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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 17, 1994
Harman International Industries, Incorporated
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-9764 11-2534306
(Commission File Number) (IRS Employer Identification No.)
1101 Pennsylvania Avenue, N.W., Suite 1010, Washington, D.C. 20004
(Address of principal executive offices) (Zip Code)
(202) 393-1101
Registrant's telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On March 17, 1994, Harman International Industries,
Incorporated ("Harman") completed its acquisition and acquired from
Motor-Columbus AG and its affiliates ("Motor-Columbus") 100% of
Studer Revox AG ("Studer Revox"), a leading company in the
professional audio field, with particular strength in the recording
and broadcast areas. Motor-Columbus retained the Revox Consumer
Products division and the rights to use the Revox name.
Under the terms of the Stock Purchase Agreement dated February
3, 1994 by and among Harman, Motor-Columbus and Studer Revox, as
amended, Harman paid 100 Swiss Francs (approximately US $70.00) for
all of the issued and outstanding stock in Studer Revox. Harman
assumed post-acquisition indebtedness of Studer Revox of
approximately 23 million Swiss Francs (approximately US
$16 million).
Studer Revox, which was founded in 1948, is headquartered in
Regensdorf, Switzerland. The company manufactures analog and
digital tape recorders, mixing consoles, switching systems, digital
audio workstations, professional compact disc players and recorders
and turnkey broadcasting studios. Its principal subsidiaries are
located in France, the United States, Canada, Germany, the United
Kingdom, Japan, Singapore and Austria. Harman currently intends to
continue to use Studer Revox's facilities for the same purposes as
they were previously used.
Item 7. Financial Statements and Exhibits
Submission of the financial statements required by Items
7(a)(1), (2) and (b)(1) is impracticable at this time. Harman will
file such financial statements under cover of Form 8-K/A as soon as
practicable, but in no event later than May 31, 1994.
Attached hereto as Exhibit 2.1 is a copy of the Stock Purchase
Agreement, together with copies of the following exhibits and
schedules attached thereto:
Exhibit A - Definitions
Exhibit B - Outstanding Bank Debt*
Exhibit C - Form of Share Purchase Agreement*
Exhibit D - Form of Asset Purchase Agreement*
Exhibit E - Form of Capital Contribution*
Exhibit F - Terms of Lease of Primary Facility*
Exhibit G - Guaranteed Bank Debt*
Exhibit H - Revox Pro Line*
Exhibit I - Subsidiaries and Subsidiary Businesses*
2
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Schedule 3.2 -- Capital*
Schedule 3.3 -- Conflicts*
Schedule 3.4 -- Government Approvals*
Schedule 3.5 -- Consents*
Schedule 3.6(A) -- Capital Expenditures*
Schedule 3.6(B) -- Liens*
Schedule 3.7 -- Real Property*
Schedule 3.8 -- Contracts*
Schedule 3.9 -- Financial Statements*
Schedule 3.10(A) -- Liabilities*
Schedule 3.10(B) -- Outstanding Debt*
Schedule 3.13 -- Litigation*
Schedule 3.15 -- Intellectual Property*
Schedule 3.17 -- Labor Matters*
Schedule 3.18 -- Employee Matters*
Schedule 3.19 -- Taxes*
Schedule 3.20 -- Insurance*
Schedule 3.21 -- Environmental Liabilities*
Schedule 3.22 -- Changes in Circumstance*
Schedule 3.23 -- Bank Accounts*
* Omitted. The Registrant agrees to furnish supplementally a
copy of any omitted Exhibit or Schedule to the Commission upon
request.
Attached hereto as Exhibit 2.2 is a copy of the Amendment to
the Stock Purchase Agreement dated March 1, 1994, together with
copies of the following exhibits and schedules attached thereto:
Exhibit A - Escrow Agreement*
Exhibit B - RP Sales Agreement*
Exhibit C - Form of Asset Purchase Agreement*
Exhibit D - Form of Capital Contribution*
Exhibit E - Form of Lease Agreement*
Exhibit F - Updated Schedules to the Agreement*
* Omitted. The Registrant agrees to furnish supplementally a
copy of any omitted Exhibit or Schedule to the Commission upon
request.
Attached hereto as Exhibit 2.3 is a copy of the press release
dated March 23, 1994 announcing the closing of the acquisition of
Studer Revox.
3
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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.
HARMAN INTERNATIONAL
INDUSTRIES, INCORPORATED
By: /s/ Sandra B. Robinson
----------------------
Sandra B. Robinson,
Vice President,
Financial Operations
Date: March 31, 1994
4
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EXHIBIT INDEX
Exhibit No. Description Page
2.1 Stock Purchase Agreement 6
2.2 Amendment to the Stock Purchase
Agreement 43
2.3 Press Release dated March 23, 1994 51
5
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EXHIBIT 2.1
6
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STOCK PURCHASE AGREEMENT
Dated as of February 3, 1994
by and among
HARMAN INVESTMENTS COMPANY, INC.
c/o HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
8500 Balboa Boulevard
Northridge, California 91329 USA
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
8500 Balboa Boulevard
Northridge, California 91329 USA
MOTOR-COLUMBUS AG
Parkstrasse 27
5401 Baden
Switzerland
SAEG REFINDUS HOLDING AG
Parkstrasse 27
5401 Baden
Switzerland
and
STUDER REVOX AG
Althardstrasse 30
8105 Regensdorf
Switzerland
concerning shares of stock in
Studer Revox AG
7
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TABLE OF CONTENTS
Page
ARTICLE 1
SALE AND PURCHASE. . . . . . . . . . . . . . . . . . . . . . . .
1
1.1 Object of Purchase. . . . . . . . . . . . . . . .
1
1.2 Sale and Purchase . . . . . . . . . . . . . . . .
1
1.3 Transfers . . . . . . . . . . . . . . . . . . . .
1
1.4 Transfers of Certain Subsidiaries . . . . . . . .
2
ARTICLE 2
PURCHASE PRICES AND PAYMENTS . . . . . . . . . . . . . . . . . .
2
2.1 Purchase Price. . . . . . . . . . . . . . . . . .
2
2.2 Delivery of Audited 1993 Financial Statements.
On or before February 24, 1994 . . . . . . . . . . . .
2
2.3 Transfer Taxes. . . . . . . . . . . . . . . . . .
2
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF MC AND THE SELLER. . . . . . .
2
3.1 Organization; Corporate Power and Authority . . .
2
3.2 Capital . . . . . . . . . . . . . . . . . . . . .
3
3.3 Conflicts; Defaults . . . . . . . . . . . . . . .
3
3.4 Governmental Approvals. . . . . . . . . . . . . .
3
3.5 Third Party Consents. . . . . . . . . . . . . . .
4
3.6 Tangible Personal Property. . . . . . . . . . . .
4
3.7 Real Property . . . . . . . . . . . . . . . . . .
4
3.8 Contracts . . . . . . . . . . . . . . . . . . . .
4
3.9 Financial Statements. . . . . . . . . . . . . . .
5
3.10 Liabilities . . . . . . . . . . . . . . . . . . .
5
3.11 Inventory . . . . . . . . . . . . . . . . . . . .
5
3.12 Accounts Receivable . . . . . . . . . . . . . . .
5
3.13 Litigation. . . . . . . . . . . . . . . . . . . .
5
3.14 Regulatory Compliance . . . . . . . . . . . . . .
6
3.15 Intellectual Property . . . . . . . . . . . . . .
6
3.16 Permits . . . . . . . . . . . . . . . . . . . . .
6
3.17 Labor Matters . . . . . . . . . . . . . . . . . .
6
3.18 Employee Plans. . . . . . . . . . . . . . . . . .
6
3.19 Taxes . . . . . . . . . . . . . . . . . . . . . .
7
3.20 Insurance . . . . . . . . . . . . . . . . . . . .
8
3.21 Environmental Matters . . . . . . . . . . . . . .
8
3.22 Changes in Circumstances and Withdrawals. . . . .
9
3.23 Bank Accounts . . . . . . . . . . . . . . . . . .
9
3.24 Nature of Disclosure. . . . . . . . . . . . . . .
9
8
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER. . . . . . . . . . . 10
4.1 Organization; Corporate Power and Authority . . . 10
4.2 Conflicts; Defaults . . . . . . . . . . . . . . . 10
4.3 Governmental Approvals. . . . . . . . . . . . . . 10
4.4 Third Party Consents. . . . . . . . . . . . . . . 10
4.5 Brokers . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 5
CERTAIN COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 11
5.1 Mutual Covenants and Agreements . . . . . . . . . 11
5.2 Actions of MC Prior to the Closing. . . . . . . . 11
5.3 Actions at the Closing. . . . . . . . . . . . . . 12
5.4 Actions After the Closing . . . . . . . . . . . . 13
ARTICLE 6
SURVIVAL AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . 14
6.1 Survival of Representations and Warranties. . . . 14
6.2 Indemnification by MC and Seller. . . . . . . . . 14
6.3 Indemnification by Purchaser. . . . . . . . . . . 15
6.4 Indemnification Procedure . . . . . . . . . . . . 15
6.5 Insurance Benefits. . . . . . . . . . . . . . . . 17
6.6 Changes in Legislation. . . . . . . . . . . . . . 17
ARTICLE 7
CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . . . . . . . 17
7.1 Conditions Applicable to Purchaser. . . . . . . . 17
7.2 Conditions Applicable to MC and the Seller. . . . 18
7.3 Conditions Subsequent to Binding Effect of This
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 8
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.1 Notices . . . . . . . . . . . . . . . . . . . . . 19
8.2 Assignment. . . . . . . . . . . . . . . . . . . . 20
8.3 Waiver. . . . . . . . . . . . . . . . . . . . . . 20
8.4 Entire Agreement. . . . . . . . . . . . . . . . . 20
8.5 Amendments, Supplements . . . . . . . . . . . . . 20
8.6 Captions. . . . . . . . . . . . . . . . . . . . . 20
8.7 Counterparts . . . . . . . . . . . . . . . . 20
8.8 Successors and Assigns . . . . . . . . . . . 21
8.9 Governing Law. . . . . . . . . . . . . . . . 21
8.10 Arbitration. . . . . . . . . . . . . . . . . 21
8.11 Severability . . . . . . . . . . . . . . . . 21
8.12 Gender and Number. . . . . . . . . . . . . . 21
8.13 No Shop. . . . . . . . . . . . . . . . . . . 21
8.14 Confidentiality. . . . . . . . . . . . . . . 21
9
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Exhibit A - Definitions
Exhibit B - Outstanding Bank Debt
Exhibit C - Form of Share Purchase Agreement
Exhibit D - Form of Asset Purchase Agreement
Exhibit E - Form of Capital Contribution
Exhibit F - Terms of Lease of Primary Facility
Exhibit G - Guaranteed Bank Debt
Exhibit H - Revox Pro Line
Exhibit I - Subsidiaries and Subsidiary Businesses
Schedule 3.2 - Capital
Schedule 3.3 - Conflicts
Schedule 3.4 - Government Approvals
Schedule 3.5 - Consents
Schedule 3.6(A) - Capital Expenditures
Schedule 3.6(B) - Liens
Schedule 3.7 - Real Property
Schedule 3.8 - Contracts
Schedule 3.9 - Financial Statements
Schedule 3.10(A) - Liabilities
Schedule 3.10(B) - Outstanding Debt
Schedule 3.13 - Litigation
Schedule 3.15 - Intellectual Property
Schedule 3.17 - Labor Matters
Schedule 3.18 - Employee Plans
Schedule 3.19 - Taxes
Schedule 3.20 - Insurance
Schedule 3.21 - Environmental Liabilities
Schedule 3.22 - Changes in Circumstances
Schedule 3.23 - Bank Accounts
10
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") made as of
the 3rd day of February, 1994 between Harman Investment Company,
Inc., a corporation organized under the laws of Delaware, U.S.A.
