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EXHIBIT 2.1
Reading Translation
Attachment II to Deed
G 277/1998 of Notary
Xx. Xxxxx Xxxxx in
Frankfurt am Main
Original document was
written in German.
English translation
of the executed
German version has
omitted the signature
pages.
SHARE PURCHASE AGREEMENT
of June 28, 1998 (the "Agreement")
between
(1) Xx. Xxxxxx Xxxx,
Ritastra(beta)e 1,
63834 Xxxxxxxx,
(2) Xx. Xxxx Xxxxxxxxx,
Kerschensteinerstra(beta)e 14,
67547 Worms,
(3) Xx. Xxxxxx Xxxxxxxxx,
Topferstra(beta)e 13,
67549 Worms,
(4) Xx. Xxx Xxxxxxxxx,
Kerschensteinerstra(beta)e 14,
67547 Worms,
(5) Xx. Xxxx Xxxx,
Hauselgasse 21,
69124 Heidelberg,
(6) Xx. Xxxxxx Xxxxxxx,
Xxxxxxxxxxx 00,
0
0
00000 Xxxxxxxxxx and
(7) Xx. Xxxxxxxx Kerschbaumer,
Reichenbergstra(beta)e 58,
71067 Sindelfingen
on the one side
(the parties under no. (1) to (7) hereinafter
referred to as the "Sellers")
and on the other side
(8) ADI Holding GmbH
c/o Bruckhaus Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxxx 00
00000 Xxxxxxxxx xx Xxxx
(hereinafter referred to as "Holding GmbH"),
(9) ADI Management GmbH
c/o Bruckhaus Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxxx 00
00000 Xxxxxxxxx xx Xxxx
(hereinafter referred to as "Management GmbH") and
(10) ADI Beteiligungs GmbH
c/o Bruckhaus Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxxx 00
00000 Xxxxxxxxx xx Xxxx
hereinafter referred to as "Beteiligungs GmbH"
(Beteiligungs GmbH, Holding GmbH and
Management GmbH hereinafter referred
to as the "Purchasers").
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PREAMBLE
(A) The Sellers and Ms. Xxxx Lips, wohnhaft Villenstra(beta)e 4b in 67433
Neustadt are the sole shareholders of EMD Gesellschaft fur
Elektroinstallation- und Maschinenbau-Dienstleistungen m. b. H. which
is registered in department B of the Commercial Register of the Lower
Court of Aschaffenburg under registration number HRB 2520 and has its
head office at Aschaffenburg (hereinafter together with its legal
successors referred to as "EMD A"). The stated capital of EMD A is DM
75.000,-- and is fully paid up. The stated capital consists of the
following shares:
(1) a share in the nominal amount of DM 22.500,--, which is held
by Xx. Xxxxxx Xxxx,
(2) a share in the nominal amount of DM 15.000,--, which is held
by Xx. Xxxxxx Xxxxxxxxx,
(3) a share in the nominal amount of DM 15.000,--, which is held
by Xx. Xxx Xxxxxxxxx, and
(4) a shares in the nominal amount of DM 22.500,--, which is held
by Ms. Xxxx Lips.
(B) The Sellers are the sole shareholders of EMD Gesellschaft fur
Elektroinstallation- und Maschinenbau-Dienstleistungen m. b. H. which
is registered in department B of the Commercial Register of the Lower
Court of Mannheim under registration number HRB 4335 and has its head
office at Mannheim (hereinafter together with its legal successors
referred to as "EMD M"). The stated capital of EMD M is DM 50.000,--
and is fully paid up. The stated capital consists of the following
shares:
(1) a share in the nominal amount of DM 15.000,--, which is held
by Xx. Xxxxxx Xxxx,
(2) a share in the nominal amount of DM 7.500,-- which is held by
Xx. Xxxxxx Xxxx,
(3) a share in the nominal amount of DM 10.000,-- which is held by
Xx. Xxxxxx Xxxxxxxxx,
(4) a share in the nominal amount of DM 10.000,--, which is held
by Xx. Xxx Xxxxxxxxx,
(5) a share in the nominal amount of DM 7.500,--, which is held by
Xx. Xxxx Xxxxxxxxx.
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(C) The Sellers and Ms. Xxxx Lips are the sole shareholders of EMD
Gesellschaft fur Elektroinstallations- und
Maschinenbau-Dienstleistungen mbH which is registered in department B
of the Commercial Register of the Lower Court of Boblingen under
registration number HRB 3398 and has its head office at Sindelfingen
(hereinafter together with its legal successors referred to as "EMD
S"). The stated capital of EMD S is DM 50.000,-- and is fully paid up.
The stated capital consists of the following shares:
(1) a share in the nominal amount of DM 10.800,--, which is held
by Xx. Xxxxxx Xxxx,
(2) a share in the nominal amount of DM 10.900,--, which is held
by Ms. Xxxx Lips,
(3) a share in the nominal amount of DM 10.800,-- which is held by
Xx. Xxxx Xxxxxxxxx,
(4) a share in the nominal amount of DM 12.500,--, which is held
by Xx. Xxxxxxxx Kerschbaumer, and
(5) a share in the nominal amount of DM 5.000,-- which is held by
Xx. Xxxx Xxxx.
(D) The Sellers and Ms. Xxxx Lips are the sole shareholders of EMD
Gesellschaft fur Elektroinstallation- und Maschinenbau-Dienstleistungen
mbH which is registered in department B of the Commercial Register of
the Lower Court of Freiburg i. Br. under registration number HRB HRB
3372 and has its head office at Freiburg (hereinafter together with its
legal successors referred to as "EMD F"). The stated capital of EMD F
is DM 50.000,-- and is fully paid up. The stated capital consists of
the following shares:
(1) a share in the nominal amount of DM 11.250,--, which is held
by Xx. Xxxxxx Xxxx,
(2) a share in the nominal amount of DM 7.500,--, which is held
by Xx. Xxxxxx Xxxxxxxxx,
(3) a share in the nominal amount of DM 7.500,--, which is held by
Xx. Xxx Xxxxxxxxx, and
(4) a share in the nominal amount of DM 11.250,--, which is held
by Ms. Xxxx Lips.
The share in the nominal amount of DM 12.500,-- which was subscribed to
by Xx. Xxxxxx Xxxxxxx-Xxxxxxx'x on occasion of the formation of EMD F
was cancelled with legal and economic effect as of December 18, 1992.
This shares was either not reissued or issued to EMD F which - in this
case - has taken over this share and continues to hold such share for
its own account.
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(E) The Sellers and Ms. Xxxx Lips are the sole shareholders of EMD
Gesellschaft fur Elektroinstallation- und Maschinenbau-Dienstleistungen
mbH which is registered in department B of the Commercial Register of
the Lower Court of Bruchsal under registration number HRB 1093 and has
its head office at Bruchsal (hereinafter together with its legal
successors referred to as "EMD B"). The stated capital of EMD B is DM
50.000,-- and is fully paid up. The stated capital consists of the
following shares:
(1) a share in the nominal amount of DM 11.250,--, which is held
by Xx. Xxxxxx Xxxx,
(2) a share in the nominal amount of DM 7.500,--, which is held by
Xx. Xxxxxx Xxxxxxxxx,
(3) a share in the nominal amount of DM 7.500,--, which is held by
Xx. Xxx Xxxxxxxxx,
(4) a share in the nominal amount of DM 12.500,-- which is held by
Xxx. Xxxxxx Xxxxxxx, and
(5) a share in the nominal amount of DM 11.250,-- which is held by
Ms. Xxxx Lips.
(F) By notarial deeds dated September 22, 1997 - roll of deeds of the
notary Xx. Xxxxxx Xxxxxxx, Viernheim, No. 471/97, 473/97, 474/97 and
475/97 - Ms. Xxxx Lips and certain Sellers have agreed on the sale,
division and transfer of shares held by Ms. Lips as follows:
(1) Out of her share in EMD A in the nominal amount of DM
22.500,--, it was intended that divided shares in the nominal
amount of DM 11.250,-- should be assigned to Xx. Xxxxxx Xxxx
and Xx. Xxxx Xxxxxxxxx,
(2) Out of her share in EMD S in the nominal amount of DM
10.900,--, it was intended that two parts of the divided share
in the nominal amount of DM 3.450,-- each should be assigned
to Xx. Xxxxxx Xxxx and Xx. Xxxx Xxxxxxxxx and one part of the
aforementioned share in the nominal amount of DM 4.000,--
should be assigned to Xx. Xxxxxxxx Kerschbaumer,
(3) Out of her share in EMD F in the nominal amount of DM
11.250,--, it was intended that two parts of that share in the
nominal amount of DM 5.625,-- each should be assigned to Xx.
Xxxxxx Xxxx and Xx. Xxxx Xxxxxxxxx, and
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(4) Out of her share in EMD B in the in the nominal amount of DM
11.250,--, it was intended that two parts of that share in the
nominal amount of DM 3.800,-- each should be assigned to Xx.
Xxxxxx Xxxx and Xx. Xxxx Xxxxxxxxx, and one part of the
aforementioned share in the nominal amount of DM 3.650,--
should be assigned to Xx. Xxxx Xxxx.
These transfers and divisions of shares are expected to be invalid, as
they would provide for fractions of shares which (in violation of
Section 17 GmbHG) cannot be divided by 100. The Sellers, therefore,
intend by notarial agreement with Ms. Lips to confirm the invalidity of
these transfers and divisions and, as a matter of precaution, to agree
on the immediate re-transfer of any shares and rights, if transferred
under the aforementioned notarial deeds dated September 22, 1997.
Accordingly, Xx. Xxxxxx Xxxx and Xx. Xxxx Xxxxxxxxx will confirm the
invalidity of the notarial deed of December 30, 1997, role of deeds no.
802/1997 of the notary Xx. Xxxxxx Xxxxxxx - with which one of the
aforementioned deficiencies should have been remedied by assigning a
part of the share of Xx. Xxxx Xxxxxxxxx to Xx. Xxxxxx Xxxx, and, as a
matter of precaution, agree on the immediate re-transfer of the share
assigned under this notarial deed.
Immediately thereafter, the Sellers intend by notarial deed shareholder
resolution (amending articles of association) to adjust the nominal
share values of the following shares in EMD F and EMD B such
adjustments upon registration leading to the following changes in
comparison with the shareholdings listed under Section D and E of their
Preamble:
With respect to EMD F as well as EMD B the shares of Xx. Xxxxxx Xxxx
will have a nominal value of DM 11.300,-- (instead of DM 11.250,-- so
far) and the one of Xxxx Lips will have a nominal value in the amount
of DM 11.200,-- (instead of DM 11.250,-- so far).
This adjustment becomes necessary due to the fact that the shares - in
violation of Section 5 GmbHG - had been defined upon incorporation with
a value which cannot be divided through 100.
In the same notarial deed regarding EMD F, Xx. Xxx Xxxxxxxxx, the other
sellers, Ms. Lips and EMD F will at the same time, by agreement and
shareholder resolution amending the articles of association, agree to
the representation of Xx. Xxx Xxxxxxxxx as a minor by his
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parents in connection with the incorporation of EMD F and subscription
of shares by Xx. Xxx Xxxxxxxxx and, as a matter of precaution, will
agree once more on the issue of the Shares in EMD F - stated for Xx.
