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EXHIBIT 10.1
Commercial Limited Partnership-Interest
Purchase- and Assignment Agreement
1. Xxxxxxxxx & Xxxx GmbH & Co. KG , Gewerbestrasse 21-23, 32584 Lohne,
represented by Provista 379. Verwaltungsgesellschaft mbH, Xxxxxxxxxxx
0, 00000 Xxxxxxx registered in the Commercial Register at the local
court Hamburg under HRB 75179 in turn legally represented by Xx.
Xxxxxxx Xxxxxxxxx, managing director with single authority of
representation,
2. Xx. Xxxxxxx Xxxxxxxxx, businessman, born on September 25, 1939,
residing at Xxxxxxxxxxxxxxx 0, 00000 Xxxxxxxxxxx,
3. Xx. Xxxxxx Xxxxxxxxx, Studienrat, born on October 2, 1941, residing at
Xxxxxxxxxxxxx 00, 00000 Xxxxxx, represented by Xx. Xxxxxxx Xxxxxxxxx
according to the power of attorney dated May 12, 2000 attached as
Exhibit A, and
4. Paxar Corporation, 000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx Xxxxxxx, Xxx Xxxx
00000, XXX, represented by Xx. Xxxxxx X. Xxxxx born on May 15, 1937
residing at 00 Xxxx Xxxxx Xxxx, Xxxxx Xxxxx, Xxx Xxxx 00000, XXX
according to the power of attorney dated May 10, 2000 attached as
Exhibit B,
herewith enter into the following
Commercial Limited Partnership-Interest-, Purchase-
and Assignment Agreement (the "Agreement"):
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Table of Contents
Article Page
Table of Attachments
Preliminary Remarks
1. Sale and Assignment.......................................................................... 9
2. Purchase Price and Payment................................................................... 12
3. Transfer Accounts of the KG.................................................................. 16
4. Adjustment of the Purchase Price............................................................. 17
5. Representations, Warranties and Guarantees of the Sellers.................................... 19
6. Legal Consequences in Case of Violation of Representations, Warranties and Guarantees........ 47
7. No Compete Restraint......................................................................... 48
8. Statute of Limitations....................................................................... 50
9. Inspection by the Purchaser.................................................................. 50
10. Taxes........................................................................................ 51
11. Conditions Precedent......................................................................... 52
12. Merger Control............................................................................... 52
13. Rights and Obligations of the Parties........................................................ 52
14. Guarantee of the Guarantor................................................................... 56
15. Seller no. 1's Profit Participation.......................................................... 56
16. Interim Period............................................................................... 60
17. Arbitration.................................................................................. 61
18. Miscellaneous................................................................................ 62
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Table of Attachments
NO. CONTENTS OF ATTACHMENT
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1.9 Tangible or intangible assets
1.15 Application in the Commercial Register
5.2.7 Abstract from the Commercial Register, articles of association et al. of the KG
5.2.8 Abstract from the Commercial Register, articles of association et al. of B+B-Polska
5.2.10 Abstract from the Commercial Register, articles of association et al. of Xxxxxxxxx-Spain
5.2.11 Abstract from the Commercial Register, articles of association et al. of Xxxxxxxxx-India
5.2.12 Abstract from the Commercial Register, articles of association et al. of Xxxxxxxxx-Turkey
5.2.23 Restrictions of KG's ownership in, liens and encumbrances of shares in Xxxxxxxxx-Spain
5.2.24 Restrictions of KG's ownership in, liens and encumbrances of shares in Xxxxxxxxx-India
5.2.26 List of other equity, interest, shares, participations or sub-participations
5.2.30 Restrictions on disposal of Xxxxxxxxx-Spain-Shares
5.2.31 Restrictions on disposal of Xxxxxxxxx-India-Shares
5.2.36 Joint-venture agreement, cooperation agreement, working party agreement (Arbeitsgemeinschaftsvertrag) or similar
contractual arrangement with third parties
5.2.37 Branch offices or other business operations
5.2.38 Supervisory board, advisory board, consultancy board or comparable boards or obligation to install such boards
5.2.39 (d) Execution of the Agreement conflicts with, violates, results any contract, agreement, arrangement et al.
5.2.39 (e) Execution of the Agreement creates or increases the amount of any liability or obligation of one of the Companies
under such contract, agreement, arrangement or instrument
5.2.39 (f) Lapse of rights of one of the Companies
5.3.1 Financial Statement of the KG
5.3.2 Financial Statement of the Subsidiary
5.3.3 Balance sheet of Xxxxxxxxx-Turkey
5.3.4 Financial Statements of the Affiliates
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5.3.5 List of liabilities that are not directly related to, and that did not arise directly out of their business
5.3.5 (a) Assets, properties and rights not owned by the Companies which were used by the Companies on the basis of binding
agreements with the Sellers
5.3.5 (b) Assets, properties and rights not owned by the Companies which were used by the Companies on the basis of binding
agreements with third parties
5.3.7 Liabilities, debts, claims or obligations in excess of DM 250,000.00
5.4 (a) German Real Estate
5.4 (b) Real estate property abstracts of German Real Estate
5.4 (c) Mortgages on German Real Estate
5.4 (e) Charges according to public law (Baulasten), building restrictions, land development plan, building scheme of
German Real Estate
5.4 (f) Foreign Real Estate
5.4 (g) Real estate property leased or rented by the KG
5.4 (h) Leased property with unwithdrawable right to purchase
5.4 (i) Real estate property leased or rented by the Subsidiary or the Affiliates
5.4 (k) Real estate property leased to third parties
5.4 (l) (i) Real estate property sold during the last 5 (five) years
5.4 (l) (ii) Terminated lease agreements during the last 5 (five) years
5.5 Material Adverse Change et al.
5.6.1 (e) Filed tax returns and countries of filing
5.6.3 Last tax audit report
5.7 (a) (i) Patents, trademarks/service marks, business or trade name
5.7 (a) (ii) Intellectual Property Rights of the Companies
5.7 (c) Use of trademarks/service marks
5.7 (d) Challenges of the Intellectual Property Rights by third parties
5.7 (e) Infringement of Intellectual Property Rights or unauthorized use of Know-How by third parties
5.7 (f) Compliance of products
5.7 (g) Licenses and agreements to pay or receive any royalty in respect to the Intellectual Property Rights of the
Companies
5.7 (h) Intellectual Property Rights licensed to, but not owned by the Companies
5.7 (i) Know-how licenses
5.8 Insurance policies (setting forth whether the third party liability insurance contract is of claim made or
occurrence type) in each case with the
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statement of the insured amount and the annual premium
5.9.1 Material licenses, certificates, permits, permit applications, franchises, private product approvals
5.10.1 Work's council agreements, collective bargaining agreements of the KG
5.10.3 Relationships of the Companies with their employees
5.10.5 Names, titles, locations, annual compensation and all bonuses for all board members, et al.
5.10.6 Benefit having a monetary value
5.10.8 Obligations arising from termination or cancellation of any employment agreement
5.10.9 Obligations to pay or grant any salary, fringe benefit
5.11 (a) Rental, leasing or similar contracts
5.11 (b) Consultancy agreements
5.11 (c) Obligations owed to a benevolent fund, pension liabilities, pension- and related benefit liabilities et al.
5.11 (d) (i) Standard sales contract
5.11 (d) (ii) General conditions of sales
5.11 (e) Agreements regarding compensation, dependant on profit or turnover of the Companies, profit sharing or similar
arrangements
5.11 (f) Competition restraints or contracts or similar restrictions to the detriment of the Companies
5.11 (g) Sureties, guarantees, comfort letters, performance bonds, letters of credit et al.
5.11 (h) Contingent or actual repayment obligations in connection with grants or subsidies received by the Companies
5.11 (i) Contractual obligations not shown in the financial statements of the Companies with a face value of more than DM
250,000.00
5.11 (j) Pending, expected or threatened actions, claims, disputes, inquiries
5.11 (k) Forward contracts regarding goods, foreign currencies and interest
5.11 (l) License agreements
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5.11 (m) Contractual or statutory obligations to make lump sum payments (Abfindungen) of whatsoever kind
5.11 (n) Commitments to pay out loans or loans which have been paid out by the Companies
5.11 (o) (i) Distribution agreements (distributor- or commercial agent agreements) (appointing the Companies as distributor or
commercial agent)
5.11 (o) (ii) Distribution agreements (distributor- or commercial agent agreements) (appointing a third party as distributor or
commercial agent).
5.11 (p) Powers of attorney
5.11 (u) Long term agreements
5.11 (v) Agreements leading to payments which are received or which have to be made by the Companies of more than DM
250,000.00 annually
5.11 (x) Loan agreements and other banking and overdraft facilities
5.13.2 (i) Managing directors of the Companies
5.13.2. (ii) Holders of a commercial limited statutory power of attorney (Prokura)
5.13.4 (i) Open accounts receivable of the Companies which came into existence up to April 30, 2000
5.13.4.(ii) Open liabilities of the Companies which came into existence up to April 30, 2000
5.13.5 Contracts, agreements or arrangements, providing for an aggregate annual payment obligation of more than DM
500,000.00 or with a termination period of more than 6 months
5.13.6 Bank accounts of the Companies except Xxxxxxxxx-Spain and Xxxxxxxxx-India
5.13.7 Guarantees (Garantien, Burgschaften, Kreditauftrage) issued by the Sellers for the benefit of the Companies or
issued by the KG for the Subsidiary or the Affiliates.
5.13.8 Credit-lines of the Companies
6.4 Persons whose knowledge is deemed to be knowledge of the Sellers
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12 Clearance at The Federal Cartel Office
13.1 Other enterprises which use the firm to identify an enterprise
13.2 Intellectual property rights being owned by the Sellers or another party
13.4 Legal relationships between the Sellers and the Companies
13.8 Sureties
15.1 Consolidated profit of the Companies as of December 31, 1999
18.15 Interest-holders meeting of the KG
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Preliminary Remarks
1. Xxxxxxxxx & Xxxx GmbH & Co. KG, with statutory seat in Lohne, for which
registration in the Commercial Register at the local court Bad
Oeynhausen has been applied for on April 27, 2000 (notarial deed no.
894/2000 of the Notar Xx. Xxxx Xxxxxxx with official seat in Hamburg)
is a commercial limited partnership duly incorporated and validly
existing under the laws of the Federal Republic of Germany (the
"Purchaser").
2. Xx. Xxxxxxx Xxxxxxxxx is a businessman with the business address at
Xxxxxxxxxxxxxx 00, 00000 Xxxxxxxxxxx (the "Seller No. 1").
3. Xx. Xxxxxx Xxxxxxxxx is a Studienrat with the business address at
Xxxxxxxxxxxxxx 00, 00000 Xxxxxxxxxxx (the "Seller No. 2"; Seller No. 1
and Seller No. 2 together, the "Sellers").
4. Xxxxxxxxx & Xxxx KG, with statutory seat in Sprockhovel with the
principal place of business at Xxxxxxxxxxxxxx 00, 00000 Xxxxxxxxxxx,
registered in the Commercial Register at the local court Hattingen
under HRA 2741, is a commercial limited partnership
(Kommanditgesellschaft) duly incorporated and validly existing under
the laws of the Federal Republic of Germany. It has a commercial
limited partnership capital registered in the Commercial Register in
the nominal amount of DM 80,000.00 (German Xxxx: eighty thousand) (the
"KG").
5. Xx. Xxxxxxx Xxxxxxxxx is the only general partner (Komplementar) of the
KG. Other general partners of the KG do not exist.
6. Xx. Xxxxxx Xxxxxxxxx is the only limited partner (Kommanditist) of the
KG and owns the only commercial limited partnership interest of the KG
(Kommanditanteil) in the nominal amount of DM 80,000.00 (German Xxxx:
eighty thousand). Other commercial limited partnership interests of the
KG do not exist.
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7. The KG has one wholly owned subsidiary, B+B Etiketten Polska Sp. Z o.o.
(the "Subsidiary"). The KG further has several directly held
affiliates, Xxxxxxxxx Xxxxxx X.X. (43,07%), Mandhana Xxxxxxxxx
Industries Limited (50%) and Xxxxxxxxx Dualplast Istanbul Etiket Ic ve
Dis Ticaret Limited Sirketi (98%) (together, the "Affiliates" or each a
"Affiliate"; the KG, the Subsidiary and the Affiliates together, the
"Companies" or each a "Company").
8. The Companies manufacture and market apparel identification products.
9. The Purchaser is a German holding company.
10. Paxar Corporation with its principal place of business at 000 Xxxxxxxxx
Xxxx Xxxxx, Xxxxx Xxxxxxx, Xxx Xxxx 00000 XXX is a corporation
organised and existing under the laws of the state of New York is the
ultimate holding company of the Purchaser (the "Guarantor").
11. The Seller No. 1 who is the only general partner of the KG desires to
withdraw from the KG and to sell and to transfer his position as
general partner of the KG to the Purchaser and the Seller No. 2 who is
the only limited partner of the KG desires to sell and to assign his
commercial limited partnership interest in the KG to the Purchaser
whereby the Sellers wish to convey all their rights to the KG to the
Purchaser according to the terms and conditions of the Agreement. The
Purchaser wishes to become the only general partner of the KG and the
only limited partner of the KG whereby the Purchaser wishes to acquire
all rights to the KG according to the terms and conditions of the
Agreement on the basis of the representations and warranties made and
guarantees and indemnities given by the Sellers.
1. SALE AND ASSIGNMENT
1.1 The Seller No. 1 hereby sells and transfers to the Purchaser his
position as the only general partner (Komplementar) of the KG. The
Seller No. 1 hereby withdraws from (xxxxx aus) the KG. The Purchaser
accepts such sale and transfer, is hereby admitted as and becomes the
only general partner of the KG.
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1.2 The Seller No. 2 hereby sells and assigns his commercial limited
partnership interest (Kommanditanteil) of the KG in the nominal amount
of DM 80,000.00 (German Xxxx: eighty thousand) being the only
commercial limited partnership interest of the KG to the Purchaser. The
Purchaser accepts such sale and assignment and herewith becomes the
only limited partner of the KG.
1.3 The sale and the transfer of the position of the only general partner
of the KG by the Seller No. 1 to the Purchaser and the sale and the
assignment of the only commercial limited partnership interest in the
KG by the Seller No. 2 to the Purchaser being the sale, transfer and
assignment of all rights to the KG according to section 1.1 and section
1.2 is made with immediate in rem effect (dingliche Wirkung) (the
"Transfer Date"), provided, however, that the withdrawal of the Seller
No. 1 as the only general partner of the KG and the assignment of the
only commercial limited partnership interest in the KG is made the
earliest with the entry (Eintragung) of the Purchaser as limited
partner of the KG due to special legal succession
(Sonderrechtsnachfolge) in the commercial register. Such period of
delay of the effectiveness of the assignment shall in no manner affect
or limit the total control of the management of the KG by the Purchaser
from and including the Transfer Date. Contractually (schuldrechtlich)
the sale, transfer and assignment is made with retroactive effect as of
April 30, 2000 24:00 hours (the "Effective Date").
1.4 The sale, transfer and assignment includes and is herewith made
regarding all claims of the Seller No. 1 and the Seller No. 2 resulting
from the partnership accounts of the Seller No. 1 and the Seller No. 2
with the KG, the rights to the profits and losses of the KG accruing
since the Effective Date as well as all other rights related to the
position as the only general partner of the KG and the only limited
partner of the KG beginning with the Effective Date, including but not
limited to:
(a) The claims of the Seller No. 2 arising out of or in connection
with the fixed capital account (Festkapitalkonto) of the
Seller No. 2 with the KG and
(b) the claims of the Seller No. 1 arising out of or in connection
with the variable capital account (variables Kapitalkonto) of
the Seller No. 1 with the KG.
1.5 The Seller No. 1 guarantees that the aggregate amount of all accounts
set forth under section 1.4 shows a credit balance of at least DM
27,556,000.00 (German Xxxx: twenty seven million five hundred fifty six
thousand) as of the Effective Date, the date of the Agreement and the
Transfer Date. The parties agree that such credit balance shall be
determined without the inclusion of the KG's interest in Dualplast
Italia Groppo Xxxxxxxxx S.r.l. ("Dualplast Italia"). Such
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interest of the KG in Dualplast Italia is carried as an asset of the KG
having a book value of DM 1,082,000.00 (German Xxxx: one million eighty
two thousand) as of December 31, 1999.
1.6 The Purchaser guarantees that the KG pays to the Sellers an amount
equal to the profit of the KG accrued during the period starting with
January 1, 2000 up to and including the Effective Date as shown in the
Binding Transfer Accounts of the KG. Such amount is due and payable by
the KG to the Sellers 10 (ten) bank working days after the Transfer
Accounts of the KG (as defined in Article 3) become the Binding
Transfer Accounts of the KG (as defined in Article 3) and shall carry
interest starting from that due date at the rate set forth in section
2.5.
