), all as delivered to the
Purchasers
prior to the date of this
Agreement
and attached hereto as
Exhibit 6 (2) a)
have been prepared with the due care of a prudent business person and in accordance with the applicable provisions of the German Commercial Code and generally accepted accounting principles in Germany and by observing the evaluation and balance sheet consistency principle. Such annual accounts present, in accordance with such principles, a true and fair view of the net assets, financial position and results of operation of
Seller
and the respective
Group Companies
as of, and with respect to each of the three financial years ending on December 31. The consolidated annual accounts of
Seller
as of December 31, 2012 have been audited in accordance with
US GAAS
.
|
b)
|
If consolidated unaudited interim financial statements of
Seller
as of and for the nine month periods ended September 30, 2012 and 2013 each will need to be filed by rules of the SEC with the SEC by Barnes Group Inc. (i.e. if the
Closing Date
occurs after November 9, 2013 and prior to March 1, 2014) these will be prepared in accordance with the principles set forth above in Section 6 (2) a).
|
c)
|
The consolidated equity of the
Group Companies
as per December 31, 2012 amounted to an amount as shown in
Exhibit 6 (2) c)
.
|
d)
|
The unaudited quarterly reports of the
Group Companies
for the months up to and including June 2013, attached as
Exhibit 6 (2) d
)
(“the
Quarterly Reports Q 2 2013
”), have been prepared in all material respects (except for certain year-end adjustments or as otherwise set forth in
Exhibit 6 (2) d)
), in accordance with the principles referred to in para. a) above, applied on a basis consistent with those used in the preparation of the previous quarterly reports. They correctly reflect in all material respects, in accordance with such principles, the items shown therein (in particular net debt, net working capital and net earnings) as of the relevant accounting dates.
|
e)
|
The consolidated equity of the
Group Companies
as per June 30, 2013 amounted to an amount as shown in
Exhibit 6 (2) e)
.
|
(3)
|
Title to Assets
|
(4)
|
Properties and Facilities
|
a)
|
Exhibit 6 (4) a)
contains a true and complete list of all real properties, buildings and space owned, leased or occupied by the
Group Companies
(the “
Properties
”). True and complete copies of all excerpts from the land register of all
Properties
owned by the
Group Companies
and of all lease agreements for all other
Properties
have been delivered to the
Purchaser
prior to the date of this
Agreement
(attached hereto as
Exhibit 6 (4) a)
)
. The
Group Companies
have the right to use the
Properties
for the conduct of its business, as currently conducted, subject to applicable law, any easements registered in the land register and the terms and conditions of the relevant lease agreements. Unless disclosed in
Exhibit 6 (4) a)
, there are no restrictions pursuant to any applicable planning, zoning or building laws affecting the current use of the
Properties
. Except for any
Properties
leased to third parties, as disclosed in
Exhibit
6 (4) a)
, the
Group Companies
are in undisturbed possession of the
Properties
.
|
b)
|
The buildings and facilities owned or used by the
Group Companies
have no material defects, are - considering their age and duration of usage and subject to normal wear and tear - in good operating condition and repair (except for ordinary wear and tear) and have been properly and regularly maintained.
|
(5)
|
Current Assets
|
a)
|
The inventories of the
Group Companies
have been duly maintained in the ordinary course of business, consistent with past practice. Such inventories are not obsolete, are free from any defects and are saleable or usable in the ordinary course of business, except to the extent that individual value adjustments are reflected in the financial statements referred to in Section 6 (2) above.
|
b)
|
All trade accounts receivable reflected in the books of the
Group Companies
have arisen from sales in the ordinary course of business. To
Seller´s Best Knowledge
, there are no circumstances which may reasonably be expected to adversely affect their collectability on the respective due dates, except to the extent that general or individual value adjustments related to trade accounts receivables are reflected in the financial statements referred to in Section 6 (2) above.
|
(6)
|
Intellectual Property Rights
|
a)
|
The
Group Companies
have taken all actions required to maintain such rights, in particular they have paid all fees (e.g. registration or license fees) when due.
|
b)
|
With respect to any intellectual property rights registered on behalf of, or applied for registration, by the
Group Companies
, no objection, cancellation or similar proceedings are pending or have been threatened in writing towards the
Group Companies
by any third party.
|
c)
|
To
Seller’s Best Knowledge
, the
Group Companies
do not infringe any intellectual property rights of any third party.
|
d)
|
The intellectual property listed in
Exhibit 6 (6)
represent all registered and to
Sellers´s Best Knowledge
, unregistered intellectual property rights currently used by the
Group Companies
and represent all the intellectual property rights sufficient for the operation of the business of the
Group Companies
.
|
e)
|
To
Seller’s Best Knowledge
no third party is infringing the intellectual property rights of the
Group Companies
.
|
f)
|
All inventions used by the
Group Companies
which have been invented by
Group Companies’
employees or other inventors (e.g. directors or (direct or indirect) shareholders of the
Group Companies
) have been transferred to the
Group Companies
effectively, in accordance with applicable law.