Xxx Xxxxxxxxx under Section D of the Preamble - to Xx. Xxx Xxxxxxxxx
and Xx. Xxx Xxxxxxxxx will subscribe to this Share.
The Sellers will cause Ms. Lips to:
(a) as a matter of precaution, approve the sale and assignment of
shares in EMD M of October 10, 1997,
(b) sell, divide and assign all shares in EMD A and EMD F pursuant
to Sections A and C of the Preamble with immediate in rem
effect and
(c) sell, divide and assign all of the shares in EMD S and EMD F
pursuant to the repartition according to Section F of the
Preamble with in rem effect conditioned on the prior
registration of the aforementioned alteration with the
articles of association with the commercial register of the
lower courts in Freiburg and Bruchsal
as follows:
(1) out of her share in EMD A in the nominal amount of DM
22.500,-- sale and assignment of one part of the
share in the nominal amount of DM 11.300,-- to Xx.
Xxxxxx Xxxx and one in the nominal amount of DM
11.200,-- to Xx. Xxxx Xxxxxxxxx,
(2) out of her share in EMD S in the nominal amount of DM
10.900,-- sale and assignment of one part of the
share in the nominal amount of DM 3.500,-- to Xx.
Xxxxxx Xxxx, one part of the share in the nominal
amount of DM 3.400,-- to Xx. Xxxx Xxxxxxxxx and one
part of the share in the nominal amount of DM
4.000,-- to Xx. Xxxxxxxx Kerschbaumer,
(3) out of her share in EMD F in the nominal amount of DM
11.200,-- sale and assignment of divided shares in
the nominal amount of DM 5.600,-- each to Xx. Xxxxxx
Xxxx and Xx. Xxxx Xxxxxxxxx and
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(4) out of her share in EMD B in the nominal amount of DM
11.200,-- sale and assignment of divided shares in the
nominal amount of DM 3.800,-- each to Xx. Xxxxxx Xxxx
and Xx. Xxxx Xxxxxxxxx as well as a part of the
aforementioned share in the nominal amount of DM
3.600,-- to Xx. Xxxx Xxxx.
If it is advisable, not to divide the aforementioned shares in
EMD A, or in the other aforementioned companies, Xx. Xxxxxx
Xxxx will acquire those shares from Ms. Xxxx Lips (at the same
time as trustee for the otherwise intended purchasers) without
division of the shares or, as a matter of precaution, a joint
acquisition by the purchasers if stipulated. The individual
assignment agreement explicitly comprises also all future
shares, all subscription rights for new shares and rights to
all profits of the past or in the future, e.g. all claims for
profits having accrued after September 22, 1997 as well as all
other contemporary or future rights of Ms. Xxxx Lips in
connection with or in the place of her shares in the
companies. As a matter of precaution, the notarial deed will
explicitly provide also for the assignment of all additional
shares (including the aforementioned rights), which are
currently owned by Ms. Xxxx Lips in access of the shares
mentioned in Section A-F of the Preamble - e.g. on grounds of
prior invalid assignments, divisions or in case of the
invalidity of the aforementioned repartition of shares.
Finally, all Sellers and Ms. Lips will affirm and repeat any
and all shareholder resolutions after September 22, 1997 with
regard to EMD A, EMD S, EMD F, EMD B and, if necessary, also
EMD M. They will also, if necessary or appropriate, affirm or
repeat prior shareholder resolutions and prior assignments or
divisions of shares.
(G) As a consequence of the aforementioned transactions, immediately upon
registration of the aforementioned changes regarding the articles of
association of EMD F and EMD B, shares in the aforementioned companies
(EMD A, EMD M, EMD S, EMD F and EMD B, in the following individually
referred to as a "Company" and collectively referred to as the
"Companies") will be held as follows:
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1) The Sellers will be the sole shareholders of EMD A and the stated
capital of EMD A with a fully paid up nominal value of DM
75.000,-- will consist of the following shares:
(a) a share in the nominal value of DM 22.500,-- which is
held by Xx. Xxxxxx Xxxx,
(b) a share in the nominal value of DM 11.300,-- which is
held by Xx. Xxxxxx Xxxx,
(c) a share in the nominal value of DM 15.000,-- which
will be held by Xxx. Xxxxxx Xxxxxxxxx,
(d) a share in the nominal value of DM 15.000,-- which
will be held by Xx. Xxx Xxxxxxxxx,
(e) a share in the nominal value of DM 11.200,-- which
will be held by Xx. Xxxx Xxxxxxxxx,
2.) The Sellers will be the unchanged sole shareholders of EMD
M as provided for in Section B of this Preamble.
3.) The Sellers are the sole shareholders of EMD S and the
stated capital of EMD S with a fully paid up nominal value
of DM 50.000,-- will consist of the following shares:
(a) one share in the nominal value of DM 10.800,--
which will be held by Xx. Xxxxxx Xxxx,
(b) one share in the nominal value of DM 3.500,--
which will be held by Xx. Xxxxxx Xxxx,
(c) one share in the nominal value of DM 10.800,--
which will be held by Xx. Xxxx Xxxxxxxxx,
(d) one share in the nominal value of DM 3.400,--
which will be held by Xx. Xxxx Xxxxxxxxx,
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(e) one share in the nominal value of DM 12.500,--
which will be held by Xx. Xxxxxxxx Kerschbaumer,
(f) one share in the nominal value of DM 4.000,--
which will be held by Xx. Xxxxxxxx Kerschbaumer,
(g) one share in the nominal value of DM 5.000,--
which will be held by Xx. Xxxx Xxxx,
4.) The Sellers are the sole shareholders of EMD F and the
stated capital of EMD F with a fully paid up nominal value
of DM 50.000,-- will consist of the following shares:
(a) one share in the nominal value of DM 11.300,--
which will be held by Xx. Xxxxxx Xxxx,
(b) one share in the nominal value of DM 5.600,--
which will be held by Xx. Xxxxxx Xxxx,
(c) one share in the nominal value of DM 7.500,--
which will be held by Xxx. Xxxxxx Xxxxxxxxx,
(d) one share in the nominal value of DM 7.500,--
which will be held by Xx. Xxx Xxxxxxxxx,
(e) one share in the nominal value of DM 5.600,--
which will be held by Xx. Xxxx Xxxxxxxxx,
(f) one share in the nominal value of DM 12.500,--
which is held by EMD F on its own account.
5.)
The Sellers are the sole shareholders of EMD B and the
stated capital of EMD F with a fully paid up nominal value
of DM 50.000,-- will consist of the following shares:
(a) one share in the nominal value of DM 11.300,--
which will be held by Xx. Xxxxxx Xxxx,
(b) one share in the nominal value of DM 3.800,--
which will be held by Xx. Xxxxxx Xxxx,
(c) one share in the nominal value of DM 7.500,--
which will be held by Xxx. Xxxxxx Xxxxxxxxx,
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(d) one share in the nominal value of DM 7.500,--
which will be held by Xx. Xxx Xxxxxxxxx,
(e) one share in the nominal value of DM 3.800,--
which will be held by Xx. Xxxx Xxxxxxxxx,
(f) one share in the nominal value of DM 12.500,--
which will be held by Xxx. Xxxxxx Xxxxxxx,
(g) one share in the nominal value of DM 3.600,--
which will be held by Xxxx Xxxx.
(H) The Sellers are interested to divest themselves of all shares in all of
the Companies. The Purchasers are interested to purchase all shares
existing with respect to the Companies (all shares including partial
shares following from their division in the following individually and
collectively referred to as the "Shares").
The aforementioned remarks were only made for clarification purposes.
Legal claims will only result from the provisions hereinafter.
This aforesaid, the parties agree as follows:
ARTICLE 1
Sale and Assignment of Shares, Further Undertakings of the Sellers
1. Upon the terms and conditions of this Agreement Xx. Xxxxxx Xxxx, Xxx.
Xxxxxx Xxxxxxxxx, Xx. Xxx Xxxxxxxxx and Xx. Xxxx Xxxxxxxxx sell
- all shares in EMD M and EMD F to Holding GmbH and
- all shares in EMD A to Beteiligungs GmbH,
including all ancillary rights, and Holding GmbH and Beteiligungs GmbH
accept the sale in the respective cases.
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2. Upon the terms and conditions of this Agreement
- Xx. Xxxxxx Xxxx undertakes to divide his Shares in EMD S in
the nominal amount of DM 10.800 into one Share with a
nominal amount of DM 500,-- and one Share with a nominal
amount of DM 10.300 and
- Xx. Xxxxxx Xxxx undertakes to divide her shares in EMD B in
the nominal amount of DM 12.500,-- into one share with the
nominal amount of DM 500,-- and one share with the nominal
amount of DM 12.000,--,
and
(a) Xx. Xxxxxx Xxxx herewith sells to Management GmbH the
aforementioned Share in EMD S in the nominal amount of DM
500,-- and Xx. Xxxxxx Xxxx sells to Management GmbH the
aforementioned Share in EMD B in the nominal amount of DM
500.-- and
(b) Xx. Xxxxxx Xxxx herewith sells to Beteiligungs GmbH the
aforementioned Share in EMD S in the nominal amount of DM
10.300,--, and Xx. Xxxxxx Xxxx sells to Beteiligungs GmbH the
aforementioned Share in EMD B in the nominal amount of DM
12.000,--
in each case including all ancillary rights, and Management GmbH and
Beteiligungs GmbH each accept such sales.
Upon the terms and conditions of this agreement
- Xx. Xxxxxx Xxxx,
- Xx. Xxxx Xxxxxxxxx,
- Xx. Xxxxxxxx Kerschbaumer and
- Xx. Xxxx Xxxx
sell all remaining shares in EMD S, and
- Xx. Xxxxxx Xxxx,
- Xx. Xxxxxx Xxxxxxxxx,
- Xx. Xxx Xxxxxxxxx,
- Xx. Xxxx Xxxxxxxxx,
- Xx. Xxxx Xxxx and
- Xx. Xxxxxx Xxxxxxx
sell the remaining shares in EMD B,
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in each case including all ancillary rights, to Beteiligungs GmbH and
Beteiligungs GmbH accepts these sales in each individual case.
3. The sale of the shares includes especially also all future shares,
subscription rights for new shares and claims to profits accrued in
the past or occurring in the future as well as all presently existing
or in the future arising rights in connection with or in the place of
the sold shares. The parties agree and stipulate that by this contract
any and all shares in the companies (including the shares currently
held by Ms. Lips) are sold. They further agree and stipulate that the
aforementioned obligations to assign and divide shares will apply
mutatis mutandis for any and all present or future shares which are
not mentioned in the Preamble or for shares which will replace
existing shares in the companies, especially if shares in one company
have a deviating nominal value or were divided or merged or are held
by other shareholders individually or currently. Sold are especially
also any additional shares or such shares with an increased nominal
value (including ancillary rights), which a seller holds in excess of
those shares described in the Preamble, e.g. due to prior invalid
assignment or division of shares. Such additional or increased shares
are to be transferred to the respective buyer of the remaining shares
of the respective company without additional remuneration or, as in
the case of EMD S and EMD B, such shares are to be transferred to
Beteiligungs GmbH also without any additional remuneration. In
addition to the shares and rights owed under the aforementioned
provisions for an unchanged purchase price in its existing division,
the Sellers remain obliged to fulfil the sales of shares under
Articles 1.1 and 1.2, if not already fulfilled by the aforementioned
assignments. Further, every purchaser may assert claims for the
violation of guarantees pursuant to Articles 4 and 5.