(the "Purchaser") and having an address at 8500 Balboa Boulevard,
Northridge, California 91329 USA, and Harman International
Industries, Inc., a corporation organized under the laws of
Delaware, U.S.A. ("Harman") and having an address at 8500 Balboa
Boulevard, Northridge, California 91329 U.S.A., and Motor-Columbus
AG, a stock corporation (Aktiengesellschaft) organized under the
laws of Switzerland and having an address at Parkstrasse 27, 5401
Baden, Switzerland ("MC"), SAEG Refindus Holding AG, a stock
corporation organized under the laws of Switzerland and having an
address at Parkstrasse 27, 5401 Baden Switzerland (the "Seller"),
and Studer Revox AG, a stock corporation organized under the laws
of Switzerland and having an address at Althardstrasse 30, 8105
Regensdorf Switzerland ("SRAG").
Capitalized terms used and not defined herein shall have the
meanings indicated in Exhibit A to this agreement.
ARTICLE 1
SALE AND PURCHASE
1.1 Object of Purchase.
The Seller holds 277,000 shares of stock (Aktien), each
with par value of SF 100.--, in SRAG, representing all of the
issued and outstanding shares of stock or other equity interests or
participations in SRAG (the "Stock").
1.2 Sale and Purchase.
Subject to the condition that neither the Purchaser nor
the Seller has withdrawn from this Agreement prior to the Closing
pursuant to Article 7 hereof, the Seller sells the Stock to the
Purchaser effective as of the Effective Date. The Purchaser
accepts such sale of the Stock.
1.3 Transfers.
Subject to the condition that neither the Purchaser nor
MC or the Seller has withdrawn from this Agreement prior to the
Closing pursuant to Article 7 hereof, the Seller shall on the
Closing Date transfer the Stock to the Purchaser effective as of
the Effective Date. The Purchaser shall on the Closing Date accept
such transfer of the Stock.
11
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1.4 Transfers of Certain Subsidiaries.
SRAG shall on the Closing Date cause Studer Revox GmbH to
transfer to SRAG at the cost of MC the shares in Studer Deutschland
GmbH. At the request of the Purchaser, SRAG shall on the Closing
Date transfer the shares in Studer Deutschland GmbH or any other
Studer Subsidiary to a company designated by the Purchaser provided
the parties agree on a price and that if the parties cannot agree
on a price, the transfers will occur as otherwise contemplated
herein. Neither MC nor the Seller shall be responsible for any
additional income or transfer taxes or sales, documentary,
recording, filing or notarial fees incurred as a result of the
Purchaser electing the transactions contemplated in the second
sentence of this Section 1.4.
ARTICLE 2
PURCHASE PRICES AND PAYMENTS
2.1 Purchase Price. The aggregate consideration for the
Stock is SF 100.-- payable by the Purchaser to the Seller upon all
conditions precedent having been met.
2.2 Delivery of Audited 1993 Financial Statements. On
or before February 24, 1994, MC shall deliver to the Purchaser the
Audited 1993 Financial Statements.
2.3 Transfer Taxes. MC and the Purchaser shall each be
liable for and pay 50% of all applicable Swiss and German sales,
documentary, recording, filing, transfer, and other similar taxes
and fees payable as a result of the consummation of the
transactions contemplated by Article 1 of this Agreement, including
notarial fees.
ARTICLE 3
REPRESENTATIONS AND
WARRANTIES OF MC AND THE SELLER
MC and the Seller, jointly and severally and in conjunction
with the remedies provided by the indemnification provisions of
Article 6 hereof represent and warrant to the Purchaser as of the
date of this Agreement and again as of the Closing Date as if made
anew, as follows:
3.1 Organization; Corporate Power and Authority. MC is
an Aktiengesellschaft (AG) duly organized and existing under the
laws of Switzerland and has all necessary power and authority to
own its property and carry on its business as presently owned and
conducted. The Seller is an Aktiengesellschaft (AG) duly organized
and existing under the laws of Switzerland and has all necessary
power and authority to own its property and carry on its business
12
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as presently owned and conducted. SRAG is an Aktiengesellschaft
(AG) duly organized and existing under the laws of Switzerland and
has all necessary power and authority to own its property and carry
on its business as presently owned and conducted. Each Studer
Subsidiary is duly organized and existing under the laws of its
country of organization and has all necessary corporate power and
authority to own its property and carry on its business as
presently owned and conducted. Subject to Section 7.3, each of MC,
the Seller and SRAG has duly authorized, executed, and delivered
this Agreement and has full power and authority to execute and
deliver, and to perform its obligations under, this Agreement.
This Agreement, when executed and delivered by all parties hereto,
constitutes the valid and binding obligation of each of MC, the
Seller and SRAG, enforceable in accordance with its terms. None of
MC, the Seller or any Company has taken or failed to take any
action, which action or failure would preclude or prevent the
Purchaser (or SRAG) from conducting the Businesses in the manner
heretofore conducted.
3.2 Capital. The authorized capital and issued and
outstanding capital of SRAG and each Subsidiary is as set forth on
Schedule 3.2 entitled "Capital" attached hereto and the number or
amount of capital shares or stock in each Subsidiary is owned by
the entities as described on such Schedule 3.2. The shares of each
Subsidiary owned directly or indirectly by the Seller or SRAG (the
"Owned Shares") are owned legally and beneficially by the owner
thereof as described on Schedule 3.2, free and clear of any Liens.
All of the shares or stock of each Subsidiary are duly authorized,
validly issued, and fully paid and are not subject to assessment.
Except as described on Schedule 3.2, SRAG has no subsidiary
corporations and owns no interest, directly or indirectly, in any
other business, enterprise, firm, or corporation. Except as
described on Schedule 3.2, for each Subsidiary, there are no
securities (issued, reserved for issuance, convertible, or
outstanding) of or other interests or rights in any Subsidiary of
any kind and there are no restrictions with respect to
transferability of the Owned Shares. Except as set forth in
Schedule 3.2, there are no options, offers, warrants, conversion
rights, preemptive rights, subscriptions or agreements or rights of
any kind to subscribe for or to purchase, or commitments to issue
(either formal or informal, firm or contingent), other than those
created by statute, share or equity capital or securities of or
interests or rights in any Subsidiary (whether debt, equity, or a
combination thereof) or obligating any Subsidiary to grant, extend,
or enter into any such agreement or commitment. Upon sale,
assignment, and delivery of the Stock as herein contemplated, the
Purchaser will acquire the entire ownership of and any and all
existing rights and interests in, SRAG, and will have good and
marketable title to the Stock, free of all Liens, as of and when
such Stock is acquired by the Purchaser.
13
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3.3 Conflicts; Defaults. Except as set forth on
Schedule 3.3 entitled "Conflicts" attached hereto, neither the
execution and delivery of this Agreement by MC, the Seller or SRAG,
nor the performance of any of their obligations hereunder, will (i)
violate or conflict with any of the terms of any Articles of
Association, By-Laws, or other organizational documents of any
Company or of MC or of the Seller, or constitute a default or
result in the acceleration of any obligation under any provisions
of any Contract, or of any order, judgment, or decree by which MC,
the Seller or any Company is bound or by which any of their assets
are affected, (ii) result in the creation or imposition of any
Liens in favor of any third Person upon any assets of any Company
or (iii) to the Best Knowledge of MC violate any Law applicable to
any assets of any Company.
3.4 Governmental Approvals. Except as set forth on
Schedule 3.4 entitled "Governmental Approvals" attached hereto, no
approval, consent, decree, or order of any Governmental Authority
is required in connection with the execution and delivery of this
Agreement by MC, the Seller or SRAG, the performance of their
obligations hereunder, or the consummation by each of them of the
transactions contemplated hereby, or for the prevention of any
termination of any right, privilege, license, or agreement relating
to the Businesses or the continuation of the Businesses following
the execution hereof.
3.5 Third Party Consents. Except as set forth on
Schedule 3.5 entitled "Consents" attached hereto, no consent,
approval, or authorization of any Person ("Third Party Consent") is
required in connection with the execution, delivery, or performance
of this Agreement by MC, the Seller or SRAG or the continuation of
the Businesses following the execution hereof. Such execution,
delivery, and performance will not give to others any rights,
including rights of termination, cancellation, or acceleration, in
or with respect to any Contract.
3.6 Tangible Personal Property. All personal property
owned or leased by any Company and used and necessary in the
operation of the Businesses is in good operating condition and
repair, except for normal wear and tear, is suitable for the uses
for which it is intended, and is adequate for each Company to
conduct its Business as presently conducted without the need for
additional capital expenditures, except as set forth on Schedule
3.6(A) entitled "Capital Expenditures" attached hereto. Each
Company is the lawful owner and possessor of, or has the right to
use, its assets and properties, and such assets and properties are
free of all Liens, except as set forth on the Schedule 3.6(B)
entitled "Liens" attached hereto. All leases of personal property
are in full force and effect according to their terms and there are
no outstanding defaults thereunder or any breach in respect thereof
by any of the parties thereto.
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3.7 Real Property. Schedule 3.7 entitled "Real
Property" attached hereto is a true, accurate and complete list of
all Owned Real Property and Leased Real Property. Each Company
listed as owner thereof on Schedule 3.7 has good and marketable
title (Eigentum und Besitz) to the Owned Real Property, free and
clear of all Liens except for such items as are set forth on
Schedule 3.7. Other than the Owned Real Property listed, no
Company owns any other Real Property. Other than the Leased Real
Property described on Schedule 3.7, no Company leases, as lessor or
lessee, any Real Property. No Company uses any other Real Property
for the conduct of its Business as presently conducted. Each Owned
Real Property other than those located in Regensdorf or Mollis,
Switzerland, is in good operating condition and repair and suitable
for the purposes for which it is being used. No Owned Real
Property other than those located in Regensdorf or Mollis,
Switzerland, or the operation or maintenance thereof violates any
restrictive covenant or any provision of any Law in any way that
could adversely affect the present use thereof, or encroach on any
Real Property owned by others. Except as set forth on Schedule
3.7, there is no condemnation proceeding pending or, to the Best
Knowledge of MC, threatened against any Owned Real Property owned
by any Company. The leases underlying the Leased Real Property are
valid and binding obligations of the Company and the lessor parties
thereto, are in full force and effect and there are no outstanding
defaults thereunder.
3.8 Contracts. Except as set forth on Schedule 3.8
entitled "Contracts" attached hereto, all Contracts are in full
force and effect in accordance with their terms on the date hereof,
the Company party thereto or bound thereby has not breached or
improperly terminated any Contract, is not in default under any
Contract, and no event has occurred which (whether with or without
notice, lapse of time or both) would constitute such a default, and
no other party is in default under any Contract. No Company has
any contracts, agreements, or commitments in effect with MC or the
Seller other than as listed on Schedule 3.8.
3.9 Financial Statements. Attached hereto as Schedule
3.9 entitled "Financial Statements" are the Agreement Financial
Statements. The Agreement Financial Statements (a) were prepared
from the books and records kept by the Companies in accordance with
US GAAP and (b) correctly present the financial condition and the
results of operations of the Companies as of the dates and for the
periods indicated.
