EXHIBIT 10.1
WORKING TRANSLATION
SHAREHOLDERS' AGREEMENT
CONSOLIDATED DOCUMENT - 010517
THE DOCUMENT IS A CONSOLIDATED VERSION OF THE ENGLISH TRANSLATION ORIGINAL
SHAREHOLDERS' AGREEMENT DATED DECEMBER 31, 2000 AND THE AMENDMENT AGREEMENT
DATED APRIL 27, 2001 AND SERVES CONVENIENCE PURPOSES ONLY. LEGALLY BINDING ARE
ONLY THE EXECUTED VERSION OF THE ORIGINAL AGREEMENTS IN THE GERMAN LANGUAGE.
CHANGES MADE IN THE AGREEMENT ARE UNDERLINED.
SHAREHOLDERS' AGREEMENT
(FOR PARTICIPATION IN XXXXXX GRIESHEIM GmbH)
BETWEEN
XXXXXX INDUSTRIE GESELLSCHAFT MIT BESCHRANKTER HAFTUNG (KONIGSTEIN)
("MIG")
AND
ALLIANZ CAPITAL PARTNERS GmbH (MUNCHEN)
("ACP")
GS CAPITAL PARTNERS 2000, L.P. (U.S.A.)
GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P. (U.S.A.)
GS CAPITAL PARTNERS 2000 OFFSHORE, L.P. (CAYMAN ISLAND)
GS CAPITAL PARTNERS 2000 GmbH & CO. BETEILIGUNGS KG
STONE STREET FUND 2000, L.P. (U.S.A.)
BRIDGE STREET SPECIAL OPPORTUNITIES FUND 2000, L.P.
(TOGETHER "GS")
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(ACP AND GS TOGETHER THE "FINANZINVESTOREN")
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CONTENT
RECITALS ....................................................................................................6
I. PRODUCTION OF TARGET STRUCTURE ..........................................................................8
ss. 1 Restructuring of MIG's Shareholding in MGG ..........................................................8
ss. 2 Consideration for Contribution, Amount of the MIG Loan against Borrower's Note......................11
ss. 2a Arrangements with Regard to a Change of the BCA, Specifications of ss. 2 of the
Shareholders' Agreement and Equity Contributions by the Financial Investors ...................... 14
ss. 3 Corporate Structure of Investor NewCo ..............................................................17
ss. 4 Corporate Structure of NewCO III, NewCo III, DebtCo and MGG ........................................17
ss. 5 Control Agreements .................................................................................19
ss. 6 Warranties of MIG ..................................................................................19
ss. 7 Management Participation Plan, Options for the Interim Financers ...................................22
II. SHAREHOLDERS'RIGHTS IN INVESTOR NEWCO, NEWCO II, NEWCO III, DEBTCO AND MGG .............................23
Article 1: General Provisions ..............................................................................23
ss. 8 Principles .........................................................................................23
ss. 9 Voting Rights ......................................................................................25
Article 2: Bodies ..........................................................................................28
ss. 10 Overview of Bodies ................................................................................28
ss. 11 Management or Management Board ....................................................................28
ss. 12 Shareholders' Committee of Investor NewCo .........................................................30
ss. 13 MGG Shareholders' Committee .......................................................................31
ss. 14 Approval of Budget and Business Plan by Shareholders' Committee ...................................32
ss. 15 Supervisory Boards ................................................................................33
ss. 16 Shareholders' Meetings ............................................................................35
ss. 17 Resolutions of Shareholders' Meetings .............................................................37
ss. 18 Capital Measures ..................................................................................39
III. RIGHTS FROM THE PURCHASE AGREEMENT WITH HOECHST .......................................................41
ss. 19 ...................................................................................................41
IV. DISPOSAL OF SHARES ....................................................................................47
ss. 20 Initial Public Offering ...........................................................................47
ss. 21 Restriction on Transferability, General Lockup Period, Admitted Transfers .........................49
ss. 22 Tender Obligation .................................................................................51
ss. 23 Right to Joint Sale ...............................................................................54
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ss. 24 Preemptive Purchase Right .........................................................................55
ss. 25 Call Option for MIG ...............................................................................56
ss. 26 Resale of Acquired Shares after Exercise of the Call Option .......................................60
ss. 27 Sale of Shares by the Financial Investors Prior to 1 October 2004 .................................62
ss. 28 Duty of MIG to Joint Sale .........................................................................62
ss. 29 Acquisition Right Upon Change of Control ..........................................................64
V. AGREEMENT BETWEEN MIG AND MGG ...........................................................................67
ss. 30 License Agreement between MGG and Xxxxxx Cutting & Welding GmbH ...................................67
ss. 31 Sale of Holding Companies of MGG and MIG ..........................................................67
ss. 32 Singapore, Syngas .................................................................................68
ss. 33 [left blank] ......................................................................................70
VI FINAL PROVISIONS ........................................................................................70
ss. 34 Obligation of MIG Until Closing ...................................................................70
ss. 35 New Shareholders, Adaption of the Agreement .......................................................71
ss. 36 Commencement and Cessation ........................................................................72
ss. 37 Arbitration Board .................................................................................72
ss. 00 Xxxxxxxxxxx, Xxxxxx Obligation ....................................................................73
ss. 39 Written Form ......................................................................................73
ss. 40 Confidentiality ...................................................................................74
ss. 41 Publications/Press Releases .......................................................................74
ss. 42 Severability ......................................................................................75
ss. 43 Notices ...........................................................................................75
ss. 44 Prohibition of Assignment .........................................................................77
ss. 45 Costs .............................................................................................77
ss. 46 Condition Precedent ...............................................................................78
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ANNEXES
ANNEX/RECITAL.3 ...................................DIAGRAM TARGET STRUCTURE
ANNEX 1.1 (a) ..........................CONTRIBUTION AGREEMENT MIG NEWCO II
ANNEX 1.1 (b) ....................CONTRIBUTION AGREEMENT MIG INVESTOR NEWCO
ANNEX 2.1 ............TERMS AND CONDITIONS MIG LOAN AGAINST BORROWER'S NOTE
ANNEX 3.1 (a) .........BYLAWS INVESTOR NEWCO GMBH (PRIOR TO TRANSFORMATION)
ANNEX 3.1 (b) ................BYLAWS GENERAL PARTNER GMBH OF INVESTOR NEWCO
ANNEX 3.2 .......................................BYLAWS INVESTOR NEWCO KGaA
ANNEX 4.2 ..................................................BYLAWS NEWCO II
ANNEX 4.3 .......................................................BYLAWS MGG
ANNEX 4.5 .................................................BYLAWS NEWCO III
ANNEX 6.1 (e) ...............................AGREEMENTS BETWEEN MGG AND MIG
ANNEX 6.1 (f) ............CLAIMS AGAINST MGG (CUTTING & WELDING ACTIVITIES)
ANNEX 7.1 ...............TERMS AND CONDITIONS MANAGEMENT PARTICIPATION PLAN
ANNEX 14.1 ...................................................BUSINESS PLAN
ANNEX 21.2 ................................LIST FURTHER FINANCIAL INVESTORS
ANNEX 25.5 ................................................LIST ARBITRATORS
ANNEX 30 .................................................LICENSE AGREEMENT
ANNEX 31.1 ...........................................PARTICIPATIONS OF MGG
ANNEX 32 ............................TERMS AND CONDITIONS OF SINGAPORE LOAN
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RECITALS
WHEREAS:
STARTING SITUATION: Hoechst AG is a shareholder of Xxxxxx Griesheim GmbH ("MGG")
with 66 2/3% ("HOECHST MGG SHARES") and MIG was a shareholder with 33 1/3% ("MIG
MGG SHARES"). Hoechst AG intends to sell the Hoechst MGG Shares to the Financial
Investors.
HOECHST RESTRUCTURING: To prepare the sale of Hoechst shares in MGG, Hoechst
AG shall in a first stage contribute the Hoechst MGG Shares to Diogenes
Vermogensverwaltungs Aktiengesellschaft registered in the Commercial Register
Frankfurt am Main under HRB 42291 ("NEWCO II") in consideration for shares.
Hoechst AG shall in turn pass on all shares in NewCo II by way of a
securities loan to Diogenes Zwanzigste Vermogensverwaltungs GmbH registered
in the Commercial Register Frankfurt am Main under HRB 48032 ("SELLER" or
"NEWCO III").
SALE TO FINANCIAL INVESTORS (INCLUDING PUT AND CALLS): The Seller has
concluded on this date to No. 680 and No. 679 of the Roll of Deeds for 2000
of the notary Xx. Xxxxx Xxxxx, Frankfurt am Main, an agreement plus reference
deed - together in the following also named "PURCHASE AGREEMENT" - , which is
referred to, on the sale of all shares in NewCo II to Xxxxxxxx
Vermogensverwaltungsgesellschaft mbH registered in the Commercial Register
Frankfurt am Main under HRB 50040 ("INVESTOR NEWCO"), in which initially only
GS holds shares. At the time of the Closing under the Purchase Agreement, the
Financial Investors shall hold equal shares in Investor NewCo. NewCo has
granted the Seller a call option to repurchase the shares in NewCo II
purchased by the Seller, which can be exercised earliest with effect as of 11
January 2002. Hoechst AG has in turn granted Investor NewCo a call option for
the period - as expected - from 16 to 23 January 2002 on all shares in NewCo
III, and Hoechst AG has a corresponding put option for the period from 24 to
31 January 2002.
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COURSE OF THE SALE OF HOECHST MGG SHARES AND THE HOECHST RESTRUCTURING: The
course of the sale of Hoechst MGG Shares and the Hoechst restructuring
including the retransfer of NewCo II AG shares to the Seller as well as the
ensuing purchase of NewCo III is described in Section 2 (Transactions Forming
the Business Combination) of the Purchase Agreement ( all operations together
the "TRANSACTION").
JOINT ENGAGEMENT: The Financial Investors and MIG shall hold all shares in MGG
via their joint shareholding in Investor NewCo and its shareholding in NewCo II
and temporarily NewCo III. The Financial Investors and MIG agree that their
joint economic engagement in MGG is to serve the steady increase of the value of
MGG and its subsidiaries ("MGG GROUP"). MIG knows that the Financial Investors
wish to be able to realize the increase in value of their shareholding in the
medium term. The Financial Investors know that MIG considers its shareholding to
be a long-term investment. The parties shall consider these intentions while
exercising their rights arising from this agreement.
TARGET STRUCTURE: The target structure of the MGG Group is evident from the
diagram attached as the ANNEX/RECITAL.3 to the Reference Deed. To obtain this
structure MIG shall first contribute its shares in MGG to NewCo II and
thereafter MIG shall contribute its shares in NewCo II resulting thereof in
Investor NewCo.
NOW, THEREFORE, the relations between the Financial Investors and MIG with
respect to the (indirect) shareholding in MGG and the joint MGG engagement shall
be determined as follows:
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I.
PRODUCTION OF TARGET STRUCTURE
SECTION 1
RESTRUCTURING OF MIG'S SHAREHOLDING IN MGG
(1) MIG undertakes to perform the following acts in order to produce the
target structure pursuant to the Annex/Recital.3 of the Reference Deed:
(a) MIG shall contribute its shares in MGG to NewCo II in exchange
for issuance of shares pursuant to Annex 1.1 attached to this
Amendment Agreement. The contribution agreement shall be
signed at the closing pursuant to Section 3 of the BCA (the
"CLOSING").
(b) MIG shall contribute after entry of the non-cash capital
increase to execute the contribution pursuant to Section 1
para. (1) (a) the shares in NewCo II to Investor NewCo as well
as the loan repayment claim against NewCo II pursuant
to Section 1 para. (1) (a) in accordance with the provisions
of the Contribution Agreement attached as ANNEX 1.1 (b) to the
Reference Deed, MIG therefore receiving the consideration as
stated in Section 2 para. (1). The participations agreed upon
in Section 2 hereof are to be produced by way of this
contribution.
(2) In the event any of the actions agreed upon in Paragraph (1) is not
implemented or may not be implemented within a reasonable period of
time, the parties shall agree upon the production of the target
structure through a different proceeding
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(e.g. by contribution to the capital reserve and assignment of the
required shares to Investor NewCo by the Financial Investors).
(3) MIG hereby undertakes to pledge its shares in MGG to the benefit of the
banks that finance the transaction ("CONSORTIUM OF BANKS") in the same
way as NewCo II pledges its shares to MGG
(4) MIG is aware that the goal and transaction structure shall be
influenced by the requirements of the financing banks and the request
for a favorable tax structure. Modifications may therefore become
necessary, for example, in the sequence of the individual stages of the
transaction. Those modifications affecting MIG may only be made with
the approval thereof. The obligation to implement this Agreement is not
effected by this approval requirement. In the event that MIG denies its
approval it is obliged to find a solution jointly with the Financial
Investors that enables the implementation of the Transaction and
acknowledges the interests of both parties as far as possible. The
Financial Investors will inform MIG of any modification no later than
two weeks prior to the implementation of the measure at hand to enable
MIG to examine the suggestion. MIG shall issue the approval to the
modification of the target and transaction structure
(a) if the modifications are asked for by Hoechst AG, the Seller
or the Consortium of Banks or otherwise are in the opinion of
the Financial Investors necessary for the execution of the
transaction or the securing of the financing of the
transaction,
and
(b) if it does not thereby incur any legal
disadvantages--particularly provided the rights under this
Agreement are not prejudiced--,
and
(c) if it does not incur any financial (including tax)
disadvantages that are not fully compensated.
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(5) The parties shall ensure that Investor NewCo takes over the costs of
the parties that have accrued in connection with the preparation, due
diligence, implementation and financing of the acquisition of the MGG
shares by Investor NewCo to the extent they do not anyway directly
accrue at Investor NewCo or MGG.
(5)(a) CONSULTING FEES(1)
The Parties agree that ACP and GS shall each receive a fee of
DM5,000,000 from Investor NewCo and/or a direct or indirect subsidiary
as consideration for consulting services provided in connection with
the financing of the transaction. Such fees shall be due under the BCA
after Closing. Section 1 para. 5 remains unchanged.
(6) In light of the particular tax situation of GS the parties undertake to
ensure that Investor NewCo and the companies affiliated therewith in
the terms of Section 15 of the Corporation Act make available elections
regarding the tax treatment of the companies of the MGG Group in a
manner favorable to GS if the other parties thereby do not suffer any
disadvantages. This includes without limitation any election pursuant
to 1.7701-3 United States Treasury Regulation and 338(h)(10) of the
United States Internal Revenue Code.
