1
Ass.Prot. 1999/26 EXHIBIT 2.1
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NOTARIAL DEED
SHARE PURCHASE AND TRANSFER AGREEMENT
Negotiated at Basel/Switzerland this 8th (eighth) day of March 1999 (nineteen
hundred and ninety-nine).
Before me, the undersigned Notary Public
XXXXXXX XXXXX
at Basel/Switzerland appeared today:
1. Xx. Xxxxx Xxxxxxxxx Xxxxxx Xxxxxx, born May 24, 1959, attorney-at-law,
German citizen, domiciled at D-45219 Essen, Unterlehberg 46, known by
person,
acting not in his own name, but as representative exempted from the
restrictions imposed by Section 181 German Civil Code, presenting an
original power of attorney, a true copy thereof being attached to this
Deed, in the name and on behalf of
Klockner Mercator Maschinenbau GmbH, a German limited liability company
with head office at D-47057 Duisburg, Xxxxxxxxxxxxxxx 00, registered with
the Commercial Register at the Local Court of Duisburg under HRB 3460,
- hereinafter referred to as " Seller" -
2. Xx. Xxxx-Xxxx Xxxxxxxxxx, born August 9, 1961, attorney-at-law, German
citizen, domiciled at D-61476 Xxxxxxxx, Xxxxxxx-Xxxx-Xxxxxxx 0x, known by
person,
acting not in his own name, but as representative exempted from the
restrictions imposed by Section 181 German Civil Code, presenting two
original
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powers of attorney, true copies thereof being attached to this Deed (the
second power of attorney dated March 4, 1999, is presented and attached
for the Secretary's Certificate of Venture Holdings Trust contained
therein), in the name and on behalf of
a) Venture Beteiligungs GmbH, a German limited liability company in
process of incorporation and registration with head office at
D-61118 Xxx Xxxxxx, Xxxxxx-Xxxxxx-Xxxxxxx 0x, to be registered
with the commercial register at the local court of Bad Vilbel,
according to the attached certified copy of the Deed of
Incorporation of Venture Germany GmbH dated March 4, 1999, and the
attached certified copy ot the Deed of Incorporation of Venture
Beteiligungs GmbH dated March 7, 1999,
- hereinafter referred to as "Buyer" -
b) Venture Holdings Trust, a grantor trust, organized and existing
under the laws of the State fo Michigan, USA, with registered head
office at 33662 Xxxxx X. Xxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000, XXX,
- hereinafter referred to as "Parent" -
- Seller, Buyer and Parent hereinafter referred to as
"Party" or "Parties", as the case may be -
The acting notary asked the persons appearing prior to the notarization whether
he or any of his partners acts or acted in the matter to be recorded for any of
the parties of this deed outside his or, as the case may be, their notarial
function (Section 3 para. 1 No. 7 Recording Act (Beurkundungsgesetz)). The
answer was negative.
The persons appearing requested this Deed including its Exhibits to be recorded
in the English language. The acting Notary Public who is in sufficient command
of the English language ascertained that the persons appearing are also in
command of the English language. After having been instructed by the acting
Notary, the persons appearing waived the right to obtain the assistance of a
sworn interpreter and to obtain a certified translation of this Deed and the
Exhibits thereto.
The persons appearing, acting as indicated, asked for the Notarization of the
following
SHARE PURCHASE AND TRANSFER AGREEMENT
3
between
KLOCKNER MERCATOR MASCHINENBAU GMBH,
Klocknerstra(beta)e 29,
D-47057 Duisburg
- hereinafter "SELLER" -
on the one hand
and
VENTURE BETEILIGUNGS GMBH I. GR.,
Xxxxxx-Xxxxxx-Xxxx(xxxx)x 0 x,
00000 Xxx Xxxxxx
hereinafter - "BUYER" -
and
VENTURE HOLDINGS TRUST
33662 Xxxxx X. Xxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000, X.X.X.
hereinafter - "PARENT" -
on the other hand
- Seller, Buyer and Parent hereinafter "Party"
or "Parties", as the case may be -
Section 1
DEFINITIONS
The terms listed below are defined with effect for the entire Agreement in the
section listed opposite the relevant term:
Activities 2.1
4
Adjustment Amount 5.6
Banking Day 11.1
BDO 6
Buyer's Auditor 9.1
Cash 5.1.4
Cash Management System 8.1
Closing Conditions 10.1
Control Agreement 7.2
Effective Date 9.1
Effective Date Accounts 9.1
Environmental Due Diligence 12a.1
Environmental Liabilities 12a.2
Financial Indebtedness 5.1.2
Financial Statements 1998 6
GAAP 9.1
Intellectual Property Rights 12.6
Klockner-Group 3.2
Known Conditions 12a.1
Net Equity 5.1.6
Peguform 2.1
Peguform-Group 3.1
Preliminary Purchase Price 5.2
Preliminary Effective Date Accounts 5.2
Preliminary Shareholder's Loans 5.2
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Purchase Price 5.1
Purchase Price Adjustment 5.4
Real Estate 12.7
Revised Effective Date Accounts 9.2
Shareholder's Loans 4.2
Shareholder's Loans Adjustment 5.5
Shares 2.2(a)
U.S. GAAP Statements 11.1
Working Capital 5.1.5
Section 2
PEGUFORM AND SUBSIDIARIES
2.1 Peguform GmbH, Botzingen, registered in the Commercial Register of
the Lower Court of Freiburg/Breisgau sub HRB 1129 ("PEGUFORM") is
active in the manufacture and sale of plastic products, in particular
plastic automotive components (the "ACTIVITIES").
2.2 The stated share capital (Stammkapital) of Peguform amounts to
Deutsche Xxxx seventy million and is held as follows:
(a) Seller holds shares in the nominal amount of DEM 25
million (twenty-five million), DEM 15 million (fifteen
million), DEM 10 million (ten million), DEM 5 million
(five million), DEM 5 million (five million), DEM
3,150,000 (three million one hundred fifty thousand), DEM
1,913,000 (one million nine hundred thirteen thousand),
DEM 1,100,000 (one million one hundred thousand), DEM
1,100,000 (one million one hundred thousand), DEM 1
million (one million), DEM 1 million (one million), DEM
12,400 (twelve thousand four hundred), DEM 10,000 (ten
thousand), DEM 10,000 (ten thousand) and DEM 4,600 (four
thousand six hundred), together shares in the nominal
amount of DEM 69.3 million (sixty nine million three
hundred thousand - the "SHARES") and
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(b) NEPTUNO Verwaltungs- und Treuhand-Gesellschaft mbH,
Cologne, holds shares in the nominal amount of DEM 300,000
(three hundred thousand), DEM 300,000 (three hundred
thousand) and DEM 100,000 (one hundred thousand), together
shares in the nominal amount of DEM 700,000 (seven hundred
thousand).
2.3 Peguform holds all of the shares (including the shares held in trust
for Peguform as set out in Section 2.4) in (a) Peguform France S.A.,
Vernon, France; (b) Peguform Iberica S.A., Polinya, Spain (except as
set out in Section 2.5); (c) Peguform Bohemia a.s., Liberec, Czech
Republic; as well as (d) a 70 %-interest in Peguform Hella Mexico
S.A., Puebla, Mexico. Peguform Iberica S.A. and Peguform Bohemia a.s.
hold the interests shown on the corporate chart attached as EXHIBIT
Section 2.3. Peguform France S.A. has entered into a joint venture
agreement with Shashi Hengfeng Plastic Co. Ltd. regarding the
foundation of Manducher Hengfeng Ltd.
2.4 The following parties hold shares in Peguform France S.A. as trustees
for Peguform:
(a) Xx. Xxxxxxxxx Barschkett 2 shares
(b) Xx. Xxxxxxxx xx Xxxxx 2 shares
(c) Xx. Xxxxx Xxxxx Solana 2 shares
(d) Xx. Xxxxxx Deggim 2 shares. 2 shares.
2.5 Domus Verwaltungsgesellschaft mbH, Duisburg, holds one share in
Peguform Iberica S.A.
