Exhibit 2.1
SHARE PURCHASE AGREEMENT
for the
Sale and Purchase
of 100 % of the Share Capital of
Steinbeis Xxxxxxx GmbH
____________________________
dated as of November 26, 1997
____________________________
TABLE OF CONTENTS
RECITALS
DEFINITIONS
ARTICLE 1: SUBJECT OF PURCHASE
1.1 Purchase, Sale and Assignment of SHARES
1.2 Consent of the COMPANY
1.3 Rights of First Refusal
ARTICLE 2: OTHER COMMITMENTS OF SELLER
2.1 DM 8 Million Loan Agreement
2.2 Expansion Land Option and Preemption Right Agreement
2.3 Assumption of Liabilities
2.4 Termination of Profit and Loss Take-Over Agreement
2.5 Transfer of Pension Obligations
2.6 Extension of Hereditary Building Rights
2.7 Other Undertakings
2.8 SELLER's Environmental Commitment
ARTICLE 3: PURCHASE PRICE
3.1 Amount of the Base Purchase Price
3.2 Payment of BASE PURCHASE PRICE
3.3 Amount of Final Purchase Price
3.4 Post-Closing Audit and Determination of FINAL PURCHASE PRICE
3.5 Payment of FINAL PURCHASE PRICE
3.6 Form of Payments
ARTICLE 4: CONDITIONS PRECEDENT; CLOSING DATE; RIGHTS OF RESCISSION
4.1 Conditions Precedent to Assignment of SHARES
4.2 Closing Date
4.3 Rights of Rescission
ARTICLE 5: EXPENSES AND INDEMNIFICATIONS FOR ACTIONS TO BE
COMPLETED BY SELLER
ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF PURCHASER;
REMEDIES
6.1 Organization and Corporate Authority
6.2 Agreement Not in Breach of Other Instruments
6.3 Regulatory Approvals
6.4 Remedies
ARTICLE 7: REPRESENTATIONS AND WARRANTIES OF SELLER
7.1 Recitals
7.2 Transfer of SHARES
7.3 Organization, Good Standing and Authority
7.4 Capitalisation
7.5 Equity Interests
7.6 Real Property and Leaseholds
7.7 Tangible Property Rights
7.8 Intangible Property Rights
7.9 Accounts Receivable and Inventory
7.10 Contracts or Agreements with AFFILIATES (including Intercompany Loans)
7.11 Bank Accounts (including Financial Debt)
7.12 Customers and Suppliers
7.13 Powers of Attorney and Suretyships
7.14 Labour and Employment
7.15 Pensions
7.16 Important Contracts
7.17 AGREEMENT Not in Breach of Other Instruments; Early Termination Rights
7.18 Insurances
7.19 Licenses and Permits
7.20 Environmental Matters
7.21 Financial Statements
7.22 TAXES
7.23 No Undisclosed Liabilities
7.24 Litigation
7.25 Compliance with Law and Agreements
7.26 Brokers
7.27 Absence of Certain Changes
7.28 Correctness of Information; Sufficiency of Assets
ARTICLE 8: REMEDIES OF PURCHASER
8.1 Right to Withdraw
8.2 Other Remedies
8.3 Indemnification and Audits
8.4 Environmental Remedies..................
8.5 Treatment of Accounts Receivable
8.6 Time Limits
8.7 Knowledge
ARTICLE 9: OTHER CLOSING AND POST-CLOSING COVENANTS
9.1 Management of the COMPANY prior to the CLOSING DATE
9.2 Notifications
9.3 Trade Names, Trademarks
9.4 Costs and TAXES
9.5 Non-Competition Clause
9.6 Customer and Supplier Relationships
ARTICLE 10: CARTEL LAW ISSUES
ARTICLE 11: MISCELLANEOUS PROVISIONS
11.1 Notices
11.2 Successors and Assigns
11.3 Amendments
11.4 Severability
11.5 Confidentiality
11.6 Applicable Jurisdiction
11.7 European Economic and Monetary Union
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement (hereinafter referred to as the "AGREEMENT") is
made and entered into on the 26th day of November 1997 (hereinafter referred to
as the "SIGNING DATE"), by and among the following parties (hereinafter
individually and collectively also referred to as the "PARTIES"):
- Steinbeis Holding GmbH, a company with limited liability organized
under the laws of the Federal Republic of Germany, registered in the
commercial register of the municipal court of Traunstein under No. HRB
6018 and having its registered office at Brannenburg (hereinafter
referred to as "SELLER" );
- Zetaphoenicis Beteiligungs GmbH, a company with limited liability
organized under the laws of the Federal Republic of Germany,
registered in the commercial register of the municipal court of Munich
under No. HRB 117443 and having its registered office in Munich
(hereinafter referred to as "GmbH I"); and
Thetaphoenicis Beteiligungs GmbH, a company with limited liability
organized under the laws of the Federal Republic of Germany,
registered in the commercial register of the municipal court of Munich
under No. HRB 117456 and having its registered office in Munich
(hereinafter referred to as "GmbH II");
GmbH I and GmbH II (hereinafter individually and collectively also
referred to as "PURCHASER") are subsidiaries of FiberMark, Inc., a
corporation under the laws of the State of Delaware, United States.
RECITALS
(A) Steinbeis Xxxxxxx GmbH, a company with limited liability organized
under the laws of the Federal Republic of Germany, registered in the
commercial register of the municipal court of Traunstein under No. HRB
112 and having its registered office at Brannenburg (hereinafter
referred to as the "COMPANY"), presently operates two paper xxxxx in
Bruckmuhl and Weidach (Feldkirchen-Westerham) with a total of three
paper machines and three saturation units and conducts the business of
developing, manufacturing, selling and marketing of paper products
such as, but not limited to, automotive filter papers, dustbag filter
paper, coffee filter paper, raw masking tape, impregnated abrasive
papers as well as impregnated masking tape (such business, as
presently conducted, referred to hereinafter also as the "Business").
(B) SELLER is the sole shareholder, and owns the entire aggregate share
capital, of the COMPANY in the amount of DM 6,145,000, divided into
shares in the nominal values as set forth below:
Number of Shares: Nominal value of Shares:
----------------- ------------------------
1 DM 2,000,000
1 DM 1,800,000
1 DM 1,145,000
1 DM 400,000
2 DM 165,000
1 DM 108,000
2 DM 73,000
2 DM 72,000
1 DM 40,000
2 DM 15,000
2 DM 1,000
-----------------------------------------
Total share capital DM 6,145,000
(C) SELLER desires to sell and transfer to PURCHASER 100 % of the shares
in the COMPANY, upon the terms and subject to the conditions set forth
in this AGREEMENT, and PURCHASER desires to purchase and acquire such
shares from SELLER.
(D) The COMPANY is the sole general partner (Komplementarin) and the owner
of a majority interest of approximately 55,556 % in Xxxxx-GmbH & Co.,
a limited partnership organized under the laws of the Federal Republic
of Germany, registered in the commercial register of the municipal
court of Traunstein under No. HRA 59 and having its registered office
in Weidach (Feldkirchen-Westerham) . Furthermore, the COMPANY has
formed by notarial deed of the notary public Xxxxxx Xxxxxxxx in
Rosenheim on November 13, 1997 (Deed No. 3138/1997) a limited
liability company under the firm name Steinbeis Xxxxxxx
Unterstutzungskasse GmbH (i.G.), organised under the laws of the
Federal Republic of Germany, to be registered in the commercial
register of the municipal court of Traunstein, having its registered
office in Bruckmuhl and having a registered share capital of DM 50,000
(hereinafter referred to as "Unterstutzungskasse"). Xxxxx-GmbH & Co.
and Steinbeis Xxxxxxx Unterstutzungskasse GmbH (i.G.) shall be
hereinafter, individually and collectively, referred to as the
"SUBSIDIARY".
The COMPANY as general partner, with capital interests
(Kapitalanteile) in the aggregate amount of DM 125,000, and the
limited partners (Kommanditisten), with aggregate registered limited
partnership liability capital (Haftsummen) of DM 100,000 and capital
interests in even amount, are the holders of the entire capital
interests in Xxxxx GmbH & Co. in the aggregate amount of DM 225,000,
in the nominal values and numbers as set opposite their respective
names below:
Names: Aggregate nominal value of capital interests
(Kapitalanteile):
General Partner:
----------------
Steinbeis Xxxxxxx GmbH DM 125,000 (Nos. 1 through 5)
Limited Partners:
-----------------
Xxxxxxxxx Xxxxxxxx DM 25,000 (No. 6)
Xxxxxx Xxxxxx DM 25,001 (Nos. 8, 9 and 11)
Xxxxxx Xxxxxx XX 41,666 (Nos. 7 and 12)
Maximiliane Xxxxxx XX 8,333 (No. 10)
----------------------------------------------------------------
Total fixed capital interests DM 225,000
(E) Neither the COMPANY nor the SUBSIDIARY own any other shares or
interests in any other corpo ration, company, partnership or
entity. The PARTIES have agreed that the COMPANY will have disposed
of its interest in Steinbeis GmbH & Co. Grundstucksverwaltungs KG,
a limited partnership organized under the laws of the Federal
Republic of Germany, registered in the commercial register of the
municipal court of Traunstein under No. HRA 6456 and having its
registered seat in Brannenburg (hereinafter referred to as
"GRUNDSTUCKS KG") prior to the EFFECTIVE DATE.
(F) SELLER has delivered to PURCHASER a collection of certain
contracts and other documents relating to the COMPANY, the
SUBSIDIARY and the Business (hereinafter referred to as
"Schedules") which, together with the EXHIBITS, are enclosed
hereto, and are deemed to form a part of this AGREEMENT and to
which reference is made in the following.
DEFINITIONS:
(A) As used in this AGREEMENT, the following terms shall have the
following meanings:
"AFFILIATE" means a person or entity which is affiliated within the
meaning of Sections 00-00 Xxxxxxxxxxxx (Xxxxxx Xxxxx Xxxxxxxxxxx Xxx)
and/or closely related within the meaning of Section 1 (2)
Aussensteuergesetz (German Foreign Tax Relations Act); the term
Affiliate shall also be deemed to include any person which is
affiliated to any of them in the foregoing sense.
"AGREEMENT" means this Share Purchase Agreement.
"AUDITED NET CLOSING BALANCE SHEET VALUE" shall have the meaning
defined in Article 3.3(c).
"BASE PURCHASE PRICE" shall have the meaning defined in Article 3.1.
"BENCHMARK" shall have the meaning defined in Article 3.3(b).
"BUSINESS" shall have the meaning defined in the Recitals under (A).
"CLOSING BALANCE SHEET" shall have the meaning defined in Article 3.4.
"CLOSING DATE" shall have the meaning defined in Article 4.2.
"COMPANY" means Steinbeis Xxxxxxx GmbH.
"CONFIDENTIAL INFORMATION" shall have the meaning defined in Article
11.5.
"CONTRACTS" shall have the meaning defined in Article 7.16 (a).
"DRAFT CLOSING BALANCE SHEET" shall have the meaning defined in
Article 3.4.
"EFFECTIVE DATE" means January 01, 1998, 0:00 hours.
"EXPANSION LAND AGREEMENT" shall have the meaning defined in Article
2.2.
"EXPERT" means ENSR Consulting and Engineering (ENSR).
"EXPERT OPINION" shall have the meaning defined in Article 8.4 (h).
"FINAL PURCHASE PRICE" shall have the meaning defined in Article
3.3(a).
"FINANCIAL STATEMENTS" shall have the meaning defined in Article
7.21(a).
"GmbH I" means zetaphoenicis Beteiligungs GmbH.
"GmbH II" means thetaphoenicis Beteiligungs GmbH.
"GRUNDSTUCKS KG" means Steinbeis GmbH & Co. Grundstucksverwaltungs KG.
"Key Employees" means any employee who (i) is entitled to bind the
legal entity on whose behalf he is acting by his signature
vis-a-vis third parties under general provisions of the applicable
corporate law, or (ii) receives an annual gross salary (with fixed and
variable fringe benefits) exceeding DM 120,000 per annum or its
equivalent in foreign currency.
"LOAN AGREEMENT" shall have the meaning defined in Article 2.1.
"LOAN AMOUNT" shall have the meaning defined in Article 2.1.
"MATERIAL ADVERSE EFFECT" means any change in, or effect on, the
business of the COMPANY or the SUBSIDIARY, as the case may be, as
currently conducted that is material adverse to the results of the
operations or the financial condition of such business; such change or
effect shall be irrefutably presumed (unwiderlegbar vermutet) to have
a material adverse effect if the damage (Schaden), including lost
profits (entgangener Gewinn) or any other losses (Einbussen) of
PURCHASER, the COMPANY or the SUBSIDIARY, respectively, incurred as a
result of the violation of the respective representation and warranty
section of Article 7 of this AGREEMENT exceed a threshold amount of DM
50,000 in the individual case or in the aggregate.
"1997 BALANCE SHEET" shall have the meaning defined in Article 3.4.
"1997 FINANCIAL STATEMENTS" shall have the meaning defined in Article
3.4.
"OTHER COMMITMENTS" shall have the meaning defined in Article 2.
"OTHER UNDERTAKINGS" shall have the meaning defined in Article 2.7.
"PARTIES" means, individually or collectively, Steinbeis Holding GmbH,
GmbH I and/or GmbH II.
"PENSION TRANSFER AGREEMENT" shall have the meaning defined in Article
2.5.
"PURCHASER" means, individually and collectively, GmbH I and/or GmbH
II.
"PURCHASER'S ACCOUNTANTS" shall have the meaning defined in Article
3.4.
"SCHEDULES" shall have the meaning defined in the Recitals under (F).
"SELLER" means Steinbeis Holding GmbH.
"SELLER'S ACCOUNTANTS" shall have the meaning defined in Article 3.4.
"SELLER'S BEST KNOWLEDGE" means and includes the knowledge of (i)
SELLER itself as well as the knowledge of its statutory
representatives (Geschaftsfuhrer) including proxy managers
(Prokuristen) and (ii) Xx. Xxxx Xxxxxxxxx Steinbeis, Xx. Xxxx Xxxx,
Xx. Xxxxx Xxxxxxx and Xx. Xxxxxx Xxxxxxxxxx of Steinbeis Verwaltungs
GmbH, and shall also include the knowledge of (iii) the statutory
representatives including proxy managers of the COMPANY and the
SUBSIDIARY, and shall include Xx. Xxxxxx Xxxxxxx, Xx. Xxxx-Xxxxxx
Xxxxxxxxx, Messrs. Xxxxxxx Xxxxxx, Xxxxxx Xxxxxxxxxxx, Xxxxx Xxxx,
Xxxxxxx Xxxxx, Luitpold Gollreiter, Arno Haufellner, Jens-Xxxxx Xxxxx,
Xxxxxxx Xxxxxxxx, Xxxxx Xxxxx, Xxxxx Xxxxxxx, Holger
Sotje, Xx. Xxxxxx Xxxxxxxx and Xx. Xxxxx Xxxxxx.
"SHARES" shall have the meaning defined in Article 1.1(c).
"SIGNING DATE" means the date of this AGREEMENT.
"SUBSIDIARY" shall have the meaning defined in the Recitals under (D).
"TAXES" means any taxes (Steuern und steuerliche Nebenleistungen)
within the meaning of Section 3 AO (German Tax Code) including all
withholding taxes and other fiscal or governmental charges , such as,
but not limited to, social security contributions
(Sozialversicherungsbeitrage), any public investment grants
(Investionszulagen), premiums (Investionszuschusse) and subsidies
(Subventionen).