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4. On the Closing Date (as defined hereinafter) the Sellers and the
Purchasers (and/or their denominees) will agree by separate notarial
deed (the "Transfer Deed") on the transfer of all Shares in the
Companies in accordance with the aforementioned sale to the respective
Purchasers or, at the election of the respective Purchaser, to an
affiliated company which is to be denominated by the Purchaser.
Alternatively, upon request of a Purchaser, the Sellers shall cause one
or several Companies in satisfaction of the aforementioned sale to
accept the assignment of one or several Shares in one or several other
Companies, provided that the Purchaser makes available to the
respective EMD Company sufficient financing for,, or pays on its
behalf, the relevant portion of the Purchase Price. For the event of
such substitution of a Purchaser by an affiliate or another Company,
the Purchasers reserve the right to assign claims under this Agreement
to the respective affiliate or Company.
The assignment deed will especially include the following provisions:
a) Besides the explicit assignment of all shares sold pursuant to
Articles 1.1. and 1.2., as a matter of precaution, also an
assignment of all additional or deviating shares and rights,
which are included in the sale pursuant to Article 1.3.
b) The sellers, as joint in several debtors, will warrant in
the form of an independent promise of guaranty, the legal
consequences of which are to be determined pursuant to
Article 5 of this contract, vis-a-vis the Purchasers, and
potential replacement acquirors, that the statements under
Preamble G of this contract were true and complete on the
Closing Date and at the moment in which the condition
precedent for the assignment of the shares under the
assignment deed are fulfilled. The Sellers further undertake
to repeat their guaranty, according to which the
subsequently made statements in Articles 4.1. till 4.8.,
4.10., 4.11., 4.14. and 4.21. are accurate and complete on
the date of the notarisation of this Agreement and the
Closing Date and at the moment in which conditions under the
assignment deed for the assignment of shares are fulfilled
and, in as far as the statements relate to future periods of
time, are also accurate and complete for the future. Other
guarantees will not be repeated, but remain in force
unchanged for such dates or periods of time, for which they
were given under this contract.
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c)
5. The parties herewith undertake, to validly sign the assignment deed
within seven banking days (the day of the entering into of the
assignment deed in this contract will be referred to as "Closing Date")
after the fulfilment of all of the subsequently mentioned conditions
and at the same time to pass all necessary shareholder resolutions and
all necessary declarations of consent of the companies:
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(a) Any and all measures which were described in Section F of
the Preamble of this contract or equivalent measures which
were agreed upon with the Purchasers have been successful
and were concluded to the utmost satisfaction of the
Purchasers evidenced by a transfer of the respective
documents in copy or - at the election of the Purchaser -
certified copy and, if it has not become clear without doubt
that, in case the alteration of the articles of association
can not be registered, the repartition of shares and the
participation of Xx. Xxx Xxxxxxxxx are valid even without
the alteration of the articles of association, the
alterations of the articles of association of EMD S and EMD
B which respect, inter alia, to the repartition of the
nominal shares and the confirmation of the shareholder
position of Xx. Xxx Xxxxxxxxx are registered with the
commercial register of the lower courts in Bruchsal or
Freiburg, respectively, and the attorney-at-law Denschlag as
representative of the Sellers and the attorney at law
Xxxxxxxx Xxxx as representative of the Purchasers have
received certified excerpts of the commercial register for
EMD F and EMD B which confirm the aforementioned, and
(b) the conditions and measures as described under Articles F
and G of the Preamble to this contract have not been
questioned by Ms. Xxxx Lips or others in a well-founded
manner.
The Purchasers undertake to use their best efforts to fulfil
the conditions set forth in Article 1.5. All conditions must
be fulfilled for all companies and a waiver hereof is only
possible by all parties acting jointly. Until the Closing
Date, every Purchaser and every Seller will be entitled to
resign from the contract without being subject to any
claims, if the conditions set forth under Article 1.5 (a)or
(b) are not fulfilled until October 31, 1998, provided that
the delay in fulfilment of the conditions is based on
circumstances, for which the resigning party is not
responsible.
Every Purchaser may resign from this contract within 15
banking days, if:
(x) the Purchasers and their affiliated companies, within
this period of time, are not able to procure all
approvals necessary for the execution of this contract
by the financial institutions, which currently have
granted loans,
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undertakings to grant loans or guaranties of a xxxx to
the Purchasers or to affiliated companies or which
will do so in the future; or
(y) the Purchasers or their affiliated companies were not
able during this period of time to receive from their
banks with reasonable conditions undertakings for the
granting of a loan in an amount equalling the purchase
price under this Agreement, if this purchase price -
at the election of the purchasers - it is not to be
financed with equity.
In the event of a justified resignation of one party, any
obligations of the other parties under this contract will
expire with the exception only of the herewith agreed
obligation of the Sellers to reimburse the purchasers for the
costs caused by the negotiations relating to, the conclusion
and the execution of this contract (including the expenses for
chartered accountants, tax advisors, lawyers, notaries and
banks) in the event that the Sellers will violate their
obligations under Article 1.5 and Article 1.7 (a),
respectively, obligating them to fulfil the conditions of this
Article 1.5 (a) and (b). In case of a resignation by the
Purchasers, any obligations to compensate the Sellers are
excluded, with the exception of the notarial costs resulting
from this contract and the reference deed for the event that
the Purchasers did not use their best efforts to bring about
the occurrence of the circumstances pursuant to subparagraph
(x) or (y). Other claims of the Purchasers or Sellers for
damages on grounds of violation of the obligation to bring
about the conditions pursuant to Article 1.5 (a) and (b)
respectively (x) or (y) are excluded.
Irrespective of the date when the assignment of the Shares becomes effective ad
rem (dinglich), it shall have economic effect as of the closing date and the
parties shall treat each other as if the assignment had occurred as of such
date. The Sellers undertake to procure that the Companies from the date of this
Agreement until the effectiveness of the assignment of the Shares pursuant to
the Transfer Deed carry on their business operations in accordance with past
practice and in the ordinary course of business except that the Purchasers have
granted their prior written consent in writing to any exceptions therefrom. In
addition, the Sellers will guarantee that shareholder resolutions relating to
the companies and measures which, according to the articles of association,
rules of procedure or pursuant to an employment agreement require the approval
by the shareholders'
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meeting, will only be carried out, if Xx. Xxxxxx Xxxxxxxxx, chief executive
officer of the ADI Group, has consented to such actions in advance.
6. The Companies' entire profits of the current fiscal yearto the extent
they have not been distributed to shareholders, the profits of previous
fiscal years (i.e. profits carried forward and profits of previous
fiscal years with respect to which no resolution on the appropriation
of results [Ergebnisverwendung] has been passed) shall be exclusively
for the account of the Purchasers.
7. The Sellers undertake and guarantee,
(a) that they will use their best efforts to fulfil the
condition set forth under Article 1.5 (a) and (b) or their
equivalent and that they will until the Closing Date have
passed the shareholder resolutions which are in draft form
attached to this Agreement as Attachment B and which relate
to the assignment and division of shares and the release of
the Sellers (respectively acquirors replacing the Sellers)
from any covenant not to compete set forth by law or the
articles of association and they will cause the managing
directors of the companies to grant the consent to the
assignments and divisions of shares in the name of the
respective companies pursuant to a consent declaration which
is attached to this agreement in draft form as Attachment C;
(b) that they, with value before the signing of this contract,
pay or will have paid all amounts owed to the companies
including interest, irrespective of the fact whether or not
those obligations were due.
(c) that they will use their best efforts to bring about the
conclusion of the software licensing agreement with RuN
Xxxxxxx und Nissle Gesellschaft fur Softwareentwicklung mbH,
69469 Weinheim, attached as Attachment 1.7 (b) of the
reference deed, for all companies and prior to the Closing
Date and guarantee that RuN Xxxxxxx und Nissle Gesellschaft
fur Softwareentwicklung mbH, for purposes of confirmation of
existing oral agreements, will sign the software licensing
agreement attached to this agreement as Attachment D with
all companies;
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(d) that until the valid assignment of the shares, distributions
by the companies will neither be resolved, nor will such
distributions be carried out and furthermore that
transactions between a Seller, persons close to him,
companions or affiliated companies, respectively, and a
company will only be entered into, terminated or changed and
the companies will grant guarantees or other securities for
the benefit of the Seller, a person close to him, a
companion or for the benefit of an affiliated company of a
Seller, a person close to him or a companion, if this is in
the interest of a company and the purchasers have granted
prior approval.
ARTICLE 2
Purchase Price, Further Undertakings of Purchaser
1. The aggregate purchase price for all Shares (the "Purchase Price")
consists of
(a) a first tranche (the "First Tranche") in the amount of DM
69,498,944 (in words: Deutsche Xxxx sixty-nine million four
hundred and ninety-eight thousand and nine hundred forty-four)
(b) a second tranche (the "Second Tranche") in the amount of DM
3,000,000,- (in words: Deutsche Xxxx three million) which is
the consideration for the Sellers selling the Companies with
the profits accrued since 1. January 1998;
(c) a third tranche (the "Third Tranche") in the amount of DM
2,250,000 (in words: Deutsche Xxxx two million two hundred
fifty thousand), and
(d) a fourth tranche (the "Fourth Tranche") in the amount of DM
2,250,000 (in words: Deutsche Xxxx two million two hundred
fifty thousand).
2. Each Seller is entitled - as individual debtor (Einzelglaubiger) - only
to that portion of the Purchase Price and Tranches, respectively,
attributable to a certain Company which is stated for the respective
Company and Seller, respectively, in the following chart:
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a) First Tranche
EMD A EMD M EMD S EMD F EMD B
Xxxx Xxxxxxxxx DM DM DM DM DM
3.551.235 255.128 8.074.870 1.220.470 581.692
Volker Xxxx XX DM DM DM DM
10.653.70 765.385 8.074.870 3.661.410 2.303.807
5
Xxxxxx Xxxxxxxxx DM DM DM DM DM
4.734.980 340.171 0 1.627.293 1.148.077
Jan Xxxxxxxxx XX DM DM DM DM
4.734.980 340.171 0 1.627.293 1.148.077
Xxxx Xxxx DM DM DM DM DM
0 0 2.833.288 0 558.731
Xxxxxx Xxxxxxx DM DM DM DM DM
0 0 0 0 1.913.461
Xxxxxxxx Xxxxxxxxxxxx XX DM DM DM DM
0 0 9.349.850 0 0
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b) Second Tranche
EMD A EMD M EMD S EMD F EMD B
Volker Xxxx XX - -
900.000,-- - -
Xxxx Xxxxxxxxx - - - DM
900.000,-- -
Xxxx Xxxx - - - - DM
300.000,--
Xxxxxxxx Xxxxxxxxxxxx - - DM - -
900.000,--
c) Third and Fourth Tranche
The Third and the Fourth Tranche shall be attributed to the
individual Sellers - as individual creditors - and the
Companies pro rata proportionately to the allocation of the
First Tranche as reflected und Article 2.1 (a).