2.6 Inerga Components S.A. holds 2,500 shares in Inerga Logistics S.L.
and Celulosa Fabril (Cefa) S.A. holds one share in Inerga Components
S.A.
2.7 Mr. Francesc Borull holds as a trustee for Peguform Iberica S.A. one
share (quota) in Peguform do Brazil and 1,000 shares in Peguform
Argentinia S.A.
SECTION 3
PEGUFORM-GROUP, KLOCKNER-GROUP
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3.1 Peguform and the direct and indirect subsidiaries (including
interests in joint ventures) referred to in Section 2.3 are
hereinafter collectively referred to as the "PEGUFORM-GROUP".
3.2 Klockner-Werke AG and its affiliated enterprises within the meaning
of Section 15 Stock Corporation Act excluding the companies of the
Peguform-Group are hereinafter collectively referred to as the
"KLOCKNER-GROUP".
SECTION 4
SALE AND TRANSFER OF SHARES, REPAYMENT OF SHAREHOLDER'S LOANS
4.1 Seller hereby sells and transfers subject to the suspensive
conditions set forth in ss. 4.3 below the Shares to Buyer. Buyer
accepts the sale and transfer of the Shares. The sale and transfer of
the Shares shall include all rights and obligations attached to the
Shares.
4.2 Buyer shall repay on behalf of Peguform-Group all accounts receivable
of Seller against the companies of the Peguform-Group existing at the
time of the Effective Date excluding accounts receivable arising from
supplies and services in the ordinary course of business
("SHAREHOLDER'S LOANS") being recorded in the Cash Management System
(Seller's account nos. 5032 and 5518).
4.3 The sale of the Shares shall become effective in relation between the
Parties as of the end of the day (24:00 hrs.) of the Effective Date.
The transfer of the Shares, however, shall become legally effective
(suspensive condition/ aufschiebende Bedingung) only at the day of
Closing, or with the payment of the Preliminary Purchase Price and
the repayment of the Preliminary Shareholder's Loans, whichever
occurs later.
SECTION 5
PURCHASE PRICE
5.1 The Purchase Price for the Shares shall be the aggregate of:
5.1.1 a fixed amount of DEM 848,118,948.-- (Deutsche Xxxx eight
hundred forty eight million one hundred eighteen thousand
nine
8
hundred forty eight);
minus
5.1.2 the amount of interest-bearing and non interest-bearing
debt obligations or other similar instruments of the
Peguform-Group to banks, financial or other similar
institutions or vendors in the case of financed equipment
purchases initially providing for deferred payments in
excess of one year (including any accrued and/or unpaid
interest thereon) and excluding any obligations arising
from financial leases each existing at the time of the
Effective Date ("FINANCIAL INDEBTEDNESS");
minus
5.1.3 the amount of the Shareholder's Loans existing at the time
of the Effective Date;
plus
5.1.4 cash and cash equivalents (Section 266(2) B IV German
Commercial Code) existing at the time of the Effective Date
("CASH");
plus/minus
5.1.5 the amount by which the accounts receivable from customers
plus inventories less accounts payable to vendors of the
Peguform-Group less of customer deposits received by the
Peguform-Group and excluding any amounts owed to vendors in
the case of financed equipment purchases initially
providing for deferred payments in excess of one year
(including any accrued and/or unpaid interest thereon) as
far as these amounts have been included in the Financial
Indebtedness (the "WORKING CAPITAL") existing at the time
of the Effective Date is more/less than DEM 208.5 million
(Deutsche Xxxx two hundred eight million five hundred
thousand);
plus/minus
5.1.6 the amount of any increase/decrease between (i) the
consolidated net equity less of minority interests
(Eigenkapital abzuglich
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Anteile Dritter) of the Peguform-Group existing at the time
of the Effective Date (the "NET EQUITY") and (ii) the
amount of DEM 159,735,625 (Deutsche Xxxx one hundred fifty
nine million seven hundred thirty five thousand six hundred
twenty five), representing the consolidated net equity less
of minority interests as shown in the Financial Statements
1998; in the calculation of the increase/decrease between
the Net Equity and the consolidated net equity less of
minority interests as shown in the Financial Statements
1998 all items which would give rise to duplicative
adjustments to the Purchase Price, such as changes in the
provisions for inventories and receivables or other items,
shall be disregarded;
(the "PURCHASE PRICE") plus interest on the Purchase Price at the
rate of 6 % per annum (365 days) from Closing to but not including
the day of payment. The Financial Indebtedness, the Shareholder's
Loans, the Cash, the Working Capital and the Net Equity which are
used in calculating the Purchase Price are shown for illustration
purposes in EXHIBIT SECTION 5.1 as of 30 September 1998.
5.2 The Preliminary Purchase Price to be paid by Buyer to Seller on
Closing as provided under Section 11.3 (a) shall be calculated by
applying the principles set out in Section 5.1 above on the basis of
Preliminary Effective Date Accounts prepared by the management of the
Peguform-Group based on good faith projections ("PRELIMINARY
EFFECTIVE DATE ACCOUNTS") and delivered to Buyer on or before the
tenth Banking Day preceding the Closing ("PRELIMINARY PURCHASE
PRICE"). The Preliminary Shareholder's Loans to be repaid by Buyer on
behalf of the Peguform-Group to Seller on Closing as provided under
Section 11.3(b) shall be calculated on the basis of the Preliminary
Effective Date Accounts ("PRELIMINARY SHAREHOLDER'S LOANS").
5.3 The Preliminary Purchase Price and the Preliminary Shareholder's
Loans shall be paid by Buyer free of costs and charges in immediately
available funds by wire transfer at Closing to the account designated
by Seller in writing prior to Closing.
5.4 If, on the basis of the Effective Date Accounts, the Purchase Price
is higher
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than the Preliminary Purchase Price, Buyer shall pay to Seller an
amount equal to the amount by which the Purchase Price exceeds the
Preliminary Purchase Price and, if, on the basis of the Effective
Date Accounts, the Preliminary Purchase Price is higher than the
Purchase Price, Seller shall pay to Buyer an amount equal to the
amount by which the Preliminary Purchase Price exceeds the Purchase
Price. Any such amount to be paid by either Buyer or Seller
("PURCHASE PRICE ADJUSTMENT") shall be paid as follows:
5.4.1 Any Purchase Price Adjustment owed by Buyer shall be paid
free of costs and charges in immediately available funds
ten Banking Days after the Effective Date Accounts have
become final and binding upon the Parties in accordance
with Section 9 below to the account designated by Seller in
writing prior to Closing.
5.4.2 Any Purchase Price Adjustment owed by Seller shall be paid
by Seller free of costs and charges in immediately
available funds by wire transfer ten Banking Days after the
Effective Date Accounts have become final and binding upon
the Parties in accordance with Section 9 below to the
account designated by Buyer in writing prior to Closing.
5.5 If, on the basis of the Effective Date Accounts, the amount of the
Shareholder's Loans is higher than the amount of the Preliminary
Shareholder's Loans, Buyer shall pay to Seller on behalf of
Peguform-Group an amount equal to the amount by which the
Shareholder's Loans exceed the Preliminary Shareholder's Loans and,
if, on the basis of the Effective Date Accounts, the Preliminary
Shareholder's Loans are higher than the Shareholder's Loans, Seller
shall pay to Buyer for the account of the Peguform-Group an amount
equal to the amount by which the Preliminary Shareholder's Loans
exceed the Shareholder's Loans. Any such amount to be paid by either
Buyer or Seller ("SHAREHOLDER'S LOANS ADJUSTMENT") shall be paid as
follows:
5.5.1 Any Shareholder's Loans Adjustment owed by Buyer shall be
paid free of costs and charges in immediately available
funds ten Banking Days after the Effective Date Accounts
have become final and binding upon the Parties in
accordance with Section 9 below to the
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account designated by Seller in writing prior to Closing.
5.5.2 Any Shareholder's Loans Adjustment owed by Seller shall be
paid by Seller free of costs and charges in immediately
available funds by wire transfer ten Banking Days after the
Effective Date Accounts have become final and binding upon
the Parties in accordance with Section 9 below to the
account designated by Buyer in writing prior to Closing.
