SALE AND PURCHASE AGREEMENT:
2
Table of Contents
Schedule of Exhibits...........................................................3
Preamble.......................................................................5
ARTICLE 1 Definitions..........................................................6
ARTICLE 2 Subject Matter of the Purchase......................................10
ARTICLE 3 Sale and Assignment of the SHARES, the LIMITED PARTNERSHIP
INTEREST in the TARGET and the SELLER'S FINANCING RECEIVABLES......12
ARTICLE 4 EFFECTIVE DATE......................................................14
ARTICLE 5 CLOSING, TRANSFER DATE..............................................14
ARTICLE 6 PURCHASE PRICE and PURCHASE PRICE ADJUSTMENT........................16
ARTICLE 7 Due Diligence.......................................................22
ARTICLE 8 Agreements on the Condition ("Beschaffenheitsvereinbarungen")
of TARGET and/or TARGET COMPANIES..................................22
ARTICLE 10 Legal Consequences of Non-Compliance, Remedies.....................33
ARTICLE 11 Transfer of the ACQUIRED BUSINESS, Post-Contractual Cooperation....38
ARTICLE 12 SELLER'S Covenants Pending CLOSING, Conduct of the
ACQUIRED BUSINESS................................................41
ARTICLE 13 Involvement in Legal Matters, THIRD PARTY CLAIMs...................43
ARTICLE 14 Merger Control.....................................................45
ARTICLE 15 Other Provisions...................................................46
ARTICLE 17 Final Provisions...................................................52
3
Schedule of Exhibits
----------- --------------------------------------------------------------------
Exhibits Contents
----------- --------------------------------------------------------------------
1.2.1 ACQUIRED BUSINESS CONSOLIDATED EFFECTIVE DATE FINANCIAL STATEMENTS
as of March 31, 2002 (EDFS)
----------- --------------------------------------------------------------------
1.2.2 Mannesmann accounting guidelines
----------- --------------------------------------------------------------------
1.4 AUDITED FINANCIAL STATEMENTS ("Einbringungsbilanz") of Demag Mobile
Cranes GmbH & Co. KG
----------- --------------------------------------------------------------------
1.13 SELLER`S FINANCING RECEIVABLES and SELLER`S FINANCING LIABILITIES
(specification)
----------- --------------------------------------------------------------------
1.17 List of SUBSIDIARIES
----------- --------------------------------------------------------------------
3.6.1 Notification acc.ss.16 para. 1 GmbHG
----------- --------------------------------------------------------------------
3.6.2 Notification acc.ss.40. para. 1 sentence 2 GmbHG
----------- --------------------------------------------------------------------
5.4.1 Filing for Registration with Commercial Register
----------- --------------------------------------------------------------------
5.5 Closing Minutes
----------- --------------------------------------------------------------------
6.1 Allocation of PURCHASE PRICE
----------- --------------------------------------------------------------------
6.3 DRESDNER LETTER
----------- --------------------------------------------------------------------
6.4 Sample of TDFS RECALCULATION
----------- --------------------------------------------------------------------
8.1.4 Rights of third parties with regard to the shares and interests in
the SUBSIDIARIES
----------- --------------------------------------------------------------------
8.2.2 List of REAL ESTATE owned by the TARGET and the relevant excerpts of
the Land Register
----------- --------------------------------------------------------------------
8.3.1 a List of managing directors of the TARGET COMPANIES and managerial
staff directly subordinated to them
----------- --------------------------------------------------------------------
8.3.1 b List of Strikes
----------- --------------------------------------------------------------------
8.3.2. Disclosure of on-fulfilment of material contract obligations which
could have a material adverse effect
----------- --------------------------------------------------------------------
8.5.3 List of pending administrative, civil and labor law proceedings
----------- --------------------------------------------------------------------
8.5.4 Environmental assessment report
----------- --------------------------------------------------------------------
8.7 List of persons qualifying for SELLER'S knowledge
4
----------- --------------------------------------------------------------------
12.2 Steps for the completion of the transfer of the ACQUIRED BUSINESS
----------- --------------------------------------------------------------------
16.1 Confidentiality Agreement
----------- --------------------------------------------------------------------
16.5 List of persons being subject to non-solicitation obligation
----------- --------------------------------------------------------------------
5
Preamble
WHEREAS,
- The SELLER is a limited liability company ("Gesellschaft mit
beschrankter Haftung") organized under the laws of Germany with its
registered seat at Zweibrucken/Germany. The SELLER is the parent
company of Demag Mobile Cranes GmbH & Co. KG, a limited liability
partnership ("Kommanditgesellschaft") with its registered seat at
Munich/Germany and the general partner of Demag Mobile Cranes GmbH &
Co. KG, Demag Mobile Cranes Verwaltungsgesellschaft mbH, a limited
liability company organized under the laws of Germany with its
registered seat at Munich/Germany. Demag Mobile Cranes GmbH & Co. KG is
engaged in business activities regarding the research and development,
production, distribution and marketing of mobile cranes, i.e.
telescopic and lattice boom cranes and related activities. These
business activities are conducted through Demag Mobile Cranes
Verwaltungsgesellschaft mbH and Demag Mobile Cranes GmbH & Co. KG as
well as its subsidiaries in various jurisdictions and through its
worldwide sales organziation.
- As part of its restructuring, the SELLER'S ultimate parent company has
decided to divest its mobile crane business, i.e. all the shares and
interests held by the SELLER in Demag Mobile Cranes
Verwaltungsgesellschaft mbH and in Demag Mobile Cranes GmbH & Co. KG.
NOW, THEREFORE, in consideration of the promises and the mutual agreements
hereinafter set forth, the PARTIES agree as follows:
6
ARTICLE 1
Definitions
For the purpose of this AGREEMENT, the following terms have the meanings
ascribed to them in the following:
1.1 Acquired Business: The business activities of the TARGET COMPANIES
which are related to the research and development, production,
distribution and marketing of mobile cranes, i.e. telescopic and
lattice boom cranes and related activities.
1.2 ACQUIRED BUSINESS CONSOLIDATED EFFECTIVE DATE FINANCIAL STATEMENTS
("EDFS"): The non-audited consolidated financial statements of the
TARGET COMPANIES as attached in Exhibit 1.2.1 (i) effective as of
March 31, 2002 and (ii) prepared in accordance with generally
accepted accounting principles applied in the United States of
America ("US-GAAP") as closer specified by the Mannesmann accounting
guidelines and the supplementary notes thereto as of April 10, 2002
(to the extent that they comply with US-GAAP) as attached in Exhibit
1.2.2. Such consolidated financial statements comprise the
consolidated balance sheet and income statement of the TARGET
COMPANIES as of March 31, 2002.