(7) ACP is entitled and obliged to acquire 50% of Investor NewCo at the
Closing at the same conditions as GS has acquired its participation in
Investor NewCo. In the event that a further Financial Investor
participates in Investor NewCo such obligation of acquisition shall
reduce pursuant to the agreements between the Financial Investors.
(8) The individual GS funds shall exercise their rights under this
Agreement in a uniform way.
(9) The parties agree that MGG's 100 % shareholding in Xxxxxx AGS GmbH and
Italfilo Engineering S.r.l, Italy, shall be sold and transferred at
Closing, and prior to Investor NewCo's acquisition of the shares in
NewCo II, to a company in which
-------------------
(1) (5)(a) has been inserted on the basis of Article 2 "Additional
Arrangements" Section 3 "Consulting Fees" of the Shareholders' of
Amendment to the Shareholders' Agreement dated April 27, 2001
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Hoechst AG holds a 38% interest, ACP a 20% interest, GS a 20% interest
and Bandinelli GmbH, in which MIG holds one hundred percent, a 22%
interest.
SECTION 2
CONSIDERATION FOR CONTRIBUTION, AMOUNT OF THE MIG LOAN AGAINST
BORROWER'S NOTE
(1) As consideration for the contribution of the NewCo II shares to
Investor NewCo pursuant to Section 1 para. (1)(b), MIG shall receive
(a) a share of [36 1/3 %] 32, 33%(2) of the share capital of
Investor NewCo,
(b) a cash payment in the amount of DM 60,000,000 (in words:
Deutsche Xxxx sixty millions) (the "CASH COMPONENT") and
(c) a loan against borrower's note claim ("MIG LOAN AGAINST
BORROWER'S NOTE") against Investor NewCo at the terms and
conditions specified in ANNEX 2.1 of the Reference Deed; its
amount shall be determined pursuant to the equation in
Paragraph (2).
(d) a cash payment in the amount of DM 5,000,000 (in words:
Deutsche Xxxx five million).
The text of Annex 2.1 shall be effective in an amended drafting as it
is made clear by deletions and additions in the text of ANNEX 1
attached to this Notarial Deed. Upon request of the persons involved
the recording notary read out the modified
----------------------
(2) Article 2 was not changed by the Amendment Agreement dated April 27,
2001. However, the total equity contribution by the Financial Investors
at the Closing in the amount of E494,975,000 million results in a
participation of MIG in the share capital of Investor NewCo in the
amount of 32.33 %. The additional cash payment of DM 5 million was
agreed in Article 2 Xxxxxxx 0 Xx. 0 of the Amendment Agreement.
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parts of the text in the English language; the persons involved and the
notary have knowledge of the English language.
(2) The amount of the MIG Loan against Borrower's Note depends on the
amount of the equity (capital stock and capital reserve) that is
injected by the Financial Investors into Investor NewCo at the Closing.
The amount of the MIG Loan against Borrower's Note is calculated as
follows:
50% of the Total Compensation
deducting the China Purchase Price,
each within the meaning of the Purchase Agreement
-in the following named "HOECHST PURCHASE PRICE"-
./.
50% of the
equity injection by the Financial Investors
./.
Cash Component pursuant to Paragraph (1)(b)
./.
issue price for 3 % additional shares
./.
DM 70,000,000,--
"Additional shares" shall be all shares exceeding a participation quota
of 33 1/3 % granted to MIG within the contribution pursuant to
Paragraph (1)(a). The issue price for the 3 % additional shares is
calculated as follows:
Issue price for 3 % = (equity injection by the Financial
Investors divided by 63 2/3 x 100)
minus (equity injection by the
Financial Investors x 1,5)
The part of the purchase price in the amount of DM 300,000,000 (in
words: Deutsche Xxxx three hundred millions) that is allowed deferred
payment in the
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Purchase Agreement shall at the Closing not be considered as equity
injection but as additional indebtedness of Investor NewCo.
Example for calculation:
The following example for calculation shall serve for the description
and clarification of the equation; the numbers used are legally not
binding.
----------------------------------------------------- -------------------------------------------------
50 % of the Hoechst Purchase Xxxxx XX 653 mio.
under the Purchase Agreement
(700 mio. Euro ./. 32 mio. Euro)
----------------------------------------------------- -------------------------------------------------
./. 50 % equity injection by the DM 367 mio.
Financial Investors (DM 734 mio.)
----------------------------------------------------- -------------------------------------------------
./. Cash Component DM 60 mio.
----------------------------------------------------- -------------------------------------------------
./. issue price for 3% additional DM 52 mio.
shares [(734 mio. DM : 63 2/3 x
100) ./. (734 mio. DM x 1,5)]
----------------------------------------------------- -------------------------------------------------
./. DM 70 mio.
----------------------------------------------------- -------------------------------------------------
MIG Loan against Borrower's Note DM 104 mio.
----------------------------------------------------- -------------------------------------------------
The nominal amount of the MIG Loan against Borrower's Note calculated
on the basis of this equation may not be smaller than 0.
(3) The equity injection by the Financial Investors at the Closing may not
exceed DM 909,000,000 (in words: Deutsche Xxxx nine hundred and nine
millions). To the extent that further equity of the Financial Investors
is necessary for the financing of the Transaction a capital increase in
connection with the Closing by up to DM 191,000,000 (in words: Deutsche
Xxxx one hundred ninety-one millions)
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may be adopted. The new shares shall be issued at the same evaluation
as additional shares are issued in Paragraph (2) (the "FIRST ISSUE
PRICE").
To other capital increases the provisions in Section 18 shall apply.
(4) In the event that the equity injection at the Closing is below DM
566,000,000 (in words: Deutsche Xxxx five hundred sixty-six millions) a
resulting -as the case may be - tax disadvantage of MIG is upon the
choice of the Financial Investors either to avoid (e.g. by granting of
additional shares) or to compensate (e.g. by partial repayment of the
MIG Loan against Borrower's Note).
(5) The Financial Investors shall hold the residual shares in the amount of
63 2/3 % in the share capital of Investor NewCo.
(6) To the extent that the Financial Investors grant shareholder loans to
Investor NewCo ("FINANCIAL INVESTORS LOANS AGAINST BORROWER'S NOTE")
the terms and conditions of the Financial Investors Loans against
Borrower's Note may not be more favorable than the terms and conditions
of the MIG Loan against Borrower's Note.
SECTION 2a(3)
ARRANGEMENTS WITH REGARD TO A CHANGE OF THE BCA, SPECIFICATIONS OF
SECTION 2 OF THE SHAREHOLDERS' AGREEMENT AND EQUITY CONTRIBUTIONS BY
THE FINANCIAL INVESTORS
1. The Financial Investors acknowledge that Section 12.1 of the BCA has
been amended and that MIG has undertaken to Hoechst not to modify
Section 1 para. 1 (a) of the Shareholders' Agreement pursuant to which
MIG receives 33 1/3 of the shares of NewCo II AG as consideration for
the contribution of its shares in MGG into NewCo II AG. The Financial
Investors undertake not to exercise their rights under
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(3) Section 2a contains the provisions of Article 2 "Additional
Arrangements" Section 1 "Arrangements with Regard to a Change of the
BCA, Specifications of Section 2 of the Shareholders' Agreement and
Equity Contributions by the Financial Investors" of the Shareholders'
Amendment to the Shareholders' Agreement dated April 27, 2001
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the Shareholders' Agreement in a way which conflicts with these
obligations of MIG towards Hoechst AG.
2. In light of the equity contribution described in no. 2 of the Preamble
and of the reduction of the total consideration to be paid under the
BCA to the amount of E 618,000,000 (excluding the China Purchase
Price), the Financial Investors and MIG agree that the MIG loan against
borrower's note pursuant to the formula in Section 2 para. 2 shall be
zero and shall, therefore, not be granted as consideration for the
contribution in kind of the Hoechst NewCoII shares pursuant to
Section 2 para. 1 (c) of the Shareholders' Agreement. Accrual of the
Singapore Loan pursuant to Section 32 of the Shareholders' Agreement
shall remain untouched. The parties hereto further agree that as
consideration for the contribution in kind pursuant to Section 1
para. 1 (b), besides shares in Investor NewCo, a cash component of
DM 60,000,000 and further payment in the amount of DM 5,000,000 will
be made by Investor NewCo to MIG. The cash component and the additional
payment shall be due as soon as the capital increase for the purpose of
contribution of the Hoechst NewCo II shares held by MIG to Investor
NewCo has been registered. For the additional payment, it shall further
be required that any claims the Financial Investors may have which are
due according to Article 2 Section 3 at such time against Investor
NewCo and/or MGG have been settled. At the signing of the contribution
agreement pursuant to Section 2 para. 1 (c) of the Shareholders'
Agreement, Investor NewCo will provide MIG with sufficient collateral
to cover its payment obligation in the amount of DM 65 million
(e.g., payment into an escrow account, bank guarantee, etc.).
3. The Financial Investors assume to contribute, before or at the Closing,
equity to Investor NewCo in the amount of E 500 million in the manner
hereinafter described: The following capital structure is resulting
therefrom:
(a) Before the closing of the BCA, the Financial Investors will
increase the share capital of Investor NewCo from E 25,000 by
the amount of E 5,000,000 to E 5,025,000. The new shares will
be issued at their nominal value.
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(b) At Closing, the Financial Investors will make a further equity
contribution in the form of a payment to the unrestricted
retained earnings in the meaning of Section 272 para. 2 no. 4
German Commercial Code ("HGB") in the amount of
E 419,962,363.22. Correspondingly, at this point in time MIG
will, pursuant to Section 2 of the Shareholders' Agreement, be
entitled to 36 1/3 % of the shares in Investor NewCo, payment
of a cash component in the amount of DM 60 million, and to be
granted an MIG loan against borrower's note which, calculated
using the formula in Section 2 para. 2 of the Shareholders'
Agreement, shall amount to zero.
(c) Immediately thereafter, the Financial Investors will, pursuant
to the second sentence of Section 2 para. 3 of the
Shareholders' Agreement, contribute the additional equity
needed for implementation of the transaction in the amount of
E 75,012,636.79 by way of a capital increase. As a result of
this capital increase, the share capital of Investor NewCo
will be increased by an additional E 1,708,700 to E 6,733,700
by way of issuance of new shares at an aggregate issue price
of E 75,012,636.79. This equity contribution will result,
after contribution in kind of the shares in NewCo II by MIG to
Investor NewCo pursuant to Section 1 para. 1 (b) of the
Shareholders' Agreement by which the share capital of Investor
NewCo will be increased by an additional E 3,266,300 to
E 10,000,000 by way of issuance of new shares, in the
Financial Investors' holding 67.34% and MIG 32.66% of the
shares in Investor NewCo.
4. If necessary for the financing of the transaction, the Financial
Investors may increase the equity contribution in connection with the
Closing by way of a further capital increase within the limits of
Section 2 para. 3 of the Shareholders' Agreement, in the course of
which shares shall be issued at the same price as provided for in the
context of the capital increase pursuant to para. 3 (c) above.
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SECTION 3
CORPORATE STRUCTURE OF INVESTOR NEWCO
(1) Investor NewCo shall initially have the legal form of a limited
liability company ("GmbH") with the bylaws attached as ANNEX 3.1 (a) to
the Reference Deed. Immediately after the contribution of the shares in
NewCo II by MIG, Investor NewCo shall be transformed into a partnership
limited by shares ("KGaA"), whose sole general partner ("GENERAL
PARTNER GMBH") shall be a GmbH to be newly formed or acquired. General
Partner GmbH is not to hold any capital share in the KGaA. The Parties
are to hold shares in General Partner GmbH in the same proportion as
they among each other, i.e. without considering the shares held by
third parties, participate in the share capital of the Investor NewCo.
General Partner GmbH shall at the outset have a share capital of
E 25.000. The Financial Investors and MIG hereby undertake to give
General Partner GmbH the bylaws attached as ANNEX 3.1 (b) to the
Reference Deed and to establish the participations pursuant to
Section 2 para. (1) (a) hereof.
(2) The Financial Investors and MIG hereby undertake to give the KGaA the
bylaws attached as ANNEX 3.2 to the Reference Deed.
(3) Investor NewCo manages the MGG Group and determines its business
policy.
SECTION 4
CORPORATE STRUCTURE OF NEWCO II, NEWCO III, DEBTCO AND MGG
(1) After the Closing under the Purchase Agreement, NewCo II shall be a
fully-owned subsidiary of Investor NewCo and this will be in the legal
form of a joint stock corporation ("Aktiengesellschaft" or "AG"). NewCo
II shall hold all shares in MGG and possibly in addition other
participations.
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(2) The Financial Investors hereby undertake to assure that NewCo II does
have the bylaws after the completion of the transaction as attached in
ANNEX 4.2 to the Reference Deed. The business activity of NewCo II
shall be limited to the shareholding in MGG and, if applicable,
additional companies as well as to the issue of high-interest-bearing
bonds to refinance the MGG Group.
(3) The Financial Investors hereby undertake to ensure that after the
Closing under the Purchase Agreement the current bylaws of MGG shall
be modified and shall have the wording as attached in ANNEX 4.3 to the
Reference Deed.
(4) The Financial Investors hereby undertake to assure that neither the
legal form of NewCo II and MGG is changed nor one of the direct or
indirect subsidiaries of Investor NewCo is merged without the approval
of MIG. However, MIG shall issue the approval for such measures
proposed by the Financial Investors
(a) if it does not thereby incur any legal
disadvantages--particularly provided the rights under this
Agreement are not prejudiced--,
and
(b) no financial (including tax) disadvantages occur that are not
fully compensated.
At variance of this rule the legal form of MGG may only be changed with
the approval of MIG as long as MIG (taking into account the provision
of Section 9) has more than 25, 1% of the voting rights in Investor
NewCo.
(5) The Financial Investors and MIG undertake to ensure that after the
purchase of NewCo III by Investor NewCo (a) NewCo III shall have the
bylaws as attached in ANNEX 4.5 to the Reference Deed, (b) the
management and the supervisory board are filled with the same persons
who are appointed to the board of directors respectively the
supervisory board of NewCo II and (c) NewCo III is merged as fast as
possible.