5.6 If one Party owes a Purchase Price Adjustment to the other Party and
that other Party owes a Shareholder's Loans Adjustment to the other,
these claims shall be offset to the extent that the amounts
correspond with each other. The excess amount shall be payable by
Seller or Buyer respectively, whoever owes the larger amount, as
provided for in Section 5.4 or Section 5.5 respectively ("ADJUSTMENT
AMOUNT").
SECTION 6
FINANCIAL STATEMENTS 1998
The financial statements of Peguform GmbH for fiscal year 1997/1998 ending on
September 30, 1998 audited and certified by BDO Deutsche Warentreuhand AG
Wirtschaftsprufungsgesellschaft, Dusseldorf ("BDO"), as well as the consolidated
financial statements of the Peguform-Group for such fiscal year audited by BDO
(collectively the "FINANCIAL STATEMENTS 1998") have been handed over to Buyer
prior to the conclusion of this Agreement.
SECTION 7
ALLOCATION OF PROFITS AND LOSSES
7.1 Seller shall arrange that the fiscal year of Peguform is changed to
the effect that the fiscal year starting on October 1, 1998 shall end
on the Effective Date.
7.2 Seller shall enter into an agreement with Peguform pursuant to which
the control and profit and loss transfer agreement between Seller and
Peguform dated July 31/August 6, 1997 ("CONTROL AGREEMENT") shall be
terminated by mutual agreement as of the Effective Date.
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7.3 Seller shall be obliged to assume the losses, if any, of Peguform as
shown in the statutory accounts of Peguform as of the Effective Date
under the Control Agreement in accordance with Section 302 (1) German
Stock Corporation Act.
7.4 The profit of Peguform for the stub fiscal year ending on the
Effective Date as shown in the statutory accounts of Peguform as of
such date shall be allocated and transferred to Seller under the
Control Agreement.
7.5 In case creditors of Peguform should require collateral pursuant to
Section 303 German Stock Corporation Act, Seller shall upon request
of Buyer provide such collateral in its own name and for its own
account, irrespective of when the claim for which collateral is
requested came into existence. Should this not be feasible, Seller
shall indemnify Buyer against any costs and expenses incurred in
providing such collateral as well as indemnify Buyer against any
recourse by third parties.
7.6 The statutory accounts of Peguform for the stub fiscal year shall be
prepared by the management of Peguform, audited by BDO and determined
by Buyer timely and without undue delay. However, in relation between
the Parties the Effective Date Accounts shall govern the
determination of the profit and loss of the stub fiscal year. If the
statutory accounts show a larger loss of Peguform in the stub fiscal
year than the Effective Date Accounts, Buyer shall hold Seller
harmless against any claim of Peguform exceeding the loss as shown in
the Effective Date Accounts. Seller herewith waives any claims
against Peguform for any profit of the stub fiscal year in excess of
the amount of profit shown in the Effective Date Accounts.
SECTION 8
CASH MANAGEMENT/WORKING CAPITAL
8.1 Seller maintains a cash management system to record and settle all
intercompany transactions between the Klockner-Group and the
Peguform-Group other than transactions between companies of those
groups concerning supplies and services in the ordinary course of
business (the "CASH MANAGEMENT SYSTEM"). The Cash Management System
shall be terminated on or before the Effective Date.
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8.2 Under the Cash Management System Seller will have an account
receivable against Peguform-Group which corresponds to the
Shareholder's Loans and shall be repaid by Buyer on behalf of
Peguform-Group as described in Section 4.2.
8.3 Seller shall, as far as necessary and appropriate, with the prior
consent or on the request of Buyer, provide Peguform-Group with
additional cash between the Effective Date and Closing by means of
further loans. The aggregate of such amounts plus interest accrued
(at the rate of 4 % per annum (365 days) from the Effective Date to
but not including the day of payment) shall be repaid by Buyer on
behalf of the Peguform-Group to Seller at Closing as provided for in
Section 5.3. Seller shall submit to Buyer satisfactory documentation
that reflects the additional cash provided by Seller after the
Effective Date on or before the seventh Banking Day prior to Closing.
8.4 Seller undertakes and covenants that the Working Capital will be
managed in the ordinary course between October 1, 1998 and the
Effective Date and in accordance with past practice prior to October
1, 1998, in particular without limitation (i) the collection of the
receivables will not be accelerated, (ii) the payables will not be
extended and (iii) the inventories will not be liquidated other than
in the ordinary course of business.
SECTION 9
EFFECTIVE DATE ACCOUNTS
9.1 The Financial Indebtedness, the Shareholder's Loans, the Cash, the
Net Equity and the Working Capital, each as per 31 March 1999 (the
"EFFECTIVE DATE") as well as any Purchase Price Adjustment,
Shareholder's Loans Adjustment and any Adjustment Amount resulting
therefrom, shall be determined on the basis of the consolidated
accounts of Peguform-Group as of the Effective Date which shall be
prepared by BDO in accordance with German generally accepted
principles of accounting and preparation of annual accounts ("GAAP")
utilizing and continuing the same election rights and valuation
principles as used by the Peguform-Group in preparation of the
Financial Statements 1998 and on the basis of (i) the then current
Klockner-Werke AG accounting and consolidation standards
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(Bilanzierungsrichtlinie Stand 9/94 and Konsolidierungsrichtlinie
Stand 9/94) used in the preparation of the Financial Statements 1998
consistently applied and (ii) the accounting policies listed in
EXHIBIT SECTION 9.1 (the "EFFECTIVE DATE ACCOUNTS"). However, in the
event that GAAP and past practices conflict, then GAAP will prevail.
Seller shall until Closing and Buyer shall after Closing instruct the
management of the companies of the Peguform-Group to effectively
assist BDO in the preparation of the Effective Date Accounts, in
particular by providing all information and documentation requested
by BDO. The Effective Date Accounts prepared by BDO shall be
delivered to Deloitte and Touche LLP ("BUYER'S AUDITOR") not later
than sixty (60) days after the Effective Date. Buyer's Auditor shall
receive all necessary assistance and shall be given access to all
relevant documentation for reviewing the Effective Date Accounts.
9.2 The calculation of the Financial Indebtedness, the Shareholder's
Loans, the Cash, the Net Equity and the Working Capital, each as of
the Effective Date, as well as any Purchase Price Adjustment,
Shareholder's Loans Adjustment and any Adjustment Amount resulting
therefrom, will be based on the Effective Date Accounts prepared by
BDO to the extent that Buyer does not within thirty (30) days after
receipt of BDO's Effective Date Accounts provide Seller with a
written report asserting that the Effective Date Accounts do not meet
the provisions of this Agreement by way of stating the specific
objections to that effect. In such event, revised Effective Date
Accounts shall be prepared by Buyer's Auditor and submitted to Seller
within the foregoing thirty (30) days' period which shall take into
account the changes that are necessary in Buyer's view ("REVISED
EFFECTIVE DATE ACCOUNTS").
9.3 If the Parties cannot agree on the changes of the Revised Effective
Date Accounts within two weeks following the delivery of the Revised
Effective Date Accounts by Buyer's Auditors, each of Seller and Buyer
shall be entitled to request the Institut der Wirtschaftsprufer in
Deutschland e.V., Dusseldorf, to appoint an auditor to act as an
arbitrator (Schiedsgutachter) to determine the correct amount of the
Financial Indebtedness, the Shareholder's Loans, the Cash, the Net
Equity and the Working Capital, but limited to any dispute on the
changes since September 30, 1998. The arbitrator shall give Seller
and Buyer adequate opportunity to present their views in writing and
at a hearing or hearings to be held in the presence of
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Seller and Buyer and their advisors. The arbitrator shall give
reasons for his decision on all issues which are in dispute between
Seller and Buyer. The arbitrator shall also determine the allocation
of the cost of the arbitration proceedings pursuant to Sections 91
sequent German Code of Civil Procedure, provided that each Party
shall fully bear the costs of his own advisors. The Effective Date
Accounts as determined by the arbitrator shall be final and binding
for the Parties but shall not limit the representations and
warranties contained in Section 12.8 otherwise.