3.10 Liabilities. No Company has any liabilities or
obligations, whether absolute, accrued, contingent, or otherwise,
except for those (a) reflected or reserved for on the Agreement
Financial Statements and the notes thereto, (b) incurred or accrued
since the date of the Agreement Financial Statements in the
ordinary and normal course of its Business, or (c) set forth on
Schedule 3.10(A) entitled "Liabilities" attached hereto. Schedule
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3.10(B) entitled"Outstanding Debt" and attached hereto contains a
description of each obligation comprising "Outstanding Debt."
3.11 Inventory. Any net Inventory shown on the
Agreement Financial Statements or thereafter acquired (and any
Revox Pro Line Inventory held by any Excluded Subsidiary), except
for such portion as have been sold or disposed of in the ordinary
course of business, consist of items in good condition and of a
quality useable or saleable in the ordinary course of business of
the Companies or Excluded Subsidiaries and are recorded in the
books and records of the respective Company and Excluded Subsidiary
and on the Agreement Financial Statements at the lower of cost or
fair market value. The number of items in the Inventory is
consistent with the numbers incorporated in the Agreement Financial
Statements. To the Best Knowledge of Seller, there is no adverse
condition affecting the regular supply of materials to any Company.
3.12 Accounts Receivable. The accounts receivable
reflected on the Agreement Financial Statements and all accounts
receivable created since that date (collectively, the "Accounts
Receivable") are recorded in the books and records of the Companies
and are good and collectible in the ordinary course of business of
the respective Company net of reserves for bad debt, which are
adequate. There are no valid counterclaims or set offs against the
Accounts Receivable in excess of the reserves relating thereto as
shown on the Agreement Financial Statements.
3.13 Litigation. Except as set forth on Schedule 3.13
entitled "Litigation" attached hereto, there is no Litigation
pending or, to the Best Knowledge of MC, threatened against any
Company before any Governmental Authority, and no Company has
received notice from any third Person threatening such Litigation.
There is no outstanding order, injunction, decree, consent,
judgment, or stipulation by or with any Governmental Authority by
which any Company or any of its assets is or may be bound.
3.14 Regulatory Compliance. The Businesses are being
conducted in compliance with all applicable Laws of each
jurisdiction where a Company conducts business, and no Company is
currently in violation of any applicable Laws. Each Company is
licensed to do business in each jurisdiction in which such
licensing is required to conduct its Business as presently
conducted.
3.15 Intellectual Property. Schedule 3.15 entitled
"Intellectual Property" attached hereto sets forth a complete and
accurate list of all Intellectual Property consisting of patents,
trademarks and licenses owned by any Company or in which any
Company has an interest or used by any Company in its Business, and
identifies whether such Intellectual Property is owned or used.
Except as set forth on Schedule 3.15, the Companies own all
intellectual property or inventions of any of their employees
16
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related to the Businesses. Except as set forth on such Schedule
3.15, no Company has licensed to any Person any of the items listed
on such Schedule or any other Intellectual Property. The
Intellectual Property listed on such Schedule 3.15 comprises all
Intellectual Property necessary to permit the operation of the
Businesses as now being conducted. None of the Intellectual
Property listed on such Schedule 3.15 is subject to any Liens.
Except as disclosed on Schedule 3.13, the conduct of the Businesses
as now conducted does not conflict with or infringe any
Intellectual Property of any third Person in any way.
3.16 Permits. Each Company possesses all Permits
necessary for the conduct of its Business in all respects as the
same is currently being conducted.
3.17 Labor Matters. Except as set forth on Schedule
3.17 entitled "Labor Matters" attached hereto, there are no
significant controversies pending or, to the Best Knowledge of MC,
threatened which involve any employees employed prior to or on the
date hereof in connection with the Businesses. Except as set forth
on Schedule 3.17, since June 1, 1990, there has not been any
significant matter under discussion by any Company with any labor
union or any strike, work stoppage, or labor trouble relating to
employees engaged in the Businesses. Schedule 3.17 sets forth each
collective bargaining agreement (Kollektivvertrag), workers council
agreement (Betriebsvereinbarung), or other contract, agreement or
commitment with any labor union or workers council, and each other
employment contract, agreement, or commitment relating to employees
either terminable on more than six (6) months notice, or that
includes equity participation or profit participation capable of
exceeding SF 5,000.-- in any one year, or that is an employment
agreement for any upper management employee (meaning managing
director, president, chief executive, administration or financial
officer or division or department leader) of any Company, to which
any Company is bound or by which any Company is affected.
3.18 Employee Plans. Except for the plans set forth on
Schedule 3.18 entitled "Employee Plans" attached hereto (the
"Existing Plans"), no Company maintains, or contributes to, any
employee pension benefit or welfare plan or medical benefit plan,
or any other disability, severance, bonus, stock option, stock
appreciation, stock purchase, retirement insurance, pension, profit
sharing, or deferred compensation plan, agreements, or arrangements
for the benefit of its employees, other than one-time discretionary
bonuses not exceeding SF 10,000 in the individual case or SF
100,000 in the aggregate (collectively "Employee Plans"), nor has
any Company taken any action directly or indirectly to obligate it
under, or to institute, any such Employee Plan. Each Company has
complied with all terms and conditions of, and has no liabilities
and obligations with respect to, its Existing Plans. All
actuarially computed potential liabilities of any Company under the
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Existing Plans are fully reflected in the Audited 1993 Financial
Statements and the Agreement Financial Statements. All Existing
Plans have been maintained in compliance with all Laws, and all
notices, reports, and other filings required to be delivered or
filed under applicable Laws with respect to the Existing Plans have
been duly and timely delivered or filed. Any contributions
required to be made by any Company to mandatory pension insurance
for its employees have been made. There are no liabilities with
respect to the Existing Plans, whether absolute, accrued,
contingent, or otherwise, other than those set forth in the
Existing Plans.
3.19 Taxes. (a) Each Company has or will have on the
Closing Date (i) timely filed or caused to be filed, either
independently or on a consolidated or group basis, all Tax returns,
reports, schedules, declarations, and Tax-related documents
(including any consolidated income tax returns of any group of
which such Company is or was a member) (collectively, "Tax
Returns") required to be filed for all periods up to and including
the Effective Date, by any jurisdictions to which it is or has been
subject, and has or will have timely paid or caused to be paid in
full or has established adequate reserves (which are fully
reflected in the Agreement Financial Statements) for the payment of
all Taxes which are due and payable to any taxing authorities for
such periods, (ii) fully paid or accrued on its books an amount
(which is fully reflected on the Agreement Financial Statements)
sufficient to pay all Taxes in respect of the period up to and
including the Effective Date which are not yet due and payable,
(iii) made or caused to be made all withholdings of Taxes required
to be made, and such withholdings have either been paid to the
appropriate government agency or set aside in separate accounts
held solely for such purpose, and (iv) otherwise satisfied, in all
material respects, all legal requirements with respect to all
aforementioned obligations to all taxing jurisdictions. All Tax
Returns filed or caused to be filed or to be filed by or in respect
of each Company either individually or on a consolidated or group
basis correctly reflect in all material respects the income,
expenses, deductions, credits, loss carryovers, and taxes due in
respect of each such Company, and are otherwise accurate and
complete in all material respects. No Company has or will have any
liability whether directly, as a transferee, or as a member of a
group having another company as its parent ("Seller Consolidated
Group") for Taxes for any period up to and including the Effective
Date in excess of amounts paid, accrued or reserved on the
Agreement Financial Statements.
(b) The Tax Returns of each Company and Seller
Consolidated Group have been accepted as filed by the appropriate
taxation authorities (or closed by applicable statutes of
limitations) and all liabilities in respect thereof have been
finally determined for all taxable periods except as disclosed in
Schedule 3.19 entitled "Taxes" attached hereto.
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(c) Other than the tax integration agreement between the
German Subsidiaries, no Company is a party to, is bound by, or has
any obligation under any Tax sharing or similar agreement.
(d) There have been delivered to Purchaser true and
complete copies of all Tax Returns relevant to the Companies for
the last five complete taxable years.
(e) For purposes of this Section 3.19, "Tax" and "Taxes"
shall include all income, capital gains, gross receipts, franchise,
excise, transfer, value added, sales, wage, payroll, workmen's
compensation, employment, occupation, and real and personal
property taxes and stamp duties; taxes measured by or imposed on
capital; levies, imposts, duties, licenses, and legislation fees;
other taxes imposed by any federal, state, municipal, local,
communal, cantonal or other governmental authority or agency,
including assessments in the nature of taxes; and including,
without limitation, interest, penalties, fines, assessments and
deficiencies relating to any Tax or Taxes.
(f) The net operating losses of SRAG are estimated at
current best judgment to be in the amounts as shown on Schedule
3.19. After the Closing, SRAG shall be entitled to use such net
operating losses to reduce taxable income during the periods before
the relevant expiration dates.
3.20 Insurance. Schedule 3.20 entitled "Insurance"
attached hereto sets forth current insurance coverage on the date
hereof for or held by each Company. No Company has been denied any
insurance coverage since June 1, 1990 which it has requested and
has not made any change in the scope or nature of its insurance
coverage, except in the ordinary course of business.
3.21 Environmental Matters. Except as set forth on
Schedule 3.21 entitled "Environmental Liabilities" attached hereto,
(a) the operations of each Company are in Material compliance with
all Environmental Laws and no Company has made or committed
anything which, with or without notice or passage of time or both,
would constitute a violation of any Environmental Law; (b) all
Hazardous Materials generated by the Companies are disposed of in
compliance with Environmental Laws and environmental permits of the
Companies; (c) the Companies possess all environmental permits
required for the conduct or operation of their respective Business
and are in compliance with all of the requirements and limitations
thereof and all such permits are in full force and effect; (d)
there is no Material liability known or caused by any Company,
whether asserted or unasserted, fixed, or contingent, relating to
its Business resulting from any environmental matters, including
the discharge, disposal, storage, accumulation, transport, leakage,
spillage, or other action with respect to Hazardous Materials; (e)
no written claim has been made with respect to the operation of
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facilities of any Company resulting from any Hazardous Material
used in the construction thereof and there is no valid basis for
any such claim; (f) no Material spills, discharges, releases,
deposits, emplacements, leaks, or disposals of any Hazardous
Material have occurred on or under any of the properties or
facilities of any Company while such properties or facilities have
been owned or operated by a Company; (g) no Company has received
any written notice, or, to the Best Knowledge of MC, oral notice,
from any Governmental Authority or any other Person that any aspect
of its Business, operations, or facilities is in violation of any
Environmental Law or environmental permit or that it is responsible
(or potentially responsible) for the clean-up or remediation of any
substances at any location; (h) no Company is the subject of any
Litigation in any forum involving a demand for damages, injunctive
relief, penalties, removal, clean-up, or other potential liability
with respect to violations of any Environmental Law; (i) each
Company has timely filed all Material reports and notifications
required to be filed with respect to all of its properties and
facilities and has generated and maintained all Material required
records and data under all Environmental Laws; and (j) no Excluded
Subsidiary has any environmentally-related liability for which a
Company may be held liable.