ACQUIRED BUSINESS CONSOLIDATED TRANSFER DATE FINANCIAL STATEMENTS
("TDFS"): The consolidated financial statements of the TARGET
COMPANIES (i) effective as of the TRANSFER DATE, (ii) prepared in
accordance with generally accepted accounting principles applied in
the United States of America ("US-GAAP") as closer specified by the
Mannesmann accounting guidelines (to the extent that they comply with
US-GAAP) as attached hereto as Exhibit 1.2.2 applied consistently
with their application in the EDFS and (iii) as audited by PWC
Deutsche Revision AG in accordance with German auditing regulations
and generally accepted standards for the review of financial
statements promulgated by the Institute of Chartered Accountants in
Germany ("Institut der Wirtschaftsprufer in Deutschland (IDW)"). Such
audited consolidated financial statements comprise the consolidated
balance sheet and income statement of the TARGET COMPANIES as of the
TRANSFER DATE.
7
1.3 Agreement: This Sale and Purchase AGREEMENT including its Exhibits.
1.4 AUDITED FINANCIAL STATEMENTS: The financial statements of Demag
Mobile Cranes GmbH drawn up for the purpose of contributing
Seller's German mobile cranes business to Demag Mobile Cranes
GmbH & Co. KG ("Einbringungsbilanz") prepared on the basis of
German-GAAP as audited by PWC Deutsche Revision AG in accordance with
German auditing regulations and generally accepted standards for the
review of financial statements promulgated by the Institute of
Chartered Accountants in Germany ("Institut der Wirtschaftsprufer in
Deutschland (IDW)") attached hereto as Exhibit 1.4.
1.5 BOOK EQUITY: The equity in the amount of EUR 31,639,248.66 (in words:
Euro thirty one million six hundred thirty nine thousand two hundred
forty eight sixty six cent) as stated in the EDFS.
RECALCULATED BOOK EQUITY: The equity as stated in the TDFS.
1.6 Business Day: A day other than a Saturday, Sunday or public holiday
or a day on which commercial banks in Munich, Germany, and/or New
York, NY are closed.
1.7 Closing: CLOSING of the transactions envisaged under this AGREEMENT
pursuant to ARTICLE 5 paras. (2) through (4).
1.8 CONTRIBUTION AGREEMENT: The agreement dated September 28, 2001 and as
amended as of December 21, 2001, as certified by Notary ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇, notary with official seat in Munich/Germany, deed no. A
3107/2001, and no. A 4270/2001, by which SELLER has contributed its
German mobile cranes business, i.e. telescopic and lattice boom
cranes and related activities, to Demag Mobile Cranes GmbH & Co. KG.
8
1.9 Effective Date: March 31, 2002, 24:00h/April 1, 2002 00:00 h.
1.10 LIMITED PARTNERSHIP INTEREST: The interest of SELLER as the sole
limited partner of Demag Mobile Cranes GmbH & Co. KG including all
ancillary rights, obligations and accounts as specified in ARTICLE 2
para. 1.
1.11 PARTIES: PURCHASER and SELLER.
PARTY: PURCHASER or SELLER.
1.12 PURCHASER`S AFFILIATES: Purchaser and the companies or partnerships
in which PURCHASER currently or at the relevant point in time holds
directly or indirectly a majority of the voting rights, or in which
PURCHASER directly or indirectly has the right to appoint or remove a
majority of its board of directors, or directly or indirectly has the
right to exercise a dominant influence over it, especially by virtue
of its articles of association or control contract.
1.13 Seller's Financing Receivables: The financial receivables as
specified in Exhibit 1.13 of the SELLER'S GROUP vis-a-vis the TARGET
COMPANIES resulting from inter-company financing in the amount
existing as of the EFFECTIVE DATE and as calculated on the basis of
the EDFS.
SELLER'S FINANCING LIABILITIES: The financial liabilities as
specified in Exhibit 1.13 of the SELLER'S GROUP vis-a-vis the TARGET
COMPANIES resulting from inter-company financing in the amount
existing as of the EFFECTIVE DATE and as calculated on the basis of
the EDFS.
9
SELLER'S NET FINANCING RECEIVABLES: SELLER'S FINANCING RECEIVABLES
minus SELLER'S FINANCING LIABILITIES.
SELLER'S RECALCULATED FINANCING RECEIVABLES: SELLER'S FINANCING
RECEIVABLES in the amount existing as of the TRANSFER DATE and as
calculated on the basis of the TDFS pursuant to ARTICLE 6 paras. 5
and 6 and as specified in Exhibit 1.13.
SELLER'S RECALCULATED FINANCING LIABILITIES: SELLER'S FINANCING
LIABILITIES in the amount existing as of the TRANSFER DATE and as
calculated on the basis of the TDFS pursuant to ARTICLE 6 paras. 5
and 6.
SELLER'S RECALCULATED NET FINANCING RECEIVABLES: SELLER'S
RECALCULATED FINANCING RECEIVABLES minus SELLER'S RECALCULATED
FINANCING LIABILITIES.
1.14 Seller's Group: SELLER and Siemens Aktiengesellschaft and the
companies and partnerships in which Siemens Aktiengesellschaft with
its registered seat in Berlin and Munich, entered into the Commercial
Register of the local court of Berlin-Charlottenburg under HRB 12300
and into the Commercial Register of the local court of Munich under
HRB 6684 (hereinafter referred to as "SIEMENS") currently or at the
relevant point in time holds directly or indirectly a majority of the
voting rights, or in which Siemens directly or indirectly has the
right to appoint or remove a majority of its board of directors, or
directly or indirectly has the right to exercise a dominant influence
over it, especially by virtue of its articles of association or
control contract.
1.15 SELLER'S Group COMPANIES: The companies and partnerships which form
part of SELLER'S GROUP.
10
1.16 SHARES: SELLER'S shareholding including all ancillary rights and
obligations in Demag Mobile Cranes Verwaltungsgesellschaft mbH as
specified in ARTICLE 2 para. 2.
1.17 Subsidiaries: The companies in which TARGET holds shares and
interests and which are listed in Exhibit 1.17.
1.18 Target: Demag Mobile Cranes GmbH & Co. KG and/or, as the case may be,
Demag Mobile Cranes Verwaltungsgesellschaft mbH, the sole general
partner of Demag Mobile Cranes GmbH & Co. KG.
1.19 Target COMPANIES: The TARGET and its SUBSIDIARIES.
TARGET COMPANY: Any of the Target COMPANIES.
1.20 TRANSFER DATE: The date as of which the PARTIES have executed and
signed the closing minutes as described in ARTICLE 5 para. 5.
ARTICLE 2
---------
Subject Matter of the Purchase
------------------------------
2.1 SELLER is the sole limited partner of Demag Mobile Cranes GmbH & Co.
KG with its interest, including all ancillary rights and accounts
(the "LIMITED PARTNERSHIP INTEREST"), consisting of
2.1.1 a fixed capital account (capital account I) ("Festkapitalkonto")
corresponding to the registered liability capital ("eingetragene
Hafteinlage") in the amount of EUR 10,000,000 (in words: Euro ten
million);
2.1.2 a variable capital reserve account (capital account II) ("variables
Kapitalkonto") with funds in the amount of EUR 0 (in words: Euro
zero);
11
2.1.3 a variable revenue reserve and loss account (capital account III)
("gesamthanderisch gebundenes Gewinnrucklagen- und
Verlustvortragskonto"); and
2.1.4 a variable account as clearing account (private account) ("privates
Verrechnungskonto").