SECTION 10
CLOSING CONDITIONS
10.1 The Closing shall take place after the following conditions ("CLOSING
CONDITIONS") have occurred:
(a) The supervisory board (Aufsichtsrat) of Klockner-Werke AG
has agreed to the conclusion and performance of this
Agreement;
(b) the shareholders' meeting (Hauptversammlung) of
Klockner-Werke AG has agreed to the conclusion and
performance of this Agreement;
(c) any necessary pre-merger antitrust clearance in Germany,
Belgium and Mexico has been obtained.
10.2 The Parties undertake to use all reasonable endeavours to ensure that
the Closing Conditions are fulfilled as soon as possible after the
time of signing of this Agreement, in particular the Board of
Directors (Vorstand) of Klockner-Werke AG shall recommend to the
shareholders' meeting of Klockner-Werke AG to approve the transaction
as contemplated hereunder. The Parties shall promptly inform each
other about the occurrence of the Closing Conditions. Each Party is
entitled to waive the satisfaction of a Closing Condition intended
for the protection of that Party.
10.3 If any of the Closing Conditions has not been satisfied on or before
June 30, 1999, this Agreement, with the exception of Section 19 and
Section 20 shall be deemed null and void unless a Party has waived a
Closing Condition pursuant Section 10.2. If the Agreement shall be
deemed null and void none of the Parties
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shall have a claim against the other in the context of having entered
into this Agreement. However, each Party shall be obliged to return
all material received from the other side and to keep secret and not
to use for its own purposes all confidential information received in
the context of the transactions contemplated in this Agreement.
Seller and Buyer may agree on an extension of the period set forth in
sentence 1.
SECTION 11
CLOSING
11.1 The Closing shall take place five banking days (a day on which banks
are open for business in Frankfurt am Main and in New York - "BANKING
DAY") following the occurrence of the last of the Closing Conditions
not waived by one of the Parties. The Parties will use their best
efforts to achieve the Closing as soon as reasonably possible,
however, the Parties are aware of Buyer's desire to receive thirty
days before Closing, consolidated financial statements of the
Peguform Group (consolidated balance sheets, income statements,
statements of cash flows, statement of shareholders' equity and notes
thereto) prepared in accordance with United States Generally Accepted
Accounting Principles and accompanied by the report of BDO in form
and substance meeting the requirements for inclusion by Buyer in
reports and other filings it may make under the United States
securities laws (i) as of September 30, 1997 and September 30, 1998
(audited) and (ii) for the three months periods ended as of December
31, 1997 and December 31, 1998 (unaudited)("U.S. GAAP STATEMENTS").
In the event that the U.S. GAAP Statements are not timely (30 days in
advance) received by Buyer, the Closing may at Buyer's request be
postponed, but in no event the Closing may be postponed to a later
date than 31 May 1999, 10 a.m. for this reason.
11.2 The Closing shall take place at the offices of Xxxxxxxx-Xxxxx XX, 00
Xxxxxxxxxxxx(xxxx)x, 00000 Xxxxxxxx or at such other place agreed
upon by the Parties.
11.3 At Closing the Parties shall procure simultaneously ("Zug um Zug")
the following:
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(a) Buyer shall pay the Preliminary Purchase Price as provided
for in Section 5;
(b) Buyer shall repay the Preliminary Shareholder's Loans as
provided for in Section 4.2 and Section 5.2;
(c) Buyer shall pay the amount of any additional cash
contribution, including any interest thereon, by Seller to
Peguform-Group after the Effective Date (as provided for in
Section 8.3);
(d) Seller shall submit to Buyer satisfactory documentation
showing that the supervisory board (Aufsichtsrat) and the
shareholders meeting (Hauptversammlung) of Klockner-Werke
AG have given their consent to the conclusion and
performance of this Agreement;
(e) Seller shall hand over to Buyer the resignation letters
provided for in Section 18;
(f) Seller shall procure that the shares referred to in Section
2.4 (a) and (b) and Section 2.5 are transferred to parties
designated by Buyer;
(g) If a list of Known Conditions has been prepared by the
Parties as provided for in Section 15.7, such list shall be
confirmed by Seller and Buyer by way of signing.
SECTION 12
REPRESENTATIONS AND WARRANTIES
Seller represents and warrants at the time of signing of this Agreement and as
of the Closing as follows:
12.1 Seller has all necessary authority, including any required board
approvals, to enter into and to perform this Agreement. Seller can
freely dispose of the Shares sold and transferred pursuant to this
Agreement, free of any encumbrances or other rights of third parties
including warrants and options to purchase Shares, and there are no
agreements to acquire or subscribe for any of the capital stock of
Peguform or any of the companies of the Peguform-Group (except as
provided for in the joint venture and
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shareholders' agreements of Celulosa Fabril (Cefa) S.A., Manducher
Hengfend Ltd. and Peguform Hella Mexico S.A. de C.V.).
12.2 The statements in Section 2 correctly reflect the ownership in and
the capital of Peguform and the companies of the Peguform-Group.
There are no other shares held by Peguform or the companies of the
Peguform-Group in any other companies nor any obligations to acquire
such shares.
12.3 Peguform and the companies of the Peguform-Group are companies duly
organised and validly existing under the laws of their respective
jurisdictions. No bankruptcy or judicial composition proceedings
concerning the assets of any of the companies of the Peguform-Group
or of Seller have been applied for and no circumstances exist
pursuant to any bankruptcy or voidance laws applicable which could
justify the voidance of this Agreement.
12.4 The share capital of Peguform and each of the companies of the
Peguform-Group is fully paid in. Cash contributions have been made in
full, and contributions in kind have been made at not more than
market value. Contributions have not been reduced by repayments.
There exist no other financial encumbrances on the Real Estate, to
the extent owned by Peguform or the companies of the Peguform-Group,
other than such securing liabilities shown in the Financial
Statements 1998.
12.5 Each of the companies of the Peguform-Group has performed and
complied with all material obligations under any material agreements,
contracts or other commitments any of them are a party to, and has
done everything which is reasonable in order to be in a position to
meet such material obligations under these agreements, contracts, or
commitments when they become due. Except as disclosed in EXHIBIT
SECTION 12.5, to the best of Seller's knowledge, no event has
occurred which would constitute a material default under any material
agreement, contract or commitment, and none of the parties to such
material agreement, contract or commitment is entitled to terminate
or modify the obligations thereunder as a result of the execution of
this Agreement.
12.6 Peguform and each of the companies of the Peguform-Group own or
lawfully use under a license all such patents, utility models, design
patents, trademarks, copyrights, software and other intellectual
property rights
19
(collectively "INTELLECTUAL PROPERTY RIGHTS") necessary to carry on
the Activities of Peguform and each of the companies of the
Peguform-Group as presently conducted and that such Intellectual
Property Rights, to the best knowledge of Seller, do not infringe on
any third party rights nor, to the best knowledge of Seller, can any
third party claim the invalidity or unenforceability of such rights
and Peguform and each of the companies of the Peguform-Group hold
unrestricted and lawful title to the Intellectual Property Rights to
the extent they are owned by Peguform and/or the companies of the
Peguform-Group. The Intellectual Property Rights are not the subject
of any pending or, to the best knowledge of Seller, threatened
proceedings for opposition, cancellation, revocation or
rectification, and there exist no facts or circumstances to the best
knowledge of Seller which might give rise to any such proceedings.
