FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 22, 1993
PENTAIR, INC.
(Exact name of Registrant as specified in its Charter)
MINNESOTA 0-4689 41-0907434
(State or other (Commission (IRS Employer
Jurisdiction of File Number) Identification
Incorporation) Number)
1500 County Road B2 West Suite 400
St. Paul, Minnesota 55113
(Address of Principal Executive Offices) (Zip Code)
612-636-7920
(Registrant's Telephone Number, Including Area Code)
Not applicable
(Former name or former address, if changed since last
report)
Item 5. Other Events.
On December 22, 1993, the Registrant entered into a
definitive agreement to acquire the Schroff Group from
Fried. Krupp AG Hoesch-Krupp of Germany. The transaction
will include the net assets and business of the Schroff
Group (Schroff) including the stock of its international
subsidiaries. The cash purchase price will be
approximately $150 million, including certain
intercompany liabilities to be paid at closing. Bank
borrowings are expected to be used to finance the
purchase. Closing is anticipated to occur by March 1994,
however the structure of the agreement provides for an
effective date of January 1, 1994.
Schroff designs, manufactures and markets cabinets,
cases, subracks and accessories for the electronics
industry. The company has approximately 1,400 employees
with operations in Germany, France, England, the United
States, Japan, Sweden, Finland, Italy and Taiwan.
Schroff is the largest manufacturer in Europe's
electronic enclosure market and a world technical leader.
The company's estimated sales are approximately $160
million.
Item 7. Financial Statements and Exhibits.
c. Exhibits
(2.1) Asset Purchase Agreement among EuroPentair Gmbh,
Pentair Deutschland Gmbh, F.C. Holdings, Inc.
USA, and Schroff Gmbh dated December 22, 1993
(without Exhibits). The Registrant agrees to
provide a copy of such Exhibits to the Commission
upon request.
(2.2) Agreement between Pentair, Inc. and Fried. AG
Krupp Hoesch-Krupp dated December 22, 1993
(2.3) Non-Competition Agreement dated December 22, 1993
(2.4) Letter of Guarantee to Seller by Pentair, Inc. of
Buyer's obligations under Asset Purchase
Agreement
(2.5) Letter of Guarantee to Buyer by Fried. Krupp AG
Hoesch-Krupp of Seller's obligations under Asset
Purchase Agreement
(99) Press Release, dated December 22, 1993,
concerning the definitive agreement to purchase
Schroff.
SIGNATURES
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.
PENTAIR, INC
By: Joseph R. Collins
Senior Vice President,
Chief Financial Officer
Dated: January 10, 1994
ASSET PURCHASE AGREEMENT
AMONG
EUROPENTAIR GmbH
PENTAIR DEUTSCHLAND GmbH
F C HOLDINGS, INC.
and
SCHROFF GmbH
FOR ACQUISITION OF ASSETS OF SCHROFF GmbH
BY PENTAIR DEUTSCHLAND GmbH
AND
FOR ACQUISITION OF SUBSIDIARIES OF SCHROFF GmbH
BY EUROPENTAIR GmbH
AND F C HOLDINGS, INC.
DATED AS OF DECEMBER 22, 1993
<PAGE>
ASSET PURCHASE AGREEMENT
Section Title
Page
PARTIES
RECITALS
AGREEMENT
1. Definitions
1.1 Agreement
1.2 Applicable Law
1.3 Assets
1.4 Business
1.5 Closing
1.6 Closing Date
1.7 Confidential Information
1.8 Contracts
1.9 Economic Transfer Date
1.10 Employee Benefits
1.11 Financial Statements
1.12 Governmental Authority
1.13 Group Balance Sheet
1.14 Hazardous Substances
1.15 Intellectual Property/Relevant
Intellectual Property
1.16 Net Equity
1.17 Operating Permits
1.18 Real Estate
1.19 Schroff Group
1.20 Seller's Balance Sheet
1.21 Straubenhardt Facility
1.22 Subsidiaries/Subsidiary
2. Sale and Transfer of Assets
2.1 Permits
2.2 Contracts
2.3 Records
2.4 Intellectual Property
2.5 Firm Name
2.6 Other Assets
2A. Sale and Transfer of Shares of
Subsidiary
2A.1 EuroPentair
2A.2 F C Holdings
2B. Noncompetition Agreement
3. Purchase Price
3.1 Group Balance Sheet
3.2 Calculation of Purchase Price
3.3 Payment
4. Assumption of Liabilities
4.1 Liabilities to be Assumed
4.2 Liabilities not Assumed
5. Closing
6. Seller's Representations
6.1 Organization
6.2 Valid and Enforceable Agreement
6.3 Title
6.4 Locations, Subsidiaries and Investments
6.5 Financial Statements
6.6 No Material Change
6.7 Inventory
6.8 Tangible Personal Property
6.9 Real Property
6.10 Leases
6.11 Intellectual Property
6.12 Material Contracts
6.13 Employee Matters
6.14 Litigation
6.15 Compliance with Laws
6.16 Permits, Certifications and Licenses
6.17 Environmental Laws
6.18 Insurance
6.19 Employee Benefits
6.20 Accounts Receivable
6.21 Books and Records
6.22 Transactions with Related Parties
6.23 Bank Accounts
6.24 No Undisclosed Liabilities
6.25 Product Warranty
6.26 Major Customers and Suppliers
6.27 Prospective Changes
6.28 All Assets
6.29 Material Omissions
7. Buyer's Representations
7.1 Organization of Pentair Deutschland
7.2 Organization of EuroPentair
7.3 Organization of F C Holdings
7.4 Valid and Enforceable Agreement
8. Actions Following Execution
8.1 Operations
8.2 Additional Restrictions Following
Economic Transfer Date
8.3 Maintenance of Assets
8.4 Access to Records and Facilities
8.5 Requirements with Respect to
Subsidiaries
8.6 Requirements with Respect to Other
Assets
8.7 Krupp Cash Clearing System
8.8 Interim Financing
8.9 Subsidiary Dividends
9. Covenants of Seller
9.1 Further Documents and Assurances
9.2 No Impairment of Transaction
10. Covenants of Buyer
10.1 Further Documents and Assurances
10.2 No Impairment of Transaction
10.3 Operating Permits
10.4 Maintenance of records and Access
11.1 Representations and Covenants
11.2 Certified Copy of Resolutions
11.3 Injunctions
11.4 Opinion of Counsel
11.5 Environmental Assessments
11.6 Real Estate
11.7 Transfer of Assets
11.8 Certain Approvals
11.9 Guaranty
11.10 Approval by Board of Directors
12. Conditions Precedent to Obligations of
Seller
12.1 Representations and Covenants
12.2 Certified Copy of Resolutions
12.3 Injunctions
12.4 Opinion of Counsel
12.5 Certain Approvals
12.6 Guaranty
12.7 Approval by Supervisory Board
13. Allocation of Purchase Price
14. Broker
15. Expenses and Taxes
15.1 Seller Expenses
15.2 Buyer Expenses
15.3 Indemnity for Subsidiary Taxes
16. Reduction in Purchase Price
16.1 Claim for Reduction
16.2 Notice of Claim
17. Damages for Breach of Agreement
17.1 Claim for Damages
17.2 Notice of Claim
18. Indemnification of Parties
18.1 Indemnification by Seller
18.2 Indemnification by Buyers
18.3 Procedure for Claiming Indemnification
19. Limitation on Monetary Remedy of Buyer
20. Seller's Confidential Information
21. Termination of Agreement
22. Consequential Damages
23. Announcements
24. Survival of Representations
25. Amendments
26. Notices
27. Waiver
28. Counterparts
29. Binding Agreement
30. Entire Agreement
31. English Language
32. Governing Law
33. Arbitration of Disputes
34. Severability
<PAGE>
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is entered into this 22 day of
December, 1993, by and between
PARTIES:
1. Pentair Deutschland GmbH, a German limited
liability company in formation under the laws of the
Federal Republic of Germany, which has its offices at
Straubenhardt, Germany and has filed for registration
in the Handelsregister of the Amtsgericht Pforzheim, a
copy of a certified extract of which is attached hereto
as Exhibit A (hereinafter referred to as "Pentair
Deutschland") and
2. EuroPentair GmbH, a German limited liability
company in formation under the laws of the Federal
Republic of Germany, which has its offices at
Straubenhardt, Germany and has filed for registration
in the Handelsregister of the Amtsgericht Pforzheim, a
copy of a certified extract of which is attached hereto
as Exhibit B (hereinafter referred to as
"EuroPentair") and
3. F C Holdings, Inc., a Delaware business
corporation, which has its principal place of business
at Waters Edge Plaza, 1500 County Road B2 West, St.
Paul, MN 55113-3105 (hereinafter referred to as "F C
Holdings")
- collectively hereinafter referred to as "Buyers"
- -
4. Schroff GmbH, a German limited liability
company duly organized and existing under the laws of
the Federal Republic of Germany, which has its
registered offices at Straubenhardt, Germany and is
registered in the Handelsregister of the Amtsgericht
Pforzheim under file no. HRB 2807, a copy of a
certified extract of which is attached hereto as
Exhibit C
- hereinafter referred to as "Seller" -
RECITALS:
A. Seller is a wholly-owned subsidiary of Fried.
Krupp AG Hoesch-Krupp (hereinafter referred to as
"Krupp") which is registered in the Handelsregister of
the Amtsgericht Essen under file no. HRB 9633 and of
the Amtsgericht Dortmund under file no. HRB 10455.
B. Krupp and Seller are parties to a profit and
loss absorption and domination agreement dated May 18,
1972 and registered December 17, 1990.
C. Buyers are ultimately owned by Pentair, Inc.
(hereinafter referred to as "Pentair"), a Minnesota
business corporation, which has its principal place of
business at Waters Edge Plaza, 1500 County Road B2
West, St. Paul, MN 55113-3105.
D. The Schroff Group is engaged in the business of
the manufacture and sale of electronic enclosures,
microprocessor packaging systems and related products
throughout the world.
E. Seller desires to sell and Buyers desire to
purchase the assets of the Business, including the
Straubenhardt Facility, the shares of the Subsidiaries
and any other assets of the Seller used in the
Business.
AGREEMENT:
1. Definitions. The terms below shall have the
following meanings under this Agreement unless the
context clearly requires otherwise:
1.1 "Agreement" means this Asset Purchase Agreement
and the Exhibits hereto and the other agreements
attached hereto and made a part of this Agreement
1.2 "Applicable Law" means all applicable laws,
statutes, treaties, rules, codes, ordinances,
regulations, permits, certificates, orders and licenses
of any Governmental Authority, interpretations of any
of the foregoing by a Governmental Authority having
jurisdiction with respect thereto, and judgments,
decrees, injunctions, writs, orders or like action of
any court, arbitrator or other judicial or
quasi-judicial tribunal (including without limitation
those pertaining to health, safety and the
environment).
1.3 "Assets" means the assets, properties and
rights to be sold by Seller as described in Section 2.
1.4 "Business" means the research, development,
engineering, fabrication, sale and marketing of
electrical and electronic enclosures, microprocessor
packaging systems and related products by Seller and
the other members of the Schroff Group as presently or
in the past conducted.
1.5 "Closing" means the actual transfer and
delivery of the instruments of conveyance for the
Assets, the exchange and delivery by the parties of
such other documents and instruments contemplated by
this Agreement.
1.6 "Closing Date" means the close of business on
the later of (i) February 28, 1994 or (ii) the
termination of any applicable waiting period imposed by
the German Cartel Office, the Department of Justice or
Federal Trade Commission, as applicable in the United
States, and any other applicable antitrust authority,
or such other date as the parties hereto mutually
agree, on which date all conditions to Closing set
forth in Sections 11 and 12 hereof shall have been
satisfied or waived.
1.7 "Confidential Information" shall consist of
information ordinarily known only to Seller's personnel
involved in the Business, such as customer lists,
supplier lists, trade secrets, pricing records,
inventory records and such other information normally
understood to be confidential or otherwise designated
as such in writing by the Seller. "Confidential
Information" shall not include information (i) which
was known to Buyers prior to its receipt from Seller
(ii) which was publicly divulged by Seller prior to its
receipt by Buyers, (iii) which through no act in breach
of this Agreement or the Confidentiality Agreement
between Krupp and Pentair dated October 10, 1993 on the
part of Buyers, becomes publicly divulged; or (iv)
which was received in good faith by Buyers from any
third party without breach by any party of any
obligations of confidentiality.
1.8 "Contracts" means all agreements, contracts,
commitments, unfilled purchase orders for raw materials
and supplies, unfilled sales orders and leases of real
and personal property relating to the Business.
1.9 "Economic Transfer Date" means 0:00 a. m. on
January 1, 1994.
1.10 "Employee Benefits" means any and all pension
or welfare benefit programs, plans, arrangements,
agreements and understandings for employees, groups of
employees or specific individual employees to which
Seller or any member of the Schroff Group contributes
or is a party, by which any of them may be bound or
under which any of them may have liability, other than
benefits required by Applicable Law, including without
limitation pension or retirement plans, deferred
compensation plans, bonus or incentive plans, early
retirement programs, severance pay policies, support
funds, medical or dental insurance, payment or
reimbursement plans.
1.11 "Financial Statements" means (i) the separate
audited balance sheets and related statements of income
of Seller, Schroff UK Ltd., Schroff Inc., Schroff S. A.
and Schroff K. K., as at December 31, 1990 through
1992, inclusive, and of Schroff S. r. L. and Schroff
Scandinavia AB, as of December 31, 1991 and 1992, and
results of operations for the years then ended,
including the audit report of which they are a part, in
each case certified by their respective auditors and
(ii) the unaudited consolidated balance sheet and
related statement of income of the Schroff Group as a
whole, as at December 31, 1992, and the results of
operations for the year then ended, which consolidated
statement shall, however, include the following
subsidiaries accounted for solely on the cost method
("Anschaffungskosten"): Schroff Scandinavia AB, Schroff
S.r.L. and Schroff Co. Ltd.
1.12 "Governmental Authority" means any
supranational, national, federal, state, departmental,
county, municipal, regional or other governmental
authority, agency, board, body, instrumentality or
court in whatever country having jurisdiction in whole
or in part over the Schroff Group or the Business.
1.13 "Group Balance Sheet" means the consolidated
balance sheet dated as of December 31, 1993 of the
Schroff Group prepared in accordance with Section 3.1
hereof.