"URGENT CLEAN-UP MEASURES" shall have the meaning defined in Article
8.4 (j) (iii) (1).
(B) The headings contained in this AGREEMENT are for reference purposes
only and shall not affect in any way the meaning or interpretation of
the terms and conditions of this AGREEMENT.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing Recitals and in accordance
with the mutual representations, warranties, covenants, obligations and
undertakings herein set forth, the PARTIES hereto agree as follows:
ARTICLE 1
SUBJECT OF PURCHASE
1.1 Purchase, Sale and Assignment of Shares
(a) SELLER hereby sells with commercial effect (mit wirtschaftlicher
Wirkung) as of the EFFECTIVE DATE and assigns to PURCHASER with effect
from the CLOSING DATE, 100 % of the shares of the COMPANY in the
aggregate nominal value of DM 6,145,000, of which shares
- one share in the nominal value of DM 40,000 shall be sold and
assigned to GmbH II; and
- all other shares shall be sold and assigned to GmbH I,
provided that such assignments shall become effective (mit dinglicher
Wirkung) upon satisfaction of the conditions precedent set forth in
Article 4.1.
(b) Purchaser hereby accepts such sale and assignments.
(c) The shares in the COMPANY which are sold and assigned pursuant to
paragraphs (a) and (b) above shall collectively and individually
hereinafter be referred to as the "Shares".
(d) The sale and assignment of the SHARES shall include all ancillary
rights, benefits and obligations arising from the SHARES, including,
without limitation, the right to receive profits, the voting rights as
well as earnings accrued and undistributed prior to the EFFECTIVE
DATE, it being understood, however, that SELLER shall be entitled to
receive the earnings of the COMPANY for the fiscal year 1997 through
December 31, 1997 under the profit and loss take-over agreement
(Gewinnabfuhrungsvertrag) between SELLER and the COMPANY of November
30, 1990. The assignments include all rights and obligations
pertaining or related to the SHARES, insofar as nothing to the
contrary is stipulated elsewhere in this AGREEMENT. It is understood
that PURCHASER does not assume any personal obligations of the SELLER
vis-a-vis third parties, including, but not limited to, tax
obligations.
(e) In the event that the CLOSING DATE shall be a later date than January
01, 1998, 00:00 hours, the PARTIES hereby agree that, regardless of
when the CLOSING DATE occurs, as among the PARTIES, the SHARES shall
be deemed to have been transferred in accordance with the law of
obligations (mit schuldrechtlicher Wirkung) as from the EFFECTIVE
DATE.
1.2 Consent of the COMPANY
In their capacity as managing directors (Geschaftsfuhrer) of the
COMPANY, Xx. Xxxxxx Xxxxxxx and Xx. Xxxx-Xxxxxx Xxxxxxxxx have given
the consent of the COMPANY to the sale and assignment of the Shares
contemplated in this AGREEMENT, pursuant to Section 5 (1) of the
Articles of Association of the COMPANY. This consent and the
corresponding shareholder resolution of the COMPANY required for such
consent are attached hereto as EXHIBIT 1.2. The acting notary will
promptly notify the COMPANY about the transfer of the SHARES from
SELLER to PURCHASER provided in this AGREEMENT pursuant to Section 16
GmbHG (German Act on Companies with Limited Liability).
1.3 Rights of First Refusal
There are no rights of first refusal, redemption rights or similar
rights pursuant to the Articles of Association of the COMPANY or
otherwise with respect to the SHARES.
ARTICLE 2
OTHER COMMITMENTS OF SELLER
In addition to the sale and assignment of the SHARES, SELLER has undertaken
further commitments which are set forth below and which shall be hereinafter
referred to as the "OTHER COMMITMENTS".
2.1 DM 8 Million Loan Agreement
Prior to the SIGNING DATE, SELLER and the COMPANY entered into the
loan agreement a copy of which is enclosed as EXHIBIT 2.1 (hereinafter
referred to as the "LOAN AGREEMENT") which provides for a loan in the
principal amount of DM 8,000,000 (eight million Deutsche Xxxx)
(hereinafter referred to as the "LOAN AMOUNT") at a fixed rate of 5 %
p.a. and the terms of this LOAN AGREEMENT shall not have been amended
or terminated and shall continue to be in effect on the CLOSING DATE.
2.2 Expansion Land Option and Preemption Right Agreement
Prior to the SIGNING DATE, by notarial deed of the notary public
Xxxxxx Xxxxxxxx in Rosenheim (Deed No. 3136/1997) GRUNDSTUCKS KG and
the COMPANY entered into the land option and preemption right
agreement, the contents of which are known to the PARTIES and a copy
of which is enclosed for evidence purposes as EXHIBIT 2.2 (hereinafter
referred to as the "EXPANSION LAND AGREEMENT"), related to the real
property registered with the land register (Grundbuchamt) of Vagen,
Volume (Band) 28, page (Xxxxx) 1257 under No. (FlNr.) 2548 and the
terms of this EXPANSION LAND AGREEMENT shall not have been amended or
terminated and shall continue to be in effect on the CLOSING DATE.
2.3 Assumption of Liabilities
The COMPANY shall be sold by SELLER to PURCHASER free and clear of any
financial debt, intercompany liabilities and any contingent
liabilities within the meaning of Section 251 HGB; prior to the
EFFECTIVE DATE SELLER shall in particular (i) assume any financial
debt of the COMPANY as defined in Section 266 subsection 3 C. 1. and
2. HGB (German Commercial Code) and (ii) waive any intercompany
liabilities of the COMPANY as defined in Section 266 subsection 3 C.
6. and 7. HGB (including any claims under the profit and loss
take-over agreement between SELLER and the COMPANY of November 30,
1990). It is expressly understood, however, that PURCHASER shall
procure that the COMPANY will pay to the entitled beneficiaries two
twelfth of the bonus payments set forth in EXHIBIT 2.3 after the
CLOSING DATE, if and to the extent such payments have been provided
for in the CLOSING BALANCE SHEET.
2.4 Termination of Profit and Loss Take-Over Agreement
Prior to the SIGNING DATE, SELLER and the COMPANY shall have finally
and irrevocably terminated (beenden) the profit and loss take-over
agreement between SELLER and the COMPANY of November 30, 1990 which
termination
shall become effective on December 31, 1997, 24:00 hours,
and shall have, prior to the EFFECTIVE DATE, taken all requisite
corporate actions in connection with such termination; copies of the
termination agreement together with the contemplated corresponding
shareholder resolutions are enclosed as EXHIBIT 2.4. SELLER confirms
that it has not assigned or otherwise transferred and hereby, with
effect as from the EFFECTIVE DATE, expressly waives any rights against
the COMPANY and, as a precaution, hereby assigns any remaining rights,
if any, to PURCHASER under the said profit and loss take-over
agreement of November 30, 1990; PURCHASER accepts such assignment.
2.5 Transfer of Pension Obligations
Prior to the EFFECTIVE DATE, SELLER and the COMPANY, with the prior
consent of PURCHASER which shall not be unreasonably withheld, shall
have entered into an agreement related to the transfer of the pension
liabilities of the COMPANY (hereinafter referred to as the "PENSION
TRANSFER AGREEMENT") substantially upon the terms enclosed as EXHIBIT
2.5 and the terms of this PENSION TRANSFER AGREEMENT shall not have
been amended or terminated and shall continue to be in effect on the
CLOSING DATE.
2.6 Extension of Hereditary Building Rights
Prior to the SIGNING DATE, by notarial deed of the notary public
Xxxxxx Xxxxxxxx in Rosenheim (Deed No. 3135/1997) the SUBSIDIARY
granted the COMPANY a binding and irrevocable offer (bindendes und
unwiderrufliches Angebot) in notarial form related to the real
property registered with the land register (Grundbuchamt) of Vagen,
volume (Band) 21, page (Xxxxx) 950 under Nos. (FlNrn.) 1569, 1570,
1573 and 1594, the contents of which are known to the PARTIES and a
copy of which is enclosed for evidence purposes as EXHIBIT 2.6
(hereinafter referred to as the "HEREDITARY BUILDING RIGHTS EXTENSION
OFFER"), and the terms of the HEREDITARY BUILDING RIGHTS EXTENSION
OFFER shall not have been amended or terminated and shall continue to
be in effect on the CLOSING DATE.
2.7 Other Undertakings
SELLER shall complete, or cause to be completed, each of the actions
described in EXHIBIT 2.7 (hereinafter referred to as "OTHER
UNDERTAKINGS") within the time limits set forth therein and the terms
of any agreements or commitments related to these OTHER UNDERTAKINGS
shall not be amended or terminated and shall continue to be in effect
on the CLOSING DATE and the execution (Vollzug) of such agreements or
commitments shall be continued as initially contemplated.
2.8 SELLER's Environmental Commitment
Prior to the SIGNING DATE, SELLER shall deliver to PURCHASER the
declaration a copy of which is enclosed as EXHIBIT 2.8.
ARTICLE 3
PURCHASE PRICE
The aggregate purchase price to be paid by PURCHASER to SELLER in consideration
of the SHARES and the OTHER COMMITMENTS shall be the amount set forth below and
shall be payable as follows:
3.1 Amount of the Base Purchase Price
The aggregate base purchase price to be paid by PURCHASER to SELLER
shall be the amount of US $ 40,000,000 (forty million US Dollars) plus
the amount of DM 5,315,000 (five million three hundred fifteen
thousand Deutsche Xxxx) (hereinafter referred to as the "BASE PURCHASE
PRICE").
3.2 Payment of BASE PURCHASE PRICE
(a) The BASE Purchase Price shall be payable by PURCHASER to SELLER on the
CLOSING DATE by banker's cheque (LZB-Xxxxxx) against (Zug um Zug)
payment of the LOAN AMOUNT to be paid by SELLER to the COMPANY on the
CLOSING DATE also by banker's cheque.
(b) A copy of the preliminary declaration of approval of the
Landeszentralbank im Freistaat Bayern (Hauptverwaltung der
Deutschen Bundesbank), Munich (Bavarian branch of the Federal
Reserve Bank), pursuant to Xxxxxxx 0 Xxxxxxxxxxxxxx (Xxxxxx
Xxxxxxxx Xxx) and Section 49 Aussenwirtschaftsgesetz (Foreign Trade
and Payments Act) for any payments to be made in a foreign currency
under this AGREEMENT is enclosed as EXHIBIT 3.2; a copy of the
final declaration shall be provided by PURCHASER to SELLER prior to
the CLOSING DATE.
3.3 Amount of Final Purchase Price
(a) The BASE PURCHASE PRICE shall be adjusted in accordance with the
formula set forth in paragraph (b) below and the amount so adjusted
shall be referred to hereinafter as the "FINAL PURCHASE PRICE".
(b) The BASE PURCHASE PRICE shall be decreased or increased, as the case
may be, if and to the extent that the AUDITED NET CLOSING BALANCE
SHEET VALUE (as defined in paragraph (c) and as determined in
accordance with Article 3.4 below) deviates from the agreed upon
benchmark value of DM 35,000,000 (thirty-five million Deutsche Xxxx)
(hereinafter referred to as the "BENCHMARK"). Thus, if the AUDITED NET
CLOSING BALANCE SHEET VALUE is lower than the BENCHMARK, the BASE
PURCHASE PRICE will be decreased by the balance (Unterschiedsbetrag)
which amount shall be repaid to PURCHASER; vice versa if the AUDITED
NET CLOSING BALANCE SHEET VALUE is higher than the BENCHMARK, the BASE
PURCHASE PRICE will be increased by the balance which amount shall be
paid to SELLER in addition.
(c) The "AUDITED NET CLOSING BALANCE SHEET VALUE" shall be defined and
calculated as follows:
(i) Fixed assets of the COMPANY as defined in Section 266 subsection
2 A. I., II. and III. HGB plus current assets of the COMPANY as
defined in Section 266 subsection 2 B. I., II., III. and IV. HGB
plus prepaid expenses
(Rechnungsabgrenzungsposten) as defined in
Section 266 subsection 2 C. HGB
less
(ii) provisions of the COMPANY as defined in Section 266 subsection 3
B. 1., 2. and 3. HGB plus current liabilities of the COMPANY as
defined in Section 266 subsection 3 C. 3., 4., 5. and 8. HGB plus
deferred income (Rechnungsabgrenzungsposten) as defined in
Section 266 subsection 3 D. HGB, however, excluding any special
reserves (Sonderposten mit Rucklagenanteil) pursuant to Section
273 HGB.
The balance resulting from the calculation pursuant to (i) and (ii)
above is the aggregate amount of the equity capital (Eigenkapital) of
the COMPANY as defined in Section 266 subsection 3 A. HGB plus the
special reserves as defined in Section 000 XXX, assuming that SELLER
has fully complied with Article 2.3 above.
A sample calculation for the determination of the AUDITED NET CLOSING
BALANCE SHEET VALUE is enclosed as EXHIBIT 3.3.
(d) Notwithstanding the obligations of SELLER pursuant to Article 2.3
above, if and to the extent there are any financial debt as defined in
Section 266 subsection 3 C. 1. and 2. HGB or any intercompany
liabilities within the meaning of Section 266 subsection 3 C. 6. and
7. HGB on the EFFECTIVE DATE, it is expressly agreed that such
financial debt or intercompany liabilities shall reduce the FINAL
PURCHASE PRICE in even amount.
3.4 Post-Closing Audit and Determination of FINAL PURCHASE PRICE
As promptly as practical, but no later than forty-five days following
the CLOSING DATE, PURCHASER shall procure that the COMPANY shall
prepare and deliver to PURCHASER and SELLER the financial statements
consisting of balance sheet (Bilanz) (hereinafter referred to as "1997
BALANCE SHEET"), profit and loss accounts (Gewinn- und
Verlustrechung), notes to the financial statements (Anhang) and report
on the economic development and position of the COMPANY (Lagebericht)
(hereinafter collectively referred to as "1997 FINANCIAL STATEMENTS")
as of December 31, 1997, 24:00 hours, which shall be prepared in
accordance with German generally accepted accounting principles
applied consistently with past practice (taking into account
adjustments resulting from prior tax audits) and using the same
methods and valuation principles applied previously. Steinbeis
Verwaltungs GmbH is entitled to assist the accountants on behalf and
at the expense of the COMPANY if required and reasonable.
As promptly as practical, but no later than forty-five days following
PURCHASER's and SELLER's receipt of the 1997 FINANCIAL STATEMENTS,
SELLER's accountants Xxxxxxx-Xxxxxxxxxx Deutsche Industrie-Treuhand
GmbH, Wirtschaftsprufungsgesellschaft, Munich (hereinafter referred as
"SELLER'S
ACCOUNTANTS"), on behalf and at the expense of the COMPANY,
shall audit the 1997 FINANCIAL STATEMENTS.
PURCHASER's accountants KPMG Deutsche Treuhand-Gesellschaft,
Aktiengesellschaft Wirtschaftsprufungsgesellschaft, Munich
(hereinafter referred to as "PURCHASER'S ACCOUNTANTS"), on behalf and
at the expense of PURCHASER, shall review the 1997 BALANCE SHEET
(including the above mentioned adjustments due to the tax audit for
1991 through 1994) included in the above mentioned 1997 FINANCIAL
STATEMENTS. PURCHASER'S ACCOUNTANTS shall be entitled to participate
in the inventory count (Inventur) and to review any bookkeeping or
other documents relating to the 1997 financial year as well as any
previous financial years of the COMPANY. PURCHASER'S ACCOUNTANTS will
in particular also have access to the working papers of SELLER'S
ACCOUNTANTS for the 1997 FINANCIAL STATEMENTS and all material related
to the 1996 and 1997 fiscal year of the COMPANY which were prepared by
the COMPANY or Steinbeis Verwaltungs GmbH, respectively.