12.7 Peguform and each of the companies of the Peguform-Group own, or hold
lawful possession to, all assets (including the Real Estate) and
inventories necessary for carrying out the Activities in
substantially the same fashion as prior to the Closing, and all such
assets and inventories are in a condition which is adequate to carry
on the Activities in the ordinary course of business in substantially
the same fashion and manner as prior to the Closing. Peguform and
each of the companies of the Peguform-Group have good and marketable
title to all of their assets necessary for carrying out the
Activities, except for leased property and third party intellectual
property rights, to which Peguform or the respective companies of the
Peguform-Group has valid and enforceable leases or licenses, as the
case may be, free and clear of all mortgages, options, leases,
covenants, conditions, agreements, liens, security interest, adverse
claims, restrictions, charges, encumbrances or right of others,
except for any statutory or customary encumbrances or restrictions
(e.g. title retention, right of way and all other servitudes of
non-financial nature, right of first refusal) and except as disclosed
in EXHIBIT SECTION 12.7. The use of the Real Estate used or owned by
Peguform or the companies of the Peguform-Group (collectively "REAL
ESTATE"), the conduct of its Activities does not violate any material
law or governmental regulation, and the buildings and improvements on
the Real Estate comply in all material aspects with the applicable
laws and regulations. This representation does not extend to Known
Conditions and Environmental Liabilities and to shareholdings within
the meaning of Section
20
12.2.
12.7a As of the Effective Date, Seller will cause Peguform to ensure that
all machinery, equipment and other fixed assets necessary to generate
the production volumes of Peguform do Brazil as originally projected
by Peguform will be in sufficient condition to support the full
operation of the facility, or, to the extent that Seller anticipates
any additional expenditures to be incurred subsequent to the
Effective Date with respect to the purchase and installation of such
fixed assets, these will be recognized as a liability of Peguform do
Brazil at the Effective Date in the Preliminary Effective Date
Accounts and the Effective Date Accounts.
12.8 The Financial Statements 1998 and the Effective Date Accounts have
each been prepared in accordance with the GAAP, utilizing and
continuing the same election rights and valuation principles as used
by the Peguform-Group in preparation of the preceding financial
statements respectively and on the basis of (i) the then current
Klockner-Werke AG accounting and consolidation standards
(Bilanzierungsrichtlinie Stand 9/94 and Konsolidierungsrichtlinie
Stand 9/94), consistently applied and (ii) the accounting policies
listed in EXHIBIT SECTION 9.1; the Financial Statements 1998 note all
material contingent liabilities within the meaning of Section 251
German Commercial Code ("Eventualverbindlichkeiten") of each of
Peguform and the companies of the Peguform-Group, stating the exact
amounts and exposure incurred with any such contingent liability. All
companies in which Peguform directly or indirectly holds the majority
of the voting rights or which are directly or indirectly controlled
by Peguform have been included in the consolidation as if they were
wholly owned subsidiaries of Peguform (including Celulosa Fabril
(Cefa) S.A.).
In accordance with German GAAP, Peguform accounts for production
tooling projects utilizing the strict "lowest value" principle, in
which the carrying value as of the balance sheet date of each
production tooling project may not exceed the proceeds reasonably
expected from the Peguform customer, net of all future estimated
costs necessary to complete the project. Any write downs necessary to
perform this "loss-free" valuation are continuously treated as a
valuation adjustment, are offset against the related production
tooling projects recorded within inventory on the balance sheet, and
are charged to expense in the period such write-downs are
21
identified. This principle will be utilized in the preparation of the
Preliminary Effective Date Accounts and the Effective Date Accounts.
12.9 The Financial Statements 1998 and the Effective Date Accounts present
a true and fair view according to GAAP of the net worth, financial
position and results of the Peguform-Group.
12.10 Peguform and each of the companies of the Peguform-Group are in
possession of all material governmental approvals, licenses and
permits necessary to operate their respective business as it
currently exists except as disclosed in EXHIBIT SECTION 12.10. The
approvals, licenses and permits are in full force and effect and will
not be terminated due to the transfer of the Shares. Peguform and
each of the companies of the Peguform-Group are each at the time of
Closing in all material respects in compliance with such approvals,
licenses and permits affecting or applicable to the Activities.
12.11 For the benefit of Peguform and the companies of the Peguform-Group
the insurances listed in EXHIBIT SECTION 12.11 have been entered
into, partially under framework agreements of Klockner-Werke AG. All
premiums due for the insurances listed in EXHIBIT SECTION 12.11 have
been paid. The insurance coverage for insurances under the framework
agreements of Klockner-Werke AG will continue until the end of the
respective current insurance period as described in EXHIBIT SECTION
12.11 provided that Peguform and each of the companies of the
Peguform-Group continue to comply with all obligations under the
relevant policies, including payment of its share of the premiums.
The coverage under all other insurance agreements of Peguform and the
companies of the Peguform-Group outside the framework agreements of
Klockner-Werke AG will continue until their respective contractual
termination date or their respective renewal date as described in
EXHIBIT SECTION 12.11, provided that Peguform and each of the
companies of the Peguform-Group continue to comply with all
obligations vis-a-vis the insurers, including the payment of
premiums. Seller does not warrant that the terms and conditions of
the insurances which are covered by the framework agreements of
Klockner-Werke AG will remain unchanged in view of the transfer of
the Shares after the end of the respective current insurance periods.
12.12 Peguform and each of the companies of the Peguform-Group at the time
of
22
signing of this Agreement are not involved in court or administrative
proceedings, including arbitration proceedings, either as plaintiff
or defendant having a litigation value (Streitwert) exceeding DEM
1,000,000 in the individual case except as disclosed in EXHIBIT
SECTION 12.12. There are no product liability, warranty or other
similar claims currently against Peguform and/or any of the companies
of the Peguform-Group exceeding a value of DEM 200,000 in the
individual case; and, to the best knowledge of Seller, there exist no
circumstances which could give rise to any such liabilities or
claims.
12.13 All obligations, whether arising by operation of law, by agreement or
past custom, for payments and contributions with respect to direct or
indirect pension and retirement benefits or other compensational
benefits, such as anniversary payments, early retirement benefits,
severance payments and other alike payments to the employees of
Peguform or the companies of the Peguform-Group in pension fund and
old age pension liabilities for periods prior to the Effective Date
have been paid, are funded for or are provided for to the extent
required by GAAP in the Effective Date Accounts taking into
consideration Section 6a German Income Tax Act; Peguform and/or the
companies of the Peguform-Group have not experienced any strike,
labour interruption or disturbance or other collective labour
controversy of any material nature since January 1, 1997 until the
signing of this Agreement, except as disclosed in EXHIBIT SECTION
12.13. To the best knowledge of Seller, Peguform and the companies of
the Peguform-Group are in compliance with all material laws and
regulations dealing with wages, hours, vacations and working
conditions for their employees. Peguform and the companies of the
Peguform-Group employ in the aggregate on the Effective Date no more
than 8.100 employees, including such employees who are not currently
on the payroll of the Peguform-Group due to maternity leave,
long-term sickness or alike circumstances, but excluding all leased
personnel. Except as set forth in EXHIBIT 12.13A, there are no union
agreements, shop floor agreements, social plans or other labour
contracts which restrain Peguform-Group or any of its constituent
companies from undertaking reductions in force, in either case which
are in addition to requirements imposed by statutory law.
12.14 Peguform and each of the companies of the Peguform-Group are not in
default regarding payment of taxes, customs and social security
23
contributions and have filed all necessary returns in time. There is
no basis for assessment of any deficiency in taxes, customs and
social security contributions and there exist no circumstances which
could give rise to the revocation or withdrawal of any subsidies
granted to Peguform or any of the companies of the Peguform-Group,
except to the extent disclosed in EXHIBIT SECTION 12.14. All
transactions and agreements entered into by Peguform and/or the
companies of the Peguform-Group amongst themselves or with the
Klockner-Group provide for customary terms and are entered into at
arms' length.
12.15 Peguform and the companies of the Peguform-Group have each made all
reasonable arrangements as far as necessary and appropriate at the
time of Closing with a view to securing that the computer systems of
each of Peguform and the companies of the Peguform-Group are
millennium-compliant which term shall mean that neither the
performance nor functionality is or will be effected by dates prior
to, during or after the year 2000 and in particular, but without
limitation, (i) date based functionality behaves, and will behave
consistently for dates prior to, during or after the year 2000, (ii)
in all interfaces and data storage, the century in any date is and
will be specified either explicitly or by unambiguous algorithms or
interferencing rules and (iii) the year 2000 is and will be
recognized as a leap year.