3.22 Changes in Circumstances and Withdrawals. Except
as disclosed on Schedule 3.22 entitled "Changes in Circumstances,"
attached hereto, since the date of the Agreement Financial
Statements, no Company has, other than as expressly contemplated by
this Agreement (and as of the Closing Date no Company will have
except as expressly contemplated by this Agreement), (a) made any
declaration, set aside or paid any dividend or other distribution
in respect of its share or equity capital, or any redemption or
other acquisition by it or any of its share or equity capital, or
paid out any partner withdrawals of capital; (b) sold, transferred,
or otherwise disposed of any properties or assets outside the
ordinary and normal course of business; (c) sustained any Material
damage, loss, or destruction of or to its assets by reason of fire,
explosion, earthquake, casualty, significant labor trouble,
requisition, or taking of property by any Governmental Authority,
embargo, riot, act of God or public enemy, flood, accident, other
calamity, or other similar event (whether or not covered by
insurance); (d) conducted its Business other than in the ordinary
and normal course; (e) granted any salary increase, other than
normal merit and cost of living increases and normal periodic
increases pursuant to its established compensation policies, or
granted any increase in the rate or terms of any bonus, insurance,
pension, or other employee benefit plan, other than pursuant to its
established compensation policies; (vi) created, incurred, or
assumed any debt for borrowed money other than trade payables
incurred in the ordinary and normal course of business, or
refinanced any existing borrowings relating to its Business; (f)
entered into, renewed, amended, or terminated prior to expiration
any agreement, lease, commitment, or transaction (including,
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without limitation, any capital expenditures or capital financing),
except agreements, commitments, leases, or transactions in the
ordinary course of business or as contemplated herein or as set
forth in the Schedule 3.8 entitled "Contracts;" (g) discharged or
satisfied any Lien, or settled any Litigation or liability pending
or threatened against it, other than in the ordinary and normal
course of business; (h) made any change in its accounting methods,
principles, or practices; (i) made any change or alteration in its
corporate or partnership structure or organization; (j) suffered
any significant adverse change in customer relations or orders from
customers; or (k) to the Best Knowledge of MC, been subject to any
other event, condition, or state of facts which adversely affects,
or threatens to adversely affect, its financial condition,
operations, business, or prospects.
3.23 Bank Accounts. Attached hereto on Schedule 3.23
entitled "Bank Accounts" is a list of all accounts, authorized
signatories thereof, and deposit boxes maintained by each Company
at any bank or other financial institution.
Nature of Disclosure. Neither the representations and
warranties contained in this Agreement nor any certificates or
documents furnished to the Purchaser by MC, the Seller or any
Company contain any untrue statement of a Material fact or omit to
state any Material fact necessary to make the statements therein,
in light of the circumstances in which they are made, not
misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
The Purchaser, in conjunction with the remedies provided by
the indemnification provisions of Article 6 hereof, absolutely and
unconditionally represents and warrants to the Seller, as of the
date of this Agreement and again as of the Closing Date as if made
anew, as follows:
4.1 Organization; Corporate Power and Authority. The
Purchaser is a corporation, duly organized and validly existing
under the laws of Delaware, and has all necessary power and
authority to own its property and carry on its business as
presently owned and conducted. The Purchaser has duly authorized,
executed, and delivered this Agreement and has full power and
authority to execute and deliver, and to perform its obligations
under, this Agreement. This Agreement, when executed and delivered
by all parties hereto, constitutes the valid and binding obligation
of the Purchaser, enforceable in accordance with its terms.
4.2 Conflicts; Defaults. Neither the execution and
delivery of this Agreement by the Purchaser, nor the performance of
its obligations hereunder, will (a) violate or conflict with any of
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the terms of its certificate of incorporation or by-laws, or
constitute a default or result in the acceleration of any
obligation under any provisions of any contract or agreement by
which the Purchaser or any of its assets are bound or (b) to the
Best Knowledge of the Purchaser, violate any Law applicable to the
Purchaser.
4.3 Governmental Approvals. Except as set forth on
Schedule 4.3 entitled "Governmental Approvals" attached hereto, no
approval, consent, decree, or order of any Governmental Authority
is required in connection with the execution and delivery of this
Agreement by the Purchaser, the performance of its obligations
hereunder, or the consummation by it of the transactions
contemplated hereby.
4.4 Third Party Consents. Except as set forth on
Schedule 4.4 entitled "Consents" attached hereto, no Third Party
Consent is required in connection with the execution, delivery, or
performance of this Agreement by the Purchaser.
4.5 Brokers. The Purchaser is not directly or
indirectly obligated to anyone acting as a broker, finder, or in
any other similar capacity in connection with this Agreement or the
transactions contemplated hereby.
ARTICLE 5
CERTAIN COVENANTS
5.1 Mutual Covenants and Agreements. The Purchaser, MC,
the Seller and SRAG hereby covenant and agree that:
(a) Publicity. Except to the extent as may be required
by applicable Law, it shall not issue any press release or make any
other public statement concerning the transactions contemplated by
this Agreement without obtaining the prior approval of the other
parties.
(b) Expenses. Except as otherwise provided in this
Agreement, MC, the Seller and the Purchaser shall each bear their
own costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby. Other than the fees and
expenses of McDaniels & Co. payable prior to December 31, 1993 (but
in no event any success fee) and the fees and expenses of Arthur
Andersen Zurich for services rendered to SRAG, SRAG shall not bear
the costs of any outside legal, tax or other counsel incurred in
connection with this Agreement or the transactions contemplated
hereby.
(c) Cooperation. The Purchaser, MC, the Seller and SRAG
shall use their best efforts to execute all documents or
certificates as may be necessary, appropriate, or desirable, on the
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advice of counsel, for the consummation of the transactions
contemplated by this Agreement. MC and the Seller shall take all
actions and execute and deliver all documents necessary or
desirable to (i) effectively convey good title, free of all Liens,
to the Stock to the Purchaser and (ii) obtain all consents and
approvals and make all notifications necessary, appropriate or
desirable, on the advice of counsel, to consummate the transactions
contemplated by this Agreement.
(d) Brokers. Except for McDaniels & Co., for whose fees
and expenses payable after December 31, 1993 (but in no event
including any success fee) MC is solely responsible, neither MC,
the Seller nor any Company is directly or indirectly obligated to
anyone acting as a broker, finder, or in any other similar capacity
in connection with this Agreement or the transactions contemplated
hereby. MC shall be solely responsible and pay all finders or
brokers fees for which it has directly or indirectly obligated
itself.
5.2 Actions of MC Prior to the Closing. Prior to the
Closing, MC shall have taken the following actions:
(a) Reduction of Bank Debt. On the Closing Date but
immediately prior to the Closing, MC shall pay in cash to SRAG
amounts equal to the amounts necessary both as of December 31, 1993
and as of the Closing Date to, and MC shall cause SRAG to, reduce
the Outstanding Debt as of December 31, 1993 to no more than SF
23,061,000 and on the Closing Date to no more than SF 23,461,000
(including interest accrued as if each such date and fees and
penalties assessed thereon). Such Outstanding Debt outstanding is
as currently shown on Exhibit B attached hereto. SRAG shall use
the funds provided by the Seller to so reduce such Outstanding
Debt.
(b) Sale of Real Property. MC shall or shall cause one
of its Affiliates to purchase and take title to the Owned Real
Property of SRAG, including by assumption of the mortgages with
simultaneous release of SRAG therefrom by the holders of such
mortgages or by payment of the mortgages (including any costs,
penalties or expenses relating to early termination), at purchase
prices equal to the Stated Value of each such Owned Real Property.
The sale agreements therefor shall be in a form agreed to by the
parties. All expenses and Taxes payable by SRAG as a result of
such real property sales shall be paid directly by MC.
(c) Sale of Revox Consumer Division. MC shall or shall
cause one of its 100%-owned subsidiaries to purchase the stock or
shares in the Excluded Subsidiaries. The share purchase agreement
shall bein substantially the form attached hereto as Exhibit C,
adapted to local law. MC or one of its subsidiaries shall purchase
the assets and assume the liabilities of the Revox Consumer
Division by executing and delivering, along with SRAG, the asset
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purchase agreement in the form attached hereto as Exhibit D (the
"Asset Purchase Agreement"). Any transfer or stamp taxes payable
as a result of the transactions contemplated by this subsection
shall be borne by MC.
(d) Contribution to Capital. MC and the Seller shall
prior to the Closing Date cancel all debt owed to it by SRAG or any
Studer Subsidiary as a contribution to the capital of SRAG and such
Studer Subsidiaries and shall evidence such cancellation and
contribution by executing the resolution in the form attached
hereto as Exhibit E. MC shall pay any Swiss stamp duty or other
tax arising from such cancellation or contribution but SRAG shall
be obligated to apply for an exemption therefrom. Such
contribution shall be made by MC and the Seller in such a manner as
to avoid income to SRAG which would be required to be set off
against accrued net operating losses. SRAG shall not have from the
date of the Agreement Financial Statements repaid any debt or made
any distributions of any kind to the Seller.
5.3 Actions at the Closing.
(a) Lease of Primary Facility. MC or its subsidiary,
and SRAG shall execute and deliver on the Closing Date a Lease
Agreement for the Primary Facility with the significant terms
attached hereto as Exhibit F.
(b) Use of Secondary Facility. MC shall cause the
purchaser of the Althardstrasse 10 Real Property to allow SRAG from
the Closing Date until the earlier to occur of June 30, 1994 or the
date on which such Real Property is transferred or leased to a non-
Affiliate of MC free use of 200 square meters in the building at
such Real Property for customer acceptance.
(c) Contribution of Capital. MC shall have prior to the
Closing contributed SF 2,000,000.-- in cash to SRAG, which funds
shall be used by SRAG to repay the loan made by Personalstiftung
der Firma Studer Revox AG to SRAG in the same amount or shall
provide evidence satisfactory to the Purchaser that MC has provided
such funds to SRAG and that SRAG has repaid such loan. MC shall
pay any Swiss stamp duty or other tax arising from such
contribution.
(d) Purchaser Guarantees. Harman shall on the Closing
Date substitute its guarantee for all debt of the Companies
remaining to banks or credit institutions outstanding at the
Closing and guaranteed by MC, where required by such bank and
taking into account the reduction of Outstanding Debt required by
Section 5.2(a) hereof. Such outstanding guaranteed debt is to the
institutions and in the amounts listed on Exhibit G to this
Agreement. In the event that the substitute guarantee does not
result in a release of the guarantee of MC, the substitute
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guarantee shall provide that the Purchaser is the primary
guarantor.
(e) Transfer of Other Shares in Subsidiaries. MC and
the Seller shall transfer or shall cause to be transferred to the
Purchaser or a designee of the Purchaser on the Closing Date, at no
additional cost to the Purchaser, any qualified or directors shares
(or equity interests) in SRAG or any Studer Subsidiary not
otherwise being directly or indirectly transferred to the Purchaser
pursuant to Section 1.3 of this Agreement.
(f) Board Changes. On the Closing Date, the Purchaser
shall, unless there are grounds not to do so, release the directors
of SRAG who are removed as directors on the Closing Date.
(g) Schedules. On the Closing Date, MC and the Seller
shall deliver per Schedule to this Agreement any additions to each
such Schedule containing facts that have arisen or become known
between the date of this Agreement and the Closing Date, duly
certified by MC and the Seller.
(h) Intercompany Waiver. Prior to the Closing, and both
as of December 31, 1993 and the Closing Date, MC shall cause all
loans or accounts payable by SRAG or any Studer Subsidiary to any
Excluded Subsidiary to be canceled and waived and SRAG shall cancel
and waive all loans or accounts payable by the Excluded
Subsidiaries to SRAG.