|
(7)
|
Sufficiency of Assets and Internal Services
|
(8)
|
Legal and Regulatory Proceedings
|
(9)
|
Permits and Compliance with Laws
|
a)
|
Unless disclosed in
Exhibit 6 (9) a)
, the
Group Companies
to
Seller´s Best Knowledge
have all governmental, regulatory and other permits, licenses, authorizations and consents (“
Permits
”) which are required by it under public or private law in order to operate its business as currently conducted. No
Permit
has been cancelled, revoked, otherwise terminated or restricted, nor, to
Seller’s Best Knowledge
, are there any circumstances which may result in any such termination or restriction. To
Seller´s Best Knowledge
, the business of the
Group Companies
is, and has been, conducted in all material respects in compliance with such
Permits
.
|
b)
|
Unless disclosed in
Exhibit 6 (9) b)
, the business of the
Group Companies
is, and has been, conducted in all material respects in compliance with all applicable laws, regulations, other legally binding rules during the last three full calendar years. Unless disclosed in
Exhibit 6 (9) b)
, the
Group Companies
have not received, prior to the date hereof, any notice by any authority or third party that it fails to comply with any applicable law or the terms of any
Permit
.
|
(10)
|
Environment
|
a)
|
The business operations of the
Group Companies
have not caused any contamination or pollution with
Hazardous Substances
of soil, water, groundwater, objects, buildings or air or other detrimental interferences with them which require, pursuant to any
Environmental Law
as currently in effect, any clean-up, containment, other remedial action or investigation or cause obligations to pay damages or other financial burdens (e. g. fines).
|
b)
|
The
Properties
owned and to
Seller´s Best Knowledge
the properties used
by the
Group Companies
and the buildings and objects thereon are free from any
Hazardous Substances
.
|
c)
|
To the extend not listed in
Exhibit 6 (10) c)
Each of the
Group Companies
currently are, and for the past full three calendar years and until today have in all material respects been in compliance with all applicable
Environmental Laws
and all permits required under applicable
Environmental Laws
for the conduct of the business of the
Group Companies
.
|
d)
|
None of the
Group Companies
or the
Seller
has received any written notice or claim against it alleging a release of
Hazardous Substances
or violation of
Environmental Laws
. In particular, neither The
Seller
nor the
Group Companies
have gained knowledge during the past full three calendar years and until today that life, limb and health of employees or third persons has been impacted or damaged by
Hazardons Substances
.
|
(11)
|
State Aid
|
(12)
|
Employees
|
a
)
|
Exhibit 6 (12)
a)
contains a true and complete list, as of the date of this
Agreement
, of all service agreements with managing directors of the
Group Companies
and of all employment agreements entered into by the
Group Companies
with employees whose annual salary (excluding any variable or discretionary bonuses) is in excess of EUR 75.000. True and complete copies of such agreements (including all side-agreements and amendments as well as written summaries of any oral agreements) have been delivered to the
Purchaser 1, 2 and 3
prior to the date of this
Agreement
(attached hereto as
Exhibit 6 (12) a)
. As of the date of this
Agreement
, no notice of termination of any such agreement has been given by either party thereto, and to the
Seller’s Best Knowledge
, no managing director or employee referred to above has expressed the intention to terminate his or her employment with the
Group Companies
. None of the
Group Companies
nor the
Seller
have entered into agreements with these employees at the expense of the
Group Companies
which take effect only after the date of this
Agreement
.
|
b)
|
Exhibit 6 (12) b)
contains a true and complete list, as of the date of this
Agreement
, setting forth all employees and contractors of the
Group Companies
, including at least the following information regarding their employment: first name, date of birth, date of entry, job description/department, salary, employee. Neither the
Seller
nor any of the
Group Companies
have entered into agreements with these employees at the expense of the
Group Companies
which take effect only after the date of this
Agreement
.
|
c)
|
Except as set forth in
Exhibit 6 (12) c)
, no compensation, payment or other benefit of any kind (including a promotion or an extension of any notice period) has been granted or promised to any managing director or employee of the
Group Companies
at the expense of the
Group Companies
in connection with the transaction contemplated hereby.
|
d)
|
As of the date of this
Agreement
,
Exhibit
6 (12) d)
contains a true and complete list of all collective bargaining agreements, works council agreements, social plans, and, if providing for payment obligations or other material obligations of the
Group Companies
, all standard practices and unilateral commitments towards the workforce by which the
Group Companies
are bound. The
Group Companies
are in full compliance with any such agreements, plans, practices and commitments.
|
e)
|
As of the date of this
Agreement
,
the
Group Companies
are not experiencing any strike or lock-out, nor is there any dispute (including any mediation proceedings) with unions, works councils or other employee representatives.
|
f)
|
The
Group Companies
have paid in full when due, or made sufficient provisions in the financial statements as per December 31, 2012 pursuant to section 6 (2) a) and the quarterly reports pursuant to section 6 (2) d) for all salaries, overtime premiums, bonuses, vacation allowances, long service awards and any other direct or indirect compensation due and payable to the management or to current employees.
|
g)
|
Except for any agreement referred to in
Exhibit
6 (12) g)
,
the
Group Companies
are not bound by any part-time retirement plan, pension commitment or other agreement providing for retirement, health, invalidity or death benefits or long service awards or any other long term employee benefit. All pension obligations of the
Group Companies
have been accrued for in the
Financial Statements 2010-2012
for the fiscal year 2012 and in the
Quarterly Reports Q 2 2013
in an amount equal to the amount permitted under the provisions of the applicable laws.