1.7 The Taxes (as defined in section 5.6.2) owed by the Sellers personally
in connection with the profits of the KG or in connection with
remuneration in cash or in kind received from the KG have to be borne
exclusively by the Sellers personally, and the Sellers herewith
indemnify the Purchaser and the KG accordingly, provided, however, the
Taxes owed by the Sellers personally in connection with the profits of
the KG beginning with the Effective Date or in connection with
remuneration in cash or in kind received from the KG on account of the
profit of the KG beginning with the Effective Date shall be borne by
the Purchaser and the Purchaser herewith indemnifies the Sellers
accordingly.
1.8 The Sellers are prohibited to make withdrawals from the KG or to
tolerate such withdrawals beginning with the date of the Agreement.
1.9 The Sellers sell and assign herewith to the Purchaser all tangible or
intangible assets to which the Sellers may hold full or partial title,
which serve the object of the Companies or which are designated to
serve the object of the Companies, as well as all eventual rights of
the Sellers against the Companies in so far as the Agreement does not
explicitly provide otherwise, except as listed in Attachment 1.9. The
Purchaser accepts such sale and assignment.
1.10 The Sellers herewith waive all option rights, sale rights
(Verkaufsrechte), right of first refusal (Vorkaufsrechte) and rights of
first receipt of an offer (Voranbietungsrechte), to which they might be
entitled regarding their position as only general partner of the KG and
only limited partner of the KG in connection with the transaction
contemplated in the Agreement.
1.11 The Sellers shall execute and deliver all documents and all notarial
formalities shall be effected which are necessary to transfer the
position of the only general partner of the KG and assign the only
commercial limited partnership interest in the KG as well as the
accounts set forth in section 1.4 of the general partner of the KG and
the limited partner of the KG with the KG free and clear of all liens,
encumbrances and other rights of third parties. An application
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(Handelsregisteranmeldung) to the commercial register of the local
court Hattingen relating to the transfer of the position of the only
general partner of the KG and the assignment of the only commercial
limited partnership interest of the KG shall be executed by the Sellers
and the Purchaser and certified by a German Notar and the application
so executed shall be delivered to counsel to the Sellers for immediate
filing with such commercial register.
1.12 The Purchaser shall pay to Xx. Xxxxxx Xxxxxx, Xxxxxx & Xxxxxxx
Anwaltssozietat, Clever Xxxxxxx 00, 00000 Xxxx (the "Escrow Agent"),
pursuant to the escrow agreement signed on the date hereof by the
Escrow Agent and the Purchaser (the "First Instalment Escrow
Agreement"), on behalf of the Seller No. 1 an amount equivalent to the
First Instalment (as defined in section 2.3.1) and on behalf of the
Seller No. 2 an amount equivalent to the Purchase Price according to
section 2.2.b. The Escrow Agent shall release the amount received on
behalf of the Seller No. 1 to the Seller No. 1 and the amount received
on behalf of the Seller No. 2 to the Seller No. 2 upon registration of
the transfer of the position as only general partner of the KG to the
Purchaser and the assignment of the only limited partnership interest
of the KG to the Purchaser in the Commercial Register of the local
court Hattingen as provided in the First Instalment Escrow Agreement or
by June 18, 2000 whichever comes first.
1.13 The transfer, withdrawal and assignment according to section 1.1,
section 1.4 (b) and section 1.9 shall become valid and binding at the
date at which the following conditions precedent are satisfied:
1.13.1 Credit of the First Instalment (as defined in section 2.3.1) to the
account set forth in section 2.6.1, and
1.13.2 Credit of the Escrow Amount (as defined in section 2.3.2) to the
account set forth in section 2.6.2.
1.14 The assignment according to section 1.2, section 1.4 (a) and section
1.9 shall become valid and binding at the date at which the condition
precedent in form of the credit of Purchase Price according to section
2.2 (b) to the account set forth in section 2.7 is satisfied.
1.15 In execution of the Agreement the parties are obliged to sign, notarise
and file the application to the Commercial Register in the form as
Attachment 1.15.
2. PURCHASE PRICE AND PAYMENT
2.1 The total consideration for the sale and transfer of the position of
the only general partner of the KG and the sale and assignment of the
only commercial limited partnership interest of the KG according to
Article 1, for the sale of all tangible and intangible assets to which
the Sellers may hold full or partial title,
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which serve the object of the Companies or which are designated to
serve the object of the Companies, for the sale of all eventual rights
of the Sellers against the Companies according to section 1.9 as well
as for all other obligations taken over by the Sellers in the Agreement
amounts to DM 76,238,500.00 (German Xxxx: seventysix million two
hundred thirtyeight thousand five hundred) (the "Purchase-Price").
2.2 The Purchase Price according to section 2.1 is split among the Seller
No. 1 and the Seller No. 2 as follows:
(a) Seller No. 1: DM 76,158,500.00 (German Xxxx: seventysix
million one hundred fiftyeight thousand five hundred)
(b) Seller No. 2: DM 80,000.00 (German Xxxx: eighty thousand).
2.3 The Purchase-Price according to section 2.2 (a) shall be paid by the
Purchaser to the Seller No. 1 in two instalments on the following due
dates:
2.3.1 The first instalment shall be in the amount of DM 64,722,725.00 (German
Xxxx: sixtyfour million seven hundred twentytwo thousand seven hundred
twentyfive) (the "First Instalment") and shall be paid by the Purchaser
to the Seller No. 1 at the date of the Agreement subject to (i) all
conditions precedent pursuant to Article 11 having been satisfied and
(ii) the First Instalment Escrow Agreement.
The First Instalment shall be paid by the Purchaser by wire transfer.
2.3.2 The second instalment shall be in the amount of DM 11,435,775.00
(German Xxxx: eleven million four hundred thirtyfive thousand seven
hundred seventyfive) (the "Escrow-Amount") and shall be paid by the
Purchaser on behalf of the Seller No. 1 to Xxxxxxxx Chance Punder
Rechtsanwalte Wirtschaftsprufer Xxxxxxxxxxxxx, Xxxxxxxxxxxxx 0, 00000
Xxxxxxxxxx ("CCP") at the date of the Agreement by wire transfer
subject to the condition precedent pursuant to Article 11 having been
satisfied to the interest bearing account regarding which CCP is only
authorised to dispose of after receipt by CCP of irrevocable and
identical instructions from both (i) the Chief Financial Officer, the
Chief Executive Officer, the Treasurer or an Assistant Treasurer of
Paxar Corporation, each of them with single authority of representation
on behalf of Paxar Corporation (each of the aforementioned officers of
Paxar Corporation, the "Paxar-Representative") and (ii) the Seller No.
1, Xxx. Xxxx Xxxxxxxxx and Xx. Xxxxx Xxxxxxxxx, each of them with
single authority of representation on behalf of the Seller No. 1 (each
of the aforementioned persons the Seller No. 1, Xxxx Xxxxxxxxx and
Xxxxx Xxxxxxxxx, the "Seller-Representative") (the "Escrow-Account").
Interest accruing on the Escrow-Amount shall be added to the
Escrow-Amount and as a consequence shall increase the Escrow-Amount.
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(a) Intentionally Omitted
(b) The Escrow-Amount shall serve the Purchaser as security for
claims of the Purchaser against the Sellers of all kind
arising out of or in connection with the Agreement (the
"Claims") raised by the Purchaser against the Sellers within a
period of 18 (eighteen) months after May 31, 2000 (the
"Claims-Period").
The Paxar-Representative and the Seller-Representative are
obliged to take all actions which are necessary and
appropriate including giving respective instructions to CCP to
transfer an amount equivalent to the Claims raised during the
Claims-Period not exceeding the Escrow-Amount from the
Escrow-Account to the Purchaser after the Claims have been
determined by mutual agreement between the parties of the
Agreement or by arbitration according to Article 17.
The Paxar-Representative and the Seller-Representative are
obliged to take all actions which are necessary and
appropriate including giving respective instructions to CCP to
transfer an amount, if any, equivalent to the Escrow-Amount
reduced by the amount equivalent to Claims, if any, raised
during the Claims-Period further reduced by an amount
equivalent to 5 (five) % (percent) of the Purchaser Price from
the Escrow-Account to the Sellers after the Claims-Period has
lapsed.
(c) 5 (five) % (percent) of the Purchase Price, if any, which
remain on the Escrow-Account after the lapse of the
Claims-Period (the "Tax-Escrow-Amount") shall serve the
Purchaser as security for claims of the Purchaser against the
Sellers in connection with Taxes according to sections 6.1 in
connection with 5.6 and Article 10 (the "Tax-Claims") raised
by the Purchaser against the Sellers within a period of 6
(six) months following the date at which the tax assessments
made after a tax field audit of the relevant periods of all
the Taxes payable by the Companies for the period up to the
Effective Date have become final and binding such period not
exceeding 5 (five) years after the date of the Agreement (the
"Tax-Claims-Period").
The Paxar-Representative and the Seller-Representative are
obliged to take all actions which are necessary and
appropriate including giving respective instructions to CCP to
transfer an amount equivalent to the Tax-Claims raised during
the Tax-Claims-Period from the Escrow-Account to the Purchaser
after the Tax-Claims have been determined by mutual agreement
between the parties of the Agreement or by arbitration
according to Article 17.
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The Paxar-Representative and the Seller-Representative are
obliged to take all actions which are necessary and
appropriate including giving respective instructions to CCP to
transfer an amount equivalent to the Tax-Escrow-Amount reduced
by the amount equivalent to the Tax-Claims, if any, raised
during the Tax-Claims-Period from the Escrow-Account to the
Sellers after the Tax-Claims-Period has lapsed.
2.4 The Purchase Price according to section 2.2 (b) shall be paid by the
Purchaser to the Seller No. 2 in one instalment at the date of the
Agreement subject to (i) all conditions precedent pursuant to Article
11 having been satisfied and (ii) the First Instalment Escrow
Agreement.
The Purchase Price according to section 2.2 (b) shall be paid by the
Purchaser by wire transfer.
2.5 In case of default in payment, the contracting parties agree that the
default interest (Verzugszinsen) shall be payable at a rate of 5.5 %
(five point five percent) annually above the respective base percentage
(Basiszinssatz) according to Section 1 German Statute Regarding
Transitory Regulations for the Discount Rate
(Diskontsatzuberleitungsgesetz, "DUG") for the period between the due
date and the receipt of payment.
2.6 The Purchaser shall make payment of the Purchase Price according to
section 2.2 (a) to the accounts set forth below:
2.6.1 The First Instalment shall be paid to the account of the Escrow Agent
Xxxxxx & Xxxxxxx Anwaltssozietat
Deutsche Bank 24 AG, Branch Koeln
account No.: 205780005
bank code No.: 370 700 24, and
2.6.2 the Escrow Amount shall be paid to the Escrow-Account
Xxxxxxxx Chance Punder
Deutsche Bank 24 AG
account No.: 0000000-06
bank code No.: 300 700 24.
2.7 The Purchaser shall make payment of the Purchase Price according to
section 2.2 (b) to the account of the Escrow Agent set forth below:
Xxxxxx & Xxxxxxx Anwaltssozietat
Deutsche Bank 24 AG, Branch Koeln
account No.: 205780005
bank code No.: 370 700 24.
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3. TRANSFER ACCOUNTS OF THE KG
3.1 The KG will as soon as practicable following the date of the Agreement
prepare a balance sheet of the KG as of the Effective Date together
with a profit and loss account of the KG in respect of the period from
January 01, 2000 to and including the Effective Date (the "Transfer
Accounts of the KG").
3.2 The KG shall send the Transfer Accounts of the KG the latest by July
31, 2000 simultaneously to the Purchaser and the Sellers.
3.3 The Purchaser and the Sellers will be deemed to have received the
Transfer Accounts of the KG on the 3. (third) day (the "Date of
Receipt") following the dispatch by the KG of the Transfer Accounts of
the KG to the Purchaser and the Sellers.
3.4 Each of the Sellers and the Purchaser shall notify the other in writing
within a period of 20 (twenty) days after the Date of Receipt, as to
whether it intends to retain a firm of auditors to review the Transfer
Accounts of the KG.
3.5 If both the Seller and the Purchaser give notice that they do not
intend to retain a firm of auditors or if they do not notify the other
of its intention to retain a firm of auditors to review the Transfer
Accounts of the KG in accordance with section 3.4, then the Transfer
Accounts of the KG as delivered by the KG shall be deemed to be
approved and shall be final and binding on the parties (the "Binding
Transfer Accounts of the KG").
3.6 If either or both of the Sellers and the Purchaser give written notice
of its intention to retain a firm of auditors in accordance with
section 3.4, such review shall be carried out and all objections raised
by the auditor(s) shall be delivered by written notice to the party who
retained such auditor and to the other party within a period of 40
(forty) days after the Date of Receipt.
3.7 If the auditors retained by the Sellers and/or the Purchaser do not
raise any objections within the period pursuant to section 3.6 to the
contents of the Transfer Accounts of the KG, then the Transfer Accounts
of the KG as delivered by the KG shall be deemed to be approved and
shall be final and binding on the parties (the "Binding Transfer
Accounts of the KG").
3.8 If either of the auditors retained by a party raises objections to the
contents of the Transfer Accounts of the KG, the parties shall use
their best efforts to resolve such objections. In case the objections
raised by either of the auditors retained by the parties should lead to
an amendment of the Transfer Accounts of the KG, the accounts amended
by the Sellers and the Purchaser by mutual written agreement signed by
the parties shall be deemed to be approved and
17
shall be final and binding on the parties (the "Binding Transfer
Accounts of the KG").
3.9 If the parties fail to reach an agreement on the disputed issues within
a period of 60 (sixty) days after the Date of Receipt, the disputed
issues shall be referred to an independent firm of auditors with
significant international experience appointed as expert
(Schiedsgutachter) in the sense of Section 317 German Civil Code
(Burgerliches Gesetzbuch, "BGB") (the "Expert") and not as an
arbitrator jointly by the Sellers and the Purchaser, who will resolve
the disputed issues. The decision of the Expert shall be final and
binding on the parties. The Transfer Accounts of the KG as amended by
the decision of the Expert shall be final and binding on the parties
(the "Binding Transfer Accounts of the KG"). If the parties fail to
agree on the firm of auditors to appoint as the Expert within a period
of 70 (seventy) days after the Date of Receipt, the Expert (which shall
be an independent firm of auditors with significant international
experience) shall be appointed by the President of the Institut der
Wirtschaftsprufer e. V., Dusseldorf upon the request of either party of
the Agreement.
3.10 Each party bears the cost of the firm of auditors it retains to review
the Transfer Accounts of the KG. Each party shall bear one half of the
costs of the Expert appointed pursuant to section 3.9.
3.11 The Transfer Accounts of the KG shall be prepared in accordance with
the principles set out in section 5.3.1 whereby (i) no hidden reserves
shall be dissolved, especially not by the exercise of option rights
pursuant to tax or commercial law, (ii) the Subsidiary and the
Affiliates shall not be consolidated, (iii) the principle of balance
sheet consistency (Grundsatz der Bilanzkontinuitat) with the Financial
Statement of the KG (as defined in section 5.3.1) shall be applicable,
and (iv) the profits of the Subsidiary and the Affiliates which have
not been distributed to the KG shall only be taken into account with a
lump sum of DM 150,000.00 (German Xxxx: one hundred fifty thousand).
The parties agree that the Transfer Accounts of the KG shall reflect
the transfer of the KG's interest in Dualplast Italia Groppo Xxxxxxxxx
S.r.l. ("Dualplast Italia") from the KG to the Seller No. 1 against no
consideration and shall not constitute a loss. Such interest of the KG
in Dualplast Italia is carried as an asset of the KG having a book
value of DM 1,082,000.00 (German Xxxx: one million eighty two thousand)
as of December 31, 1999.
4. ADJUSTMENT OF THE PURCHASE PRICE
4.1 Adjustment of the Purchaser Price due to lower equity capital:
4.1.1 In the course of the determination of the Purchase Price the parties
proceeded on the assumption that the equity capital of the KG in the
sense of Section 266 para. (3)
18
lit. A of the German Commercial Code (Handelsgesetzbuch, "HGB")
(Eigenkapital) (the "Equity Capital") in the Binding Transfer Accounts
of the KG amounts to at least DM 27,556,000.00 (German Xxxx: twenty
seven million five hundred fifty six thousand).
4.1.2 Should the Equity Capital in the Binding Transfer Accounts of the KG be
lower than the amount of DM 27,556,000.00 (German Xxxx: twenty seven
million five hundred fifty six thousand) the Purchase Price shall be
reduced by an amount equivalent to the difference.
4.1.3 The amount by which the Purchase Price is reduced in accordance with
section 4.1.2 is due and payable by the Seller Xx. 0 xx xxx Xxxxxxxxx,
00 (xxx) bank working days after the Transfer Accounts of the KG became
the Binding Transfer Accounts of the KG and shall carry interest
starting from such due date up to the date at which the amount by which
the Purchase Price is reduced is credited on the account of the
Purchaser at the rate set forth in section 2.5.