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(6) The Financial Investors may request that the participation of NewCo II
in MGG is completely or in part contributed to another Intermediate
Holding ("DEBTCO") for the purpose of tax optimization. DebtCo shall
be given bylaws essentially corresponding to the ones attached in
ANNEX 4.5 to the Reference Deed.
SECTION 5
CONTROL AGREEMENTS
It is planned for a control agreement to be concluded between Investor NewCo and
NewCo II and between NewCo II and MGG. At the request of the Financial Investors
MIG hereby undertakes to consent to the necessary resolutions. The conclusion of
additional agreements between business enterprises, e.g., between Investor NewCo
and one of its direct or indirect subsidiaries or between the subsidiaries among
themselves, shall require MIG's approval. MIG shall issue such approval,
provided it does not thereby incur any legal disadvantages, particularly
provided the rights under this Agreement are not prejudiced or, to the extent
that only financial (including tax) disadvantages occur provided these are fully
compensated.
SECTION 6
WARRANTIES OF MIG
(1) After the establishment of the target structure, MIG shall warrant the
Financial Investors the following by way of an independent guaranty:
(a) Investor NewCo shall receive the sole, unrestricted and
unencumbered title to the shares in NewCo II contributed to it
by MIG with the exception of rights (including pledges) in or
with regard to the shares for the benefit of the financing
banks.
(b) NewCo II shall receive the sole, unrestricted and unencumbered
title to the shares in MIG MGG Shares contributed to it by MIG
with the exception of
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rights (including pledges) in or with regard to the shares for
the benefit of the financing banks.
(c) The contributions to the shares pursuant to Literi (a) and (b)
above have been duly and fully paid in and have not been
repaid and are not reclaimable. After the amendment of the
bylaws of MGG no measures or obligations to change the
corporate or shareholder relations exist which have not been
disclosed to the Financial Investors (e.g., modifications of
bylaws, changes in capital, options, preemptive purchase
rights).
(d) MIG or one of its shareholders and the companies affiliated
with each of them have no rights to assets of MGG or the
companies affiliated therewith which are of significance for
the business operations of MGG or its affiliated companies,
particularly not to the real properties, industrial property
rights with the exception of the trademark "Xxxxxx" including
the logo belonging thereto and other material assets used by
MGG or the companies affiliated therewith.
(e) No agreements exist between MGG and the companies affiliated
therewith of the one part and MIG and its shareholders and
affiliated companies of the other part apart from those
mentioned in ANNEX 6.1 (e) to the Reference Deed.
(f) No tax obligations for MGG exist or will arise in future from
the sale of the Cutting & Welding activities resulting from
hidden profit distribution. All guarantees of MGG and
companies affiliated therewith for present or future
obligations from the Cutting & Welding field are fully
redeemed. MIG has no knowledge on itself or third parties
having claims against MGG arising from contracts with MGG on
the taking over of Cutting & Welding activities with the
exception of those listed in ANNEX 6.1 (f) of the Reference
Deed. The Parties agree that the provisions in Annex 6.1 (f)
of the Reference Deed shall be replaced by the following
statement:
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"potential claims of MG System + Weding Inc. against MG
Industries Inc. USD 2.500.000,-- "
In case the aforementioned risk materializes, MIG shall bear
2/3 of any damages arising through the reduction of a
possible Singapore Loan pursuant to Section 32 by an amount
equal to 2/3 of the damages incurred. MIG shall not be subject
to any payment or other adjustment obligation if the Singapore
Loan does not fully cover the damages.
(2) In the event of any breach of the warranties contained in this Section
6, MIG hereby undertakes to establish with the company in question - as
far as possible - the condition which would have come about had the
warranty been accurate. In the event of a breach of the warranties
included in Section 6 para. (1) (f) the Sections 439, 460, 464 BGB
shall not apply.
(3) Further statutory claims or claims arising from breach of duty in
negotiations of the Financial Investors against MIG with regard to the
acquisition of its indirect participation in MGG or with regard to the
contributions pursuant to Section 1 para. (1) are excluded. With the
exception of the claims arising out of breach of the guarantees given
pursuant to Litera (d) and (e), to which the limitation period of
Section 195 BGB applies, the claims of the Financial Investors arising
from this Section 6 become statute-barred within ten years.
(4) The claims arising from this Section 6 are subject to:
(a) The Financial Investors shall ensure that MIG is completely
informed and kept posted without undue delay on all
circumstances that may lead to a claim pursuant to Section 6.
(b) In the event of a claim arising out of breach of the
guarantees given pursuant to Paragraph (1) (f) the Financial
Investors shall ensure that MIG is
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given the opportunity to participate in all meetings with tax
authorities in connection with audits and tax assessment
notices that refer to the sale of the Cutting & Welding
activities and to comment in writing vis-a-vis the tax
authorities. On request of MIG the Financial Investors will
ensure that all available remedies against tax assessment
notices that may lead to a claim of the Financial Investors
against MIG from Paragraph (1) (f) are filed, if MIG
indemnifies MGG from all costs arising in and out of court
from the filing of such remedy.
(c) Claims arising out of breach of the guarantees given pursuant
to Paragraph (1) (c) and (f) are limited to Euro 10.000,000
(in words: Euro ten millions) in case of a monetary liability.
SECTION 7
MANAGEMENT PARTICIPATION PLAN, OPTIONS FOR THE INTERIM FINANCERS
(1) For managing directors and executive employees of MGG and its
subsidiaries and holdings, a management participation plan is to be
launched pursuant to the terms and conditions as set forth in ANNEX 7.1
of the Reference Deed. The beneficiaries are to receive convertible
bonds which can be converted into a direct share in the form of
non-voting preference shares in the share capital of Investor NewCo.
For this management participation plan, conditional or authorized
capital of up to 5% of the share capital of Investor NewCo is to be
created. The terms and conditions of the management share option plan
shall be adopted by the shareholders in general meeting by way of a
simple majority.
(2) The consortium of banks that provides the financing of the transaction
is to receive option rights for shares of Investor NewCo on which no
more than 5 % of the share captial are to be allotted. In addition, in
consideration of a partial deferment of the purchase price owed for the
Hoechst-MGG-shares, Hoechst NewCo III shall be granted warrants
- 23 -
in Investor NewCo in accordance with the provisions of the Convertible
Bonds Agreement dated 27 April 2001 and made between ACP, GS, MIG,
Investor NewCo and DIOGENES Zwanzigste Vermogensverwaltungs-GmbH for a
nominal amount of E 1 each, which shall not account for more than 3% of
the share capital. The Parties undertake to create the corresponding
conditional capital increase for the coverage of these option rights.
The Financial Investors shall ensure in the respective agreements with
the beneficaries that shares issued in consequence of convertible bonds
pursuant to this para. 2 shall be subject to the rules in Section 25
(Call Option) and the duty of joint sale pursuant to Section 28 of the
Shareholders' Agreement. The terms and conditions of the warrants will
provide for antidilution protection. This provision may lead to the
issuance of more warrants to the beneficiaries. In this case, the 5%
or, respectively, 3% threshold in the first or, respectively, the
second sentence shall not qpply.
II.
SHAREHOLDERS' RIGHTS IN INVESTOR NEWCO, NEWCO II, NEWCO III,
DEBTCO AND MGG
ARTICLE 1: GENERAL PROVISIONS
SECTION 8
PRINCIPLES
(1) Between the Parties the provisions of this Agreement take precedence
over the provisions of the bylaws of Investor NewCo, General Partner
GmbH, NewCo II, NewCo III, DebtCo and MGG.
(2) In as far as admitted by law the parties undertake to perform all
measures that are necessary to reach the goals and results agreed upon
in this Agreement.
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(3) The parties particularly undertake to exercise all their rights
accordingly to this effect, in particular their rights as shareholders
of Investor NewCo and the general partner GmbH, and to the extent that
this is necessary to coordinate its action, so that the fulfillment of
the results agreed upon or adopted according to this Agreement (also
with subsidiaries and holdings) is effected.
(4) In the event rights can only be exercised via the members of a
supervisory board seconded by respectively elected according to the
proposal of the Parties, the Parties shall assure, as permitted by law,
that these members of the supervisory board act in accordance with the
stipulations of this Agreement. Each Party shall be obligated to
dismiss those members of a supervisory board seconded by respectively
elected according to the proposal of it whose actions and voting
conduct are contrary to reaching the goals and results agreed upon in
this Agreement, in particular if the agreements pursuant to Sections
11, 14 and 15 may not be implemented. At the request of any Party, all
Parties shall be obligated to immediately hold an extraordinary
respectively a regular general shareholders' meeting in order to
enable the dismissal of the supervisory board.
(5) The Parties shall assure, as permitted by law, including without
limitation by issuance of corresponding rules of procedures, that
measures concerning a subsidiary of Investor NewCo are examined and
approved by the bodies competent pursuant to Sections 12 et seq.
prior to their implementation. This applies particularly to decisions
that regarding their type are within the competence of the
shareholders' meeting of Investor NewCo (Section 16).
(6) The Parties shall assure that these agreements and resolutions that are
adopted by bodies of Investor NewCo are implemented in NewCo II, NewCo
III, DebtCo and MGG. If possible, the bodies of such companies are to
be occupied by the same persons and hold meetings immediately following
each other.
(7) The provisions in this Agreement shall continue to apply accordingly in
the event the target structure changes due to any mergers,
transformations, etc. The Parties
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shall then be obligated to adjust this Agreement accordingly, if
relevant. Section 1 para. 3 remains unaffected.
(8) To the extent that the reasons preventing a granting or exercise of
rights by ACP do no longer apply or are no longer to be observed, ACP
and GS shall jointly exercise the shareholders' rights and the
seconding rights GS is entitled to in correspondence with their
participation to each other in the share capital of Investor NewCo. The
other provisions of this Agreement shall then be applied internally
between the Financial Investors and their Successors pursuant to
Sentence 1 mutatis mutandis.
(9) To the extent that GS has nomination rights pursuant to this Agreement,
these rights will be exercised by GS as follows: GS Capital Partners
2000 L.P., GS Capital Partners 2000 Offshore L.P., and GS Capital
Partners 2000 GmbH & Co. Beteiligungs KG will each norninate one
member, each of whom shall be considered as a member nominated by GS
pursuant to this Agreement.
SECTION 9
VOTING RIGHTS
(1) Subject to the provisions of this Agreement, the voting rights of the
Parties in the (general) shareholders' meeting of Investor NewCo and
General Partner GmbH shall correspond to the shareholding in the share
capital of Investor NewCo entitled to voting.
(2) At variance with Paragraph (1) above, the following special provisions
shall apply to the calculation of the voting rights of MIG in (general)
shareholders' meetings of Investor NewCo and General Partner GmbH:
(a) In the event the share of MIG in the share capital of Investor
NewCo entitled to voting is decreased through capital
increases to below 25.1% but not below 10%, MIG shall be
entitled to 25.1% of the voting rights. Provided the voting
rights actually held are above 25.1% or below 10%, MIG shall
be entitled to the voting rights actually held.
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(b) In the event the share of MIG in the share capital of Investor
NewCo entitled to voting is decreased through sale of shares
to below 25.1 % but not below 20%, subject to Litera (c) MIG
shall be entitled to 25.1% of the voting rights. Provided the
voting rights actually held are above 25.1% or below 20%, MIG
shall be entitled to the voting rights actually held.
(c) In the event the share of MIG in the share capital of Investor
NewCo entitled to voting is decreased through both a capital
increase and a sale to below 25.1 %, the amount of voting
rights shall be determined as follows: In the event the
shareholding is decreased not below 20% by sales without
regard to capital increases, the provision in Litera (b) above
shall apply, i.e., MIG shall keep a voting right of 25.1%,
provided MIG still holds at least a 10% share after due regard
to capital increases. In the event the shareholding is
decreased below 20% by sales without regard to capital
increases, the voting right shall correspond to the percentage
shareholding in the share capital after due regard to capital
increases.
In those cases in that the voting rights of MIG are increased pursuant to the
paragraphs above, the voting rights of the Financial Investors shall decrease
correspondingly.
For the calculation of the threshold value shares in the stock capital of
Investor NewCo entitled to voting created by exercise of the option rights
pursuant to Section 7 para. (2) will be disregarded.
A reduction in MIG's interest in Investor NewCo's voting share capital as a
result of any transfers pursuant to Section 19 shall not be deemed a sale within
the meaning of this paragraph, but rather a capital increase.
The Financial Investors undertake to exercise their voting rights in the
(general) shareholders' meeting in such a way that the restrictions as in this
Agreement bindingly agreed upon between the Parties shall be taken into account.
Apart from
that no pooling of votes or other coordination of the exercise of votes shall
take place between the Financial Investors.
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(3) If, in the event the capital share of MIG is reduced, the conditions
for minority protection in accordance with the Paragraph (2) above are
not met any longer, the special rights of MIG in relation to the
approval of the change of legal form of MGG (Section 4 para. (4) last
sentence), appointment of members to bodies (Sections 11 to 13 and 15),
approval of capital increases (Section 18) and the budget of the Xxxxxx
Griesheim Group (Section 14) shall no longer be applicable. The rights
arising under Section IV (Disposal of Shares) as well as legal
provisions on the protection of minorities including without limitation
those with regard to capital increases, in particular Sections 186
para. (3), 255 AktG, are not affected.
(4) Without prejudice to the above provisions, resolutions modifying or
supplementing the Shareholders' Agreement of Investor NewCo which
violate the principle of the equal treatment of all shareholders or
impose additional obligations, particularly contribution obligations,
on any Party shall require the approval of the affected shareholder or
Party.
(5) Any Party which is to be released from any liability through a
resolution shall not have any voting right in the corresponding vote
and may not exercise such a right for others. This shall also apply in
the event of any vote relating to the undertaking of a legal
transaction or the initiation or dealing of any lawsuit against a
Party.
-28-
ARTICLE 2: BODIES
SECTION 10
OVERVIEW OF BODIES
(1) The bodies of Investor NewCo after the transformation into a KGaA shall
be the shareholders in general meeting, the supervisory board and the
General Partner GmbH.
(2) The bodies of General Partner GmbH are the management, the
shareholders' meeting and the shareholders' committee.
(3) The bodies of NewCo II shall be the shareholders in general meeting,
the supervisory board and the management board.
(4) The bodies of MGG shall be the management, the shareholders' meeting,
the shareholders' committee and the supervisory board.