12.16 During the period from October 1, 1998 until the Effective Date
(a) no material adverse changes in the financial position and
conditions of operation of Peguform and the companies of
the Peguform-Group have occurred (except for the currency
devaluation in Brazil);
(b) no damages to Peguform or each of the companies of the
Peguform-Group the amount of which exceeds DEM 1 million in
the individual case or DEM 5 million in the aggregate have
been incurred.
12.17 During the period from October 1, 1998 until the Closing Peguform and
each of the companies of the Peguform-Group have continued to conduct
their Activities in all material respects in the ordinary course of
business.
24
12.18 During the period from October 1, 1998 until the signing of the
Agreement
(a) Peguform or any of the companies of the Peguform-Group have
not incurred any material liabilities, disposed of or used
as a security, any material asset, or entered into any
material transactions not in the ordinary course of
business, made any material capital expenditure or
commitment therefore other than set forth in the budget of
Peguform-Group, in each case exceeding DEM 1 million in the
individual case, except as disclosed in EXHIBIT SECTION
12.18;
(b) the remuneration payable, including any employee benefits,
in particular under any bonus or pension schemes, to the
managing directors, officers, employees, are not being
changed other than under statutory laws or existing union
agreements or in the ordinary course of business.
12.19 As far as representations and warranties are given to the Seller's
best knowledge, only the knowledge of the current members of Seller's
management (Geschaftsfuhrung/Prokuristen) and Klockner-Werke AG's
board of directors (Vorstand) as of the signing of this Agreement
shall be attributed to Seller, provided that such knowledge is deemed
present if any of the foregoing persons could have obtained knowledge
about the underlying facts and circumstances giving rise to a breach
of a representation and warranty by applying the standard of care of
a prudent business man pursuant to Section 93 German Stock
Corporation Act.
12.20 No representation or warranty by Seller in this agreement contains
any untrue statement of a material fact or deliberately fails to
contain any material fact necessary in order to make the statements
therein not misleading as of the signing of this Agreement.
SECTION 12a
ENVIRONMENTAL INDEMNITY
12A.1 Seller had engaged Xxxxxxxx ERM International for the conduct of
Phase I environmental examinations for all of the Peguform-Group
companies, the
25
results of which were disclosed to Buyer prior to the signing of this
Agreement. Buyer has in addition conducted investigations on its own
behalf through Xxxxxx Associates U.K., Ltd. ("ENVIRONMENTAL DUE
DILIGENCE"). The findings of such Environmental Due Diligence make up
all contaminations and conditions known to Buyer as of the date of
the signing of this Agreement ("KNOWN CONDITIONS"). Seller shall be
under no obligation whatsoever for the removal, clean up or treatment
of any contamination or the costs thereof up to an amount of DEM
7,500,000 (Deutsche Xxxx seven million five hundred thousand)
(exclusive of V.A.T.). Any cost exceeding this amount shall be borne
by the Parties as described below in Section 12a.2 (b)-(e).
12A.2 Except as for the Known Conditions Seller shall indemnify and hold
harmless Buyer, Peguform and each of the companies of the
Peguform-Group, as the case may be, from all liabilities, losses or
damages of any nature whatsoever, excluding, however, damages for
lost profit, which arise (i) as a result of any soil (including
buildings) or ground water contamination, to the extent existing at
the Closing, of any of the sites currently or formerly, used or owned
by Peguform or the companies of the Peguform-Group, including their
respective legal predecessors, caused only by the actual removal,
clean up or treatment of a contamination which is currently required
by the laws in force at the time of Closing or (ii) as a result of
the failure to obtain, maintain and effect or comply with any air
emission or noise control permits, licenses, consents, applicable
laws or regulations prior to Closing ((i) and (ii) collectively
"ENVIRONMENTAL LIABILITIES") in accordance with the following:
(a) An amount of up to DEM 6 million (exclusive of VAT) shall
be exclusively borne by Buyer.
(b) Any further costs incurred between the Effective Date and
the 2nd anniversary of the Effective Date shall be borne in
shares of 75 % by Seller and 25 % by Buyer.
(c) Any further costs incurred between the 2nd anniversary of
the Effective Date and the 5th anniversary of the Effective
Date shall be borne in shares of 50 % by Seller and of 50 %
by Buyer.
(d) Any further costs incurred between the 5th anniversary of
26
the Effective Date and the 7th anniversary of the Effective Date
shall be borne in shares of 25 % by Seller and 75 % by Buyer.
(e) Any further costs incurred after the 7th anniversary of the
Effective Date shall exclusively be borne by Buyer.
Costs shall be considered incurred in the relevant period if Buyer
has timely given notice of the claim to Seller and if the costs have
actually been paid by Buyer no later than within twelve months
following the end of the respective period.
12a.3 The limitations set forth in Section 12a.2 shall not apply to such
Environmental Liabilities of which Seller had actual knowledge at the
time of the signing of this Agreement and which were not Known
Conditions.
12a.4 The burden of proof that any contamination existed prior to the
Closing, to which extent it existed prior to the Closing and to what
extent any costs resulting from the clean up, removal or treatment
can be attributed to such contaminations existing prior to Closing as
opposed to such contaminations coming into existence after Closing
shall rest with the Buyer. Should Buyer raise any claim against
Seller under this Section 12a, Buyer shall with the statement
describing the nature and extent of the claim deliver to Seller a
true and complete copy of all environmental due diligence reports and
findings reported to or delivered to Buyer by Buyer's advisors,
including Xxxxxx Associates U.K. Ltd., in the preparation of this
Agreement, true and complete copies of which shall be deposited with
the acting notary public at the time of the signing of this
Agreement.
12a.5 This Section 12a shall exclusively govern all of Seller's
obligations, liabilities, representations and warranties with respect
to Environmental Liabilities. No other representation or warranty in
this Agreement shall be construed or applied to extend to
Environmental Liabilities and the Known Conditions.
12a.6 Seller covenants and undertakes that the environmental liability
insurance taken out by Klockner-Werke AG with HDI Haftpflichtverband
der Deutschen Industrie, the beneficiaries of which include Peguform,
providing for coverage against personal and property damage in
connection with environmental occurrences on ground, water and air
shall remain in force until 30 September 1999, provided that Buyer
shall be responsible for
27
any premiums becoming due and payable after the Effective Date.
SECTION 13
REMEDIES
13.1 If a representation or warranty set forth in Section 12 or Section
12a is partially or entirely incorrect, the Seller shall put the
Buyer, or at the option of Buyer, if a company of the Peguform-Group
has suffered a financial disadvantage, the respective company, in the
position as if the representation or warranty had been correct. Buyer
is not entitled to assert damages for lost profit (entgangener
Gewinn).
13.2 The Buyer shall only be entitled to assert claims under Section 12 or
Section 12a exceeding the amount of DEM 75,000 in the individual
case. The Buyer shall furthermore only be entitled to assert claims
once the aggregate amount of all claims asserted by Buyer - de
minimis claims of up to DEM 75,000 shall not be included for such
purpose - exceeds DEM 6 million (Deutsche Xxxx six million) in which
event Buyer shall be entitled to claim the full amount (except as for
de minimis claims and except as for claims under Section 12a.1 and 2
to which the limitations as set forth in Section 12a.1 and 2(a) et
seq. shall apply).
For the avoidance of doubt, the aggregate of a particular type of
taxes owed by a company of the Peguform Group as a result of an
external tax audit covering more than one tax period shall constitute
one individual claim within the meaning of this paragraph. The same
shall apply, if and to the extent a serial of claims of the same or
similar nature is based on the same kind of factual circumstances
(basierend auf gleichartigem Lebenssachverhalt).
13.3 To the extent that the financial effect of circumstances constituting
a breach of a representation or warranty are reflected or provided
for in the Effective Date Accounts, claims of Buyer shall be
excluded.
13.4 In case of a claim resulting from a tax audit pursuant to which
depreciation expenses or provisions are not recognised with the
result that they can be utilised for a later period (tax deferment),
the obligation to pay damages pursuant to Section 13.1 is limited to
the costs of financing the relevant tax
28
payment for the time until the tax deferment reduces the tax burden
of the relevant company. Financing costs are computed on the basis of
an interest rate of 4 % p.a. (365 days).