4.2 Adjustment of the Purchase Price due to higher obligations owed to
banks:
4.2.1 In the course of the determination of the Purchase Price the parties
proceeded on the assumption that the aggregate amount of the
obligations of the Companies (except Xxxxxxxxx-India and
Xxxxxxxxx-Spain both as defined below), Bonny Nice Industries Limited
and Bonny Nice (Panyu) Label Co., Ltd. owed to banks at the Transfer
Date including interest accrued thereon up to and including the
Transfer Date (the "Bank-Debt") does not exceed the amount of DM
9,500,000.00 (German Xxxx: nine million five hundred thousand).
4.2.2 Should the Bank-Debt exceed the amount of DM 9,500,000.00 (German Xxxx:
nine million five hundred thousand), the Purchase Price shall be
reduced by an amount equivalent to the difference between the Bank-Debt
and the amount of DM 9,500,000.00 (German Xxxx: nine million five
hundred thousand).
4.2.3 The amount by which the Purchase Price is reduced in accordance with
section 4.2.2 is due and payable by the Seller No. 1 to the Purchaser
(i) 40 (forty) days after the Transfer Date or (ii) in case the dispute
is referred to the Bank Debt Expert 10 (ten) days after the decision of
the Bank Debt Expert has been rendered and shall in both cases carry
interest starting from the Transfer Date up to the date at which the
amount by which the Purchase Price is reduced is credited on the
account of the Purchaser at the rate set forth in section 2.5.
4.2.4 The amount of the Bank-Debt shall be determined by Xxxxxx Xxxxxxxx
Wirtschaftsprufungsgesellschaft Steuerberatungsgesellschaft mbH,
Xxxxxxxxxxxxxx 0, 00000 Xxxxxxxx, Xxxxxxx Xxxxxxxx of Germany
("Xxxxxx Xxxxxxxx") and shall be notified by Xxxxxx Xxxxxxxx in writing
to the Sellers
19
and the Purchaser simultaneously the latest 30 (thirty) days after the
Transfer Date (the "Date of Receipt").
4.2.5 In case the Purchaser or the Sellers do not agree with the
determination made by Xxxxxx Xxxxxxxx according to section 4.2.4, the
Purchaser or the Sellers as the case may be shall notify the respective
other parties of such disagreement at the latest 10 (ten) days after
the Date of Receipt. If a notification according to this section is not
made, the amount of the Bank-Debt as determined by Xxxxxx Xxxxxxxx
shall be binding on the parties.
4.2.6 If the parties fail to reach an agreement on the amount of the
Bank-Debt after a notification has been made according to section 4.2.5
within a period of 20 (twenty) days after the Date of Receipt, the
dispute shall be referred to an independent firm of auditors with
significant international experience appointed as an expert
(Schiedsgutachter) in the sense of Section 317 BGB (the
"Bank-Debt-Expert") and not as an arbitrator jointly by the Sellers and
the Purchaser who will resolve the dispute. The decision of the
Bank-Debt-Expert shall be final and binding on the parties. The amount
of the Bank-Debt as decided by the Bank-Debt-Expert shall be final and
binding on the parties. If the parties fail to agree on the firm of
auditors to appoint as the Bank-Debt-Expert within a period of 30
(thirty) days after the Date of Receipt the Bank-Debt-Expert (which
shall be an independent firm of auditors with significant international
experience) shall be appointed by the President of the Institut der
Wirtschaftsprufer e.V., Dusseldorf upon the request of either party of
the Agreement.
4.2.7 The cost of the determination made by Xxxxxx Xxxxxxxx shall be borne by
the Purchaser. Each party shall bear one half of the costs of the
Bank-Debt-Expert appointed pursuant to section 4.2.6.
5. REPRESENTATIONS, WARRANTIES AND GUARANTEES OF THE SELLERS
The Seller No. 1 hereby represents (gewahrleist) and warrants (sichert
zu) to the Purchaser and takes responsibility for, as an independent
guarantee (als selbstandiges Garantieversprechen) in the meaning of
Section 305 German Civil Code (Burgerliches Gesetzbuch, BGB) vis a vis
the Purchaser that the following statements and declarations are
complete and correct as of the date of the Agreement and the Transfer
Date, except as provided otherwise in the Agreement and the Seller No.
2 hereby represents (gewahrleistet) and warrants (sichert zu) to the
Purchaser and takes responsibility for, as an independent guarantee
(als selbstandiges Garantieversprechen) in the meaning of Section 305
German Civil Code (Burgerliches Gesetzbuch, BGB) vis a vis the
Purchaser that the statements and declarations made in No. 7 of the
Preliminary Remarks and in sections 5.2.14, 5.2.20 and 5.2.27 are
complete and correct as of the date of the
20
Agreement and the Transfer Date, except as provided otherwise in the
Agreement:
5.1 Preliminary Remarks
The representations made in the Preliminary Remarks to the Agreement
especially relating to the KG, the sole general partner of the KG and
the sole limited partner of the KG, the Subsidiary and the Affiliates
and the direct or indirect interests or shares of the KG in the
Subsidiary and the Affiliates are complete and correct in every
respect.
5.2 Corporate Matters
5.2.1 The KG is a commercial limited partnership duly incorporated and
validly existing, is licensed or qualified to transact business in all
locations in which it transacts business and has the corporate power
and authority to own, lease or operate its assets and properties and to
carry on its business as now being conducted.
5.2.2 B+B Etiketten Polska Sp. Z o.o. ("B+B-Polska") is duly incorporated and
validly existing under the laws of its jurisdiction of incorporation,
is licensed or qualified to transact business in all locations in which
it transacts business and has the corporate power and authority to own,
lease or operate its assets and properties and to carry on its business
as now being conducted. If required by law, B+B-Polska is properly and
correctly registered in the commercial or other relevant company
registers, and the current registrations reflect the most recent
corporate status in B+B-Polska.
5.2.3 (Intentionally Omitted)
5.2.4 Xxxxxxxxx Xxxxxx X.X. ("Xxxxxxxxx-Spain") is duly incorporated and
validly existing under the laws of its jurisdiction of incorporation,
is licensed or qualified to transact business in all locations in which
it transacts business and has the corporate power and authority to own,
lease or operate its assets and properties and to carry on its business
as now being conducted. If required by law, Xxxxxxxxx-Spain is properly
and correctly registered in the commercial or other relevant company
registers, and the current registrations reflect the most recent
corporate status in Xxxxxxxxx-Spain.
5.2.5 Mandhana Xxxxxxxxx Industries Limited ("Xxxxxxxxx-India") is duly
incorporated and validly existing under the laws of its jurisdiction of
incorporation, is licensed or qualified to transact business in all
locations in which it transacts business and has the corporate power
and authority to own, lease or operate its assets and properties and to
carry on its business as now being conducted. If required by law,
Xxxxxxxxx-India is properly and correctly
21
registered in the commercial or other relevant company registers, and
the current registrations reflect the most recent corporate status in
Xxxxxxxxx-India.
5.2.6 Xxxxxxxxx Dualplast Istanbul Etiket Ic ve Dis Ticaret Limited Sirketi
("Xxxxxxxxx-Turkey") is duly incorporated and validly existing under
the laws of its jurisdiction of incorporation, is licensed or qualified
to transact business in all locations in which it transacts business
and has the corporate power and authority to own, lease or operate its
assets and properties and to carry on its business as now being
conducted. If required by law, Xxxxxxxxx-Turkey is properly and
correctly registered in the commercial or other relevant company
registers, and the current registrations reflect the most recent
corporate status in Xxxxxxxxx-Turkey.
5.2.7 Attachment 5.2.7 contains a most recent abstract from the competent
Commercial Register and the true, accurate and complete version of the
articles of association or other organisational instruments of the KG
presently valid and in full force and effect. No changes have been made
thereto. Besides such articles of association or other organisational
instruments there are no agreements, resolutions or arrangements
whatsoever which relate to the relationship between the KG and the
partners of the KG or the relationship among the partners of the KG.
There are no obligations to enter into such agreements, resolutions or
arrangements which the Purchaser would be subject to as a consequence
of the acquisition of the partnership interests in the KG.
5.2.8 Attachment 5.2.8 contains a most recent abstract from the competent
Commercial Register and the true, accurate and complete version of the
articles of association or other organisational instruments of
B+B-Polska presently valid and in full force and effect. No changes
have been made thereto. Besides such articles of association or other
organisational instruments there are no agreements, resolutions or
arrangements whatsoever which relate to the relationship between
B+B-Polska and the interest holders of B+B-Polska. There are no
obligations to enter into such agreements, resolutions or arrangements
which the Purchaser or the Companies would be subject to as a
consequence of the acquisition of the partnership interests in the KG.
5.2.9 (Intentionally Omitted)
5.2.10 Attachment 5.2.10 contains a most recent abstract from the competent
Commercial Register and the true, accurate and complete version of the
articles of association or other organisational instruments of
Xxxxxxxxx-Spain presently valid and in full force and effect. No
changes have been made thereto. Besides such articles of association or
other organisational instruments there are no agreements, resolutions
or arrangements whatsoever which relate to the relationship between
Xxxxxxxxx-Spain and the share holders of Xxxxxxxxx-
22
Spain or the relationship among the share holders of Xxxxxxxxx-Spain.
There are no obligations to enter into such agreements, resolutions or
arrangements which the Purchaser or the Companies would be subject to
as a consequence of the acquisition of the partnership interests in the
KG.
5.2.11 Attachment 5.2.11 contains a most recent abstract from the competent
Commercial Register and the true, accurate and complete version of the
articles of association or other organisational instruments of
Xxxxxxxxx-India presently valid and in full force and effect. No
changes have been made thereto. Besides such articles of association or
other organisational instruments there are no agreements, resolutions
or arrangements whatsoever which relate to the relationship between
Xxxxxxxxx-India and the share holders of Xxxxxxxxx-India or the
relationship among the share holders of Xxxxxxxxx-India. There are no
obligations to enter into such agreements, resolutions or arrangements
which the Purchaser or the Companies would be subject to as a
consequence of the acquisition of the partnership interests in the KG.
5.2.12 Attachment 5.2.12 contains a most recent abstract from the competent
Commercial Register and the true, accurate and complete version of the
articles of association or other organisational instruments of
Xxxxxxxxx-Turkey presently valid and in full force and effect. No
changes have been made thereto. Besides such articles of association or
other organisational instruments there are no agreements, resolutions
or arrangements whatsoever which relate to the relationship between
Xxxxxxxxx-Turkey and the shareholders of Xxxxxxxxx-Turkey or the
relationship among the share holders of Xxxxxxxxx-Turkey. There are no
obligations to enter into such agreements, resolutions or arrangements
which the Purchaser or the Companies would be subject to as a
consequence of the acquisition of the partnership interests in the KG.
5.2.13 The KG, the Subsidiary and the Affiliates are not bound by or otherwise
a party to a domination or profit and loss absorption agreement within
the meaning of Sections 291 et seq. or Section 324 para. (2) of
the German Stock Corporation Act (Aktiengesetz, AktG) or other
agreement to make up for losses of whatsoever kind of a person or
company. The KG has not been a subordinate company (Organgesellschaft)
to a dominant company (Organtrager) for trade tax purposes.
5.2.14 The limited partner's capital contribution (Hafteinlage) of the Seller
No. 2 being the only limited partner of the KG in the amount of DM
80,000.00 (German Xxxx: eighty thousand) has been fully contributed
(erbracht). No repayments of capital have been made in whole or in
part. Such commercial limited partnership interest is non-assessable
(nicht nachschusspflichtig). There are neither obligations to repay
nor collateral obligations. No capital contributions in kind have been
made in respect of the capital of the KG.
23
5.2.15 The registered share capital in the nominal amount of PLN 4,000 (polish
zlotys: four thousand) of B+B-Polska has been fully paid up in cash. No
repayments of capital have been made in whole or in part. The shares
are non-assessable (nicht nachschusspflichtig). There are neither
obligations to repay nor collateral obligations. There have been no
contributions in kind in respect of the share capital of B+B-Polska.
5.2.16 (Intentionally Omitted)
5.2.17 The registered share capital in the nominal amount of 65,000,000
Pesetas (spanish pesetas: sixty five million) of Xxxxxxxxx-Spain has
been fully paid up in cash. No repayments of capital have been made in
whole or in part. The shares are non-assessable (nicht
nachschusspflichtig). There are neither obligations to repay nor
collateral obligations. There have been no contributions in kind in
respect of the share capital of Xxxxxxxxx-Spain.
5.2.18 The registered share capital in the nominal amount of 16,000,000.00
Indian Rupees (Indian Rupees: sixteen million) of Xxxxxxxxx-India has
been fully paid up in cash/in kind. No repayments of capital have been
made in whole or in part. The shares are non-assessable (nicht
nachschusspflichtig). There are neither obligations to repay nor
collateral obligations. There have been no contributions in kind in
respect of the share capital of Xxxxxxxxx-India.
5.2.19 The registered share capital in the nominal amount of 16,000,000,000.00
TL (Turkish Lira: sixteen billion) of Xxxxxxxxx-Turkey has been fully
paid up in cash/in kind. No repayments of capital have been made in
whole or in part. The shares are non-assessable (nicht
nachschusspflichtig). There are neither obligations to repay nor
collateral obligations. There have been no contributions in kind in
respect of the share capital of Xxxxxxxxx-Turkey.
5.2.20 No other persons or companies, except those mentioned in the
Preliminary Remarks of the Agreement, hold any direct or indirect
interest in the KG and no rights to grant such interests exist. The
position of the only general partner sold and transferred and the only
commercial limited partnership interest sold and assigned are validly
existing. The Seller No 1 is the sole and unrestricted general partner
of the KG and the Seller No 2 is the sole and unrestricted limited
partner of the KG. The Seller No 1 and the Seller No 2 are the only
partners (Gesellschafter) of the KG. Both, the Seller No 1 is holding
his position as general partner (Komplemetar) and the Seller No 2 is
holding his commercial limited partnership interest (Kommanditist) free
and clear of all liens, encumbrances and other rights of third parties
and are not subject to any option rights, preemptive rights, rights of
first refusal or other rights in favour of third parties. No rights
exist to grant such rights or to transfer the position as general
partner and to assign the commercial limited partnership interest.
24
5.2.21 The KG is the sole and unrestricted owner of all shares in B+B-Polska,
being 80 shares of a nominal value of 50 zlotys each (the
"B+B-Polska-Shares"). The B+B-Polska-Shares are free and clear of any
liens, encumbrances or other rights of third parties and the
B+B-Polska-Shares are not subject to any option rights, preemption
rights or rights of first refusal in favour of any third party; the
B+B-Polska-Shares have been fully paid up in cash, have not been repaid
(in whole or in part) and are non-assessable.
5.2.22 (Intentionally Omitted)
5.2.23 Except as listed in Attachment 5.2.23, the KG is the sole and
unrestricted owner of 2,800 shares in Xxxxxxxxx-Spain with a nominal
value of 10,000 Pesetas each, being 43.07% of the total outstanding
6,500 shares with a nominal value of 10,000 Pesetas each (the
"Xxxxxxxxx-Spain-Shares"). The Xxxxxxxxx-Spain-Shares are free and
clear of any liens, encumbrances or other rights of third parties and
the Xxxxxxxxx-Spain-Shares are not subject to any option rights,
preemption rights or rights of first refusal in favour of any third
party; all the Xxxxxxxxx-Spain-Shares have been fully paid up in cash,
have not been repaid in whole or in part and are non-assessable.
5.2.24 Except as listed in Attachment 5.2.24, the KG is the sole and
unrestricted owner of 800.000 shares in Xxxxxxxxx-India with a nominal
value of 10 Indian Rupees each, being 50% of the total outstanding
1,600,000 shares of a nominal value of 10 Indian Rupees each (the
"Xxxxxxxxx-India-Shares"); the Xxxxxxxxx-India-Shares are free and
clear of any liens, encumbrances or other rights of third parties and
the Xxxxxxxxx-India-Shares are not subject to any option rights,
preemption rights or rights of first refusal in favour of any third
party; all the Xxxxxxxxx-India-Shares have been fully paid up in cash,
have not been repaid in whole or in part and are non-assessable.
5.2.25 The KG is the sole and unrestricted owner of 634 shares in
Xxxxxxxxx-Turkey with a nominal value of TL 25,000,000.00 each, being
98% of the total outstanding 640 shares of a nominal value of TL
25,000,000.00 each (the "Xxxxxxxxx-Turkey-Shares"). The
Xxxxxxxxx-Turkey-Shares are free and clear of any liens, encumbrances
or other rights of third parties and the Xxxxxxxxx-Turkey-Shares are
not subject to any option rights, preemption rights or rights of first
refusal in favour of any third party; all the Xxxxxxxxx-Turkey-Shares
have been fully paid up in cash, have not been repaid (in whole or in
part) and are non-assessable.