|
h)
|
Except as set forth in
Exhibit 6 (12) h)
,
OM USA Inc.
does not maintain, contribute to or have any obligation with respect to, any employee benefit plan within the meaning of § 3(3) of Employee Retirement Income Security Act of 1974 (“
ERISA
”) or any other employee benefit plan, program or arrangement of any kind (each a “
Benefit Plan
”). All
Benefit Plan
have been and are being maintained, funded and administered in all material respects in accordance with all Laws applicable to such plans and the terms and conditions of the respective plan documents. The Internal Revenue Service (the “
IRS
”) has issued a favourable determination letter with respect to each
Benefit
Plan
(or, in the case of a
Benefit
Plan
that is based upon a prototype plan, an opinion letter with respect to the underlying pre-approved plan) that is intended to be a “qualified plan” within the meaning of § 401(a) of the of the Internal Revenue Code of 1986
and, to the
Seller’s Best Knowledge
and knowledge of
OM USA Inc.
, nothing has occurred that could adversely affect the qualified status of such
Benefit
Plan
. Neither
OM USA Inc.
or any “
ERISA
”
Affiliate
maintains or contributes to any employee benefit plan that is subject to Title IV or § 302 of
ERISA,
§ 412 of the Internal Revenue Code of 1986, or any Multiemployer Plan (as defined in Section 3(37) of
ERISA
) or has any liability (including withdrawal liability) with respect to any such employee benefit plan or to the Pension Benefit Guaranty Corporation on behalf of any such employee benefit plan.
|
(i)
|
The
Seller
has delivered to the
Purchaser 1, 2 and 3
, to the extent applicable, correct and complete copies of the current plan documents and summary plan descriptions, the most recent determination or opinion letter received from the
IRS
, the three most recent Form 5500 Annual Reports filed with the U.S. Department of Labor and all accompanying schedules, all related trust agreements, insurance contracts and other funding arrangements that implement each
Benefit Plan
and all material correspondence regarding any
Benefit Plan
with the US Department of Labor or the
IRS
.
|
(ii)
|
All contributions (including all employer contributions and employee salary reduction contributions, if any) and premium payments that are due have been made within the time period prescribed by applicable law to each
Benefit Plan
. All contributions (including all employer contributions and employee salary reduction contributions, if any) and premium payments that are not yet due prior to the
Closing Date
have been accrued in accordance with
US GAAP
and
OM USA Inc.
past practice.
|
(iii)
|
No actions, suits, claims or proceedings with respect to the administration of any
Benefit Plan
or the investment of the assets of any
Benefit Plan
(other than routine claims for benefits) are pending or, to the
Seller’s Best Knowledge
and/or knowledge of
OM USA Inc.
, threatened by or before any authority.
|
(iv)
|
Neither the execution and delivery of this
Agreement
nor the completion of the transactions will directly or indirectly result in any payment made or to be made by
OM USA Inc.
prior to
Closing
to or on behalf of any person to constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of the year 1986.
OM USA Inc.
have no obligation to “gross up” any current or former employee, officer or director for any excise taxes or other taxes relating to any excess parachute payment under Sections 280G and 4999 of the Internal Revenue Code of 1986.
|
(13)
|
Material Agreements
|
a)
|
Except for the agreements referred to in
Exhibit
6 (13)
(the “
Material Agreements
”), as of the date of this
Agreement
, the
Group Companies
are not bound by any of the following agreements which have not been fulfilled completely and to the
Seller’s Best Knowledge
Group Companies
do not know of any claimed material breach by any customer, supplier, or third party of such
Material Agreements
:
|
(i)
|
Lease of personal property involving an annual consideration in excess of EUR 250,000.
|
(ii)
|
Realty property leases.
|
(iii)
|
Agreements (including agreements that relate to the acquisition of any business, a material participation, any real property or other assets) involving annual or one-time payment obligations in excess of EUR 250,000.
|
(iv)
|
Agreements that commit to a capital expenditure in excess of EUR 250,000.
|
(v)
|
Loan agreements, related collateral and security agreements with a value matter in excess of EUR 250,000.
|
(vi)
|
Agreements with agents and distributors.
|
(vii)
|
Joint Venture, co-operation and partnership agreements.
|
(viii)
|
Agreements restraining competition, including agreements granting exclusivity.
|
(ix)
|
Agreements of the
Group Companies
with the shareholders of the
Seller
, with relatives of the shareholders in the meaning of section 15 I of the German Tax Code or with entities affiliated with the shareholders of
Seller
, other than the
Group Companies
.
|
(x)
|
Employment or service agreements (including other agreements with consultants) providing for an annual compensation in excess of EUR 75,000 unless disclosed in
Exhibit 6 (12) a)
.
|
(xi)
|
License Agreements for intellectual property rights.
|
(xii)
|
Agreements with suppliers or customers required to be set forth in Section 6 (18).
|
(xiii)
|
Settlement or conciliation agreements resolving a dispute which require payments after the date hereof or will limit or restrict the
Group Companies
in any material aspect.
|
b)
|
True and complete copies of all
Material Agreements
have been delivered to the
Purchaser 1, 2 and 3
prior to the date of this
Agreement
, attached as
Exhibit 6 (13).