13.5 If the Buyer is becoming aware of a fact, circumstance or event which
may lead or has led to a breach of representations or warranties,
Buyer shall inform Seller promptly, but in no event later than within
ninety days, stating the nature of the fact, the circumstance or the
event and the damage expected or sustained.
13.6 If a breach of a representation or warranty is the result of or is
connected with a liability vis-a-vis or a dispute with a third party
including public authorities, Buyer shall ensure that
(a) the Buyer or each of the respective companies of the
Peguform-Group at the request and on the instructions of
Seller shall reasonably do everything (or, as the case may
be, refrain therefrom) to conduct a defence against, or to
negotiate about the claim concerned and to minimize the
damage which may arise from this claim;
(b) in connection with the defence referred to under (a), the
Buyer or each of the respective companies of the
Peguform-Group shall only engage advisors after
consultation with Seller, or give to the Seller power of
attorney to act in and out of court as the agent of the
relevant company;
(c) if a claim is filed for which a response is required, that
Seller shall be promptly and adequately informed by Buyer
or each of the respective companies of the Peguform-Group.
Seller shall have the right to declare within two weeks (unless a
prompter response is required due to the lapse of appeal periods)
after having been notified by Buyer of a breach of a representation
or warranty within the foregoing meaning, that it will compromise or
defend, at its own expense and by its own counsel, any such dispute,
unless Buyer elects to assume such defense. Seller's right to defend
or compromise a dispute shall always in good faith take into account
Buyer's relationship with its customers. If Seller shall undertake to
compromise or defend any such asserted liability,
29
he shall promptly notify the Buyer in writing of his intentions to do
so. The Buyer shall reasonably cooperate with the Seller or Seller's
counsel in the defense against any such asserted liability and in any
compromise thereof. Such cooperation shall include, but not be
limited to, furnishing the Seller with any books, records or
information reasonably requested by Seller. If Seller shall desire to
settle any such asserted liability and Buyer shall unreasonably
refuse to consent to such compromise, then the Seller's liability
shall be limited to the amount so offered in compromise.
The Buyer shall ensure that no liability is acknowledged and no
settlement with respect to a fact or circumstance which may lead to a
breach of representations is entered into without the Seller's prior
written consent, which may not be unreasonably withheld.
13.7 The statute of limitations shall be as follows:
(a) claims for legal defects (Rechtsmangel) within in the
meaning of Section 434 German Civil Code relating to the
Shares and the interests in the companies of the
Peguform-Group directly or indirectly held by Peguform
shall be time barred in accordance with statutory laws;
(b) all other claims for a breach of a representation or
warranty, except for claims arising from a breach of the
representation or warranty set forth in Section 12.1, shall
be time barred in two years after the Effective Date;
(c) claims relating to taxes, customs or social security
contributions shall be time barred six months after the
assessment for the respective tax, social security
contribution or customs duty has become final;
(d) all claims relating to Environmental Liabilities shall be
time barred seven years after the Effective Date.
13.8 The statute of limitations shall be interrupted (unterbrochen) by
raising the specific claim in writing to the other Party. In case of
interruption, the new statute of limitations beginning after the end
of the interruption (Section 217 German Civil Code) shall be the
longer of six months or the
30
remainder of the original limitation period.
13.9 The Buyer has no right to invoke a breach of representation or
warranty or to claim an indemnification or otherwise in the event and
to the extent:
(a) the provision in Section 13.5 has not been complied with
and as a result thereof Seller has been prejudiced;
(b) the Buyer or its professional advisors having been engaged
in the preparation of this Agreement having actual
knowledge of a breach of a representation or warranty or an
Environmental Liability prior to signing of this Agreement;
(c) the Buyer has not undertaken all reasonable things
necessary from Closing to prevent and minimize damage;
(d) the breach is covered by an insurance policy;
(e) the breach is a result of a change after the Effective Date
in the accounting principles and methods, applied by a
company of the Peguform-Group;
(f) the Buyer has already been indemnified directly or
indirectly by a third party.
The Seller will be given the opportunity to take part in all meetings
with the tax authorities in the context of tax audits and tax
assessments relating to the period until the Effective Date and to
present Seller's position to the tax authorities in writing in
consultation with Buyer.
13.10 Peguform and Seller belong to the tax consolidation group of
Klockner-Werke AG. To the extent Klockner-Werke AG was or is itself
the tax debtor for reasons of such tax consolidation, the rights of
the Seller pursuant to Section 13 may be invoked correspondingly by
Klockner-Werke AG.
13.11 Payments of the Seller made according to Section 12a or Section 13
constitute in the relationship between Seller and Buyer a reduction
of the Purchase Price; to the extent they are made directly to a
company of the Peguform-Group, in relation between Buyer and the
relevant company as a capital contribution (Einlage) on behalf of
Buyer.
31
13.12 Subject to Section 14.3, the provisions of this Section 13 represent
the full and entire agreement of the Parties with regard to the
consequences of a violation of any representations and warranties of
the Seller set forth in Section 12.
SECTION 14
GENERAL LIMITATION OF LIABILITY
14.1 Any claims of Buyer relating to this Agreement and the transactions
contemplated herein for a reduction of the Purchase Price, payment of
damages, indemnification or otherwise, whether on the basis of
violation of statutory or contractual obligations or pre-contractual
duties of care (culpa in contrahendo) or any other course of action
other than the representations, warranties and covenants explicitly
set forth in this Agreement shall be excluded.
14.2 Any claims of Buyer to unwind or rescind this Agreement, regardless
of their cause, are excluded. The provisions of Sections 459 et seq.
German Civil Code shall not apply.
14.3 Seller's aggregate liability for all claims arising out of this
Agreement, including but not limited to the representations,
warranties and indemnifications set forth in Section 12 and Section
12a, shall be limited to the total amount of DEM 200 million
(Deutsche Xxxx two hundred million). This limitation shall not apply
to Seller's representations in Section 12.1 and Section 12.2. with
respect to the Shares.
SECTION 15
CONDUCT OF BUSINESS AND UNDERTAKINGS
15.1 For the period between the signing of this Agreement and the Closing,
Seller will see to it that Peguform and the companies of the
Peguform-Group shall (i) preserve customer relationships of Peguform
and the companies of the Peguform-Group, (ii) preserve the assets of
Peguform and the companies of the Peguform-Group in good working
condition, (iii) keep the necessary insurances for the Activities in
place, (iv) maintain accounting procedures in accordance with past
practice. Further, for the
32
period between the signing of this Agreement and the Closing, Seller
shall see to it that Peguform and each of the companies of the
Peguform-Group will not, except in the ordinary course of business
and in accordance with past practice and without limiting any
representations and warranties contained in this Agreement, (i)
permit any of its material assets to be subjected to any mortgage,
pledge, lien, security, interest, encumbrance, restriction, or charge
of any kind, (ii) make any material capital expenditure or commitment
therefor, (iii) grant any increase in wages, salaries, bonus or other
remuneration of any employee, (iv) cancel or waive any claims or
rights of substantial value, (v) accelerate the collection of
receivables, (vi) effect any reduction of inventory, (vii) pay any
dividends from Peguform to Seller, (viii) agree, whether or not in
writing, to do any of the foregoing except as otherwise agreed with
Buyer. Seller shall see to it that Buyer has appropriate access to
the management of the Peguform-Group between the signing of this
Agreement and the Closing.
15.2 Seller shall procure that Buyer and Buyer's advisors and other
persons designated by Buyer are granted full access to all files,
documents, personnel and information useful for the performance of
this Agreement and the transition of the Peguform-Group.
15.3 Subject to the terms and conditions provided in this Agreement, each
of the Parties hereto agrees to use all commercially reasonable
efforts to take all action and to do all things necessary,
appropriate or advisable under applicable laws and regulations to
satisfy the conditions set forth in and to consummate and make
effective the transactions contemplated by this Agreement.