5.4 Actions After the Closing.
(a) No Use of Studer Name. Following the Closing, MC
shall not and shall cause any Affiliate of MC to not use the name
"Studer" and MC, the Seller and SRAG shall not have directly or
indirectly transferred or attempted to transfer to any Person any
rights in or to use the name "Studer." MC shall be responsible for
any costs associated with requiring any Affiliate of MC other than
SRAG and the Studer Subsidiaries to discontinue use of and to give
up any rights to use the name "Studer." MC shall, within 6 months
following the Closing Date, cause the Excluded Subsidiaries to
eliminate the name "Studer" from their corporate names.
(b) Sale of Revox Pro Line Inventory. A certain amount
of Revox Pro Line is owned by Studer Revox GmbH (Germany). Prior
to the Closing the Seller undertakes to provide the Purchaser with
a list of such Revox Pro Line and to cause Studer Revox GmbH to
sell to the Purchaser, and the Purchaser undertakes to purchase,
such Revox Pro Line, for cash within 30 days of Closing, payment
due within 30 days of the date of delivery and shipment to be CIF
Studer Revox AG, Regensdorf (with Studer Revox GmbH to be obligated
for all applicable sales and VAT), at 50% of its value included in
the Audited 1993 Financial Statements except that no payment shall
be made for any items received in damaged or defective condition
and no payment shall be made to the extent the list does not
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substantially conform to the items included in the Audited 1993
Financial Statements and to the extent that any such items have
been disposed of between December 31, 1993 and the date of
delivery.
(c) SRAG shall and shall cause the Studer Subsidiaries
to file with the appropriate commercial register within 6 months of
the date of this Agreement applications to change their corporate
names to remove the word "Revox" from such names.
(d) MC and the Seller shall cause Studer-Revox GmbH
(Germany) to transfer within 30 days of the Closing Date at no cost
to SRAG all technical information (including, without limitation,
drawings, reports, plans, schematics, memoranda and manuals), know-
how, patents, trademarks and any other Intellectual Property as
well as any tooling or other manufacturing equipment held or owned
by Studer-Revox Deutschland and primarily used or planned to be
used in or otherwise reasonably necessary to the SRAG Business with
respect to the Studer line of products and the Revox Pro Line.
(e) The Purchaser shall cooperate with MC and the Seller
in obtaining a tax ruling to separate the net operating losses of
SRAG associated exclusively with the assets of the Revox Consumer
Division for allocation to Buyer as defined in the Asset Purchase
Agreement.
ARTICLE 6
SURVIVAL AND INDEMNIFICATION
6.1 Survival of Representations and Warranties. The
period during which claims under the respective representations and
warranties of MC and the Seller contained in Article 3 hereof and
of the Purchaser contained in Article 4 hereof shall be pursuable
in accordance with Section 6.4(f) hereof is one year ending at
midnight of February 28, 1995, except that such period for claims
under Sections 3.1 and 3.2 shall be 5 years, for claims under
Section 3.13 shall be 2 years and 6 months, for claims under
Section 3.22 shall be 10 years and for claims under Section 3.19
(Taxes) shall expire in accordance with the expiration of the
applicable statute of limitations (Verjahrung) with respect to such
Taxes.
6.2 Indemnification by MC and Seller. (a) MC and the
Seller shall, jointly and severally, defend, indemnify, and hold
harmless any Indemnified Purchaser, from and against any Losses,
including interest thereon, caused by or arising out of (i) any
failure by MC or the Seller to perform its covenants or obligations
as set forth in this Agreement or in any instrument or agreement
delivered by MC or the Seller pursuant to this Agreement, and (ii)
subject to the limitations contained in Sections 6.1, 6.2(b) and
6.4(f), any breach by MC or the Seller of any representation and
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warranty to Purchaser contained in Article 3 of this Agreement,
(iii) the sale to the Seller or its subsidiary of the assets of the
Revox Consumer Division pursuant to the Asset Purchase Agreement,
such assets (or any assets which should have been transferred
pursuant to the Asset Purchase Agreement but were not) or the
liabilities assumed by the Seller or its subsidiary pursuant to the
Asset Purchase Agreement, (iv) any and all liabilities of or
associated with the Excluded Subsidiaries, and (v) any liabilities
assumed by MC or its subsidiaries pursuant to any Real Property
Sales Agreement executed pursuant to this Agreement.
(b) The liability of MC and the Seller under the
indemnification contained in Section 6.2(a)(ii) for claims noticed
in accordance with Section 6.4(f) of this Agreement shall be
limited in accordance with the following and the limitations on
MC's and the Seller's liability contained in this Section 6.2(b)
shall not act to limit in any other way MC's or the Seller's
liabilities and obligations under this Agreement.
(i) MC and the Seller shall not be obligated to pay any
claims under the indemnification contained in Section 6.2(a)(ii)
for breaches resulting from or arising out of Sections 3.1 through
3.18, 3.20, and 3.22 through 3.24 of this Agreement, inclusive,
unless and until such claims exceed in the aggregate SF 1,000,000.-
- -;
(ii) Once such claims exceed in the aggregate SF
1,000,000.--, then MC and the Seller shall be obligated to pay the
aggregate amount of all such claims to the extent such amount
exceeds the SF 1,000,000.-- threshold, provided, however, that MC's
and the Seller's liability for such claims shall not exceed in the
aggregate SF 5,000,000.--; and
(iii) MC's and the Seller's obligation to pay any claims
under the indemnification contained in Section 6.2(a)(ii) for
breaches resulting from or arising out of Sections 3.19 and 3.21 of
this Agreement shall not be limited.
6.3 Indemnification by Purchaser. The Purchaser hereby
agrees to defend, indemnify, and hold harmless any Indemnified
Seller from and against any Losses, including interest thereon,
caused by or arising out of (a) any failure by Purchaser to perform
its covenants or obligations to such Seller as set forth in this
Agreement or in any instrument or agreement delivered by Purchaser
pursuant to this Agreement, and (b) subject to the limitations
contained in Sections 6.1 and 6.4(f), any breach by Purchaser of
any representation and warranty to the Seller contained in Article
4 of this Agreement.
6.4 Indemnification Procedure. (a) Each Indemnified
Party agrees to give the Indemnifying Party prompt written notice
of any event, or any written claim by a third party, of which it
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obtains knowledge, which could give rise to any Losses as to which
it may require indemnification under this Agreement. Such written
notice shall set forth the basis on which a claim for indemnity
hereunder is requested and, in the case of claims by third parties,
shall advise the Indemnifying Party whether the Indemnified Party
intends to contest same. The Indemnified Party shall have the
right to contest such claim, in which case the Indemnifying Party
shall have the right to be represented, at its own expense, by its
own counsel, its participation to be subject to the reasonable
direction of the Indemnified Party.
(b) Except in the case of claims arising under Section
3.19, if the Indemnified Party determines not to contest such
claim, the Indemnifying Party shall have the right, at its own
expense, to contest and defend against such claim by giving written
notice to the Indemnified Party within fifteen days after the
receipt of the Indemnified Party's notice that it intends not to
contest. If the Indemnifying Party determines to contest such
claim, the Indemnified Party shall have the right to be
represented, at its own expense, by its own counsel, its
participation to be subject to the reasonable direction of the
Indemnifying Party. If the Indemnifying Party determines to
contest such claim, it shall be deemed to have agreed that such
claim is absolutely subject to indemnification hereunder, and, if
the Indemnifying Party subsequently determines to settle such
claim, such settlement shall be subject to Section 6.4(d) hereof.
If the Indemnifying Party fails to undertake the defense of or
settle or pay any such third-party claim within 15 days after the
Indemnified Party has given written notice to the Indemnifying
Party advising that the Indemnified Party does not intend to
contest such claim, or if the Indemnifying Party, after having
given notice to the Indemnified Party that it intends to contest
such claim, fails promptly to defend, settle, or pay such claim,
then the Indemnified Party may take any and all necessary action to
dispose of such claim, including, without limitation, the
settlement or full payment thereof upon such terms as it shall deem
appropriate, in its sole discretion, and the Indemnifying Party
shall be liable to indemnify, upon demand, the Indemnified Party
for the full amount of the indemnity claim therefor.
(c) In any case, each party shall make available to the
other and its attorneys at all reasonable times during normal
business hours, all books, records, and other documents in its
possession relating to such claim and the party contesting any such
claim shall be furnished all reasonable assistance in connection
therewith by the other party or parties.
(d) Except in the case of claims arising under Section
3.19, in the event that a Settling Party desires to settle any such
third-party claim, the Settling Party shall advise the other party
in writing of the terms of the Proposed Settlement. If such
Proposed Settlement is unsatisfactory to such other party, such
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<PAGE>
other party shall have the right, at its expense, to contest such
claim, by giving written notice of such election to the Settling
Party within 15 days of such other party's receipt of the advice of
the Proposed Settlement. If such other party delivers no such
written notice within such 15 days, the Settling Party may offer
the Proposed Settlement to the third party making such claim. If
the Proposed Settlement is not accepted by the third party making
such claim, any new Proposed Settlement which the Settling Party
may wish to present to the third party making such claim shall
again be subject to the provisions of this subparagraph. Any
settlement proposed by a Seller shall contain an unconditional
release of the Purchaser from such claim and shall not involve any
non-monetary relief affecting the Businesses as then conducted or
proposed to be conducted or the Purchaser.
(e) At the time the amount of any liability on the part
of an Indemnifying Party under this section is determined (which in
case of payments to a third party shall be the earlier of (i) the
date of such payment or (ii) the date that a court of competent
jurisdiction shall enter a judgment, order, or decree establishing
such liability, and in the case of claims arising under Section
3.19, shall be the date such liability is agreed with the relevant
taxing authority), the Indemnifying Party shall forthwith, upon
notice to the Indemnified Party, pay to the Indemnified Party the
amount of the indemnity claim.
(f) A claim of indemnification under this Article 6 with
respect to breach of a representation and warranty shall be
pursuable so long as written notice, including a description of the
claim and the basis for the belief that the claim is indemnifiable,
of such claim was given before the expiration of such
representation and warranty as set forth in section 6.1 of this
Agreement.
(g) The remedies agreed in this Agreement are in lieu of
and not in addition to, any remedies otherwise available by law
(other than for fraud). In particular, Buyer waives any and all
rights to cancel or rescind this Agreement.
6.5 Insurance Benefits. In determining the amount of
Losses for which any Indemnified Party seeks indemnity from an
Indemnifying Party hereunder, no Losses shall be deemed to have
been suffered by such Indemnified Party to the extent that it is
actually reimbursed to the Indemnified Party (net of any Taxes)
through insurance or received by the Indemnified Party from any
other Person through rights of indemnity, contribution or
otherwise.
6.6 Changes in Legislation. No Losses shall be deemed
to have been suffered by an Indemnified Party to the extent such
Losses are directly attributable to any change in governmental
legislation or regulatory administration, including but not limited
29
<PAGE>
to tax legislation or regulation, after the Closing Date.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 Conditions Applicable to Purchaser. Until the
Closing has occurred, the Purchaser may withdraw from this
Agreement without any penalty or payment obligation under this
Agreement by written notice to the Seller if any of the following
conditions are not fully met:
(a) Performance of This Agreement. All the terms,
covenants and conditions of this Agreement to be complied with and
performed by MC, the Seller or SRAG on or before the Closing Date
shall have been fully complied with and performed in all respects.
(b) Accuracy of Representations and Warranties. The
representations and warranties of MC and the Seller set forth in
this Agreement shall be true and correct in all respects both on
the date of this Agreement and as of the Closing Date.