In as far as the aforementioned payments to Xx. Xxxxxx Xxxx are below
the figures which would correspond to the nominal value of the shares
sold by him, such difference is a result of the fact that Xx. Xxxx in
so far as he, on grounds of measures pursuant to Article F of the
Preamble to this contract, will receive larger shares than he would
have received, if the assignments pursuant to the notarial deed of
September 22, 1997 which are described in the Preamble of this contract
were valid, will be acting in the eternal relation ship as trustee, or
under the granting of subparticipation for the benefit, of Xx. Xxxx
Xxxxxxxxx (relating to EMD A, EMD F and EMD S), respectively, Xx. Xxxx
Xxxx (relating to EMD B). If Xx. Xxxx, as can be inferred from Preamble
F, will take over further shares as a trustee, this
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will not affect the aforestipulated sales and Xx. Xxxx will transfer
the shares in so far for the account of the respective Sellers.
Every Purchaser is only responsible for those parts of the purchase
price, as individual debtor, which, pursuant to the aforementioned
provisions of this Article 2.2, are attributable to the shares bought
by him. In as far as a purchaser determines an affiliated company or a
company for the acquisition of the shares bought by the Purchaser, the
respective Purchaser's obligations to pay the purchase price accruing
to the Purchaser will expire, as soon as (a) both parts of the first
and second purchase price installment attributable to the Purchaser
have been paid either by the respective Purchaser or, at this election,
the respective affiliated company or the respective company and
otherwise, (b) as soon as the respective affiliated company or the
respective company has assumed his pro rata obligation relating to the
third and fourth installment of the purchase price and the respective
Seller has received as security the guaranty described in Article 1.4
(c).
3. The First and Second Tranche plus 4% interest for the time after the
signing of this agreement are to be transferred with value within 7
banking days following the Closing Date to the bank accounts stated for
the individual Sellers under Article 2.6 hereinafter.
4. The Third Tranche shall be transferred within 12 months after the
Effective Date, plus interest thereon for the period after the signing
of this agreement at a rate of 4%, to the bank accounts stated for the
individual Sellers under Article 2.6 hereinafter, provided that the
Closing Statements have become binding between the parties in
accordance with Art. 3.5 hereof at such payment date. In case that the
Closing Statements should not have become binding between the parties
within 12 months after the Closing Date, the Third Tranche shall be
payable within 5 banking days following the date at which the Closing
Statements have become binding. Any due claims of a Purchaser against
a Seller shall be deducted from such Third Tranche irrespective to
which purchaser or seller the set-off portion of the Tranche is
attributable. For purposes of this set-off, the Sellers are jointly
and severally liable for all obligations vis-a-vis the Purchasers even
if this would not be the case outside the scope of this set-off
agreement.
5. The Fourth Tranche shall be transferred within 24 months after the
signing of this agreement, plus interest thereon for the period from
the signing of this agreement at a rate of
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4%, to the bank accounts stated for the individual Sellers under
Article 2.6 hereinafter, provided that the Closing Statements have
become binding between the parties in accordance with Art. 3.5 hereof
at such payment date. In case that the Closing Statements should not
have become binding between the parties within 24 months after the
Effective Date, the Second Tranche shall be payable within 5 banking
days following the date on which the Closing Statements have become
binding. Any due claims of a Purchaser against a Seller shall be
deducted from such Fourth Tranche irrespective to which seller or
purchaser, respectively, the set-off portion of the Tranche is
attributable. For purposes of this set-off, the Sellers are jointly
and severally liable for all obligations vis-a-vis the Purchasers
even, if this would not be the case outside the scope of this set-off
agreement.
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6. The individual Seller's portion of the First, Second, Third and Fourth
Tranche shall be paid to the bank account stated for the respective
Seller hereinafter:
SELLER BANK BANK ID. NO. ACCOUNT NO.
Xxxxxx Xxxx Dresdner Bank Aschaffenburg 795 800 99 16 13 583 00
Xxxx Xxxxxxxxx Deutsche Bank AG Mannheim 545 700 94 3999 380 01
Xxxxxx Xxxxxxxxx Deutsche Bank AG Mannheim 545 700 94 3999 380 02
Xxx Xxxxxxxxx Deutsche Bank AG Mannheim 545 700 94 3999 380 03
Xxxx Xxxx Dresdner Bank Bruchsal 660 800 52 6041 75900
Xxxxxx Xxxxxxx Xxxxxxxxx Xxxxxxxxxx 000 500 20 4170822
Xxxxxxxx Xxxxxxxxxxxx Xxxxxxxx Xxxx Xxxxxxxxxxxxx 000 000 99 162 936 000
ARTICLE 3
Adjustment of the Purchase Price
1. The Purchasers have based their calculation of the First, Third and
Fourth Tranche on the financial statements of the Companies as per
December 31, 1997 (the "1997 Financial Statements") of which an
excerpt is attached hereto as Attachment 3.1 a) of the reference deed
and eight (8) times the adjusted EBIT (earnings before interest and
taxes) for each Company as reflected in Attachment 3.1 b (the
"Adjusted EBIT") which has been derived
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from the 1997 Financial Statements. If a Financial Statement 1997 of a
Company has not been prepared in accordance with German generally
accepted accounting principles or otherwise violates a representation
under Article 4.8 of this contract, the Purchase Price is to be
adjusted as follows: If the respective Financial Statements 1997 of
the Company, in a case of their adjustment, shows Adjusted EBIT
(calculated in line with the principles reflected in Attachment 3.1 b)
for the period from January 1 until December 31, 1997 different from
the Adjusted EBIT reflected in Attachment 3.1 b for such Company, the
Purchase Price portion for the respective Company (a) shall be reduced
by eight (8) times the amount by which the revised Adjusted EBIT falls
short of the Adjusted EBIT reflected in Attachment 3.1 b or (b) shall
be increased for the respective Company by eight (8) times of the
amount by which the revised Adjusted EBIT exceeds the Adjusted EBIT
reflected in Attachment 3.1. b. Should the Sellers and Purchasers of
the respective Company not agree on the aforementioned violation of
German GAAP or representation by the 1997 Financial Statements and on
the corrected Adjusted EBIT within 20 bank business days since a
Seller has received from a Purchaser or a Purchaser has received from
a Seller a written indication for the revised Adjusted EBIT stating
the relevant deficiencies, an independent expert shall be nominated by
those Sellers and Purchasers which sell or acquire, respectively,
Shares in the respective Companies and the expert will decide with
binding and final effect upon all parties on the revised Adjusted EBIT
(which is to be calculated in accordance with the principles reflected
in Attachment 3.1 b) and on the reduction or increase of the
respective Seller's and Purchaser's portion of the Purchase Price.
The independent expert must be a German certified auditor or auditing
firm (Wirtschaftsprufer) and shall be appointed jointly by all Sellers
and Purchasers selling or acquiring, respectively, shares in the
respective Company. If the respective parties fail to agree on the
expert within 10 banking days since a party has requested from a party
of the other side to have the 1997 Financial Statements reviewed by the
independent expert, the expert shall be appointed by the president of
the Institute of Auditors in Dusseldorf (Institut der Wirtschaftsprufer
e.V.). The expert shall decide as an arbitrator of facts
(Schiedsgutachter) within 20 banking days succeeding his appointment.
If the determination of the Adjusted EBIT for an individual Company by
such expert lies between the Adjusted EBIT reflected in Attachment 3.1
b and/or a Seller's and/or Purchaser's indication made in writing until
nomination of the expert for the revised adjusted
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EBIT, such determination shall be final and binding upon all parties
for the Adjusted EBIT of this Company; if the expert's indication for
the Adjusted EBIT of a Company is outside, the Adjusted EBIT reflected
for this Company in Attachment 3.1 b or a Seller's or a Purchaser's
indication made vis-a-vis a party on the other side until nomination
of the expert which is the closest to the determination of the
independent expert, shall with binding and final effect upon all
parties qualify as Adjusted EBIT for this Company.
The costs of the independent expert shall be split among those
Purchasers (as joint debtors on the one side) and those Sellers (as
joint debtors on the other side) which have purchased or sold,
respectively, shares in the Company proportionately to the amount by
which the Adjusted EBIT for the respective Company as determined by the
expert falls short of or exceeds the adjusted EBIT reflected in those
documents which among all of the aforementioned written indications
from a Seller or Purchaser and Attachment 3.1 b are the farest away
from the determined Adjusted EBIT. As regards information and support,
Article 3.6 Sentence 3 and 4 shall apply accordingly.
To the extent that the final assessment of workmen's compensation for
1997 is already to be taken into account pursuant to Article 3.2 b
hereunder, a reduction of the workmen's compensation for 1997 shall no
more be taken into account for the purpose of calculating the Adjusted
EBIT for the purpose of this Article 3.1. Furthermore, any reduction or
refund of the workmen's compensation for 1996 shall not be taken into
account in order to calculate the Adjusted EBIT and shall not give rise
to an increase of the Purchase Price.
2. The Purchase Price agreed in Article 2 of this Agreement
(a) shall be reduced
(aa) by the amount by which the total of the equity of a
Company within the meaning of ss. 272 German
Commercial Code less any outstanding shareholder's
contributions at the Closing Date as determined by the
Closing Balance Sheets defined in Article 3.3
(hereinafter referred to as the "Closing Equity")
falls short of a minimum amount (the "Minimum Equity")
reflected for this Company in Attachment 3.2. a of the
reference deed, and in addition
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(bb) by the monetary value of any obligations of a Company
(together with interest, legal advise, litigation and
other costs accruing before or after the Effective
Date) which are referring to or are caused during
periods up to December 31, 1997 and which until the
expiration of 36 months since the Closing Date arise
or become known to the extent they have not or not
fully been reflected or accrued in the respective 1997
Financial Statements and in addition
(cc) by the monetary value of any output or service
performed after the signing of this agreement or
existing obligations or reserves of a Company,
Purchaser or legal successor (together with
interest, legal advice, litigation and other costs
incurred before or after the Effective Date) (i)
vis-a-vis Ms. Xxxx Lips, to the extent that their
total does exceed the pension reserve for Ms. Lips
in the respective 1997 Financial Statements and
the Effective Balance Sheet, (iii) vis-a-vis Xx.
Xxxxxx Xxxxxxx-Xxxxxxx or (iii) vis-a-vis the
authorities due to the hiring out of employees in
the construction sector (including fine imposed
against a Company, Purchaser or managing
director), and
(b) shall be
increased by eight times the amount (less ancillary
charges, non-recoverable legal, litigation and other
costs) by which it becomes definite and irrevocable
through non-appealable assessment by the authorities
or court ruling that the workmen's compensation of a
Company for 1997 as assessed by the respective
authorities and as fully accrued for in the 1997
Financial Statements has been too high or shall be
reduced, respectively, by 8 times the amount by which
it becomes definite and irrevocable through
non-appealable assessment by the authorities or court
ruling that the workmen's compensation of a Company
for 1997 as assessed by the respective authorities and
as fully accrued for in the 1997 Financial Statements
has been too low.