To
Seller´s Best Knowledge
, the
Group Companies
are not in material breach of any
Material Agreement
and have not materially breached any such agreement in the past, to the extent that this may still result in any liability or other adverse consequence for the
Group Companies.
To
Seller´s Best Knowledge
, no supplier, customer or third party has claimed any material breach of any
Material Agreement
unless disclosed in
Exhibit 6 (13) b)
. To the
Seller’s Best Knowledge,
none of the respective third parties is in material breach of any
Material Agreement
.
|
(14)
|
Insurance Coverage
|
(15)
|
Taxes and other Public Charges
|
With respect to Taxes as defined in Section 3, para. (1) German Tax Code or equivalent taxes under the laws of any other jurisdiction, including but not limited to corporate income tax as well as any surcharges, municipal (“trade”) taxes, state, local and provincial taxes, wage taxes, property taxes, sales and use taxes, value added taxes, payments based on a tax allocation agreement, customs duties and other public duties, charges and fees of all kinds as well as social security charges and contributions, together with any interest, fine, penalty, late payment fees and any other ancillary tax obligations as defined in Section 3 para. (4) German Tax Code or any equivalent provision under the laws of any other relevant jurisdiction or addition thereto, no matter how they are levied or determined, regardless of whether arising as a primary or secondary liability or joint and several liability (hereinafter collectively referred to as “
Taxes
”), of the
Group Companies
the
Seller
makes the following representation and warranty in the form of an independent guarantee
|
a)
|
The
Group Companies
have duly filed, when due, all tax returns required to be filed by it under applicable tax laws.
|
b)
|
All such tax returns were correct and complete.
|
c)
|
All
Taxes,
advance payments on
Taxes
assessed against the
Group Companies
or shown as payable in any
Tax
assessment or return have been paid when due.
|
d)
|
The
Group Companies
have established adequate reserves for Tax liabilities becoming due and payable in the future in the financial statements 2012 and in the
Quarterly Reports Q 2 2013
, to the extent possible under the German Commercial Code and under
German GAAP
and the respective local laws of the Group Companies and the respective applicable GAAP.
|
e)
|
The conditions for tax effective corporate and trade tax groups between
OM I GmbH
and
OM Immo GmbH
and between
Seller
and
OM GmbH
have been met, the tax groups have been properly executed for as long as declared und up to the
Closing Date
. The conditions for the tax effective creation of the VAT Groups have been met and the VAT group have properly existed and have been declared up to the
Closing Date
. There are no
Tax
liabilities of the
Group Companies,
to pay any
Taxes
for periods prior to the
Closing Date.
|
f)
|
The profit and loss transfer agreement between
Seller
and
OM GmbH
dated June 27, 2011 and the VAT tax unity between
Seller
and
OM GmbH
shall terminate at the
Closing Date
at the latest. This termination shall have no tax consequences for the fiscal years 2011, 2012 and the stub year commencing on January 1, 2013 and ending on the October, 31
st
2013, as the case may be, i.e. will not lead to any retroactive
Tax
payment obligations of the
Group Companies
.
|
g)
|
None of the
Group Companies
has executed any outstanding waivers or comparable consents extending the statute of limitation with respect to any
Taxes
or tax returns.
|
h)
|
All
Taxes
which have to be collected or withheld by the
Group Companies
have been duly collected or withheld and were paid when due.
|
i)
|
To the
Seller’s Best
Knowledge
, no jurisdiction where the
Group Companies
do not file a tax return has made a claim in writing that the
Group Companies
are required to file a tax return for such jurisdiction or pay Taxes.
|
j)
|
There are no ongoing tax audits in or tax claims made against the
Group Companies
.
|
k)
|
There are no US IRC section 481 like adjustments or accounting method changes that have to be taken into account post the
Closing Date
which will increase
Tax
in those periods.
|
l)
|
The
Group Companies
have not undertaken any listed or reportable transactions in the United States (or the equivalent in other jurisdictions of the
Group Companies
).
|
m)
|
There have been no reorganizations, transfers or measures under the German Transformation Act or comparable laws in other jurisdictions of the
Group Companies
for which
Purchaser 1, 2 and 3
or the
Group Companies
could become liable for any associated
Taxes
.
|
n)
|
Related party transactions of and amongst the
Group Companies
have been agreed and carried out at arm’s length and supported by a transfer pricing documentation.
|
(16)
|
Products
|
(17)
|
Undisclosed Liabilities
|
a)
|
liabilities reflected in the annual accounts or reports referred to in Section 6 (2) or disclosed in the notes thereto;
|
b)
|
liabilities included in the
Financial Debt
or
Net Working Capital
;
|
c)
|
liabilities arising out of any matter that is the subject of any of the
Warranties
in Section 6 (6) and (9) through (16) or of the
Seller’s
indemnities in Sections 11 and 12;
|
d)
|
liabilities under pending transactions (in particular, long-term contracts) which are not capable of being recognized under the accounting principles referred to in Section 6 (2);
|
e)
|
other liabilities incurred since January 1, 2013 in the ordinary course of business and not exceeding an aggregate amount of EUR 250,000.
|
(18)
|
Customers and Suppliers
|
a)
|
Since December 31, 2012, none of the suppliers listed in
Exhibit 6 (18)
has indicated by written statement of the persons in charge of the business relationship or other management level employee thereof with the
Group Companies
that it will stop, or materially decrease the rate of, supplying materials, products or services to the
Group Companies
, or otherwise materially change the terms of its relationship with the
Group Companies
.