1.14 "Hazardous Substances" shall include any
substance, material, or waste which is as of the
Closing Date regulated or, on or before the Closing
Date, is proposed to be regulated, by any Governmental
Authority, including, but not limited to, any material
or substance which is designated as a hazardous or
polluting substance or subject to regulation as a
hazardous or toxic substance pursuant to any Applicable
Law.
1.15 "Intellectual Property" consists of patents
("Patente"), utility patents ("Gebrauchsmuster"),
design patents ("Geschmacksmuster") and registrations
and applications therefor; copyrights and copyright
registrations and applications therefor; trademarks,
brand names and tradenames and registrations and
applications therefor; know-how; and licenses of any of
the foregoing. "Relevant Intellectual Property" means
Intellectual Property owned or licensed by the Schroff
Group or otherwise used in the Business.
1.16 "Net Equity" means the sum of the amounts of
the following separate accounts reflected on the Group
Balance Sheet:
Subscribed Capital
Capital Reserves
Retained Earnings
Consolidation Items
1.17 "Operating Permits" means all of the permits,
licenses, authorities or other franchises granted by
any Governmental Authority or other third party
required or appropriate for the continued operation of
the Business in the manner heretofore operated by
Schroff Group.
1.18 "Real Estate" means the land, buildings and all
attached fixtures of the Straubenhardt Facility and any
other real estate owned by Seller, all of which real
property shall be listed in Exhibit 6.11.
1.19 "Schroff Group" means the Seller and its
Subsidiaries, collectively.
1.20 "Seller's Balance Sheet" means the separate
audited balance sheet of Seller as at December 31,
1993, as certified by its auditors.
1.21 "Straubenhardt Facility" means the office,
warehousing and manufacturing complex of the Seller
located at Straubenhardt, Germany which is the location
of Seller's registered offices.
1.22 "Subsidiaries" means the following business
organizations, located in and founded in the
jurisdictions listed below, and "Subsidiary" shall mean
any one of the following, as the context may require:
Name of Primary Jurisdiction of
Subsidiary Location Incorporation
SCHROFF S.A. Betschdorf France
SCHROFF UK Ltd. Hemel Hempstead,
England United Kingdom
SCHROFF Inc. Warwick,
Rhode Island Rhode Island
(US)
SCHROFF K.K. Yokohama Japan
SCHROFF
Scandinavia AB Enskede Sweden
(formerly SCHROFF Svenska AB)
SCHROFF S.r.L. Gallarate Italy
SCHROFF Co. Ltd.Taipei Taiwan
2. Sale and Transfer of Assets. Seller shall
sell, transfer and deliver to Pentair Deutschland and
Pentair Deutschland shall purchase from Seller at the
Closing all of Seller's right, title and interest in
all of the assets of the Seller as reflected in
Seller's Balance Sheet (except for the shares of the
Subsidiaries), and the assets and property described
below owned by Seller on the Closing Date:
2.1 Permits. All Operating Permits relating to the
Business, to the extent transferable by the Seller.
2.2 Contracts. All Contracts except those not
assumed by Pentair Deutschland pursuant to Section 4
herein; provided, however, if the assignment of any
such Contract requires the consent of the other party
thereto, this Agreement shall not constitute an
agreement to assign the same, if an attempted
assignment will constitute a breach thereof, but Seller
and Pentair Deutschland agree that they will use their
best efforts to obtain the written consent of the other
parties to such assignment; failing such consent,
Seller will continue to execute any such Contract upon
the direction for the risk and benefit of Pentair
Deutschland.
2.3 Records. All books, records and procedural
manuals, whether stored electronically or otherwise.
2.4 Intellectual Property.
2.4.1 Patents, utility patents, and design patents
and registrations therefor as listed in Exhibit 2.4.1.
2.4.2 Trademarks, brand names, trade names and
registrations therefor as listed on Exhibit 2.4.2.
2.4.3 Copyrights for computer software developed by
Seller as listed in Exhibit 2.4.3.
Copyrights to other documents to the extent
owned by Seller.
2.4.4 Right to use copyrights developed by current or
former employees of Seller ("Urheberrechte") to the
extent owned by Seller.
2.4.5 Subject to the approval of licensor, if
required, rights to use industrial property granted
under license agreements listed in Exhibit 2.4.5.
2.4.6 Subject to the approval of licensees, if
required, licenses granted by Seller as listed in
Exhibit 2.4.6.
2.4.7 Technical documentation reflecting the
engineering and production data, design data, plans,
specifications, drawings, technology, know-how, trade
secrets, manufacturing processes, relating to the
Business or to the maintenance of Assets and all
documentary evidence thereof, including without
limitation the technical knowledge incorporated in such
documentation as more specifically categorized in
Exhibit 2.4.7.
2.4.8 To the extent that Intellectual Property owned
by Seller is entered in the pertinent patent and trade
mark registers or offices, Seller shall, to the full
extent permitted by law, deliver to Pentair Deutschland
all related files in Seller's direct and indirect
possession and all documents, certificates and
declarations (hereinafter referred to as "Assignment
Documents") necessary to enable Pentair Deutschland to
register such Intellectual Property in its name.
If at a later date any competent Governmental
Authority shall demand additional Assignment Documents
from the previously registered owner, Seller shall
prepare and submit them to Pentair Deutschland.
Seller and Pentair Deutschland shall use their
best efforts to obtain the approval of licensors and
licensees pursuant to Sections 2.4.5 and 2.4.6 above;
the failure to so obtain required consents shall be
deemed to constitute incapability of performance in
accordance with Section 34 hereof.
2.5 Firm Name. The right to use the name "Schroff"
and any derivation thereof.
2.6 Other Assets. All other assets used in the
Business which are not capitalized and therefore not
reflected in Seller's Balance Sheet.
Those assets, although reflected in the Seller's
Balance Sheet, that were disposed of in the normal
course of business between January 1, 1994 and Closing
are not being sold or transferred hereunder. Those
assets, although not reflected in Seller's Balance
Sheet, that were acquired by Seller in the ordinary
course of business between January 1, 1994 and Closing
shall be sold and transferred hereunder.
2A. Sale and Transfer of Shares of
Subsidiaries. Seller shall sell, transfer and deliver
to EuroPentair and to F C Holdings, and they shall
purchase from Seller, at the Closing all of Seller's
right, title and interest in all of the shares of the
Subsidiaries shown below:
2A.1 EuroPentair. EuroPentair shall acquire the
shares of Schroff UK Ltd., Schroff S. A., Schroff
S.r.L. and Schroff Scandinavia AB.
2A.2 F C Holdings. F C Holdings shall acquire the
shares of Schroff Inc., Schroff K. K. and Schroff Co.
Ltd.
2B. Noncompetition Agreement. Seller and Buyers
conclude the attached Noncompetition Agreement in
notarial form, which is made a part of this Agreement.
3. Purchase Price.
3.1 Group Balance Sheet. Seller shall prepare a
consolidated balance sheet of the Schroff Group as of
December 31, 1993, based on the audited financial
statements of Seller and the Subsidiaries as at such
date, which statements shall be prepared in accordance
with GOB (generally accepted accounting principles in
Germany) and the principles of consolidation laid down
in the 1992 Krupp annual report, applicable to the
Business, consistently applied. Any permitted change in
accounting methods or principles listed in Exhibit 6.6
since the date of the Financial Statements will be
offset in the preparation of the Group Balance Sheet,
in order to ensure such consistency.
The Group Balance Sheet shall be audited by C &
L Treuhandvereinigung Deutsche Revision AG, Essen ("C &
L"). Deloitte & Touche GmbH, Mannheim will conduct a
review of the auditors' working papers of (i) the
audited financial statements as of December 31, 1993
for Seller and for Schroff UK Ltd., Schroff S. A.,
Schroff Inc. and Schroff K. K. and (ii) the
consolidation of the financial statements of the
Schroff Group, for the purpose of verifying the
consolidation and accounts of the Schroff Group on
behalf of Buyers. The separate financial statements of
Seller and its Subsidiaries as of December 31, 1993
shall have received an unqualified opinion of their
respective auditors; the consolidated financial
statements of the Schroff Group as of that date shall
have received an unqualified opinion of C & L.
3.2 Calculation of Purchase Price. The purchase
price for the Assets shall be the total of the
following amounts:
(i) DM 216.000.000; plus or minus
(ii) the difference, if any, between Net Equity and
DM 103.400.000; plus
(iii) the amount of reserves reflected on the Group
Balance Sheet for Seller's pension obligations related
to retirees and former employees with vested pension
rights; plus
(iv) the amount, if any, of other reserves reflected
on the Seller's Balance Sheet which are specifically
destined to cover then-existing claims in tort for
products liability, then-existing claims for
environmental liabilities, claims for taxes owed by
Seller and claims for compensation with respect to
employee inventions ("Arbeitnehmererfindungen"); plus
(v) any value added tax which becomes legally due
or is triggered at the election of the Seller.
The purchase price shall be calculated as of
December 31, 1993. The acquisition of the Assets shall
take place with economic effect as of January 1, 1994.
The above amounts (i) through (iv) shall bear interest
at the rate of 6.8% per annum for the period from the
Economic Transfer Date to the date of payment of each
portion of the purchase price.
3.3 Payment. The amount of DM 216.000.000,
constituting the portion of the purchase price set
forth in Section 3.2(i) above and all amounts of
indebtedness to Krupp and its affiliates reflected on
the Seller's Balance Sheet, plus interest at 6.8% per
annum thereon, shall be paid in cash or in immediately
available funds by wire transfer on the Closing Date.
If notice to Buyers of the amount of indebtedness to
Krupp and its affiliates is not given on or prior to
the tenth business day preceding Closing, payment
thereof shall be made on the tenth business day
following the date such notice is given. The balance
of the purchase price, plus interest at 6.8% per annum
thereon, shall be paid by Buyers at Closing, unless
such amount has not then been finally calculated and
agreed to by Closing, in which case such amount shall
be paid when finally calculated pursuant to Section 3.2
above and agreed to by the Seller and Buyers. Any
amount payable under Section 3.2(v) above shall be
settled by immediate assignment by Buyers to Seller, or
to its affiliates as directed by Seller, of any
recoverable VAT claims ("abzugsfahige Vorsteuer")
therefor, except for amounts set off against such
recoverable amount by the competent Governmental
Authority for VAT taxes payable by Buyers with respect
to its operations following the Economic Transfer Date.
If there exists any dispute between the parties over
any amount of the purchase price, under Section 3.2(ii)
through (iv), Buyers shall promptly pay the undisputed
portion thereof and the balance shall be subject to
negotiation or arbitration.
4. Assumption of Liabilities.
4.1 Liabilities to be Assumed. At Closing, Pentair
Deutschland shall assume, and agree to satisfy and
perform, to the extent not satisfied or performed prior
to the Closing Date, without any charge or cost to
Seller, the liabilities reflected on the Seller's
Balance Sheet, including indebtedness to Krupp and its
affiliates, except (A) as specifically excluded
pursuant to Section 3.2 (iii) and (iv) above, (B) those
claims for product liability for injury to persons or
property arising out of a defect in products of the
Business, to the extent the injury which gives rise to
such claim occurs before the Economic Transfer Date,
(C) those claims for environmental damages or
liabilities to the extent the actions which give rise
to such claims occurred prior to the Economic Transfer
Date, (D) claims for taxes owed by Seller and (E)
claims for compensation with respect to employee
inventions ("Arbeitnehmer-erfindungen"). If the
assumption of any liabilities assumed by Pentair
Deutschland under this Section 4.1 require the consent
of any third party, Seller and Pentair Deutschland
agree they will use their best efforts to obtain the
written consent of such third parties to the
assumption; failing such consent, Pentair Deutschland
will indemnify Seller against any claim arising out of
such assumed liabilities.
4.2 Liabilities Not Assumed. Pentair Deutschland
shall not assume and shall not be responsible for any
liabilities and obligations of Seller, other than as
set forth in Section 4.1, regardless whether such
liabilities are imposed by law upon Pentair
Deutschland, including without limitation Section 419
of the German Civil Code, Section 25 of the Commercial
Code ("HGB"), Section 75 of the Tax Procedure Act or
otherwise. As between the parties, Seller agrees to
indemnify Pentair Deutschland with respect thereto
pursuant to Section 18 hereof, to the extent Pentair
Deutschland is liable to pay or perform any such
liability. Seller and Pentair Deutschland shall
cooperate in the entry in the Handelsregister of an
appropriate notice under Section 25 of the HGB of the
limitation on Pentair Deutschland's liability provided
for herein.
5. Closing. The Closing shall take place on the
Closing Date at the offices of Krupp in Essen, Germany
or at such other time and place as may be mutually
agreed upon. All transfers and assignments shall
become effective and all documents shall be deemed to
have been delivered simultaneously by the parties upon
receipt by Seller of payment by Buyers in cash or by
wire transfer of that portion of the purchase price and
indebtedness of Seller to Krupp and its affiliates set
forth in Section 3.3 above due on the Closing Date.
5.1 Pentair Deutschland and Seller agree that title
to all Assets sold hereunder shall pass to Pentair
Deutschland at such time and that Pentair Deutschland
shall take possession of the Assets on that date. With
respect to Assets in the possession of third parties,
Seller hereby assigns at Closing its recovery claims
("Herausgabeanspruche") to Pentair Deutschland.
5.2 At the Closing, Seller and Pentair Deutschland
shall notify the notary hereof in writing that the
notary may proceed with all appropriate actions to
consummate the attached real estate agreement concluded
by the parties in notarial form and made a part of this
Agreement.
5.3 At the Closing, Seller shall deliver to
EuroPentair and F C Holdings such stock certificates,
stock powers and other instruments of conveyance
necessary to transfer title to the shares of the
Subsidiaries as provided in Section 2A hereof, in a
manner consistent with the law of the jurisdiction of
incorporation of each Subsidiary.
5.4 At the Closing, Pentair Deutschland shall, to
the extent obtained, deliver to Seller such
undertakings and other instruments satisfactory in form
and substance to Seller and its counsel as shall be
effective to cause Pentair Deutschland to assume the
liabilities of Seller assumed pursuant to Section 4
hereof.
5.5 At the later of Closing or the date fifteen
(15) business days following delivery of a list of all
financial guarantees of Seller, Krupp and its
affiliates theretofore provided in favour of any member
of the Schroff Group, Buyers shall secure the discharge
of each of them from such guaranties, effective on
such date.