The purpose of PURCHASER'S ACCOUNTANTS' review is to determine whether
the 1997 BALANCE SHEET has been prepared in accordance with the
requirements of this AGREEMENT. If PURCHASER'S ACCOUNTANTS, following
their review, conclude that the 1997 BALANCE SHEET has been prepared
in accordance with the requirements of this AGREEMENT, then the 1997
BALANCE SHEET will become the final closing balance sheet for the
purpose of this AGREEMENT (hereinafter referred to as the "CLOSING
BALANCE SHEET").
If PURCHASER'S ACCOUNTANTS disagree with the 1997 BALANCE SHEET, they
will prepare a revised balance sheet which will become the draft
closing balance sheet (hereinafter referred to as "DRAFT CLOSING
BALANCE SHEET"). In the event of dispute between PURCHASER'S and
SELLER'S ACCOUNTANTS with respect to the DRAFT CLOSING BALANCE SHEET,
PURCHASER and SELLER together with PURCHASER'S and SELLER'S
ACCOUNTANTS shall first use their best efforts to resolve such dispute
among themselves. If the dispute is settled, the appropriate
adjustments will be made to the DRAFT CLOSING BALANCE SHEET which will
then become the final CLOSING BALANCE SHEET for purposes of this
AGREEMENT.
If PURCHASER and SELLER together with PURCHASER'S and SELLER'S
ACCOUNTANTS are unable to resolve such dispute within ten banking days
(in Munich), the dispute shall be submitted to a mutually agreed
independent accountant, whose resolution of such dispute shall be
final and binding. For the avoidance of doubt, the final balance sheet
so determined shall constitute and become the final CLOSING BALANCE
SHEET for purposes of this AGREEMENT.
If PURCHASER and SELLER are unable to agree on an independent
accountant, such accountant shall be determined at the request of
either PURCHASER or SELLER by the Institut der
Wirtschaftsprufer in Deutschland e.V. (IDW) (Institute of Chartered
Accountants in Germany); it being understood that any independent
accountant shall have discretion (Entscheidungs-
spielraum) only in the range between the amounts in dispute between
PURCHASER'S and SELLER'S ACCOUNTANTS, respectively.
The costs of such independent accountant shall be borne by PURCHASER
and/or SELLER, respectively, in accordance with Sections 91 et seq.
ZPO (German Code of Civil Procedure).
The FINAL PURCHASE PRICE shall be determined on the basis of the
AUDITED NET CLOSING BALANCE SHEET VALUE resulting from the final
CLOSING BALANCE SHEET.
3.5 Payment of FINAL PURCHASE PRICE
Any balance between the BASE PURCHASE PRICE and the FINAL PURCHASE
PRICE shall be paid by SELLER or PURCHASER, as the case may be, in
German currency within five banking days (in Munich) after the
determination of the FINAL PURCHASE PRICE pursuant to Article 3.4,
together with interest thereon at a percentage rate of three percent
above the prevailing discount rate of the German Federal Reserve Bank
(Bundesbankdiskontsatz) as from the CLOSING DATE until the date of
payment.
3.6 Form of Payments
The BASE PURCHASE PRICE as well as the LOAN AMOUNT shall be paid by
banker's cheque (LZB-Xxxxxx) pursuant to Article 3.2 (a). All other
payments to be made by SELLER or PURCHASER, respectively, under this
AGREEMENT shall be made in German currency and at the discretion of
the payor of such payment, by banker's cheque or wire transfer. Any
payments by either PURCHASER shall be with releasing effect
(schuldbefreiende Wirkung) upon each PURCHASER.
ARTICLE 4
CONDITIONS PRECEDENT; CLOSING DATE; RIGHTS OF RESCISSION
4.1 Conditions Precedent to Assignment of SHARES
The assignment of the SHARES pursuant to Article 1.1 (a) and (b) shall
be subject to satisfaction, or waiver by SELLER, of the conditions
precedent (aufschiebende Bedingungen) of (i) payment of the BASE
PURCHASE PRICE by PURCHASER in accordance with Article 3.1 and (ii)
provision of the guarantee (Burgschaft) for the LOAN AMOUNT in the
form as enclosed as EXHIBIT 4.1 to SELLER.
4.2 Closing Date
(a) The closing date (referred to as the "CLOSING DATE") shall be the
fifth banking day (in Munich) after satisfaction of the closing
condition set forth in paragraph (b) below, but in no event earlier
than the first banking day (in Munich) after the EFFECTIVE DATE.
(b) The obligation of PURCHASER to pay the BASE PURCHASE PRICE or the
FINAL PURCHASE PRICE, respectively, or to provide the guarantee
referred to in Article 4.1 (ii) above, shall be subject to the closing
condition (Vollzugsbedingung) that the Board of Directors of
FiberMark, Inc. has approved the transaction contemplated by this
AGREEMENT; the decision of the Board of Directors of FiberMark, Inc.,
be it approval or denial, shall be communicated to SELLER prior to or
on January 31, 1998, 24:00 hours, or, in the event of additional
investigations pursuant to Article 8.4 (h), February 28, 1998, 24:00
hours, respectively; if no notification is received by SELLER within
the foregoing period (as applicable) such approval shall be deemed to
have been denied.
4.3 Rights of Rescission
(a) PURCHASER shall be entitled to rescind this AGREEMENT (zurucktreten)
(i) pursuant to Article 8.1, or (ii) if the Board of Directors of
FiberMark, Inc. has finally refused approval of the acquisition
contemplated by this AGREEMENT or, (iii) pursuant to Article 8.4 (j)
(ii) until the later of January 31, 1998, 24:00 hours, or, if
additional investigations will be made pursuant to Article 8.4 (h),
until February 28, 1998, 24:00 hours.
(b) SELLER shall be entitled to rescind this AGREEMENT (zurucktreten) (i)
pursuant to Article 8.4 (f), or (ii) if the CLOSING DATE has not
occurred by the later of five banking days (in Munich) after January
31, 1998, 24:00 hours, or, if additional investigations will be made
pursuant to Article 8.4 (h), five banking days (in Munich) after
February 28, 1998, 24:00 hours.
(c) Any right of rescission pursuant to paragraphs (a) and (b) above shall
be exercised in writing (including fax communication). Any dates for
exercising the rights of rescission referred to in paragraphs (a) and
(b) above may be extended in writing if SELLER and PURCHASER mutually
so agree.
(d) It is agreed that in the event of termination of this AGREEMENT by way
of rescission pursuant to paragraphs (a) and (b) above (with the
exception of a rescission pursuant to Article 8.1 by PURCHASER, in
which case this AGREEMENT shall be unwound (ruckabgewickelt) in
accordance with the statutory provisions), this AGREEMENT shall
forthwith become null and void and shall be unwound to the extent
already executed (vollzogen) and there shall be no further liability
of SELLER or PURCHASER, as the case may be, except as set forth in
Article 9.4 which shall continue to apply, and there shall be in
particular no damage or indemnification claims of either SELLER or
PURCHASER against the other party because of such rescission.
ARTICLE 5
EXPENSES AND INDEMNIFICATIONS FOR ACTIONS TO BE COMPLETED BY SELLER
SELLER shall indemnify (entschadigen) and hold harmless (freistellen) PURCHASER
and/or the COMPANY and/or the SUBSIDIARY from and for:
(a) any TAXES, costs, fees, expenses or other charges
whatsoever (including payments to third parties), incurred by
PURCHASER and/or the COMPANY and/or the SUBSIDIARY relating to any
of the actions to be completed pursuant to Articles 2.3 through
2.7, except for any real estate transfer tax triggered by the
acceptance of the HEREDITARY BUILDING RIGHTS EXTENSION OFFER; it is
agreed that although the COMPANY has assumed the obligation to
remove certain tanks on a certain part of the real property to be
acquired by GRUNDSTUCKS KG pursuant to the notarial deed of the
notary public Xxxxxx Xxxxxxxx in Xxxxxxxxx of November 13, 1997
(Deed No. 3137/1997) (cf. EXHIBIT 2.7) at its costs, the costs of
such removal shall be paid by the COMPANY either prior to the
EFFECTIVE DATE or appropriate provisions shall be made in the
CLOSING BALANCE SHEET; otherwise SELLER shall reimburse PURCHASER
for such amount;
(b) any TAXES, costs, fees, expenses or other charges
whatsoever incurred by the COMPANY in connection with the disposal
of the COMPANY's interest in Steinbeis GmbH & Co.
Grundstuckverwaltungs KG referred to in the Recitals under (E)
which shall be borne by SELLER;
(c) any TAXES, costs, fees, expenses, charges or other claims whatsoever
incurred by the COMPANY in connection with any prior profit and loss
take-over agreement to which the COMPANY is or has been a party; and
(d) any TAXES, costs, fees, expenses, charges or other claims whatsoever
regardless of their legal nature, including, but not limited to,
warranty claims (Gewahrleistungsanspruche) or claims of any
governmental or administrative body related to any real property other
than the real property owned or used by the COMPANY on the basis of a
hereditary building right referred to in Article 7.6 (a) (i) and (ii).
It is understood, that PURCHASER's claims under paragraphs (a) through (d) shall
be reduced accordingly if and to the extent the COMPANY and/or the SUBSIDIARY
have made the respective payment prior to the EFFECTIVE DATE or corresponding
provisions have been established in the CLOSING BALANCE SHEET or payment is made
by SELLER after the EFFECTIVE DATE.
If and to the extent the consents of cancellation (Loschungbewilligungen)
required to be delivered by SELLER to PURCHASER pursuant to EXHIBIT 2.7 and
Article 7.6 (b), respectively, are not received by PURCHASER prior to the
CLOSING DATE, SELLER shall deliver to PURCHASER prior to the CLOSING DATE an
unconditional, irrevocable guarantee of a German major bank payable at first
sight and not limited in duration
(unwiderrufliche, unbedingte, unbefristete selbstschuldnerische
Bankburgschaft -auf erstes Verlangen- einer deutschen Grossbank) in
an amount even to the aggregate amount of all incumbrances for
which the necessary consents of cancellation have not been
provided; PURCHASER shall return this guarantee upon receipt of all
outstanding consents of cancellation.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER; REMEDIES
PURCHASER represents and warrants ("sichert zu") within the meaning of Section
459 subsection 2 BGB (German Civil Code) to SELLER the following:
6.1 Organization and Corporate Authority
Each of PURCHASER is a duly organized and validly existing company
with limited liability under the laws of the Federal Republic of
Germany; each of PURCHASER has all requisite corporate power and
authority to enter into this AGREEMENT and to consummate the
transactions contemplated hereby, save for the approval of the Board
of Directors of FiberMark, Inc. referred to in Article 4.2 (b). This
AGREEMENT and all other agreements herein contemplated to be executed
in connection herewith by PURCHASER have been (or upon execution will
have been) duly executed and delivered by PURCHASER, and constitute
(or upon execution will constitute) legal, valid and binding
obligations of PURCHASER in accordance with their respective terms and
conditions. Copies of excerpts from the commercial register of each
PURCHASER of recent date and accurate in substance are enclosed hereto
as EXHIBIT 6.1.
6.2 Agreement Not in Breach of Other Instruments
The execution, delivery, and performance of this AGREEMENT by
PURCHASER and the consummation of all other agreements herein
contemplated to be executed in connection herewith and the fulfillment
of the terms thereof will not result in a breach of any of the terms
or provisions of, or constitute a default under, or conflict with, any
agreement to which PURCHASER is a party or by which it is bound, the
Articles of Association of PURCHASER, any judgement, decree, or order
of any court, governmental body or arbitrator by which PURCHASER is
bound, or any law, rule or regulation applicable to Purchaser, save
for the approval of the Board of Directors of FiberMark, Inc. referred
to in Article 4.2 (b).
6.3 Regulatory Approvals
All consents, approvals, authorizations and other requirements of any
governmental or other administrative authorities prescribed by any
law, rule or
regulation which must be obtained or satisfied by
PURCHASER in order to permit the consummation of the transactions
contemplated by this Agreement have been or will be obtained and
satisfied.
6.4 Remedies
If any of the representations and warranties assumed by PURCHASER in
this Article 6 is partially or totally incorrect, PURCHASER shall be
liable for any damages incurred by SELLER because of this
incorrectness. However, such claims shall only be valid if such
incorrectness is not cured by PURCHASER within six weeks after it has
received written notice from SELLER describing such incorrectness.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF SELLER
SELLER represents and warrants ("sichert zu") within the meaning of Section 459
subsection 2 BGB (German Civil Code) to PURCHASER, that all of the following
statements shall be true and correct as of the SIGNING DATE and shall continue
to be true and correct until the EFFECTIVE DATE, unless SELLER promptly notifies
without delay (unverzuglich) PURCHASER about any material changes to the
information disclosed to PURCHASER in the time period between the SIGNING DATE
and the EFFECTIVE DATE:
7.1 Recitals
The statements in the Recitals hereto are correct. Copies of the excerpts
from the commercial register of SELLER, the COMPANY, the SUBSIDIARY and
GRUNDSTUCKS KG of recent date and correct in substance are attached hereto
as SCHEDULE 7.1.
7.2 Transfer of SHARES
(a) SELLER is a company duly organized, validly existing and in good standing
under the laws of the Federal Republic of Germany, and has all requisite
corporate power and authority to enter into this AGREEMENT and to
consummate the transactions contemplated hereby. This AGREEMENT and all
other agreements herein contemplated to be executed in connection herewith
by SELLER have been (or upon execution will have been) duly executed and
delivered by SELLER, and constitute (or upon execution will constitute)
legal, valid and binding obligations of SELLER.
(b) SELLER has good and valid title to the SHARES and will effectively assign
to PURCHASER the SHARES pursuant to this AGREEMENT, free and clear of all
liens, pledges, security interests, restrictions, encumbrances, options or
rights of third parties of whatever kind, in particular sub-participation
rights and rights to usufruct.
(c) The SHARES represent 100 % of the entire share capital of the COMPANY.
PURCHASER has received a true and complete compilation of all documents by
which, up to the CLOSING DATE, the COMPANY's SHARES have been created,
transferred or otherwise affected. The SHARES have been held for at least
the last ten consecutive years prior to the EFFECTIVE DATE by a legal
entity (juristische Person) entitled to corporate tax credits
(anrechnungsberechtigte juristische Person) rather than an individual
(naturliche Person) with the exception of two SHARES in the nominal value
each of DM 1,000 which were held in trust (treuhanderisch) by Xxxxxx
Xxxxxxx and Xx. Xxxx Xxxxxxxxx Steinbeis from November 30, 1990 through
August 2, 1991.
(d) The execution, delivery, and performance of this AGREEMENT by SELLER, and
the consummation of all other agreements herein contemplated to be executed
in connection herewith and the fulfillment of the terms thereof, do not and
will not contravene any provision of SELLER's Articles of Association;
moreover, such execution, delivery, performance and consummation do not (i)
constitute a breach of or result in a default under, or cause the
acceleration of any payments pursuant to any agreement, contract or
indenture (Treuhandverhaltnis) to which SELLER, the COMPANY or the
SUBSIDIARY is a party, or any of their assets is bound; or violate any
provision of law, rule, regulation, order, permit, license, judgement or
decree, to which any of them is subject, in a manner that would have a
MATERIAL ADVERSE EFFECT on the COMPANY or the SUBSIDIARY; or (ii) require
any consents other than disclosed by SELLER in this AGREEMENT and will not
(iii) cause a dissolution of the COMPANY or the SUBSIDIARY.