Seller
has no reason to believe that any supplier listed in
Exhibit 6 (18)
will stop, or materially decrease the rate of, supplying products or services to the
Group Companies
or otherwise materially change the terms of its relationship with the
Group Companies
after, or as a result of, the consummation of the transactions contemplated hereby or that any such supplier is threatened with bankruptcy or insolvency.
Seller
does not know of any fact, condition or event which would adversely affect the relationship of the
Group Companies
with any supplier listed in
Exhibit 6 (18)
. The warranties listed above do not apply to facts which are disclosed in
Exhibit 6 (18) a)
.
|
b)
|
Since December 31, 2012, none of the customers listed in
Exhibit 6 (18)
has indicated by written statement of the persons in charge of the business relationship with the
Group Companies
or other management level employee that it will stop, or materially decrease the rate of, buying products or services from the
Group Companies
or otherwise materially change the terms of its relationship with the
Group Companies
.
Seller
has no reason to believe that any customer listed in
Exhibit 6 (18)
will stop, or materially decrease the rate of, buying products or services from the
Group Companies
or otherwise materially change the terms of its relationship with the
Group Companies
after, or as a result of, the consummation of the transactions contemplated hereby or that any such customer is threatened with bankruptcy or insolvency.
Seller
does not know of any fact, condition or event which would adversely affect the relationship of the
Group Companies
with any customer listed in
Exhibit 6 (18)
. The warranties listed above do not apply to facts which are disclosed in
Exhibit 6 (18) b)
.
|
(19)
|
Conduct of Business since December 31, 2012
|
a)
|
any transaction requiring the consent of the shareholders’ meetings pursuant to applicable law or the articles of association;
|
b)
|
any payment or benefit to a shareholder, indirect shareholder, any shareholder affiliate or any person related to any of them, unless disclosed in
Exhibit 6 (19) b)
;
|
c)
|
any investments in fixed assets exceeding EUR 250,000 in each case;
|
d)
|
any material amendment to any
Material Agreement
(as defined in Section 6 (13)) or termination of any agreement which would qualify as a
Material Agreement;
|
e)
|
any change in the compensation or other terms of employment of any managing director or employee, other than normal salary or wage increases, consistent with past practice; any measure qualifying as a change of operations within the meaning of Sec. 111 of the German Shop Constitution Act;
|
f)
|
any damage, destruction, other casualty loss or third party liability claim which is, in each case, in excess of EUR 250,000;
|
g)
|
made any material change in the policies with respect to the payment of accounts payable or accrued costs or the collection of accounts receivable, including any acceleration or deferral of the payment or the collection;
|
h)
|
made any change in its accounting methods, principles or practices;
|
i)
|
sold, licensed, leased, transferred or otherwise disposed of or pledged any of its material assets other than in the normal course of business.
|
(20)
|
Compliance with Anti-Corruption Laws
|
a)
|
The business of the Group Companies has not within the last five (5) years directly or indirectly been involved in any material violation of
Anti-Corruption Laws
. In particular, neither the
Seller
with respect to the
Group Companies’
business nor to the
Group Companies
knowledge, any member of the
Group Companies
nor any
Company Associate
has, within the last five (5) years, directly or indirectly, (x) paid or given, offered or promised to pay or give, or authorized the offer or payment or giving of, (y) taken or received, promised to take or receive, or authorized the taking or receiving of, anything of value (including money, gifts and benefits) to or from any
Government Official
or any
Commercial Party
, under circumstances where he/she/it knew or ought reasonably to have known that all or a portion of such thing of value would be paid, given, offered, promised, taken or received, directly or indirectly
for the purpose of (A) influencing any act or decision of a
Government Official
or
Commercial Party
in their official capacity; (B) inducing a
Government Official
or
Commercial Party
to influence or affect any act or decision of any
Government Body
or other person or entity; (C) securing any improper advantage; and/or (D) assisting the
Group Companies
or
Company Associate
or any of their respective affiliates in obtaining or retaining business (whether governmental or commercial) for or with, or directing business to, any
Group Company
or any
Company Associate
or any other party; and did not violate any anti competition laws.
|
b)
|
No
Company Associate
is a
Government Official
. No
Government Official
or
Government Body
presently owns an interest, whether direct or indirect, or has any legal or beneficial interest, in the
Seller
or any
Group Company
.