6. Seller's Representations. Seller represents as
follows, and acknowledges that, (i) notwithstanding any
investigation Buyers may undertake, Buyers are relying
on the following representations and (ii) the same
shall be true on the date hereof and as of the Closing
Date and shall survive the Closing of this transaction
in accordance with Section 24 of this Agreement:
6.1 Organization. Seller is a limited liability
company organized, validly existing and in good
standing under the laws of the Federal Republic of
Germany and has full power and authority (corporate and
other) to carry on its business as it is now being
conducted and to own the properties and assets it now
owns. To the extent Seller does business outside its
jurisdiction of incorporation, it is qualified or
licensed to do business in such jurisdiction. Exhibit
6.1 hereto contains a complete and correct copy of the
Seller's Articles of Association as presently in
effect.
6.2 Valid and Enforceable Agreement. This
Agreement constitutes a valid and binding agreement of
the Seller enforceable in accordance with its terms,
except insofar as enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally under any
Applicable Law. Neither the execution and delivery of
this Agreement nor the consummation of the transactions
contemplated hereby violates or conflicts with, results
in a breach of, or constitutes a default under (i) any
law, regulation, judgment or order, decree, award or
ruling to which Seller or the Assets are subject, (ii)
the Articles of Association of Seller or (iii) subject
to obtaining necessary consents, under material
guaranties, contracts, agreements or leases or other
restrictions of any kind or character, to which Seller
is a party, by which Seller is bound or to which any of
its property is subject.
6.3 Title. Seller has good and marketable title to
all of the Assets and the Assets are free and clear of
all liens, claims, charges, encumbrances and
restrictions, except those defects in title and liens,
charges and encumbrances arising out of customary
retention of title ("Eigentumsvorbehalt") or those
listed in Exhibits 6.8 or 6.9 hereto, if any, which do
not detract from the value or otherwise impair the
operations of the Business. Seller has the complete
and unrestricted right, power and authority to sell,
transfer and assign the Assets pursuant to this
Agreement. Seller is explicitly entitled to transfer
the firm name "Schroff" without restriction.
6.4 Locations, Subsidiaries and Investments. Set
forth on Exhibit 6.4 hereto is a list of all branches,
offices and warehouses of each member of the Schroff
Group.
(a) Each Subsidiary is a corporation duly
organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, and
has all requisite corporate power to own its property
and to carry on its business as now being conducted.
To the extent any Subsidiary does business outside its
jurisdiction of incorporation, it is qualified or
licensed to do business in such jurisdiction.
(b) All of the outstanding shares of capital stock
of each Subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable, and
are owned, of record or beneficially, by Seller, and
except as set forth in Exhibit 6.4, free and clear of
all liens, encumbrances, equities, options or claims
whatsoever. No shares of capital stock of, or other
ownership interest in, any Subsidiary are reserved for
issuance and there are no outstanding options,
warrants, rights, subscriptions, claims of any
character, agreements, obligations, convertible or
exchangeable securities, or other commitments,
contingent or otherwise, relating to the capital stock
of, or other ownership interest in, such Subsidiary,
pursuant to which such Subsidiary is or may become
obligated to issue or exchange any shares of capital
stock of, or other ownership interest in, such
Subsidiary.
(c) Except as set forth in Exhibit 6.4, neither
Seller nor any Subsidiary owns, directly or indirectly,
any capital stock or other equity or ownership or
proprietary interest in any other corporation,
partnership, association, trust, joint venture or other
entity.
6.5 Financial Statements. Buyers have received
true, complete and accurate copies of the Financial
Statements. The Financial Statements, including the
notes thereto, have been prepared in accordance with
generally accepted accounting principles adopted in the
jurisdictions of incorporation of the members of the
Schroff Group consistently applied throughout the
periods indicated, and present fairly the financial
condition of such members of the Schroff Group as at
the dates indicated and for the periods indicated in
the Financial Statements. The financial statements of
the members of the Schroff Group dated as of December
31, 1993, including the notes thereto, have been
prepared in accordance with generally accepted
accounting principles adopted in their respective
jurisdictions of incorporation consistently applied
throughout the fiscal year indicated, and present
fairly their respective financial condition as at the
date indicated and for the periods indicated therein.
6.6 No Material Change. Except as set forth in
Exhibit 6.6 hereto or as contemplated in Section 8
hereof, since December 31, 1992 there has not been:
(a) any material adverse change in the business,
financial condition, operations or results of
operations of the Schroff Group;
(b) any damage, destruction or loss, whether
covered by insurance or not, materially and adversely
affecting the properties or businesses of the Schroff
Group;
(c) any declaration, setting aside or payment of
any dividend (whether in cash, stock or property) in
respect of the share capital of any member of the
Schroff Group, or any redemption or other acquisition
of any of its shares by Seller;
(d) any increase in the compensation or granting of
bonuses payable or to become payable by any member of
the Schroff Group to its shareholders, directors,
officers or employees except increases or grants
occurring in the ordinary course of business and in
accordance with past practice;
(e) any sale or transfer by any member of the
Schroff Group of any tangible or intangible asset, any
mortgage or pledge or creation of any security
interest, lien or encumbrance of or in any such asset,
any lease of real property or equipment, or any
cancellation of any debt or claim, all except in the
ordinary course of business or as disclosed in or
reflected on the Financial Statements;
(f) any other transaction not in the ordinary
course of business; or
(g) any change in accounting methods or principles.
6.7 Inventory. Except as set forth on Exhibit 6.7,
since December 31, 1992, the members of the Schroff
Group have maintained their respective inventories of
raw materials, work in process, finished goods,
merchandise, supplies and packaging materials in a
normal and customary manner consistent with the prior
practice of the Business. Exhibit 6.7 sets forth a
listing of each location at which Inventory of the
Schroff Group is, or is customarily, maintained.
6.8 Tangible Personal Property. To the extent not
covered by reserves therefor in the Group Balance
Sheet, the machinery and equipment (including without
limitation office equipment and the like), as defined
in Section 266(2) A II 2 and 3 of the HGB, reflected in
the Group Balance Sheet is in good operating condition
and repair and there is no extraordinary wear and tear
to such property, or any other deterioration, damage or
defect, which would prohibit or materially impair the
continued use of such property for the purposes for
which they are presently employed by the Schroff Group,
or which would require any material expenditure for
repair or replacement for such use. Except as set
forth on Exhibit 6.8, all such property has been
maintained in accordance with maintenance procedures
generally accepted in the industry. Exhibit 6.8 shall
also disclose the existence of any liens, claims,
charges, encumbrances and restrictions imposed upon or
relating to all such property or to which such property
is subject.
6.9 Real Property.
(a) Exhibit 6.9 hereto contains an accurate and
complete list of all real property owned by any member
of the Schroff Group and includes the name of the
registered title holder thereof and a list of all
indebtedness secured by a lien, mortgage, charge,
encumbrance or restriction thereon. Excerpts from the
entries in the Land Register, where applicable, are
attached to Exhibit 6.9. To the extent not covered by
reserves therefor in the Group Balance Sheet, the land
and buildings as defined in Section 266(2) A II 1 of
the HGB, reflected in the Group Balance Sheet are in
good condition and repair and there is no material
defect or extraordinary wear and tear to any such
property, or any other deterioration, damage or defect,
which would prohibit or materially impair the continued
use of such property for the purposes for which they
are presently employed by the Schroff Group, or which
would require any material expenditure for repair or
replacement for such use. Except as set forth on
Exhibit 6.9, all of such property has been maintained
in accordance with maintenance procedures generally
accepted in the industry. Except as set forth on
Exhibit 6.9, no portion of such real property is
subject to any lease or leasehold interest contract or
agreement for use thereof by third parties.
(b) Seller's present use of the Real Estate, and
each Subsidiary's present use of their respective real
property, and the improvements thereon, complies with
all Applicable Laws and private restrictions which are
applicable to such real property and the improvements
thereon. To the knowledge of Seller, there are no
pending, proposed or threatened changes in any
Applicable Law which would apply to such real property.
There are no pending or, to the best of Seller's
knowledge, threatened proceedings contesting the use by
any member of the Schroff Group of such real property;
nor has any notice been given to any such member of any
use thereof which is nonconforming.
(c) There are no existing or, to the best of
Seller's knowledge, pending special assessments
("Erschliessungsgebuhren") affecting such real property
and there are no current public improvements (water,
sewer, sidewalk, street, alley, curbing, etc.) or
condemnation actions affecting such real property or
improvements thereon for which assessments may be
levied after Closing other than as disclosed in the
Exhibit 6.9. Seller has no knowledge of any planned
improvements which may result in assessments or
condemnation actions.
(d) All utilities, including without limitation
telephone, sewer system, water, electricity, gas and
any other utilities necessary for the operation of such
real property and the Business, are available,
connected and operational.
6.10 Leases. Exhibit 6.10 hereto contains an
accurate and complete list of all leases to which any
member of the Schroff Group is a party (as lessee or
lessor) where the remaining rental, as of December 31,
1993, under the lease (to the earliest termination
date) exceeds DM 100.000, copies of which leases have
been delivered to Pentair Deutschland prior to Closing.
Except as set forth on Exhibit 6.10: each such lease
is in full force and effect; all rents due to date on
each such lease have been paid or accrued; in each case
the lessee has been in peaceable possession since the
commencement of the original term of the lease and is
not in default thereunder. Except as set forth in
Exhibit 6.10, the property leased by the Schroff Group
under such leases has been maintained in accordance
with maintenance procedures generally accepted in the
industry.
6.11 Intellectual Property.
(a) To the knowledge of Seller, after due and
proper examination as of December 1, 1993, all
Intellectual Property listed on the Exhibits provided
for in Section 2.4 hereof is owned by Seller. The same
applies to the licenses granted or acquired by Seller
which were still in force at Closing. If contrary to
expectations it should emerge that at Closing there
exist further Intellectual Property or further licenses
granted or acquired by Seller which were still in force
at Closing, those rights and licenses shall also be
treated as if they were listed in Exhibits relating to
Section 2.4 and Seller shall undertake such further
action to transfer such Intellectual Property in
accordance with Section 2.4.8.
(b) The Relevant Intellectual Property is
free of any liens or encumbrances. To the knowledge of
Seller, no one is infringing upon any rights of the
Schroff Group with respect to any Relevant Intellectual
Property.
(c) Seller declares that as of December 1,
1993 according to the patent roll of the German Patent
Office or the European Patent Office, no objections of
third parties other than those listed in Exhibit 6.11
hereto have been made to such applications in Germany
and to applications made under the European Patent
Convention. Seller declares further that to the best
of its knowledge, no such objections have been made up
to the Closing Date.
(d) In addition, Seller declares that
according to the best of its knowledge no actions for
annulment or cancellation are either pending or have
been threatened against the Intellectual Property so
listed and that to the extent according to the best of
its knowledge actions for recovery have neither been
made nor threatened.
(e) Seller is not aware that in its current
business activities it is infringing on Intellectual
Property rights of third parties or that it has been
accused of doing so by a third party. Finally, Seller
is aware of no circumstance, having made due and proper
examination, which may entitle a licensor included in
Exhibit 2.4.5 hereto to terminate such license.
(f) No shareholder, director, officer, or employee
of any member of the Schroff Group owns, directly or
indirectly, in whole or in part, any Intellectual
Property rights which the Schroff Group uses, has used
or the use of which is necessary for the conduct of the
Business as presently conducted, except as listed or
described in the Exhibits to Section 2.4. Rights to
compensation belonging to former and current employees
of Seller for inventions used by Seller in the conduct
of its business ("Arbeitnehmererfindungen") will have
been fully settled by Seller out of the purchase price
without undue delay.
6.12 Material Contracts.
(a) Exhibit 6.12 sets forth a list of all of the
following Contracts or arrangements by which any member
of the Schroff Group is bound:
(i) any agreement which by its terms involves the
future payment by or to the Schroff Group of DM 250.000
or more, as of the dates listed on such Exhibit;
(ii) any Contract limiting the freedom of the
Schroff Group to engage in any line of business or to
compete with any other person;
(iii) any Contract for the purchase of raw materials
or supplies for, or the furnishing of services to, the
Business, determined as of the date listed on such
Exhibit,
(A) for which, to the knowledge of Seller,
comparable goods or services are not readily available
in the ordinary course of business, at prices at or
similar to those which the Schroff Group has agreed to
pay under such Contract, or
(B) the quantities of which are in excess of the
normal operating requirements of the Business for the
Schroff Group; or
(iv) any distributor, sales representative or agency
agreements to which any member of the Schroff Group is
a party, regardless of amounts involved.
(b) Except as set forth therein, each Contract
listed on Exhibit 6.12 is in full force and effect and
there exists no default nor to the knowledge of Seller,
no event, occurrence, condition or act exists
(including the sale of the Assets or the assignment of
the Contracts in accordance herewith) which, with the
giving of notice or the lapse of time, would become a
default thereunder.
6.13 Employee Matters. Except as set forth in
Exhibit 6.13, there has been no complaint filed with
any Governmental Authority or other body alleging
unfair labor practices, human rights violations,
employment discrimination charges, or the like, and
there are no existing facts known to the Seller which
would lead to any such charge. Exhibit 6.13 lists all
collective bargaining agreements or agreements with a
works council or similar body. For the past three
years, there has not occurred any work stoppages,
walkouts or strikes. No notice has been received of
any pending claim asserting any failure to comply with
any Applicable Law relating to employment of labor,
wages, hours, collective bargaining, withholding taxes
on employee compensation, or employee health and
benefits. The representations contained in this
Section 6.13 shall be made only with respect to Seller,
Schroff S. A., Schroff UK Ltd., Schroff Inc. and
Schroff K. K.
6.14 Litigation. Except as set forth on Exhibit
6.14 hereto, there are no legal actions, suits,
arbitrations or other legal, administrative or other
governmental proceedings or investigations pending
or, known to the Seller, threatened against the Schroff
Group, arising out of the Business. Routine litigation
relating to the collection of receivables shall only be
listed if the aggregate amount involved is in excess of
DM 5 million. No member of the Schroff Group is
subject to a judgment, order or decree entered in a
lawsuit or proceeding which might have a material
adverse effect on the Business or render it unable in
any material respect to acquire any property or conduct
business (in the manner presently conducted) in any
jurisdiction.
6.15 Compliance with Laws. Except as set forth on
Exhibit 6.15 and except for environmental and similar
laws addressed in Section 6.17, the Schroff Group is in
compliance in all material respects with all Applicable
Laws.
6.16 Permits, Certifications and Licenses. Exhibit
6.16 lists all of the Operating Permits of the Seller.