In accordance with the partners' resolution of September 28, 2001,
the fixed capital of Demag Mobile Cranes GmbH & Co. KG was increased
from EUR 1,000 (in words: Euro one thousand) by EUR 9,999,000 (in
words: Euro nine million nine hundred ninety nine thousand) to EUR
10,000,000 (in words: Euro ten million). SELLER effected the
contribution to the increased fixed capital by way of contributing
its mobile cranes business pursuant to the CONTRIBUTION AGREEMENT
with economic effect as of October 1, 2001, 00.01 hours.
The initial fixed capital in the amount of EUR 1,000 (in words: Euro
one thousand) and the increased fixed capital in the amount of EUR
9,999,000 (in words: Euro nine million nine hundred ninety nine
thousand) has been fully paid in respectively has been contributed
and has not been repaid.
2.2 Demag Mobile Cranes Verwaltungsgesellschaft mbH is the sole general
partner of Demag Mobile Cranes GmbH & Co. KG without an equity share.
After the increase of the share capital to EUR 3,000,000 (in words:
Euro three million), SELLER holds two shares (the "SHARES") in Demag
Mobile Cranes Verwaltungsgesellschaft mbH in the nominal amount of
EUR 25,000 (in words: Euro twenty five thousand) and EUR 2,975,000
(in words: Euro two million nine hundred seventy five thousand).
The initial share capital in the amount of EUR 25,000 (in words: Euro
twenty five thousand) and the increased share capital in the amount
of EUR 2,975,000 (in words: Euro two million nine hundred seventy
five thousand) has been fully paid in respectively has been
contributed and has not been repaid.
12
ARTICLE 3
---------
Sale and Assignment of the SHARES, the LIMITED PARTNERSHIP INTEREST in the
--------------------------------------------------------------------------
TARGET and the SELLER'S FINANCING RECEIVABLES
---------------------------------------------
3.1 SELLER sells to PURCHASER with economic effect as per the EFFECTIVE
DATE
3.1.1 by way of subrogation arising out of contract
("Sonderrechtsnachfolge") its LIMITED PARTNERSHIP INTEREST in Demag
Mobile Cranes GmbH & Co. KG and
3.1.2 its SHARES in Demag Mobile Cranes Verwaltungsgesellschaft mbH.
3.2 The PURCHASER accepts the sales pursuant to para. 1.
3.3 Subject to ("aufschiebend bedingt") the occurrence of the TRANSFER
DATE and subject to ("aufschiebend bedingt") the registration of the
assignment by way of subrogation arising out of contract
("Sonderrechtsnachfolge") in the competent Commercial Register,
SELLER - in fulfilling its obligations to transfer the LIMITED
PARTNERSHIP INTEREST hereunder - assigns its LIMITED PARTNERSHIP
INTEREST sold according to para. 3.1.1 by way of subrogation arising
out of contract ("Sonderrechtsnachfolge") as of the TRANSFER DATE to
PURCHASER'S ASSIGNEE who accepts the aforesaid assignment.
3.4 Subject to ("aufschiebend bedingt") the occurrence of the TRANSFER
DATE, SELLER - in fulfilling its obligations to transfer the SHARES
hereunder - assigns its SHARES sold according to para. 3.1.2 as of
the TRANSFER DATE to PURCHASER'S ASSIGNEE who accepts the aforesaid
assignment.
13
3.5 The current fiscal year's profit allotted to the SHARES and the
LIMITED PARTNERSHIP INTEREST sold according to para. 3.1 remains with
the respective company and is part of the sale under para. 3.1.
3.6 The Notary is appointed and irrevocably instructed to file the
notification according to ss. 16 para. 1 GmbHG ("German Limited
Liability Corporation Act") as outlined in Exhibit 3.6.1 and the
notification according to ss. 40 para. 1 sentence 2 GmbHG as outlined
in Exhibit 3.6.2 upon presentation of evidence either in form of a
written confirmation by SELLER or other evidence that the TRANSFER
DATE has occurred.
3.7 SELLER herewith sells and assigns the SELLER'S RECALCULATED FINANCING
RECEIVABLES to PURCHASER. The assignments ("Abtretungen") are subject
to ("aufschiebend bedingt") the occurrence of the TRANSFER DATE.
PURCHASER herewith accepts the sale and assignment of the SELLER'S
RECALCULATED FINANCING RECEIVABLES from SELLER and from SELLER'S
GROUP COMPANIES pursuant to this paragraph.
3.8 Subject to the occurrence of the TRANSFER DATE, PURCHASER herewith
assumes SELLER'S RECALCULATED FINANCING LIABILITIES with full
discharge of SELLER and SELLER'S GROUP COMPANIES as the original
debtors ("befreiende Schuldubernahme"). PURCHASER shall procure that
the TARGET COMPANIES waive as of the TRANSFER DATE all claims
following from inter-company financing of the TARGET COMPANIES
towards SELLER and SELLER'S GROUP COMPANIES, which shall be
indemnified accordingly by PURCHASER.
14
ARTICLE 4
---------
EFFECTIVE DATE
--------------
To the extent not specifically stated otherwise in this AGREEMENT, any business
transactions concluded as of the EFFECTIVE DATE and thereafter by the TARGET
COMPANIES are considered to have economically been made as if the legal transfer
of the SHARES and the LIMITED PARTNERSHIP INTEREST to be effected as of the
TRANSFER DATE was effected as of the EFFECTIVE DATE. Therefore, subject to the
terms of this Agreement and subject to the occurrence of the TRANSFER DATE the
economic risk and benefit of the ACQUIRED BUSINESS passes to PURCHASER as of the
EFFECTIVE DATE.
ARTICLE 5
---------
CLOSING, TRANSFER DATE
----------------------
5.1 CLOSING of the transactions contemplated in this AGREEMENT shall be
conditional upon the following conditions precedent ("aufschiebende
Bedingungen") having been fulfilled:
(i) final clearance of the execution of this AGREEMENT by the
merger control authorities of Austria, France, Germany
and, if legally required, USA.
and
(ii) no judgment, injunction or order being ruled by a court or
other governmental body having jurisdiction over the subject
matter to restrain or prohibit the transfer of the LIMITED
PARTNERSHIP INTEREST and the SHARES according to ARTICLE 3.
5.2 SELLER and PURCHASER shall inform each other without undue delay as
soon as either PARTY has become aware that the conditions precedent
listed in para. 1 have been satisfied (hereinafter referred to as
CLOSING NOTICE). Each PARTY shall use best efforts to provide that
each of such conditions shall be satisfied as soon as possible
following the date hereof, in particular neither party shall initiate
any proceedings which reasonably might be expected to lead to a
judgment, injunction or order as mentioned in para 5.1 (ii) above
unless required by law.
15
5.3 CLOSING shall take place at the offices of SIEMENS
Aktiengesellschaft, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇/ ▇▇▇▇▇▇▇,
5.3.1 subject to the prior signing of the CLOSING NOTICE and as anticipated
on the date hereof, on June 30, 2002 24:00h//July 1, 2002 00:00h or
5.3.2 if the CLOSING NOTICE has not been signed before the date specified
in para 5.3.1 above, on the last calendar day of the month of the
CLOSING NOTICE.