(5) The bodies of NewCo III are the management and the shareholders'
meeting.
(6) The bodies of DebtCo are the management and the shareholders' meeting.
SECTION 11
MANAGEMENT OR MANAGEMENT BOARD
(1) The positions of the management bodies at General Partner GmbH, NewCo
II, NewCo III, DebtCo and MGG are to be occupied by the same persons.
(2) The management bodies of General Partner GmbH, NewCo II NewCo III and
MGG each are to have at least three but a maximum of five members. The
exact number shall be determined for all bodies by the shareholders'
committee of Investor NewCo. One member respectively shall be appointed
as proposed by MIG; the residual members shall be appointed pursuant to
a proposal of GS after
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consultation with MIG. GS will consider important objections of MIG.
However, if prior to a decision GS heard MIG its decision is binding
and may not be subjected to judicial review by MIG or in any other way
be treated as none binding. The members of the management appointed
pursuant to the proposal of GS shall also include the management board
member or managing director competent for finances.
(3) GS may request that the management bodies of General Partner GmbH,
NewCo II, NewCo III or DebtCo have less members than the management of
MGG, provided the appointment right of MIG in accordance with Paragraph
(2) is not prejudiced thereby.
(4) The members of the management bodies appointed at the proposal of any
of the Parties to this Agreement are to be dismissed at the respective
Parties' request by the competent bodies prior to the expiration of the
term of office.
(5) The members of the MGG management appointed upon the conclusion of this
Agreement are to remain in office. In this regard, Xxxxxx Xxxxxx shall
be considered a member seconded by MIG pursuant to Section 11 para. (2)
sentence 3. The other members shall be considered as members not
appointed by any Party. If relevant, they shall be dismissed based on a
resolution of the shareholders' committee of Investor NewCo adopted by
way of a majority. The Parties hereby undertake to assure as permitted
by law that such a dismissal resolution is implemented with regard to
the members of the management of MGG by resolution of the MGG
supervisory board. GS shall have the right to currently appoint up to
two additional members of the management pursuant to the Paragraphs
above. The dismissal provision in Paragraph (4) above shall apply with
regard to these additional members. GS shall also have the right to
determine who is to be the management board or management member
competent for finances. Such member may be a previously appointed
member or a member newly appointed by the GS.
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SECTION 12
SHAREHOLDERS' COMMITTEE OF INVESTOR NEWCO
(1) After transformation into a partnership limited by shares the
shareholders' committee of Investor NewCo shall be formed at General
Partner GmbH and consist of six members. MIG and GS shall each second
half of the members. The members seconded by a Party to this Agreement
shall be dismissed at such Party's binding proposal by the
shareholders' meeting prior to the expiration of the term of office.
(2) The shareholders' committee shall be responsible for advising and
supervising the management of Investor NewCo. In particular, the
shareholders' committee of Investor NewCo shall decide on the approval
of the budget, deviations from and modifications of the business plan,
the business policy and the strategic position of the MGG Group.
Otherwise, the shareholders committee shall make all decisions which
fall within the competence of the shareholders and are not reserved to
the shareholders in general meeting pursuant to Section 16.
(3) The voting right of the members in the shareholders committee shall be
weighted. The members seconded by MIG shall together have as many votes
as MIG in the general shareholders' meetings of Investor NewCo pursuant
to Sections 9 and 17 hereof. The members seconded by GS shall together
have as many votes as the Financial Investors including their
successors have together pursuant to Sections 9 and 17 in the
shareholders' meeting of Investor NewCo. However, the representatives
seconded by GS are not subject to instructions of the other Financial
Investors. The shareholders' committee resolves by simple majority of
votes unless it adopts resolutions on items that are subject to a
higher majority requirement according to the provisions of this
Agreement or mandatory statutory provisions..
(4) The provisions of the rules of procedure of the shareholders'
committee, particularly provisions on the form and periods for the
convocation of meetings and on voting are evident in the bylaws of
General Partner GmbH respectively the bylaws of Investor NewCo prior to
transformation.
- 31 -
(5) The initial chairperson of the shareholders' committee shall be a
representative seconded by GS; thereafter, the chair shall be assumed,
beginning with MIG, alternately by a representative seconded by MIG
and a representative seconded by GS. The terms of office of the first
chairperson are to amount to three years; thereafter, the chairperson
shall be elected for a term of one year. Further details are evident
from the provisions of the bylaws of Investor NewCo.
(6) Insofar as a certain majority requirement for resolutions of the
shareholders' committee is agreed upon herein, the votes of all members
of the shareholders committee are to be taken as the basis for
calculating the majority.
SECTION 13
MGG SHAREHOLDERS' COMMITTEE
(1) The parties undertake to ensure that half of the members of the
shareholders' committee are appointed upon the proposal of MIG and
half upon the proposal of GS. The shareholders' committee of MGG is to
be seconded with the same persons as the shareholders' committee of the
General Partner GmbH, if possible. Section 12 para. (3) applies
accordingly to the voting rights of the members.
(2) In particular the shareholders' committee shall resolve on the approval
of transfers of shares and of the management measures listed in the
bylaws pursuant to Annex 4.2 of the Reference Deed, unless they have
already been approved by the shareholders' committee or the
shareholders' meeting of Investor NewCo. All competence, which is not
reserved to the shareholders' meeting or the supervisory board
according to mandatory law, is to be granted to the shareholders
committee.
(3) The members of the shareholders committee shall receive an adequate
remuneration that shall be determined by shareholders' resolution.
- 32 -
SECTION 14
APPROVAL OF BUDGET AND BUSINESS PLAN BY SHAREHOLDERS' COMMITTEE
(1) The specifications for the management of MGG, particularly the planned
sales of participations for the next three years shall result from the
draft of a business plan attached as ANNEX 14.1 to the Reference Deed;
on the basis of the draft the Parties shall prepare the final business
plan.
(2) The shareholders' committee of Investor NewCo shall resolve on an
annual budget of the MGG group by way of 75% of the votes. In the event
the necessary majority does not come about in two votes, a further
vote, in which a simply majority shall suffice, may be held at the same
meeting. In as far as in the budget
a) investments of more than E51.000.000 in any specific case
and/or
b) sales of companies in the U.S.A. or Europe with a market value
of more than E51.000.000 in any specific case
that were not provided for in the business plan are stipulated, the
inclusion of these measures in the budget must be approved by the
shareholders' committee respectively the shareholders' meeting with a
majority of 75%. Sentences 1 and 2 of this paragraph shall not apply.
MIG shall consent to the sale of companies in the U.S. or Great
Britain, if the proceeds are used to reduce indebtedness or to finance
investments.
(3) Any variation of management from the Budget shall require the prior
approval of the shareholders' committee respectively the shareholders'
meeting of Investor NewCo. Paragraph (2) Sentence 1 and 2 apply
accordingly to the resolution. At variance herewith, i.e. without the
provisions in Paragraph (2) Sentence 2, an approving resolution of the
shareholders' committee of Investor NewCo with 75% of the votes shall
be necessary for divestments of companies in the U.S.A. or Europe with
a market value of more than E51.000.000 in any specific case. Paragraph
(2) last sentence shall apply accordingly.
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(4) Furthermore, divestments in Europe require the consent of the
shareholders' committee of Investor NewCo regardless of their value if
(a) they were not provided for in the business plan and (b) lead in
fact to a total retreat of the Xxxxxx Griesheim Group from a country.
The resolution requires a majority of 75% of the votes. Paragraph (2)
Sentence 1 and 2 shall not apply.
(5) Divestments of companies outside of Europe always require the consent
of the shareholders' meeting of General Partner GmbH respectively prior
to transformation of the shareholders' meeting of Investor NewCo
regardless of whether they have been provided for in the business plan.
(6) Investments of more than E5.000.000 require the approval of the
shareholders' meeting. Investments that were not provided for in the
budget or in the business plan and that exceed E51.000.000 may only be
approved with a majority of 75% of the votes. Paragraph (2) Sentence 2
shall not apply.
(7) Any Party to this Agreement may request that the threshold of
E51.000.000 may be adopted from time to time to the currency value
development for the purposes of the Paragraphs (2), (3) and (6).
SECTION 15
SUPERVISORY BOARDS
(1) Supervisory boards are to be formed at Investor NewCo, NewCo II and
MGG. In the event such companies are not subject to co-determination,
the supervisory boards are to have six members. In the event of
co-determination, the number of supervisory board members shall
correspond to the provisions of law. To the extent that the supervisory
boards are appointed by shareholders, they are to be occupied at all
three companies by the same persons.
- 34 -
(2) GS and MIG shall each second to all supervisory boards half of the
members to be appointed by the shareholders. Each Party may request
that the members appointed by it are dismissed prior the expiration of
the term of office.
(3) The supervisory boards are to be appointed for a term of office that
ends with the shareholders' meeting that adopts the resolution on the
fourth business year after the beginning of the term. In this
connection the business year in which the election takes place shall
not be counted in.
(4) A member appointed by GS shall assume the chair of the supervisory
board. GS shall determine the person of the chairperson in consultation
with MIG considering important objections of MIG. However, if prior to
a decision GS heard MIG its decision is binding and may not be
subjected to judicial review by MIG or in any other way be treated as
none binding.
(5) Otherwise, the rights and duties of the supervisory board members and
the rules of procedure of the supervisory boards shall result from the
provisions of the bylaws and, insofar as the supervisory board is
co-determined, from the provisions of law.
(6) The supervisory board members shall receive an adequate remuneration
that shall be determined by shareholders' resolution.
(7) The supervisory boards shall form committees. The Parties must ensure
that GS and MIG are represented in equal numbers in any supervisory
board committee.
(8) As permitted by law the parties will work towards the aim that the
supervisory board of MGG shall not make use of the rights arising from
Section 111 para. (4) sentence 2 AktG.
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SECTION 16
SHAREHOLDERS' MEETINGS
(1) The general shareholders' meeting of Investor NewCo and the
shareholders' meeting of General Partner GmbH respectively prior to
transformation the shareholders' meeting of Investor NewCo shall have
the following competences:
(a) Modification of provisions of the bylaws;
(b) capital measures;
(c) approval of transfers of shares;
(d) dissolution and liquidation;
(e) transformation and conclusion of agreements within
Sections 291 et seq. AktG;
(f) use of profits.
(2) Furthermore, the shareholders' meeting of General Partner GmbH and
prior to transformation the shareholders' meeting of Investor NewCo
decides on
(a) Consent to divestments of companies belonging to the MGG Group
outside of Europe;
(b) consent to investments of companies belonging to the MGG Group
exceeding E5.000.000 (in words: Euro five millions);
(c) conclusion of loan agreements by companies belonging to the
MGG Group with a volume exceeding E5.000.000 (in words: Euro
five millions);
(d) resolution on timing and conditions of an IPO as well as
selection of the syndicate banks;
(e) resolution concerning the date/time and terms and conditions
of the sale and transfer of shares in MGG.
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(3) Until an IPO of Investor NewCo the shareholders' meetings of General
Partner GmbH and the shareholders' meeting of Investor NewCo are to
take place immediately following each other. The general shareholders'
meetings of Investor NewCo and the shareholders' meeting of the
General Partner GmbH shall be convoked by management. Any Party
holding more than 10% of the share capital may request that the
management be instructed to convoke a (general) shareholders' meeting.
The modalities of the convocation shall be evident from the respective
bylaws. After an IPO the shareholders' meeting of the General Partner
GmbH is to take place before the convocation of the annual general
shareholders' meeting, so that the agenda and the voting conduct can
be set.
(4) Until an IPO of the relevant company, a quorum shall only be
constituted at (general) shareholders' meetings if all Parties are
represented. In the event the (general) shareholders' meeting has no
quorum subsequently a new meeting can be convoked with a period of two
weeks. A quorum shall be constituted at a further (general)
shareholders' meeting with the same agenda which is convoked due to the
absence of a quorum provided the majority of the capital entitled to
voting is represented. Provided all Parties to this Agreement are
represented and agree to the adoption of the resolution, resolutions
may also be adopted if the statutory provisions and the provisions
provided by the bylaws applicable to the convocation and notice have
not been observed.
(5) The shareholders' meetings of General Partner GmbH shall be chaired
alternatively by a representative of MIG and the Financial Investors,
the general shareholders' meeting of the Investor NewCo by the
supervisory board chairperson. The respective chairperson must ensure
that minutes are kept regarding the (general) shareholders' meetings
which specify the place and date of the meeting, the participants, the
items on the agenda, the material contents of the deliberations and the
resolutions of the shareholders.
(6) In the event that a resolution under para. (2) (d) or (e) is adopted,
each Financial Investor shall be allowed, in order to safeguard their
interests as shareholders, to
- 37 -
provide comprehensive assistance in implementing the approved measures
and to support and advise MGG's management so long as these services
are provided for free. If fees are to be paid for this advise, MIG
needs to give its consent which shall not be withheld but for good
reason. The Financial Investors shall ensure by way of mutual
coordination or other concerted action that there no contradictory
support or advise is administered.
SECTION 17
RESOLUTIONS OF SHAREHOLDERS' MEETINGS
(1) Voting rights in shareholders' meetings of the General Partner GmbH and
of the general shareholders' meeting of the Investor NewCo shall be
determined in accordance with Section 9 hereof.
(2) The Parties hereby agree that, subject to the provisions in Section 9
hereof and in Paragraph (3) below, for all resolutions of the organs
mentioned in Paragraph (1) the simple majority of the votes present
shall be necessary and sufficient, even in the event another majority
is prescribed by law. In the event that pursuant to statutory law
resolutions require a majority of 75% of the votes and, however,
according to the provisions of this Agreement they are subject to the
majority principle, any Parties outvoted undertake to vote with the
majority. Abstentions shall be considered as nay votes.
(3) At variance with Paragraph (2) above, the following resolutions - in
addition to those mentioned in Section 14 - shall require 75% of the
votes:
(a) modifications of provisions of the bylaws, except for capital
changes pursuant to Section 18 and modifications of the bylaws
which are solely modifications of the wording in the terms
of Section 179 para. (1) sentence 2 of the Corporation Act
(AktG);
- 38 -
(b) capital increases for the purpose of executing investments
with a volume exceeding E51.000.000;
(c) liquidation of Investor NewCo;
(d) approval of the conclusion of agreements between business
enterprises, except for those agreements mentioned in Section
5 hereof;
(e) approval of mergers of Investor NewCo into third parties.