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The closing financial statements shall, if not already paid, fully
accrue for the workmen's compensation which has been assessed by the
authorities for 1996 and 1997 as accrued in the 1997 financial
statements and not show refund claims in the balance sheet, even if a
reduction or refund is granted or expected.
3. In order to determine the Closing Equity, a statement of each of the
Companies (hereinafter referred to as the "Closing Statements")
including a balance sheet at the Closing Date (hereinafter referred to
as the "Closing Balance Sheets") and a profit-and-loss-account for the
period from January 1, 1998 through the Closing Date shall be prepared.
The Closing Statements have to be prepared in accordance with generally
accepted accounting principles (Grundsatze ordnungsgema(beta)er
Buchfuhrung) and observing continuity in the accounting and evaluation
principles with the 1997 Financial Statements.
4. A draft of the Closing Statements (the "Draft Statements") shall be
prepared by the Companies together with Price Waterhouse or another
auditor of the Purchasers' choice The Purchasers and the Sellers shall
endeavour to cause the Companies to prepare the Draft Statements within
20 banking days after the closing date. Immediately upon its
preparation the Draft Statements shall be made available to the
Purchasers and the Sellers.
5. The Draft Statements become binding between the parties and qualify as
Closing Statements, especially with respect to the determination of the
Closing Equity, if not within 20 banking days after his receipt of the
Draft Statements for all Companies a Purchaser or Seller provides any
party on the other side with (a) his written objection that one or
several Draft Statements are not in accordance with the provisions of
the Agreement and (b) revised drafts of Closing Statements (hereinafter
referred to as the "Revised Statements") which reflect the amendments
to be made in his opinion. In this case, the determination of all
Closing Statements and in particular the Closing Equity shall be
decided with binding effect upon all parties, by an independent expert.
Such expert must be a German certified auditor or auditing firm
(Wirtschaftsprufer or Wirtschaftsprufungsgesellschaft) and shall be
appointed jointly by the parties. If the parties fail to agree on the
expert within 10 banking days since a Purchaser or Seller for the first
time made available a Revised Statement the expert shall be appointed
by the president of the Institute of Auditors in Dusseldorf (Institut
der Wirtschaftsprufer e. V.). The expert
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shall decide as an arbitrator of facts (Schiedsgutachter) within 20
banking days succeeding his appointment with binding and final effect
upon all parties on the Closing Statements and the Closing Equity.
If the determination of the Closing Equity for an individual Company by
such expert lies between the equity reflected in the respective Draft
Statement and a Revised Statement, such determination shall be final
and binding upon all parties for the Closing Equity of this Company; if
the expert's indication for the Closing Equity of a Company is outside,
the Closing Equity reflected for this Company in the respective Draft
Statement or the Revised Statement, which is the closest to the
determination of the independent expert, shall with binding and final
effect upon all parties qualify as Effective Equity for this Company.
6. From the costs of the auditors involved in the preparation of the Draft
Statements the Purchasers shall bear as joint debtors an amount of up
to DM 25.000 and otherwise the Sellers shall bear as joint debtors an
amount up to DM 25.000,--. The costs of the independent expert shall be
split among the Purchasers as joint debtors on the one side and the
Sellers as joint debtors on the other side proportionately to the
amount by which the total of the Closing Equity for all Companies as
determined by the expert falls short of or exceeds the equity reflected
in those statements which among all Draft Statements and Revised
Statements are the farest away from the determined Closing Equity. The
Purchasers shall procure that representatives of the auditors appointed
in accordance with this Agreement shall have access to the offices of
the Companies and to their books and records for the purpose of
auditing the Draft Statements and Revised Statements, and that suitable
personnel shall be available for the support of such representatives
with respect to the audit of the Draft Statements and Revised
Statements. The parties shall endeavour that the auditors appointed in
accordance with this Agreement grant each other access to their working
papers.
7. The amount of any reduction or increase of the Purchase Price pursuant
to this Article 3 allocated to the Company to which the respective
adjustment refers and is attributed to, shall on a pro rata basis be
distributed to or paid by, respectively,, the Sellers and Purchasers of
this Company in accordance with Article 2.2. (a). Each Seller shall pay
its portion of any reduction and each Purchaser, respectively, shall
pay its portion of any increase
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30
(a) in the events under Article 3.2 (a) (aa) within 10 banking
days since, as regards all Companies, all Effective Statements
have become binding between the parties in accordance with
this Article 3 and
(b) in the events under Article 3.2 (a) (bb) (cc) and (b) within
10 banking days since the additional output/services,
liability, or reserve has become existent or known
(irrespective of whether it is due) or since the date as of
when it became definite and irrevocable through non-appealable
official assessment or court ruling that the initial
assessment of the respective workmen's compensation amount was
too high or too low.
Purchase price reductions under this Article 3 shall be borne by those
Sellers as joint and several debtors which have sold shares in the
company to which the purchase price reduction is attributable. However,
in addition, every Purchaser is entitled to set-off his obligations
under this Article 3 not only with claims for a purchase price
reduction with regard to the same or another company, which the
Purchaser or another Purchaser has vis-a-vis the same Seller, but also
with such purchase price reduction claims, which the purchaser or
another purchaser has against another seller. Internally, the Sellers
will procure an appropriate compensation.
ARTICLE 4
Seller's Warranties
The Sellers jointly warrant to each Purchaser in the form of an independent
promise of guarantee that the following statements as of the recording of this
Agreement, and as of the Closing date and to the extent statements are made for
the future, also in future are accurate and complete:
1. The statements in the Preamble of this Agreement with respect to each
Company, its shareholders, and all shares existing in the Companies are
complete and correct.
2. Each Company is a company with limited liability (Gesellschaft mit
beschrankter Haftung) duly organised under the laws of the Federal
Republic of Germany and validly existing in accordance with the
certified excerpts of the Commercial Register attached hereto as
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Attachment 4.2 of the reference deed and the Articles of Association of
EMD A, EMD F, EMD M and EMD B dated December 9, 1993 and EMD S dated
June 6, 1994, in the case of EMD F and EMD B with exception only of the
difficencies described in the Preamble D and E, which however, will be
remedied before the Closing Date as indicated in Preamble F with the
effect that the aforementioned articles of association will be valid
with the changes pursuant to Preamble F and G. There are neither
shareholder resolutions amending the Articles of Association which have
not yet been registered in the Commercial Register nor are there any
side agreements relating to the constitution and organisation of any
Company.
3. Except to the extent disclosed in Attachment 4.3(a) of the reference
deed, no Company has direct or indirect participations in other
businesses or is under an obligation to acquire such participations.
Except to the extent disclosed in Attachment 4.3(b) of the reference
deed no Seller, no relative or cohabitant of the Seller and no
affiliated enterprise of a Seller, its relative or cohabitant directly
or indirectly holds or is under an obligation to acquire a
participation in another business engaged in temporary work,
procurement of employment, security services or other personal services
which compete with any of the Companies' business.
4. No Company has entered with a Seller, another Company or any other
person into any enterprise contracts (Unternehmensvertrage) within the
meaning of Sec. 291 et seq. of the Stock Corporation Act (Aktiengesetz)
nor any agreement relating to the establishment of a silent
partnership, neither presently nor at any time in the past.
5. With the exception of Ms. Lips, who however, will assign her shares
prior to the Closing Date to the Sellers as can be inferred from
Preamble F and G, and the share in EMD F which is held by this company
for its own account beyond the Closing Date, there are no shareholders
of the Company other than the Sellers and, apart from the Shares, no
Seller, related person or affiliated enterprise holds assets which are
used for the business operations of any Company. Attachment 4.5 of the
reference deed is an accurate and complete description of all
shareholders which at any time held shares in any of the Companies as
well as of their shareholdings and their duration. During the entire
holding period reflected in this Attachment 4.5 the respective
shareholder and, to the best knowledge of the sellers, the respective
former shareholder was the sole legal and beneficial owner of the
shares
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stated for him. The Sellers and Ms. Lips are the sole legal and
beneficial owners of the Shares as reflected in the Preamble of this
Agreement. The Shares are free of any encumbrances or any other
unconditional or conditional rights for the benefit of other persons.
Each Seller has the right and the power to freely dispose of its Shares
without the consent of any other party being be required for such
disposal or that such disposal would violate the right of any other
person. The Shares do not constitute all or substantially all of the
assets of a Seller.
6. The Shares are fully paid up by cash contributions and no repayment of
capital contributions has been made, neither openly nor concealed,
except only for the cancellation of one share in EMD F which had been
held by Xx. Xxxxxxx-Xxxxxxx and which have been cancelled with legal
and economical effect as of December 18, 1992 without Xx.
Xxxxxxx-Xxxxxxx or any other person having any further rights with
respect to this share or Xx. Xxxxxxx-Xxxxxxx'x role as a shareholder
and/or managing director. In particular, all compensation payments owed
to Xx. Xxxxxxx-Xxxxxxx have been made so that neither Xx.
Xxxxxxx-Xxxxxxx nor any other person can raise any claims in connection
with the cancellation of the share. There are no obligations existing
or threatening in connection with the Companies or Shares for which a
Purchaser would be held liable by becoming a shareholder in a Company.
7. Neither against a Seller nor a Company have any bankruptcy or
composition proceedings been initiated nor are there any circumstances
which would justify the initiation of such proceedings in the future.
8. The financial statements for the fiscal year 1996, and the 1997
Financial Statements of all Companies (in each case consisting of
balance sheet and profit and loss account, the notes) and the
management reports of the Companies for the fiscal years 1996 and 1997
(all of the aforementioned statements and reports for all Companies in
the following referred to as the "Annual Statements") as well as
Closing Statements have been and will be prepared, respectively, in
accordance with generally accepted accounting principles (Grundsatze
ordnungsgema(beta)er Buchfuhrung) as well as observing continuity in
the accounting and evaluation principles and present a
view of the assets, finance and results situation of each Company which
is in accordance with the actual circumstances. To the extent that
there are capitalisation options (Aktivierungswahlrechte) no
capitalisation has taken place. To the
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33
extent that there are options to include items in the liabilities
(Passivierungswahlrechte) such items have been included. All
statutorily permitted deprecations are taken. All statutorily permitted
accruals are made. At the Closing Date the Company has, with exception
of liabilities resulting from pending contractual relationships which
are not required to be shown on a balance sheet, no liabilities other
than those which are shown in the Closing Balance Sheet or covered
therein by accruals. To the extent that potential and contingent
liabilities (including liabilities resulting from the issue of comfort
letters), have not been included in the liabilities they have been
reflected as below-the-line items on the balance sheet of the Annual
Statements. As of the signing of this agreement, no companies have
contingent liabilities (including liabilities resulting from the issue
of comfort letters), other than those reflected in Attachment 4.8 of
the reference deed which will not exceed the maximum amounts stated
thereunder. There have been no changes of the asset, finance or results
situation of the Companies which would lead to a substantial deviation
of the respective Closing Statements from the 1997 Financial
Statements. The financial statements of the Companies have been audited
and confirmed without reservations for all fiscal years for which this
was required under German law and their is and was no obligation
existing which would require to produce or have audited consolidated
financial statements for several Companies.