Each such permit, certification and license is in full
force and effect. The Schroff Group is without notice
of any threatened or pending action which would result
in any revocation of any Operating Permits which would
materially and adversely affect the operation of the
Business as presently conducted.
6.17 Environmental Laws. Except as set forth on
Exhibit 6.17, the Schroff Group is in compliance in all
material respects with all Applicable Laws with respect
to the environment. Seller is not aware of any pending
or threatened environmental investigation or proceeding
with respect to the operation of the Business. Except
as set forth on Exhibit 6.17, there is and has been no
current or past usage or practice of the Business with
respect to any Hazardous Substances which may support a
claim or cause of action against the Schroff Group
under Applicable Law.
6.18 Insurance. Exhibit 6.18 hereto contains an
accurate and complete list of insurance policies which
the Schroff Group maintains with respect to the
Business or their properties or employees. Except as
set forth on Exhibit 6.18, all such policies are in
full force and effect and shall survive the Closing.
Since December 31, 1992 there has not been any material
adverse change in the Schroff Group's relationship with
its insurers or on their premiums payable pursuant to
such policies.
6.19 Employee Benefits.
(a) Exhibit 6.19 contains a complete listing of the
benefits to employees granted by the Schroff Group
beyond what is provided for by Applicable Law or
collective bargaining agreements previously supplied to
Buyers. Except as set forth in Exhibit 6.19, the costs
of such Employee Benefits which are paid currently by
the Schroff Group are reflected as expenses in the
statements of income contained in the Financial
Statements of the members of the Schroff Group. Except
as set forth in Exhibit 6.19, the costs of such
Employee Benefits which are, in whole or in part, not
paid currently are reserved for in the balance sheets
contained in the Financial Statements of the members of
the Schroff Group.
(b) Except as described in Exhibit 6.19 no member
of the Schroff Group has, since December 31, 1992,
instituted or increased the benefit levels of any
benefit programs or specific benefits or changed the
material terms thereof or conditions for participation
therein or vesting thereof beyond the ordinary course
of business or contrary to prior practice.
(c) Except as set forth on Exhibit 6.19,
(i) each member of the Schroff Group has performed
all material obligations required to be performed by it
under the Employee Benefits;
(ii) no member of the Schroff Group is in material
default under or in material violation of, or has any
knowledge of any default or violation by any other
party to any of the Employee Benefits;
(iii) there are no requests for documents,
investigations, proceedings or claims pending, or to
Seller's knowledge, threatened (other than routine
claims for benefits) or which could reasonably be
expected to be asserted, with respect to any Employee
Benefit, against any member of the Schroff Group, any
of the assets of any such member or against the assets
of any funded Employee Benefit;
(iv) Schroff Inc. does not maintain or contribute
to, nor at any time in the past has it maintained or
contributed to, any Employee Benefit subject to Section
302 of Title IV of the U. S. Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section
412 of the U. S. Internal Revenue Code of 1986, as
amended; and
(v) Schroff Inc. is not and has not been obligated
to contribute to any "multiemployer plan" as defined in
Section 4001 (a) (3) of ERISA.
6.20 Accounts Receivable. Handling of accounts
receivable with customers has been undertaken in a
normal and customary manner consistent with the prior
practice of the Business.
6.21 Books and Records.
(a) The respective minute books of the
Subsidiaries, as previously made available to Buyers,
contain full and complete minutes of all annual,
special and other shareholders' meetings (or written
consents in lieu thereof) of each of them; the
signature on such minutes and written consents are the
true signatures of the persons purporting to have
signed them.
(b) The Seller has maintained its records in strict
compliance with Applicable Law. The Schroff Group does
not have any of its respective records, systems,
controls, data or information recorded, stored,
maintained, operated or otherwise dependent upon or
held by any means (including any electronic, mechanical
or photographic process, whether computerized or not)
which (including all means of access thereto and
therefrom) are not under the direct control of the
Schroff Group.
6.22 Transactions with Related Parties. Except as
set forth on Exhibit 6.22 hereto, the Schroff Group is
not a party to any transaction or proposed transaction,
including, without limitation, the leasing of the
property, the purchase or sale of raw materials or
finished goods, or the furnishing of services, with
Krupp or any person who is related to or affiliated
with Krupp involving payments or accruals of more than
DM 100.000 in fiscal years 1992 or 1993.
6.23 Bank Accounts. Exhibit 6.23 hereto sets forth
a true and complete list of all banks in which any
member of the Schroff Group has an account, safe
deposit box or line of credit and the names and titles
of all persons authorized to draw thereon or to have
access thereto.
6.24 No Undisclosed Liabilities. Neither the Schroff
Group nor any of its properties is subject to any known
liability or obligation (absolute, accrued, contingent
or otherwise), including without limitation any
Contract, except:
(i) as disclosed in the Exhibits hereto or
reflected in the Group Balance Sheet or in the notes to
Seller's Balance Sheet; and
(ii) liabilities or obligations arising or incurred
in the ordinary course of operation of the Business
since December 31, 1993 and then only as consistent
with the past practice of the Schroff Group.
6.25 Product Warranty. Warranty claims have been
handled in a normal and customary manner consistent
with the prior practice of the Business.
6.26 Major Customers and Suppliers.
a) Exhibit 6.26 contains a list of the twenty (20)
largest customers of the Schroff Group, showing the
total DM amount of net sales to each such customer
during the period from January 1 through October 31,
1993. Seller has no reason to believe that any of the
customers listed on Exhibit 6.26 will not continue to
be a customer of the Schroff Group after the Closing at
substantially the same level of purchases as
heretofore.
b) Exhibit 6.26 contains a list of the ten (10)
largest suppliers to the Schroff Group, showing the
total DM amount of purchases from each such supplier
during the period from January 1 through October 31,
1993. Seller has no reason to believe that any of the
suppliers listed on Exhibit 6.26 will not continue to
be a supplier to the Schroff Group after the Closing
and will not continue to supply substantially the same
quantity and quality of goods at competitive prices.
6.27 Prospective Changes. Except as described in
Exhibit 6.27 hereto, there are no impending changes in
the Business or in the relationships of the Schroff
Group with its customers or suppliers, or in any
governmental actions or relations affecting the
Business, which if one or more should occur, could have
a material adverse effect on the Business.
6.28 All Assets. The Assets constitute all of the
assets necessary to conduct the Business as it has been
conducted by Seller since its acquisition of the assets
of the former Schroff GmbH.
6.29 Material Omissions. No representation or
warranty by Seller in this Agreement nor any statement,
certificate or exhibit furnished to or to be furnished
by Seller pursuant to this Agreement or any document or
certificate delivered to Buyers pursuant to the
Agreement or in connection with the transactions
contemplated herein contains or will contain any untrue
statement of material fact or omits or will omit a
material fact necessary to make the statements
contained therein not misleading.
7. Buyers' Representations. Buyers represent and
warrant to the Seller as follows and acknowledge that
the same shall be true as of the date hereof and of the
Closing Date and shall survive the Closing of this
transaction in accordance with Section 24 of this
Agreement:
7.1 Organization of Pentair Deutschland. Pentair
Deutschland is a limited liability company in formation
(notarial deed of December 15, 1993 no. 190 of the
notary Dieter Heitbaum, attached hereto as Exhibit 7.1)
organized and validly existing under the laws of the
Federal Republic of Germany and has full power and
authority (corporate and other) to carry on its
business as it is now being conducted and to own the
properties and assets it now owns. Pentair Deutschland
has filed for registration with the competent
Commercial Register in Pforzheim. Exhibit 7.1 hereto
contains a complete and correct copy of its Articles of
Association as presently in effect and the application
to the Commercial Register for registration of Pentair
Deutschland, or in the case that Pentair Deutschland
has been entered in the Commercial Register, a copy of
the certified extract of the entry of Pentair
Deutschland therein, as the case may be.
7.2 Organization of EuroPentair. EuroPentair is a
limited liability company in formation (notarial deed
of December 14, 1993, no. 189 of the notary Dieter
Heitbaum, attached hereto as Exhibit 7.2) organized and
validly existing under the laws of the Federal Republic
of Germany and has full power and authority (corporate
and other) to carry on its business as it is now being
conducted and to own the properties and assets it now
owns. EuroPentair has filed for registration with the
competent Commercial Register in Pforzheim. Exhibit
7.2 hereto contains a complete and correct copy of its
Articles of Association as presently in effect and the
application to the Commercial Register for registration
of EuroPentair, or in the case that EuroPentair has
been entered in the Commercial Register, a copy of the
certified extract of the entry of EuroPentair therein,
as the case may be.
7.3 Organization of F C Holdings. F C Holdings is
duly and validly organized and existing under the laws
of the State of Delaware and has full power and
authority (corporate and other) to carry on its
business as it is now being conducted and to own the
properties and assets it now owns. Exhibit 7.3 hereto
contains a complete and correct copy of F C Holdings'
Certificate of Incorporation and By-Laws as presently
in effect.
7.4 Valid and Enforceable Agreement. This
Agreement constitutes a valid and binding agreement of
each of the Buyers enforceable in accordance with its
terms, except insofar as enforceability may be limited
by bankruptcy, insolvency, reorganization or similar
laws affecting the rights of creditors generally under
any Applicable Law. Neither the execution and delivery
of this Agreement nor the consummation of the
transactions contemplated hereby violates or conflicts
with, results in a breach of, or constitutes a default
under (i) any law, regulation, judgment or order,
decree award or ruling to which the Buyers are subject,
(ii) the Articles of Association or Certificate of
Incorporation, as the case may be, of Buyers or (iii)
subject to obtaining necessary consents, under material
guaranties, contracts, agreements or leases or other
restrictions of any kind or character, to which Buyers
are parties, by which Buyers are bound or to which any
of their property is subject.
8. Actions Following Execution. The parties
hereto agree that from the date hereof to the Closing
Date or, if no Closing shall take place, to the date of
termination of this Agreement:
8.1 Operations. Without the consent of the Buyers'
representatives:
(i) Seller will conduct, and shall cause its
Subsidiaries to conduct, the Business in the ordinary
course and in accordance with the Schroff Group's
operational and capital plans as revised from time to
time.
(ii) Seller will not enter into any transaction or
perform any act which could constitute a breach of the
representations, warranties or covenants contained
herein, or which would be outside the ordinary course
of business or inconsistent with prior practice of the
Business.
(iii) Seller will pay, and shall cause the
Subsidiaries to pay, creditors of the Business
consistent with its and their prior practice and course
of dealing with such creditors.
(iv) The Schroff Group shall not grant any bonus or
increase in pay to employees other than bonuses or
increases consistent with the past practice of the
Business.
(v) Seller shall use its best efforts to preserve
the business organization of the Schroff Group intact
and to keep available to Pentair Deutschland the
services of Seller's present employees.
The Buyers and their designated representatives will
promptly respond to all notifications by Seller
hereunder and shall not unreasonably withhold their
consent under this Section 8, so long as such actions
do not adversely affect the conduct of the Business as
presently carried on by the Schroff Group, its
profitability, operations, financing or the value of
the Assets.
8.2 Additional Restrictions Following Economic
Transfer Date. Following the Economic Transfer Date,
Seller shall not, except as otherwise contemplated in
this Agreement:
(i) pay any dividend in cash or make any
distribution in cash with respect to its shares,
(ii) redeem any shares,
(iii) other than in the ordinary course of business,
make any loans, borrow any funds (except pursuant to
Section 8.8 below) or guarantee any obligation of any
party,
(iv) pay any management fee or corporate office
charge to any affiliated person, or
(v) materially revise its capital and operational
plans,
without the consent of the Buyer's designated
representatives.
8.3 Maintenance of Assets. Seller shall maintain
the Assets in good operating condition. Seller shall
not remove, retire or sell any of the Assets, without
the consent of Pentair Deutschland's designated
representatives, outside the ordinary course of
business or inconsistent with prior practice of the
Business.
8.4 Access to Records and Facilities. The Schroff
Group will make available to Buyers and their
designated representatives, all of the books and
records relating to the Business and the Assets.
Buyers, their designated representatives and employees,
shall be given full access during regular business
hours to the Schroff Group's physical plants upon 2
days notice in writing to the designated
representatives of the Schroff Group at such locations,
and the Schroff Group and its employees shall cooperate
fully with Buyers in their examination and inspection
of the same.
8.5 Requirements with Respect to Subsidiaries.
Buyers and Seller agree that promptly following
execution of this Agreement, they shall actively
cooperate in making all requests, filings and
applications for all consents, approvals or other
actions necessary to permit on the Closing Date the
transfer to EuroPentair and F C Holdings of all shares
of stock in the Subsidiaries.
8.6 Requirements with Respect to Other Assets.
Pentair Deutschland and Seller agree that promptly
following clearance by the German Cartel Office of the
transactions contemplated herein, they shall actively
cooperate in making all requests, filings and
applications for transfer or assignment of, or consents
to the transfer or assignment of, all Contracts,
Operating Permits, Vehicles and other Assets which may
not be transferred or assigned without the consent,
approval or other action of third parties.
8.7 Krupp Cash Clearing System. On the Economic
Transfer Date, the Schroff Group shall be separated
from participation in the Krupp cash clearing system.
8.8 Interim Financing. From the Economic Transfer
Date to the Closing Date, Krupp shall secure for the
Schroff Group financing for working capital, either
directly or through one or more banking institutions,
on a short-term basis on customary banking terms at
prevailing market interest rates for such financing (or
at a rate of 6.8% per annum, if such financing is
provided directly by Krupp). At Closing, Buyers shall
assume any such third-party financing, and shall secure
the discharge of Krupp from any continuing obligations
with respect to such financing. Buyers and Seller
shall settle all amounts owing with respect to interim
financing provided by Krupp or its affiliates on the
later of the Closing Date or the date ten (10) business
days following the rendering to the other of an
accounting for such amount.
8.9 Subsidiary Dividends. Prior to the Economic
Transfer Date, Seller may cause Schroff S. A. to pay to
Seller a dividend not greater than the equivalent of DM
12.000.000 and may further cause Schroff UK Ltd. to pay
to Seller a dividend not greater than the equivalent of
DM 5.000.000, to the extent that such dividends are
legally available under Applicable Law.