(Mergers with Investor NewCo being the receiving company are
subject to the regulations in Section 18 hereof);
(f) approval of investments exceeding C51.000.000 that were not
provided for in the business plan or in the budget;
(g) resolutions pursuant to Section 16 para. 2 (e) through
September 30, 2004.
- 39 -
SECTION 18
CAPITAL MEASURES
(1) Before minutes are taken of any general shareholders' meeting of
Investor NewCo in which capital measures are to be approved, the
parties will hold a prior vote on the relevant capital measure proposed
in the agenda. The capital measure adopted by a simple majority of
votes present at the prior vote shall then be approved at the general
shareholders' meeting. Capital measures that are approved in order to
implement investments which only may be approved with a majority of 75%
of the votes pursuant to Section 14 may only be approved with a
majority of 75% of the votes.
(2) A subscription right is in principle to be granted in the event of cash
capital increases. This does not apply for a capital increase for the
purpose of a widespread placement within an IPO or a second placement.
In the event a Party declares that it shall not make use of its
subscription right pursuant to Sentence (1), the cash capital increase
may only be conducted based on the current market value of Investor
NewCo. A premium is to be rendered by the Parties participating in the
capital increase in the amount of the difference between the market
value of the shares newly created through the capital increase and the
nominal value thereof.
(3) In the case of Paragraph (2) Sentences 3 and 4 the premium must be
determined by the Parties by mutual agreement. In the event no
agreement on the market value of Investor NewCo is reached within three
weeks after presentation of the proposal to execute a capital increase,
the capital increase may be approved and executed pursuant to the
proposal of the Parties having the majority of the votes in the
shareholders' meeting. In this case the voting rights and the other
rights of membership arising from the newly issued shares shall not be
taken into account for the purposes of this Agreement as well as the
newly issued shares shall not be taken into account for the calculation
pursuant to Section 9 para. (2) until the issue price has been fixed
pursuant to the following Paragraph (4).
- 40 -
(4) In the event no agreement on the market value of Investor NewCo has
been reached, the Party not participating in the capital increase may
have reviewed whether the issue amount at the capital increase
corresponded to the market value. An expert selected pursuant to
Section 25 para. (5) is to be commissioned with the review as
arbitrator.
(5) If in the event of an evaluation by an arbitrator it becomes evident
that the issue amount did not correspond to the market value of the
shares issued, newly issued shares are to be redeemed in the number
which is necessary in order to establish the shareholding relation
which would have existed had the new shares been issued at the market
values with the amount of contributions unchanged, provided sufficient
revenue reserves or sufficient net income (for the year) are provided
for a simplified capital decrease in accordance with Section 237 para.
(3) of the Corporation Act. In the event no redemption through a
simplified capital decrease is possible, the Parties participating in
the capital increase are to transfer to the non-participating parties
to this Agreement the number of shares which is necessary in order to
produce the shareholding relation adequate in accordance with this
Paragraph. The shares must be transferred within three weeks after the
communication of the result of the review on the market values by the
arbitrator to the Parties participating in the capital increase. In the
event it becomes evident from the arbitrator's valuation that the
market value was below the issue amount, no adjustment will take place.
As far as permitted by law, Investor NewCo will bear the costs of the
valuation. In other respects Section 91 of the Civil Procedure Code
(ZPO) shall apply accordingly.
(6) With regard to any non-cash capital increase, the issue amount of the
shares to be issued to the non-cash contributor is to be mutually
determined by the Parties. In the event the non-cash contributor is a
company affiliated with the Financial Investors in the terms of Section
15 of the Corporation Act, the provisions of Section 18 para. (3) and
(4) shall apply accordingly. In the event the non-cash contributor is
an independent third party, the issue amount negotiated by Investor
NewCo with the third party shall be considered as binding, provided the
general shareholders'
- 41 -
meeting of Investor NewCo approves the non-cash capital increase with
simple majority and Investor New Co presents a fairness opinion from
an investment bank not participating in the transaction which
confirms that the issue amount in the terms of Section 255 of the
Corporation Act (AktG) is fair.
(7) In the event of a cash capital increase a mutual exclusion of
subscription rights with regard to non-voting preference shares is to
be provided for. The issue amount for the issuance of new preference
shares is to correspond with the issue amount of the common stock
shares.
III.
RIGHTS FROM THE PURCHASE AGREEMENT WITH HOECHST
SECTION 19
GUARANTEE CLAIMS FROM THE PURCHASE AGREEMENT
(1) If, pursuant to the BCA or in connection with its subject matter,
payment is ultimately made to a direct or indirect subsidiary of
Investor NewCo and/or MGG in respect of any damages claim, indemnity or
breach of warranty, then the Financial Investors may require MIG to
assign its shares in Investor NewCo to the extent stipulated in the
following paragraphs. The obligation to assign shall also apply to
payments that are made by the Seller to Investor NewCo or MGG at
Closing with regard to the period between 1 September 2000 and the
Closing Date pursuant to obligations to indemnify or to pay under the
BCA. There shall be no
- 42 -
duty to assign if Investor NewCo or one of its subsidiaries receives
payments under the Singapore Separation Agreement (Annex 3.1 (1) of
the Reference Deed to the BCA) or a payment as a result of
non-compliance with claims for performance under the BCA. Each payment
to Investor NewCo that triggers a duty to assign shall be referred to
below as an "ASSIGNMENT EVENT"."
(2) As soon as an Assignment Event occurs, the Financial Investors may
require MIG to assign such number of shares in the stock capital of
Investor NewCo as is necessary to create the participation structure
that would have existed if the payment claim that triggered the
Assignment Event had been assigned to the Financial Investors, and the
Financial Investors had subsequently reinvested the received payment in
Investor NewCo by way of a capital increase. The rules on capital
increases contained in Section 18 para. 2 through Section 18 para. 4
shall apply correspondingly to the calculation of this participation
quota, except that the calculation shall be based on a market value
determined in accordance with Section 18 para. 4 within the last seven
months immediately preceding the Assignment Event. In the event that an
Assignment Event occurs within the first seven months after Closing,
then, for purposes of calculating share movement caused by a fictitious
capital increase, the First Issue Price pursuant to Section 2 para. 2,
which on the basis of the equity contribution and capital increases
described in Art. 2 Section 1 and calculated pursuant to the formula in
Section 2 para. 2 above shall amount to (rounded) E74.25 (E74.2533822)
shall be assumed as the issue price for the fictitious new shares.
- 43 -
(3) MIG may avoid the duty to assign to the extent that it makes a payment
to the capital reserves in Investor NewCo pursuant to Section 272 para.
2 no. 4 of the German Commercial Code ("HGB"). The payment may not
exceed the maximum amount calculated pursuant to the following formula:
Damages
MaximumPayment MIG = -------------------------- x participation MIG
1 - participationMIG
(with participation to be expressed as the participation quota in
percentage points).
MIG shall make this payment within two months of receiving a notice
pursuant to Section 43 from the Financial Investors or Investor NewCo,
but not before an Assignment Event has occurred. This notice can be
given, as soon as it is finally determined that and in which amount
Investor NewCo will receive a payment which triggers an Assignment
Event. The notice must contain the amount of this payment and a
calculation of the number of shares to be assigned in accordance with
the formula set forth in para. 4 below. Should MIG take the decision
not to make any payment to the capital reserves in accordance with
this paragraph it shall be obliged to inform Investor NewCo and the
Financial Investors immediately, even before the two-month-period ends.
(4) The shareholding of MIG after assignment pursuant to the first sentence
of para. 2 shall be calculated according to the following formula.
MIG's shareholding must have the same value before and after the
indemnity payment.
Market value of Investor NewCo x percentage of shares held by MIG + MIG's payment
---------------------------------------------------------------------------------
Market value of Investor NewCo + damages + MIG's payment
where for the purposes of employing the formulas in this para. 4 and in
para. 3, any figures shall be rounded to seven digits behind the
decimal point, and
"MARKET VALUE OF INVESTOR NEWCO" is the market value to be determined
in accordance with Section 18;
- 44 -
"PERCENTAGE OF SHARES HELD BY MIG" is MIG's interest in the share
capital of Investor NewCo, expressed in percentage points (e.g.
67.34 % = 0,6734), immediately prior to the payment that triggers
the Assignment Event, but not taking into account any options or
conversion rights; and
"DAMAGES" is the payment that triggers the Assignment Event.
Example:
1. Assumptions
-------------------------------------------------------------------------------------------------------------
Share Capital of Investor NewCo: E 10,000,000 divided into 10,000,000 shares
-------------------------------------------------------------------------------------------------------------
Participation Quota: Financial Investors: 67.34% ^/= 6,733,700 shares
-------------------------------------------------------------------------------------------------------------
MIG: 32.66% ^/= 3,266,300 shares
-------------------------------------------------------------------------------------------------------------
Damages from Aventis: E 10 million
-------------------------------------------------------------------------------------------------------------
Market Value of Investor NewCo. E742,533,822 (equity value)
per share: E74,25
-------------------------------------------------------------------------------------------------------------
Payment MIG to avoid assignment: 0
2. Calculation according to Formula
742,533,822 x 32.66 % + 0
---------------------------- = 32.23%
742,533,822 + 10,000,000 + 0
Shareholding new: 32.23 % [EQUIVALENT TO] 3,222,896 shares
Share movement = 32.66 % - 32.23 % = 0.43 %
MIG has to assign 43,404 shares to the Financial Investors.
Shareholding after assignment:
Financial Investors: 6,777,104 shares ^/= 67.77%
MIG: 3,222,896 shares ^/= 32.23%
3. Verification: Hypothetical Capital Increase
- 45 -
-------------------------------------------------------------------------------------------------
Amount paid in: E 10 million
-------------------------------------------------------------------------------------------------
Issue price per share: E 74.25
-------------------------------------------------------------------------------------------------
Amount of capital increase: 10,000,000
---------- = E 134,674
74.25
-------------------------------------------------------------------------------------------------
Capital after capital increase: E 10,134,674
-------------------------------------------------------------------------------------------------
Financial Investors' shares: 6,868,374 ^/= 67.77 %
-------------------------------------------------------------------------------------------------
MIG's shares: 3,266,300 ^/= 32.23 %
-------------------------------------------------------------------------------------------------
Share movement: 0.43%
-------------------------------------------------------------------------------------------------
4. Shareholding in terms of value:
------------------------------------------------------------
Value of Investor NewCo Value after damages
before damages
-------------------------------------------------------------------------------------------------
E 742,533,822 E 752,533,822
-------------------------------------------------------------------------------------------------
Financial Investors: 67.34% = E 500.0 million 67.77% = E 510.0 million
-------------------------------------------------------------------------------------------------
MIG: 34.66 % = E 242.5 million 32.23 % = E 242.5 million
-------------------------------------------------------------------------------------------------
(5) Notwithstanding the aforementioned provisions, the parties agree that
if, after the exercise of the Seller's Call Option (Section 2.8 of the
BCA) and the Counter-Call Option (Section 2.9 of the BCA), the shares
in NewCo II are not re-assigned to Investor NewCo and instead Investor
NewCo acquires a damages claim under Section 4.14 of the BCA, then any
and all outstanding debts owed by Investor NewCo will be repaid from
the proceeds of such damages claim. The Financial Investors agree that
before any generated profits are distributed they will sell and assign
to MIG all shares in Investor NewCo including the shares in the
GmbH-General Partner. MIG agrees to purchase and accept the assignment
of such shares. The purchase price shall be the amount of damages
claims remaining after such claims are applied in the manner described
in the first sentence of this paragraph. The parties may also agree to
another arrangement, provided that in the end the Financial Investors
can be assured of receiving the damages claims remaining after the
debts have been repaid (without deducting any avoidable taxes) and MIG
ultimately holds all shares in Investor NewCo.
- 46 -
(6) The duty to assign the shares, as set forth in para. (1) above, will
also apply to the corresponding shares in the GmbH-General Partner once
the shares are assigned in accordance with this Section 19 and such
shares represent more than 5% of the share capital. If such a threshold
is reached only after several assignments, then upon reaching this
threshold, shares in the GmbH-General Partner shall also be assigned
such that, to the extent possible and in view of the aforementioned
assignments, the share of equity held in the GmbH-General Partner is
the same as the share of equity held in Investor NewCo following the
assignment.
(7) With respect to each sale and assignment made under these provisions,
MIG warrants, in the form of an independent guaranty, that it is the
legal owner of the shares being sold and assigned, that the shares are
fully paid in and have not been redeemed, that the shares are free and
clear of any third party rights and that it may freely dispose of the
shares. The sale and assignment are not subject to any other warranties
or liabilities. If a notarial recordation is required, the costs
related thereto hall be borne by the assignee.
(8) Should the assignment of shares trigger any taxes for MIG which would
not have been triggered under the original version of Section 19 as of
31 December 2000, the Financial Investors shall indemnify MIG against
such taxes. The indemnification obligation can be discharged by
retransferring shares. For the purposes of such discharge the shares to
be retransferred shall be valued at their fair market value at the time
of the retransfer. Section 18 par. 2 through 4 shall apply accordingly.
- 47 -
IV.
DISPOSAL OF SHARES
SECTION 20
INITIAL PUBLIC OFFERING
(1) The Parties may only decide on an IPO of Investor NewCo or any of its
subsidiaries by mutual agreement. In the event no decision on the IPO
is made by 30 June 2003, the Financial Investors shall have the right
to request an IPO, which, however, is not to take place prior to 1
January 2004; however, the Financial Investors are granted this right
only in the event that the Financial Investors, including those
individuals or corporations to whom they have transferred shares, are
holding the majority of the share capital of Investor NewCo at the time
the IPO is requested. MIG shall then be obligated to support the IPO
and to issue all necessary statements pursuant to the following
provisions.
(2) In the event the Parties have agreed on an IPO or the Financial
Investors have requested the execution of an IPO pursuant to Paragraph
(1) above, the Parties shall be obligated to undertake all legal steps
and issue all statements necessary for an IPO. In particular, they
shall be obligated at the request of a Party to approve any
transformation of the company to be admitted to the stock exchange into
a joint stock corporation for the purposes of the IPO and any capital
measures to prepare the IPO which are proposed by the lead manager. As
permitted by law, the rights of the Parties provided in this Agreement
must be safeguarded, either in the bylaws of the joint stock
corporation or in a shareholders' agreement to be newly agreed upon.