9. The receivables reflected in the Annual Statements and still
outstanding at the date hereof will be fully collected upon their due
date without incurring any non-recoverable collection costs, less any
specific or lump sum value adjustment reflected in the Annual
Statements or the Effective Statements.
10. The pension accrual shown in the Annual Statements and the Effective
Statements duly reflects the cash value of the Company's liabilities
from commitments for company pension plans (both direct and indirect
commitments) on the basis of a calculation interest rate of 6 per cent
and the application of the most recent orientation schedules of Xx.
Xxxx Xxxxxxx. With the exception of the pension entitlements of Xx.
Xxxxxx Xxxx and Xx. Xxxx Xxxxxxxxx for which pension reserves have been
made, the pension entitlement of Xx. Xxxx Xxxx and Xx. Xxxxxxxx
Kerschbaumer for which pension reserves have also been made, but which
will be cancelled prior to the transfer of shares, and those pension
entitlements of Ms. Xxxx Lips which have been already cancelled, the
company has not granted any pension entitlements. No Company has
granted other benefits within the meaning of the German Xxxx-
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xxxxxxxx Xxxxxxx Xxx, except only for direct insurance schemes
(Direktversicherungszusagen) which are reflected in Attachment 4.10 of
the reference deed which states the relevant employees and the total of
all annual insurance premiums payable by each Company. All direct
insurance commitments are fully funded by insurance contracts with
constant annual premiums. There are no insurance premiums outstanding
under these insurance contracts for periods until the Closing Date and
no Company is obliged in the future to make contributions to the direct
insurance scheme in excess of the amount reflected in Attachment 4.10
of the reference deed. However, the Sellers point out that the premiums
for the direct insurance scheme increase with an increasing duration of
employment.
11. Since January 1, 1997 the management of the Companies has not proposed,
the shareholders have not decided upon and the Company have not made
any distributions, neither in cash nor in kind, other than those
reflected in Attachment 4.11. of the reference deed. No Company has
ever distributed any constructive dividends (verdeckte
Gewinnausschuttungen) neither under corporate nor under tax law.
12. With the exception of the items listed in Attachment 4.12 of the
reference deed of the reference deed to this Agreement, all assets
necessary for, or used in, the present business operations of the
Companies are reflected in the 1997 Financial Statements. The Companies
are the sole legal and beneficial owner of all fixed assets
(Gegenstanden des Anlagevermogens) used in their business operations.
Such assets are free of any encumbrances or any other rights for the
benefit of other person. Such assets are in a good operating and
conservation condition. The Companies are the sole legal and beneficial
owner of all current assets (Gegenstande des Umlaufvermogens) used in
their business operations. Such assets are free of any encumbrances and
any other rights for the benefits of other persons with the exception
of statutory pledges or retention of title rights entered into the
ordinary course of business for liabilities which are and will be
reflected in 1997 Financial Statements and the Effective Statements.
13. With the exception of the software license agreement with RuN Xxxxxx
und Nissle GmbH, which provides for a monthly license payment of not
more than DM 6.500,-- for all companies together, and of standard
computer software which has been purchased for not more than DM
10,000.- or is licensed for not more than DM 5,000.- per annum,
Attachment 4.13of the reference deed to this Agreement is a complete
and correct list of all industrial
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property rights (in particular patents, utility models, trade and
service marks, design patents, and topographic rights ) and copy rights
which are owned by any Company or with respect to which any Company has
been granted a license for use as well as, with respect to such rights
in respect to which any Company has been granted a license for use, a
list of the relevant license agreements. With the exception of the
industrial property rights and copyrights set forth in this list, the
Companies in their business operations or for any own software
developments do not use any further industrial property rights or
copyrights nor are they dependent thereon. To the best knowledge of
each Seller no industrial property or copyrights used by a Company have
been challenged. The Companies do not own rights in connection with any
own software developments. The Company has no outstanding obligations
in connection with inventions or software developments under the
Arbeitnehmererfindergesetz or otherwise.
14. Between a Company on the one side and another Company, a Seller, a
relative or cohabitant of a Seller or an enterprise affiliated with a
Company, a Seller, his relative or cohabitant (affiliation, for
purposes of this contract, is to be determined in accordance with Sect.
15 sequ of the Stock Corporation Act (Aktiengesetz) as if the Seller,
relative or cohabitant were an enterprise) on the other side there are
no contractual or de facto relationships existing with the exception of
those listed in Attachment 4.14 of the reference deed Company has
assumed guarantees, security or other obligations vis-a-vis other
parties for the benefit of another Company, a Seller, a relative or
cohabitant of a Seller or an enterprise affiliated with a Company, a
Seller, his relative or cohabitant.
15. Attachment 4.15 (a) to this Agreement is a complete and correct list of
the 20 largest customers of each Company, listing in each case the
business volume for the fiscal year 1997. To the best knowledge of each
Seller there is no reason to believe that any of such customers of the
Companies (with the exception of MST regarding EMD A) (a) will reduce
the extent of its dealings with the respective Company to any material
degree (when compared with the 1997 business volume) or (b) will
require a substantial change of the present terms of his agreements
with the respective Company or the practice of hiring-out employees
from the Company. There has been and is no violation of agreements with
the aforementioned 20 largest or with any other customers existing,
which could give raise to customer claims in excess of DM 5.000-- per
customer (with the exception of PAGO relating to EMD S in an amount of
a maximum of DM 30.000,--) or DM 100.000.-- per Company and
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to the best knowledge of each Seller there is no reason to believe that
the continuation of the Companies' business would lead to such a
violation, complaints or claims.
16. Attachment 4.16(a) to this Agreement is a complete and correct list of
all employees of the Company (including newly hired employees and
executive personnel) other than temporary workers. No managing
director, branch manager, disponent or telephone sales person, all of
whom are accurately marked therein, has declared an intention to
terminate the employment relationship with the Company. On March 31,
1998, the Companies had the number of temporary workers stated in
Attachment 4.16 (b) of the reference deed for each individual Company
separately. Upon request of the Purchasers, Xx. Xxxx Xxxxxxxxx, Xx.
Xxxxxx Xxxx, Xx. Xxxx Xxxx and Xx. Xxxxxxxx Kerschbaumer will serve for
at least another three years after the Closing date as managing
directors of the Companies, a purchaser or one or several other German
subsidiaries of AHL Services Inc. engaged in the hiring out of
employees or in the procurement of labour to the same extent as before
and without side jobs. There are no labour law disputes pending or
threatening which could or give raise to claims in excess of DM
5,000.-- in the individual case or DM 50,000.-- in the aggregate for
all cases related to any individual Company. To the best knowledge of
each Seller, no claims have been raised by present or former employees
of any Company against customers of any Company and no such claims are
threatening. Currently, it is not intended to terminate any managing
director, branch manager, disponent or telephone sales person and there
are no claims outstanding of employees who have been terminated by any
Company or have received a termination notice until today. With the
exception of potential claims resulting from pending labour law
disputes of less than DM 5,000.-- in the individual case and less than
DM 50,000.-- in the aggregate for all disputes related to any
individual Company, all wages and other compensations to employees of
any Company have been paid when due. To the best knowledge of each
Seller until today there have been no injuries of employees or their
assets which could give rise to workers' compensation claims against
any Company, any of its customers or a workmen compensation
association. To the best knowledge of each Seller there is no reason to
believe that the percentage or duration of employees not being hired
out should be higher in future. There has been no works council formed
by the employees of any Company or Companies, and to the best knowledge
of each Seller there is no reason to believe that the employees will
implement a works council. No Company has entered into or otherwise is
bound by collective bargaining agreements or shop agreements with the
exception of agreements pursuant to ss.1 subsec 1
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and 2 Arbeitnehmerentsendegesetz and no Company is a member of an
employers' union. Presently no more than 80 employees of the Companies
are indirectly bound to a bargaining agreement viass.1 subsec 1 and 2 a
Arbeitnehmerentsendegesetz. Existing is an internal regulation for
business operation which is attached as Attachment 4.16 (c) of the
reference deed.
17. Attachment 4.17 of the reference deed to this Agreement is a complete
and correct list of all bank accounts of the Companies, the respective
signatories, as well as the guarantees and other security which a
Company, a Seller, or any other person has assumed for liabilities of a
Company.
18. Attachment 4.18 to this Agreement is a complete and correct list of all
insurances taken out by, or for the benefit of, the Companies or their
business operations with the exception of any insurance of the motor
vehicles used in the Company's business operations. The respective
policy holder is in good standing with respect to its obligations under
the insurance contract. Insurances which lapse upon the acquisition of
the Company by the Purchasers, a transformation of a Company into a
partnership or a change in the Company's management are marked.
19. Attachment 4.19.1 to 4.19.2 of the reference deed and the subsequent
subparagraphs include a complete and correct list of certain important
(written or orally concluded) agreements and obligations of the
Companies (hereinafter referred to as the "Material Contracts"), i.e.
all agreements and commitments of any Company which relate to one of
the following items or have been concluded with, or granted to, one of
the following parties:
19.1 All general agreements and, even if not listed in the
attachment, all other agreements with the 5 largest customers
of each Company as of December 31, 1997 within the meaning of
Article 4.15;
19.2 All agreements and obligations relating to the acquisition,
divestiture, encumbrance or other disposal of real estate or
real-estate-like rights;
19.3 All agreements relating to the acquisition or the divestiture
of fixed assets (Gegenstande des Anlagevermogens) including
intangible assets, physical fixed assets and
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financial assets whose value exceeds DM 50,000.-- per item or,
in the case of related matters, collectively DM 100,000.--,
unless fully performed by both sides;
19.4 All usufructuary lease agreements (Pachtvertrage), rental
agreements (Mietvertrage) or leasing arrangements to the
extent that they trigger annual payments of DM 25,000.-- per
item or, in the case of related matters, collectively of DM
50,000.--, while standard car lease agreements are included in
this list only if in the individual case triggering annual
payments in excess of DM 25,000.--;
19.5 The validly existing oral software license contract with RuN
Xxxxxxx und Nissle GmbH, the material content of which can be
inferred from the draft agreement attached as Attachment D
which is intended to confirm the existing agreements, and all
license agreements into which a Company as licensor or
licensee has entered other than standard software license
agreements which provide for license fees of more than DM
5,000.-- per annum;
19.6 All credit agreements into which a Company, as lender or
borrower, has entered, with the exception of employer loans to
Xx. Xxxxxxxxx (DM 40.000,--) and Xx. Xxxxxxxxxxxx (DM
10.00,--) and customary extensions of the due date of
receivables or payables agreed to in the ordinary course of
business, as well as all factoring arrangements;
19.7 All agreements with domestic or foreign intermediaries,
representatives, agents or employment agencies as well as all
similar agreements;
19.8 All employment agreements which provide for an annual
aggregate remuneration of more than DM 100,000.-- (including
fringe benefits, bonus and other agreed or discretionary
benefits) or whose period of termination exceeds three months
as well as all agreements with advisers to the extent that
they trigger annual payments which exceed DM 24,000.-- or
provide for a termination period in excess of three months;
19.9 All agreements, practice and obligations relating to pensions,
other social benefits, profit participations, turnover
participations or other bonuses as well as similar agreements;
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19.10 All co-operation and similar agreements with third parties as
well as any agreement or obligation having an restrictive
impact on competition;
19.11 All agreements or obligations which have been entered into or
assumed outside the ordinary course of business of a Company
to the extent that they trigger lump sum or annual payments of
DM 5,000.-- per item or, in the case of related matters,
collectively DM 10,000.--;
19.12 Other agreements and obligations which trigger lump sum annual
payments exceeding DM 100,000.-- per item or, in the case of
related matters, collectively DM 150,000.--;
The validity or enforceability of none of the Material Contracts has
been legally contested or questioned. No Material Contract is
terminated nor to the best knowledge of each Seller about to be
terminated. Neither a Company nor to the best knowledge of each Seller
its respective contractual partner have breached, or are violating or
in default with respect to, any Material Contract nor are any
complaints or claims because of such a breach, violation or default
existing or threatening, neither presently nor in the case of the
continuation of a Company's business. The transaction contemplated in
this Agreement to the best knowledge of each Seller will not give any
party an express right to termination or amendment of a Material
Contract.