5.2.26 Neither the KG, nor the Subsidiary nor any of the Affiliates owns or
holds any other equity, interest, shares, participations or
sub-participations of any kind in any other person or entity except as
shown in Attachment 5.2.26.
25
5.2.27 The Sellers have the unrestricted right to freely dispose of the
position as the only general partner of the KG sold and transferred and
the only commercial limited partnership interest of the KG sold and
assigned in the Agreement. There are no restrictions regarding the
right to dispose of, or rights of third parties regarding the position
as the only general partner of the KG and the only commercial limited
partnership interest of the KG. Sub-participations (Unterbeteiligungen)
do not exist. With the transfer of the position as the only general
partner of the KG and the assignment of the only commercial limited
partnership interest in the KG, and the transfer of assets and possible
rights against the Companies according to section 1.8, the Purchaser
acquires full, unrestricted and unencumbered title to the position as
the only general partner of the KG and the only commercial limited
partnership interest in the KG, assets and rights to his free
disposition.
5.2.28 The KG has the unrestricted right to freely dispose of the
B+B-Polska-Shares. There are no restrictions regarding the right to
dispose of, or rights of third parties regarding the B+B-Polska-Shares.
Sub-participations (Unterbeteiligungen) do not exist.
5.2.29 (Intentionally Omitted)
5.2.30 Except as listed in Attachment 5.2.30, the KG has the unrestricted
right to freely dispose of the Xxxxxxxxx-Spain-Shares; there are no
restrictions regarding the right to dispose of, or rights of third
parties regarding the Xxxxxxxxx-Spain-Shares. Sub-participations
(Unterbeteiligungen) do not exist.
5.2.31 Except as listed in Attachment 5.2.31, the KG has the unrestricted
right to freely dispose of the Xxxxxxxxx-India-Shares; there are no
restrictions regarding the right to dispose of, or rights of third
parties regarding the Xxxxxxxxx-India-Shares. Sub-participations
(Unterbeteiligungen) do not exist.
5.2.32 The KG has the unrestricted right to freely dispose of the
Xxxxxxxxx-Turkey-Shares sold and assigned in the Agreement. There are
no restrictions regarding the right to dispose of, or rights of third
parties regarding the Xxxxxxxxx-Turkey-Shares. Sub-participations
(Unterbeteiligungen) do not exist.
5.2.33 Neither the KG nor the Subsidiary and the Affiliates have any right or
obligation to acquire or to subscribe to any equity or other interest
in any other person or entity and no person or entity has the right to
call for the allotment, issuance, conversion, sale or transfer of any
share or interest of, or other securities as the case may be, giving
rise to a right over the capital of any company of the Companies.
5.2.34 (Intentionally Omitted)
26
5.2.35 Except for Xxxxxxxxx-Turkey none of the Companies is over-indebted or
insolvent (uberschuldet oder zahlungsunfahig).
5.2.36 Neither the KG nor the Subsidiary and Affiliates are a party to any
joint-venture agreement, cooperation agreement, working party agreement
(Arbeitsgemeinschaftsvertrag) or similar contractual arrangement with
third parties (excluding membership in professional associations),
except as listed in Attachment 5.2.36.
5.2.37 None of the Companies has branch offices or other business operations
apart from the administrative headquarters, except as listed in
Attachment 5.2.37.
5.2.38 None of the Companies has a supervisory board, advisory board,
consultancy board or comparable boards and no other obligations as the
statutory obligations or the obligations arising out of the articles of
association to institute such boards, except as listed in Attachment
5.2.38.
5.2.39 Neither the execution or delivery of the Agreement and any other
agreements or instruments executed or to be executed in connection with
the Agreement to which the Sellers will become a party, nor the
consummation of the transactions contemplated hereby or thereby
(a) requires any filing or registration with, or permit,
authorization, consent or approval of, any court,
governmental, administrative or regulatory authority or any
third party for which the parties of the Agreement shall not
be obliged to comply using their best efforts,
(b) violates legal provisions or instruments or other agreements
the Sellers are subject to,
(c) violates the Articles of Association of the Companies or
similar legal provisions or instruments the Companies are
subject to,
(d) except as set forth in Attachment 5.2.39 (d) conflicts with,
violates, results in breach of, or constitutes a default
under, any contract, agreement, arrangement or instrument to
which one of the Companies is a party or by which one of the
Companies is bound or relieves any other party to such
contract, agreement, arrangement or instrument of its
obligations thereunder or entitles any such party to
terminate, amend, supplement, suspend or renegotiate such
contract, agreement, arrangement or instrument,
(e) except as set forth in Attachment 5.2.39 (e) creates or
increases the amount of any liability or obligation of one of
the Companies under such contract, agreement, arrangement or
instrument (or give any other party
27
the right to accelerate the obligation thereunder or claim any
fee or penalty with respect thereto) or any liability or
obligation for which the Purchaser or one of the Companies
will assume responsibility following the date of the
Agreement, or
(f) except as set forth in Attachment 5.2.39 (f) will result in
the lapse of rights of one of the Companies.
5.2.40 The KG has no liability arising out of or in connection with the sale
of Dualplast Italia Gruppo Xxxxxxxxx S.r.l. ("Dualplast Italia"), the
liquidation of Intertag Labels S.r.l., Xxx Xxxxxx, 00, 00000 Xxx
Xxxxxxxxxx (XX), Xxxxx and the liquidation or sale of Tunital Labels
s.a.r.l., Rotue de La Xxxxxx xx 0, 0000 Xx Xxxxxx, Xxxxxx.
5.3 Financial Matters
5.3.1 The Sellers have delivered to the Purchaser the financial statement
(balance sheet, profit and loss account and notes (Anhang) thereto) of
the KG for the fiscal year 1999 (the "Financial Statement of the KG").
The Financial Statement of the KG is contained in Attachment 5.3.1. The
Financial Statement of the KG has been prepared with the due diligence
of an orderly and prudent businessman in accordance with the generally
accepted German principles of proper accounting and preparation of
financial statements (Grundsatze ordnungsgemasser Buchfuhrung und
Bilanzierung) and valuation (Bewertung) according to the governing
principles set forth in the German Commercial Code (Handelsgesetzbuch,
HGB) for commercial partnerships as well as in accordance with all
other applicable statutory provisions applying the principle of balance
sheet consistency (Grundsatz der Bilanzkontinuitat) as well as applying
the same valuation methods. The Financial Statement of the KG contains
all known (bekannte) assets and all recognizable (erkennbare)
liabilities. All recognizable risks (erkennbare Risiken), depreciation
in value (Wertminderungen) and/or losses are taken care of by
sufficient depreciation (Abschreibungen), value adjustments (Einzel-
oder Pauschalwertberichtigungen) or provisions (Ruckstellungen). The
Financial Statement of the KG is complete and correct and correctly
reflects the actual economic (Vermogens-), financial (Finanz-) and
profit situation (Ertragslage) of the KG as of the date
(Bilanzstichtag) and for the period of the Financial Statement of the
KG within the meaning of Section 264 HGB.
5.3.2 The Sellers have delivered to the Purchaser the financial statement
(balance sheet and profit and loss account) of the Subsidiary for the
fiscal year 1999, the "Financial Statement of the Subsidiary"). The
Financial Statement of the Subsidiary is contained in Attachment 5.3.2.
The Financial Statement of the Subsidiary has been prepared with the
due diligence of an orderly and prudent businessman in accordance with
the principles of proper accounting and
28
preparation of financial statements and valuation generally accepted in
the jurisdiction of organisation of the Subsidiary applying the
principle of balance sheet consistency as well as applying the same
valuation methods. The Financial Statement of the Subsidiary contains
all known assets and all recognizable liabilities. All recognizable
risks, depreciation in value and/or losses are taken care of by
sufficient depreciation, value adjustments or provisions. The Financial
Statement of the Subsidiary is complete and correct and correctly
reflects the economic, financial and profit situation of the Subsidiary
as of the date and for the period of the Financial Statement of the
Subsidiary.
5.3.3 The Sellers have delivered to the Purchaser the balance sheet of
Xxxxxxxxx-Turkey as of December 31, 1999. The balance sheet of
Xxxxxxxxx-Turkey as of December 31, 1999 is contained in Attachment
5.3.3. The balance sheet of Xxxxxxxxx-Turkey as of December 31, 1999
has been prepared with the due diligence of an orderly and prudent
businessman in accordance with the principles of proper accounting and
preparation of financial statements and valuation generally accepted in
Turkey applying the principle of balance sheet consistency as well as
applying the same valuation methods. The balance sheet of
Xxxxxxxxx-Turkey as of December 31, 1999 contains all known assets and
all recognizable liabilities. All recognizable risks, depreciation in
value and/or losses are taken care of by sufficient depreciation, value
adjustments or provisions with the exception of potential provisions in
connection with the past business practices of Xxxxxxxxx-Turkey. The
balance sheet of Xxxxxxxxx-Turkey as of December 31, 1999 is complete
and correct and correctly reflects the economic, financial and profit
situation of Xxxxxxxxx-Turkey as of the respective date with the
exception of potential provisions in connection with the past business
practices of Xxxxxxxxx-Turkey. The exception made in the two preceding
sentences regarding the past business practices of Xxxxxxxxx-Turkey is
also applicable to all other representations, warranties and guarantees
of the Sellers regarding Xxxxxxxxx-Turkey referred to in the Agreement.
5.3.4 The Sellers have delivered to the Purchaser the financial statements
(balance sheet and profit and loss account) of Xxxxxxxxx-Spain for the
fiscal year 1999 and Xxxxxxxxx-India for the fiscal year ended March
31, 2000 (the financial statements of Xxxxxxxxx-Spain and
Xxxxxxxxx-India together, the "Financial Statements of the
Affiliates"). The Financial Statements of the Affiliates are contained
in Attachment 5.3.3. The Financial Statements of the Affiliates have
been prepared with the due diligence of an orderly and prudent
businessman in accordance with the principles of proper accounting and
preparation of financial statements and valuation generally accepted in
the jurisdiction of organisation of such Affiliate applying the
principle of balance sheet consistency as well as applying the same
valuation methods. The Financial Statements of the Affiliates contain
all known assets and all recognizable liabilities. All recognizable
risks,
29
depreciation in value and/or losses are taken care of by sufficient
depreciation, value adjustments or provisions. The Financial Statements
of the Affiliates are complete and correct and correctly reflect the
economic, financial and profit situation of each of the Xxxxxxxxx-Spain
and Xxxxxxxxx-India as of the respective dates and for the respective
periods of the Financial Statements of the Affiliates (the Financial
Statement of the KG, the Financial Statement of the Subsidiary, the
balance sheet of Xxxxxxxxx-Turkey as of December 31, 1999 and the
Financial Statements of the Affiliates, together the "Financial
Statements".)
5.3.5 All the tangible assets having a book value in excess of DM 100,000.00
(German Xxxx: one hundred thousand) reflected in the Financial
Statements are fit to be used and in good operating condition and
repair (with the exception of normal wear and tear). All the tangible
and intangible assets, properties and rights reflected in the Financial
Statements are in unrestricted ownership of the Companies, which
Companies can dispose freely of such assets, properties and rights
which are, except as set forth under section 5.3.6, free and clear of
any liens, encumbrances or other rights of third parties and comprise
all the business assets which are necessary for carrying on the
business of the Companies as now carried on and such assets, properties
and rights, were sufficient to produce the income for the period
between January 1, 2000 and the Transfer Date as shown on the relevant
income statement for that period contained in the relevant financial
statement other than assets, properties and rights not owned by the
Companies which were used by the Companies on the basis of binding
agreements with (i) the Sellers as set forth in Attachment 5.3.5 (a) or
(ii) third parties as listed in Attachment 5.3.5 (b). Except as listed
in Attachment 5.3.5, the Companies have not any liabilities that are
not directly related to, and that did not arise directly out of their
business. Each single asset has a value of at least the amount as shown
in the Financial Statements.
5.3.6 The stock (Vorrate) stated in the Financial Statements is only
encumbered with title retention rights (Eigentumsvorbehaltsrechte) or
other securities for liabilities which came into existence during the
ordinary course of the business and which are shown in the Financial
Statements. The stock of the Companies are readily saleable or properly
reserved against.
5.3.7 The Financial Statements including the notes (Anhang) thereto, makes
full and adequate disclosure of, and provision for, all obligations and
liabilities of the Companies to which they relate as of the date
thereof. The Companies do not have any liabilities, debts, claims or
obligations (including "off-balance sheet" liabilities, debts, claims
or obligations) and nothing of the foregoing comes into existence out
of events, actions or omissions during the time period up to the
Transfer Date in excess of DM 250,000.00 (German Xxxx: two hundred
fifty thousand) in each single case, whether accrued, absolute,
contingent or
30
otherwise, and whether due or to become due, other than (i) as fully
provided for in the Financial Statements, (ii) as listed in Attachment
5.3.7 or (iii) trade payables and accrued expenses incurred in the
ordinary course of business since the respective dates of the Financial
Statements.
5.4 Real Estate Property
(a) The KG is the sole owner of the real estate property located
in Germany and described in Attachment 5.4 (a) as to owner,
postal address of property, competent real estate property
register (Grundbuchamt), land register folio number
(Grundbuchblatt-Nummer), cadastral district (Flur), cadastral
unit (Flurstuck) and size. The real estate property described
in Attachment 5.4 (a) is identical with such real estate
property which is marked with red colour on the current
certified cadastre maps contained in Attachment 5.4 (a) the
"German Real Estate"). The abstracts from the real estate
register regarding the German Real Estate are attached as
Attachment 5.4 (a).
(b) There are no rights to purchase (Ankaufsrechte), rights of
sale (Verkaufsrechte), buy-back rights (Ruckkaufrechte) or
similar rights and no mortgages (Grundpfandrechte) relating to
the German Real Estate, except statutory purchase rights of
the municipalities (Vorkaufsrecht der Gemeinden) and those
which have been registered in the respective real estate
property abstracts which are listed in Attachment 5.4 (b) as
to real estate property register, land register folio number
and date of the latest entry.
(c) The German Real Estate is only encumbered with such mortgages
(Grundpfandrechte) which are entered into Section III (Dritte
Abteilung) of the land register folio and listed in Attachment
5.4 (c).
(d) The KG has no outstanding obligations to pay local improvement
assessments (Erschliessungsbeitrage) regarding the German Real
Estate.
(e) There are no encumbrances according to private or
administrative law on the German Real Estate, other than those
set forth above, which may result in any financial obligation
of the KG or would have a detrimental effect on the present
and future use of the German Real Estate. The German Real
Estate is not subject to charges according to public law
(Baulasten), except as listed in Attachment 5.4 (e) (i). The
land development plan (Flachennutzungsplan) and the building
scheme (Bebauungsplan) applicable to the German Real Estate
are attached as Attachment 5.4 (e) (ii).
31
(f) The Subsidiary and the Affiliates are the owner of the real
estate property located outside of Germany described in
Attachment 5.4 (f) as to location, size and ownership. The
real estate described in Attachment 5.4 (f) is identical with
such real estate property which is marked with red colour on
the maps contained in Attachment 5.4 (f). Such real estate
property is only encumbered as shown in Attachment 5.4 (f)
(the "Foreign Real Estate"; the German Real Estate and the
Foreign Real Estate together, the "Companies Real Estate").
The Subsidiary and the Affiliates have no obligations to pay
local improvement assessments regarding the Foreign Real
Estate. There are no encumbrances on the Foreign Real Estate,
other than those set forth above, which may result in any
financial obligation of the Companies or would have a
detrimental effect on the present and future use of the
Foreign Real Estate.
(g) The real estate property leased or rented by the KG is
described in Attachment 5.4 (g) as to lessor, lessee,
location, size and annual lease payment. The lessee has not
committed a material violation of the lease or rental
agreement which would give the owner or lessor of the real
estate property the right to prematurely terminate the rental
or lease agreement concerned. The KG is not in default with
payments or other obligations owed under the lease or rental
agreements. The lessor has not given notice of termination
regarding such lease or rental agreements (the "German Leased
Real Estate").
(h) The KG has the unwithdrawable right to purchase the leased
property which is described in Attachment 5.4 (h) as to
Lessor, Lessee, Size and annual lease payment from the Lessor
for such terms and conditions as described in Section B II
Section 1 through to Section 20 of the notarial deed
No.1028/1988B dated 8 June 1988 of the German Notar Xx.
Xxxxxxxxx Xxxxx with official residence in Mainz (the "Sale
and Lease Back Agreement"). The Sellers are not responsible
for legal consequences in connection with the lease agreement
due to acts or omissions caused by the Purchaser or its legal
successors.