(e) SELLER is not restricted from entering into or performing this AGREEMENT in
any manner; the SHARES do not represent all or substantially all of the
assets of SELLER within the meaning of Section 000 XXX (Xxxxxx Civil Code).
7.3 Organization, Good Standing and Authority
(a) The COMPANY and the SUBSIDIARY are companies duly organized, validly
existing and in good standing under the laws of the Federal Republic of
Germany. They have full corporate power to carry on their businesses as
they are now and have since their incorporation been conducted, and are
entitled to own, lease or operate the properties and assets they now own,
lease or operate.
(b) Schedule 7.3 contains true, correct and complete copies of the Articles of
Association of the COMPANY and the Articles of Association/limited
partnership agreement of the SUBSIDIARY, respectively, in each case as in
effect on the EFFECTIVE DATE; and these Articles of Association and limited
partnership agreement have not been amended, or filed for amendment with
any competent register or authority. There are no side agreements relating
to the constitution or formation of the COMPANY or the SUBSIDIARY which
will be binding upon PURCHASER or, with respect to the SUBSIDIARY, the
COMPANY, or which affect PURCHASER's or the COMPANY's rights in the COMPANY
or the SUBSIDIARY, respectively.
7.4 Capitalisation
The issued share capital of the COMPANY and the share capital/capital
contributions of the SUBSIDIARY are fully paid and not diminished, in full
or in part, by any repayment of any contribution or withdrawal of profits
to the respective shareholders and partners or for their or the benefit of
third parties, and there are no further outstanding payment obligations by
the shareholders or partners, respectively. There are not outstanding with
respect to the COMPANY and the SUBSIDIARY:
(i) any options, warrants or other rights to purchase from the COMPANY or
the SUBSIDIARY any shares or interests of the COMPANY or the
SUBSIDIARY;
(ii) any securities convertible into or exchangeable for shares or
interests in the COMPANY or the SUBSIDIARY;
(iii) any other commitments of any kind for the issuance of additional
shares or interests or options, warrants or other securities with
respect to the COMPANY or the SUBSIDIARY.
7.5 Equity Interests
Neither the COMPANY nor the SUBSIDIARY, with the exception of the COMPANY's
interest in the SUBSIDIARY, own directly or indirectly any capital stock of
or other equity interests (representing 10 % or more of the issued and
outstanding capital stock, equity interests or voting rights) in any
corporation, association, partnership, equity joint venture or other
entity.
7.6 Real Property and Leaseholds
(a) There is listed on Schedule 7.6:
(i) all real property owned (Grundstuckseigentum) or used by the COMPANY
and the SUBSIDIARY (already taking into account the final execution
(Vollzug) of the items referred to in Articles 2.6 and 2.7);
(ii) each hereditary building right (Erbbaurecht) or comparable right under
which the COMPANY or the SUBSIDIARY own a building or other structures
(already taking into account the final execution of the items referred
to in Articles 2.6 and 2.7); and
(iii) each lease of real property (Miet-, Xxxxx- und Leasingvertrage)
under which the COMPANY or the SUBSIDIARY is a lessee, lessor,
sublessee or sublessor.
Unless disclosed in SCHEDULE 7.6, to SELLER'S BEST KNOWLEDGE, there are no
ancient rights (so-called Altrechte) or any other rights relating to the
real property referred to in paragraphs (i) and (ii) which have not been
entered into the land register (Grundbuch) and there are no undisclosed
duties (Duldungs-, Nutzungs- und Handlungspflichten) to which the COMPANY
or the SUBSIDIARY are subject including, but not limited to, maintenance
obligations (Instandhaltungspflichten), rights of way or access (Wegerechte
und Rechte zum Betreten oder Befahren) or any other rights of use
(Nutzungsrechte) with respect to such real property owned or used, that
would have a MATERIAL ADVERSE EFFECT on the PURCHASER, the COMPANY or the
SUBSIDIARY.
(b) Except for the rights shown in the land register extracts
(Grundbuchauszuge) of the real property referred to in paragraphs (a) (i)
and (ii) above, as of the EFFECTIVE DATE there are no other rights and in
particular, but not limited to, no other obligations whatsoever of the
COMPANY to transfer title (Ubereignung) or to create any other rights
(dingliche Rechte) except for those disclosed in SCHEDULE 7.6; to the
extent that any of the agreements referred to in Articles 2.6 and 2.7 have
been notarized or signed, as the case may be, but have not been fully
executed (vollzogen) on the CLOSING DATE, such agreements shall not be
amended or terminated and shall continue to be in effect on the CLOSING
DATE without any changes thereto and shall be fully executed (vollzogen) as
initially contemplated. It is expressly agreed between the PARTIES that
SELLER shall deliver or cause to be delivered to PURCHASER prior to the
CLOSING DATE consents of cancellation (Loschungsbewilligungen) in
appropriate form for land register purposes (in grundbuchtauglicher Form)
for the deletion of all encumbrances registered in part III of the
respective land registers (in Abteilung III des Grundbuchs eingetragene
Belastungen) of the real estate referred to in paragraphs (a) (i) and (ii)
above.
(c) Except as disclosed in Schedule 7.6:
(i) the COMPANY and the SUBSIDIARY, as the case may be, has good and valid
title to each of the real properties owned or used by them on the
basis of a hereditary building right listed in Schedule 7.6, free and
clear of all rights of third parties, claims, charges and encumbrances
of any kind which are not shown in the land register (if a land
register exists) or listed in Schedule 7.6;
(ii) all of the buildings, fixtures and other improvements owned, leased or
otherwise used by the COMPANY and the SUBSIDIARY are technically in
sufficient operating condition (faktisch standsicher) and to SELLER'S
BEST KNOWLEDGE capable of being properly used in connection with the
BUSINESS or the business of the SUBSIDIARY as currently conducted and
in state of good repair and maintenance; to continue the BUSINESS in
its present shape, as far as the real property and building situation
is concerned, does not require any further action, except for the
replacement of existing items due to regular wear and tear;
(iii) the COMPANY and the SUBSIDIARY have access to all utilities,
including water and sewage, necessary to operate the BUSINESS and
the business of the SUBSIDIARY in the normal course and as
presently conducted and there are no overdue unpaid assessments
for the installation thereof or overdue charges for making
connection thereto that have not been fully paid on the EFFECTIVE
DATE; with respect to such real property, public utilities,
including connection and permanent right to discharge sanitary
waste into the collector system, as the case may be, of the
appropriate sewer authority, are installed and operating, and all
due and payable installation and connection charges have been
paid in full; there are no current or pending instalments of
special assessments which are overdue and unpaid, nor, to
SELLER'S BEST KNOWLEDGE, has the COMPANY or the SUBSIDIARY been
threatened for any instalments of special
assessments; and there are, to SELLER'S BEST KNOWLEDGE, no
proceedings pending, or threatened, for any increase of the
assessed valuation for any portion of such real property;
(iv) there are, to SELLER'S BEST KNOWLEDGE, no condemnation
(Abbruchsverfugung oder Enteignungsverfahren) or appropriation
(behordliche Inbesitznahme-Verfugungen) proceedings pending or
threatened against any of such real property or improvement;
(v) none of the real property now or heretofore owned or used (for any
purpose) and none of the real property now or heretofore leased for
manufacturing, processing or similar activities
(alpha) is used in any manner in material violation of applicable ,
building, zoning, land use, administrative, occupational or
safety or health law or regulation,
(beta) is in a state or condition that could subject the COMPANY or
the SUBSIDIARY to material expense or liability pursuant to
such laws or regulations, or
(gamma) is, to SELLER'S BEST KNOWLEDGE, subject to any governmental
inquiry or investigation pursuant to such laws and regulations.
7.7 Tangible Property Rights
(a) All tangible assets (bewegliche Sachen) which are used for the BUSINESS or
located on the real property owned, used or in possession of the COMPANY,
are owned or properly leased in the ordinary course of business by the
COMPANY, save for items of minor value that are provided to the COMPANY in
connection with services, such as waste containers, gas cylinders and
similar items.
(b) Except as otherwise expressly indicated in this AGREEMENT:
(i) the COMPANY or the SUBSIDIARY, as the case may be, has good and valid
title to, or is in lawful possession of, each item of such tangible
property free and clear of all liens, encumbrances, security interests
and similar rights of third parties (except for liens or security
interests in the ordinary course of commercial or banking
transactions); no property is pledged or assigned as security to banks
or other financial institutions as collateral;
(ii) each item of tangible personal or leased property is in good operating
condition, repair and maintenance and is fit for its intended
purposes;
(iii) the COMPANY is the owner of the partnership interests in the
SUBSIDIARY free and clear of restrictions, encumbrances or any
third party rights
whatsoever, unless otherwise provided by the
limited partnership agreement of the SUBSIDIARY;
(iv) all current assets (Gegenstande des Umlaufvermogens) are
unrestrictedly owned by the COMPANY and the SUBSIDIARY, as the case
may be, and are not encumbered with any rights of third parties with
the exception of retention of title rights of suppliers or other
security rights for obligations entered into in the ordinary course of
business.
7.8 Intangible Property Rights
(a) There is listed on Schedule 7.8:
(i) a true and complete list of the items of intangible property owned by,
or used in the business of, the COMPANY and the SUBSIDIARY, including,
but not limited to, domestic and foreign patents, utility patents
(Gebrauchsmuster), trade names, service marks, trademarks and
trademark registrations, design patents (Geschmacksmuster) and
copyright registrations (if applicable) and applications for any of
the foregoing; and
(ii) a true and complete list of all licenses or similar agreements or
arrangements to which the COMPANY or the SUBSIDIARY is a party either
as licensee or licensor for each such item of intangible personal
property.
(b) Except as indicated in Schedule 7.8:
(i) the COMPANY or the SUBSIDIARY, as the case may be, is the owner of or
the lawful licensee, respectively, of all right, title and interest in
and to each such item of intangible personal property, free and clear
of restrictions, encumbrances, liens and other adverse claims;
(ii) the COMPANY and the SUBSIDIARY, as the case may be, have the right and
authority to use said intangible property in connection with the
conduct of their respective businesses in the manner presently
conducted, and such use, to SELLER'S BEST KNOWLEDGE, does not conflict
with, infringe upon or violate any rights of third parties; and
(iii) in their operations the COMPANY and the SUBSIDIARY, as the case
may be, do not use nor are they dependent on the use of any
intangible property rights other than those mentioned in such
list the lack of which use would have a MATERIAL ADVERSE EFFECT
on the conduct of the businesses of the COMPANY or the SUBSIDIARY
as presently conducted.
(c) With regard to all such intangible property rights:
(i) all are vested in or validly granted to the COMPANY or the SUBSIDIARY
and are not restricted in any way and all renewal fees and steps
required for their maintenance or protections have been paid and
taken; no intangible property right used or owned by the COMPANY or
the SUBSIDIARY has been challenged by any third party and, to SELLER'S
BEST KNOWLEDGE, there are no circumstances which could give rise to
any challenge;
(ii) neither the COMPANY nor the SUBSIDIARY granted or is obliged to grant
any licence, sub-licence or assignment in respect of any such
intangible property rights owned or used by it or has disclosed or is
obliged to disclose any information relating to such intellectual
property rights to any person,
other than its employees for the purpose of carrying on their
respective businesses;
(iii) neither the COMPANY nor the SUBSIDIARY is, to SELLER'S BEST
KNOWLEDGE, in breach of any licence, sub-licence or assignment
granted to it in respect of any such intellectual property rights
or of any agreement under which any intellectual property was or
is to be made available;
(iv) the processes and methods employed, the services provided, the
business conducted and the products manufactured, used or dealt with
by the COMPANY or the SUBSIDIARY do not, to SELLER'S BEST KNOWLEDGE,
infringe the rights of any other entity or person;
(v) all licences in respect of such intangible property rights are in full
force and effect, have not been terminated and all requirements under
such licences have been fully complied with and there are, to SELLER'S
BEST KNOWLEDGE, no circumstances which indicate that any licence,
consent, permission or approval is likely to be revoked or which might
confer a right of revocation;
(vi) neither the COMPANY nor the SUBSIDIARY, to SELLER'S BEST KNOWLEDGE, is
aware of, nor have acquiesced in the unauthorised use by any person of
any of such intangible property rights or of any infringement of the
rights of the COMPANY or the SUBSIDIARY in any items.
(e) The COMPANY and the SUBSIDIARY, as the case may be, are owners of the
know-how required to conduct the BUSINESS. PURCHASER, as from the CLOSING
DATE, will have access to and will be able to use without any restrictions
all know-how relating to the BUSINESS and all marketing information
relating thereto.
(f) The COMPANY and the SUBSIDIARY, as the case may be, have good title, or
valid licenses, as the case may be, to any software rights used by it in
the course of business, free and clear of restrictions, encumbrances or any
third party rights whatsoever except as disclosed on SCHEDULE 7.8 and
except for certain copies of certain standard software programs. A further
exception is to be made for any moral rights belonging to the authors
("Urheber") of the software rights within the meaning of the
Urheberrechtsgesetz (German Copyright Act).
7.9 Accounts Receivable and Inventory
(a) The accounts receivable reflected on the CLOSING BALANCE SHEET of the
COMPANY constitute valid receivables, have arisen in the ordinary course of
business, are fully collectible within ninety days following their
respective due date (Falligkeitszeitpunkt) , and are, unless disclosed and
appropriately accrued for in the CLOSING BALANCE SHEET, not subject to any
set-off or counterclaim.
(b) Except as stated in SCHEDULE 7.9, neither the COMPANY nor the SUBSIDIARY
holds any items of inventory on consignment or has title to any items of
inventory in the possession of others.
7.10 Contracts or Agreements with Affiliates (including Intercompany Loans)
(a) SCHEDULE 7.10 contains a true, correct and complete list of each contract
or agreement (including options) made between the COMPANY or the
SUBSIDIARY, on the one hand, and SELLER or any of its AFFILIATES (including
the COMPANY and the SUBSIDIARY, as the case may be), on the other hand.
Except as listed in Schedule 7.10, there is no such contract or agreement
(including options) in force or pending as of the CLOSING DATE. Except as
indicated in SCHEDULE 7.10, all such agreements are concluded on an arm's
length basis, are legally binding and fully enforceable, have been properly
fulfilled and no obligations contemplated by this AGREEMENT may be
jeopardized or rendered unenforceable thereby. On request of PURCHASER,
SELLER shall terminate or cause to be terminated with immediate effect any
of these agreements, whether or not listed on SCHEDULE 7.10. The PARTIES
agree that the service agreement between GRUNDSTUCKS KG and the COMPANY of
December 20/30, 1996 concerning certain real estate services to be provided
by the COMPANY shall not be terminated to expire prior to June 30, 1998.
(b) Except as expressly set forth on SCHEDULE 7.10, on the EFFECTIVE DATE there
are no outstanding intercompany loans or other financial obligations of the
COMPANY or the SUBSIDIARY towards SELLER or any of its AFFILIATES.