(3) The investment bank which accompanies the IPO as lead manager is to be
determined jointly by the Parties and commissioned jointly with the
Investor NewCo or solely by Investor NewCo. A beauty contest is to be
held at any Party's request. If the Parties do not agree on an
investment bank after the conclusion of the beauty contest, the
Financial Investors shall be entitled to the determine the
- 48 -
investment bank. The bank determined by the Financial Investors
alone may not be a company affiliated with a Financial Investor
within the meaning of Section 15 AktG.
(4) The number of shares offered in the IPO and the scope of the cash
capital increase and the sale of old shares shall be determined in
accordance with the recommendations of the lead manager. In the event
not all Parties can sell the desired amount of shares held by them in
the IPO, the Financial Investors shall have the right to sell the
shares held by them with priority. MIG may only then sell shares in the
IPO if the Financial Investors are able to sell the full number of
shares they wish to sell. To the extent that MIG participates in a
capital increase pursuant to Section 18 para. (8), the Financial
Investors shall negotiate with MIG, if and to what extent MIG may
participate in the sale of old shares within the IPO for the financing
of the contribution and the costs.
(5) In the event the Financial Investors still hold shares after the IPO,
the Financial Investors jointly shall have the one time right to
request a further public offering in which they can sell their shares
in whole or in part. The Financial Investors shall decide on the date
thereof. At least six months are to elapse between the IPO and the
further offering. In the event not all Parties can sell the desired
amount of shares held by them in a further public offering, the
Financial Investors shall have the right to sell up to 81% of the old
shares placed in the offering. This rule shall be valid for the first
three years after the IPO. The Financial Investors are entitled to
require, after such secondary offering in which they have priority,
further secondary offerings, in which they can sell shares. In such
further secondary offerings the Financial Investors do not have
priority, but can only sell together with MIG on a pro rata basis, in
the same ratio as they hold shares in Investor NewCo.
(6) The Parties hereby undertake to hold pursuant to the recommendation of
the lead manager after the execution of the IPO or any further offering
the residual shares
- 49 -
for the period recommended by the lead manager and not to sell them
over the stock exchange. However, the lockup period may not be longer
than 180 days subject to imperative provisions of the stock exchange
concerned.
(7) In the event of an IPO or a further offering, the Parties shall seek
that the management board of the company to be listed at the stock
exchange shall support the IPO or the further offering, particularly
through participation in road shows, support in the preparation of the
prospectus, provision of information to the underwriters, elaboration
of a detailed business plan, etc.
SECTION 21
RESTRICTION ON TRANSFERABILITY, GENERAL LOCKUP PERIOD, ADMITTED TRANSFERS
(1) The Parties and MIG hereby undertake not to dispose of their shares in
Investo NewCo and General Partner GmbH without the approval of the
other Parties. They hereby further undertake to work towards the aim in
every suitable fashion that Investor NewCo does not dispose of its
shares in NewCo II respectively NewCo III, that NewCo II does not
dispose of its shares in MGG, and that NewCo III does not dispose of
its shares in NewCo II. For this purpose, a clause on the restriction
of the transferability of shares shall be incorporated into the Bylaws
of Investor NewCo, NewCo II, NewCo III and MGG. Corresponding rules
apply to DebtCo if applicable. The Parties must ensure that the bodies
competent according to the bylaws to issue the approval only issue the
approval if a unanimous consenting resolution of the Shareholders'
Meeting pursuant to Section 16 para. I (c) was adopted. Exempt from
this approval requirement shall be the sale and transfer of 66 2/3 of
the shares in NewCo II to NewCo III after the exercise of the Call
Option pursuant to Section 2.8 of the Purchase Agreement with a
transfer of single or all shares of MGG to DebtCo. In connection with
the IPO, the clause on the restriction of the transferability of shares
in the bylaws of that company whose shares are to be traded on the
stock exchange shall be revoked. However, the approval duty for the
-50-
transfer of shares held by the Parties in such company as existing
according to the provisions of this Agreement shall not be prejudiced
hereby.
(2) The approval to the transfer of shares in Investor NewCo shall be given
in the following events:
(a) transfer of shares which are held by MIG to a shareholder of
MIG or any member of the Xxxxxx Family as defined in Section
29 para. (2) hereof;
(b) transfer of shares to companies affiliated with ACP or GS or
with The Xxxxxxx Sachs Group Inc. respectively Allianz AG in
the terms of Section 15 of the Corporation Act or to
holdings managed by ACP or GS or by The Xxxxxxx Xxxxx Group
Inc. respectively Allianz AG or by companies affiliated
therewith in the terms of Section 15 of the Corporation Act
or to funds managed by such companies;
(c) transfer to employees employed at the companies specified in
Litera (b) above or, however, at maximum, up to 10% of all
shares in the share capital of Investor NewCo, whereby shares
which have been issued in accordance with the Management Share
Option Plan in accordance with Section 7 hereof are not to be
taken into account;
(d) transfer of shares, to which up to 16% of the share capital
are alloted, by ACP and/or GS to a further financial investor
listed in ANNEX 21.2 of the Reference Deedif ACP does not
transfer more shares than GS;
(e) transfer of shares pursuant to Section 19.
However, the approval pursuant to Paragraph (1) above only then has to
be given, if the respective buyer consents to the provisions of this
Agreement. This shall not apply to sales in accordance with Litera (c)
above. Sales pursuant to this Paragraph (2) are to be notified to all
Parties immediately in writing. Buyers, to whom a Party has transferred
shares according to the provisions of this Agreement and who
-51-
have consented to the provisions of this Agreement are jointly named
"SUCCESSORS" in the following. In the event of the joining of a
Successor to the Financial Investors all provisions concerning the
rights and obligations of the Financial Investors as a group apply
accordingly to this Successor. In this event the Financial Investors
may require that the rights of appointment, that GS is entitled to
pursuant to this agreement, are completely or in part transferred to
the Successor. The Successor or Successors of MIG succeed(s) to all
rights and obligations of MIG. If MIG does not sell all of its shares
MIG and the Successors may exercise the rights of MIG under this
Agreement only jointly and in a uniform way.
(3) Sales of shares via the stock exchange after an IP0 of Investor NewCo
do not require approval.
(4) At a sale of shares of Investor NewCo shares in General Partner GmbH
may be transferred in the same ratio. The requirement for approval
pursuant to Paragraph (2) applies accordingly. Sentence (1) shall not
apply to sales in accordance with Paragraph (2) (c) and Paragraph (3)
above. In the event the shareholding in the share capital of Investor
NewCo has decreased by more than 10% as a result of sales over the
stock exchange, the affected Party must transfer a corresponding share
in the share capital of General Partner GmbH to the other Parties in
such a ratio that, to the extent legally permitted, their
participations in the General Partner GmbH correspond to their
participation in the share capital of Investor NewCo .
(5) In the event of transfers pursuant to Paragraph (2) (c) the Successors
may only exercise their voting rights in a uniform way with the
transferring Party.
SECTION 22
TENDER OBLIGATION
(1) After 30 September 2004, the consent to the transfer of shares to a
third party shall be given in addition to the cases laid out in Section
21 para. (2) provided the following provisions have been observed prior
to the disposal.
-52-
(2) In the event any Party intends to sell shares in Investor NewCo, such
Party must communicate its intention to sell to the other parties and
present them with a binding notarial sales offer for the shares to be
sold ("SALE SHARES"), specifying all contractual conditions intended
to apply to the purchase. The communication of the intention to sell
shall give an indication on the expected sales price and other
provisions, determining the sales price. The notarial sales offer is to
be presented no earlier than three weeks after announcement of the
intention to sell. The shares are to be transferred in consideration
for payment of the purchase price within three months after the
acceptance of the offer. If at this point of time not all of the
official authorizations necessary for the transfer of the Sale Shares
exist, the transfer in consideration for payment is to be executed
directly after the granting of all official authorizations.
(3) The other Parties to this Agreement shall be entitled to acquire the
offered Sale Shares in proportion to their share in the share capital
of Investor NewCo. To the extent a Party entitled to acquisition does
not avail itself of its acquisition right or does not do so within the
required period, its acquisition right shall accrue to the other
Parties entitled to acquisition in the ratio of their shareholdings in
the share capital of Investor NewCo. In the event non-divisible
fractional amounts arise upon the prorated dividing of the Sale Shares
that Party entitled to acquisition which has exercised its acquisition
right first shall be entitled to such amounts. A Party entitled to
acquisition may exercise its acquisition right only with regard to the
total of all Sale Shares that it is originally entitled to pursuant to
Sentence 1 above and that are accruing to it pursuant to Sentence 2.
(4) The right to acquire the Sale Shares by the Parties entitled to
acquisition may only be exercised by a notarized acceptance declaration
to the selling Party within six weeks from the receipt of the sales
offer. In the event that the sales offer has been presented prior to
the expiration of the three weeks period pursuant to Paragraph (2), the
period pursuant to Sentence 1 is extended by the number of days that
were between the presentation of the sales offer and the day of the
expiration of the three weeks period. Immediately after the expiration
of this period, the selling Party must
-53-
notify the Parties entitled to acquisition that have exercised the
acquisition right on the scope of the exercise of the acquisition right
and, if relevant, offer the Sale Shares for which the acquisition right
was not exercised in accordance with Paragraph (2) above. In the event
of such a second offer MIG, its Successors and the Third Party as well
as the Financial Investors and their Successors are each considered a
group that may exercise or reject the additional acquisition right in
a uniform way only so that the selling Party has to carry out no more
than two tender rounds. The offer to acquire the additional Sale
Shares may be accepted within two weeks after receipt of the notice.
Sentence 1 shall apply accordingly for the acceptance of the offer.
(5) In the event the right of acquisition has not been exercised with
respect to all Sale Shares pursuant to Paragraph (4) all offers will
cease to exist. The Party desiring to sell is then entitled to a
transfer to a third party in accordance with the following Paragraph
(6).
(6) In the event the Parties entitled to acquisition have not accepted the
binding offer without reservation within the periods pursuant to
Paragraph (4) above or paid the purchase price in consideration for the
transfer of the shares within the period pursuant to Paragraph (2), the
Party desiring to sell shall be authorized for a period of six months
from (i) the rejection of the offer or (ii) the due date of the payment
or (iii) the date of the refusal of the necessary official
authorizations, whatever date occurs first, to sell its Sale Shares to
a third party, though not at conditions more favorable for the third
party than those offered pursuant to Paragraph (2) above. In the event
one or more of the Parties entitled to acquisition have not paid the
purchase price when due, the selling Party must offer these shares
prior to a sale to a third party to the other Parties entitled to
acquisition that have fulfilled their obligations. Paragraph (4)
Sentence 3 and 4 apply accordingly. The selling Party must inform the
others on the fulfillment of the conditions for a free sale in writing
pursuant to Section 39 hereof. In the event the conditions which the
selling Party has offered to the third party are more favorable than
those notified pursuant to Paragraph (2), the Parties entitled to
acquistion shall have a preemptive purchase
-54-
right pursuant to Section 24. The Purchase Agreement must assure that
the other shareholders may exercise their rights pursuant to Sections
23 and 24. The selling Party has to send the other Parties a copy of
the Purchase Agreement without delay.
(7) For purposes of the sale, the selling Party may provide information
about MGG to third parties provided that the third party signs a
statement of confidentiality that is beneficiary and entitling also
for the other Parties and MGG. The selling Party has to send the
statement of confidentiality to the other Parties. The Parties endeavor
to ensure that the management provide to the selling Party the
information necessary for the sale, to cooperate in the preparation of
information memorandums and similar documents, and to participate in
presentations.
(8) The tender duty stipulated in this provision and the accordingly
existing acquisition right with regard to the shares in Investor NewCo
shall, always also encompass a corresponding share in the share capital
of General Partner GmbH.
SECTION 23
RIGHT TO JOINT SALE
(1) In the event after the tender pursuant to Section 22 hereof the Party
desiring to sell is entitled to sell to a third party, each Party
entitled to acquisition may declare to sell its share pro rata (i.e.
the same proportion in percent with regard to the then existing
participation in the share capital of Investor NewCo as the selling
Party) to the buyer at the otherwise identical terms and conditions as
the selling Party. The declaration must be issued within one month
after the selling Party has informed the other Parties on
(a) the fulfillment of the conditions for a free sale pursuant
to Section 22 para. (6) hereof,
(b) the potential purchaser and
-55-
c) the purchase price negotiated until then and other provisions
determining the purchase price.
The Parties intending to exercise their right to joint sale may submit
the exercise of their right to joint sale to the condition that in the
sale a minimum price determined by them is realized that may be higher
than the communicated price.
(2) The right to joint sale must be as well exercised for a corresponding
share in the share capital of General Partner GmbH.
SECTION 24
PREEMPTIVE PURCHASE RIGHT
(1) In the event of Section 22 para. (6) sentence 4 hereof, the Parties
not having exercised their right pursuant to Section 23 hereof shall be
entitled to a preemptive purchase vis-a-vis the selling Party. The
preemptive right also applies to the shares sold in addition pursuant
to Section 23 hereof. A preemptive purchase right shall also exist in
the event of disposals similar to purchases, such as exchange,
contribution in consideration for holdings, etc. The value of the
consideration shall then replace the purchase price.
(2) The preemptors shall be entitled to the preemptive purchase right in
the ratio of their shareholdings in the share capital of Investor NewCo
at the time of the occurence of the preemptive purchase event. To the
extent a preemptor does not avail itself of its preemptive purchase
right or does not do so within the required period, such right shall
accrue to the other preemptors in the ratio of their shareholdings in
the share capital of Investor NewCo at the time of the occurrence of
the preemptive purchase event. In the event several preemptors exercise
their preemptive purchase rights and the shares to be acquired cannot
be divided into whole amounts, that beneficiary which has exercised its
preemptive purchase right first shall be entitled to the non-divisible
fractional amounts. A preemptor may exercise its preemptive purchase
right only with regard to the entire share to which it is entitled to
pursuant to this Paragraph (2).
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(3) The preemptive purchase right may only be exercised within six months
from the receipt of the contract which the selling Party has concluded
with the third party and only by notarized declaration to the selling
Party. After the exercise, the purchase agreement must be fulfilled
within three weeks. If at this point of time not all of the official
authorizations necessary for the transfer of shares exist, the transfer
is to be executed directly after the granting of all official
authorizations. In case of non-payment of the purchase price, Section
22 para. (6) sentence 2 hereof shall apply accordingly.