(i) The real estate property leased or rented by the Subsidiary or
the Affiliates is described in Attachment 5.4 (i) as to
lessor, lessee, location, size and annual lease payment. The
lessee has not committed a material violation of the lease or
rental agreement which would give the owner or lessor of the
real estate property the right to prematurely terminate the
rental or lease agreement concerned. The Subsidiary and the
Affiliates are not in default with payments or other
obligations owed under the lease or rental agreements. The
lessor has not given notice of termination regarding such
lease or rental agreements (the "Foreign Leased Real
32
Estate"; the German Leased Real Estate and the Foreign Leased
Real Estate together, the "Leased Real Estate").
(j) The Companies do not use or possess real estate property which
is neither the Companies Real Estate nor the Leased Real
Estate. The Companies do not own and have not leased any real
estate property which is not set forth in Attachment 5.4 (f)
(Companies Real Estate) and Attachment 5.4 (i) (Leased Real
Estate).
The Companies do not have any obligation to acquire or lease
any real estate property.
(k) The Companies have leased real estate property to third
parties as set forth in Attachment 5.4 (k) as to location,
lessor, lessee and annual lease payment.
(l) During the last 5 (five) years the Companies
(i) have only sold the real estate property listed in
Attachment 5.4 (l) (i) and
(ii) have terminated lease agreements regarding real
estate property listed in Attachment 5.4 (l) (ii).
(m) To the best knowledge of the Seller No. 1 after due inquiry,
the buildings located on the Companies Real Estate and the
buildings used by the Companies have been erected in
compliance with the - to the extent the buildings are located
in the Federal Republic of Germany - applicable provisions of
the construction planning law (Bauplanungsrecht) and of the
building regulation law (Bauordnungsrecht) or - to the extent
the buildings are located outside the Federal Republic of
Germany - applicable other legal provisions applicable to the
buildings at their respective location and are used and
maintained in compliance with such laws. The Companies Real
Estate is not subject to the laws regarding protection of
monuments (Denkmalschutz). All public permits and licences
required for the construction and operation of the buildings
and constructions installed on the Companies Real Estate or on
the buildings used by the Company have been obtained. No
withdrawal or revocation of such public permits and licences
has been threatened and there are no circumstances which would
allow such withdrawal or revocation of any such public permit
or licence. All statements in the application for such public
permits and licences were, and to the best knowledge, all
statements in such public permit and licences are true,
accurate and
33
complete and all permits and licences that are necessary or
useful for the operation of the buildings and constructions
are transferable.
5.5 Period following the End of the Recent Fiscal Year
Except as mentioned in Attachment 5.5 and since December 31, 1999 or
since March 31, 2000 as the case may be until the date of the Agreement
the business and the operations of the Companies have been conducted
according to the principles of a prudent businessman; no changes in the
business activities or the financial circumstances or the kind and
manner of conducting the business of the Companies have occurred, which
are outside the ordinary course of the business activities of the
Companies and which are not consistent with past practices. Without
limiting the foregoing and except as mentioned in Attachment 5.5 since
December 31, 1999 or since March 31, 2000 as the case may be until the
date of the Agreement:
(a) The Companies have not suffered any material adverse effect
on, or material adverse change in the condition (financial or
otherwise), business, operations, assets, liabilities, results
of operation, cash flows, or prospects.
(b) The Companies have not incurred any obligation (contingent or
otherwise) or entered into any contract, agreement or
arrangement which, ab initio, either
(i) requires a payment by any party in excess of, or a
series of payments which in the aggregate exceed, DM
500,000.00 (German Xxxx: five hundred thousand) or
provides for the delivery of goods or performance of
services, or any combination thereof, having a value
in excess of DM 500,000.00 (German Xxxx: five hundred
thousand), or
(ii) has a term in excess of, or requires the performance
of any obligations by the Companies over a period in
excess of 6 (six) months.
(c) The Companies have not taken any action, or entered into or
authorized any contract, agreement or arrangement or
transaction, other than in the ordinary course of business and
consistent with past practice. None of the Companies incurred
any obligation in excess of DM 200,000.00 (German Xxxx: two
hundred thousand) in the aggregation which are not shown in
the books of the Companies or which were not incurred in the
ordinary course of the business of the Companies.
34
(d) The Companies have not sold, transferred, conveyed, assigned
or otherwise disposed of any of their assets or properties in
each single case in excess of DM 200,000.00 (German Xxxx: two
hundred thousand), except sales of inventory in the ordinary
course of business and consistent with past practice.
(e) The Companies have not acquired or disposed of any shares or
interest in other companies or partnerships.
(f) The Companies have not entered into, authorized, or permitted
any transaction with the Sellers.
(g) The Companies have not authorized for issuance, issued, sold,
delivered or agreed or committed to issue, sell or deliver
(whether through the issuance or granting of options,
warrants, convertible or exchangeable securities, commitments,
subscriptions, rights to purchase or otherwise) any of their
capital or any other securities, or amended any of the terms
of any such capital or securities. The Companies have not
changed their corporate documents or changed their registered
capital.
(h) The Companies have not split, combined, or reclassified any
interests in their capital, declared, set aside or paid any
dividend or other distribution (whether in cash, securities or
property or any combination thereof) in respect of their
capital, or redeemed or otherwise acquired any capital or
securities of the Companies.
(i) The Companies have not made any borrowing or agreements to
borrow, incurred any debt or applied for the granting or
increase of a credit line (other than trade payables in the
ordinary course of business and consistent with past
practice), or assumed, guaranteed, endorsed (except for the
negotiation or collection of negotiable instruments in
transactions in the ordinary course of business and consistent
with past practice) or otherwise become liable (whether
directly, contingently or otherwise) for the obligations of
any other person or entity, or made any payment or repayment
in respect of any indebtedness (other than trade payables and
accrued expenses in the ordinary course of business and
consistent with past practice).
(j) The Companies have not made any loans or extensions of credit
to, advances or capital contributions to, or investments in,
any other person or entity in excess of DM 100,000.00 (German
Xxxx: one hundred thousand) in each single case or DM
250,000.00 (German Xxxx: two hundred fifty thousand) in the
aggregate.
35
(k) The Companies have not entered into, adopted, amended or
terminated any bonus, profit sharing, compensation,
termination, stock option, stock appreciation right,
restricted stock, performance unit, pension, retirement,
deferred compensation, employment, severance or other employee
benefit agreements, trusts, plans, funds or other arrangements
for the benefit or welfare of any director, officer,
consultant or employee, or increased in any manner the
compensation or fringe benefits of any director, officer,
consultant or employee or paid any benefit not required by any
existing plan and arrangement or entered into any contract,
agreement, commitment or arrangement to do any of the
foregoing in excess of an annual obligation of DM 150,000.00
(German Xxxx: one hundred fifty thousand) in each single case.
(l) The Companies have not except for capital expenditures
contemplated by section 5.5 (m) acquired, leased or encumbered
any assets or properties outside the ordinary course of
business or any assets with a market value of more than DM
100,000.00 (German Xxxx: one hundred thousand) in each single
case or DM 250,000.00 (German Xxxx: two hundred fifty
thousand) in the aggregate.
(m) The Companies have not authorized or made any capital
expenditure which individually is in excess of DM 200,000.00
(German Xxxx: two hundred thousand).
(n) The Companies have not made any tax election or settled or
compromised any liability for Taxes (as defined in section
5.6).
(o) The Companies have not paid any amount, performed any
obligation or agreed to pay any amount or perform any
obligation, in settlement or compromise of any suits or claims
of liability against the Companies or any of their respective
board members, managing directors, officers, employees or
agents in excess of DM 50,000.00 (German Xxxx: fifty thousand)
in each single case and DM 100,000.00 (German Xxxx: one
hundred thousand) in the aggregate.
(p) The Companies have not been subject of a substantial change or
termination of any Material Contract (as defined in section
5.13.5 below).
5.6 Taxes and Other Levies
5.6.1 The Companies have
(a) paid when due (and, if not yet due, has fully and adequately
provided for on the Financial Statements) all Taxes (as
defined below), levies, social
36
contributions, duties or other assessments or charges of any
nature whatsoever imposed by any taxing authority and any
amounts representing the recapture of investment and other
incentives. The Companies have not incurred any liabilities
for Taxes other than in the ordinary course of business for
any taxable year for which the applicable statute of
limitations has not expired; there are no liens (other than
liens for current Taxes not yet due and payable) upon the
assets or properties of the Companies. The Companies have not
granted or been requested to grant any waiver or extension of
any statute of limitations applicable to any claim for Taxes,
(b) filed all Tax Returns (as defined below) for all periods
through and including the date of the Agreement as required by
applicable statutes, law, regulations or common practice and
paid (and, if not yet due, has fully and adequately provided
for on the Financial Statements) all Taxes shown as due on the
Tax Returns and on all tax assessments. Each tax return is
true, accurate and complete and the Companies have not and
will not have any additional liability for Taxes with respect
to any Tax Return, other than as reflected as liabilities on
the Financial Statements. No amended Tax Returns have been or
are proposed to be filed by the Companies nor has any
liability for Taxes been settled or compromised. The Companies
have furnished to the Purchaser correct and complete copies of
all Tax Returns for all tax years for which the applicable
statutes of limitations has not expired. The Companies have
copies of all Tax Returns and supporting work schedules for
all tax periods or portions thereof ending before or including
the Transfer Date and has not destroyed or otherwise disposed
of any such records,
(c) paid the current adequate advance payments for all relevant
Taxes,
(d) duly withheld or collected all Taxes the Companies are
required to withhold or collect,
(e) filed tax returns in the countries listed in Attachment 5.6.1
(e) and has no current or former presence in any taxing
jurisdiction in which it does not file Tax Returns that may
cause the Companies to be subject to any Tax in such taxing
jurisdiction,
(f) not made any hidden profit distributions.
5.6.2 "Tax" or "Taxes" means all income, corporation, gross receipts,
profits, sales, use, value added, transfer, employment, social
contribution, franchise, license, payroll, unemployment, exercise,
capital duties, customs duties, environmental, property, estimated
withholding or other taxes, fees, stamp taxes and duties,
37
assessments or charges of any kind whatsoever (whether payable directly
or by withholding), together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority
with respect thereto.
"Tax Return(s)" means any return (including any consolidated, combined
or pro forma return), report, declaration, claim for refund,
information return or statement, relating to any Tax, including any
schedule or attachment thereto or any amendment thereof.
5.6.3 The last tax field audit (steuerliche Aussenprufung) of the KG has been
carried out during the year 1999 and was related to the period
including 1997. A copy of the last tax audit report is contained in
Attachment 5.6.3. No Tax Return of the Companies is currently under
examination by any taxing authority nor have the Companies been
contacted by any taxing authority in order to commence such an
examination. There are no pending appeals or other administrative or
judicial proceedings with respect to any Tax imposed with respect to
the activities of the Companies.
5.7 Intellectual Property Rights
(a) Attachment 5.7 (a) (i) sets out a true, accurate and complete
list of all patents including utility patents and design
patents (Patente, Gebrauchsmuster und Geschmacksmuster),
trademarks/service marks (Xxxxxx) (including logos), business
or trade name including respective applications which are
owned by, licensed to, necessary for or used in the business
of the Companies (including intellectual property rights
licensed to the Companies from the Sellers) for products
designed, developed, manufactured, used, marketed, sold,
distributed, serviced or maintained as well as for related
services as of the date of the Agreement or at any time during
the 2 (two) year period prior to the date of the Agreement or
in development as of the date of the Agreement or at any time
during the 2 (two) year period prior to the date of the
Agreement (hereinafter the "Intellectual Property Rights").
Attachment 5.7 (a) (ii) sets out a true, accurate and complete
list of all such Intellectual Property Rights which are owned
by the Companies (the "Intellectual Property Rights of the
Companies").
(b) Besides the Intellectual Property Rights there are no
intellectual property rights including respective applications
which are owned by the Sellers which relate to the business of
the Companies.
(c) Except for design patents the Companies have fully carried out
their business activities and have used all trademarks/service
marks (Xxxxxx) included in the Intellectual Property Rights of
the Companies to the
38
extent required by law for the Companies to register and
enforce such trademarks/service marks except as listed in
Attachment 5.7 (c).
(d) Third parties neither have challenged nor have threatened to
challenge the Intellectual Property Rights by means of filing
objections, taking action for cancellation or otherwise except
as set forth in Attachment 5.7 (d).
(e) To the best knowledge of the Sellers third parties do neither
infringe the Intellectual Property Rights nor make
unauthorized use of the know-how except as set forth in
Attachment 5.7 (e).
(f) No intellectual property rights of third parties are
conflicting with or prevent the unlimited use of the
Intellectual Property Rights and Know-How; the products
produced and sold and the services provided by the Companies
and any process, method and design employment in connection
with such products or services and the marketing, use or
provision by the Companies of any such product or service do
not infringe or conflict with any intellectual property rights
of any other person or entity; none of the Intellectual
Property Rights is subject to any pending or threatened
litigation or claim of infringement and no written notice has
been received by the Sellers and the Companies contesting the
right of the Companies to use any Intellectual Property
Rights; the Companies can make unlimited use of their
Know-How; except as listed in Attachment 5.7 (f).
(g) All Intellectual Property Rights of the Companies are properly
registered and maintained and valid, or a proper application
for registration has been filed with regard to such
Intellectual Property Rights of the Companies. The Companies
have not granted any license or agreed to pay or receive any
royalty in respect to the Intellectual Property Rights of the
Companies except as listed in Attachment 5.7 (g). The
Intellectual Property Rights of the Companies are free and
clear of any liens, encumbrances and other rights of third
parties.
(h) All Intellectual Property Rights licensed to, but not owned by
the Companies are shown in Attachment 5.7 (h) and all such
licenses are valid and enforceable and the Companies are not
in breach or default with respect to any such license or
royalty agreements nor have they received any written notice
of termination thereunder.
(i) The Companies have not granted or received know-how licenses
except as listed in Attachment 5.7 (i).
39
(j) The Companies own or hold valid and enforceable licenses for
the use of all software rights used in their business.
(k) All software used in the business of the Companies is Year
2000 compliant.
5.8 Insurance
Attachment 5.8 contains a true, accurate and complete list of all
insurance policies applicable to the Companies (and its respective
business and assets) including the third party liability insurance
contracts (setting forth whether the third party liability insurance
contract is of claim made or occurrence type) in each case with the
statement of the insured amount and the annual premium. Such insurance
policies provide type and amounts of insurance customarily obtained by
businesses similar to the business of the Companies (including with
respect to product liability coverage).
5.9 Approvals
5.9.1 Attachment 5.9.1 sets out a true, accurate and complete list of all
material licenses, certificates, permits, permit applications,
franchises, private product approvals ("Approvals") held by or applied
for by the Companies. The Approvals listed in Attachment 5.9.1 are the
only material approvals required according to public and private law to
conduct the respective business operations of the Companies, as
presently conducted and the revocation, withdrawal or refusal of any of
the Approvals is not pending. The business of the Companies is carried
out in compliance with such Approvals. Except as listed in Attachment
5.9.1 all material approvals required for the production, marketing and
sale of all products of the Companies have been obtained and are valid
and in full force and effect. All products sold by the Companies comply
with the applicable statutory or other legal provisions and the
Approvals.
Neither the Sellers nor the Companies are aware of nor have received
notice that any supranational, national, federal, state or local
governmental or regulatory authority or agency (the "Authorities") in
their respective jurisdiction has commenced, or is considering
commencing, any action to seize, withdraw any of the Approvals of, or
recall any device developed, produced, manufactured, tested,
distributed, packaged or sold or serviced by the Companies, and have no
grounds to believe that these or other enforcement actions are
imminent.
5.9.2 Except as previously disclosed to the Guarantor or its accountant to
the best knowledge of the Seller No. 1 after due inquiry, the Companies
have not and no officer, employee, or agent of the Companies has made
an untrue statement of material fact or fraudulent statement to the
Authorities, failed to disclose a material fact required to be
disclosed to the Authorities, or committed an act,
40
made a statement, or failed to make a statement that could reasonably
be expected to provide a basis for the Authorities to invoke any
investigative or other proceedings.
5.9.3 Except as previously disclosed to the Guarantor or its accountant to
the best knowledge of the Seller No. 1 after due inquiry, the Companies
do not violate in their businesses any right or rights of third
parties. The Companies and their businesses and all of their
properties, assets and equipment are in compliance with, and no
violation exists under, any and all laws, statutes, rules, regulations,
ordinances and decrees applicable to the Companies and to such
businesses, properties assets and equipment (including applicable laws,
regulations and orders of any Authorities). The Companies are currently
not the subject of any compliance or enforcement actions by any
Authorities nor are they subject to any consent orders or decrees. No
notice from any Authorities has been received by the Companies claiming
any violation of any law, statute, rule, regulation, ordinance or
decree or requiring any work, constructing or expenditure, or asserting
any tax, assessment or penalty.