20. Attachment 4.20 of the reference deed to this Agreement is a complete
and correct list of all powers of attorney issued by any Company and
presently in force which are not reflected in the excerpt from the
commercial register attached as Attachment 4.2. of the reference deed.
21. The Company has duly prepared and timely filed all tax returns and
notifications vis-a-vis the social security organisation, without
making use of any extension of regular time limits (except for regular
permanent extensions available for VAT purposes). All taxes (here and
in the following including ancillary charges such as interest, fines
and penalties and including tax deductions for which a Company can be
held liable such as pay roll and withholding tax), all contributions to
workmen compensation and trade associations, social security
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contributions (Sozialversicherungsbeitrage) and all other public law
dues of any kind (here and in the following including compensations
pursuant to the Act concerning Disabled Employees) owed by any Company,
or for which any Company can be held liable (including pay roll tax,
withholding tax and social security deduction) have been duly and
timely declared and paid upon their due date or, to the extent that
such taxes, all contributions to workmen compensation and trade
associations, social security contributions and other public law dues
have not yet been due at the respective statement day have been or will
be accrued for in the balance sheets being part of the Annual
Statements at an amount which will cover all such liabilities. From the
contributions assessed by the workmen compensation association for the
calendar year 1997, each Company has retained up to 20 % of its
contribution and has shown in its 1997 Financial Statements a liability
which will be sufficient to cover all such outstanding contributions to
the workmen compensation plus any interest and charges which may be
levied in connection therewith. In particular, all withholding taxes,
all corporate income tax (Korperschaftsteuer zur Herstellung der
Ausschuttungsbelastung), and solidarity surtax arising in connection
with the dividends reflected in Attachment 4.11 of the reference deed
have been paid (all ancillary charges inclusive). Any ---------------
claims for tax refunds reflected in the 1997 Financial Statements have
been or will be fully allowed and paid by the tax authorities. Taxwise
all distributions decided or made since 1. January 1997 (irrespective
for which business year) have been made or are made from previously
taxed "EK-accounts" as from fully taxable profits so that no imputation
tax applies. All social security organisations and the workmen
compensation associatious repeatedly reviewed the amount and the
payment by the Companies of social security contributions and
contributions to the workmen compensation without any substantial
mistakes, delays or shortfalls having been discovered, except only for
workmen contributions retained with respect to former appeals below the
amount by which the assessment had been reduced as a consequence of the
settled appeal. Unless stated in Attachment 4.21(a) of the reference
deed there are no appeals or disputes pending or
threatening between the tax authorities, workmen compensation
associations or social security organisation and a Company and the
dispute listed in Attachment 4.21 (a) only relates to a potential
reduction of the contributions to the workmen compensation association.
Attachment 4.21(b) of the reference deed to this
Agreements is a complete and correct descriptions of the corporate
income tax structure of the usable equity of each Company (verwendbares
Eigenkapital) shown in the Annual Statement
for 1997. No Company is participating or has participated in a fiscal
unity. The title and beneficial ownership to all shares in the
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Companies have at any time been held by shareholders who, during the
period of their shareholding, were subject to unlimited German tax
liability.
22. The Companies have applied for, received and used all public grants
(including subsidies regarding the employment of employees for which
employment is difficult to achieve, hereinafter referred to as
"long-term unemployed") only in accordance with applicable law and in
compliance with all regulatory orders, conditions and impositions. No
such grants will have to be repaid as a result of the consummation of
the transactions reflected in this Agreement or due to other
circumstances already known. The minimum employment period during which
subsidies for long-term unemployed can be reclaimed if terminated by a
Company without good reason does for no long-term unemployed exceed two
years and the total of all subsidies which have been or will be
received for any periods before or up to today for such long-term
unemployed for which the minimum employment period has not yet lapsed
as of today does not exceed, except of subsidies for which no potential
risk of repayment exists, DM 200,000.-- in the aggregate for all
Companies.
23. Attachment 4.23 of the reference deed to this Agreement is a complete
and correct list as of May 20, 1998 of all legal disputes and
regulatory proceedings to which any Company or employees of any Company
(to the extent that such disputes or proceedings could result in a
liability of a Company) are party or subject or which, to the best
knowledge of a Seller, are pending or threatening between an employee
of any Company and a customer of any Company and which can give raise
to claims in excess of DM 5,000.-- in the individual case of DM
50,000.-- in the aggregate for any individual Company. Since then, no
additional or legal disputes or proceedings in the aforementioned sense
have been impending and not such disputes or proceedings are
threatening, with the exception of legal actions for the collection of
receivables, which in their scope. do not exceed the customery for the
companies. Aside from the listed disputes and proceedings no disputes
or proceedings are impending nor are there any circumstances which are
likely to give rise to such disputes or proceedings.
24. Each Company holds an unconditional and permanent licence for temporary
work pursuant to Section 1 subsec 1 sentence 1
Arbeitnehmeruberlassungsgesetz ("AUG") free from any obligation. EMD A
and EMD M each also hold an unconditional and permanent license for
procurement of labour pursuant toss.23 sequ. Arbeitsforderungsgesetz
("AFG"), now ss. 291
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sequ. Sozialgesetzbuch Vol. III (SGB III) free from any orders. EMD B,
has applied and is expected to be granted in the near future a license
for procurement of labour free of any orders. EMD A is entitled by
registration with the Handwerksrolle to provide services in the field
of electro installation, such registration being free from any time
limits, conditions or orders. Presently, the services of not more than
15 exclusively of EMD A's employees is depending upon this
registration. In connection with the granting of the permanent
temporary work license the Employment Offices in charge for the last
time have reviewed the activities of each Company and have not
discovered any violations of the AUG or other regulations, nor raised
any complaints. No Company has hired out or is hiring out employees to
the construction sector in violation ofss.1b AUG or other or former
regulations, except only for the Magdeburg branch office of EMD S
which, from April 25, 1996 until October 25, 1997 had by mistake hired
out not more than 40 employees to the construction sector. This has
been fully disclosed to the competent State Employment Office already
in Spring 1997 and, apart from a potential small fine against the
management, no other negative consequences will result from this
incident. Each Company has duly and timely made all notifications and
filings which have to be made with the Employment Office, the social
security organisations, the workmen compensation association and any
other authorities. Neither a revocation nor any restrictions of the
temporary work license or the licenses regarding procurement of labour
is impending. The Companies held temporary work licenses and as regards
EMD A and EMD M employment procurement licenses and EMD A was
registered with the Handwerksrolle at any time for which this was
required and the activities of the Companies and their business do not
and did not require other regulatory permits. The business facilities
of the Company have been erected in compliance with all applicable law
and regulatory orders (especially in the area of construction law and
trade law). Neither their operation nor the present or former business
operations of any Company nor any of a Company's present or former
products, services, agreements with customers or employees or their
contemplation at any time have violated nor presently violate
requirements or limitations existing under the AUG, AFG, SGB III, other
labour laws or other German or non-German laws or regulatory orders
presently or at that time applicable, except only for potential minor
mistakes which may have happened with respect to limitations existing
under the AUG which, however, have meanwhile been fully remedied and
cannot lead to a revocation, restriction, time limitation or refusal of
any of the aforementioned existing or applied for licences regarding
temporary work and procurement of labour and which cannot result in
liabilities, fines or other substantial consequences for a
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Company, or its management, personnel or customers. Neither a customer
nor employee of any Company, nor the authorities or courts have raised
any concerns and objections against a Company's business operations and
its practice of hiring out employees and to the best knowledge of each
Seller there are no circumstances existing which could preclude or
hinder any Company from continuing its business activities and its
practice of hiring out employees, and in the case of EMD A and EMD M
also the procurement of labour, in the same manner as in the past.
25. The Companies do not own real estate or similar rights or usage rights
(Verwertungsrechte) with respect thereto, neither as legal nor as
beneficial owner. The real estate used by the Companies whether or not
such real estate is the property of the Companies or third parties as
well as the other operational facilities are free of any pollution of
soil, ground water, air or any other environmental pollution for whose
curing and cleaning up a Company could be held liable on a contractual
basis or as "Verhaltensstorer" and to the best knowledge of each Seller
there is also no pollution for whose curing and cleaning up a Company
could be held liable as "Zustandsstorer".
26. Since December 31, 1997, the business operations of each Company have
been and will be conducted exclusively in the ordinary course of
business, in accordance with cautious practice and substantially in the
same manner as before; there have been no materially adverse changes
with respect to such business operations or the asset, financial or
result situation or with respect to important assets or contracts of
any Company. Since December 31, 1997 unless in the ordinary course of
business, no hidden reserves have been dissolved or withdrawn.
27. To the best knowledge of each Seller all information supplied to the
Purchasers and their advisers by the Sellers prior to the recording of
this Agreement is complete, correct and accurate in any respect. It is
not misleading and does not omit anything relating to the Shares, the
Companies and their business operations which would be important for
the individual information or which the Purchaser at the time of the
recording of this Agreement for the evaluation of such information
should know. To the best knowledge of each Seller there are no material
facts or circumstances which in future could have a materially adverse
impact on any Company and its business operations with the exception of
general developments of the economy or the market.
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ARTICLE 5
Legal Consequences
1. If one or several of the statements for which a Seller pursuant to
Article 4 of this Agreement or pursuant to Article 4 will assume in the
assignment deed a guarantee turns out not to be accurate or incomplete,
then the Purchasers have the right to demand that those Sellers who
sell Shares under this Agreement in a Company affected by the
inaccurate or incomplete statement as joint debtors (Gesamtschuldner)
within an appropriate period of time but in any case not later than 20
banking days after receipt of such demand produces the situation which
would exist were such statements correct. If the respective Sellers
within such period of time do not produce the situation which is in
accordance with this Agreement or if such production of conditions in
accordance with this Agreement is not possible, then the Purchasers
have the right to demand from the aforementioned Sellers as joint
debtors monetary damages including consequential damages and lost
profits. The monetary damage is payable to the Purchasers
proportionately to the nominal value of their shareholdings in the
Company for which the representation was not correct or incomplete or,
at the option of the Purchasers to the affected Company. The legal
principle expressed in Sect. 460, 464 of the Civil Code (Burgerliches
Gesetzbuch) andss.377 of the Commercial Code does not apply. In
particular, the Purchasers are not unable to claim damages due to the
fact that they got knowledge of the circumstances described in the
Preamble and, either themselves or their advisors, comment on those
documents which are to be prepared pursuant to Preamble F.If any
guarantee which has been assumed by the Sellers expressly depends on
whether they know or should have known certain circumstances, this
shall also be the case if another Seller or an employee of the Company
which is listed in Attachment 4.16 (a) of the reference deed know or
should have known thereof.