(4) In the event the preemptive purchase right is not exercised in full,
the selling Party must send a written notice to the other Parties
entitled to preemptive purchase pursuant to Section 39 hereof. The
Parties entitled to preemptive purchase must exercise their preemptive
purchase right regarding the additional Sale Shares within two weeks.
Section 22 para. (4) sentence 3 shall apply accordingly. The preemptive
purchase right expires if it has not been exercised regarding the total
of the Sale Shares even to the extent it had already been exercised.
SECTION 25
CALL OPTION FOR MIG
(1) The Financial Investors and their Successors hereby grant MIG the right
to acquire in the period between 1 April 2004 and 30 September 2004 the
shares held by them in Investor NewCo and their shares in General
Partner GmbH at the price determined pursuant to Paragraph (3) below
("CALL OPTION"). The Call Option may only be exercised for all of the
shares held by the Financial Investors.
(2) MIG must declare the exercise of the Call Option to the Financial
Investors pursuant to Section 39 hereof. The contract arising from
exercise of the Call Option must be carried out within three weeks
after the purchase price has been definitively determined pursuant to
the following provisions. If at this point of time not all of the
official authorizations necessary for the transfer of the shares after
the exercise
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of the Call-Option exist, the transfer against payment is to take place
immediately after the granting of all official authorizations.
(3) The purchase price for the stock and the shares in General Partner
GmbH held by the Financial Investors shall correspond to the market
value as of the date of the notice on the exercise of the Option
pursuant to Paragraph (2) above, though at least to the value which
results to a total revenue of the Financial Investors on their
Acquisition Costs rendered on the shares sold by them, which results in
an internal rate of return of 30% per annum, calculated in accordance
with the equation total revenue = Acquisition Costs x 1,3 to the
power of N, whereby "N" shall be the number of expired years (the
"MARKET VALUE"). "AQUISITION COSTS" shall mean the amount of the
contributions to the equity capital of Investor NewCo by the
Financial Investors until such time as the call-option is exercised, as
well as any other proven acquisition, financing, and ancillary costs
and other investments of any kind incurred in connection with the
acquisition or the holding of the equity participation in Investor
NewCo and the acquisition and the holding of an indirect participation
by Investor NewCo in MGG, no matter in what legal or economic form,
e.g. as a capital increase, contributions to the capital reserve,
additional contribution, shareholder's loan, or in any other manner,
as well as all investments and costs incurred by the Financial
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Investors since the acquisition of their indirect participation in
MGG, minus any earnings after taxes from dividends, interest or
alienations which the Financial Investors received and get to keep
(together the "EARNINGS"). In this context, an assignment of
shares pursuant to Section 19 is not considered Acquisition Costs
or Earnings in the sense of the preceding sentence. To compute the
Market Value all cash outflows from the Financial Investors shall
be balanced with all Revenues on a pro rata basis with a markup or
discount for interest. In the event of computation for less than a
year N shall be computed pro rata temporis.
(4) In its declaration on the exercise of the Call Option pursuant to
Paragraph (2) above, MIG must submit a proposal for the Market Value of
the shares to be acquired by the Financial Investors calculated on the
basis of the principles presented in the above Paragraph. In the event
the Financial Investors declare within a period of two weeks after
receipt of the exercise declaration pursuant to Paragraph (2) above
that they hold the proposed price to be too low, they shall be entitled
to appoint an expert, if possible, an internationally active investment
bank, which shall determine the Market Value in accordance with the
specifications pursuant to Paragraph (3) above. The Financial Investors
shall bear the costs of the expert opinion.
(5) In the event MIG does not acknowledge the Market Value computed by the
expert of the Financial Investors, MIG may commission a second expert
to determine the Market Value pursuant to Paragraph (3). MIG shall bear
the costs of the second opinion. In the event a second opinion is
prepared, the following provisions shall apply to the final
determination of the Market Value:
(a) In the event the Market Values of the two experts do not vary
from each other by more than 10%, the Market Value shall
correspond to the arithmetic mean between the Market Values
computed by the two experts.
(b) In the event the Market Values computed by the two experts
vary from each other by more than 10%, the Financial Investors
and MIG shall commission a third neutral expert
("ARBITRATOR"), which they shall determine by
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elimination from the list attached as ANNEX 25.5 to the
Reference Deed, which includes five proposals for a
neutral expert. To this effect one Party shall first
delete a name, then the other Party etc., until only one
name remains; the Financial Investors will be considered a
single party. Whether MIG or the Financial Investors
begin with the deletion, shall be determined by lots. The
Market Value computed by the Arbitrator shall be binding,
provided such Market Value is between the Market Values
proposed by the first two experts. In the event the Market
Value computed by the expert is outside the framework for
the Market Value determined by the first two experts, the
Market Value shall correspond to the arithmetic mean
between the Market Value computed by the Arbitrator and
the Market Value of the expert most closely approximating
that computed by the Arbitrator. Section 91 of the Civil
Procedure Code shall apply accordingly to the costs of the
arbitration opinion.
(6) MIG may not exercise the Call Option if a decision on the execution of
an IPO has been reached pursuant to Section 20 para (1) (Initial Public
Offering) hereof. In case the Public Tender for the IPO has not been
executed by 1 September 2004, the Call Option may be exercised again
within the remaining period for the exercise of option.
(7) For the agreement to be concluded with the Financial Investors upon the
exercise of the Call Option concerning the sale and assignment of the
shares of the Financial Investors in Investor NewCo and General Partner
GmbH, the following conditions shall apply for the remaining aspects:
(a) MIG shall be entitled to the full scope of the profits not yet
distributed and allocable to the purchased shares.
(b) The Financial Investors shall warrant in the form of
independent guaranties that they are legal owners of the sold
shares, that the shares are fully paid in and no repayments
have occurred, that the shares are not encumbered with
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third-party rights, and that they can freely dispose of the
shares. Otherwise, the sale shall be made without any
warranty or liability.
(c) MIG shall bear the costs of the notarized agreement and the
implementation thereof.
(d) The Agreement must foresee that after transfer of the shares
of the Financial Investors to MIG no obligations of the
Financial Investors vis-a-vis Investor NewCo, NewCo II, NewCo
III, DebtCo, MGG and the subsidiaries thereof remain; in
particular, all credits and guaranties of the Financial
Investors must be redeemed respectively the Financial
Investors must be indemnified from such obligations if such
redemption is not possible.
SECTION 26
RESALE OF ACQUIRED SHARES AFTER EXERCISE OF THE CALL OPTION
(1) In the event MIG resells the shares acquired based on the Call Option
within the periods pursuant to (4), MIG must send the parts of the
purchase agreement relevant to determine the sale price to the
Financial Investors immediately after the signing thereof. The
Financial Investors shall be entitled to any additional proceeds from
any such resale in accordance with the following provisions. In the
event MIG does not sell its entire shares in Investor NewCo to the
third party, the shares acquired via the Call Option shall be
considered as sold first. Section 24 para. (1) sentence 3 hereof shall
apply accordingly.
(2) Additional proceeds is the difference between (i) the sale price for
the resold shares and/or the market value of the retained consideration
at the time of the conclusion of the relevant transaction governed by
the law of obligations, if no (complete) cash payment is made, and (ii)
the acquisition costs for the sold shares. The acquisition costs shall
correspond to the prorated purchase price paid at the exercise of the
Call Option. All transaction costs, particularly costs for advisors and
other implementation costs and all payments to buyers under warranty
and guarantee
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claims and alike as well as taxes arising from the resale shall be
deducted from the value of the consideration. The Financial Investors
may request rendering of accounts in this regard pursuant to Section
259 of the Civil Code. In the event the consideration received by MIG
consists in non-exchange-listed shares in a company, the market value
of the consideration at the time of conclusion of the relevant
transaction governed by the law of obligations is to be determined by
one of the experts mentioned in Annex 25.5 to the Reference Deed in
accordance with the generally accepted methods for the valuation of
companies, provided the Parties do not reach agreement on the market
value of the consideration within one month after notice of the sale.
In the event no agreement on the person of the expert is reached, the
provision in Section 25 para. (5)(b) hereof shall apply accordingly.
(3) Within two weeks after the amount of the additional proceeds has been
determined, the additional proceeds are to be paid pro rata to the
Financial Investors onto bank accounts specified by them. In the event
MIG has deferred any portion of the purchase price payable by the third
party, also the corresponding portion of the additional proceeds shall
first be payable upon the due date of the purchase price. The deferred
portion of the additional proceeds shall accrue interest at the same
rate as the deferred purchase price. For claims from the warranties,
MIG may retain a reasonable portion of the additional proceeds. After
the periods of limitation for single claims have run out reasonable
portions of the retained proceeds shall be released. At the latest when
the periods of limitations for all warranties except for such of title
have ended, the retained portion shall be released.
(4) The duty to pay the additional proceeds to the Financial Investors
pursuant to Paragraph (1) above shall exist:
(a) if the consideration received in the resale consists of cash
resources or in freely disposable shares in an exchange-listed
company -whereby exchange-listed shares for which MIG must
observe a lockup period of less than one year shall be
considered as freely disposable - for any resale within two
years after the execution date of the Call Option;
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(b) if the consideration received in the resale consists in
non-exchange-listed shares for any resale within one year
after the execution date of the Call Option;
(c) if the consideration received in the resale consists in
exchange-listed shares for which a lockup period of one year
or longer has been agreed upon, for any resale within a period
of one year after the expiration of the lockup period.
Decisive shall respectively be the conclusion of the respective
agreements governed by the law of obligations.
SECTION 27
SALE OF SHARES BY THE FINANCIAL INVESTORS
PRIOR TO 1 OCTOBER 2004
In the event the Financial Investors sell their shares in Investor NewCo in
whole or in part with MIG's approval prior to 1 October 2004 in a tender
proceeding, MIG may participate in such tender proceeding. The purchase price to
be offered by MIG shall not be subject to the provisions of Section 25 (Call
Option) hereof. In the event MIG has acquired shares in this way, the provisions
on the payment of additional proceeds from resale pursuant to Section 26 hereof
shall not apply.
SECTION 28
DUTY OF MIG TO JOINT SALE
(1) After 30 September 2004, the Financial Investors shall have the right
in the event of a sale to a third party permissible pursuant to
Sections 21 et seq. - transfers pursuant to Section 21 para. (2) shall
not be deemed sales to third parties - to request from MIG the joint
sale of its shares in Investor NewCo and General Partner GmbH to a
third party at the same conditions provided:
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(a) the buyer thereby receives directly or indirectly or together
with others, with whom it coordinates the exercise of its
voting rights, the majority of the shares in Investor NewCo
(including those already held prior to the purchase), and
(b) the Financial Investors sell shares at least in the amount of
20% of the share capital, and
(c) the Financial Investors sell all of the shares still held by
them, and
(d) MIG may sell all of the shares held by it, and
(e) the sale is not caused by official and/or supervisory order
actually issued or definitely possible, or does serve the
prevention of such an order if MIG does not at least receive a
purchase price in such a sale that corresponds to an internal
rate of return of 15% per annum for MIG. Assessment basis
shall be 50 % of the Hoechst Purchase Price plus the issue
price for the additional shares pursuant to Section 2 para.
(2) plus the issue price for additional shares from any later
capital increases. Such minimum interest shall be calculated
pursuant to Section 25 para. (3).
(2) When calculating the shares sold by the Financial Investors, shares
which the Financial Investors have first sold and then repurchased may
not be taken into account. When calculating the minimum participation
pursuant to Paragraph (1)(b) Section 9 shall apply accordingly, i.e.
as long as the participation of the Financial Investors due to capital
increases has dropped below 20% but not below 10% taking any sales into
taking into account, the Financial Investors may request the joint sale
by MIG. In the event the participation has dropped below 20% due to
sales without taking into account any capital increases, the obligation
to joint sale expires.
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SECTION 29
ACQUISITION RIGHT UPON CHANGE OF CONTROL
(1) In the event of a Change of Control-as defined in Paragraph (2)
below-over a Party to this Agreement, the other Parties shall have a
prorated acquisition right pursuant to this Section 29 with regard to
the shares in Investor NewCo and General Partner GmbH of the Party
affected by the Change of Control.
(2) In the terms of this Section 29, a "Change of Control" shall exist with
regard to:
(a) MIG when the majority of the share capital and voting rights
in MIG are no longer held directly or indirectly, legally or
economically, by members of the Xxxxxx Family;
(b) ACP when the majority of the share capital and voting rights
in ACP are no longer held directly and/or indirectly, legally
and economically, by Allianz AG;
(c) GS when a fund holding the shares in Investor NewCo is no
longer managed directly or indirectly, legally or
economically, by companies which are affiliated companies of
The Xxxxxxx Sachs Inc., New York, in relation to the shares
held by such fund.
In the event of Litera (b) and (c) there shall be no Change of Control,
if the Financial Investors no longer hold the majority of the shares of
the share capital of Investor NewCo at the time of the acquisition.
In the terms of this provision, the "XXXXXX FAMILY" shall mean the
natural offspring of Mr. Senator Xx. Xxxxx Xxxxxx with their spouses.
The natural offspring shall also include their children and
grandchildren. In the terms of this provision, the "Xxxxxx Family"
shall further include companies, which are fully directly or indirectly
owned by the above-mentioned persons or upon which the above-mentioned
persons are in the position to jointly exert a controlling influence
and in which the remaining shares are held by non-profit foundations or
non-economic associations
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with legal capacity, as well as family foundations and non-profit
foundations that are close to the Family.
(3) The provisions in Paragraph (2) (b) and (c) apply accordingly to
Successors of the Financial Investors.
(4) The Party affected by a Change of Control shall inform the other
Parties about the fact of the imminent Change of Control in writing 30
days prior to the occurrence of the Change of Control at the latest. In
this regard, the Party affected by the Change of Control must
communicate the material details of the Change of Control, particularly
the name(s) of the persons or companies acquiring control.
(5) Within 60 days after receipt of the notice pursuant to Paragraph (3)
above, the other Parties shall have the right to request by written
declaration from the Party affected by the Change of Control the
sale of the shares in Investor NewCo and General Partner GmbH to
the other Parties, and this will be in the ratio of their
shareholdings in the share capital of Investor NewCo. In the event
any Party entitled to acquisition does not avail itself of its
acquisition right or does not do so within the required period, its
acquisition right shall accrue to the other Parties in the ratio of
their shareholdings in the share capital of Investor NewCo to each
other. Section 22 para. (4) shall apply accordingly.