7.11 Bank Accounts (including Financial Debt)
(a) SCHEDULE 7.11 lists the names and addresses of every bank and other
financial institution in which the COMPANY and the SUBSIDIARY maintain
an account (whether a check, savings or other account), lock box or
safe deposit box, and the account numbers and names of persons having
signing authority or other access thereto.
(b) Except as expressly set forth on SCHEDULE 7.11, there are no
outstanding financial debt of the COMPANY or the SUBSIDIARY towards
any bank or other financial institution.
7.12 Customers and Suppliers
(a) There does not exist any reason to believe that any substantial customer
of, or substantial supplier to the COMPANY or the SUBSIDIARY, as the case
may be, will reduce the extent of its previous dealing with the COMPANY or
the SUBSIDIARY to any material degree, except as for the general
development of the economy or the market and, to SELLER'S BEST KNOWLEDGE
the attitude or actions of customers, suppliers, employees or other persons
with regard to the
COMPANY, the SUBSIDIARY or the BUSINESS will not be affected by the
execution of this Agreement.
(b) None of the principal suppliers of the COMPANY or the SUBSIDIARY has for
the last two years given notice terminating, cancelling or threatening to
terminate or cancel any contract or relationship with the COMPANY or the
SUBSIDIARY; to SELLER'S BEST KNOWLEDGE, there is no material deterioration
of any such relationship.
7.13 Powers of Attorney and Suretyships
Except as disclosed in SCHEDULE 7.13, neither the COMPANY nor the
SUBSIDIARY have any general or special powers of attorney outstanding
giving the grantee the power to bind the grantor to any material obligation
(whether as grantor or grantee thereof) or have any obligation or liability
(whether actual, accrued, accruing, contingent or otherwise) as guarantor,
surety, co-signer, endorser, comaker, indemnitor or otherwise in respect of
the obligation of any person, except as endorser or maker of checks, bills
of exchange, or letters of credit, respectively, endorsed or made in the
ordinary course of business.
7.14 Labour and Employment
SCHEDULE 7.14 contains a true, complete and correct list of each agreement
with a KEY EMPLOYEE of the COMPANY and the SUBSIDIARY. Except as set forth
in SCHEDULE 7.14:
(i) the COMPANY and the SUBSIDIARY have complied in all material respects
with all labour and employment laws, including provisions thereof
relating to wages, employment security, hours, equal opportunity
(Gleichheitsgrundsatz), collective bargaining, and have paid all
applicable social security and employee taxes;
(ii) no labour complaint (Arbeitsgerichtsverfahren) is pending against the
COMPANY or the SUBSIDIARY before any federal, state or local agency or
other judicial or administrative forum, no labour strike or other
labour trouble affecting the COMPANY or the SUBSIDIARY is pending, and
no grievance is pending against the COMPANY or the SUBSIDIARY;
(iii) no organization or representation question ("Fragen hinsichtlich
der Zusammensetzung des Betriebsrats") is pending regarding the
employees of the COMPANY or the SUBSIDIARY, and no such question
has been raised within the three year period prior to the SIGNING
DATE;
(iv) there is no shop agreement or similar contract or arrangement
regarding retirement rights, profit or turnover participation of
employees or regarding similar benefits. SCHEDULE 7.14 further lists
any existing "employee benefit plans" and all contributions required
by law for such benefit plans;
(v) no change in the compensation or other terms of engagement of any
managing director or employee of the COMPANY or the SUBSIDIARY, and
no negotiation or request for such a change is due or expected within
three months from the SIGNING DATE, except for the normal annual
salary review;
(vii) none of SELLER, the COMPANY or the SUBSIDIARY is aware that any
executive or KEY EMPLOYEE, or any group of employees has any
plans to terminate employment with it;
(viii) SCHEDULE 7.14 further contains a complete and correct list of all
employees of the COMPANY and the SUBSIDIARY as of the date
indicated in such list including the respective salaries or wage
rates for each class of employees. Furthermore, SCHEDULE 7.14
contains a list of each collective bargaining agreement
(Tarifvertrag), shop agreement (Betriebsvereinbarung) or
comparable agreements and material applicable usages
(betriebliche Ubungen), if any; and
(ix) there are no claims, whether absolute, accured, contingent, due or to
become due for any liabilities pursuant to Section 128 AFG (German
Act to Promote Employment), unless appropriately accrued for in the
CLOSING BALANCE SHEET.
7.15 Pensions
SELLER has delivered to PURCHASER prior to the SIGNING DATE a true and
complete list of all pension claims and commitments of any kind as of
October 01, 1997 ("Pensionsverpflichtungen und Anwartschaften") related to
the COMPANY and the SUBSIDIARY.
7.16 Important Contracts
(a) SCHEDULE 7.16 contains a true and complete list of all material contracts,
agreements and commitments (hereinafter together referred to as the
"Contracts") to which the COMPANY or the SUBSIDIARY, as the case may be, is
a party and which are not disclosed to PURCHASER under another section of
this AGREEMENT. For the purpose of this Agreement a Contract is defined to
be each contract, agreement or commitment pertaining to or concluded with:
(i) any employment, consulting or other service agreement with a total
gross remuneration exceeding DM 120,000 per annum (as of the SIGNING
DATE), or providing for the payment of bonuses, profit sharings,
turnover participations, or any similar agreement with advisers or
present or previous shareholders or managing directors;
(ii) any agreement or commitment pertaining to the acquisition,
construction, development, manufacturing, disposal or encumbrance of
any tangible or intangible fixed assets whether or not shown on the
financial statements;
(iii) any lease or rental agreement for real property;
(iv) any written agreement which has a remaining term of more than 12
(twelve) months and cannot on or any time after the first anniversary
of the SIGNING DATE be terminated by it on 90 (ninety) or fewer days
notice without material penalty to it;
(v) any agreement and commitment relating to investments pending on the
SIGNING DATE which, in each case, exceed DM 100,000 or in the
aggregate DM 250,000;
(vi) any material agreements with domestic and international distributors,
commercial agents and representatives and similar material
distribution agreements which in case of their termination may give
rise to compensation claims against the COMPANY or the SUBSIDIARY
exceeding in each individual case DM 10,000 or DM 50,000 in the
aggregate or for which the non-cancellable remaining term exceeds
three months;
(vii) any agreement which contains a restraint on competition (whether
vertical or horizontal), including, but not limited to,
agreements which exclude or limit the right of the COMPANY or the
SUBSIDIARY to do business in certain lines or certain geographic
areas;
(viii) any loan, loan engagement, credit and overdraft facility,
promissory note or other evidence of indebtedness relating to the
borrowing or lending of money of any kind to which the COMPANY or
the SUBSIDIARY is a party, except for customary extensions of the
due date of accounts receivables or payables;
(ix) any guarantee of indebtedness or other obligations of third parties,
surety, mortgage, pledge, grant of security interest in or pledges of
assets, derivative transactions or securities of any kind granted by
the COMPANY or the SUBSIDIARY and any commitments of the COMPANY or
the SUBSIDIARY to third parties which have issued guarantees or
sureties of any kind on behalf of the COMPANY or the SUBSIDIARY;
(x) any factoring agreements;
(xi) unless already disclosed in SCHEDULE 7.14, any collective bargaining
agreements and shop agreements with trade unions or works councils to
which the COMPANY or the SUBSIDIARY is a party or otherwise subject
to, except for regional or national collective bargaining agreements
covering numerous companies or partnerships;
(xii) any other agreement or commitment which exceeds DM 100,000 in
each case, except for sale agreements concluded in the ordinary
course of business;
(xiii) any other agreement or commitment which is outside the ordinary
course of business of the COMPANY or the SUBSIDIARY and which in
each case exceed DM 50,000 or in the aggregate DM 100,000;
(xiv) any agreement on supplies and services rendered by or provided to
the COMPANY and the SUBSIDIARY and paid by them which in each
case or in the aggregate exceed DM 50,000; SELLER represents and
warrants that all supplies and services (including employments)
rendered by or provided to the COMPANY or the SUBSIDIARY are used
only for the benefit of their respective businesses.
(b) The validity or enforceability of the Contracts has not been legally
contested or questioned by anyone. To SELLER'S BEST KNOWLEDGE, (i) none of
the Contracts is nor is about to be terminated and (ii) except as disclosed
in SCHEDULE 7.16, all CONTRACTS to which the COMPANY and/or the SUBSIDIARY
is a party have been performed by the respective party pursuant to the
respective contractual terms and conditions, and with respect to none of
the CONTRACTS any contractual violations, non-performances or late
performances have occurred or have been announced or are reasonably to be
expected - be it on the part of the COMPANY or its SUBSIDIARY or on the
part of the respective contract partner. To SELLER'S BEST KNOWLEDGE, the
acquisition contemplated in this Agreement will not give any party a right
of early termination or amendment of, or create a breach under, any
Contract.
7.17 AGREEMENT Not in Breach of Other Instruments; Early Termination Rights
Neither the execution and delivery of this Agreement, nor the consummation
of the acquisition contemplated hereby, will violate, or result in a breach
of any of the terms and provisions of, or constitute a default under, or
conflict with, or give any party a right of amendment, early termination or
similar right under any agreement, indenture or other instrument to which
the COMPANY or the SUBSIDIARY is a party or by which any of them is bound,
or any law, rule, regulation, permit, license, judgement, decree, order or
award applicable to the COMPANY or the SUBSIDIARY, which would have a
MATERIAL ADVERSE EFFECT.
7.18 Insurances
SCHEDULE 7.18 contains a true, correct and complete list of all insurances
taken out by the COMPANY and the SUBSIDIARY; the insurance policies are in
full force, all premiums have been paid and except as set forth in SCHEDULE
7.18 none of the insurances will terminate upon the transfer of the SHARES
to PURCHASER. The insurance policies maintained by the COMPANY and the
SUBSIDIARY cover all material risks customary for the BUSINESS with a view
to
any losses or damages incurred by the COMPANY or the SUBSIDIARY prior to
the CLOSING DATE, and conform to the care of an orderly businessman, in
particular with respect to scope and coverage amounts. In the event that
the insurance policies contain stipulations or provisions that are not
customary, such facts have been disclosed to PURCHASER.
7.19 Licenses and Permits
The COMPANY and the SUBSIDIARY have all governmental licenses, permits and
authorisations including, but not limited to, all permits under the
relevant water laws (partially limited in time) (wasserrechtliche
Genehmigungen und Gestattungen, die teilweise befristet sind,) necessary to
carry on their businesses as currently conducted, except for such
governmental licenses, permits and authorisations, the absence of which
would not have a MATERIAL ADVERSE EFFECT on businesses, operations or
financial condition of the COMPANY or the SUBSIDIARY. Such licences,
permits and authorisations have neither been returned, revoked, nor
restricted, nor is, to SELLER'S BEST KNOWLEDGE, such return, revocation or
restriction impending or threatened.
7.20 Environmental Matters
Any representations and warranties relating to environmental matters are
dealt with separately under Article 8.4.
7.21 Financial Statements
(a) SELLER has provided PURCHASER with (i) the audited financial
statements (Jahresabschlusse) of the COMPANY for the fiscal years
1994, 1995 and 1996, as testified by Xxxxxxx-Xxxxxxxxxx, Deutsche
Industrie-Treuhand GmbH, Wirtschaftsprufungsgesellschaft, Munich, on
April 20, 1995, April 15, 1996 and April 21, 1997, and (ii) the
unaudited financial statements of the SUBSIDIARY for such fiscal
years, as well as the related profit and loss accounts and statements
of income.
The aforementioned documents and financial information shall
collectively hereinafter be referred to as the "FINANCIAL STATEMENTS".
(b) The FINANCIAL STATEMENTS:
(i) were prepared in accordance with the books and records of the COMPANY
and the SUBSIDIARY;
(ii) were prepared consistent with German commercial law in accordance with
German generally accepted accounting principles (Grundsatze
ordnungsgemasser Buchfuhrung) consistently applied (Bilanzkontinuitat);
and
(iii) present a true and fair view of the net worth, the financial
position and results (Finanz-, Vermogens- und Ertragslage) within
the meaning of Section 264 subsection 2 HGB of the COMPANY's and
the SUBSIDIARY's assets, financial condition and earnings, and
the results of their operations as at the relevant dates thereof
and for the periods covered thereby, observing continuity in the
accounting and evaluation methods; depreciations have been made
in accordance with the statutory provisions and reserves were
made for all known or identifiable risks in accordance with
German generally accepted accounting principles.
7.22 Taxes
Except as disclosed in Schedule 7.22:
(i) the COMPANY and the SUBSIDIARY have since their respective formation
been, and are, properly characterised and qualify for German tax
purposes as a company with limited liability (GmbH) and limited
partnership (KG), respectively, for the purposes of federal and
applicable state tax laws;
(ii) within the times and in the manner prescribed by law or, if it was
not the case, without ensuing any legal effects, the COMPANY and the
SUBSIDIARY have filed all federal, state and local tax returns and
all tax returns for foreign countries, provinces and other governing
bodies having jurisdiction to levy taxes upon them;
(iii) SELLER warrants that all tax returns constitute complete and
accurate representations of the basis for the respective tax
liabilities of the COMPANY and the SUBSIDIARY for such period and
accurately set forth all items (to the extent required to be
included or reflected in such returns) relevant to their tax
liabilities, including the tax bases of their properties and
assets;
(iv) neither the COMPANY nor the SUBSIDIARY has waived or extended any
applicable statute of limitations relating to the assessment of
federal, state, local or foreign TAXES;
(v) SELLER warrants that all TAXES, charges, fees, levies or other
assessments, including, without limitation, income, excise, property,
sales, gross receipts, employment , franchise and all withholding
taxes imposed by the Federal Republic of Germany, or any state,
county, local or foreign government, or subdivision or agency
thereof, including any interest, penalties or additions attributable
thereto due and payable by the COMPANY or the SUBSIDIARY prior to the
EFFECTIVE DATE have been paid in full;
(vi) to SELLER'S BEST KNOWLEDGE, no audits of the federal, state, local or
foreign tax returns of the COMPANY or the SUBSIDIARY are currently in
progress nor is any special audit threatened; no issue or issues have
been raised in connection with any prior or pending review or audit
of any federal,
state, local or foreign tax returns which SELLER reasonably believes
may be expected to be raised in the future by such taxing authorities
in connection with the audit or review of the tax returns of the
COMPANY or the SUBSIDIARY;
(vii) TAXES relating to periods of time up to the EFFECTIVE DATE(i)
have been paid in full or (ii) are provided for or will be
provided for in the CLOSING BALANCE SHEET;
(viii) until December 31, 1997, 24:00 hours, a fiscal unity
(Organschaft) with respect to corporate, trade and value added
tax existed between SELLER and the COMPANY;
(ix) No individual or legal entity not entitled to German tax credit has
owned the COMPANY's SHARES within the last ten years prior to the
EFFECTIVE DATE. In case the COMPANY's SHARES have been sold
(veraussert) by individuals or legal entities entitled to German tax
credit within the last ten years prior to the EFFECTIVE DATE the sale
has been subject to German income or corporate tax. In case the
COMPANY's SHARES have been transferred without remuneration
(unentgeltlich verauBert) or contributed without remuneration
(unentgeltlich eingelegt) by individuals or legal entities entitled
to German tax credit within the last ten years prior to the EFFECTIVE
DATE, a sale instead of the transfer or contribution would have been
subject to German income or corporate tax. The foregoing
representation in this paragraph (ix) does not apply with respect to
the two SHARES which were held by Xxxxxx Xxxxxxx and Xx. Xxxx
Xxxxxxxxx Steinbeis as set forth in Article 7.2 (c).