5.4 On the day of CLOSING, the following documents are to be exchanged
and the following actions are to be taken:
5.4.1 With regard to SELLER:
(i) execution of the filing for the registration of the transfer
of the LIMITED PARTNERSHIP INTEREST by way of subrogation
arising out of contract as attached in draft form as Exhibit
5.4.1;
5.4.2 With regard to PURCHASER:
(i) payment of the PURCHASE PRICE in accordance with ARTICLE 6
para 2.
16
(ii) transfer of SECURITIES (as defined in ARTICLE 11 para. 6)
to SELLER;
(iii) execution of the filing for the registration of the transfer
of the LIMITED PARTNERSHIP INTEREST by way of subrogation
arising out of contract as attached in draft form as Exhibit
5.4.1.
5.4.3 PURCHASER, PURCHASER'S ASSIGNEE and SELLER will - and SELLER in its
capacity as sole shareholder of Demag Mobile Cranes
Verwaltungsgesellschaft mbH will instruct Demag Mobile Cranes
Verwaltungsgesellschaft mbH accordingly - appoint and irrevocably
instruct the notary being present at CLOSING to file the registration
attached in draft form as Exhibit 5.4.1.
5.5 Upon completion of the exchanges and actions listed in para. 5.4 the
PARTIES will jointly execute and sign minutes in two originals in a
form consistent with the draft attached hereto as Exhibit 5.5
documenting that the exchanges and actions to be taken pursuant to
this ARTICLE were duly taken and that the TRANSFER DATE has occurred.
ARTICLE 6
---------
PURCHASE PRICE and PURCHASE PRICE ADJUSTMENT
--------------------------------------------
6.1 The purchase price in cash for the SHARES, the LIMITED PARTNERSHIP
INTEREST sold and transferred according to ARTICLE 3 paras. 1-4 and
for the SELLER'S FINANCING RECEIVABLES minus the SELLER'S FINANCING
LIABILITIES ("SELLER'S NET FINANCING RECEIVABLES") amounts to
17
EUR 162,497,265.
(in words: Euro one hundred sixty two million four hundred ninety
seven thousand two hundred sixty five)
- "PURCHASE PRICE" -
The PURCHASE PRICE shall be allocated as specified in Exhibit 6.1.
6.2 On CLOSING, PURCHASER shall pay to SELLER the Purchase Price by wire
transfer of funds free of costs and charges in immediately available
funds to the account of Siemens AG, account no. ▇▇▇▇▇▇▇ with Deutsche
Bank AG in Munchen, bank identification number (BLZ) 700 700 10.
6.3 PURCHASER shall deliver to SELLER as of the date hereof a letter from
Dresdner Bank AG (the "DRESDNER LETTER") confirming that PURCHASER
has availability under its banking facilities at least in the amount
of the PURCHASE PRICE. A copy of the DRESDNER LETTER is attached to
this AGREEMENT as Exhibit 6.3.
6.4 SELLER shall recalculate the PURCHASE PRICE as of the TRANSFER DATE
on the basis of the TDFS ("TDFS RECALCULATION"). For the avoidance of
doubt the PARTIES have attached a sample of the TDFS RECALCULATION in
Exhibit 6.4, which, however, shall be subject to para. 6.8 below. The
TDFS RECALCULATION shall only result in an adjustment of the PURCHASE
PRICE as follows:
If on the basis of the TDFS RECALCULATION
6.4.1 the SELLER'S RECALCULATED NET FINANCING RECEIVABLES are higher than
the respective SELLER'S NET FINANCING RECEIVABLES and the
RECALCULATED BOOK EQUITY is higher than or equal to the BOOK EQUITY
as stated in Exhibit 6.4, the PURCHASE PRICE is increased by the
increase in the SELLER'S NET FINANCING RECEIVABLES; the increase in
BOOK EQUITY will not lead to an additional PURCHASE PRICE increase;
18
6.4.2 the SELLER'S RECALCULATED NET FINANCING RECEIVABLES are lower than
the respective SELLER'S NET FINANCING RECEIVABLES and the
RECALCULATED BOOK EQUITY is lower than or equal to the BOOK EQUITY as
stated in Exhibit 6.4, the PURCHASE PRICE is decreased by the
decrease in the SELLER'S NET FINANCING RECEIVABLES; the decrease in
BOOK EQUITY will not lead to an additional PURCHASE PRICE decrease;
6.4.3 the SELLER'S RECALCULATED NET FINANCING RECEIVABLES are higher than
the respective SELLER'S NET FINANCING RECEIVABLES and the
RECALCULATED BOOK EQUITY is lower than the BOOK EQUITY as stated in
Exhibit 6.4 and such decrease in BOOK EQUITY does not exceed the
increase in the SELLER'S NET FINANCING RECEIVABLES, the PURCHASE
PRICE is increased by the increase in the SELLER'S NET FINANCING
RECEIVABLES and is decreased by the decrease in BOOK EQUITY;
6.4.4 the SELLER'S RECALCULATED NET FINANCING RECEIVABLES are lower than
the respective SELLER'S NET FINANCING RECEIVABLES and the
RECALCULATED BOOK EQUITY is higher than the BOOK EQUITY as stated in
Exhibit 6.4 and such increase in BOOK EQUITY does not exceed the
decrease in the SELLER'S NET FINANCING RECEIVABLES, the PURCHASE
PRICE is decreased by the decrease in the SELLER'S NET FINANCING
RECEIVABLES and is increased by the increase in BOOK EQUITY.
No adjustment of the PURCHASE PRICE will take place in any other scenarios,
including the following scenarios, if on the basis of the TDFS RECALCULATION:
19
6.4.5 the SELLER'S RECALCULATED NET FINANCING RECEIVABLES are higher than
the respective SELLER'S NET FINANCING RECEIVABLES and the
RECALCULATED BOOK EQUITY is lower than the BOOK EQUITY as stated in
Exhibit 6.4 and such decrease in BOOK EQUITY exceeds an increase in
the SELLER'S NET FINANCING RECEIVABLES;
6.4.6 the SELLER'S RECALCULATED NET FINANCING RECEIVABLES are lower than
the respective SELLER'S NET FINANCING RECEIVABLES and the
RECALCULATED BOOK EQUITY is higher than the BOOK EQUITY as stated in
Exhibit 6.4 and such increase in BOOK EQUITY exceeds the decrease in
the SELLER'S NET FINANCING RECEIVABLES;
6.4.7 the SELLER'S NET FINANCING RECEIVABLES are unchanged and the
RECALCULATED BOOK EQUITY is higher than the BOOK EQUITY as stated in
Exhibit 6.4;
6.4.8 the SELLER'S NET FINANCING RECEIVABLES are unchanged and the
RECALCULATED BOOK EQUITY is lower than the BOOK EQUITY as stated in
Exhibit 6.4.