9. Covenants of Seller. In connection with the
transactions contemplated in this Agreement, Seller
agrees to perform the following actions or to enter
into the following agreements:
9.1 Further Documents and Assurances. At any time
and from time to time after the Closing Date, Seller
shall, upon request of Buyers, execute, acknowledge and
deliver all such further and other assurances and
documents, and will take such action consistent with
the terms of this Agreement, as may be reasonably
requested to carry out the transactions contemplated
herein and to permit Buyers to enjoy their rights and
benefits hereunder. If requested by Buyers, Seller
further agrees to prosecute or otherwise enforce in its
own name for the benefit of Pentair Deutschland, any
claim, right or benefit transferred by this Agreement
that may require prosecution or enforcement in Seller's
name.
9.2 No Impairment of Transaction. Seller shall
take no action which would impair or prevent the
consummation of the transactions contemplated by this
Agreement.
10. Covenants of Buyers. In connection with the
transactions contemplated in this Agreement, Buyers
agree to perform the following actions or to enter into
the following agreements:
10.1 Further Documents and Assurances. At any time
and from time to time after the Closing Date, Buyers
shall, upon request of Seller, execute, acknowledge and
deliver all such further and other assurances and
documents, and will take such action consistent with
the terms of this Agreement, as may be reasonably
requested to carry out the transactions contemplated
herein and to permit Seller to enjoy its rights and
benefits hereunder.
10.2 No Impairment of Transaction. Buyers shall
take no action which would impair or prevent the
consummation of the transactions contemplated by this
Agreement. In addition, EuroPentair agrees that it
shall not transfer, pledge or otherwise dispose of any
of the shares of stock of Pentair Deutschland prior to
the Closing.
10.3 Operating Permits. Pentair Deutschland shall
promptly undertake to apply for and to take all other
actions to obtain at or prior to Closing all Operating
Permits required to operate the Straubenhardt Facility
in a normal and customary manner consistent with
Seller's prior practice.
10.4 Maintenance of Records and Access. Buyers
agree to maintain their books and records, including
without limitation relevant tax documents relating to
periods prior to the Economic Transfer Date, for the
statutorily mandated period and to provide access
thereto and to provide reasonable support to Seller and
Krupp upon reasonable prior notice to the extent they
might need access thereto for all normal and customary
purposes.
11. Conditions Precedent to Obligation of Buyers.
The obligations of Buyers hereunder are subject to
fulfillment prior to or at Closing of each of the
following conditions:
11.1 Representations and Covenants. The
representations of Seller herein shall be true and
correct in all respects and Seller shall have performed
all of the obligations to be performed by it prior to
Closing in the time and manner herein stated.
11.2 Certified Copy of Resolutions. Seller shall
deliver to Buyers a certified copy of the resolutions
adopted by Krupp's Supervisory Board authorizing the
execution and delivery of this Agreement and the
consummation of the transactions contemplated herein.
11.3 Injunctions. No injunctions shall have been
issued restricting or prohibiting the transactions
contemplated by this Agreement.
11.4 Opinion of Counsel. Seller shall have
delivered to Buyers the opinion of its counsel, dated
the Closing Date, in form and substance satisfactory to
Buyers and their counsel to the effect that:
(a) Seller is a limited liability company
organized, validly existing and in good standing under
the laws of the Federal Republic of Germany and has
full power and authority (corporate and other) to carry
on its business as it is now being conducted and to own
the properties and assets it now owns. To the extent
Seller does business outside its jurisdiction of
incorporation, it is qualified or licensed to do
business in such jurisdiction;
(b) neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated hereby violates or conflicts with, results
in a breach of, or constitutes a default under (i) any
law, regulation, judgment or order, decree, award or
ruling to which Seller or the Assets are subject, (ii)
the Articles of Association of Seller or (iii) subject
to obtaining necessary consents, under material
guaranties, contracts, agreements or leases or other
restrictions of any kind or character known to counsel,
to which Seller is a party, by which Seller is bound or
to which any of its property is subject;
(c) all requisite corporate action has been taken
by Seller for the due authorization, execution and
delivery and performance of this Agreement by Seller
and this Agreement constitutes a legal and binding
obligation of Seller, enforceable in accordance with
its terms, except insofar as enforceability may be
limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors
generally under any Applicable Law; provided further,
however, no opinion is given that any particular
provision will be enforced by specific performance;
(d) to counsel's knowledge, without investigation,
Seller is not in default under any material contract to
be assumed by Pentair Deutschland hereunder and there
are no legal, administrative, or other governmental
proceedings pending or threatened which materially and
adversely affect the Business or the Assets except as
disclosed in the Exhibits;
(e) each Subsidiary is a corporation organized,
validly existing and in good standing under the laws of
jurisdiction of its incorporation as set forth in
Exhibit 6.5 and has full power and authority (corporate
and other) to carry on the business in which it is
engaged as it is now being conducted and to own the
properties and assets it now owns To the extent any
Subsidiary does business outside its jurisdiction of
incorporation, it is qualified or licensed to do
business in such jurisdiction.
11.5 Environmental Assessments. Buyers shall have
caused to be undertaken by independent consultants on
its behalf and shall have received an environmental
assessment of the locations of all manufacturing or
warehousing sites of the Schroff Group, with findings
thereof acceptable to the Buyers and, if appropriate
based on such assessments, any further environmental
studies, reports or other information necessary to
permit Buyers to adequately investigate any existing
environmental issues. If any action is recommended to
be undertaken by any such assessment with respect to
any potential problem not described in Exhibit 6.17,
appropriate actions shall have been undertaken, or
provision therefor satisfactory to Buyers, at Seller's
cost, shall have been implemented; provided, however,
that Seller shall not be obligated to Buyers hereunder
to perform any such action; rather the failure or
refusal by Seller to undertake any such implementation
shall entitle Buyers to refuse to close the
transactions contemplated herein.
11.6 Real Estate. A preliminary registration
("Auflassungsvormerkung") of the Real Estate shall have
been received in accordance with Exhibit 5.2.
11.7 Transfer of Assets. Buyer shall have received
all Operating Permits necessary for it to operate the
Straubenhardt Facility.
11.8 Certain Approvals. All governmental and other
consents and approvals, if any, necessary to permit the
consummation of the transactions contemplated under the
Agreement shall have been received; provided, however,
Seller agrees to use its best efforts to obtain such
consents and approvals prior to Closing. The waiting
period required by the German Cartel Office or, in the
United States, pursuant to Section 7A of the Clayton
Act and the rules and regulations promulgated
thereunder, or any other relevant antitrust authority,
if applicable, shall have expired or been terminated.
11.9 Guaranty. At the Closing, Krupp shall have
provided to Buyers its Guaranty in the form attached as
Exhibit 11.9 hereto, promising to pay or to cause the
Seller to pay to Buyers all indemnification amounts
which may be owing to Buyers on the Closing Date or
arising thereafter.
11.10 Approval by Board of Directors. The Board of
Directors of Pentair shall have approved Buyers'
execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
12. Conditions Precedent to Obligations of Seller.
The obligations of Seller are subject to fulfillment
prior to or at Closing of each of the following
conditions:
12.1 Representations and Covenants. The
representations of Buyers herein shall be true and
correct in all respects and Buyers shall have performed
all of the obligations to be performed by Buyers prior
to Closing in the time and manner herein stated.
12.2 Certified Copy of Resolutions. Buyers shall
have delivered to Seller a certified copy of
resolutions adopted by Buyers' shareholders or Board of
Directors and the Board of Directors of Pentair
authorizing the execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby.
12.3 Injunctions. No injunctions shall have been
issued restricting or prohibiting the transactions
contemplated by this Agreement.
12.4 Opinion of Counsel. Buyers shall have
delivered to Seller the opinion of their counsel, dated
the Closing Date, in form and substance satisfactory to
Seller and its counsel to the effect that:
(a) Pentair Deutschland is, as the case may be,
either (i) a limited liability company in formation
(notarial deed of December 15, 1993 no. 190 of the
notary Dieter Heitbaum,) which has been filed for
registration with the competent Commercial Register in
Pforzheim, Germany and is organized and validly
existing under the laws of the Federal Republic of
Germany or (ii) has been entered in the competent
Commercial Register Pforzheim, Germany and is a
limited liability company duly organized, validly
existing and in good standing under the laws of the
Federal Republic of Germany and has full power and
authority (corporate and other) to carry on its
business as it is now being conducted and to own the
properties and assets it now owns;
(b) EuroPentair is, as the case may be, either (i)
a limited liability company in formation (notarial deed
of December 14, 1993, no. 189 of the notary Dieter
Heitbaum,) which has been filed for registration with
the competent Commercial Register in Pforzheim, Germany
and is organized and validly existing under the laws of
the Federal Republic of Germany or (ii) has been
entered in the competent Commercial Register Pforzheim,
Germany and is a limited liability company duly
organized, validly existing and in good standing under
the laws of the Federal Republic of Germany and has
full power and authority (corporate and other) to carry
on its business as it is now being conducted and to own
the properties and assets it now owns;
(c) F C Holdings is duly and validly organized and
existing under the laws of the State of Delaware and
has full power and authority (corporate and other) to
carry on its business as it is now being conducted and
to own the properties and assets it now owns. F C
Holdings is in good standing in the states of Delaware
and Minnesota, as evidenced by Certificates of Good
Standing issued thereby as of dates not earlier than
ten days prior to the Closing Date;
(d) neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated hereby violates or conflicts with, results
in a breach of, or constitutes a default under (i) any
law, regulation, judgment or order, decree award or
ruling to which the Buyers are subject, (ii) the
Articles of Association or Certificate of
Incorporation, as the case may be, of Buyers or (iii)
subject to obtaining necessary consents, under material
guaranties, contracts, agreements or leases or other
restrictions of any kind or character known to counsel,
to which Buyers are parties, by which Buyers are bound
or to which any of their property is subject;
(e) all requisite corporate action has been taken
by Buyers for the due authorization, execution and
delivery and performance of this Agreement by Buyers
and this Agreement constitutes legal and binding
obligations of Buyers, enforceable in accordance with
its terms, except insofar as enforceability may be
limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors
generally under Applicable Law; provided further,
however, no opinion is given that any particular
provision will be enforced by specific performance;
(f) to counsel's knowledge, without investigation,
there are no legal, administrative, or other
governmental proceedings pending or threatened which
materially and adversely affect the business or assets
of any of the Buyers.
12.5 Certain Approvals. All governmental and other
consents and approvals, if any, necessary to permit the
consummation of the transactions contemplated under the
Agreement shall have been received; provided, however,
Buyers agree to use its best efforts to obtain such
consents and approvals prior to Closing. The waiting
period required by the German Cartel Office or, in the
United States, pursuant to Section 7A of the Clayton
Act and the rules and regulations promulgated
thereunder, or any other relevant antitrust authority,
if applicable, shall have expired or been terminated.
12.6 Guaranty. At the Closing, Pentair shall have
provided to Seller its Guaranty in the form attached as
Exhibit 12.6 hereto, promising to pay or to cause the
Buyers to pay to Seller all indemnification amounts
which may be owing to Seller on the Closing Date or
arising thereafter.
12.7 Approval by Supervisory Board. The Supervisory
Board of Krupp shall have approved Seller's execution
and delivery of this Agreement and the consummation of
the transactions contemplated hereby.
13. Allocation of Purchase Price. The purchase
price applicable to the purchase of the Assets shall be
allocated among the Assets as reflected on Exhibit 13.
14. Broker. Seller represents and warrants to
Buyers that it has dealt with no broker in connection
with the sale of the Business. Seller will defend,
indemnify and hold Buyers harmless from and against any
claim for commissions and all liability, costs and
expenses in connection therewith, by reason of the
assertion of any agreement, understanding or other
arrangement with Seller with respect to the
transactions contemplated herein.
Buyers represent and warrant to Seller that they have
dealt with no broker in connection with the purchase of
the Business. Buyers will defend, indemnify and hold
Seller harmless from and against any claim for
commission, and all liability, costs and expenses in
connection therewith, by reason of the assertion of any
agreement, understanding or other arrangement with
Buyers with respect to the transactions contemplated
herein.
15. Expenses and Taxes.
15.1 Seller's Expenses. Seller shall pay, out of
the purchase price payable to it under this Agreement
(if paid subsequent to December 31, 1993), all expenses
incurred by, and all taxes imposed upon, it or any
other member of the Schroff Group relating to the
transactions contemplated by this Agreement, including
without limitation, the fees and expenses of their
respective legal, accounting and financial advisors.
15.2 Buyers' Expenses. Buyers shall pay all
expenses incurred by, and all taxes imposed upon, each
of them relating to the transactions contemplated by
this Agreement, including without limitation, the fees
and expenses of their respective legal, accounting and
financial advisors. Pentair Deutschland agrees to pay
the real estate transfer tax relating to the transfer
of title to the Real Estate. Buyers agree to pay the
notarial fees for the notarization of this Agreement.
15.3 Indemnity for Subsidiary Taxes. All taxes, all
liability for taxes and all tax claims, whether income
taxes, trade taxes, value added taxes, sales and use
taxes, property taxes, real estate taxes,
employment-related taxes and charges and withholding
taxes on employee compensation, including without
limitation interest, penalties, surcharges and the like
(collectively, "Taxes") for, or payable with respect
to, any period ending on or before December 31, 1993
(the "Indemnity Period"), for each of the Subsidiaries,
shall be the responsibility of, and shall be borne
solely by, Seller. The Subsidiaries have established
appropriate reserves for such tax liabilities.
15.3.1 The liability for all Taxes of the Subsidiaries
for the Indemnity Period by law remains with each
Subsidiary, who shall also retain the associated
reserves and no special calculation shall be made at
Closing with respect to reserves for Taxes of
Subsidiaries for the purpose of determining the value
of the Net Equity under the provisions of Section 3.2
hereof.
15.3.2 The term "Assessment Period" shall mean, as to
each separate Tax for each separate Subsidiary, the
period from the Closing Date to the date which is the
later of (i) the expiration of the time for assessment
by the competent Governmental Authority or (ii) the
date on which all tax audits, if any, for the Indemnity
Period, or any portion thereof, shall have become final
and subject to no further appeal and the relevant Tax
liability with respect thereto shall have become fixed.
15.3.3 To the extent that the associated tax reserves
reflected on the December 31, 1993 financial statements
of each separate Subsidiary are greater than actual
Taxes payable with respect thereto, as determined in
accordance with this Section 15.3, the amount of such
excess reserves, as an addition to Net Equity of the
Seller, will be promptly paid, with interest thereon
from the Economic Transfer Date to the date of payment
compounded annually at the rate of 6.8% per annum, by
Pentair Deutschland to Seller, once the Assessment
Period, as defined above in Section 15.3.2, has ended.