(c) Litigation. On the Closing Date, there shall not be
in force any injunction, order or decree restricting or enjoining
consummation of the transactions contemplated by this Agreement,
and there shall be no litigation, proceeding, governmental
investigation, claim or action pending or threatened to enjoin,
restrict, restrain, set aside or invalidate the transactions
contemplated by this Agreement.
(d) No Material Adverse Change. Since the date hereof
there shall have been no Material Adverse Change in the financial
condition, results of operations, Businesses or prospects of the
Companies. There shall be no Material Adverse Change on the
updated Schedules provided to the Purchaser pursuant to Section
5.3(g) of this Agreement.
(e) Completion of Due Diligence. The Purchaser shall
have completed its due diligence review of SRAG and the
Subsidiaries without having discovered any Material Obligation.
(f) Consents and Governmental Approvals Obtained. The
Seller shall have obtained all Third Party Consents and
Governmental Approvals and all corporate approvals necessary for
MC, the Seller and SRAG to enter into and perform this Agreement.
(g) UK Merger Approval. The Secretary of State for
Trade and Industry has confirmed that it is not his intention to
refer any of the transactions contemplated hereby to the Monopolies
and Mergers Commission.
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(h) German Cartel Office Approval. The German Federal
Cartel Office has confirmed that it has no objection to the
transactions contemplated hereby.
(i) Lex Friedrich. The Purchaser shall have received
the Lex Friedrich approval of the Swiss Office of the Interior
relating to the lease agreement regarding the Primary Facility
contemplated in Section 5.2(a) of this Agreement.
7.2 Conditions Applicable to MC and the Seller. Until
the Closing has occurred, MC and the Seller may withdraw from this
Agreement without any penalty or payment obligation under this
Agreement by written notice to the Purchaser if any of the
following conditions are not fully met:
(a) Performance of This Agreement. All the terms,
covenants and conditions of this Agreement to be complied with and
performed by the Purchaser on or before the Closing Date shall have
been fully complied with and performed in all respects.
(b) Accuracy of Representations and Warranties. The
representations and warranties of the Purchaser set forth in this
Agreement shall be true and correct in all respects both on the
date of this Agreement and as of the Closing Date.
(c) Litigation. On the Closing Date, there shall not be
in force any injunction, order or decree restricting or enjoining
consummation of the transactions contemplated by this Agreement,
and there shall be no litigation, proceeding, governmental
investigation, claim or action pending or threatened to enjoin,
restrict, restrain, set aside or invalidate the transactions
contemplated by this Agreement.
7.3 Conditions Subsequent to Binding Effect of This
Agreement. The parties expressly agree that a condition subsequent
to their obligations under this Agreement is approval of this
Agreement by the boards (Verwaltungsrat) of both MC and the Seller.
MC shall provide evidence to the Purchaser of the approval of this
transaction by the boards of MC and the Seller before 17:00 Zurich
time on February 9, 1994. If such evidence is not so provided to
the Purchaser, this Agreement shall become null and void.
ARTICLE 8
MISCELLANEOUS
8.1 Notices. Except as otherwise provided herein, any
notice required hereunder shall be in writing, and shall be deemed
to have been validly served, given or delivered upon delivery
thereof to the party to be notified (in the case of a fax, by
delivery with confirmation of receipt), in each case to the address
of the party to be notified, as follows:
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<PAGE>
(a) If to the Purchaser or Harman:
Harman Investment Company, Inc.
c/o Harman International Industries, Incorporated
8500 Balboa Boulevard
Northridge, California 91329
U.S.A.
Attention: Bernard A. Girod
Telephone: 1-818-893-8411
Fax: 1-818-891-7345
With copies to:
Jones, Day, Reavis & Pogue
62, rue du Faubourg Saint-Honore
75008 Paris
France
Attention: David F. Clossey, Esq.
Telephone: 33-1-44-71-39-39
Fax: 33-1-49-24-04-71
(b) If to MC or the Seller:
Motor-Columbus AG
Parkstrasse 27
5401 Baden
Switzerland
Telephone: 41-56-30-11-11
Fax: 41-56-21-13-29
(c) If to SRAG:
Studer Revox AG
Althardstrasse 30
8105 Regensdorf
Switzerland
Attention: Robert Lombardini
Telephone: 41-1-870-71-11
Fax: 41-1-840-06-90
or to such other address or addresses as the Purchaser, MC, the
Seller or SRAG may from time to time designate by notice as
provided herein.
8.2 Assignment. None of MC, the Seller or SRAG shall
assign or delegate this Agreement or any rights or obligations
hereunder to any Person. The Purchaser may assign or delegate this
Agreement and any rights or obligations hereunder.
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8.3 Waiver. Any party may, by written notice to the
other party, (a) extend the time for the performance of any of the
obligations or other actions of such other under this Agreement;
(b) waive compliance with any of the conditions or covenants of
such other contained in this Agreement; or (c) waive or modify
performance of any of the obligations of such other under this
Agreement. Except as provided in the preceding sentence, no action
taken pursuant to this Agreement, including, without limitation,
any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance
with any of the covenants, conditions, agreements, or indemnities
contained in this Agreement. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
8.4 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto which are incorporated into this
Agreement by reference, supersedes any other agreement, whether
written or oral, that may have been made or entered into by any of
the parties relating to the matters contemplated hereby, and
constitutes the entire agreement of the parties.
8.5 Amendments, Supplements. This Agreement may be
amended or supplemented only by an instrument in writing executed
and delivered by a duly authorized director or officer of each of
the parties hereto.
8.6 Captions. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect
the construction or interpretation of any provision of this
Agreement.
8.7 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be an original, but all
of which together shall constitute one and the same instrument.
8.8 Successors and Assigns. This Agreement shall be
binding upon, inure to the benefit of, and may be enforced by, the
Purchaser, MC, the Seller and SRAG, and their respective successors
and permitted assigns.
8.9 Governing Law. This Agreement shall be governed by
the laws of Switzerland.
8.10 Arbitration. All disputes arising in connection
with the present agreement (other than those concerning the
adjustment of the purchase price pursuant to Section 2.2 of this
Agreement which shall be resolved pursuant to such Section 2.2)
shall be finally settled by arbitration under the Rules of
Arbitration of the International Chamber of Commerce ("ICC Rules")
by three arbitrators appointed in accordance with the ICC Rules.
The parties expressly agree that the party or parties submitting a
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<PAGE>
request for arbitration shall jointly nominate one co-arbitrator
and the party or parties designated as defendant(s) therein shall
likewise jointly nominate one co-arbitrator, pursuant to the time
periods set forth in Article 2 of the ICC Rules.
The place of arbitration shall be Geneva, Switzerland. The
language of the arbitral proceedings shall be English.
8.11 Severability. Should any provision or portion of
this Agreement be held unenforceable or invalid for any reason, the
remaining provisions and portions of this Agreement shall be
unaffected by such holding, unless to do so would alter
substantially the intended effect of this Agreement, in which case
the remaining provisions or portions of this Agreement shall be
read together so as to give effect to the extent possible to the
intentions of the parties.
8.12 Gender and Number. The masculine, feminine, or
neuter gender and the singular or plural shall each be deemed to
include the others whenever the context so indicates.
8.13 No Shop. MC and the Seller shall not, from the
date of this Agreement until the earlier to occur of Closing and
termination of this Agreement, discuss with or approach any Person
other than the Purchaser regarding the possible sale of SRAG or any
of its assets or Studer Subsidiaries other than those related to
the Revox Consumer Division.
8.14 Confidentiality. All parties shall maintain the
complete confidentiality of and with respect to this Agreement and
its terms, conditions and provisions until such time as this
Agreement is required to be publicly disclosed by Law.
IN WITNESS WHEREOF, the Purchaser, Harman, MC, the Seller and
SRAG have duly executed and delivered this Agreement as of the date
first above written.
HARMAN INVESTMENT COMPANY, INC.
By: /s/ Bernard A. Girod
----------------------
Name: Bernard A. Girod
HARMAN INTERNATIONAL INDUSTRIES, INC.
By: /s/ Bernard A. Girod
---------------------
Name: Bernard A. Girod
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<PAGE>
MOTOR-COLUMBUS AG
By: /s/ Ernst Thomke By: /s/ Robert Lombardini
----------------- ----------------------
Name: Ernst Thomke Name: Robert Lombardini
Title: Executive Vice-President Title: Vice-President
SAEG REFINDUS HOLDING AG
By: /s/ Robert Lombardini By: /s/ Fredy Hiltman
---------------------- ------------------
Name: Robert Lombardini Name: Fredy Hiltman
Title: Director Title: Director
STUDER REVOX AG
By: /s/ Ernst Thomke By: /s/ Robert Lombardini
----------------- ----------------------
Name: Ernst Thomke Name: Robert Lombardini
Title: Director Title: Chief Executive Officer
35
<PAGE>
EXHIBIT A
Definitions
36
<PAGE>
1. "Accounts Receivable" means "Accounts Receivable" as
defined in Section 3.12 of this Agreement.
2. "Adjustments" means (a) the reduction in bank debt called
for in Section 5.2(a) of this Agreement, (b) the sale of the Real
Property called for in Section 5.2(b) of this Agreement, (c) the
contribution to capital called for in Section 5.2(d) of this
Agreement, (d) the contribution of capital called for in Section
5.3(d) of this Agreement, (e) an increase in accounts receivable
reserves by SF 1,000,000.--, (f) the writing down of inventory
(after elimination of the Revox Consumer Division) by an amount
equal to SF 12,517,000.--, (g) the writing down of fixed assets
(after elimination of the Revox Consumer Division) by an amount
equal to SF 1,000,000.--, (h) the writing off of good will and
intangibles, (i) the writing down of the Revox Pro Line Inventory
of the Companies by 50% of its value (as shown on the relevant
financial statements being adjusted), (j) the increase in the
amount shown as attributable to minority shareholders to SF
1,400,000 by a reduction of equity and (k) the writing off of all
spare parts Inventory relating to the Revox Consumer Division at
SRAG and the Studer Subsidiaries.
3. "Affiliate" means, with respect to any party to this
Agreement, any Person controlled by or under common control with,
under the control of, or controlling such party.
4. "Agreement" means this Stock Purchase Agreement.
5. "Agreement Financial Statements" means the unaudited
interim consolidated balance sheet for SRAG and the Studer
Subsidiaries at December 31, 1993 prior to Adjustments but
eliminating the Excluded Subsidiaries and all intercompany
balances, prepared in accordance with US GAAP except for Owned Real
Property in Switzerland which is valued in accordance with Swiss
accounting practice consistently applied, a copy of which is
attached as Annex 1 to this Agreement.
6. "Arbitrator" means "Arbitrator" as defined in Section
2.3(d) of this Agreement.
7. "Asset Purchase Agreement" means "Asset Purchase
Agreement" as defined in Section 5.2(d) of this Agreement.
8. "Audited 1993 Financial Statements" means the audited
consolidated balance sheet and statement of income for SRAG and the
Studer Subsidiaries at December 31, 1993 prior to Adjustments but
eliminating Excluded Subsidiaries and all intercompany balances,
prepared in accordance with US GAAP except for Owned Real Property
in Switzerland which is valued in accordance with Swiss accounting
practice consistently applied.
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9. "Best Knowledge of MC" means the best knowledge (nach
bestem Wissen und Gewissen), after due inquiry, of MC and of any
officer or other senior management employee, employee of any
Company who has reason to know or in the ordinary course of
business should know.