6.5 For the purpose of the TDFS RECALCULATION according to ARTICLE 6
para. 4 above, the SELLER'S RECALCULATED NET FINANCING RECEIVABLES
and the RECALCULATED BOOK EQUITY, each existing as of the TRANSFER
DATE, shall be determined on the basis of the TDFS which shall be
prepared by the TARGET according to the directions of SELLER. For
this purpose, the PURCHASER will use its best efforts to cooperate
with SELLER in the preparation of the TDFS and instruct the TARGET
accordingly. The PURCHASER will ensure the TARGET'S and SELLER'S
ability to prepare the TDFS by giving SELLER, through PURCHASER,
inter alia,
20
- access to all necessary documents, including but not
limited to all documents relating to tax matters;
- access and authority to give directions to all relevant
employees as well as members of the management of the
TARGET COMPANIES;
- the right to deploy employees of the TARGET COMPANIES for
such preparation which may include the on site work of
such employees and authorized representatives in the
facilities of the TARGET COMPANIES.
The TDFS as prepared by the TARGET in cooperation with SELLER shall
be presented by SELLER to PWC Deutsche Revision AG ("PWC") for audit
no later than 60 (sixty) days after the TRANSFER DATE. PWC shall be
instructed by SELLER to audit the TDFS within further 30 (thirty)
days. The costs of the audit of the TDFS by PWC shall be borne by
SELLER. The SELLER shall deliver the TDFS as prepared by the TARGET
in cooperation with SELLER and audited by PWC together with the PWC
audit report to PURCHASER and the auditor designated by PURCHASER in
writing ("PURCHASER'S AUDITOR") no later than 10 (ten) days after
delivery by PWC. PURCHASER shall pay the cost of PURCHASER'S AUDITOR.
6.6 The TDFS submitted to PURCHASER and PURCHASER 'S AUDITOR shall be
final and binding upon the PARTIES unless PURCHASER provides SELLER
within 60 (sixty) days after the receipt of the TDFS with a written
notice giving a detailed statement of PURCHASER'S refusal (REFUSAL
NOTICE). To the extent SELLER and PURCHASER cannot agree on the TDFS
within 30 (thirty) days following the delivery of PURCHASER'S REFUSAL
NOTICE, each PARTY is entitled to refer such dispute to Ernst & Young
Deutsche Allgemeine Treuhand AG Wirtschaftsprufungsgesellschaft,
Stuttgart, which shall act as an expert ("Schiedsgutachter") and
determine the TDFS and the correct amount of the SELLER`S NET
FINANCING RECEIVABLES and BOOK EQUITY as of the TRANSFER DATE. If
21
Ernst & Young Deutsche Allgemeine Treuhand AG
Wirtschaftsprufungsgesellschaft, Stuttgart, rejects the referral by
SELLER and PURCHASER, each PARTY shall have the right to request from
the Institute of Chartered Accountants in Germany ("Institut der
Wirtschaftsprufer in Deutschland e.V.") to appoint such expert. The
expert appointed herein or by the Institute of Chartered Accountants
in Germany shall be in the following referred to as the "EXPERT". The
EXPERT shall decide as EXPERT on the issues in dispute as presented
in the REFUSAL NOTICE in accordance with the principles set out in
this AGREEMENT. The EXPERT shall give SELLER and PURCHASER adequate
opportunity to present their views in writing and at a hearing or
hearings to be held in the presence of SELLER and PURCHASER and their
advisors. The EXPERT shall deliver its written opinion no later than
4 (four) weeks upon its appointment. The EXPERT shall give reasons
for its decision in writing and on all issues which are presented in
the REFUSAL NOTICE. The costs and expenses incurred by the EXPERT
shall be borne by SELLER and PURCHASER in proportion of their defeat
and success (▇▇.▇▇. 91, 92 German Code of Civil Procedure - ZPO - as
applied mutatis mutandis). The TDFS as determined by the EXPERT shall
be final and binding on the PARTIES subject to Section 319 German
Civil Code (BGB). Each PARTY shall give the EXPERT full access to all
information and documents the EXPERT deems necessary for rendering
its decision, and instruct SELLER'S GROUP COMPANIES and PURCHASER'S
AFFILIATES accordingly.
6.7 Any Purchase Price adjustment owed by PURCHASER shall be paid by
PURCHASER free of costs and charges in immediately available funds by
wire transfer 5 (five) BUSINESS DAYS after the TDFS have become final
and binding upon the PARTIES in accordance with this ARTICLE 6 to the
account of SELLER set forth in ARTICLE 6 para. 2.
Any PURCHASE PRICE adjustment owed by SELLER shall be paid by SELLER
free of costs and charges in immediately available funds by wire
transfer 5 (five) BUSINESS DAYS after the TDFS have become final and
binding upon the PARTIES in accordance with this ARTICLE 6 to an
account to be notified by PURCHASER to SELLER in writing.
22
6.8 The PARTIES agree that for purposes of the recalculation of the
PURCHASE PRICE as of the TRANSFER DATE pursuant to paras. 4 to 7 above
the Equity Contribution (as defined in ARTICLE 12.3 below) shall be
disregarded. Therefore, for the avoidance of doubt, the PARTIES confirm
that (i) the amount of SELLER'S FINANCING RECEIVABLES waived by
SELLER in order to make the Equity Contribution shall be added to
SELLER`S RECALCULATED FINANCING RECEIVABLES in the TDFS RECALCULATION
and shall not reduce the PURCHASE PRICE and (ii) the amount of Equity
Contribution shall be deducted from the RECALCULATED BOOK EQUITY and
shall have no impact on the PURCHASE PRICE.
ARTICLE 7
---------
Due Diligence
-------------
In the period of time from January 3 until January 10, 2002 and from May 6 until
May 7, 2002, the PURCHASER and PURCHASER'S representatives inspected the data
room established and provided by SELLER containing legal, financial, technical,
business and miscellaneous other information and documents relating to the
ACQUIRED BUSINESS.
ARTICLE 8
---------
Agreements on the Condition ("Beschaffenheitsvereinbarungen") of TARGET and/or
------------------------------------------------------------------------------
TARGET COMPANIES
----------------
The PARTIES are in agreement that as of the date hereof and, to the extent
explicitly specified below, as of the TRANSFER DATE, the TARGET, and, to the
extent explicitly specified below, the TARGET COMPANIES, shall have the
following condition within the meaning of Section 434 para. 1 sentence 1 German
Civil Code ("Beschaffenheit im Sinne des ss. 434 I 1 BGB"):
23
8.1 Legal Relations
8.1.1 The statements contained in ARTICLE 2 of this AGREEMENT are correct
as of the date hereof and as of the TRANSFER DATE.
8.1.2 As of the date hereof and as of the TRANSFER DATE the articles of
association of Demag Mobile Cranes Verwaltungsgesellschaft mbH in the
version of August 8, 2001, Doc. No. A 2368/2001 of notary ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇ with his office in Munich, as amended by the minutes of August
22, 2001, Doc. No. A 2543/2001 of notary ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇ with his
office in Munich and the partnership agreement of Demag Mobile Cranes
GmbH & Co. KG in the version of August 27, 2001 as amended by the
partners' resolution of September 28, 2001 are the current articles
of association and the current partnership agreement of Demag Mobile
Cranes Verwaltungsgesellschaft mbH and Demag Mobile Cranes GmbH & Co.
KG respectively.