2. In the amount of each Sellers' liability pursuant to Sect. 5.1 hereof
is in any case limited to the amount of his or her portion of the
entire Purchase Price for all Companies. This limitation does not apply
with respect to liability of a Seller for malicious and intentional
violation of guarantees.
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3. Subject to Article 5.4 hereof, all warranty rights of Purchaser
pursuant to this Article 5 are subject to a limitation period of three
(3) years. This does not apply to legal defects of the Share sold with
respect to which limitation period of 15 years applies and such 15-year
limitation period shall also apply to any other violation of Article
4.1, 4.2, 4.5 or 4.6 warranty rights of a Purchaser and Article 5.1 in
connection with Article 4.5 or Article 4.6 with respect to obligations
existing or arising vis-a-vis former or present shareholders or
managing directors of any Company, whereby for claims which are
asserted after ten years since the Closing Date, the liability of each
Seller will be limited to one half of his total share of the Purchase
Price for all companies. Condition for such liability of a Seller after
ten years is the fact that he has sold a share which is affected by the
violation of a guarantee described in Article 5.3 sentence 2. The
limitation period shall start to run with the Closing Date.
4. Any claims because of non-fulfilment of the warranties assumed in Sect.
4.21 expire due to the running of the limitation period one year after
the underlying tax assessments have become final and non-reputable for
the respective taxes and the respective assessment period, after the
final and non-re-reputable assessment of the relevant contributions by
the workmen compensation and trade association and the final and
non-reputable review of the respective social security contributions by
the social security institutions, respectively; this does not apply for
cases of tax fraud and grossly negligent tax reduction in which case
the limitation period shall expire only one year after the respective
taxes can no more be claimed by the tax authorities due to limitation
periods.
5. Damage claims due to any constructive dividends shall include a
compensation for all arising taxes, losses of tax credits associated
with "EK accounts" and any other tax disadvantages, but shall not
entitle a Purchaser or a Company to reclaim the distributed amount,
unless the constructive dividend resulted in the repayment of
registered share capital or in equity of a Company falling below the
Closing Equity.
6. Purchasers shall cause the Companies to permit Sellers or their
advisers who are bound by professional secrecy obligations to get
involved in all tax field audits of a Company for the period before the
Closing Date. The Purchasers shall procure that the Companies inform
the Sellers about the announcement or commencement of such field audit
without any undue delay. If no agreement can be reached about the
results of any such field audit, then
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Purchaser shall upon joint request of Sellers cause the respective
Company to initiate legal proceedings against the respective tax
assessment (Steuerbescheid) and, if necessary, conduct a legal action
in accordance with Sellers' instructions. The cost of any such legal
action shall be borne by Sellers.
7. In the event of the violation of a guarantee or another substantial
obligation under this contract by a Seller, the Purchasers shall have
the right to resign from this contract (also with regard to all other
Sellers and companies), which can only be excercised until the Closing
Date, provided that the Sellers do not eliminate, immediatley and
without remaining disadvantages, all facts resulting from a violation
of the guarantees or this agreement. With the exception of this right
to resign and the remaining rights under Articles 4 and 5 of this
contract, all statutory representations and warranties of the Sellers
are excluded.
8. Any payment claims of the Purchasers against the Sellers under this
Art. 5 shall first be set-off against the claims of the Sellers for
payment of the Third Tranche and the Fourth Tranche, irrespective to
which Seller and Purchaser the respective payment claim and Tranche
relates. Only for the purpose of this set off against Tranches, all
Sellers are jointly liable for the payment obligations under this
Article 5, even if they are not selling Shares in the Company for which
the guarantee was incorrect or incomplete. Only any excess claims of
the purchasers, i.e. after all outstanding Tranches of all Sellers have
been used for set-off, shall then be collected from the Sellers, first
from the Sellers of the Company or Shares for which the guarantee was
incorrect or incomplete and, if any of these Sellers does not effect
such payments with value within three bank business days since the
Purchaser's payment request, from those other Sellers who are jointly
liable as described in Article 5.1.
ARTICLE 6
Covenant not to compete
1. The Sellers undertakes for a period of three (3) years from the signing
of this contract within the territory of Germany defined hereinafter
not to conduct any activity with which it would directly or indirectly
compete with the present business operations of any Company or which
would directly or indirectly result in such competition. This
non-compete obligation includes the obligation of each Seller not
directly or indirectly to become en-
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gaged in the hiring-out of employees, the procurement of employees or
similar personnel services. As part of this non-compete, the Sellers
undertake for the period of three (3) years from the signing of this
agreement not to cause any employees of any Company to assume
employment with another employers (including a Seller, a relative or
cohabitant of a Seller, an affiliated enterprise of a Seller, his
relative or cohabitant or a competitor or customer of the Company) and
not to procure or otherwise support that employees of any Company
assume an employment with another employer. The Sellers shall
especially not establish or acquire any business which would, directly
or indirectly, compete with the business operations of any Company, or
acquire a participation in such business act for or support such
business or employee, advisor or otherwise. Apart from enterprises
hiring-out employees also enterprises offering employment agency or
other personnel services do qualify as competitors. This covenant not
to compete does not apply to the acquisition of not more than 10 per
cent of the shares of companies listed on a stock exchange.
2. The non-compete obligations under this Article 6 apply to activities
within Germany; it applies also to activities conducted outside of
Germany, to the extent they compete with the business operations of any
Company within Germany, in particular the employment, hiring out or
procurement of employees resident in Germany or to the providing of
temporary work or employment procurement services to customers within
Germany or for work in Germany from abroad.
3. Until January 1, 1999, Sellers holding direct or indirect
participations or interests in any enterprises disclosed in Attachment
4.3 of the reference deed shall sell and transfer these direct or
indirect, legal or beneficial participations and interests without
retaining any interest to a person who is neither a related person or
cohabitant of a Seller nor an enterprise affiliated with a Seller, his
relatives or cohabitants or, if such a sale and transfer cannot be
achieved in time, until January 1, 1999 shall unconditionally and
irrevocably declare the termination of the respective company,
partnership or participation or interest to the next possible date,
however not later than with effect as of December 31, 2001. Apart from
this entitlement to maintain these passive investments with relevant
entities for a limited period, the non-compete obligations under this
Article 6 do not allow a Seller to support or to become active with
respect to any such entity. The respective Sellers are obliged to keep
the Purchasers (represented by Xx. Xxxxxx Xxxxxxxxx) informed on the
status of their negotiations on such divestitures and on all activities
in connection with these participations on
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a current basis. Should the economic and legal effect of the
aforementioned sale or transfer, not take place or should the
termination not be declared within this time limit or should the
termination not become effective until December 31, 2001, the holding
of the direct or indirect participations and interests in these
entities with effect from January 1, 1999 on constitutes a violation
under this Article 6 and in addition to other claims hereunder, the
Purchasers may demand from the respective Seller that all benefits
stemming from the respective participations be transferred to them.
4. If a Seller violates the covenant not to compete set forth in Section
6.1, 6.2 and 6.3 continues such violation despite of warning by a
Purchaser or a Company, then the Seller shall be liable to pay a
contractual penalty in the amount of DM 300,000.-- (in words: Deutsche
Xxxx three hundred thousand) to the Purchasers. In case of a continuing
violation the Seller has for each further month that the violation
continues to pay a further contract penalty in the amount of DM
300,000.-- (in words: Deutsche Xxxx three hundred thousand). Any rights
of Purchasers to demand compensation for further damages incurred by
them or a Company and discontinuance of the prohibited conduct shall
remain unaffected. If inspite of the declaration of the termination of
his participation before January 1, 1999 with effect for the next
possible date, however not later than with effect as of December 31,
2001, a Seller - because of reasons for which he is not responsible -
does not succeed to terminate his shareholding with effect as of
December 31, 2001 and taking all required actions, at the latest, such
participation shall trigger the aforementioned contractual penalties
under Article 6.4 sentence 1 and 2 only from 1st of January 2002
onwards.
ARTICLE 7
Confidentiality and Press Releases
1. The Sellers shall keep secret their knowledge about the Companies and
the business operations if the respective facts are not publicly known
and to the extent that no legal disclosure requirements exist and shall
further not use such confidential information for itself or for others.
In particular, the Seller undertakes to keep secret all matters in
connection with those facts and measures described in the Preamble of
this contract.
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2. The parties to this Agreement agree to keep strictly confidential any
information obtained by them in connection with the negotiation and
conclusion of this Agreement with respect to the respective other party
and its affiliated companies.
3. The Sellers shall not make any press release nor similar public
announcements with respect to the transaction contemplated in this
Agreement, unless with the prior written consent of the Purchasers.
ARTICLE 8
Miscellaneous
1. Clearance by the cartel authorities has been achieved. The parties will
co-operate in order to make the required certifications following to
the signing of the Purchase Agreement. Also with respect to other
issues, the parties undertake to support each other in the execution of
this contract. In particular, the Sellers will, upon the request of the
Purchasers, on the Closing Date or before, co-operate in the granting
of securities, including the shares and other assets of the companies,
for acquisition financing to be undertaken by the Purchasers within a
reasonable scope, provided that this obligation to co-operate is
subject to the condition precedent of the "becoming valid" of the
assignment of the shares to the Purchasers.
2. Each party to this Agreement bears the cost of its advisers. The costs
of the notarisation of this agreement, the reference deed and the
assignment deed will be borne by the Sellers with one half of its
amount up until a maximum of DM 67.000,-- net with the remaining costs
being borne by the Purchasers. Between the individual Purchaser and
Sellers of Shares in each Company, the notarial costs attributable to
the respective Company (pro rata based on the attributable Purchase
Price portion) shall be allocated pro rata to the nominal value of
Shares in the Company sold or acquired by them, respectively. Claims of
the Sellers under this Agreement can be assigned only with a prior
written consent of the respective obligor.
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3. This Agreement, including this provision, may only be amended or
supplemented by written or, if necessary, notarial instrument. Any
agreements made heretofore between the parties to this Agreement are
superseded by the conclusion of this Agreement.
4. Should any provision of this Agreement be held wholly or in part
invalid or unenforceable, the validity or enforceability of the other
parts shall not be affected thereby. The invalid or unenforceable
provision shall be deemed replaced by a valid and enforceable provision
which serves best the economic interest of the contract parties
originally pursued by the invalid or unenforceable provision.
5. This Agreement shall be governed by the laws of the Federal Republic of
Germany. For the event that claims are asserted under this Agreement
against a Seller who has moved his domicile or habitual place of
residence after the conclusion of this Agreement to a place outside the
Federal Republic of Germany or if his domicile or habitual place of
residence is not known at the time of the initiation of such legal
action, the parties agree on the registered office of .