7.23 No Undisclosed Liabilities
(a) Except as and to the extent specifically provided for in the CLOSING
BALANCE SHEET or otherwise disclosed in the AGREEMENT, neither the
COMPANY nor the SUBSIDIARY have any liabilities or obligations of any
nature, including, but not limited to, product liability, whether
absolute, accrued, contingent or otherwise, whether known or unknown
and whether due or to become due which exceed in the aggregate DM
250,000 or are material to the financial condition, assets, or
business of the COMPANY and the SUBSIDIARY.
(b) Except as disclosed in SCHEDULE 7.23, neither the COMPANY nor the
SUBSIDIARY nor their assets have any liability (whether contingent or
otherwise) within the meaning of Section 251 HBG for any third party
obligations.
(c) Except as disclosed in SCHEDULE 7.23, neither the COMPANY nor the
SUBSIDIARY have received any financial support from public sources
(Subventionen) of whatever kind or nature, and in the event of a claim
for repayment of such financial support for non-compliance with its
terms prior to the EFFECTIVE DATE, whether disclosed or undisclosed,
the COMPANY or the SUBSIDIARY shall be indemnified in accordance with
Article 8.
7.24 Litigation
Except as listed in Schedule 7.24 and except for actions involving less
than DM 10,000 individually:
(i) there is no action, suit, proceeding, order, investigation or claim in
which the COMPANY or the SUBSIDIARY are engaged in any capacity
(including litigation before the labour courts) or affecting any of
its property pending (rechtshangig) before or conducted by any court
or governmental agency, authority or body or arbitrator, and there is,
to SELLER'S BEST KNOWLEDGE, no action, suit threatened by or against
the COMPANY or the SUBSIDIARY and there are no facts or circumstances
which are likely to give rise to any such dispute;
(ii) there is not in existence any order, judgement or decree of any court
or other tribunal or other agency enjoining or requiring the COMPANY
or the SUBSIDIARY to take any action of any kind with respect to its
business, assets or properties;
(iii) there are no product liability claims pending (rechtshangig) or,
to SELLER'S BEST KNOWLEDGE, threatened to be initiated against
SELLER, the COMPANY or the SUBSIDIARY.
7.25 Compliance with Law and Agreements
Except as set forth in SCHEDULE 7.25, the conduct of business by the
COMPANY and the SUBSIDIARY, respectively, is in compliance with all
federal, state, local or foreign laws, statutes, ordinances, rules,
regulations, decrees, orders, permits or other similar items in force on
the EFFECTIVE DATE (including, but not limited to, any of the foregoing
relating to employment discrimination, social security), the enforcement of
which would have a MATERIAL ADVERSE EFFECT on the COMPANY or the
SUBSIDIARY, nor has the COMPANY or the SUBSIDIARY received any notice of
any such violation or asserted failure. There are no legal or
administrative proceedings or investigations pending (rechtshangig) or, to
SELLER'S BEST KNOWLEDGE, threatened against the COMPANY or the SUBSIDIARY.
There have been no illegal kickbacks, bribes or political contributions
made by the COMPANY or the SUBSIDIARY.
7.26 Brokers
SELLER retained Rothschild GmbH, Frankfurt a.M., to act as its advisor with
respect to the acquisition contemplated by this AGREEMENT. SELLER
represents and warrants that no other broker, finder or other person has
been retained by SELLER and that neither Rothschild GmbH nor any other
broker, finder or other person is entitled to any brokerage, finder's or
similar fee against the COMPANY, the SUBSIDIARY or PURCHASER in connection
with the
transactions contemplated by this Agreement by reason of any
action taken by SELLER, the COMPANY, the SUBSIDIARY, or any of their
respective KEY EMPLOYEES, other employees or agents. Any claim for any fee,
commission or brokerage shall be the sole responsibility of SELLER.
7.27 Absence of Certain Changes
Except as disclosed in SCHEDULE 7.27, or in any other SCHEDULE or as
provided for or contemplated in this Agreement, since December 31, 1996
there has not been any of the following with regard to the COMPANY and the
SUBSIDIARY:
(i) any payment of dividends or transfer of assets of any kind to SELLER
or any of its AFFILIATES with respect to the COMPANY, or SELLER or
any of its AFFILIATES including the COMPANY with respect to the
SUBSIDIARY;
(ii) any profit distributions - including preliminary and concealed
distributions - and no hidden reserves were dissolved or withdrawn
except in transactions within the ordinary course of business; SELLER
has used its best efforts to preserve the reputation of the COMPANY
and the SUBSIDIARY and their relationship with customers, suppliers,
employees and the general public;
(iii) any transaction not in the ordinary course of business which may
have a MATERIAL ADVERSE EFFECT on the businesses of the COMPANY
or the SUBSIDIARY;
(iv) any material adverse changes in the financial condition, assets,
liabilities or businesses of the COMPANY and the SUBSIDIARY; and no
such material adverse changes are, to SELLER'S BEST KNOWLEDGE, likely
to occur;
(v) any material damage, destruction, or loss to their assets, whether or
not covered by insurance;
(vi) any sale or transfer by the COMPANY or the SUBSIDIARY of any real
property, material tangible or material intangible asset, or any
mortgage or pledge, or the creation of any security interest, lien,
or encumbrance on any such asset, or any lease of property, including
equipment, other than in the ordinary course of business and except
for the sale of GRUNDSTUCKS KG;
(vii) the discharge or satisfaction of any material lien or encumbrance
or the payment of any material liability other than in the
ordinary course of business;
(viii) any strike, lockout, labour trouble or other event of similar
nature;
(ix) any material amendment, modification or termination of any material
contract or agreement to which the COMPANY or the SUBSIDIARY is a
party;
(x) any increase in, or commitment to increase, the compensation payable
or to become payable to any officer, director, employee or agent to
the COMPANY or the SUBSIDIARY, or any increase of salary, bonus
payment or similar arrangement made to or with any of such KEY
EMPLOYEES, employees or agents, other than increases made in the
ordinary course of business and increases for KEY EMPLOYEES not
exceeding DM 25,000 per annum for any of them individually;
(xi) the making of any loan, advance, or guaranty to or for the benefit of
any person except as made in the ordinary course of business; or
(xii) any undertaking to enter into any of the foregoing transactions
or agreements, as the case may be.
7.28 Correctness of Information; Sufficiency of Assets
(a) The information concerning the COMPANY and the SUBSIDIARY set forth in
this Agreement, the Schedules and any document, statement or
certificate furnished or to be furnished to PURCHASER or its advisors
pursuant hereto, is true and correct. To SELLER'S BEST KNOWLEDGE, the
information does not omit anything relating to the Shares, the COMPANY
and the business operated by it or the SUBSIDIARY which is important
for the individual information given or of which the PURCHASER should
be aware when entering into this Agreement, for the purpose of the
assessment of such information. There are, to SELLER'S BEST KNOWLEDGE,
no events or circumstances which, in the future, could have a MATERIAL
ADVERSE EFFECT on the COMPANY and its SUBSIDIARY or their operations
except as connected with general developments of the economy or the
market.
(b) The assets owned or used (including any know-how) by the COMPANY and
the SUBSIDIARY as of the EFFECTIVE DATE are all that are required for
PURCHASER for engaging the conduct of the businesses of the COMPANY
and the SUBSIDIARY to the same extent and in the same manner as the
COMPANY and the SUBSIDIARY conducted such businesses prior to the
EFFECTIVE DATE. SELLER or its affiliates do not retain or own any
assets used or useful primarily in the businesses of the COMPANY and
the SUBSIDIARY.
ARTICLE 8
REMEDIES OF PURCHASER
8.1 Right to Withdraw
Save for any additional rights pursuant to Article 4.3 (a) and further
notwithstanding any mandatory statutory rights of PURCHASER (such as in
cases of malicious intent (Arglist), intentional tort (vorsatzliche
Schadigung), fraud (Betrug) or similar situations), PURCHASER shall be
entitled to withdraw (wandeln) from or rescind (zurucktreten) this
Agreement only in the event that
(i) the acquisition of the Shares or, with respect to the interests in the
SUBSIDIARY, such interests should be subject to legal restrictions
which SELLER did not remove within six weeks after having received a
written demand from PURCHASER; or
(ii) with respect to the Shares and/or the interests in the SUBSIDIARY
there are rights of third parties which could materially affect the
exercise of the shareholder rights connected with such SHARES or
interests of PURCHASER or the COMPANY, as the case may be, or the
value of such SHARES or interests (other than as a result of any
action, event or circumstance for which PURCHASER is responsible) and
SELLER did not
remove such third party rights within six weeks after
having received a written demand from PURCHASER; or
(iii) any of the representations and warranties assumed by SELLER in
Article 7 above, is totally or partially incorrect or incomplete,
or SELLER fails to duly observe or satisfy any other term or
obligation under this AGREEMENT, and such incorrectness,
incompleteness or failure leads to any loss or damages whatsoever
in an aggregate amount exceeding fifty percent of the BASE
PURCHASE PRICE; the rescission right under this Article 8.1 (iii)
shall be excluded if not exercised by March 31, 2000, 24:00
hours.
8.2 Other Remedies
(a) If and to the extent any of the representations and warranties assumed by
SELLER in Article 7 above, is totally or partially incorrect, misleading or
incomplete, or if SELLER fails to duly observe or satisfy any other term or
obligation under this AGREEMENT, SELLER shall be liable for all types of
damages incurred by PURCHASER, the COMPANY or the SUBSIDIARY because of
this incorrectness, incompleteness, misrepresentation or failure. SELLER
shall be liable to place PURCHASER, or if PURCHASER so requests, the
COMPANY or the SUBSIDIARY, in the position that they would have been in,
had the representation been correct, the warranty not been breached or the
respective term or obligation been observed or satisfied
(Naturalrestitution). Alternatively, under the same conditions, PURCHASER,
or if PURCHASER so requests, the COMPANY or the SUBSIDIARY, respectively,
may demand monetary damages in cash (Schadensersatz in Geld) in order to be
compensated for any misrepresentation, breach of warranty, non-observance
or non-fulfilment.
(b) Unless otherwise provided in this AGREEMENT, any other claims of PURCHASER
for the reduction of the purchase price (Minderung) or arising under culpa
in contrahendo (as far as related to any representations or warranties in
Article 7) are expressly excluded. There exist no other representations and
warranties, other than those expressly given under this AGREEMENT.
(c) In the event of any breach or non-fulfillment by SELLER of any of the
representations and warranties contained under Article 7, PURCHASER will
give SELLER written notice within three months upon knowledge of such
breach or non-fulfillment stating the nature thereof and the expected
amount involved to the extent that such amount has been determined at the
time where such note is given. Section 377 HGB shall not apply.
(d) The maximum aggregate liability of SELLER in respect of any breach or
non-fulfillment of the representations and warranties arising under Article
7, however excluding the items set forth in paragraph (h) below, shall not
exceed DM 4,250,000 (four million two hundred and fifty thousand Deutsche
Xxxx). No liability shall be assumed by SELLER where the aggregate claims
are less than DM 250,000 (two hundred and fifty thousand Deutsche Xxxx),
such claims being ignored for the purpose of calculating the liability of
SELLER (Freibetrag); it being understood, however, that any items which do
not constitute a violation of the
representations and warranties in Article 7 because they do not
have a MATERIAL ADVERSE EFFECT shall be fully compensated by SELLER,
regardless of whether or not they have a MATERIAL ADVERSE EFFECT, once
the foregoing threshold amount of DM 250,000 is exceeded.
(e) SELLER shall not be liable for, and PURCHASER shall not be entitled to any
claim arising under Article 7 above, with the exception of the items
referred to in paragraph (h) below, for any breach or nonfulfilment by
SELLER of such representations and warranties, if and to the extent that
(i) the facts and circumstances to which PURCHASER's claims relate are
explicitly disclosed in the SCHEDULES; or
(ii) such claims result from a failure of PURCHASER, the COMPANY or the
SUBSIDIARY to mitigate damages pursuant to paragraph 254 BGB.
(f) When calculating the amount of SELLER's liability under this AGREEMENT all
advantages in connection with the respective item shall be taken into
account (Vorteilsausgleichung), in particular if and to the extent (i) the
items to which PURCHASER's claims relate have been taken into account in
the CLOSING BALANCE SHEET by way of provision (Ruckstellung) or an
extraordinary devaluation (Wertberichtigung), or (ii) accounts receivable
have been collected which were written off or were not accounted for in the
CLOSING BALANCE SHEET or (iii) tax advantages (Steuervorteile) result from
a future tax audit for any period up to the EFFECTIVE DATE, calculated with
an assumed tax rate of forty-five percent and a discount rate
(Abzinsungsrate) of six percent, and, vice versa, tax disadvantages
(Steuernachteile) under the foregoing criteria, or (iv) any amount of
PURCHASER's claims is recovered by PURCHASER or the COMPANY or the
SUBSIDIARY, as the case may be, from third parties.
(g) If either the COMPANY, the SUBSIDIARY or PURCHASER are sued or threatened
to be sued by a third party, which suit would give rise to a claim of
PURCHASER under Article 7, PURCHASER shall give SELLER prompt notice of any
such claim. Furthermore, PURCHASER undertakes that (i) SELLER shall be
given reasonable access at its own expense during ordinary business hours
to the books and records of PURCHASER or the COMPANY or the SUBSIDIARY, as
the case may be, to the extent that such access may assist SELLER in
avoiding or reducing its liability under this AGREEMENT, (ii) SELLER shall
be provided, to the extent reasonable and at its own expense, with material
and information relevant in relation to the third-party claim, (iii) SELLER
shall be given reasonable opportunity to comment or discuss with the
COMPANY or the SUBSIDIARY any measures which SELLER proposes to take or to
omit in connection with the third-party claim, (iv) upon SELLER's request
PURCHASER will diligently defend any such claim at SELLER's cost, provided
that such defense does not substantially impair PURCHASER's or the
COMPANY's or the SUBSIDIARY's interests, and (v) settle any such claim only
after having obtained SELLER's consent which consent may not unreasonably
be withheld. The costs for any such proceedings shall be reimbursed by
SELLER to PURCHASER.
(h) Any rights of PURCHASER under Articles 7.9, 7.20/8.4 and 7.22 and, for the
avoidance of any doubt, under Articles 2 and 5 shall not be subject to the
restrictions set forth in paragraphs (d) and (e) above.
8.3 Indemnification and Audits
(a) TAXES of any kind owed by or leading to a liability of the COMPANY or the
SUBSIDIARY, as the case may be, in each case including any interest thereon
or connected therewith, which relate to a period prior to the EFFECTIVE
DATE and which are not accurately reflected or fully provided for in the
CLOSING BALANCE SHEET, shall be borne by SELLER. SELLER shall be under an
obligation to make any payments in accordance with this paragraph upon
presentation of a payable tax assessment or other public payment order,
even though not formally assessed against (Zug um Zug) assignment of the
possible tax refund claims (Steuererstattungsanspruche) in accordance with
Section 46 AO (German Tax Code) or, in case of wage tax (Lohnsteuer) to be
paid by the COMPANY, the assignment of the corresponding recourse claims
(RegreBanspruche) against the respective employees, to the extent legally
permissible by PURCHASER, the COMPANY or the SUBSIDIARY, respectively.