15.4 If and to the extent the Peguform-Group has granted any guarantees,
securities or any other collaterals of whatsoever nature for the
benefit of Seller of companies forming part of the Klockner-Group,
such collaterals shall be released at the sole expense of Seller at
the latest on Closing.
15.5 For the period between the signing of this Agreement and the Closing,
Seller shall ensure that Buyer and all of Buyer's affiliates are
given the opportunity to bid on, and the opportunity to be awarded,
all tooling, design and prototyping contracts with each of the
companies of the Peguform-Group that such companies bid out to
independent third parties during the
33
period between the signing of this Agreement and the Closing.
15.6 The Parties will cooperate in good faith to cause Celulosa Fabril
(Cefa) S.A. to transfer its one share in Inerga Components S.A. on
Closing to a party designated by Buyer.
15.7 The Parties shall cooperate in good faith to agree on a list of Known
Conditions prior to Closing from the Xxxxxxxx ERM International and
Xxxxxx Associates U.K., Ltd. reports.
SECTION 16
NON-COMPETITION COVENANT
16.1 Seller and the companies of the Klockner-Group shall not compete with
the Peguform-Group for a period of five years after Closing in the
relevant geographic and product markets in which the Peguform-Group
is active at the time of the signing of this Agreement.
16.2 It shall not constitute a violation of the non-competition covenant
pursuant to Section 16.1 if, in the context of an acquisition of an
undertaking or a group of undertakings, a business is acquired which
operates in the product and geographic markets referred to in Section
16.1, provided that the turnover of such business in the last
preceding fiscal year amounted to not more than 10 % of the
undertaking or group of undertakings acquired. If such threshold is
exceeded, the acquisition and operation of such business shall not
constitute a violation of the non-competition covenant pursuant to
Section 16.1, provided the business is subsequently sold and the time
period between the acquisition and sale of the business does not
exceed one year.
16.3 The acquisition or the holding of interests up to 5 % in stock
exchange listed companies shall not constitute a violation of the
non-competition covenant pursuant to Section 16.1.
16.4 Seller shall refrain for a period of two years after Closing from
soliciting for employment any current employees of the
Peguform-Group.
SECTION 17
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MERGER CONTROL CLEARANCE
17.1 Seller and Buyer shall cooperate and provide each other with all
necessary and appropriate assistance to notify the concentration
contemplated in this Agreement to the Federal Cartel Office as well
as to the Belgian and Mexican antitrust agencies.
17.2 The notifications shall be filed jointly by Seller and Buyer.
Representatives of Seller and Buyer shall be present at meetings with
representatives of the antitrust agencies. Seller and Buyer shall
keep each other fully informed on all contacts which they may have
with such agencies' representatives in the context of the
notifications.
17.3 Should any antitrust agency clear the concentration contemplated in
this Agreement only upon conditions and/or obligations, the Buyer
shall take all reasonable actions necessary, including but not
limited to divestments or terminating certain existing contractual
relationships with third parties, in order to obtain the clearance as
soon as possible and within the time frame imposed by the agency. All
financial consequences of any such action, including all costs and
expenses incurred by the Buyer in this regard shall be for his own
account without recourse to the Seller.
SECTION 18
RESIGNATIONS
Seller shall procure that the members of the supervisory board (Aufsichtsrat) of
Peguform and each of the companies of the Peguform-Group appointed by Seller
shall at Buyer's request which shall be communicated to Seller no later than
three weeks after the signing of this Agreement, submit their resignation in
writing as of Closing waiving all their compensation rights, if any, against
Peguform and the companies of the Peguform-Group.
SECTION 19
PARENT GUARANTEE
Parent herewith unconditionally and irrevocably guarantees as a principal debtor
to Seller the performance and fulfilment of all of Buyer's obligations and
Seller's
35
claims under this Agreement, including but not limited to the prompt
payment of all amounts owed to Seller under Section 4 and Section 5
when due. Parent is not entitled to deposit any monies owed.
SECTION 20
MISCELLANEOUS
20.1 Neither Seller nor Buyer is entitled to transfer without the consent
of the other Party rights or obligations arising out of this
Agreement to a third party, provided, however, that either Seller or
Buyer may transfer its rights and obligations under this Agreement to
an affiliate of such party as long as such transfer does not affect
the rights of the other Party.
20.2 Buyer shall not be entitled to exercise any right of retention or
set-off against Seller's claims under Sections 4 and 5.
20.3 All costs, notarial fees, transfer taxes and the like arising in the
context of this Agreement and the implementation of the transactions
contemplated herein shall be borne by Buyer. Each Party shall bear
the costs for its own advisers.
20.4 Changes and amendments to this Agreement, including a change of this
written form clause, shall require written form, except if notarial
form is required by statutory law.
20.5 Should any provision of this Agreement be or become in whole or in
part invalid, this shall not affect the validity of the rest of the
Agreement. In this event, the invalid provision shall be deemed to be
replaced by a valid provision which corresponds to the economic
purpose of the invalid provision to the largest extent possible. This
shall also apply in the case of any gaps in this Agreement.
20.6 Notices or declarations to Seller made in the context of this
Agreement shall be deemed to be validly given if sent by registered
mail or courier to the following address or such other address as
notified in writing by Seller to Buyer:
Klockner Mercator Maschinenbau GmbH
36
Klocknerstra(beta)e 29
D-47057 Duisburg
Attn.: Geschaftsfuhrung
Notices or declarations to Buyer or Parent made in the context of
this Agreement shall be deemed to be validly given if sent by
registered mail or courier to the following address or such other
address as notified in writing by Buyer to Seller:
Venture Holdings Trust
33662 Xxxxx X. Xxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000, X.X.X.
Attn. General Counsel
with copies to:
Doser Amereller Xxxxx Xxxxxx Xxxxxxx
Zollhof 3 000 Xxxxxxxxxxx Xxxx. 00xx xx.
X-00000 Dusseldorf Xxxxxxx, Xxxxxxxx 00000 XXX
Attn.
Xx. Xxxx-Xxxx Xxxxxxxxxx Xxxxxxxxx X. Xxxxxx, Esq.
20.7 This Agreement shall be governed by the laws of the Federal
Republic of Germany.
20.8 The courts in Dusseldorf shall have exclusive jurisdiction.
(continued on next page)
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IN WITNESS THEREOF this Notarial Dseed including the Exhibits hereto has been
read aloud to the persons appeared and was confirmed and approved by the persons
appeared. The persons appeared then signed this Deed. All this was done at the
day herebelow written in the presence of me, the Notary Public, who also signed
this Deed and affixed my official Seal.
Basel, this 8th (eighth) day of March 1999 (nineteen hundred and ninety-nine).
/s/ Xx. Xxxxx Xxxxxxxxx Xxxxxx Xxxxxx
/s/ Xx. Xxxx-Xxxx Xxxxxxxxxx
/s/ Xxxxxxx Xxxxx
Notary
-Notary's Seal-
38
LIST OF EXHIBITS
Section 2.3 corporate chart
Section 5.1 purchase price adjustments Section 5,
definition as of September 30, 1998
Section 9.1 accounting policies Peguform Group
Section 12.5 termination or modification of agreements, contract or
commitments as a result of the execution of this
agreement
Section 12.7 assets not owned but necessary for carrying out the
activities encumbrances
Section 12.10 governmental approvals, licenses, permits necessary to
operate the respective business as it currently,
exists which are not completely fulfilled
Section 12.11 insurances
Section 12.12 litigations (exceeding DEM 1.0 Mio. in the individual
case)
Section 12.13 list of strikes, labour interruptions or disturbances
since January 1, 1997
Section 12.13a union agreements, shop floor agreements, social plans
or other labour contracts which could restrain from
undertaking reductions in work force
Section 12.14 circumstances or conditions which could give rise to the
revocation or withdrawal of subsidies
circumstances or conditions of subsidies, which could
restrain from undertaking reductions in work force
Section 12.18 period from October 1, 1998, until the signing of the
agreement
- disposal of fixed assets/leasing
- capital expenditures other than set forth in the
budget
- change in remuneration payable other than under
statutory laws of existing union agreements