|
(21)
|
Other Material Circumstances
|
Section 7
|
Seller’s Liability
|
(1)
|
Damage Claim
|
(2)
|
Limitation of Liability
|
a)
|
the relevant matter has been reflected in the
Closing Date Financial Schedules
and has been reflected in the calculation of the
Final Purchase Price
; or
|
b)
|
the facts resulting in an inaccuracy of the
Warranty
have been disclosed to
Purchaser 1, 2 and 3
in sufficient clarity in this
Agreement
and its
Exhibits
or in the due diligence documents which
Purchaser 1, 2 and 3
have been provided with a data carrier (DVD) (contents of the data room as of September 18, 2013), which DVD will be kept by the Notary pursuant to
Exhibit 7 (2) b)
; provided however that the limitation in this Section 7 (2) b) shall not apply with respect to a disclosure made only in the due diligence documents if the damage in the individual case exceeds the amount of EUR 500,000. The disclosure of facts resulting in an inaccuracy of a
Warranty
which occurred after signing of this
Agreement
shall not release the
Seller
from the liability under Section 7 (1). Sec. 442 of the German Civil Code shall not apply. For the avoidance of doubt: the limitation of liability pursuant to this section 7 (2) b) shall not apply for the
Warranties
in § 6 (15); or
|
c)
|
Purchaser 1, 2 and 3
or the
Group Companies
have received payment of the damage pursuant to a third party indemnity or pursuant to an insurance policy of the
Group Companies
, or have a valid claim for payment against such insurance carrier and such carrier pays after the enforcement of such claim;
Purchasers 1, 2 and 3
agree to use their commercially reasonable efforts to obtain a full recovery under such policies, provided that any non-refunded costs of the
Purchasers
related to any such recovery shall reduce the amount of the limitation of damages pursuant to Section 7 (2); or.
|
d)
|
the
Seller
is actually prejudiced by the
Purchasers’ 1, 2 and 3
failure to give the
Seller
notice of a breach of warranty within 90 days of the date that
Purchaser 2
’s executive officers have actual knowledge of the breach of such
Warranty
hereunder.
|
(3)
|
De Minimis, Threshold, Cap
|
(4)
|
Time Limitation
|
(5)
|
Third Party Claims
|
a)
|
If any third party asserts a claim against the
Group Companies
which may result in any liability of the
Seller
for the inaccuracy of any
Warranty,
the
Purchaser 1, 2 and 3
shall within 10 Business Days of receipt of such claim notify the
Seller
thereof and grant the
Seller
the opportunity to reasonably participate in the defense at its own cost, provided, that, failure to give such notice shall not release the Seller from its obligations hereunder to the extent the interests of the Seller have not been prejudiced by such failure, i. e, the
Seller
shall be released from liability insofar as the lack of the opportunity to defend the claim led to damages of the
Seller
caused by the delay. In no event shall the
Purchaser 1, 2 and 3
permit such third party claim to be acknowledged or settled without the
Seller’s
prior consent (provided, however, that any such consent to a settlement may not be unreasonably withheld or delayed). The
Purchaser 1, 2 and 3
will, upon request and as soon as reasonably practicable, provide to the
Seller
and its representatives all documents and information and grant them access to the management and employees of the
Group Companies
, to the extent reasonably required by the
Seller
in order to make use of its rights under this Section 7 (5) which access shall not limit any of the
Purchasers’ 1, 2 and 3
rights or privileges.
|
b)
|
Seller
shall be entitled to, at its own costs and after written notification to
Purchasers 1, 2 and 3
, to take over the conduct of a dispute with the owner of a third party claim, if
|
|
(i)
|
Seller
confirms towards
Purchasers 1, 2 and 3
to pay unlimited damages for this claim and
|
|
(ii)
|
Seller
provides security for the anticipated costs (including settlement costs) presumably arising in connection with the conduct of the dispute. In case
Seller
takes over the conduct of the dispute, it shall be obliged to carry on the case diligently and in proper from and to engage attorneys which
Purchasers 1, 2 and 3
could reasonably be expected to accept.
|
c)
|
Fort the avoidance of doubt: Section 7 (5) shall not apply for claims regarding the
Warranties
in Section 6 (15), for which only section 11 shall apply.
|
(6)
|
Exclusion of other Remedies
|
Section 8
|
Pre-Closing Covenants
|
(1)
|
Omissions after Signing
|
a)
|
any amendment to the articles of association; any merger, spin-off or other corporate reorganization within the meaning of the German Act on Corporate Reorganizations with the exception of the change of the fiscal year of
OM GmbH
according to § 9 (1);
|
b)
|
any declaration or payment of dividends or any payment or promise of any benefit to the
Seller
or any shareholder of the
Seller,
any affiliate of the
Seller
or any person related to any of them, or any measure which might result in a deemed distribution, payment or promise of benefit, all with the exception of distributions to
Seller
to comply with Section 3 (4) or enter into any agreement or arrangement with
Seller
or any shareholder of the
Seller,
any affiliate of the
Seller
or any person related to any of them;
|
c)
|
any divestiture or encumbrance of a business (or portion thereof) or of any real property or other material fixed asset;
|
d)
|
any capital expenditure with a purchase price exceeding EUR 250,00 in the individual case and EUR 1,000,000 in the aggregate;
|
e)
|
any incurrence of any indebtedness or guarantee for borrowed money or any other financial debt, other than any indebtedness or guarantees incurred or assumed under existing credit lines or intercompany credit arrangements in amounts and on terms consistent with past practice;
|
f)
|
any material change in any accounting practice or policy, except as required due to a concurrent change in generally accepted accounting principles;
|
g)
|
promise to or agree to or make any payments, bonus payments by the
Group Companies
to employees of the
Group Companies
related to the transaction contemplated by this Agreement and any promise, agreement or grant of increases of payments to employees out of the ordinary course of business;
|
h)
|
grant any licenses or transfer any intellectual property rights other than transfers required for the
Group Companies
to obtain or retain valid ownership;
|
i)
|
change any tax filing methodologies in any jurisdiction, except as required for the purpose to ending the tax group of
Seller
and
OM GmbH
.