5.10 Pension / Labour
5.10.1 all work's council agreements (Betriebsvereinbarungen) or collective
bargaining agreements (Tarifvertrage) of the KG are listed in
Attachment 5.10.1. No further works council agreements or collective
bargaining agreements are currently being negotiated in respect of the
KG,
5.10.2 (Intentionally Omitted)
5.10.3 except as listed in Attachment 5.10.3, the relationships of the
Companies with their employees are good and there is, and during the
past 3 (three) years prior to the date of the Agreement there has been,
no material dispute with trade unions, labor strike, dispute,
slow-down, work stoppage or other labor difficulty actually pending or
threatened against or involving the Companies,
5.10.4 the Companies have and currently are conducting their business in full
compliance with all laws, rules, regulations and ordinances, works
council agreements and collective bargaining agreements relating to
employment and employment practices, terms and conditions of
employment, family leave, wages and hours and nondiscrimination
unemployment,
5.10.5 Attachment 5.10.5 sets out a true, accurate and complete list of the
names, titles, locations, annual compensation and all bonuses and
similar payments made with respect to each such individual for the
current and preceding fiscal years for all board members, managing
directors, directors, officers and employees of the
41
Companies who have an annual base salary of more than DM 150,000.00
(German Xxxx: one hundred fifty thousand) or who can only be terminated
by the Companies with a notice period of 3 (three) or more months.
5.10.6 except as listed in Attachment 5.10.6 the KG does not owe any benefit
having a monetary value (geldwerte Leistung) to any of its current or
former employees which is not owed on the basis of employment contracts
or collective bargaining agreements and which have without reservation
of their voluntary nature been granted more than three times.
5.10.7 (Intentionally Omitted)
5.10.8 The Companies have no obligations arising from the termination or
cancellation of any employment agreement exceeding DM 50,000.00 (German
Xxxx: fifty thousand) in each single case, except as set forth in
Attachment 5.10.8.
5.10.9 The Companies have no obligation, whether contractually established or
by plant exercise (betriebliche Ubung), to pay or grant to any of its
current or former employees any salary, fringe benefit exceeding DM
150,000.00 (German Xxxx: one hundred fifty thousand) annually in each
single case, other than listed in Attachment 5.10.9.
5.10.10 (Intentionally Omitted)
5.11 Negative Representations
The Companies are not party or subject to:
(a) rental, leasing or similar contracts with continuing
obligations which in each single case provide for an annual
payment in excess of DM 250,000.00 (German Xxxx: two hundred
fifty thousand) except as listed in Attachment 5.11 (a),
(b) consultancy agreements which provide for an annual payment in
excess of DM 200,000.00 (German Xxxx: two hundred thousand)
except as listed in Attachment 5.11 (b),
(c) obligations owed to a benevolent fund, pension liabilities,
pension- and related benefit liabilities or other agreements
for payments in case of sickness, disablement or age except as
listed in Attachment 5.11 (c),
(d) sales agreements with a volume of more than DM 250,000.00
(German Xxxx: two hundred fifty thousand) annually of the
Companies which have a different wording compared to the
standard sales contract of the Companies which is contained in
Attachment 5.11 (d) (i) and which are not governed by the
general conditions of sales of the Companies
42
contained in Attachment 5.11 (d) (ii), whereby sales
agreements with varying delivery terms, discounted payment
terms of less than 61 (sixtyone) days and annual volume
bonuses of less than 3 (three) % (percent) of invoiced prices
are not considered as having different wording compared to the
standard sales contract of the Companies,
(e) agreements regarding compensation, dependant on profit or
turnover of the Companies, profit sharing or similar
arrangements except as listed in Attachment 5.11 (e),
(f) competition restraints or contracts or other documents that
limit the freedom of the Companies to compete or similar
restrictions to the detriment of the Companies except as
listed in Attachment 5.11 (f),
(g) sureties, guarantees, comfort letters, performance bonds,
letters of credit or similar undertakings regarding the
indebtedness of any person or entity incurred or issued by the
Companies with a face value of more than DM 250,000.00 (German
Xxxx: two hundred fifty thousand), except as listed in
Attachment 5.11 (g),
(h) contingent or actual repayment obligations in connection with
grants or subsidies received by the Companies except as listed
in Attachment 5.11 (h),
(i) contractual obligations of whatsoever kind which are not shown
in the Financial Statements with a face value of more than DM
250,000.00 (German Xxxx: two hundred fifty thousand), except
as set forth in sections 5.11 (a) through to 5.11 (h) or in
sales agreements and except as listed in Attachment 5.11 (i),
(j) pending, expected or threatened actions, claims, disputes,
inquiries or proceedings before courts, administrative
authorities or arbitration bodies, investigations or inquiries
by administrative authorities, especially due to impairment of
the environment (including no criminal investigations) where
the Companies are a party to or involved or named in or where
properties or assets of the Companies are involved in, with an
aggregate value in dispute (Streitwert) in excess of DM
500,000.00 (German Xxxx: five hundred thousand) except as
listed in Attachment 5.11 (j). There are no facts known which
could give reason to institute the aforementioned proceedings,
(k) forward contracts regarding goods, foreign currencies and
interest (Waren-, Devisen- und Zinstermingeschafte) except as
listed in Attachment 5.11 (k),
43
(l) license agreements with the Companies as licensor or licensee
regarding intellectual property rights or other unprotected
Know-How except as listed in Attachment 5.11 (l),
(m) contractual or statutory obligations to make lump sum payments
(Abfindungen) of whatsoever kind except as listed in
Attachment 5.11 (m),
(n) commitments to pay out loans or loans with a principal amount
of more than DM 10,000.00 (German Xxxx: ten thousand) which
have been paid out by the Companies except as listed in
Attachment 5.11 (n),
(o) distribution agreements (distributor- or commercial agent
agreements) (Eigenhandler oder Handelsvertretervertrage) of
whatsoever kind (including similar commission arrangement)
except as listed in Attachment 5.11 (o) (i) (appointing the
Companies as distributor or commercial agent) and Attachment
5.11 (o) (ii) (appointing a third party as distributor or
commercial agent). All such agreements are in conformity with
the respective applicable law including EU-law, if EU-law is
applicable on such agreements, except as stated in the
aforementioned attachments,
(p) powers of attorney of whatsoever kind including bank,
cashier's or powers of attorney regarding bills of exchange
except as listed in Attachment 5.11 (p),
(q) acts of violation of competition, e.g. no violations of
Sections 1 et seq. German Act Against Unfair Trade Practice
(Gesetz gegen den unlauteren Wettbewerb, UWG),
(r) orders by the Companies, except in the ordinary course of
business, especially no orders for investments in an amount
exceeding DM 200,000.00 (German Xxxx: two hundred thousand) in
each single case,
(s) obligations outside the ordinary course of business,
(t) any judgement or order rendered by court or administrative
proceedings or any settlement entered into in such context
which would substantially impair or restrict the Companies in
conducting their businesses, in acquiring or selling of goods
or assets or in competing in the market,
(u) agreements with an annual volume of more than DM 250,000.00
(German Marks: two hundred fifty thousand) which either do not
automatically come to an end 6 (six) months after the entering
into of the Agreement or which cannot be terminated by the
Companies so that they
44
come to an end the latest within 6 (six) months after the
entering into of the Agreement except as listed in Attachment
5.11 (u),
(v) agreements which in each single case lead to payments which
are received or which have to be made by the Companies of more
than DM 250,000.00 (German Xxxx: two hundred fifty thousand)
annually or which are otherwise of special significance for
the Companies other than sales in the ordinary course with the
exception of those listed in Attachment 5.11 (v). The Sellers
do not know of any impairment of the performance of
obligations arising out of such agreements, especially the
Companies are not in default with any obligations of the
Company arising out of such agreements,
(w) agreements which are to the best knowledge of the Sellers not
valid,
(x) loan agreements and other banking and overdraft facilities
other than those set forth in Attachment 5.11 (x).
5.12 Environmental
No harmful substances (Schadstoffe) have been let (einlassen), have
seeped (einsickern), have been stored (einlagern) or otherwise have
been put (einbringen) into the ground (Erdreich), water (Grundwasser
und Oberflachenwasser) and air (Xxxx) of any of the property, owned,
leased or used by the Companies and no such substances have been on
such property in violation of all the applicable laws. All harmful
substances have been dealt with (umgehen), stored (lagern) and disposed
of (entsorgen) in compliance with all Environmental Laws and
Environmental Permits applicable from time to time when any such action
has been taken.
The Companies are in compliance with all Environmental Laws and
Environmental Permits. All waste products generated by the Companies
are disposed of in compliance with applicable Environmental Laws in
effect now or at the time of such disposal, and, where applicable,
pursuant to and in accordance with all Environmental Permits.
There is no liability, whether asserted or unasserted, fixed or
contingent, relating to the real estate property, owned, leased or used
by the Companies which results from any environmental matters,
including, the use, discharge, disposal, storage, accumulation,
transport, leakage, spillage or other actions by the Companies with
respect to any harmful or toxic substances, hazardous waste or other
pollutants, contaminants or nuisances.
45
No claim has been made with respect to the operation of facilities of
the Companies resulting from any harmful substance, hazardous waste or
from any asbestos or similar materials used in the construction thereof
and there is no valid basis for any such claim.
For purposes of this Article:
(a) the term "Environmental Law(s)" means any law, statute,
regulation, ordinance, rule, order, decree, judgement, consent
decree, settlement agreement or governmental requirement
enacted, promulgated, entered into, agreed or imposed by any
government of any country in which the properties owned,
leased or used by the Companies are located, or any state or
political subdivision thereof and any entity, body or
authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government in such country, which relates to or otherwise
imposes liability or standard of conduct concerning
discharges, emissions, releases or threatened releases of
noises, odours or any pollutants, contaminants or hazardous or
toxic wastes, substances or materials, whether as matter of
energy, into ambient air, water, or land, or otherwise
relating to manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or
handling of pollutants, contaminants, or hazardous or toxic
wastes, substances or materials; and
(b) the term "Environmental Permit(s)" means any permit, license,
approval, consent or other authorization required by pursuant
to any applicable Environmental Law.
The statements and declarations contained in section 5.12 are only
given to the best knowledge of Sellers to the extent they relate to the
Affiliates.
5.13 Miscellaneous
5.13.1 Neither the Purchaser nor any affiliate of the Purchaser nor the
Companies have or shall have any liability or otherwise suffer or incur
any loss, cost or damage as a result of or in connection with any
brokerage or finder's fee or other commission of any person retained by
the Sellers or the Companies in connection with any of the transactions
contemplated by the Agreement.
5.13.2 The managing directors of the Companies are listed in Attachment 5.13.2
(i). Holders of a commercial limited statutory power of attorney
(Prokura) are listed in Attachment 5.13.2 (ii). There are no other
managing directors or holders of a commercial limited statutory power
of attorney.
46
5.13.3 Except as previously disclosed to the Purchaser and its accountant to
the best knowledge of the Seller No. 1 after due inquiry, neither the
Companies nor the Subsidiary and Affiliates nor any of its respective
board members, managing directors, directors, officers, employees,
agents or representatives, nor any other person or entity acting on
behalf of any of them, has made, paid or received bribes, kickbacks or
other similar payments to or from any person, whether lawful or
unlawful.
5.13.4 Attachment 5.13.4 (i) contains a true, accurate and complete list of
all open accounts receivable of the KG which came into existence up to
April 30, 2000 and of the Subsidiary and the Affiliates which came into
existence up to March 31, 2000 including its respective due dates and
Attachment 5.13.4 (ii) contains a true, accurate and complete list of
all open liabilities of the KG which came into existence and which have
been invoiced on or prior to April 30, 2000 and of the Subsidiary and
the Affiliates which came into existence and which have been invoiced
on or prior to March 31, 2000 including its respective due dates with
the exception of such accounts receivable and liabilities of the
Companies which are contained in the Financial Statements.
5.13.5 Attachment 5.13.5 contains a true, accurate and complete list of all
contracts, agreements or arrangements, other than contracts set forth
under section 13.4, by which the Companies are bound, or in respect of
which any of their assets or properties are subject, providing for an
aggregate annual payment obligation of more than DM 500,000.00 (German
Xxxx: five hundred thousand) or with a termination period of more than
6 (six) months (all contracts, agreements or arrangements listed in
Attachment 5.13.5, the "Material Contracts"). All Material Contracts
(true, accurate and complete copies of which have been delivered to the
Purchaser) are in full force and have not been terminated by any party
thereto. The Companies are not in default in the fulfilment of any of
the obligations under or resulting from such Material Contracts. No
other party to such Material Contract is in default of its obligations
thereunder.
5.13.6 The list of all bank accounts of the Companies except Xxxxxxxxx-Spain
and Xxxxxxxxx-India set forth in Attachment 5.13.6 is complete and
correct including the list of all persons which are authorized to sign
or to dispose about such accounts.
5.13.7 Attachment 5.13.7 sets out a true, accurate and complete list of all
guarantees (Garantien, Burgschaften, Kreditauftrage) issued by the
Sellers for the benefit of the Companies or issued by the KG for the
Subsidiary or the Affiliates.
5.13.8 The credit-lines of the Companies are set forth in Attachment 5.13.8.
47
5.13.9 The information provided by the Sellers and the Companies regarding the
KG, B+B-Polska and Xxxxxxxxx Turkey in the course of the due diligence
process to the Purchaser and on the Purchaser's behalf to its advisors,
is true, accurate and complete in all respects. The information
provided by the Sellers and the Companies regarding Xxxxxxxxx Spain and
Xxxxxxxxx India in the course of the due diligence process to the
Purchaser and on the Purchaser's behalf to its advisors, is to the best
knowledge of the Seller No. 1 after due inquiry true, accurate and
complete in all respects. No information has been withheld which is of
importance for the evaluation of the Companies and their business.
6. LEGAL CONSEQUENCES IN CASE OF VIOLATION OF REPRESENTATIONS, WARRANTIES
AND GUARANTEES
6.1 In case a representation or warranty or guarantee given by the Sellers
in Article 5 should be incorrect, the Purchaser shall give the Sellers
respective notice by registered letter and shall request the Sellers to
bring about the contractual condition which would have existed if such
representation or warranty or guarantee would have been fulfilled
within a period, selected at the discretion of the Purchaser, but being
at least 60 calendar days. In the event that
(i) the Sellers are not able to bring about such contractual
condition, or
(ii) the Sellers refuse to bring about such contractual condition,
or
(iii) the Sellers fail to bring about such contractual condition
within the period of time identified in the Purchaser's
notice, and
(iv) the Purchaser or the Companies suffer any financial damage or
loss as a consequence of such breach of representation or
warranty or guarantee (whether or not the Sellers have brought
about the contractual condition),
then at the discretion of the Purchaser, either (A) the Purchaser shall
reduce the Purchase Price (Minderung) in the respective amount of the
loss or damage arising from such breach of a representation or warranty
or guarantee or (B) the Sellers shall put at the discretion of the
Purchaser the Purchaser or the Companies in the position the Purchaser
or the Companies would have been in if the representation or warranty
or guarantee would have been correct.
6.2 The Purchaser is only entitled to assert claims based on breach of
representations, warranties or guarantees if the aggregate amount of
such claims exceeds the amount of DM 1,000,000.00 (German Xxxx: one
million).
48
6.3 The aggregate amount of all claims of the Purchaser against the Sellers
arising out of Article 6 shall not exceed 30% (thirty percent) of the
Purchase Price as reduced (if any) in accordance with Article 4. Within
the limitation contained in the preceding sentence (i) all claims of
the Purchaser against the Sellers arising out of Article 6 in
connection with Xxxxxxxxx-Turkey shall not exceed DM 10,000,000.00
(German Xxxx: ten million), (ii) all claims of the Purchaser against
the Sellers arising out of Article 6 in connection with Xxxxxxxxx-Spain
shall not exceed 5 (five) % (percent) of the Purchase Price as reduced
(if any) in accordance with Article 4, and (iii) all claims of the
Purchaser against the Sellers arising out of Article 6 in connection
with Xxxxxxxxx-India shall not exceed 5 (five) % (percent) of the
Purchase Price as reduced (if any) in accordance with Article 4.
6.4 To the extent that representations or warranties or guarantees are
based upon knowledge (Kenntnis) or constructive knowledge
(Kennenmussen) of the Sellers, knowledge or constructive knowledge of
the Sellers or of the persons listed in Attachment 6.4 is or is deemed
to be knowledge or constructive knowledge of the Sellers.
6.5 Rights of the Purchaser pursuant to Article 6 in connection with
Article 5 are excluded to the extent that losses or damages resulting
from a breach of representations, warranties and guarantees have lead
to a reduction of the Purchase Price according to section 4.1
6.6 Rights of the Purchaser pursuant to Article 6 in connection with
Article 5 are excluded to the extent that losses or damages resulting
from a breach of representations, warranties and guarantees regarding
the Bank-Debt (as defined in section 4.2.1) have lead to a reduction of
the Purchase Price according to section 4.2.