8.1.3 As of the date hereof and as of the TRANSFER DATE SELLER holds the
SHARES and the LIMITED PARTNERSHIP INTEREST as the sole beneficial
and legal owner in its own name and on its own account. The SHARES
and the LIMITED PARTNERSHIP INTEREST are free of any rights of third
parties and no claims by third parties to grant such rights are
pending. The transfer of the SHARES or the LIMITED PARTNERSHIP
INTEREST do not require any consent by third parties as of the date
hereof and as of the TRANSFER DATE. There are no preemption rights,
option rights or any other purchase rights of third parties with
regard to the SHARES and the LIMITED PARTNERSHIP INTEREST, and in
particular the SHARES and the LIMITED PARTNERSHIP INTEREST have not
been assigned, pledged or encumbered with third party rights in any
other way. As of the date hereof and as of the TRANSFER DATE, the
profit of Demag Mobile Cranes GmbH & Co. KG and Demag Mobile Cranes
24
Verwaltungsgesellschaft mbH is not subject to any silent
participations, loans with profit participation or any other rights
by third parties other than the rights of SELLER arising out of the
SHARES and the LIMITED PARTNERSHIP INTEREST.
8.1.4 Exhibit 1.17 contains a complete list of all SUBSIDIARIES, and the
type and amount of interest held by the TARGET as of the date hereof
and as of the TRANSFER DATE. The SUBSIDIARIES have been duly
established. As of the date hereof and as of the TRANSFER DATE, the
TARGET holds the shares and/or interests in the SUBSIDIARIES as the
sole beneficial and legal owner in its own name and on its own
account. Except as mentioned in Exhibit 8.1.4, as of the date hereof
and as of the TRANSFER DATE, there are no preemption rights, option
rights or any other purchase rights of third parties with regard to
the shares and/or interests in the SUBSIDIARIES, and in particular
the shares and/or interests of the SUBSIDIARIES have not been
assigned, attached, pledged or encumbered with third party rights in
any other way. As of the date hereof and as of the TRANSFER DATE, the
profit of the SUBSIDIARIES is not subject to any silent
participations, loans with profit participation or any other rights
by third parties other than the rights of the TARGET arising out of
their ownership interest in the SUBSIDIAIRES.
8.1.5 Notwithstanding restrictions of merger control and/or any
restrictions explicitly mentioned in this AGREEMENT, the SELLER has
all necessary powers and authorities to execute this AGREEMENT and to
perform fully its obligation hereunder and to consummate the
transaction contemplated hereby as of the date hereof and as of the
TRANSFER DATE. As of the date hereof and as of the TRANSFER DATE, the
execution, delivery and performance of this AGREEMENT by the SELLER
constitutes the valid and legally binding obligation of it and is
enforceable against it in accordance with its terms. As of the date
hereof and as of the TRANSFER DATE, neither the consummation, the
execution nor the implementation of this AGREEMENT: (i) constitute a
breach of any provision in the articles of association or other
company provisions of any of the SELLER or the TARGET COMPANIES, or
(ii) constitute a breach of any material contract or other material
agreement to which the SELLER or the TARGET COMPANIES are a party
provided that such breach has a material adverse effect on the profit
situation ("Ertragslage") of the TARGET COMPANIES as a whole.
25
8.1.6 As of the date hereof and as of the TRANSFER DATE, neither Demag
Mobile Cranes Verwaltungsgesellschaft mbH nor Demag Mobile Cranes
GmbH & Co. KG are insolvent. As of the date hereof and as of the
TRANSFER DATE, no request or application has been filed for the
institution of an insolvency proceeding with the competent local
insolvency court ("Insolvenzgericht") of Munich, and due to the
subordination agreement ("Rangrucktrittsvereinbarung") entered into
between SELLER and Demag Mobile Cranes GmbH & Co. KG no threat of
indebtedness or insolvency (under commercial or insolvency law)
exists, with respect to Demag Mobile Cranes Verwaltungsgesellschaft
mbH or Demag Mobile Cranes GmbH & Co. KG.
8.1.7 As of the date hereof and as of the TRANSFER DATE, Demag Mobile
Cranes Verwaltungsgesellschaft mbH and Demag Mobile Cranes GmbH & Co.
KG conduct their business within their respective object of business
("Unternehmensgegenstand") as defined in the articles of association
and the partnership agreement respectively.
8.1.8 The ACQUIRED BUSINESS has been conducted materially the same ("im
wesentlichen ubereinstimmend") with past practice between October 1,
2001 and the date of this AGREEMENT.
8.2 Property Relations
8.2.1 As of the date hereof and as of the TRANSFER DATE, the TARGET
COMPANIES have the right to own or use the fixed assets ("Gegenstande
des Anlagevermogens") and inventories necessary for carrying out the
ACQUIRED BUSINESS. As of the date hereof and as of the TRANSFER DATE,
the fixed assets owned by TARGET COMPANIES and necessary for carrying
out the ACQUIRED BUSINESS are free from rights of third parties
except for retentions of title or other similar security rights
arisen in the ordinary and usual course of business.
26
8.2.2 Except as disclosed in Exhibit 8.2.2 (i.e. subject to registration
with the land register), Exhibit 8.2.2 includes a true and complete
list of all developed and undeveloped real estate property owned by
the TARGET as of the date hereof and as of the TRANSFER DATE. Exhibit
8.2.2 contains excerpts of the Land Register of the real estate
property. With the exception of the real estate property listed in
Exhibit 8.2.2, the TARGET does not own any real property or rights
equivalent to real property as of the date hereof and as of the
TRANSFER DATE. As of the date hereof and as of the TRANSFER DATE the
real estate property listed in Exhibit 8.2.2 is free from the rights
of third parties and property liens to be registered in the Land
Register except those that have been registered in the Land Register.
8.2.3 As of the date hereof and as of the TRANSFER DATE, the TARGET owns
the intellectual property rights to the extent specifically provided
for in the CONTRIBUTION AGREEMENT and listed therein. The TARGET owns
or may use under the terms and conditions of the CONTRIBUTION
AGREEMENT all intellectual property rights which are necessary to
conduct the ACQUIRED BUSINESS as of the TRANSFER DATE.
8.2.4 As of the date hereof and as of the TRANSFER DATE, the TARGET owns
the know how, in particular certain trade and business secrets,
formulas and methods and other immaterial items which are not
protected by intellectual property rights as well as certain objects
representing the know how to the extent specifically provided for in
the CONTRIBUTION AGREEMENT. To SELLER'S knowledge, the TARGET may use
under the terms and conditions of the CONTRIBUTION AGREEMENT all know
how which is necessary to conduct the ACQUIRED BUSINESS as of the
TRANSFER DATE.
27
8.2.5 As of the date hereof and as of the TRANSFER DATE, the insurable
assets and inventories of the TARGET COMPANIES which are necessary
for carrying out the ACQUIRED BUSINESS are adequately insured against
fire, accident and all other damages to the extent customary in the
industry at the relevant seat of the legal entity.