(b) As to the defence of any legal proceedings regarding the payment of TAXES,
social security or other payments to be made to fiscal or governmental
authorities, Article 8.2 (g) above shall apply mutis mutandis. In addition
thereto, SELLER shall be given an opportunity to comment on or participate
from the outset in and review any reports from all relevant tax, social
security and any other fiscal or governmental audits or other measures
which may give rise to any claims, provided, that they relate to periods
prior to the EFFECTIVE DATE, and PURCHASER shall ensure that SELLER
receives without undue delay copies of all relevant tax and social security
assessment letters available to PURCHASER at the cost of SELLER. PURCHASER
shall ensure that upon the request of SELLER, to the extent reasonable,
objections are filed, rights of defence exercised and all proceedings
instituted and conducted against any tax, social security and other
assessments in accordance with SELLER's discretion and at SELLER's expense,
including any proceedings to pursue an opportunity to obtain a refund,
relating to periods prior to the EFFECTIVE DATE, provided in each case that
the foregoing actions and measures do not unduly impair PURCHASER's or the
COMPANY's or the SUBSIDIARY's legitimate interests. If PURCHASER, contrary
to SELLER's request, decides not to initiate, or not to cause the COMPANY
or the SUBSIDIARY to initiate, a defense against any such third party
claim, SELLER shall be released from its liability with respect to such
third party claim towards PURCHASER, the COMPANY and the SUSIDIARY, as the
case may be.
(c) Disregarding the foregoing provisions, for the avoidance of any doubt, it
is understood that the FINAL PURCHASE PRICE shall not be affected by the
results of any future tax audits.
8.4 Environmental Remedies
(a) SELLER's liability for environmental pollution on
(i) properties which are in the ownership of the COMPANY or the SUBSIDIARY
or used by the COMPANY on the basis of hereditary building rights on
the EFFECTIVE DATE,
(ii) properties which, pursuant to contractual agreements already existing
on the SIGNING DATE, are to be transferred to the ownership of the
COMPANY,
(iii) properties which were used in the past by the COMPANY or its
legal predecessors prior to the EFFECTIVE DATE, and which
properties do not belong to the properties listed above under (i)
and (ii), and
(iv) properties which do not belong to those listed under (i), (ii) and
(iii) above but which have, nevertheless, been polluted by the COMPANY
or its legal predecessors
shall be governed exclusively by the provisions of this Article 8.4.
(b) Environmental pollution for the purposes of this Article means
contamination of the ground and soil, buildings and installations located
thereon, the groundwater as well as of drinking water xxxxx or sources
through pollutants from industrial or trade activity, the deposit either
above ground or underground, regardless whether these were made legally or
illegally - whereby the term deposit includes also temporary deposits - of
production waste and other waste from industrial or trade activity,
provided that such contamination or deposits were caused by the COMPANY or
the SUBSIDIARY or their legal predecessors prior to the CLOSING DATE or
provided that such contamination or deposits existed prior to the CLOSING
DATE. There shall be no requirement that on the CLOSING DATE there is a
danger to public safety or public order due to the environmental pollution
or that certain measures have been ordered by a regulatory authority or
will be necessary following justified third party claims.
(c) Clean-up measures for the purposes of this Article are all measures which
(i) pursuant to the findings of the EXPERT referred to in paragraph (f)
below, (ii) because of orders of regulatory authorities, (iii) pursuant to
a mutual agreement of the contracting parties or (iv) pursuant to final and
enforceable judgements in favour of third parties, are required in relation
to environmental pollution, it being understood that -without prejudice to
the costs- PURCHASER shall be entitled to at any time carry out clean-up
measures pursuant to subparagraph (j) (iii) (3) below.
(d) The clean-up costs shall, in addition to the actual costs of clean-up
measures (only third party costs - "Fremdkosten"), also include the costs
of the expert's findings, the costs of specialist engineers for the
planning, tender and supervision of the clean-up works, also the costs due
to the stoppage of production, but not, however, the costs of additional
staffing requirements of the COMPANY.
(e) To the extent that orders of regulatory authorities are mentioned in this
Article, such orders must be enforceable; SELLER can demand that appeals
and court action be filed against such orders provided that SELLER assumes
the costs thereof and reimburses the damages incurred by PURCHASER
resulting from the delay thereby caused, in particular in the form of
increased clean-up costs or restricted production. The deadline agreed in
paragraph (j) (iii) shall be extended by the duration of the proceedings
initiated by the appeal plus a further term of six months. PURCHASER shall
inform SELLER without undue delay of any such order; SELLER bears no
liability if and to the extent SELLER has not been properly informed on any
such order. The provisions set forth in Article 8.2 (g) shall apply mutatis
mutandis.
The provisions set forth in this Article 8.4 (e) shall apply mutatis
mutandis if third party claims (zivilrechtliche Anspruche) relating to
environmental pollution are raised against PURCHASER.
(f) SELLER hereby consents to PURCHASER examining the ground and soil,
buildings, groundwater and drinking water for the presence of environmental
pollution.
The examination shall be carried out by ENSR (hereinafter referred to as
"EXPERT") in accordance with the examination plan attached hereto as
SCHEDULE 8.4. If this first examination of the EXPERT comes to the
conclusion that the clean-up costs exceed DM 5 million, then SELLER shall
have the right to rescind (zurucktreten) this AGREEMENT within a period of
three days following the day of receipt of the examination results which
right of rescission shall forfeit (AusschluBfrist) thereafter.
(g) The object of the examination referred to in paragraph (f) is to clarify
whether, which and to what extent there is environmental pollution, whether
and subject to which conditions clean-up measures will be required and what
clean-up costs will thereby foreseeably be incurred.
The carrying-out of the examination, the evaluation of the results thereof
and the determination whether and which clean-up measures are necessary and
under what conditions are to be made taking into account all of the
relevant site conditions and any affected protected rights (Schutzguter)
and on the basis of the pertinent statutory and other applicable
provisions, in particular the "Guidelines for the Treatment of Pollutant
Deposits and Contaminated Sites in Bavaria" (Leitfaden fur die Behandlung
von Altablagerungen und kontaminierten Standorten in Bayern), as of July
1991 ("Pollution Guidelines") and the "Technical Rules of the State Working
Group Waste (LAGA) Requirements for the Material Utilisation of Mineral
Residual Substances and Waste" (Technische Regelung der Arbeitsgemeinschaft
Xxxxxx (LAGA) Anforderungen an die stoffliche Verwertung von mineralischen
Reststoffen und Abfallen), as of March 1994 ("Technical Rules of the
Working Group").
(h) For the event that the EXPERT concludes that further investigations are
expedient, such further investigations may not be carried out without
SELLER'S consent.
References in this clause to an "expert opinion" refer to all expert
opinions drawn up by the EXPERT (hereinafter referred to as the "EXPERT
OPINION").
(i) SELLER shall receive for his information a copy of the EXPERT's findings,
in particular the final EXPERT OPINION.
(j) (i) Without prejudice to the costs, PURCHASER or the COMPANY or the
SUBSIDIARY, as the case may be, shall be entitled vis-a-vis SELLER to
at any time after the CLOSING DATE carry out the clean-up measures
suggested by the EXPERT on the properties listed under paragraphs (a)
(i) and (ii). Prior to carrying out clean-up measures, PURCHASER shall
inform SELLER thereof.
(ii) In the event that the EXPERT OPINION forecasts clean-up costs of more
than DM 15 million, PURCHASER shall instruct the EXPERT to determine
the foreseeable costs as precisely as possible by appropriately
detailed tenders. In the event that on the basis of such detailed cost
determination, expenditure of more than DM 20 million is foreseeable,
PURCHASER shall have the right to rescind this AGREEMENT pursuant to
Article 4.3 (a). PURCHASER's right to rescind this AGREEMENT shall
lapse in the event that SELLER acknowledges in writing that SELLER
will pay the entire costs in excess of DM 20 million.
(iii) As regards clean-up measures and clean-up costs in relation to
the properties listed in paragraph (a) (i) and (ii), the
following shall apply:
(1) Clean-up costs for clean-up measures which (i) are to be
taken according to applicable laws due to any danger to
public safety or public order, (ii) are ordered by public
authorities or (iii) are mutually considered to be necessary
by both PARTIES (hereinafter referred to as "URGENT CLEAN-UP
MEASURES") shall be borne by SELLER in full to the extent
the relevant environmental pollution was identified by the
EXPERT in his examination pursuant to paragraph (f).
(2) Clean-up costs for URGENT CLEAN-UP MEASURES in relation to
environmental pollution which was not identified by the
EXPERT in his examination pursuant to paragraph (f) but any
time thereafter within five years as of the CLOSING DATE
shall be shared between SELLER and PURCHASER as follows:
- With regard to clean-up costs of up to the amount of DM
10 million, SELLER shall bear 82,5 % and PURCHASER shall
bear 17,5 %.
- With regard to clean-up costs between DM 10 million up
to the amount of DM 20 million, SELLER shall bear 97,5 % and
PURCHASER shall bear 2,5 %.
- Clean-up costs in excess of DM 20 million shall be
borne by PURCHASER in full.
(3) Clean-up costs for clean-up measures which are not urgent
(for example, because clean-up measures are required only in
the event that construction measures, in particular
soil-shifting operations, are to be carried out) in relation
to environmental pollution discovered by the EXPERT in his
examination pursuant to paragraph (f) or thereafter within
five years as of the CLOSING DATE shall be shared between
SELLER and PURCHASER in accordance with the preceding
paragraph (2) above. However, SELLER's obligation to share
in such costs shall be subject to the condition that
(aa) the clean-up measures are justified by a reasonable
interest of PURCHASER,
(bb) the clean-up measures are notified to SELLER within
five years as of the CLOSING DATE, and
(cc) the clean-up measures are initiated within seven years
as of the CLOSING DATE at the latest.
(4) The clean-up costs pursuant to the preceding paragraph (3)
above shall be limited to the difference between ordinary
and mandatory (gesetzlich zwingend vorgeschrieben) increased
(special) dumping ground costs. SELLER is liable for such
clean-up costs only if and to the extent the respective
clean-up measures have been carried out (erbracht) within
eight years as of the CLOSING DATE. Article 8.4 (d) shall
not apply.
(5) SELLER shall not be liable for clean-up costs
(aa) which are incurred by reason of statutory provisions or
amended statutes adopted after the CLOSING DATE
("liability exclusion"), it being understood that
SELLER shall remain liable if and to the extent SELLER
would be liable pursuant to the laws applicable on the
CLOSING DATE; however, this liability exclusion shall
neither apply to the xxxx for a soil protection act
(Bodenschutzgesetz) as presently discussed in the
mediation committee (Vermittlungsausschuss) nor to any
federal or state law, regulations and/or ordinances
connected with or based on the soil protection act (in
the following collectively referred to as the "Soil
Protection Act"); SELLER shall also be
liable for any clean-up measures and clean-up costs
required under the Soil Protection Act;
(bb) which become necessary because PURCHASER materially
changes the object of the COMPANY; modernisations and
expansions of the production facilities of the COMPANY
and changes based upon the development of the COMPANY'S
now existing market shall not be deemed to constitute a
material change of the object of the COMPANY;
(cc) which are attributable to the fact that PURCHASER has
incriminated himself with the competent environmental
authorities, provided that such self-incrimination is
not based upon a statutory obligation.
(6) If, in the case of construction measures pursuant to
subparagraph (3) above, it transpires that clean-up measures
become URGENT CLEAN-UP MEASURES, for example because
contaminated excavated soil presents a danger to public
safety or public order, the costs shall be governed by
subparagraphs (3) and (4) above. In such event Article 8.4
(d) shall not apply.
Save for the provisions set forth in paragraph (e) hereof and
unless otherwise provided for in this paragraph (iii), SELLER's
obligations under this paragraph (iii) shall lapse upon the
expiry of five years after the CLOSING DATE unless orders of the
regulatory authorities or judgments in favour of third parties
have become enforceable prior to said date, or unless an expert
finding is pending pursuant to paragraphs (l) and (k) below.
(iv) In the event that regulatory authorities or third parties hold
the COMPANY or the SUBSIDIARY liable for (1) carrying out
clean-up measures on the properties mentioned in paragraph (a)
(iii) and (iv) or for (2) costs incurred in connection with
clean-up measures carried out or to be carried out, SELLER shall
hold the COMPANY and the SUBSIDIARY harmless from the full scope
and full amount of all such claims. In the event that the COMPANY
or the SUBSIDIARY are held liable by regulatory authorities or
third parties to carry out clean-up measures or to reimburse
clean-up costs despite this indemnity, SELLER alone shall bear
such costs in their full amount as between SELLER and PURCHASER
or SELLER and the COMPANY. However, SELLER'S liability as to
properties mentioned in paragraph (a) (iv) under this paragraph
(iv) shall be limited to environmental pollution the source of
which lies on a property mentioned in paragraph (a) (iii) and in
the event that the source of the environmental pollution lies on
a property mentioned in paragraph (a) (i) and (ii) the provisions
set forth in paragraph (j) (iii) shall apply.
(v) SELLER is - unlimited in time - fully liable vis-a-vis PURCHASER,
the COMPANY and the SUBSIDIARY for environmental pollution,
clean-up measures and costs incurred in connection with clean-up
measures as regards the properties listed in paragraph (a) (iii)
and (iv). However, SELLER'S liability as to properties mentioned
in paragraph (a) (iv) under this paragraph (v) shall be limited
to environmental pollution the source of which lies on a property
mentioned in paragraph (a) (iii) and in the event that the source
of the environmental pollution lies on a property mentioned in
paragraph (a) (i) and (ii) the provisions set forth in paragraph
(j) (iii) shall apply.
(k) In the event that PURCHASER or SELLER doubt the EXPERT findings, in
particular in respect of the necessity or the extent of the clean-up
measures, both parties hereto shall instruct an independent EXPERT who
shall finally settle the issues disputed between the PARTIES with binding
effect. In the event that the PARTIES hereto cannot agree on an independent
expert, such EXPERT shall upon request of either party be appointed by the
Bayerische Landesamt fur Umweltschutz (Bavarian Land Authority for
Environmental Protection) or, if such Authority refuses to appoint an
expert, by the President of the Chamber of Industry and Commerce in Munich.
The costs incurred in connection with the EXPERT shall be borne by the
losing party by analogously applying the provisions in sec. 91 et seq. ZPO
(German Code of Civil Procedure).
(l) If the PARTIES hereto fail to agree on the type and extent of environmental
pollution and the necessary clean-up measures and costs, the provisions
contained in paragraph (k) above shall apply mutatis mutandis.
(m) If a third party assumes any possible liabilities of SELLER under this
Article 8.4, PURCHASER shall accept such assumption of liability by such
third party with discharging effect for SELLER (befreiende Schuldubernahme)
if such third party provides PURCHASER with an irrevocable and
unconditional guarantee of a major German bank unlimited in time
(unwiderrufliche, unbedingte, unbefristete Bankburgschaft einer deutschen
GroBbank) in favour of PURCHASER in the amount of DM 20 million.
8.5 Treatment of Accounts Receivable
(a) From and after the CLOSING DATE, PURCHASER shall use commercially
reasonable efforts to collect in full amount each of the accounts
receivable referred to in Article 7.9 (a), provided, however, that
(i) PURCHASER's obligation to use commercially reasonable efforts shall
not require PURCHASER to file any lawsuit or initiate other legal
proceedings against any party to any such accounts receivable, unless
the terms of any existing credit insurance (Kreditversicherung)
provide otherwise in which case SELLER shall bear the costs of such
legal proceedings (unless such costs are covered by the respective
credit insurance), and
(ii) SELLER shall provide to PURCHASER assistance reasonably requested by
PURCHASER in its efforts to collect such accounts receivable.