15.3.4 To the extent that the associated tax reserves
reflected on the December 31, 1993 financial statements
of each Subsidiary are less than actual Taxes payable
with respect thereto, as determined in accordance with
this Section 15.3, the amount of such shortfall or
reserves for Taxes, as an reduction in the purchase
price of the Seller, will be promptly paid, with
interest thereon from the Economic Transfer Date to the
date of payment compounded annually at the rate of 6.8%
per annum, to Pentair Deutschland by Seller, once the
Assessment Period has ended.
15.3.5 If any filing or return for Taxes for any
portion of the Indemnity Period has not been made on or
before the Closing Date, the respective Subsidiaries
shall timely make such filing or return in accordance
with the past practice of the Schroff Group.
15.3.6 EuroPentair and F C Holdings agree that they
shall provide to Seller copies of all returns for Taxes
filed with the respective Governmental Authorities and
prompt notice of all communications regarding Tax
audits, assessments or inquiries to and from such
Governmental Authorities.
15.3.7 Seller or Krupp may, in accordance with Section
18.3 hereof, assume the direction and control of some
or all audits, assessments or inquiries with regard to
Taxes imposed or sought to be imposed upon any
Subsidiary for any portion of the Indemnity Period.
Should Seller or Krupp assume direction and control of
any such audit, assessment or inquiry, EuroPentair and
F C Holdings agree that they shall cause the
appropriate Subsidiary to support Seller or Krupp in
the prosecution of such audits, assessments or
inquiries to the extent reasonably necessary and
mutually agreed. Seller and Krupp hereby agree that
all out-of-pocket expenses of each Subsidiary incurred
in the conduct of such support shall be promptly
reimbursed.
15.3.8 The provisions of Section 18 relating to
indemnification generally shall apply to all audits,
assessments or inquiries regarding Taxes, to the extent
not inconsistent with the express provisions of this
Section 15.3.
16. Reduction in Purchase Price.
16.1 Claim for Reduction. Notwithstanding
(i) the right of the Buyers to refuse to close the
purchase of the Assets in the event of any
misrepresentation as provided by Section 11.1 of this
Agreement,
(ii) that such misrepresentation was made either
knowingly, recklessly, negligently or innocently, and
(iii) that Buyers could have known of such
misrepresentation as a result of Buyers' investigation
of the Schroff Group in connection with the
transactions contemplated herein,
in the event of any misrepresentation contained in
Sections 6.3, 6.4, 6.5, 6.7, 6.8, 6.9, 6.10, 6.16, 6.20
and 6.25 of this Agreement, Buyers shall be entitled to
a reduction of the purchase price for the Assets in an
amount equal to the difference between (A) the purchase
price of the Business, as calculated pursuant to
Section 3.2 hereof and (B) what the purchase price of
the Business would have been, if the Group Balance
Sheet had accurately reflected the economic value of
the misrepresented item, subject to any limitation of
liability contained in this Agreement.
16.2 Notice of Claim. Promptly upon discovery of
any misrepresentation contained in any of the Sections
of this Agreement listed in Section 16.1 above, Buyers
shall give Seller written notice of such claim, subject
to the provisions of Section 24 hereof, along with the
proposed adjustment of the purchase price and a full
statement of the reasons therefor. Within 30 days
following dispatch of such claim, Seller shall either
pay the amount of the claim to Buyers (subject,
however, to the limitation on payment of claims
provided for in Section 19 hereof) or advise Buyers of
Seller's intent to dispute such claim, along with a
full statement of the reasons therefor.
17. Damages for Breach of Agreement.
17.1 Claim for Damages. Notwithstanding
(i) the right of the Buyers to refuse to close the
purchase of the Assets in the event of any
misrepresentation as provided by Section 11.1 of this
Agreement,
(ii) that such misrepresentation was made either
knowingly, recklessly, negligently or innocently, and
(iii) that Buyers could have known of such
misrepresentation as a result of Buyers' investigation
of the Schroff Group in connection with the
transactions contemplated herein,
in the event of any misrepresentation contained in
Sections 6.6, 6.11, 6.12, 6.14, 6.15, 6.17, 6.22, 6.24,
6.27 and 6.28 of this Agreement, Buyer shall be
entitled to recover any and all liabilities, losses,
damages, claims, costs and expenses, including all
legal fees, incurred by Buyers, by reason of, arising
out of or relating in any way to such
misrepresentation, subject to any limitation of
liability contained in this Agreement.
17.2 Notice of Claim. Promptly upon discovery of
any misrepresentation contained in any of the Sections
of this Agreement listed in Section 17.1 above, Buyers
shall give Seller written notice of such claim, along
with the proposed calculation of damages and a full
statement of the reasons therefor. Within 30 days
following dispatch of such claim, subject to the
provisions of Section 24 hereof, Seller shall either
pay the amount of the claim to Buyers (subject,
however, to the limitation on payment of claims
provided for in Section 19 hereof) or advise Buyers of
Seller's intent to dispute such claim, along with a
full statement of the reasons therefor.
18. Indemnification of Parties.
18.1 Indemnification by Seller. Without limiting
any other substantive remedy Buyers may expressly have
hereunder, including without limitation those provided
in Sections 16 and 17 hereof, Seller hereby agrees to
indemnify, defend and hold Buyers harmless from and
against and in respect of any and all liabilities,
losses, damages, claims, costs and expenses, including
reasonable attorneys fees, from the assertion against
Buyers of any liabilities of Seller not assumed by
Buyers hereunder or any claim or demand for payment
therefor.
18.2 Indemnification by Buyers. Without limiting
any other substantive remedy Seller may expressly have
hereunder, including without limitation those provided
in Sections 16 and 17 hereof, Buyers hereby agree to
indemnify, defend, and hold Seller harmless from and
against in respect of all and any liabilities, losses,
damages, claims, costs and expenses, including
reasonable attorneys fees, from the failure of Buyers
to pay, discharge, or perform any liability assumed by
Buyers hereunder.
18.3 Procedure for Claiming Indemnification.
(a) The party seeking indemnification (the
"Indemnitee") shall give the party from whom
indemnification is sought (the "Indemnitor") notice of
any claim or the commencement of action or proceeding
promptly after the Indemnitee receives notice thereof;
provided, however, that the failure of the Indemnitee
to give notice shall not relieve the Indemnitor of its
obligations hereunder, except to the extent the
Indemnitor is actually prejudiced or harmed by such
failure to give notice. The Indemnitor shall be
permitted to participate in or to assume the defense of
any such claim or litigation resulting from such claim,
with counsel reasonably satisfactory to the Indemnitee.
Indemnitor must provide Indemnitee written notice of
such assumption of defense within thirty (30) days of
receipt of Indemnitor of notice of the proceeding.
(b) If the Indemnitor assumes the defense
of any such claim or litigation resulting therefrom,
the Indemnitor shall take all steps necessary in the
defense or settlement of such claim or litigation
resulting therefrom and hold the Indemnitee harmless
from and against any and all losses, damages and
liabilities caused by or arising out of any settlement
approved by the Indemnitor or any judgment in
connection with such claim of litigation resulting
therefrom. The Indemnitee may participate, at its
expense, in the defense of any such claim or
litigation, provided that the Indemnitor shall direct
and control the defense of such claim or litigation.
Except with the written consent of the Indemnitee, the
Indemnitor shall not, in the defense of such claim or
any litigation resulting therefrom, consent to entry of
any judgment or enter into any settlement which does
not include as an unconditional term thereof, the
giving by the claimant or the plaintiff to the
Indemnitee of a release from a liability with respect
to the claim or litigation.
(c) If the Indemnitor shall not assume the
defense of any such claim or litigation resulting
therefrom, the Indemnitee may defend against such claim
or litigation in such manner as it may deem appropriate
and, unless the Indemnitor shall deposit with the
Indemnitee a sum equivalent to the total amount
demanded in such claim or litigation, or shall deliver
to Indemnitee a surety bond in form and substance
reasonably satisfactory to Indemnitee, Indemnitee may
settle such claim or litigation on such terms as it may
reasonably deem appropriate, and the Indemnitor shall
promptly reimburse Indemnitee for the amount of all
expenses, legal or otherwise, reasonably incurred by
the Indemnitee in connection with the defense against
or settlement of such claims or litigation. If no
settlement of such claim or litigation is made, the
Indemnitor shall promptly reimburse the Indemnitee for
the amount of any final judgment rendered with respect
to such claim or in such litigation and for all
reasonable expenses, legal or otherwise, incurred by
the Indemnitee in the defense against such claim or
litigation, but only to the extent that such amounts
are actually paid.
19. Limitation on Monetary Remedy of Buyer. The
first DM 1.000.000 (the "basket amount") of (i)
reduction in the purchase price pursuant to Section 16
hereof, and (ii) damages payable to Buyers pursuant to
Section 17 hereof, in the aggregate, shall be borne by
Buyers and shall not be refundable or payable by
Seller; provided, however, that if all amounts of
monetary relief in favour of Buyers pursuant to
Sections 16 and 17 exceed the basket amount, then all
such sums in excess of the basket amount shall be paid
by Seller to Buyers.
20. Seller's Confidential Information. Buyers
acknowledge that pursuant to their right to inspect
Seller's records and facilities, Buyers may become
privy to Confidential Information. Buyers agree that
in the event the transaction contemplated by this
Agreement is not completed, all Confidential
Information disclosed to Buyers shall remain
confidential, shall not be used for the benefit of
Buyers or disclosed to outside sources and all recorded
evidence thereof shall be delivered to Seller together
with certificate to the effect that no copies thereof
remain in possession of Buyers, or Buyers' agents,
affiliates, counsel or auditors. All parties hereto
agree that they shall be bound by the terms of the
Confidentiality Agreement between Pentair and Krupp
dated October 10, 1993 as if they were signatories
thereto.
21. Termination of Agreement. This Agreement may
be terminated upon ten (10) business days prior written
notice at any time prior to Closing without liability
of either party to the other:
(i) by mutual consent of the Seller and Buyers;
(ii) by Buyers, if Closing has not occurred on or
before June 30, 1994 as a result of the nonfulfillment
of any of the conditions to Buyers' obligation to
perform contained in Section 11 of this Agreement;
(iii) by Seller, if Closing has not occurred on or
before June 30, 1994 as a result of the nonfulfillment
of any of the conditions to Seller's obligation to
perform contained in Section 12 of this Agreement.
This Agreement may also be terminated by any party upon
ten (10) business days prior written notice if a
non-terminating party has breached any covenant to be
performed by it pursuant to Section 3, 4, 8, 9 or 10
hereof. In such event, the terminating party shall
have the right to receive, as damages for such breach,
reimbursement of all expenses incurred by it in
connection with the transactions contemplated in this
Agreement. Neither party shall be liable for, and no
party may recover, consequential damages as a result of
the termination of this Agreement. Termination of this
Agreement shall not affect in any way the continuing
obligations of the parties hereto pursuant to Section
14 hereof relating to brokers and Section 20 hereof
relating to the treatment of Confidential Information.
22. Consequential Damages. Seller is not
responsible for and Buyers may not recover from Seller
any amount of consequential damages, e. g., lost
profits or the like. Notwithstanding this exclusion of
consequential damages sustained by Buyers, to the
extent Buyers sustain any loss or incur any expense
compensable under this Agreement which contains or
includes any measure of consequential damages sustained
by a third party, for which Buyers are held
responsible, then such losses or expenses shall be
recoverable from Seller.
23. Announcements. Buyer and Seller shall
cooperate in the preparation of any announcements
regarding the transaction contemplated by this
Agreement. Except as required by Applicable Law (in
which case such announcing party shall prior thereto
advise the other parties), no party shall issue any
announcement regarding the transactions contemplated
hereby without the prior consent of the others, which
consents shall not be unreasonably withheld.
24. Survival of Representations. Notwithstanding
any statutory limitations to the contrary, all
representations herein shall survive the Closing hereof
for a period of two (2) years, except for the
representations set forth in Section 6.17 hereof, which
shall survive the Closing for a period of four (4)
years. The parties hereto each agree that Section 377
of the HGB shall not apply to this Agreement.
25. Amendments. This Agreement may only be amended
or modified by written instrument executed by the
parties hereto.
26. Notices. Any notice or communication required
or permitted to be given hereunder shall be in writing
and shall be deemed given, if personally delivered,
upon delivery, or if mailed, upon deposit in German or
United States mail, first class airmail, postage
prepaid, certified mail and addressed as follows:
(a) If to Seller: Vermogensverwaltung Straubenhardt
GmbH
Altendorferstrasse 103
45143 Essen, Germany
Fax: (0201) 1882328
Attn: Mr. Reineke
with a copy to: Fried. Krupp AG Hoesch-Krupp
Altendorferstrasse 103
45143 Essen, Germany
Fax: (0201) 1882233
Attn: Mr. Ringleb
(b) If to Buyers: Pentair Deutschland GmbH or
EuroPentair GmbH
P. O. Box 3
D-75332 Straubenhardt, Germany
Fax: (07082) 794670
Attn: Mr. Gengenbach
F C Holdings, Inc.
Waters Edge Plaza
1500 County Road B2 West
St. Paul, MN 55113-3105
Fax: (612) 639-5251
Attn: Gerald C. Kitch
with copies to:
Pentair, Inc. Henson & Efron, P.A.
Waters Edge Plaza 1200 Title Insurance
Building
1500 County Road B2 West 400 Second Avenue
South
St. Paul, MN 55113-3105 Minneapolis, MN 55401
Fax: (612) 639-5203 Fax: (612) 339-6364
Attn: Richard W. Ingman Attn: Louis L.
Ainsworth, Esq.
27. Waiver. No waiver by either party hereto of
any condition or of any breach of any term, covenant,
representation or warranty contained in this Agreement
shall be deemed or construed as a further or continuing
waiver of such condition or breach or waiver of any
other or subsequent condition or the breach of any
other term, covenant, representation or warranty
contained in this Agreement.
28. Counterparts. Any number of counterparts of
this Agreement may be executed and each such executed
counterpart shall be deemed to be an original.
29. Binding Agreement. This Agreement shall be
binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns,
subject to the covenant contained in Section 10.2
hereof.
30. Entire Agreement. This Agreement, the
agreements made a part hereof, the Exhibits hereto and
the instruments delivered pursuant hereto constitute
the entire agreement between the parties hereto and
supersede all prior written agreements and
understandings, oral or written, between the parties
relating to the subject matter hereof. The
Confidentiality Agreement between Pentair and Krupp
dated October 10, 1993 shall continue in full force and
effect following execution hereof.