(6) A Party entitled to acquisition may only exercise its acquisition right
with regard to the entire share to which it is entitled from the outset
pursuant to Paragraph (4) Sentence 1 and which is accruing to it
pursuant to Paragraph (4) Sentence 2. In the event several Parties
exercise their acquisition right and the shares to be acquired by them
cannot be divided into whole amounts, that Party entitled to
acquisition which has exercised its acquisition right first shall be
entitled to the non-divisible fractional amounts.
(7) The acquisition right stipulated in this Section 29 with regard to the
shares in Investor NewCo shall always encompass a corresponding share
in the share capital of the General Partner GmbH. The shares in
Investor NewCo and the corresponding share
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in the share capital of General Partner GmbH shall be designated
hereinafter as the Shareholdings.
(8) In the event the acquisition rights stipulated in this Section 29 are
exercised, the Party affected by the Change of Control and the Parties
entitled to acquisition which have exercised their acquisition right
shall conclude an agreement on the sale and assignment of the
Shareholding to which the following conditions shall apply:
(a) The purchase price for the Shareholding shall correspond to
the market value thereof on the date of the notice of the
exercise of the acquisition right pursuant to Paragraph (3)
above. If Investor NewCo has been admitted to the stock
exchange at such point in time, the market value shall
correspond to the stock exchange price. In the event the
Parties do not agree within 90 days after the notice
pursuant to Paragraph (3) above on the purchase price, the
purchase price shall be bindingly determined by one of the
persons or companies mentioned in Annex 25.5 of the
Reference Deed as arbitrator at the request of any Party.
The arbitrator shall be selected in accordance with Section
25 para. (5) hereof. The Party affected by the Change of
Control and the Parties entitled to acquisition which have
exercised their acquisition right shall equally bear the
costs for such arbitrator. Within two weeks after the
announcement of the arbitration award the Parties entitled
to acquisition may rescind from the contract. The purchase
price must be paid within three banking days after the
conclusion of the notarized agreement concurrently to the
assignment of the Shareholding, provided official
authorizations are not required, otherwise as soon as these
authorizations are available.
(b) The shareholders entitled to acquisition which have exercised
their acquisition right shall be entitled to the full scope of
profits not yet distributed and allocable to the Shareholding.
(c) The Party affected by the Change of Control shall warrant in
the form of an independent guaranty that it is the legal owner
of the Shareholding, that the Shareholding is not encumbered
by third-party rights, and that it can freely
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dispose of the Shareholding. Otherwise, the sale shall be made
without any warranty or liability.
(d) The Party affected by the Change of Control and the Parties
entitled to acquisition which have exercised their acquisition
right shall equally bear the costs of the notarized agreement
and the implementation thereof.
V. AGREEMENT BETWEEN MIG AND MGG
SECTION 30
LICENSE AGREEMENT BETWEEN MGG AND XXXXXX CUTTING & WELDING GmbH
The Parties shall ensure that MGG concludes the License Agreement set forth in
ANNEX 30 of the Reference Deed with Xxxxxx Cutting & Welding GmbH.
SECTION 31
SALE OF HOLDING COMPANIES OF MGG AND MIG
Immediately upon Closing, MGG shall enter into negotiations in connection with
the sale of the equity participations listed in Exhibit 31.1 to this Amendment
Agreement with the intention to come to an agreement within six weeks following
the Closing. The Financial Investors commit themselves to ensure that MGG does
not break off the negotiations without good reason. However, there shall be no
obligation to sell. MGG has, by virtue of
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agreement dated 12 April, 2001, sold and transferred its shares in Greenbelt
Holdings Ltd. to Xxxxxx Xxxxxx GmbH on April 29, 2001.
SECTION 32
SINGAPORE, SYNGAS
(1) MIG agrees to be bound to a participation, be it directly or indirectly
via a one hundred percent subsidiary, in the new holding company which,
pursuant to the Singapore Separation Agreement (Annex 3.1 of the
Reference Deed to the BCA), shall hold the shares in Xxxxxx Singapore
and Syngas, should the Financial Investors so require by written
notice.
(2) In the event that risks realize with regard to Singapore in an amount
of less than DM 180,000,000 (in words: Deutsche Xxxx one hundred eighty
millions), Investor NewCo is obliged to distribute 7/18 of the short
amount to MIG. Risks shall be
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considered as realized if loans have been granted under the Singapore
Separation Agreement since 1 September 2000. MIG shall issue the
distribution payment of Investor NewCo as a loan against borrower's
note, which shall be subject to the terms and conditions attached as
Annex 32 ("SINGAPORE LOAN").
(3) Any short amount will be assessed for the first time on 31 December
2003.
(4) After 31 December 2003 the Singapore Loan shall be reduced on each 1st
January and 1st July, for the first time on 1 July 2004, by an amount,
that corresponds to 7/18 of the sum of the loans granted by Investor
NewCo or one of its subsidiaries to the Singapore holding company after
the directly preceding 1st January respectively 1st July. In the
subsequent interest period the accordingly reduced nominal amount of
the Singapore Loan shall continue to bear interest.
(5) If the Singapore holding company redeems loans to Investor NewCo or its
subsidiaries (e.g. after the sale of participations), MIG is entitled
to 7/18 of the redemption amount as distribution. The redemption
amount shall increase the Singapore Loan, however not exceeding
DM 70 millions.
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SECTION 33
[INTENTIONALLY LEFT BLANK]
VI
FINAL PROVISIONS
SECTION 34
OBLIGATION OF MIG UNTIL CLOSING
(1) Until the Closing under the Purchase Agreement, i.e., until the
Financial Investors have acquired the indirect Shareholding in MGG, MIG
hereby undertakes vis-a-vis the Financial Investors not to approve any
measures related to MGG which require the approval of Investor NewCoin
accordance with Section 4.2 of the Purchase Agreement.
(2) MIG hereby undertakes to inform the Financial Investors within the time
period between execution of this Agreement and the Closing under the
Purchase Agreement on all material modifications of the business
development or material business incidents of the MGG Group that would
entitle to rescission of the Purchase Agreement and of which MIG
obtained knowledge. The knowledge of Xx. Xxxxxx Xxxxxx shall be
constructed knowledge of MIG to the extent that disclosure is permitted
to him.
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SECTION 35
NEW SHAREHOLDERS, ADAPTION OF THE AGREEMENT
(1) The Parties shall be obligated to ensure that any new shareholders of
Investor NewCo to whom shares may be transferred in accordance with the
provisions of this Agreement or who acquire shares by way of non-cash
capital increase shall become Party to this Agreement upon their entry
into the company. The Parties to this Agreement hereby offer any
natural or legal person which is admitted for acquisition respectively
for take-over of a share in the company to join this Agreement by
declaration which must be issued to all Parties to this Agreement. This
joinder shall only be valid provided it is made without conditions,
additions or other modifications to this Agreement. Originals of the
joinder declaration are to be sent to each Party to this Agreement. New
shareholders which join this Agreement in lieu of a previous
shareholder are subrogated to all rights and duties of the previous
shareholder pursuant to this Agreement. Except for previously
established claims and the obligations from Section 36 hereof, with
regard to the transferred shares a new shareholder shall join with
exonerating effect for the withdrawing shareholder.
(2) Paragraph (1) above shall not apply to new shareholders which have
acquired their shareholding via the stock exchange or under the
management participation plan pursuant to Section 7.
(3) In case of the joining of an additional Financial Investor the rule of
adaption pursuant to Section 21 para. (2) sentence 6 shall additionally
apply.
(4) The antitrust authorities may request modifications of this Agreement
so that the transaction is released. The Parties undertake to implement
the required modifications if the legal position of MIG under this
Agreement is not affected. Section 21 para. (2) sentence 6 shall apply
accordingly in the event that restrictions under Antitrust Law that
require the restriction of the shareholders' rights of ACP are no
longer applicable. Additionally, the Financial Investors may request
that
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competences of the shareholders' meeting of Investor NewCo are
transferred to the shareholders' committee provided that rights of
MIG are not affected.
SECTION 36
COMMENCEMENT AND TERMINATION
(1) The rights and duties from this Agreement shall commence for the
undersigning Parties upon the signing hereof and for all Parties
joining subsequently upon the effective acquisition of their position
as shareholders in Investor NewCo.
(2) The rights and duties from this Agreement shall cease
(a) in the event this Agreement is mutually rescinded by all
Parties;
(b) for the Party which no longer holds a share in Investor NewCo.
after complete windup of all rights and duties from such share
which already had been established upon the withdrawal date.
(3) In the event this Agreement ceases because MIG exercises its Call
Option, the duties of MIG from Section 26 hereof shall continue to
exist.
(4) In any event the rights and obligations arising from SECTION Sections
32 and 40 shall not be affected.
SECTION 37
ARBITRATION BOARD
(1) With regard to disputes arising from this Agreement or in relation with
it or its subject matter between MGG, NewCo II, NewCo III, DebtCo,
Investor NewCo including their direct and indirect subsidiaries, the
Parties to this Agreement or among such persons, an arbitration board
shall be competent, ousting the jurisdiction of courts of law. This is
to apply to the broadest degree possible, e.g.,
- 73 -
even concerning the validity of this arbitration clause and
irrespective of the legal or factual ground.
(2) The arbitration rules of the German Arbitration Institute (DIS) shall
apply to the arbitration proceedings. The arbitration board shall
consist of three arbitrators. The chairman must be eligible for the
office of a judge in the Federal Republic of Germany. Frankfurt am Main
shall be the seat of the arbitration board.
(3) The District Court of Frankfurt am Main shall be competent in the event
any action before the courts is necessary within the framework of the
arbitration proceedings or in relation thereto.
SECTION 38
EXCLUSIVITY, COMMON OBLIGATION
(1) This Agreement and the annexes mentioned herein comprises all
agreements between the Parties concerning the subject hereof. Any
earlier agreements shall hereby become obsolete. This shall also apply
to term sheets and other records.
(2) To the extent as pursuant to this Agreement obligations have to be
performed by the Financial Investors together, the obligations are not
considered as joint and several liability but as common obligation of
the Financial Investors that may only be performed by them in common.
The Financial Investors may claim their rights only jointly as joint
and several creditors provided they are not bound to an specific
person.
SECTION 39
WRITTEN FORM
Any modifications of or additions to this Agreement, including this requirement
for the written form, must be made in writing, unless a more stringent form is
prescribed by law.
- 74 -
All declarations and notices admitted in accordance with this Agreement or the
annexes mentioned herein must be made in writing.
SECTION 40
CONFIDENTIALITY
The contents of this Agreement are to be treated in strict confidence by the
Parties; however, the contents may be disclosed:
- to employees or advisors of the respective Party or any of shareholders
thereof who are subject to a comparable confidentiality agreement
vis-a-vis the respective other Party,
- to investors which hold shares directly or indirectly in the capital of
a Financial Investor,
- to tax, antitrust and other authorities, as required by law,
- to banks which are financing or are to finance the Parties to this
Agreement, Investor NewCo and/or any of their direct or indirect
subsidiaries,
- in the event disclosure is otherwise required based on legal provisions
or under the law of the stock exchanges or is made by mutual agreement,
- vis-a-vis shareholders of MIG and their consultants, and
- vis-a-vis the Xxxxxx family foundation.
SECTION 41
PUBLICATIONS/PRESS RELEASES
The Parties to this Agreement hereby undertake to jointly prepare all public
announcements related to this Agreement and their participation in Investor
NewCo and/or
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a direct or indirect subsidiary of Investor NewCo, even those in
the press, and to disclose the contents thereof only in a concerted fashion.
SECTION 42
SEVERABILITY
In the event any provision of this Agreement is or becomes invalid or
impracticable, the validity of the remaining provisions hereof shall not be
affected thereby. That valid and practicable provision which most closely
approximates the economical purpose of the invalid or impracticable provision
shall be considered as agreed upon to replace the invalid or impracticable
provision. This shall also apply to any supplementary interpretation of this
Agreement.
SECTION 43
NOTICES
(1) Any notices or declarations to MIG related to this Agreement shall be
considered as validly issued if sent per registered letter or courier
to the following address or to any other address notified by MIG in
writing to the other Parties:
Xxxxxx Industrie GmbH
Herrn Xxxxxx Xxxxxx
Hardtberg 1
D - 61462 Konigstein/Taunus
cc: Freshfields Bruckhaus Xxxxxxxx, Herrn Rechtsanwalt Xx. Xxxxxxx
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(2) Any notices or declarations to ACP related to this Agreement shall be
considered as validly issued if sent per registered letter or courier
to the following address or to any other address notified by ACP in
writing to the other Parties:
Allianz Capital Partners GmbH
Herrn Xxxxxxx Xxxxx
Theresienstrasse 1 - 7
80333 Munchen
cc: Xxxxx XxXxxxxx
Herrn RA Xx. X. Xxxxx
Xxxxxxxxxxxxxxxx 00
00000 Xxxxxxx
(3) Any notices or declarations to GS related to this Agreement shall be
considered as validly issued if sent per registered letter or courier
to the following address or to any other address notified by GS in
writing to the other Parties:
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Xxxxxxx Xxxxx International
Principal Investment Area
Xxxxxxx Xxxxxx
Peterborough Court
000 Xxxxx Xxxxxx
Xxxxxx, XX0X 2 BB
Grossbritannien
cc: Hengeler Xxxxxxx Xxxxxxx Xxxxx
XX Xx. Xxxxxx
Bockenheimer Xxxxxxxxxxx 00 - 00
00000 Xxxxxxxxx xx Xxxx
SECTION 44
PROHIBITION OF ASSIGNMENT
Subject to the provisions of this Agreement, no Party shall be entitled to
transfer rights or obligations from this Agreement to any third party without
the approval of the other shareholders.
SECTION 45
COSTS
All costs, fees and transfer taxes arising in relation to this Agreement,
including the fees for this deed shall be borne by the Financial Investors at
two thirds and MIG at one third. Each Party shall bear the costs associated with
the commissioning of its advisors.
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SECTION 46
CONDITION PRECEDENT
This Agreement shall be subject to the condition precedent that the Closing
under the Purchase Agreement takes place.