7. NO COMPETE RESTRAINT
7.1 The Seller No. 1 shall not without prior written consent of the
Purchaser,
7.1.1 for a period of 3 (three) years, beginning with the date of the
Agreement, commence or pursue any activity in the business area of
designing, developing, manufacturing, using, marketing, distributing
and selling woven labels, printed labels, merchandise tags and other
apparel identification products in the territory of the Federal
Republic of Germany, Poland, Spain, Turkey and India no matter for his
own account or in connection with or to the benefit of any third party;
the Seller No. 1 shall neither support such activities directly or
indirectly, nor shall he receive any economic benefit from such
activities, nor shall he participate in an enterprise in any way
whatsoever which is active in such areas, nor shall he
49
disturb, or attempt to disturb, any business relationship between any
third party and the Companies or make any statement to any third party,
including the press or media, likely to result in adverse or negative
publicity for the Companies,
7.1.2 for a period of 3 (three) years, beginning with the date of the
Agreement, solicit, divert or attempt to solicit or divert any third
party who is, was, or was solicited to become, a customer or supplier
of the Companies at any time prior to the date of the Agreement,
7.1.3 for a period of 3 (three) years, beginning with the date of the
Agreement, cause any employee, distributor or advisor or independent
consultant (with the exception of attorneys, chartered accountants and
tax advisers) who is presently active for the Companies or has been
active for the Companies since January, 1990 or will be active for the
Companies in the future, or any client, customer or supplier of the
Companies, to become active for himself or for a company in which the
Seller No. 1 participates or for a competing company in any way
whatsoever, be it for himself or to the benefit of any person, firm or
company,
7.1.4 at any time after the date of the Agreement provide or disclose to
third parties, neither directly nor indirectly, business secrets of the
Companies, and shall neither cause third parties to provide or to
disclose such business secrets, nor to promote or cover such provision
or disclosure, nor to use such business secrets for his personal
purposes.
7.2 For the purposes of section 7.1.1 there shall be disregarded the
financial interest of any person or company in a class of securities
which are listed on any recognised stock exchange if that interest is
less that 5 (five) per cent of that class.
7.3 For each individual breach of the provisions contained in section 7.1
the Seller No. 1 shall pay to the Purchaser an adequate contractual
penalty in an amount to be assessed by the Purchaser according to
Section 315 BGB. If a dispute arises as to the adequacy of the amount
of such contractual penalty, such amount shall be assessed by the
competent court upon request of the Seller No. 1 according to Section
315 para. 3 BGB. This provision, however, does not affect the other
remedies of the Purchaser to recover an exceeding damage as well as the
enforcement of other claims. Each day during which a violation of
section 7.1 continues is considered to be an independent event
triggering the contractual penalty.
7.4 The parties of the Agreement assume that the provisions contained in
section 7.1 and section 7.3 are reasonable. If at any time any of the
provisions of section 7.1 and/or section 7.3 shall be determined to be
invalid or unenforceable by reason of being vague or unreasonable as to
duration, territory, scope of activity or otherwise, then this Article
shall be considered divisible (with the other
50
provisions to remain in full force and effect) and the invalid or
unenforceable provisions shall become and be deemed to be immediately
amended to include only such duration, territory, scope of activity and
other restrictions, as shall be determined to be reasonable and
enforceable by the court or other body having jurisdiction over the
matter, and parties expressly agreeing that the Agreement, as so
amended, shall be valid and binding as though any invalid or
unenforceable provision had not been included herein.
7.5 The participation of the Seller No. 1 in Dualplast Italia does not
violate Article 7.
8. STATUTE OF LIMITATIONS
8.1 Any claims of the Purchaser pursuant to section 6.1 in connection with
Article 5 shall be time-barred after 2 (two) years following the date
of the Agreement, provided that
(i) any claims of the Purchaser pursuant to section 6.1 in
connection with section 5.1 and section 5.2 shall be
time-barred after 10 (ten) years following the date of the
Agreement,
(ii) any claims of the Purchaser pursuant to section 6.1 in
connection with section 5.4 (h) shall be time barred after 6
(six) months following the date mentioned in Section B II
Section 3 No. 1 b) of the Sale and Lease Back Agreement, and
(iii) any claims of the Purchaser pursuant to section 6.1 in
connection with section 5.6 shall be time-barred after 60
(sixty) months after the date of the Agreement.
According to the law of the Federal Republic of Germany mandatory
shorter periods of limitation remain untouched.
8.2 The claims of the Sellers are time-barred after 5 (five) years
following the date of the Agreement.
9. INSPECTION BY THE PURCHASER
9.1 Any knowledge obtained by the Purchaser or its advisers in the course
of the due diligence audit or otherwise leave statements,
representations, warranties, guarantees and indemnities of the Sellers
made in the Agreement untouched and leave also untouched the right of
the Purchaser to make claims based on such statements, representations,
warranties, guarantees and indemnities of the Sellers made in the
Agreement.
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10. TAXES
10.1 To the extent that the Companies are subject to payments of any Taxes
(as defined in section 5.6) relating to periods or events prior to the
Effective Date, the Seller No. 1 hereby indemnifies and holds harmless
the Purchaser and the Companies from and against any and all such Taxes
and any other losses, cost and expenses (including attorney's fees and
disbursements) arising out of or in connection with the obligation to
pay the Taxes, but only to the extent that such payment to be made by
the Companies exceed the specific provisions relating thereto in the
Financial Statements provided, however, that the Seller No. 1 is not
obliged to indemnify the Purchaser for Taxes payable by the KG (i) due
to profit distributions made by the Subsidiary or the Affiliates to the
KG received by the KG after the Effective Date or (ii) due to profits
gained by the Subsidiary or the Affiliates after the Effective Date.
10.2 After the Transfer Date the Purchaser will request the Companies, as
far as legally permissible, to give to the Sellers reasonable access to
the books and records of the Companies, as necessary and appropriate,
to allow the Sellers to safeguard their concerns and interests in tax
field audits relating to the period or events prior to the Effective
Date and the Purchaser is obliged at the cost of the Sellers to appeal
against any tax assessments and to challenge a notice of assessment
upon the Sellers' request concerning any tax purposes involving all
periods prior to the Effective Date, but only to the extent that the
affairs of the Companies and the Purchaser are not thereby prejudiced.
10.3 Furthermore, the Purchaser shall ensure, to the extent legally
permissible, that the Sellers are given reasonable opportunity to
consult with the Companies regarding any tax field audits of the
Companies relating to periods or events prior to the Effective Date,
but only to the extent the affairs of the Companies and the Purchaser
are not thereby prejudiced. The Sellers are obliged to cooperate with
the Companies concerning any tax field audits of the Companies
involving all periods prior to the Effective Date.
10.4 An increase in the valuation of an asset and a decrease in the
valuation of a liability as consequence of a tax audit of the Companies
do not lead to claims of the Sellers against the Purchaser or the
Companies and do not reduce claims of the Purchaser and the Companies
against the Sellers.
52
11. CONDITIONS PRECEDENT
11.1 Upon signing of the Agreement, section 13.5 and Articles 16 and 17
shall become valid and binding for the parties. The remainder of the
Agreement, including the sale of and the withdrawal from the position
as the only general partner of the KG and the sale and assignment or
the only commercial limited partnership interest in the KG shall become
valid and binding upon the satisfaction of the condition precedent
(aufschiebende Bedingung) in form of the entering into (Abschluss) of
the Sale and Purchase Agreement between Paxar Far East Limited as
purchaser and Xx. Xxxxxx Xxxxxxxxx as seller regarding shares in Bonny
Nice Industries Limited dated with the date of the Agreement.
11.2 (Intentionally Omitted)
11.3 If the condition set forth in section 11.1 above has not been satisfied
by 30 June 2000, the Purchaser may until the day preceding the day of
the satisfaction of all such conditions rescind (zurucktreten) the
Agreement by written statement to the other parties in which case all
commitments of the Sellers and the Purchaser hereunder shall terminate
without any continuing liability except that each party shall deliver
to the other party all documents, working papers and other materials
furnished to it by the respective other party in connection with the
transaction contemplated by the Agreement hereunder irrespective of
whether such materials have been furnished before or after the signing
of the Agreement. Each party will keep strictly and confidential all
information which has been so revealed by the other party.
12. MERGER CONTROL
The transaction which is object of the Agreement has been cleared by
the German Federal Cartel Office (Bundeskartellamt, "FCO") by letter of
the FCO dated May 4, 2000 attached as Attachment 12.
13. RIGHTS AND OBLIGATIONS OF THE PARTIES
13.1 The Sellers grant to the Purchaser, its respective affiliates
(Beteiligungsgesellschaften) and the Companies and its respective
affiliates as well as to their respective successors a worldwide
perpetual royaltyfree and exclusive right to use for itself or for an
affiliate (Beteiligungsgesellschaft), a branch office or a department
with right to sublicense, the name "Xxxxxxxxx + Xxxx" (including the
right to use such name as a "geschaftliche Bezeichnung" and to register
new trademarks (Xxxxxx) including the name "Xxxxxxxxx + Xxxx") and/or
each distinctive part thereof in the business of designing,
53
developing, manufacturing, using, marketing, distributing and selling
woven labels, printed labels, merchandise tags and other apparel
identification products and related services. The Sellers declare that
they do not know of any other enterprise which uses the firm to
identify an enterprise except as listed in Attachment 13.1.
The Sellers will support the Purchaser, its respective affiliates and
the Companies as well as their respective successors in each and any
permissible way and will give all necessary declarations and will issue
all documents to put the Purchaser its respective affiliates and the
Companies as well as their respective successors in the position to use
such name and/or distinctive parts thereof with and without additions.
13.2 The Sellers shall cause that all intellectual property rights which are
identified in Attachment 13.2 as being owned by the Sellers or another
party are transferred from the Sellers or the respective other party
holding such intellectual property rights to the Companies, at Sellers'
expense, as soon as possible after the date hereof and that all
applications or filings necessary for such transfer shall have been
effected prior to the date of the Agreement. Moreover, the Sellers
hereby grant the Companies a worldwide, exclusive royalty-free licence
to use, with right to sublicense, such intellectual property rights
during the period between the Transfer Date and the effectiveness of
their transfer to the Companies. With regard to such intellectual
property rights, the Sellers hereby give as of the date of
effectiveness of the transfer of the intellectual property rights the
representations and warranties set forth in section 5.7 above mutatis
mutandis, it being understood that the limitation period pursuant to
section 8.1 will be 2 (two) years following the effectiveness of the
transfers. The Sellers shall not, contest or support third parties in
contesting the Company's rights to use the intellectual property rights
or the know-how referred to in section 13.2.
In so far as the Sellers own at the date of the Agreement, intellectual
property rights including respective applications which are adverse to
the business activity of the Companies and which for any reason have
not been transferred to the Companies pursuant to this section, the
Sellers herewith grants to the Companies a worldwide, perpetual royalty
free and exclusive licence regarding such intellectual property rights.
13.3 The Sellers agrees that all know-how previously provided by the Sellers
to the Companies, may continue to be used by the Companies after the
Transfer Date without restriction, including without any further
requirement for licensing or payments with respect thereto. The Sellers
have delivered or will deliver to the Companies all know-how related
documents including but not limited to drawings, plans, computer
programs etc. relating to the object of the Companies.
54
13.4 Except as provided explicitly otherwise in Attachment 13.4, the Sellers
neither have any legal relationships with the Companies, nor have the
Sellers any rights and claims against the Companies or to any tangible
or intangible asset of the Companies (including rights arising out of
licenses), which are necessary for the conduct of the business of the
Companies in its present area and scope of activity, or which are used
by the Companies, nor have the Sellers any other rights and claims
against the Companies.
To the extent that any such legal relationships which are not
explicitly mentioned in Attachment 13.4 should exist nevertheless, all
such legal relationships between the Sellers and the Companies end on
the Transfer Date without coming into existence of any liability or
obligation whatsoever for the Purchaser or the Companies. To the extent
that such rights and claims, which are not explicitly mentioned in
Attachment 13.4, should exist nevertheless, the Sellers are at the
discretion of the Purchaser either obliged to waive such rights and
claims or obliged to transfer such rights and claims to the Companies
without further consideration, or such rights and claims end on the
Transfer Date without coming into existence of any liability or
obligation whatsoever for the Purchaser or the Companies. The Sellers
herewith guarantee that the same applies to all legal relationships
between the members of their families, the persons or companies related
to the Sellers and former partner or interest-holders of the Companies
and persons related to such former partner or interest-holders of the
Companies on the one hand and the Companies on the other.
13.5 The Sellers guarantee that the KG sells its interest in Dualplast
Italia Gruppo Xxxxxxxxx S.r.l. to the Seller No. 1 against no
consideration the latest by the date of the Agreement. The Sellers
herewith indemnify the KG from and against all liability arising out of
or in connection with such sale.
13.6 The Seller No. 2 is obliged prior to the Transfer Date to repay to the
KG the total principal amount of the loan including interest thereon
granted to the Seller No. 2 by the KG.
13.7 The Purchaser procures that the KG continues the environmental
protection insurance which the KG presently has also after the Transfer
Date at least for a time period of 2 (two) years after the date of the
Agreement, provided the present insurance company is willing to
continue to provide such insurance coverage during such period on the
basis of reasonable terms and conditions. The Purchaser is, however,
entitled to substitute the present insurance company by another
insurance company the Purchaser may designate, provided the insurance
coverage of the other insurance company is not materially different
from the insurance coverage provided by the present insurance company.
55
13.8 The Seller No. 1 has granted sureties to banks as security for loans
granted by such banks to the KG and to Bonny Nice Industries Limited,
Hong Kong attached as Attachment 13.8 (the "Sureties"). The Purchaser
and the Guarantor hereby jointly and severally indemnify the Seller No.
1 from and against all liability arising out of the Sureties. This
indemnity is irrevocable. The Purchaser and the Guarantor shall use
their best efforts to externally release the Seller No. 1 from all
liability arising out of the Sureties. Any setting of (Aufrechnung) and
right of retention (Zuruckbehaltung) with regard to the indemnity
contained in this section is excluded unless claims have been
acknowledged (anerkannt) in writing or have been confirmed by final
decision of a competent court or court of arbitration.
13.9 The Seller No. 1 is the only general partner of the KG. Upon completion
of the Agreement the Seller No. 1 withdraws from the KG as general
partner. Pursuant to Section 160 HGB the Seller No. 1 is liable for all
liabilities of the KG which came into existence prior to such
withdrawal of the Seller No. 1 from the KG during a period of 5 (five)
years after such withdrawal. The Purchaser and Paxar Corporation hereby
jointly and severally indemnify the Seller No. 1 from and against all
liability arising out of Section 160 HGB. This indemnity is
irrevocable. Section 13.8 last sentence is applicable. This section
13.9 is also applicable regarding liability, if any, arising out of
Section 159 HGB and/or Section 613 a BGB.
13.10 The Seller No. 1 guarantees payment by Xxxxxxx Xxxxxxx, Xxxxxxxxxxx
00x, 00000 Xxxxxxxxx of all obligations X. Xxxxxxx owes to the
Companies including interest thereon existing at the date of the
Agreement the latest by December 31, 2000 to the respective Company.
The Purchaser is obliged to assign the respective claims of the
Companies to the Seller No. 1 to the extent the Seller No. 1 makes
payment to the Companies due to the guarantee contained in this
section.
13.11 The Seller No. 1 guarantees payment by Europrint S.A., Bat. 2 BP 49
Torcy, 77201 Xxxxx Xx Xxxxxx Xxxxx 0, Xxxxxx of all obligations
Europrint owes to the Companies including interest thereon existing at
the date of the Agreement the latest by December 31, 2000 to the
respective Company. The Purchaser is obliged to assign the respective
claims of the Companies to the Seller No. 1 to the extent the Seller
No. 1 makes payment to the Companies due to the guarantee contained in
this section.
13.12 Notwithstanding the exception made in the 5th and 6th sentences of
Section 5.3.3 the Seller No. 1 is obliged to indemnify the Purchaser
and Xxxxxxxxx-Turkey against claims raised by third parties against
Xxxxxxxxx-Turkey if such claims relate to the past business practices
of Xxxxxxxxx-Turkey to the extent no provision has been made or to the
extent such claims have not been recorded as liabilities.
56
14. GUARANTEE OF THE GUARANTOR
The Guarantor guarantees the obligations of the Purchaser arising out
of section 2.1, section 13.8, section 13.9 and Article 15.
15. SELLER NO. 1'S PROFIT PARTICIPATION
15.1 During the calendar years 2000, 2001 and 2002 the Seller No. 1 shall
receive a participation in the profits of the Companies in the amount
of the product of the Differential Amount (as defined below) and the
factor 3 (three) (the "Profit-Participation").
The "Differential Amount" is the positive difference between the
Average Consolidated Profit of the Companies (as defined below) and the
consolidated profit of the Companies as of December 31, 1999 as set
forth on Attachment 15.1.