|
(2)
|
Obligations
|
a)
|
The
Parties
shall cooperate in good faith in procuring that the conditions precedent according to Section 5 of this
Agreement
will be met.
|
b)
|
Seller
prepares and delivers a proper transfer pricing documentation for the calendar years 2011 and 2012 with all underlying, supporting, proving and substantiating data for the
Group Companies
compliant with the German rules on transfer pricing.
|
c)
|
Seller
undertakes to use its best efforts to solve or, as the case may be, take the necessary steps to prepare the solution of
Plant-II-Issue.
In this respect,
Seller
will act in agreement with the competent authority. If the competent authority demands steps to be taken with regard to the
Plant-III-Issue
,
Seller
will coordinate these steps with
Purchaser 1
and then start implementing the measures.
|
d)
|
Seller
shall conclude an agreement with
OM GmbH
pursuant to which
Seller
commits to reimburse all payment obligations including any obligations to withhold and pay
Taxes
related to promises or agreements or any payments, bonus payments to employees of the
Group Companies
related to the transaction contemplated by this
Agreement
.
|
(3)
|
Access after Signing
|
(4)
|
Exclusive Dealing
|
Section 9
|
Continued Legal Relations between the Seller and the Group Companies and Covenants
|
(1)
|
Termination of Profit and Loss Transfer Agreement
|
(2)
|
Release of Guarantees
|
(3)
|
Termination of Inter-Company Agreements
|
(4)
|
Usage of Trademark Männer
|
(5)
|
Tail Insurances
|
(6)
|
Transfer of Contracts
|
(7)
|
With the exception of the advisory services agreed between Mr. Hans-Peter Männer and
OM
GmbH
rsp. Purchaser 1 according to § 5 (2) l), the
Shareholders
shall terminate their activities for the
Group Companies
as of the
Closing Date
and the
Shareholders
and the
Seller
shall procure that the
Shareholders
and the
Group Companies
effectively terminate all of their existing employment or other service agreements as of the
Closing Date
and agree that the
Shareholders
do not have or waive any claims under such agreements against the
Group Companies
for the period after the
Closing Date
. On the
Closing Date
, the
Seller
shall provide the
Purchaser 1, 2 and 3
with all written powers of attorney necessary to replace officers or agents (e. g. managing directors or persons with commercial power to represent).
|
Section 10
|
Covenant not to Compete, Non-Solicitation and Confidentiality
|
(1)
|
Non-Compete
|
(2)
|
Non-Solicitation
|
(3)
|
Confidentiality
|
(4)
|
No-Disparagement
|
Section 11
|
Indemnification of Taxes
|
(1)
|
Tax Indemnification by Seller
|
(2)
|
Tax Refunds to Seller
|
(3)
|
Purchase Price Adjustments
|
(4)
|
Time Limitation
|
(5)
|
Access
|
(6)
|
Straddle Period
|
Section 12
|
Specific Indemnities
|
(1)
|
The
Seller
shall indemnify and hold harmless the
Purchaser 1, 2 and 3,
in accordance with the terms stated in
Exhibit 12
from and against any claims of third parties and all damages relating to the matters described in
Exhibit 12
.
|
(2)
|
Any claims of the
Purchaser 1, 2 and 3
under Section 12 (1) shall be time-barred upon the expiration of a period of 5 years after the
Closing Date
. Section 7 (5) shall apply with respect to the defense of the relevant third party claims.
|
Section 13
|
Termination Rights
|
(1)
|
Each
Party
shall be entitled to terminate this
Agreement
if the conditions to
Closing
set forth in Section 5 (2) have not been fulfilled or waived by February 1, 2014 or as soon as the Federal Cartel Office or any other competent merger control authority has prohibited the
Closing
.
Parties
can agree at any time to prolong the deadline agreed above.
|
(2)
|
The
Purchaser 1, 2 and 3
shall be entitled to terminate this
Agreement
if a
Material Adverse Change
has occurred or become known and as a result the condition to
Closing
set forth in Section 5 (3) has not been fulfilled.
|
(3)
|
The
Purchaser 1, 2 and 3
shall be entitled to terminate this
Agreement
if
Seller
is in breach of a material obligation under Section 8.
|
(4)
|
In each case, this
Agreement
may only be terminated prior to the
Closing Date
pursuant to Section 5 (1) and (6) and by giving written notice to the other
Party.