10. "Best Knowledge of the Purchaser" means the best
knowledge after due inquiry of the Purchaser and any officer or
other senior management employee thereof who has reason to know or
in the ordinary course of business should know.
11. "Business or Businesses" mean, respectively, either and
all of the SRAG Business or any Subsidiary Business.
12. "Closing" shall mean the transfer of the Stock to the
Purchaser by the Seller pursuant to Section 1.3 of this Agreement.
13. "Closing Date" shall mean February 28, 1994 or such other
date as the Seller and the Purchaser shall mutually agree.
14. "Company and Companies" mean, respectively, any or all of
SRAG and the Studer Subsidiaries.
15. "Contracts" means any (i) union or collective bargaining
agreement (Kollektivvertrag) or workers agreement
(Betriebsvereinbarung); (ii) employment, consulting, or severance
agreement; (iii) joint venture agreement or acquisition or
disposition agreement; (iv) mortgage, security agreement or other
agreement relating either to the borrowing of money, the extension
of credit, or the granting of Liens; (v) sales, agency, franchise,
distributorship, or other marketing agreement; (vi) leases of real
property; and (vii) any other contracts, agreements, orders,
leases, licenses, or other commitments which involve an amount in
excess of SF 30,000.-- or which have a term in excess of one year.
16. "Disputed Item" means "Disputed Item" as defined in
Section 2.3(a)(i) of this Agreement.
17. "Effective Date" means January 1, 1994.
18. "Environmental Laws" means all applicable Swiss federal,
or local and European Community environmental Laws and
environmental Laws of any country member or associate member of the
European Community or the European Free Trade Association and of
any country where any Company has operations or owns or leases Real
Property.
19. "Employee Plans" means "Employee Plans" as defined in
Section 3.18 of this Agreement.
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20. "Excluded Subsidiary" or "Excluded Subsidiaries" mean,
respectively, any or all of Studer Revox GmbH (Germany), Studer
Revox America, Inc. (USA) and Revox Italia Srl (Italy).
21. "Existing Plans" means "Existing Plans" as defined in
Section 3.18 of this Agreement.
22. "Force Majeure" means an event which is beyond the
reasonable control of a party, and which makes a party's
performance of its obligations impossible or so impractical as
reasonably to be considered impossible under the circumstances, and
includes, without limitation, war, riots, civil disorder,
earthquake, fire, explosion, storm, flood, or other adverse weather
conditions, strikes, lockouts, or other industrial action, and
confiscation or any other action by Governmental Authorities.
23. "Governmental Authority" means any court, governmental
authority, governmental body, or other regulatory or administrative
agency or commission of any government of any country or any
private or governmental arbitration or conciliation authority or
other similar body.
24. "Hazardous Material" means any hazardous or toxic waste
or substance or constituent petroleum product or any other chemical
or substance currently regulated pursuant to or affected by any
Environmental Law.
25. "Indemnified Party" means a party to this Agreement
seeking indemnification from another party to this Agreement
pursuant to the terms and conditions of Article 6 of this
Agreement.
26. "Indemnified Purchaser" means SRAG, its Subsidiaries, the
Purchaser, the Affiliates of the Purchaser, and their respective
successors and assigns.
27. "Indemnified Seller" means MC, the Seller and their
successors and permitted assigns.
28. "Indemnifying Party" means a party hereto from whom
another party hereto is seeking indemnification pursuant to the
terms and conditions of Article 6 of this Agreement.
29. "Intellectual Property" means copyrights, patents and
applications, registrations and licenses therefor, know-how and
licenses therefor, including, without limitation, the names
"Studer" and "Revox."
30. "Inventory" means, at any point in time, all raw
material, work-in-process, parts, finished products, or trade goods
of SRAG or any of its Subsidiaries.
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<PAGE>
31. "Law" means any law, statute, judgment, decree, order,
rule, regulation, ordinance, zoning regulation, legal requirement,
enactment, or Permit of any Governmental Authority.
32. "Leased Real Property" means all Real Property leased by
any Company as described on Schedule 3.7 to this Agreement.
33. "Lien" means any lien, encroachment, easement,
encumbrance, mortgage, hypothecation, charge, restriction, or other
conflicting ownership, equity, or security interest.
34. "Litigation" means any litigation, action, arbitration,
suit, investigation, filed claim, or proceeding.
35. "Losses" means claims asserted, actions, deficiencies,
damages, losses, costs, taxes, penalties, expenses, and liabilities
(including reasonable attorneys' fees, court costs, investment
expenses and any other costs incident to or interest chargeable on
any of the foregoing). In the case of claims arising under Section
3.19 of this Agreement, "Losses" shall also include the value of
any loss of or limitation on any tax credit, or other item of tax
benefit, and such value shall be determined as if such item of tax
benefit had been immediately used by the relevant Company to reduce
a tax liability imposed at the highest marginal rate of tax in the
relevant jurisdiction. A Loss shall not be a Loss to the extent
provision was made for the item concerned on the Audited 1993
Financial Statements after Adjustments.
36. "MC" means Motor-Columbus AG, a Swiss stock corporation.
37. "Material" means any single occurrence or item or series
of occurrences or items having in the aggregate an adverse effect
on the Purchaser or its Affiliates or any Company, in an amount
estimated by the Purchaser to be or liquidated at more than SF
100,000.--.
38. "Material Obligation" means any obligations or
liabilities of any Company exceeding singly or in the aggregate SF
500,000.-- and (i) not listed in the draft memoranda attached as
Annex 2 to this Agreement and (ii) not reserved for or reflected on
the Agreement Financial Statements after Adjustments to the extent
not so reserved for or reflected.
39. "Material Adverse Change" means (i) any adverse change or
changes in the financial condition or operations of the Companies
between December 31, 1993 and the Closing, (ii) any decrease of Net
Worth from the Agreement Financial Statements to the Audited 1993
Financial Statements, which in either case in the aggregate exceeds
SF 500,000.--, or (ii) the discovery by Purchaser of the existence
of any Material Obligation.
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40. "Net Worth" means the consolidated net assets of SRAG and
the Studer Subsidiaries as shown on either the Agreement Financial
Statements after Adjustments or the Audited 1993 Financial
Statements after Adjustments.
41. "Outstanding Debt" means all debt listed on the Agreement
Financial Statements and the Audited 1993 Financial Statements for
all Companies as "amounts payable to banks," "long-term debt
third," "bank and other debt," "bank debts," "intercompany notes
payable," "current portion of long-term debt" and any and all
amounts payable to MC, the Seller or any Excluded Subsidiary and
any long-term loans payable by Studer S.A. (France) to any
governmental authority including ANVAR.
42. "Owned Real Property" means all Real Property owned by
any Company or Excluded Subsidiary on October 31, 1993 as described
on Schedule 3.7 to this Agreement.
43. "Owned Shares" means "Owned Shares as defined in Section
3.2 of this Agreement.
44. "Permit" means any license, notification, permit,
approval, consent, qualification, or the like.
45. "Person" means an individual, a corporation, a
partnership, a joint stock company, a joint venture, an estate, a
trust, an unincorporated organization, a Governmental Authority, or
any other entity.
46. "Primary Facility" means the land, buildings and fixtures
located at Althardstrasse 30 in Regensdorf Switzerland.
47. "Proposed Settlement" means the amount and terms and
conditions of any Settling Party's proposed settlement of a third
party claim.
48. "Purchaser" means Harman Investment Company, Inc., a
Delaware corporation.
49. "Purchaser's Accountant" means "Purchaser's Accountant"
as defined in Section 2.3(d) of this Agreement.
50. "Real Property" means real estate, any interests therein,
land, buildings, structures, and fixtures.
51. "Real Property Sale Agreement" means "Real Property Sale
Agreement" as defined in Section 5.2(b) of this Agreement.
52. "Revox Consumer Division" means certain assets of SRAG,
including office furniture and equipment, trademarks, inventories,
an account receivable, obligations to certain named employees and
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certain other liabilities all as described in Exhibit D attached
hereto.
53. "Revox Pro Line" means all currently existing and useable
and saleable Inventory (and not including damaged or defective
Inventory) of, as of December 31, 1993, relating to the products
listed on Exhibit H attached hereto.
54. "Secondary Facility" means the land, buildings and
fixtures located at Althardstrasse 10 in Regensdorf Switzerland.
55. "Seller" means SAEG Refindus Holding AG, a Swiss stock
corporation.
56. "Seller's Accountant" means "Seller's Accountant" as
defined in Section 2.3(b) of this Agreement.
57. "Settling Party" means any Indemnified Party or
Indemnifying Party who desires to settle a third-party claim for
which indemnification is being sought pursuant to the terms of
Article 6 of this Agreement.
58. "SRAG" means Studer Revox AG, a Swiss stock corporation.
59. "SRAG Business" means the business of SRAG which is to
manufacture, market, sell, and lease professional and consumer
audio equipment.
60. "Stated Value" means any value stated by MC in a range
between SF 40-50 million.
61. "Stock" means "Stock" as defined in Section 1.1 of this
Agreement.
62. "Studer Subsidiaries" means the Subsidiaries other than
the Excluded Subsidiaries.
63. "Subsidiary" means any subsidiary or Affiliate of SRAG as
listed on Exhibit I to this Agreement.
64. "Subsidiary Business" means the business of any
Subsidiary as described on Exhibit I to this Agreement.
65. "Tax" and "Taxes" mean "Tax" and "Taxes" as defined in
Section 3.19 of this Agreement.
66. "Third Party Consent" means "Third Party Consent" as
defined in Section 3.5 of this Agreement.
67. "US GAAP" means United States generally accepted
accounting principles, consistently applied.
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EXHIBIT 2.2
43
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AMENDMENT TO STOCK PURCHASE AGREEMENT
The undersigned parties entered into a Stock Purchase Agreement
dated February 3, 1994 (the "Agreement") and have agreed to amend
the Agreement in certain respects by execution and delivery of this
Amendment dated as of March 1, 1994 (this "Amendment").
Capitalized terms used herein and not otherwise defined herein are
defined as in the Agreement.
The Agreement is hereby amended in the following respects:
1. Due to delays in obtaining appointments with the public
notaries, the parties agree to execute the Escrow Agreement
attached hereto as Exhibit A (the "Escrow Agreement") and to
perform their respective obligations thereunder. All
documents executed on or as of March 1, 1994 will upon release
of the escrow pursuant to Section 4.2(a) of the Escrow
Agreement be deemed to have been executed as of the date of
such release which shall constitute the Closing Date for
purposes of this Amendment and the Agreement.
2. The cover page of the Agreement is amended by replacing the
words "HARMAN INVESTMENTS COMPANY, INC." with "HARMAN
INVESTMENT COMPANY, INC."
3. Section 2.3 is amended by adding at the end of such Section
the following sentence: "MC shall be liable for and shall
directly pay the legal and notarial fees of Peltzer &
Riesenkampf in connection with the transfers of Studer-Revox
GmbH to Revox AG and Studer Deutschland GmbH to Harman
Deutschland GmbH as contemplated by Sections 1.4 and 5.2(c)
hereof."
4. Section 3.1 is amended in the sixteenth and seventeenth lines
by deleting the words "Subject to Section 7.3."