The average consolidated annual profit of the Companies before taxes on
operating and non-operating income for the calendar years 2000, 2001
and 2002 is 1/3 of the sum of the consolidated profits of the Companies
before taxes on operating and non-operating income for the calendar
years 2000, 2001 and 2002 (the "Average Consolidated Profit of the
Companies").
15.2 The parties agree that for the calendar years 2000, 2001 and 2002 the
consolidated profit of the Companies before taxes on operating and
non-operating income
15.2.1 is ascertained as follows:
(a) On the basis of the statutory financial statements of the
Companies which shall be prepared on the basis of the same
principles and practices used to prepare the Financial
Statements referred to in section 5.3,
(b) the actual amount of the annual remuneration of the Seller No.
1 shall be treated as business expenses,
(c) for the respective Company according to the generally accepted
accounting principles applicable at the seat of the respective
Company,
(d) within the scope of the consolidation of the Affiliates, is
only computed on a pro rata basis according to the interest
the KG holds immediately prior to the Transfer Date in the
Affiliates, both directly and indirectly, except as set forth
in section 15.2.4,
57
(e) shall be expressed in German Xxxx converted from other
currencies using the generally accepted accounting principles
applicable at the seat of the respective Company, and
(f) is increased by the trade tax payable in the Federal Republic
of Germany.
15.2.2 is ascertained regarding intercompany transactions between the
Companies on the one side and Paxar Corporation and companies in which
Paxar Corporation directly or indirectly owns interests on the other
side (the "Intercompany Transactions") as follows:
(a) Intercompany Transactions regarding manufactured products
between the KG, B+B-Polska and Xxxxxxxxx-Turkey on the one
side and companies in which Paxar Corporation directly or
indirectly owns at least 75% will be at intercompany transfer
prices (the "IC-Prices"), which are set at a xxxx up of 28%
above direct cost only consisting of direct materials, direct
labor, direct factory overhead and shipping costs. IC-Prices
so determined will apply unless market conditions require a
lower price, which will then be determined in a fair and
reasonable negotiation between the buyer and the seller of the
manufactured products.
(b) If either the seller or the purchaser of manufactured products
are less than 75% owned by either Paxar Corporation and
companies in which Paxar Corporation directly or indirectly
owns interests or the Sellers, the IC Price will be set by the
seller of the manufactured products so as to be no higher than
the lowest price charged to any of its third-party customers.
(c) Purchases or sales of raw materials or other products to which
the selling company does not add significant value will be
sold at cost plus a handling charge not to exceed 5% of cost.
(d) For the elimination of doubt, the Sellers and Paxar
Corporation agree that each will endeavour to sell the
products manufactured by the other and will do so with the
understanding that no sales commissions shall be paid.
15.2.3 is ascertained according to cash required or excess cash as follows:
(a) Profit before taxes on operating and non-operating income will
be calculated so as to include an appropriate interest cost
based upon the cash required by any of the Companies provided
by Paxar Corporation beyond amounts generated from the
operations of the businesses. The
58
source and the terms and conditions of funding of such cash
requirements will be determined by Paxar Corporation.
(b) Profit before taxes on operating and non-operating income will
reflect an appropriate interest income credit to the extent
that the Companies generate more cash than is needed to
support current requirements. The disposition of such excess
(e.g., debt repayment or short-term investments) will be
determined by Paxar Corporation.
15.2.4 is ascertained according to the following rules in the event that the
equity ownership percentages should change for any of the Companies
currently directly or indirectly owned less than 51% by the Sellers as
follows:
(a) In the event Paxar Corporation combines its business in Spain
with Xxxxxxxxx-Spain or decreases the interest held in
Xxxxxxxxx-Spain or Xxxxxxxxx-India then such entity as
disregarded for the purpose of Article 15.
(b) In the event Paxar Corporation increases the interest held in
Xxxxxxxxx-Spain or Xxxxxxxxx-India then section 15.1.1 (d)
remains applicable and such entity is taken into account with
such interest as has been held by the KG at the date of the
date of the Agreement.
15.2.5 is ascertained, since it is likely that there will be some integration
of the Sellers' businesses with Paxar Corporation's businesses
according to the following rules:
(a) Where businesses are combined for administrative purposes
(e.g., accounting reasons or customer service) in order to
reduce overall costs, the administrative costs of the combined
businesses will be allocated between the Sellers' and Paxar
Corporation's businesses using sales to determine the
apportionment factors. Paxar Corporation agrees that such
combinations will not occur unless the Sellers' agree that
there is an advantage to making the combination (lower costs
or improved capabilities) or unless Paxar Corporation agrees
to override the apportionment of costs set forth in the
preceding sentence by charging the Sellers' businesses no more
than an amount equal to the cost incurred prior to the
combination.
(b) If existing manufacturing operations are combined into one
plant or adjacent plants that are managed by the same plant
management, the indirect costs (i.e., overhead costs) of the
combined operation will be allocated to the previously
separate businesses using sales to determine the apportionment
factors. In this instance, only the results of the Sellers'
previously existing business will be included. The foregoing
would
59
apply, for example, if the Sellers' and Paxar Corporation's
existing manufacturing operations in Turkey were to be
combined.
15.2.6 is ascertained for the elimination of doubt, in such a way as that
profit before taxes on operating and non-operating income will include
the results of any expansion of activities of the Companies beyond
those taking place on the date of the Agreement. For example, existing
woven label operations of the Seller and Paxar Corporation in Panyu may
be combined. As another example, narrow woven edge tape production may
be introduced to Xx. Xxxxxx Xxxxxxxxx'x plant in Panyu.
15.3 The Profit-Participation shall be due for payment by the Purchaser to
the Seller No. 1 on April 15, 2003.
15.4 The Profit-Participation of the Seller No. 1 amounts to a maximum of DM
20,000,000.00 (German Xxxx: twenty million), provided, however, that
such maximum amount of DM 20,000,000.00 shall be increased if any by
the difference between the maximum amount of the profit-participation
as defined in section 14.4 of the Sale and Purchase Agreement between
Paxar Far East Limited as purchaser and Xx. Xxxxxx Xxxxxxxxx as seller
regarding shares in Bonny Nice Industries Limited dated with the date
of the Agreement (the "HK-Agreement") being HK$ 58,500,000.00 (Hong
Kong Dollar: fifty eight million five hundred thousand) and the actual
amount paid to Xx. Xxxxxx Xxxxxxxxx under section 14.1 of the
HK-Agreement. For the purpose of this section HK$ shall be converted
into DM using the rates printed in the New York edition of the Wall
Street Journal for the last business day in New York City of the year
2002. Independent from the provisions contained in Article 15, the
Profit-Participation of the Seller No. 1 amounts to a minimum of DM
2,500,000.00 (German Xxxx: two million five hundred thousand).
15.5 The amount of the Profit-Participation shall be determined by Xxxxxx
Xxxxxxxx and shall be notified by Xxxxxx Xxxxxxxx in writing to the
Seller No. 1 and the Purchaser simultaneously the latest on April 1,
2003 (the "Receipt Date").
15.6 In case the Purchaser or the Seller No. 1 do not agree with the
determination made by Xxxxxx Xxxxxxxx according to section 15.5, the
Purchaser or the Seller No. 1 as the case may be shall notify the
respective other parties on such disagreement at the latest 10 (ten)
days after the Receipt Date. If a notification according to this
section is not made, the amount of the Profit-Participation as
determined by Xxxxxx Xxxxxxxx shall be binding on the parties.
15.7 If the parties fail to reach an agreement on the Profit-Participation
after a notification has been made according to section 15.6 within a
period of 45 (forty five) days after Receipt Date, the dispute shall be
referred to an independent firm
60
of auditors with significant international experience appointed as an
expert (Schiedsgutachter) in the sense of Section 317 BGB (the
"Profit-Participation-Expert") and not as an arbitrator jointly by the
Seller No. 1 and the Purchaser, who will resolve the dispute. The
decision of the Profit-Participation-Expert shall be final and binding
on the parties. The Profit-Participation as decided by the
Profit-Participation-Expert shall be final and binding on the parties.
If the parties fail to agree on the firm of auditors to appoint as the
Profit-Participation-Expert within a period of 60 (sixty) days after
the Receipt Date, the Profit-Participation-Expert (which shall be an
independent firm of auditors with significant international experience)
shall be appointed by the President of the Institut der
Wirtschaftsprufer e.V., Dusseldorf upon the request of either party of
the Agreement.
15.8 The cost of the determination made by Xxxxxx Xxxxxxxx shall be borne by
the Purchaser. Each party shall bear one half of the costs of the
Profit-Participation-Expert appointed pursuant to section 15.7.
15.9 In case the Seller No. 1 voluntarily resigns as managing director of
the Purchaser prior to December 31, 2002 the Seller No. 1 is only
entitled to a payment according to Article 15 equivalent to the
Profit-Participation multiplied by a fraction the numerator of which is
equivalent to the number of months the Seller was General Partner of
the KG and managing director of the Purchaser after January 1, 2000 and
the denominator of which is 36 (thirty six), provided, however, that
the Seller No. 1 is entitled to a payment of not less than DM
2,500,000.00 (German Xxxx: two million five hundred)
16. INTERIM PERIOD
16.1 The Sellers undertake to procure that during the period between the
date of the Agreement and the Transfer Date the Companies have been and
will be managed in the ordinary course of business in compliance with
the provisions of any applicable laws or regulations and in compliance
with the obligations assumed by them, and that the Companies have not
and will not enter into agreements or arrangements which, by their
nature, scope or duration are outside the ordinary course of business
or which may conflict with the representations and warranties set out
in Article 5.
16.2 In particular, but without limitation thereto, the Companies have not
and will not within the limits mentioned above
16.2.1 give guarantees or surety in respect of obligations of the Sellers, or,
in respect of obligations of third parties, other than in the ordinary
course of business;
61
16.2.2 neither acquire nor dispose of (including by way of leasing agreements)
any businesses, interests or fixed assets, nor undertake to make such
acquisition or disposal;
16.2.3 make any legally relevant declaration in respect of any other item
addressed in sections 5.5 (a) through to 5.5 (p).
16.3 The Sellers will cause that
16.3.1 the Purchaser's and Paxar Corporation's employees have reasonable
access to the Companies' premises and documents at all times during
normal business hours;
16.3.2 the Purchaser is regularly and continuously informed about the
Companies' business, financial and economic situation.
16.4 Regarding Article 16 the Seller is only obliged to use its best efforts
to cause the Affiliates to comply.
17. ARBITRATION
17.1 Any dispute arising out of or in connection with the Agreement and its
Attachments, including any question regarding its existence, validity
or termination, shall be referred to and finally resolved by
arbitration under the Rules of London Court of International
Arbitration (the "Rules"), which Rules are deemed to be incorporated by
reference into this clause.
17.2 The jurisdiction of the ordinary courts shall be excluded.
17.3 The tribunal shall consist of three arbitrators, two of them shall be
nominated by the respective parties and the third arbitrator shall be
appointed in accordance with the Rules.
17.4 The rules governing the arbitration proceeding before the arbitrators
shall be the Rules and, where the Rules are silent the parties hereof
agree that the procedural law of the Federal Republic of Germany shall
be applicable.
17.5 The language of the arbitration shall be the English language.
17.6 The place of the arbitration shall be Wuppertal, Federal Republic of
Germany.
17.7 (Intentionally omitted)
17.8 The parties hereof agree that the winning party of an arbitration
proceeding has a claim for reimbursement against the losing party for
all reasonable costs which the winning party had to spend for and
during the course of the arbitration proceeding.
62
17.9 The decision of the arbitrators which has to contain a reasoning (the
"Decision") shall be binding upon the parties hereof and enforceable by
any court having jurisdiction for the enforcement of the Decision.
18. MISCELLANEOUS
18.1 (Intentionally Omitted)
18.2 Any transfer taxes in connection with the sale, transfer and assignment
according to Article 1 are borne by the Purchaser. Each party, however,
bears the cost of its advisors and chartered accountants itself unless
it is provided expressly otherwise in the Agreement.
18.3 Changes, amendments and supplements to the Agreement shall be in
writing, signed by each of the parties hereto to be valid and require
the explicit reference to the Agreement but need to be notarized if
this is required by mandatory law.
This is also applicable for a change or addition of this section.
18.4 Any demand, notice, declaration or other communication to be given in
connection with the Agreement shall be given in English and in writing
addressed to the recipient as follows:
18.4.1 to the Sellers: Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxxxxxx 0
D-45549 Sprockhovel
with a copy to: Xxxxxx & Xxxxxxx
Clever Xxxxxxx 00
X-00000 Xxxx
18.4.2 to the Purchaser: Paxar Corporation
Att.: General Counsel
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
XXX
with a copy to: Xxxxxxxx Chance Punder
Attn.: Gustaf-Xxxxxx Xxxxxxxxx
Xxxxxxxxxxxxx 0
00000 Xxxxxxxxxx
or to such other individual or address as a party hereto may designate
for itself by notice given as herein provided.
18.5 If any provision of the Agreement or any provision to be incorporated
into the Agreement is or becomes invalid or impracticable or should a
necessary provision not be contained in the Agreement, the validity of
the Agreement and the remaining provisions of the Agreement shall
remain unaffected. Instead of
63
the invalid or impracticable provision or to bridge the gap, a valid
provision is applicable which to the fullest extent possible
corresponds to what the parties would have wanted or according to the
sense and object of the Agreement would have agreed if they had known
the invalidity or impracticability or had realised the gap.
18.6 Declarations which are contained in an Attachment to the Agreement are
part of the Agreement and are deemed also for purposes of all other
Attachments to the Agreement as part of the Agreement.
18.7 The Agreement is exclusively governed by and construed in accordance
with the law of the Federal Republic of Germany applicable to parties
residing within the Federal Republic of Germany.
18.8 (Intentionally Omitted)
18.9 The Agreement is written in the English language (except that certain
of the Attachments may be in the German language). The Agreement may be
translated into any language other than the English language, provided,
however, that, for all purposes, the English language text of the
Agreement shall prevail, provided, further, that, such terms to which a
German translation has been added in parenthesis shall be interpreted
throughout the Agreement in the meaning assigned to them by the German
translation.
18.10 The Agreement including the Attachments hereto contain all of the
terms, conditions, representations and warranties agreed upon between
the parties relating to the subject matter of the Agreement and
supersedes all prior negotiations, agreements and undertaking of the
parties, oral, written, with respect to the subject matter hereof. Oral
side agreements to the Agreement do not exist.
18.11 Except as required by law and except as required to perform the
Agreement, no public announcements or press releases concerning the
entering into of the Agreement shall be made by any party hereto
without the prior written consent of the other party. If required by
law and except as required to perform the Agreement, public
announcements or press releases shall only be made upon consultation
with the other party.
18.12 No party shall assign the Agreement, any part hereof or any rights
arising hereunder to any third party (including affiliates of such
party) without having obtained the prior written consent of the other
party provided, however, that the Purchaser may at any time and from
time to time, even without the prior written consent of the Sellers
assign in whole or in part its respective rights and obligations under
the Agreement to one or more wholly owned subsidiaries of the
Purchaser, such assignee(s) shall collectively be deemed to be the
64
"Purchaser" for all purposes of the Agreement and the assignee in such
assignment shall have no further obligations with respect to the
portions of its rights and obligations that have been assigned.
18.13 Except as expressly provided herein, no delay or omission to exercise
any right, power or remedy accruing to any party to the Agreement,
shall impair any such right, power or remedy of such party nor shall it
be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any
kind or character of any breach or default under the Agreement, or any
waiver of any provisions or conditions of the Agreement, must be in
writing and shall be effective only to the extent specifically set
forth in such writing.
18.14 Each party shall from time to time execute and deliver all such
additional documents and take all such additional actions as the other
party may reasonably require in order to effectively consummate the
Agreement as provided herein.
18.15 The KG has in an extraordinary interest-holders meeting on February 20,
2000 resolved that it approves the transfer of its interests to the
Purchaser. This resolution is attached to the Agreement as Attachment
18.15.
18.16 All Attachments to the Agreement have been given by the parties to the
Notar Xx. Xxxxxx Xxxx with his official residence in Dusseldorf who on
request of the parties accepted the Attachments to the Agreement and
prepared his notarial deed no. W369/2000 out of the Attachments to
the Agreement.
Sprockhovel, May 18, 2000
/s/ Xxxxxxx Xxxxxxxxx
Xxxxxxxxx & Xxxx GmbH & Co. KG ______________________________
By: /s/ Xxxxxxx Xxxxxxxxx (Xxxxxxx Xxxxxxxxx)
________________________
(Xxxxxxx Xxxxxxxxx, managing director
with single authority of representation of
Provista 379. Verwaltungsgesellschaft mbH,
general partner of Xxxxxxxxx & Xxxx
GmbH & Co. KG)
/s/ Xxxxxxx Xxxxxxxxx
Paxar Corporation ______________________________
By: /s/ Xxxxxx X. Xxxxx (Xx. Xxxxxx Xxxxxxxxx)
________________________
(Xxxxxx X. Xxxxx)