|
Section 14
|
Guarantees of the Guarantor
|
Section 15
|
Distribution of the purchase price; Guarantees of the Shareholders
|
a)
|
The
Seller
shall not distribute a partial amount of EUR 27,500,000 for a period of 36 months after the
Closing Date
(the “
Non-Distributable Amount
”). This Non Distributable Amount will be reduced to EUR 13,750,000 which amount will be retained until the fifth anniversary of the
Closing Date
(the “
Non-Distributable Amount For The Years 4 and 5
”),
|
b)
|
Except as otherwise provided in this
Agreement
, the
Seller
can invest in its sole discretion the
Non Distributable Amount
and the
Non-Distributable Amount For The Years 4 and 5
in investments of any kind and can distribute the earnings thereof to its shareholders.
|
c)
|
The
Shareholders
of
Seller
guarantee by way of an independent guarantee in the meaning of § 311 BGB, each in proportion to his shareholding in the
Seller
and excluding any joint and several liability, that the
Seller
will obey the distribution regulation under lit. a) above.
|
d)
|
The
Shareholders
of
Seller
guarantee by way of an independent guarantee in the meaning of § 311 BGB each in proportion to his shareholding in the
Seller
and excluding any joint and several liability that the
Seller
will fulfill all of its obligations under § 6 (1) of this
Agreement
.
|
Section 16
|
Public Announcements
|
(1)
|
Confidentiality Undertaking
|
(2)
|
Proprietary Information
|
(i)
|
with respect to the confidentiality obligations of either
Party:
the contents of (a) this
Agreement
; (b) any related agreements, minutes, term sheets, notes, letters or other documents prepared or executed by the
Seller,
the
Group Companies
or its or their directors, officers and representatives on the one side and the
Purchaser 1, 2 and 3
or its directors, officers and representatives on the other side; and (c) related discussions and negotiations;
|
(ii)
|
with respect to the confidentiality obligations of the
Seller
alone: any information about the
Group Companies
and any information obtained in connection with the preparation, negotiation, execution or consummation of this
Agreement
and the transactions contemplated herein about the
Purchaser 1, 2 and 3;
and
|
(iii)
|
except for information that (a) in the case of items (i), (ii) and (iii) has come into the public domain; or (b) in the case of items (ii) and (iii) has been received from an independent source, save in either case where such information has come into the public domain or been received from an independent source following a breach by either
Party
or its respective directors, officers or representatives of any confidentiality obligation owed under Section 16 (1).
|
(3)
|
Consented Disclosures
|
(4)
|
Mandatory Disclosures
|
(5)
|
Public Announcements
|
(6)
|
Termination of Obligations
|
Section 17
|
Notices
|
Section 18
|
Costs
|
Section 19
|
Miscellaneous
|
(1)
|
Exhibits
|
(2)
|
Entire Agreement
|
(3)
|
Amendments
|
(4)
|
Interpretation
|
(5)
|
German Language
|
(6)
|
Assignment
|
(7)
|
Release
|
(8)
|
Governing Law and Venue
|
(9)
|
Partial Invalidity
|
-
|
All agreements must be correctly and completely recorded; all stipulations which are not recorded are potentially void and may put at risk the validity of the entire agreement.
|
-
|
All parties shall bear the costs of the notary without respect to the agreements between the parties.
|
-
|
The transfer of shares shall only be valid if all consents required by law and the Articles of Association have been validly granted. Such consents shall be obtained by the parties themselves.
|
-
|
The Company may treat only such person as shareholder who is listed in the shareholders’ list registered with the commercial register.
|
-
|
The law normally provides for a bona-fide-acquisition only, if the Seller is listed in the shareholders’ list registered with the commercial register, such list has not been objected to for at least three years and the purchaser is not in bad faith.
|
-
|
The division of a share requires consent of the shareholders’ meeting.
|
-
|
With respect to the new shareholdings an amendment of the Articles of Association may be appropriate.
|
-
|
In the event of the consolidation or transfer of at least 95% of the shares of the company in the hands of the purchaser or companies affiliated with him, real property acquisition tax may be levied.
|
|
The notary does not advise on tax matters.
|
-
|
If a company is dependent on another enterprise in accordance with Sections 16 and following German Stock Corporation Act (e.g. majority of shares or votes) this has to be revealed to the concerned company and their shareholders. Otherwise there might be claims to omission, compensation or withdrawal of shares against the controlling enterprise. If a stock corporation is involved there are further information obligations and sanctions in accordance with Sections 20, 21 German Stock Corporation Act. Any necessary steps will be arranged for by the parties themselves.
|
-
|
Today’s transfer of shares does not affect any intercompany agreements (management control agreements or profit transfer agreements). Any necessary steps will be arranged for by the parties themselves.
|
-
|
The notary pointed out that he has no knowledge of foreign law, in particular not foreign company law.
|
-
|
The formation of companies and acquisition of interests in companies through foreigners must be reported according to the External Trade Act and the External Trade Regulation. More information can be obtained from the German Federal Bank.
|
-
|
Furthermore the notary pointed out that the corporate body that grants power of attorney must also be released from the restrictions of Section 181 German Civil Code and appropriate restrictions of any other applicable law. The parties declare that these requirements are fulfilled.
|
-
|
The permissibility and limits of the representation of foreign companies are governed by the foreign law applicable to such companies of which the notary has no knowledge.
|