5. Section 5.2(a) of the Agreement is amended in its entirety as
follows: "On the Closing Date but immediately prior to the
Closing, SRAG shall pay to MC the amount by which Outstanding
Debt (excluding any element thereof due to MC or any Affiliate
thereof) is less than SF 23,461,000.- at December 31, 1993
viz:
Maximum Outstanding SF
Debt at December 31, 1993 23,461,000
less
Amounts per Audited 1993
Financial Statements shown as
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amounts payable to Banks (18,829,000.-)
current portion Long
Term Debt ( 1,124,000.-)
Long Term Debt Third ( 1,072,000.-)
--------------
2,436,000.-
This excess amount is deemed to be the portion of
Outstanding Debt due to MC. MC agrees that there will
be no material increase in Outstanding Debt between
December 31, 1993 and the Closing Date, and that if
there is any such material increase then MC will make
up the difference in cash at the Closing. It is agreed
that the amount of SF 2,436,000.- payable by SRAG to MC
shall be netted against amounts due from MC and its
Affiliates to the Companies laid out in Exhibit E
attached hereto."
6. Section 5.2(b) of the Agreement is amended as follows:
(a) The second sentence is deleted; and the "sales
agreements" referred to in such sentence are to be in the
form attached to this Amendment as Exhibit B (the "RP Sales
Agreements").
(b) "Stated Value" shall be the purchase prices set forth
in the RP Sales Agreements.
(c) Adding to the end of Section 5.2(b) a new sentence as
follows: "SRAG shall upon due and legally valid execution of
the Real Property Sales Agreements owe MC a sales commission
for the sale of the SRAG Owned Real Property amounting to 2%
of the Stated Values therefor. MC shall at the Closing
cancel the amount due, waive any right to payment therefor,
and release SRAG from any obligation therefor."
7. Section 5.2(c) is amended as follows:
(a) In the fourth line the word "bein" is replaced with the
words "be in."
(b) The Asset Purchase Agreement shall be in the form
attached to this Amendment as Exhibit C.
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8. Section 5.2(d) is amended as follows:
(a) In the first line by replacing the words "MC and the
Seller" with the words "MC and any Affiliate thereof."
(b) In the second line by replacing the word "it" with the
word "them."
(c) In the ninth and tenth lines by replacing the words "MC
and the Seller" with the words "MC and any Affiliate
thereof."
(d) In the last line by replacing the words "the Seller"
with the words "MC or any Affiliate thereof."
(e) By replacing Exhibit E of the Agreement with Exhibit D
attached to this Amendment.
9. Section 5.3(a) is amended by replacing the "significant
terms" attached to the Agreement as Exhibit F with the Lease
Agreement in the form attached to this Amendment as Exhibit
E.
10. Section 5.3(c) is amended in the fifth line by replacing the
word "or" with the word "and."
11. Section 5.3(d) is restated in its entirety as follows:
"Within 30 days of the Closing Date, Harman shall either (i)
provide to Union Bank of Switzerland ("UBS") a guarantee of
the Outstanding Debt owing to UBS in form and content
suitable to UBS in order to effect the release of MC from
its guarantee of such Outstanding Debt or (ii) take whatever
other action may be necessary to result in the release of MC
from its guarantee of such Outstanding Debt, in any case,
taking into account the reduction of Outstanding Debt as
required by Section 5.2(a) hereof."
12. Section 5.3(g) is amended by providing that the updated
Schedules to the Agreement are as attached to this Amendment
as Exhibit F.
13. Section 5.3(h) is amended as follows:
(a) In the first and second lines by replacing the words
"and both" with the word "effective."
(b) In the second line by deleting the words "and the
Closing Date."
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14. A new Section 5.3(i) is added as follows: "On the Closing
Date MC shall or shall cause Studer-Revox GmbH to pay to
Studer Deutschland DM 500,000.- representing the loan from
Studer Deutschland GmbH to Studer-Revox GmbH listed on
Schedule 3.22-2".
15. Section 5.4(d) is amended in the eighth line by replacing
the word "Deutschland" with the abbreviation "GmbH."
16. A new section 5.4(f) is added as follows:
"(a) SRAG shall cause MC or its designee to have an option
to purchase the Vienna Owned Real Property, such option to
extend for a period of one year from the Closing Date, at a
purchase price equal to the book value therefor as shown in
the Audited 1993 Financial Statements (approximately AS 1.6
million) payable in cash to Studer Revox Wien Ges.m.b.H.
("SRW") immediately upon such transfer. The Vienna Owned
Real Property shall be transferred free and clear of the
mortgage registered currently in the amount of AS 10,000,000
and any mortgages registered or for which registration was
applied subsequent to the Closing Date. MC shall be solely
liable for and responsible for any real estate transfer tax,
gains tax or other similar tax and notarial and recording or
other similar fees in respect of the transfer on account of
such purchase. MC agrees that SRW shall not be obligated to
vacate such property upon sale thereof until 90 days after
receipt by it of notice from MC that it has made
arrangements to purchase such property or to cause it to be
purchased by its designee.
(b) MC shall have the right to pursue at its sole cost and
expense (including attorneys' fees) civil claims against the
following individual persons related to expropriation of
funds, embezzlement and corporate wrongdoing (the "Claims")
in connection with their employment by SRW or SRAG on the
conditions hereinafter stated: Messrs. Mussmann, Weimann,
Abromeit and Scharer and Ms. Zwickl (the "Potential
Defendants"). SRAG agrees to cooperate with MC, and to the
extent necessary participate in, or cause SRW to participate
in, legal proceedings which have been instituted or which
may be instituted by MC against any of the Potential
Defendants relating to the Claims . Similar actions against
other individuals on behalf of SRW relating to time periods
prior to the Closing shall be pursuable by MC only with the
written consent of SRAG, which consent shall not be
unreasonably withheld. MC hereby unconditionally guarantees
to SRAG and SRW that the pursuit of any such Claims by MC
(i) shall not be disruptive to the business or operations of
SRAG or SRW; (ii) shall not impose a significant demand on
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the time of or otherwise significantly disturb any employees
thereof; (iii) shall not create or otherwise result in any
Loss, cost or liability to SRAG or SRW of any kind,
especially through any counterclaims, claims of set-off or
similar claims; (iv) shall not directly or indirectly damage
the reputation of SRAG or SRW; and (v) shall be conducted
through an attorney or law firm of high repute and approved
by SRAG, which approval shall not be unreasonably withheld.
SRAG and SRW shall at all times during the course of such
legal proceedings be kept informed of the course, progress
and development of such proceedings and MC shall upon demand
deliver to them copies of any documents relating to
such proceedings. Subject to compliance with the foregoing,
MC shall be entitled to receive the benefit of any award,
judgment or settlement in any such legal proceeding."
17. Section 6.1 is amended in the ninth line by changing the
number "3.22" to the number "3.21."
18. Section 6.2(a) is amended by adding a subsection (vi)
thereto as follows:
"(vi) all debts to banks, other than as provided for in the
Audited 1993 Financial Statements,(including interest
accruing from December 31, 1993 and penalties), any Losses
incurred by SRAG or SRW that are guaranteed by MC pursuant
to Section 5.4(f) and, to the extent not reserved for or
provided for on the Audited 1993 Financial Statements, any
guarantees of debt by SRW to employees or former employees
thereof, amounts needed to fund any bank accounts of SRW
which as of the Closing Date are overdrawn or in debtor
status, and any other similar liabilities of SRW, including
without limitation any claims of employees still employed by
SRW on January 1, 1994 against SRW (other than the claim of
Mr. Arnold)."
19. Section 6.4(g) is amended in the third line by replacing the
word "Buyer" with the words "the Purchaser."
20. Section 7.1(i) is amended in the last line by replacing
"5.2" with "5.3".
21. Section 7.3 is deleted in its entirety.
22. Section 8.10 is amended by deleting the parenthetical phrase
contained in lines two through five thereof.
23. The definition of "Adjustments" is amended in the sixth line
by replacing "(d)" with "(c)."
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24. The definition of "Asset Purchase Agreement" is amended in
the second line by replacing "(d)" with "(c)."
25. The definition of "Closing Date" is amended to mean the date
upon which the escrow is released pursuant to Section 4.2(a)
of the Escrow Agreement.
26. The definition of "Disputed Item" is deleted.
27. The definition of "Outstanding Debt" is amended in the sixth
line thereof by replacing the words "the Seller" with the
words "any Affiliate thereof."
28. The definition of "Purchaser's Accountant" is deleted.
29. The definition of "Real Property Sale Agreement" is deleted.
30. The definition of "Seller's Accountant" is deleted.
31. Section 6.1 is amended in the sixth line by replacing the
date "February 28, 1995" with the words "the first
anniversary of the Closing Date".
The parties agree that all conditions contained in Sections 7.1
and 7.2 of the Agreement are duly waived and only the conditions
contained in the Escrow Agreement shall remain in force.
All documents executed pursuant to this Amendment shall be deemed
to have been executed pursuant to the Agreement.
IN WITNESS WHEREOF, the parties have executed this AMENDMENT as
of the date first written above.
HARMAN INVESTMENT COMPANY, INC.
By: /s/ Bernard A. Girod
---------------------
Name: Bernard A. Girod
HARMAN INTERNATIONAL INDUSTRIES, INC.
By: /s/ Bernard A. Girod
---------------------
Name: Bernard A. Girod
49
<PAGE>
MOTOR-COLUMBUS AG
By: /s/ Ernst Thomke By: /s/ Robert Lombardini
----------------- ----------------------
Name: Ernst Thomke Name: Robert Lombardini
Title: Executive Vice-President Title: Vice-President
SAEG REFINDUS HOLDING AG
By: /s/ Robert Lombardini By: /s/ Fredy Hiltman
---------------------- ------------------
Name: Robert Lombardini Name: Fredy Hiltman
Title: Director Title: Director
STUDER REVOX AG
By: /s/ Ernst Thomke By: /s/ Fredy Hiltman
----------------- ------------------
Name: Ernst Thomke Name: Fredy Hiltman
Title: Director Title: Director
50
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EXHIBIT 2.3
51
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FOR IMMEDIATE RELEASE MARCH 23, 1994
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
ANNOUNCES THE CLOSING OF THE ACQUISITION OF STUDER REVOX AG
Washington, D.C. -- Harman International announced today that it
closed on the acquisition of Studer Revox AG on March 17, 1994.
Studer Revox is a leader in the Professional Audio field with
particular strength in the recording and broadcast areas. The
Company is headquartered in Regensdorf, Switzerland. Principal
subsidiaries are located in France, the United States, Canada,
Germany, the United Kingdom, Japan, Singapore and Austria.
Studer Revox is recognized for the high quality and reliability of
its professional products which include analog and digital tape
recorders, mixing consoles, switching systems, digital audio
workstations, professional compact disc players and recorders and
turnkey broadcasting studios.
52 (continued)
<PAGE>
March 23, 1994
Page Two
Commenting on the acquisition, Dr. Sidney Harman, Chairman and
Chief Executive Officer of Harman International, said:
"We are very pleased to add Studer Revox to the Harman Group
of Companies. Its principal markets and technologies
complement ideally those of the Harman Professional group
which includes JBL Professional, UREI, Soundcraft, Allen &
Heath, DOD, Lexicon, AKG, BSS, dbx and Turbosound.
"Harman now offers complete professional system solutions
employing some of the industry's most prestigious brand names
and products. Harman's product range and geographical
coverage is now unmatched in the Professional Audio field.
Although Studer Revox AG will operate as an autonomous group,
it will benefit substantially from its association with the
Harman International Professional group in the areas of
technology, marketing and distribution."
Harman International Industries Incorporated is a leader in the
design, manufacture and marketing of high-quality, high-fidelity
audio products targeted primarily at the consumer, professional and
automotive markets. The Company's stock is traded on the New York
Stock Exchange under the symbol: HAR.
53