In the event that at the expiration of six months after the respective due
dates certain of such accounts receivable shall not have been collected by
the COMPANY or the SUBSIDIARY with commercial reasonable efforts in
accordance with this Article 8.5, SELLER shall, at PURCHASER's election,
acquire these accounts receivable against payment of the respective
uncollected amount subject to any adjustments made in the CLOSING BALANCE
SHEET (Teilwertabschreibung). If PURCHASER decides against the acquisition
by SELLER of any such accounts receivable, SELLER shall be released from
its obligation to compensate PURCHASER for the respective receivables.
(b) Any accounts receivable of the COMPANY within the meaning of Section 266
subsection 2 B. II. 2. and 3. HGB shall be compensated by SELLER to
PURCHASER, if and to the extent such accounts receivable prove to be
uncollectable within ten days after their respective due dates.
8.6 Time Limits
(a) Any warranty claims of PURCHASER arising under Article 7 are excluded if
and to the extent that they are not asserted in writing by March 31, 2000,
24:00 hours, at the latest, save that
(i) any rights or claims with regards to defects in rights (Rechtsmangel)
of the SHARES or the interests in the SUBSIDIARY are subject to the
statutory limitation period,
(ii) any claims resulting from the reassessment of any tax, social security
and comparable charges may be asserted within six months after such
assessment or reassessment of taxes or of social security payment
obligations or comparable charges served upon the COMPANY or the
SUBSIDIARY, as the case may be, has become final, unappealable and
binding upon the respective recipient, and
(iii) any environmental remedies shall have the limitation period set
forth in Article 8.4.
(b) Any claims of PURCHASER under Article 2 or Article 5 shall have a four
years' limitation period as from the CLOSING DATE, with the exception of
any claims under Article 5 (d) which claims shall have a thirty years'
limitation period.
(c) All asserted claims, unless acknowledged by SELLER in writing, shall expire
one year after the foregoing periods, unless court action has been filed
with respect to such claims within such one year period.
8.7 Knowledge
PURCHASER's possibility to get knowledge of certain facts relating to the
COMPANY, the SUBSIDIARY and the Business shall not release SELLER from its
liabilities under this Agreement, in particular, but not limited to, any
claims based on a breach of any of the representations and warranties
contained in Article 7 hereof, except if and to the extent that any such
fact has been expressly disclosed in the Schedules to this Agreement.
SELLER shall only be released from its liabilities under this AGREEMENT if
PURCHASER has positive knowledge (positive Kenntnis) of certain facts
relating to the COMPANY, the SUBSIDIARY and the BUSINESS. For purposes of
this Article 8.7 it is agreed that PURCHASER is deemed to have positive
knowledge of certain facts only if PURCHASER is precisely aware of (i)
those facts and (ii) the precise legal evaluation and the legal
consequences resulting from those facts. For evidence purposes only (nur zu
Beweiszwecken) a copy of the legal due diligence report (without exhibits
thereto) prepared by PURCHASER's legal counsel has been deposited
(hinterlegt) at the acting notary public a certified copy of which shall be
forwarded by the notary public to SELLER if and to the extent PURCHASER
initiates any claims against SELLER under Article 7 of this AGREEMENT. The
acting notary may destroy the legal due diligence report after December 31,
2007.
ARTICLE 9
Other Closing and Post-Closing Covenants
9.1 Management of the COMPANY prior to the CLOSING DATE
SELLER undertakes that during the period from the SIGNING DATE until the
CLOSING DATE (i) SELLER will not dispose of any assets nor engage in any
activity or enter into any commitment in this respect outside the ordinary
course of business of the COMPANY or the SUBISIDARY, as the case may be,
unless PURCHASER has agreed thereto in writing; (ii) SELLER will not enter
into any agreement with customers or suppliers which fall outside the
ordinary course of business; (iii) SELLER will not hire or commit to hire
any employee (including freelance) and will not conduct the BUSINESS other
than in the ordinary course as previously conducted, unless PURCHASER has
agreed thereto in writing; and from the EFFECTIVE DATE (iv) SELLER will
grant to PURCHASER and its representatives full access to all premises,
file and bookkeeping documents as well as instruct all employees to
disclose any information to PURCHASER and its representatives if material
for the future conduct of the business of the COMPANY and the SUBSIDIARY.
9.2 Notifications
PURCHASER and SELLER will comply with any applicable post-closing
notification or other legal provision (including trade, cartel or currency
exchange provisions).
9.3 Trade Names, Trademarks
For the avoidance of any doubt, after the CLOSING DATE, SELLER will not
have any right to use, and shall cause its AFFILIATES not to use, any of
the names and trademarks described in EXHIBIT 9.3.
9.4 Costs and TAXES
(a) The costs of this Agreement, i.e. notarial fees, commercial register fees,
publication costs, and filing fees of the Federal Cartel Office or the
competent authorities in the United States or any other country (but
excluding the fees of SELLER'S advisors) incurred in connection with this
AGREEMENT shall be borne by PURCHASER; this applies also with respect to
the real estate transfer tax (Grunderwerbsteuer) triggered by the execution
of this AGREEMENT but, for the avoidance of any doubt, shall not apply to
TAXES referred to in paragraph (c) below.
(b) SELLER and PURCHASER, respectively, shall bear their own legal, accounting
and consulting fees and any other costs incurred by them in connection with
negotiations and conclusion of this AGREEMENT.
(c) It is expressly understood and agreed between the PARTIES that neither
PURCHASER nor the COMPANY shall be liable for or assume any of the costs or
TAXES including real estate transfer tax (Grunderwerbssteuer) incurred in
connection with any preparatory measures or other steps taken prior to the
CLOSING DATE by SELLER and/or the COMPANY or the SUBSIDIARY, in particular,
but not limited to, any costs or taxes incurred as a result of the transfer
to the COMPANY's interest in GRUNDSTUCKS KG or any of the actions to be
completed by SELLER under Article 2 of this AGREEMENT, except for any real
estate transfer tax triggered by the acceptance of the HEREDITARY BUILDING
RIGHTS EXTENSION OFFER.
9.5 Non-Competition Clause
As from the EFFECTIVE DATE, neither SELLER nor any of its AFFILIATES shall
compete directly or indirectly, for their own account, for the benefit of
third parties, as shareholder, partner or employee or in any other
capacity, with the COMPANY, with regard to the BUSINESS as conducted by the
COMPANY, at the time of the EFFECTIVE DATE. Furthermore, SELLER and its
AFFILIATES will not attempt or effectively entice away any employees
including the managing directors from the COMPANY without a prior written
consent of PURCHASER. The non-competition covenants shall have a duration
of five years as from the CLOSING DATE and shall be restricted to the
present jurisdictions in which the COMPANY conducts the BUSINESS.
9.6 Customer and Supplier Relationships
The PARTIES shall duly co-operate with regard to the smooth transfer of
customer relationships of the COMPANY following the EFFECTIVE DATE. The
same shall apply with regard to the possible termination or continuance of
agreements with sales representatives currently acting on behalf of the
COMPANY which are listed in SCHEDULE 9.7.
ARTICLE 10
CARTEL LAW ISSUES
The PARTIES shall support each other with respect to responding to any
requests by the Federal Cartel Office or any other filing or notification
requirements with other authorities in other countries.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 Notices
All notices and other communications required or permitted hereunder shall
be in writing, in the English or German language, and, unless otherwise
provided in this Agreement, will be deemed to have been duly given when
delivered in person or when dispatched by telex or telefax (confirmed in
writing by mail simultaneously dispatched) to the appropriate party at the
address specified below:
If to PURCHASER to:
FiberMark, Inc.
000 Xxxxxxxxxx Xxxx
XX Xxx 000
Xxxxxxxxxxx, XX 00000
XXX
Attn: Xxxx Xxxxxx
Xxxxx Xxxxx
with a copy to:
BEITEN XXXXXXXXX XXXXX & XXXXXXX
Xxxxxxxxxx. 000, 00000 Xxxxxx,
Xxxxxxx Xxxxxxxx of Germany
Telefax No. (000) 00000-000
Attn: Xx. Xxxxxxxxx Xxxxxxx
Xx. Xxxx Xxxxxxxxxx
If to SELLER to:
Steinbeis Holding GmbH
Xxxxxxxxxxx XxxxXx 00
00000 Xxxxxxxxxxx
Xxxxxxx Xxxxxxxx xx Xxxxxxx
Telefax No. (08034) 70-240
Attn: Xx. Xxxxxx Xxxxxx-Xxxxxxx
Xx. Xxxx Xxxx
Xx. Xxxx Xxxxxxxxx Steinbeis
or to such other address or addresses as such party may from time to time
designate as to itself by like notice.
11.2 Successors and Assigns
This Agreement will be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. PURCHASER
shall be entitled to transfer all rights and obligations under this
Agreement to a company affiliated with PURCHASER.
11.3 Amendments
Any amendment to this Agreement must be in writing or (if required by law)
in the form of a notarial deed. This requirement shall also apply to the
waiver of this written form requirement. The term "writing" shall not
include the verbal statement of one of the PARTIES which is reflected in
the confirmation letter of one of the PARTIES.
11.4 Severability
(a) In the event that one or several provisions of this Agreement should be
invalid or unenforceable, or if this Agreement should be incomplete, the
validity of and enforceability of the other provisions of this Agreement
shall not be affected thereby. In such case, the PARTIES hereto shall
replace the invalid provision by such valid and enforceable provision or by
such provision completing this Agreement which is or which are commensurate
with the commercial intent of this Agreement as of the date hereof.
(b) In the event that the prohibition to compete pursuant to Article 9.5 of
this AGREEMENT is declared to be void by an unappealable decision of a
court due to its coverage as to time or contents, then a scope of this
provision as to time and/or contents shall be deemed to apply which comes
closest to the void prohibition to compete which would be considered as
being effective by the competent court. This shall not affect the validity
of the remaining provisions of this AGREEMENT.
11.5 Confidentiality
(a) SELLER shall, and shall cause its representatives, to hold in strict
confidence, and not use for any commercial purpose or provide to any third
party, any confidential information of any kind concerning PURCHASER,
FiberMark, Inc. and any enterprises affiliated with PURCHASER. The term
"confidential information" shall mean facts and circumstances of any kind
which are not publicly known, including trade and business secrets.
(b) The foregoing obligations regarding confidentiality shall apply
correspondingly to the obligation of PURCHASER with respect to any
confidential information regarding the SELLER and/or the COMPANY and/or the
BUSINESS.
(c) The PARTIES shall not disclose the terms of this AGREEMENT, in particular
the purchase price stipulated herein, to any third party that is not
entitled to receive such information. Such disclosure may, however, be made
to direct or indirect shareholders of PURCHASER, to any person providing
any debt or equity finance to or investing in PURCHASER or its AFFILIATES
and related parties, or to any professional advisor or any public or
governmental authority in Germany or any other country. The PARTIES will
endeavour to jointly agree on press releases relating to this AGREEMENT.
PURCHASER shall have the right to release and file any information required
by law.
11.6 Applicable Jurisdiction
(a) This Agreement and the legal relations among the PARTIES shall be governed
by and construed in accordance with the laws of the Federal Republic of
Germany.
(b) All disputes arising in connection with this AGREEMENT or related thereto
shall be finally settled by arbitration under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce with a tribunal of
three arbitrators with sufficient proficiency in both the German and the
English language, who shall be appointed in accordance with the said Rules,
and which arbitration shall be conducted in the German language; however,
this AGREEMENT or any other agreements or instruments which have been
signed and/or executed in the English language shall be introduced in the
arbitration proceedings in the English language. The place of arbitration
shall be Munich. In as far as the said Rules do not provide procedural
regulations, the statutory provisions of the ZPO (German Code of Civil
Procedure) shall apply.
(c) To the extent that any documents of or related to the COMPANY or the
SUBSIDIARY are not in possession of the COMPANY or the SUBSIDIARY,
respectively, in the event of arbitration SELLER shall upon request of
PURCHASER disclose and, at PURCHASER's expense, provide copies of any these
documents if SELLER or any of its AFFILIATES is in possession of such
documents.
11.7 European Economic and Monetary Union
The European Union anticipates the introduction of a single currency and
substitution of the national currencies of Member States participating in a
Monetary Union. On the date on which the Deutsche Xxxx is replaced by
single currency, conversion into such currency shall take effect. The
denomination of the original currency shall be retained for so long as this
is legally permissible. Conversions shall be based on the officially fixed
rate of conversion. Neither the introduction of the single currency nor the
substitution of the national currencies of the Member States participating
in such Monetary Union nor the fixing of the official rate of conversion
nor any economic consequences that arise from any of the aforementioned
events or in connection with such Monetary Union shall give rise to any
right to terminate prematurely, contest, cancel, rescind, modify, or
renegotiate this AGREEMENT or any of its provisions or to raise any other
objections and/or exceptions or to assert any claims for compensation. This
AGREEMENT shall continue in full force and effect in accordance with its
terms; in particular, interest rates which have been set for an interest
period shall remain unchanged for such interest period, subject to any
mandatory provisions.
List of Exhibits
EXHIBIT 1.2 Consent of COMPANY to Sale and Assignment as well as
Corresponding Shareholder Resolution of SELLER
EXHIBIT 2.1 DM 8 Million Loan Agreement
EXHIBIT 2.2 Expansion Land Option and Preemption Right Agreement
EXHIBIT 2.3 Bonus Schedule
EXHIBIT 2.4 Termination of Profit and Loss Take-Over Agreement and
Corresponding Shareholder Resolutions
EXHIBIT 2.5 Pension Transfer Agreement
EXHIBIT 2.6 Hereditary Building Rights Extension Offer
EXHIBIT 2.7 Other Undertakings
EXHIBIT 2.8 Seller's Environmental Commitment
EXHIBIT 3.2 Preliminary Declaration of Approval of the Landeszentralbank
EXHIBIT 3.3 Sample Calculation for Audited Net Closing Balance Sheet
Value
EXHIBIT 4.1 Guarantee for Loan Agreement
EXHIBIT 6.1 Commercial Register Excerpts of Each Purchaser
EXHIBIT 9.3 Trade Names, Trademarks
The Company will provide supplementally to the Commission a copy of any
omitted exhibit upon request.
List of Schedules
SCHEDULE 7.1 Commercial Register Excerpts of SELLER, the COMPANY, the
SUBSIDIARY and GRUNDSTUCKS KG
SCHEDULE 7.3 Articles of Association of COMPANY and Limited Partnership
Agreement of SUBSIDIARY
SCHEDULE 7.6 Real Property and Leaseholds
SCHEDULE 7.8 Intangible Property Rights
SCHEDULE 7.9 Accounts Receivable and Inventory
SCHEDULE 7.10 Contracts or Agreements with Affiliates
SCHEDULE 7.11 Bank Accounts
SCHEDULE 7.13 Powers of Attorney and Suretyships
SCHEDULE 7.14 Labour and Employment
SCHEDULE 7.16 Important Contracts
SCHEDULE 7.18 Insurances
SCHEDULE 7.22 Taxes
SCHEDULE 7.23 No Undisclosed Liabilties
SCHEDULE 7.24 Litigation
SCHEDULE 7.25 Compliance with Law and Agreements
SCHEDULE 7.27 Absence of Changes
SCHEDULE 8.4 Environmental Examination Plan
SCHEDULE 9.7 Customer and Supplier Relationships
The Company will provide supplementally to the Commission a copy of any
omitted schedule upon request.