31. English Language. The English version of this
Agreement, regardless of whether a translation into any
other language is or will be made, will be the only
authentic version. All Exhibits to be delivered
hereunder may be in their original language without
translation.
32. Governing Law. This Agreement shall be
governed by and construed in accordance with the
substantive laws of the Federal Republic of Germany.
33. Arbitration of Disputes.
(a) Any dispute arising out of or in connection
with this Agreement, including any question regarding
its existence, validity, interpretation or termination,
that can not be resolved amicably by the parties shall
be referred to and finally resolved by arbitration
under the then applicable rules of the International
Chamber of Commerce, as hereinafter modified or
supplemented.
(b) The arbitration proceeding shall be presided
over by a panel of three arbitrators, one arbitrator
each appointed by Buyers as a group and Seller and a
chairman appointed by the two party-appointed
arbitrators. Any communication between a party and any
arbitrator shall be directed to the arbitration panel.
The parties expressly agree that the arbitrators may
call and question any witness, including any expert
witness and may require a party to produce any relevant
documents or evidence prior to or at any hearing. The
parties expressly agree that the arbitrators will be
empowered to grant injunctive relief in the form of
interim orders pending the outcome of the arbitration
and in the final arbitral award.
(c) The location of the arbitration shall be
London, England, and the language of the arbitration
shall be English.
(d) The arbitral award will be the exclusive remedy
for all claims, counterclaims, issues or accountings
presented or pled to the arbitrators. The award will
be granted and paid in Deutschmarks and may, in the
discretion of the arbitrators, include interest from
the date of breach or other violation of the Agreement
until the award is fully paid. Judgment upon the
arbitral award may be entered in any court that has
jurisdiction thereover. Any additional costs, fees or
expenses incurred in enforcing the arbitral award will
be charged against the party that resists its
enforcement.
34. Severability. Should any provision of this
Agreement be or become invalid in whole or in part or
be incapable of performance for whatever reason or
should a relevant provision have been omitted, then the
validity of the remaining provisions of this Agreement
shall not be affected thereby. In such an event, the
parties hereby undertake to substitute for any such
invalid provision or for any provision incapable of
performance or for any omitted provision, a provision
which corresponds to the spirit and purpose of such
invalid, unperformable or omitted provision as far as
permitted under Applicable Law with a view to the
economic purpose of this Agreement.
AGREEMENT
Date: December 22, 1993
Parties: Pentair, Inc., a Minnesota corporation
("Pentair")
Fried. Krupp AG Hoesch-Krupp, a German
stock corporation ("Krupp")
Re: Asset Purchase Agreement between Pentair
Deutschland GmbH, EuroPentair GmbH and F C
Holdings, a Delaware corporation ("Buyers")
and Schroff GmbH ("Seller") dated of even
date herewith (the "Purchase Agreement")
Recitals:
A. Pentair is, directly or indirectly, the
sole shareholder of the Buyers.
B. Krupp is, directly or indirectly, the
sole shareholder of the Seller.
C. Buyers and Seller have entered into the
Purchase Agreement simultaneously with the execution of
this Agreement, whereby all of the assets of Seller will
be sold at Closing (as defined therein) to Buyers on the
terms and conditions provided for therein (the "Sale").
D. Pentair and Krupp are entering into this
Agreement to confirm their mutual understandings with
respect to each other's obligations in connection with
the transactions contemplated in the Purchase Agreement.
Agreement:
1. Guaranties. The Purchase Agreement provides in
Sections 11.9 and 12.6 respectively that, as conditions
precedent to the obligations of the Buyers and the Seller
to consummate the Sale, each of Krupp and Pentair shall
provide their guaranties of the obligations of their
respective subsidiaries contained in the Purchase
Agreement.
1.1 Krupp Guaranty. At the Closing, Krupp shall
provide to Buyers its Guaranty in the form attached to
the Purchase Agreement as Exhibit 11.9.
1.2 Pentair Guaranty. At the Closing, Pentair shall
provide to Seller its Guaranty in the form attached to
the Purchase Agreement as Exhibit 12.6.
2. Noncompetition Agreement. The Purchase Agreement
provides in Section 2B that Seller is entering into a
Noncompetition Agreement with Buyers on the date hereof
in the form of Exhibit 2 to this Agreement.
2.1 Krupp Noncompetition Agreement. Krupp hereby
agrees that, upon Closing of the Sale, by its execution
of this Agreement and without further action or execution
of any further instrument or agreement, it shall accede
to and be bound by the terms of the Noncompetition
Agreement executed by Seller as if such agreement had
been fully executed by Krupp. All of the terms and
conditions of the Noncompetition Agreement shall be
incorporated herein fully by this reference and Pentair
and all or any of the Buyers shall be entitled to enforce
the obligations of Krupp with respect to the
Noncompetition Agreement in the same manner as set forth
therein with respect to Seller. Nothing contained in
this Agreement shall preclude the members of the Krupp
Konzern from the carrying out and developing their
business as existing on the Closing Date.
2.2 Pentair Indemnification. In consideration of
Krupp's agreement to accede to the terms of the
Noncompetition Agreement, Pentair agrees that,
notwithstanding any partial or total invalidity or
unenforceability of the provisions of the Noncompetition
Agreement or the terms of Section 2.1 hereof, it shall
not take, and shall not permit Buyers or any other
person affiliated with Pentair to take, any action to
seek, claim, sue or use any legal process to recover or
have returned any portion of the purchase price payable
under the Purchase Agreement allocated to the value of
the Noncompetition Agreement in Exhibit 13 thereto. In
addition, Pentair agrees to indemnify Krupp from and
against any and all such claims or proceedings for return
or recovery of any portion of such purchase price. The
provisions of Section 18 of the Purchase Agreement
regarding indemnification shall be incorporated herein
fully by this reference and Krupp shall be entitled to
enforce the obligations of Pentair contained in this
Section 2.2 in the same manner as set forth in such
provision.
3. No Solicitation of Other Offers. Krupp agrees
that it will not, and will not cause or permit Seller nor
any of Krupp's or Seller's representatives or affiliates
to, enter into any negotiations with or solicit any
offer, inquiry or proposal from any other person with
respect to the sale, merger or other acquisition of
Seller or any or all of its assets or of the Business
(as defined in the Purchase Agreement) unless and until
the Purchase Agreement is terminated in accordance with
the provisions of Section 21 thereof.
4. Covenants of Krupp and Pentair.
4.1 Actions Following Execution. Krupp agrees that
it shall take all actions necessary to perform directly
or cause the performance (by Seller or by any other
party) of the provisions of Sections 8.7 and 8.8 of the
Purchase Agreement.
4.2. Change in Name of Seller. In the notarial deed
no. 1714/93 of the notary Ursel Hubmann Deinert in Essen,
Krupp has reached a shareholders' resolution to change
Sellers' Articles of Association as to the firm name from
"Schroff GmbH" to "Vermogensverwaltung Straubenhardt
GmbH". Seller has signed an application to the
Commercial Register for registration of the name change
and the notary has certified such signature. Copies of
both documents are attached hereto as Exhibit 4.2. The
notary Ursel Hubmann Deinert shall be obligated to file
the original notarial deed on the name change together
with the original application with the Commercial
Register in Pforzheim within five days following closing
in order that Buyer may adopt as its firm name "Schroff
GmbH" and as its registered address, the address of the
Straubenhardt Facility. Krupp agrees that it shall not
use or permit the use of the name "Schroff" in any form
in Seller's new firm name or as the name or part of the
name of any other company affiliated with Krupp in
Germany.
4.3 Assurance of Performance. So long as any
obligations of Seller under the Purchase Agreement, or in
any document or instrument which is an Exhibit thereto or
entered into in furtherance or consummation of the
transactions contemplated therein, remain in effect
(other than payment of liabilities not assumed or other
monetary obligations guaranteed by Krupp under the
Guaranty to be executed at Closing pursuant to Section
1.1 hereof), Krupp agrees not to liquidate Schroff or
otherwise take any action which would prevent or
materially impair the ability of Schroff to perform such
obligations, unless or until Krupp shall notify Pentair
of any such action and Krupp shall have entered into an
arrangement or agreement satisfactory to Pentair in its
reasonable business judgment by which Krupp will have
assumed such obligations or will otherwise have made
adequate provision therefor.
4.4 Assurance of Performance. So long as any
obligations of Buyers under the Purchase Agreement, or in
any document or instrument which is an Exhibit thereto or
entered into in furtherance or consummation of the
transactions contemplated therein, remain in effect
(other than payment of liabilities assumed or other
monetary obligations guaranteed by Pentair under the
Guaranty to be executed at Closing pursuant to Section
1.2 hereof), Pentair agrees not to take any action which
would prevent or materially impair the ability of Buyers
to perform such obligations, unless or until Pentair
shall notify Krupp of any such action and Pentair shall
have entered into an arrangement or agreement
satisfactory to Krupp in its reasonable business judgment
by which Pentair will have assumed such obligations or
will otherwise have made adequate provision therefor.
Pentair agrees not to sell or otherwise transfer the
shares of EuroPentair prior to the Closing Date.
5. Premerger Notification Filings. Krupp and
Pentair, as ultimate parent entities of Seller and Buyer,
hereby agree to promptly prepare and file a complete and
accurate Premerger Notification Form with the Department
of Justice and the Federal Trade Commission under the
Antitrust Improvements Act of 1976 and with the German
Federal Cartel Office pursuant to applicable regulations.
6. Termination of Agreement. This Agreement
shall be automatically terminated upon termination of the
Purchase Agreement pursuant to the terms of Section 21 of
the Purchase Agreement. Termination of this Agreement
shall not affect in any way the continuing obligations of
Pentair pursuant to the Confidentiality Agreement between
Pentair and Krupp dated October 10, 1993.
7. Amendments. This Agreement may only be amended
or modified by written instrument executed by the parties
hereto.
8. Notices. Any notice or communication required or
permitted to be given hereunder shall be in writing and
shall be deemed given, if personally delivered, upon
delivery, or if mailed, upon deposit in German or United
States mail, first class airmail, postage prepaid,
certified mail and addressed as follows:
(a) If to Krupp: Fried. Krupp AG Hoesch-Krupp
Altendorferstrasse 103
45143 Essen, Germany
Fax: (0201) 1882233
Attn: Mr. Ringleb
(b) If to Pentair:
Pentair, Inc. Henson & Efron, P.A.
Waters Edge Plaza 1200 Title Insurance
1500 County Road B2 West Building
St. Paul, MN 55113-3105 400 Second Avenue South
Fax: (612) 639-5203 Minneapolis, MN 55401
Attn: Richard W. Ingman Fax: (612) 339-6364
Attn: Louis L.
Ainsworth, Esq.
9. Waiver. No waiver by either party hereto of any
condition or of any breach of any term, covenant,
representation or warranty contained in this Agreement
shall be deemed or construed as a further or continuing
waiver of such condition or breach or waiver of any other
or subsequent condition or the breach of any other term,
covenant, representation or warranty contained in this
Agreement.
10. Counterparts. Any number of counterparts of this
Agreement may be executed and each such executed
counterpart shall be deemed to be an original.
11. Binding Agreement. This Agreement shall be
binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
12. Entire Agreement. This Agreement, the agreements
made a part hereof, the Exhibits hereto and the
instruments delivered pursuant hereto constitute the
entire agreement between the parties hereto and supersede
all prior written agreements and understandings, oral or
written, between the parties relating to the subject
matter hereof. The Confidentiality Agreement between
Pentair and Krupp dated October 10, 1993 shall continue
in full force and effect following execution hereof.
13. English Language. The English version of this
Agreement, regardless of whether a translation into any
other language is or will be made, will be the only
authentic version.
14. Governing Law. This Agreement shall be governed
by and construed in accordance with the substantive laws
of the Federal Republic of Germany.
15. Arbitration of Disputes.
(a) Any dispute arising out of or in connection with
this Agreement, including any question regarding its
existence, validity, interpretation or termination, that
can not be resolved amicably by the parties shall be
referred to and finally resolved by arbitration under the
then applicable rules of the International Chamber of
Commerce, as hereinafter modified or supplemented.
(b) The arbitration proceeding shall be presided over
by a panel of three arbitrators, one arbitrator each
appointed by Buyers as a group and Seller and a chairman
appointed by the two party-appointed arbitrators. Any
communication between a party and any arbitrator shall be
directed to the arbitration panel. The parties expressly
agree that the arbitrators may call and question any
witness, including any expert witness and may require a
party to produce any relevant documents or evidence prior
to or at any hearing. The parties expressly agree that
the arbitrators will be empowered to grant injunctive
relief in the form of interim orders pending the outcome
of the arbitration and in the final arbitral award.
(c) The location of the arbitration shall be London,
England, and the language of the arbitration shall be
English.
(d) The arbitral award will be the exclusive remedy
for all claims, counterclaims, issues or accountings
presented or pled to the arbitrators. The award will be
granted and paid in Deutschmarks and may, in the
discretion of the arbitrators, include interest from the
date of breach or other violation of the Agreement until
the award is fully paid. Judgment upon the arbitral
award may be entered in any court that has jurisdiction
thereover. Any additional costs, fees or expenses
incurred in enforcing the arbitral award will be charged
against the party that resists its enforcement.
16. Severability. Should any provision of this
Agreement be or become invalid in whole or in part or be
incapable of performance for whatever reason or should a
relevant provision have been omitted, then the validity
of the remaining provisions of this Agreement shall not
be affected thereby. In such an event, the parties
hereby undertake to substitute for any such invalid
provision or for any provision incapable of performance
or for any omitted provision, a provision which
corresponds to the spirit and purpose of such invalid,
unperformable or omitted provision as far as permitted
under Applicable Law with a view to the economic purpose
of this Agreement.