8.3 Employment and Contractual Relationships
8.3.1 Exhibit 8.3.1 a contains a complete list of the managing directors
employed with the TARGET COMPANIES and the managerial staff directly
subordinated to them giving their dates of employment, position and
date of their respective employment agreements. Except as disclosed
in Exhibit 8.3.1. b, there have not been in the last 12 months and
there are no strikes at the TARGET COMPANIES. There are no pension or
401 (k) liabilities other than reserved for in the EDFS or those
funded in pension fund for employees of Demag Mobile Cranes Ltd. (UK)
or in a trust for employees of Demag Mobile Cranes Inc. (USA) as of
the EFFECTIVE DATE.
8.3.2 Except as disclosed in Exhibit 8.3.2, as of the date hereof and as of
the TRANSFER DATE, all obligations of the TARGET COMPAnies from
material contracts (except purchase contracts) with a single or total
obligation of more than EUR 1,000,000 (in words: Euro one million),
the non-performance of which could have a material adverse effect on
the business and financial situation of the ACQUIRED BUSINESS, have
in all material respects been fulfilled when due.
8.4 Financial Statements and Taxes
8.4.1 The ACQUIRED BUSINESS Consolidated Effective Date Financial
Statements ("EDFS") present fairly in all material respects the
assets, financial condition and results of operation of the ACQUIRED
BUSINESS ("Vermogens-, Finanz- und Ertragslage") as of the EFFECTIVE
DATE.
28
8.4.2 The AUDITED FINANCIAL STATEMENTS have been audited without
qualifications. The AUDITED FINANCIAL STATEMENTS present fairly in
all material respects the assets, financial condition and results of
operation of Demag Mobile Cranes GmbH & Co. KG ("Vermogens-, Finanz-
und Ertragslage"); the AUDITED FINANCIAL STATEMENTS have been
prepared in accordance with German law and German GAAP ("Grundsatze
ordnungsma(beta)iger Buchfuhrung und Bilanzierung").
8.4.3 As of the date hereof and as of the TRANSFER DATE, the TARGET has
filed complete tax returns and all other declarations as required by
law with respect to all kinds of taxes, social security contributions
or public duties ("TAXES"); the TARGET has paid all TAXES including
possible interests and charges owing due to delayed payment of due
TAXES not later than on the due date.
8.5 Compliance
8.5.1 To the knowledge of SELLER, as of the date hereof and as of the
TRANSFER DATE, the operation of the TARGET COMPANIES does not violate
material rights of third parties, the violation of which could have a
material adverse effect on the financial, assets and profit situation
("Vermogens- Finanz- und Ertragslage") of the TARGET COMPANIES as a
whole. As of the date hereof and as of the TRANSFER DATE, SELLER has
no notice that any such violations have been asserted until now and
there is no reason for SELLER to believe that such violations could
have occurred.
8.5.2 To the knowledge of SELLER, the TARGET has obtained all public
permits and is in compliance in all material respects with all
material applicable German laws, rules and regulations currently in
effect the violation of which may have a material adverse effect on
the financial, assets and profit situation ("Vermogens- Finanz- und
Ertragslage") which are necessary to conduct its current business and
is not in default with the fulfilment of court or administrative
orders, decrees, injunctions or decisions delivered upon them that
may have a material adverse effect on the financial, assets or profit
situation ("Vermogens- Finanz- und Ertragslage") of the TARGET.
29
8.5.3 To the knowledge of SELLER, Exhibit 8.5.3 contains a complete and
correct list of all pending administrative procedures
("Verwaltungsgerichtsverfahren"), civil proceedings
("Zivilgerichtsverfahren") and labor law proceedings
("Kundigungsschutzklagen") disputes of the TARGET with an amount at
dispute in each case of more than EUR 300,000 (in words: Euro three
hundred thousand).
8.5.4 With the exception of facts disclosed to PURCHASER, especially by the
documents listed in Exhibit 8.5.4, there are to SELLER'S knowledge no
expenses and costs to be suffered by the TARGET in relation to the
removal of proven environmental pollution, contamination, of the
soil, the groundwater, buildings and the other fixed assets of the
TARGET resulting from the business of the TARGET and the properties
currently owned and/or used by the TARGET up to the TRANSFER DATE
(hereinafter referred to as "REAL ESTATE"), except if resulting from
facts disclosed to PURCHASER, such event is referred to as
"INDEMNIFICATION EVENT".
SELLER shall hold harmless PURCHASER in respect of any expense and
costs suffered by the TARGET due to an INDEMNIFICATION EVENT
according to the terms and conditions set out in this AGREEMENT and
especially as follows:
8.5.4.1. An INDEMINIFICATION EVENT shall only be present if the
relevant environmental pollution, contamination, of the soil,
the groundwater, the buildings and the other fixed assets of
the TARGET has been caused in violation of any applicable laws
regarding environmental pollution or contamination of the
jurisdiction the REAL ESTATE is located in, to the extent such
laws are in force as of the TRANSFER DATE.
30
8.5.4.2. An obligation to indemnify shall only be present if the
obligations resulting from an INDEMNIFICATION EVENT have been
agreed to by SELLER, which agreement shall not be unreasonably
withheld, or determined by a final administrative or court
order or by a settlement agreement entered into between the
TARGET and/or the PURCHASER on the one hand, the relevant
public authority or third party on the other hand, which shall
not be executed without the prior written consent of SELLER
which shall not be unreasonably withheld.
8.5.4.3 Except as required by law, the PURCHASER and the PURCHASER'S
AFFILIATES, in particular the TARGET shall not initiate or
cause any third parties to initiate any procedures in relation
to any INDEMNIFICATION EVENT, be it by public authorities,
courts or third parties, to cause the removal or any
conservatory or safeguarding measures including the payment of
moneys in relation to an INDEMNIFICATION EVENT.
8.5.4.4 If the PURCHASER (including the management of the TARGET)
becomes aware of any actual or imminent administrative or
court procedures, preparatory steps or comparable measures
which are destined to lead or could lead to an obligation of
the TARGET in relation to an INDEMNIFICATION EVENT, the
PURCHASER shall inform or cause the TARGET and/or PURCHASER'S
AFFILIATES to inform SELLER without undue delay of such
imminent or actual procedures, steps or measures inclosing all
available evidence relating thereto.
SELLER shall be entitled to conduct on behalf of the TARGET
and/or the PURCHASER and/or the PURCHASER'S AFFILIATES, as the
case may be, and have the sole authority as to the
determination of any steps to be taken vis-a-vis such
threatened, imminent or actual proceedings; however, SELLER
shall duly liase with the PURCHASER or the TARGET or the
PURCHASER AFFILIATES if there are any steps to be taken, and
shall be subject to the consent of PURCHASER or the TARGET or
the PURCHASER AFFILIATES, which consent shall not be
unreasonably withheld.
31
In particular, SELLER shall be entitled to negotiate and agree
with public authorities, courts or third parties regarding any
INDEMNIFICATION EVENT and shall have the right to appoint the
relevant company which shall fulfil any requirements of a
public authority, court order or a third party. SELLER shall
also be entitled to use its own employees or any of SELLER'S
AFFILIATES for this purpose provided that any such employees
or SELLER'S AFFILIATES are qualified to perform the work
required.