Noncompetition Agreement
Date: December 22, 1993
Parties: 1. Pentair Deutschland GmbH iG, a
German limited liability company in formation under the
laws of the Federal Republic of Germany, which has its
offices at Straubenhardt, Germany and has filed for
registration in the Handelsregister of the Amtsgericht
Pforzheim, and
2. EuroPentair GmbH iG, a German limited liability
company in formation under the laws of the Federal
Republic of Germany, which has its offices at
Straubenhardt, Germany and has filed for registration in
the Handelsregister of the Amtsgericht Pforzheim,and
3. F C Holdings, Inc., a Delaware business
corporation, which has its principal place of business at
Waters Edge Plaza, 1500 County Road B2 West, St. Paul, MN
55113-3105
- - collectively hereinafter referred to as "Buyers" -
4. Schroff GmbH, a German limited liability company
duly organized and existing under the laws of the Federal
Republic of Germany, which has its registered offices at
Straubenhardt, Germany and is registered in the
Handelsregister of the Amtsgericht Pforzheim under file
no. HRB 2807,
- - hereinafter referred to as "Seller" -
Recitals: A. Seller and Buyers entered into an
Asset Purchase Agreement on December 22, 1993 (the "Asset
Agreement"), whereby Seller sold to Buyers substantially
all of its assets and all of its good will, which have
been used by Seller in the research, development,
engineering, fabrication, sale and marketing of
electrical and electronic enclosures, microprocessor
packaging systems and related products by Seller and the
other members of the Schroff Group as presently or in the
past conducted ( the "Business").
B. Buyers have acquired all of the goodwill of the
Seller gained through its exploitation of the Business
throughout the world.
C. A form copy of this Noncompetition Agreement is
contemplated by Section 2B of the Asset Agreement and is
entered into as an integral part of the transaction by
which the assets of the Business were sold to Buyers.
D. The restrictions contained herein are necessary
to protect the legitimate continuing interests of Buyers
in acquiring the Business through the purchase of the
assets of the Seller and the assumption of the
liabilities assumed pursuant to the Asset Agreement.
Agreement:
1. Noncompetition Agreement. For a period of five
(5) years following the Closing Date (as defined in the
Asset Agreement), neither Seller nor any party affiliated
by ownership or control with Seller, will directly or
indirectly engage in the manufacture for resale or
marketing of individual products competitive with those
manufactured or marketed by the Schroff Group within the
three (3) years preceding the date hereof in the
Territory, as defined in Section 2.
2. Geographic Scope. The Territory, which consists
of those countries in which Seller manufactured or sold
products of the Business within the last three years, is
defined as the European Community, Sweden, Norway,
Finland, Austria, Switzerland, United States of America,
Canada, Mexico, Israel, South Africa, Australia, New
Zealand, Japan, Taiwan, Singapore, the People's Republic
of China and South Korea.
3. Value of Noncompetition Agreement. In connection
with the sale of the Business by Seller pursuant to the
Asset Agreement, the parties have agreed that the value
to Buyers of this Agreement, and therefore the amount of
the purchase price allocated to this Agreement in Exhibit
13 to the Asset Agreement, is DM 20.000.000.
4. Remedies.
(a) Each of the Buyers affected by competition from
Seller in contravention of this Agreement shall be
entitled to injunctive or other relief restraining the
continued violation or breach and to such further relief
as may be ordered by any arbitral judgment or court of
competent jurisdiction after considering the intent of
this Noncompetition Agreement.
(b) In addition, each of the Buyers so affected shall
have the right to seek compensation for actual damages,
if any, suffered by it or them or any of the
subsidiaries of any of them or any affiliate of any of
the foregoing as a result of any such violation. No
claim by Buyers to recover damages shall affect in any
way the right of Buyers or any of them to seek injunctive
relief restraining continued violation of the provisions
of this Noncompetition Agreement.
5. Amendments. This Agreement may only be amended
or modified by written instrument executed by the parties
hereto.
6. Notices. Any notice or communication required or
permitted to be given hereunder shall be in writing and
shall be deemed given, if personally delivered, upon
delivery, or if mailed, upon deposit in German or United
States mail, first class airmail, postage prepaid,
certified mail and addressed as follows:
If to Seller: with a copy to:
Vermogensverwaltung
Straubenhardt GmbH Fried. Krupp AG
Altendorferstrasse 103 Hoesch-Krupp
45143 Essen, Germany Altendorferstrasse 103
Fax: (0201) 1882328 45143 Essen, Germany
Attn: Mr. Reineke Fax: (0201) 1882233
Attn: Mr. Ringleb
If to Buyers:
Pentair Deutschland GmbH or F C Holdings, Inc.
EuroPentair GmbH Waters Edge Plaza
P. O. Box 3 1500 County Road
D-75332 Straubenhardt, Germany B2 West
Fax: (07082) 794670 St. Paul, MN 55113-3105
Attn: Mr. Gengenbach Fax: (612) 639-5251
Attn: Gerald C. Kitch
with copies to:
Pentair, Inc. Henson & Efron, P.A.
Waters Edge Plaza 1200 Title Insurance
1500 County Road B2 West Building
St. Paul, MN 55113-3105 400 Second Avenue South
Fax: (612) 639-5203 Minneapolis, MN 55401
Attn: Richard W. Ingman Fax: (612) 339-6364
Attn: Louis L.
Ainsworth, Esq.
7. Waiver. No waiver by either party hereto of any
condition or of any breach of any term, covenant,
representation or warranty contained in this Agreement
shall be deemed or construed as a further or continuing
waiver of such condition or breach or waiver of any other
or subsequent condition or the breach of any other term,
covenant, representation or warranty contained in this
Agreement.
8. Counterparts. Any number of counterparts of this
Agreement may be executed and each such executed
counterpart shall be deemed to be an original.
9. Binding Agreement. This Agreement shall be
binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
10. Entire Agreement. This Agreement, the agreements
made a part hereof, the Exhibits hereto and the
instruments delivered pursuant hereto constitute the
entire agreement between the parties hereto and supersede
all prior written agreements and understandings, oral or
written, between the parties relating to the subject
matter hereof. The Confidentiality Agreement between
Pentair and Krupp dated October 10, 1993 shall continue
in full force and effect following execution hereof.
11. English Language. The English version of this
Agreement, regardless of whether a translation into any
other language is or will be made, will be the only
authentic version.
12. Governing Law. This Agreement shall be governed
by and construed in accordance with the substantive laws
of the Federal Republic of Germany.
13. Arbitration of Disputes.
(a) Any dispute arising out of or in connection with
this Agreement, including any question regarding its
existence, validity, interpretation or termination, that
can not be resolved amicably by the parties shall be
referred to and finally resolved by arbitration under the
then applicable rules of the International Chamber of
Commerce, as hereinafter modified or supplemented.
(b) The arbitration proceeding shall be presided over
by a panel of three arbitrators, one arbitrator each
appointed by Buyers as a group and Seller and a chairman
appointed by the two party-appointed arbitrators. Any
communication between a party and any arbitrator shall be
directed to the arbitration panel. The parties expressly
agree that the arbitrators may call and question any
witness, including any expert witness and may require a
party to produce any relevant documents or evidence prior
to or at any hearing. The parties expressly agree that
the arbitrators will be empowered to grant injunctive
relief in the form of interim orders pending the outcome
of the arbitration and in the final arbitral award.
(c) The location of the arbitration shall be London,
England, and the language of the arbitration shall be
English.
(d) The arbitral award will be the exclusive remedy
for all claims, counterclaims, issues or accountings
presented or pled to the arbitrators. The award will be
granted and paid in Deutschmarks and may, in the
discretion of the arbitrators, include interest from the
date of breach or other violation of the Agreement until
the award is fully paid. Judgment upon the arbitral
award may be entered in any court that has jurisdiction
thereover. Any additional costs, fees or expenses
incurred in enforcing the arbitral award will be charged
against the party that resists its enforcement.
(e) Notwithstanding the foregoing, Buyers may seek in
any competent court injunctive or other equitable relief
restraining Seller from taking any action in
contravention of this Agreement, until arbitration of the
issues raised in such court proceeding is resolved.
14. Severability. Should any provision of this
Agreement be or become invalid in whole or in part or be
incapable of performance for whatever reason or should a
relevant provision have been omitted, then the validity
of the remaining provisions of this Agreement shall not
be affected thereby. In such an event, the parties
hereby undertake to substitute for any such invalid
provision or for any provision incapable of performance
or for any omitted provision, a provision which
corresponds to the spirit and purpose of such invalid,
unperformable or omitted provision as far as permitted
under Applicable Law with a view to the economic purpose
of this Agreement.
Letter of Guarantee
Pentair Deutschland GmbH has purchased by Asset Purchase
Agreement dated as of December 21, 1993 (the "Purchase
Agreement") the assets of
Schroff GmbH
Langenalber Strasse 96-100
75334 Straubenhardt ("Seller")
EuroPentair GmbH has purchased the shares of the Schroff
subsidiaries Schroff S. A., France, Schroff UK Ltd.,
Great Britain, Schroff S.r.l., Italy, and Schroff
Scandinavia AB, Sweden and
F C Holdings Inc., USA, has purchased the shares of the
Schroff subsidiaries Schroff Inc., USA, Schroff K. K.,
Japan, and Schroff Co., Ltd., Taiwan
Pentair Deutschland GmbH, EuroPentair GmbH and F C
Holdings Inc. (collectively referred to as "Buyers") are
directly or indirectly wholly-owned subsidiaries of
Pentair, Inc., USA.
Pursuant to Section 12.6 of the Purchase Agreement Buyers
have to submit to Seller a guarantee of Pentair, Inc. to
secure Seller for the amounts owed to it by Buyers on the
Closing Date or thereafter. This premised, we hereby
unconditionally and irrevocably undertake and agree to
pay or to cause the Buyers to pay to Seller the purchase
price, all amounts of indebtedness of Seller to Krupp and
its affiliates plus interest according to Section 3.2 of
the Purchase Agreement, and all indemnification amounts
which may be owing to Seller with respect to the Purchase
Agreement on the Closing Date or arising thereafter.
This Letter of Guarantee becomes valid from its date of
issuance and will remain in force until two years from
Closing Date and thereafter it shall become null and
void, whether being returned to us or not.
This Letter of Guarantee shall be governed by German law.
Place of jurisdiction shall be Essen, Germany.
Pentair, Inc.
By___________________
Its_________________
St. Paul, Minnesota
EXHIBIT 99
PENTAIR
WATERS EDGE PLAZA
1500 COUNTY ROAD B2 WEST
SAINT PAUL, MN 55113-3105
612.636.7920
NEWS RELEASE
DATE: DECEMBER 22, 1993
FOR RELEASE: IMMEDIATELY
CONTACT: MARK CAIN (612) 636-7920
PENTAIR TO ACQUIRE EUROPEAN ENCLOSURE MANUFACTURER
Purchase makes Pentair the work's leading enclosure
manufacturer; furthers acquisition and international
expansion strategies
ST. PAUL, Minn. -- Pentair, Inc. (NASDAQ/NMS:PNTA), the
St. Paul-based manufacturer of industrial products and
paper, today announced it has reached a definitive
agreement to acquire the Schroff Group, Straubenhardt,
Germany, from Fried. Krupp AG Hoesch-Krupp, subject to
the approval of appropriate governmental authorities.
the transaction will include the net assets and business
of the Schroff Group, including its international
subsidiaries. The purchase price will be approximately
$150 million.
Schroff designs, manufactures and markets cabinets,
cases, subracks and accessories for the electronics
industry. The company has approximately 1,400 employees
with operations in Germany, France, England, the United
States, Japan, Sweden, Finland, Italy and Taiwan.
Schroff is the largest manufacturer in Europe's
electronic enclosure market and a world technical leader.
The company's estimated sales are approximately $160
million.
Pentair's Hoffman Engineering subsidiary is the leading
North American manufacturer of electrical enclosures and
related products. Pentair acquired the Hoffman business
in December, 1988.
"This friendly transaction furthers our dual strategy of
building the industrial side of our business through a
major acquisition and providing Pentair a more
significant global presence." said Pentair Chairman and
Chief Executive Officer Winslow H. Buxton. "Pentair's
ownership of Schroff and Hoffman will represent
leadership in the world-wide enclosure market. The
combination of electronic enclosures from Schroff and
electrical enclosures from Hoffman provides the most
comprehensive product offering in the world."
Schroff and Hoffman will continue to operate as separate
businesses within Pentair, providing uninterrupted
service to their customers. Buxton said there are
significant opportunities to add value to both businesses
through joint efforts in specific product lines, markets
and geographic locations.
"We have been searching for a major acquisition for some
time, but I believe our patience and resolve over the
last three years have been rewarded in this opportunity
to acquire Schroff," Buxton said. "With its strong brand
name, leading market position and extensive product line,
Schroff is an ideal fit with Pentair's strategic
objectives. We are very enthusiastic about the growth
potential this acquisition offers Schroff, Hoffman
Engineering and Pentair."
Pentair, Inc. is a St. Paul, Minnesota-based company with
1992 sales of $1.23 billion and approximately 8,300
employees. The company is currently comprised of 10
businesses which manufacture electrical enclosures;
woodworking equipment; power tools; sporting ammunition;
automotive service equipment; industrial lubrication
systems and material dispensing equipment; pumps; and
paper. Pentair common stock is quoted on the NASDAQ
National Market System under the symbol: PNTA.
EXHIBIT 2.5
FRIED KRUPP AG HOESCH-KRUPP
LETTER OF GUARANTEE
SCHROFF GMBH
Langenalber Strabe 96-100
75334 Straubenhardt ("Seller")
a wholly-owned subsidiary of Fried. Krupp AG Hoesch-
Krupp, has sold
- - its assets by Purchase Agreement as of December 22,
1993 to Pentair Deutscheland Gmbh,
- - its shares of its subsidiaries Schroff S. A., France,
Schroff UK Ltd., Great Britain, Schroff S.r.l., Italy and
Schroff Scandinavia A.B., Sweden to EuroPentair, and
- - its shares of its subsidiaries Schroff Inc., USA,
Schroff K.K., Japan and Schroff Co. Ltd., Taiwan to F.C.
Holdings Inc., USA.
Pentair Deutschland Gmbh, EuroPentair Gmbh and F.C.
Holdings Inc. (collectively hereinafter referred to as
"Buyers"), are directly or indirectly wholly-owned
subsidiaries of Pentair Inc., USA.
Pursuant to Sec. 11.9 of the Purchase Agreement, Fried.
Krupp AG Hoesch-Krupp has to submit to Buyers a guarantee
to secure Buyers for the amounts owed to them by Seller
on the Closing Date or thereafter. This premised, we
hereby unconditionally and irrevocably undertake and
agree to guarantee to pay or to cause the Seller to pay
to Buyers all indemnification amounts which Seller may be
owing to Buyers on the Closing Date or arising
thereafter.
This Letter of Guarantee becomes valid from its date of
issuance and will remain in force until four years after
Closing Date and thereafter it shall become null and
void, whether being returned to us or not.
This Letter of Guarantee shall be governed by German Law.
Place of jurisdiction shall be Essen, Germany.
Fried. Krupp AG Hoesch-Krupp
Essen, Germany