8.5.4.5 SELLER'S liability for any INDEMNIFICATION EVENT is limited to
- 90 % of the expenses or costs to be indemnified
pursuant to this article if the INDEMNIFICATION
EVENT has occurred prior to June 30, 2004,
- 75 % of the expenses or costs to be indemnified
pursuant to this article if the INDEMNIFICATION EVENT
has occurred prior to June 30, 2005.
8.5.4.6 Any indemnification obligation in relation to any
INDEMNIFICATION EVENT shall only comprise remedial measures
required by law to allow for the current use of the REAL
ESTATE by the TARGET.
8.5.4.7 Any claims of the PURCHASER for an INDEMNIFICATION EVENT shall
terminate and expire as of June 30, 2005.
8.6 The CONTRIBUTION AGREEMENT contains in its Exhibit 6.1 a list
of all agreements which are material for the business of Demag
Mobile Cranes GmbH & Co. KG as of the EFFECTIVE DATE.
32
8.7 For the purposes of this AGREEMENT, the terms "to the knowledge of
SELLER," "known to SELLER" or "SELLER'S knowledge" shall exclusively
refer to the actual knowledge ("positives Wissen") of the persons
conclusively listed in Exhibit 8.7.
ARTICLE 9
---------
Representations and Warranties of PURCHASER
-------------------------------------------
PURCHASER represents and warrants in the form of an independent guarantee
("selbstandiges Garantieversprechen") according ss. ▇▇▇ ▇▇▇ (▇▇▇▇▇▇ Civil Code)
as of the date hereof and as of the TRANSFER DATE:
9.1 The PURCHASER is a corporation duly organized and validly existing
under the laws of Delaware and has all necessary powers and lawful
authority to own, lease and operate its assets and properties and to
conduct its business as presently conducted.
9.2 The PURCHASER has all necessary powers and authorities to execute
this AGREEMENT and to perform fully its obligation hereunder and to
consummate the transaction contemplated hereby. The execution and
performance of this AGREEMENT by the PURCHASER constitutes the valid
and legally binding obligation of it and is enforceable against it in
accordance with its terms and will not:
9.2.1 violate any provisions of the Articles of Incorporation or any other
company regulation of the PURCHASER;
9.2.2 violate, conflict with or result in the breach of any of the terms
of, results in a modification of the effect of, otherwise give any
party a right to terminate, or constitute (or, with notice or laps of
time or both, would constitute) a default under any contract or other
agreement to which the PURCHASER is a party or by or to which it or
any of its respective assets, properties or business may be bound or
subject;
33
9.2.3 violate any statute, law or regulation of any jurisdiction or any
order, judgement, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding
upon, the PURCHASER;
9.2.4 violate any license of the PURCHASER or result in the creation or
imposition of (or the obligation to create or impose) any lien upon
any of the properties or assets of the PURCHASER.
ARTICLE 10
----------
Legal Consequences of Non-Compliance, Remedies
----------------------------------------------
10.1 In the event of any breach or non-fulfilment by SELLER of any of the
agreements on the condition contained in ARTICLE 8 above, SELLER
shall be liable for putting PURCHASER into the position that it would
have been in if the agreements on the condition contained in ARTICLE
8 above had been correct or had not been breached
("Naturalrestitution"), or, at the election of SELLER, to pay damages
for non-performance ("▇▇▇▇▇▇▇ Schadenersatz"). For purposes of
determining the liability of SELLER, only the actual losses incurred
by the PURCHASER shall be taken into account and not any potential or
actual reduction ("Minderung") in value of the TARGET COMPANIES.
SELLER shall in no event be liable for any consequential damages
("Folgeschaden") or any internal costs and expenses, e.g. overhead
costs, incurred by PURCHASER.
10.2 In the event of any breach or non-fulfilment by SELLER of the
agreements on the condition contained in ARTICLE 8 above (herein
"PURCHASER CLAIM"), PURCHASER shall give SELLER notice of such breach
or non-fulfilment, with such notice stating the nature thereof and
the amount involved within a reasonable period of time
("unverzuglich") after discovery of such breach or non-fulfilment.
Without prejudice to the validity of the PURCHASER CLAIM or alleged
claim in question, PURCHASER shall allow, and shall cause the TARGET
34
COMPANIES to allow, SELLER and its accountants and its other
professional advisors to investigate the matter or circumstance
alleged to give rise to such PURCHASER CLAIM. For such purpose,
PURCHASER shall give and shall cause the TARGET COMPANIES to give
such information and assistance, including access to PURCHASER'S
TARGET COMPANIES' premises and personnel upon reasonable notice and
during normal working hours, and including the right to examine and
copy or photograph any assets, accounts, documents and records, as
SELLER may reasonably request.
10.3 SELLER shall not be liable for, and PURCHASER shall not be entitled
to bring, any PURCHASER CLAIM or any other claim under or in
connection with this AGREEMENT, if and to the extent that:
10.3.1 the matter to which the PURCHASER CLAIM relates has been taken into
account in the AUDITED FINANCIAL STATEMENTS, the EDFS or the TDFS by
way of a liability ("Verbindlichkeit") provision ("Ruckstellung"), or
depreciation ("Abschreibung"), or exceptional depreciation
("au(beta)erplanma(beta)ige Abschreibung") or has resulted in an
adjustment of the PURCHASE PRICE pursuant to ARTICLE 6;
10.3.2 the amount of the PURCHASER CLAIM has been recovered or would have
been recovered if PURCHASER had used reasonable efforts to recover
such amount from a third party or under an insurance policy in force
on the EFFECTIVE DATE or obtained by PURCHASER after the EFFECTIVE
DATE pursuant to ARTICLE 11 para. 3;
10.3.3 the payment or settlement of any item giving rise to a PURCHASER
CLAIM results in a reduction of the tax burden and/or in a tax
benefit by the TARGET COMPANIES or the PURCHASER or PURCHASER'S
AFFILIATES;
10.3.4 the PURCHASER CLAIM results from a failure of PURCHASER or the TARGET
COMPANIES to mitigate damages pursuant to Section ▇▇▇ ▇▇▇ (▇▇▇▇▇▇
Civil Code);
35
10.3.5 the matter to which the PURCHASER CLAIM relates was known ("positive
Kenntnis") by PURCHASER as of the date hereof, taking into account
that the PURCHASER, prior to entering into this AGREEMENT, had the
opportunity to conduct due diligence. The PARTIES agree that
PURCHASER has actual knowledge ("positive Kenntnis") of any and all
information disclosed to PURCHASER and PURCHASER'S representatives by
SELLER or SELLER'S representatives in connection with the transaction
governed by this AGREEMENT, including but not limited to the
information disclosed (i) during the management presentation held for
PURCHASER on December 20, 2001and/or in the written material
presented and/or submitted to PURCHASER on that day, (ii) in the
information memorandum relating to the ACQUIRED BUSINESS
submitted/delivered to PURCHASER prior to the date hereof, (iii) in
the course of the due diligence, or (iv) in this AGREEMENT;
10.3.6 the PURCHASER CLAIM results from or is increased by the passing of,
or any change in, after the TRANSFER DATE, any law, statute,
ordinance, rule, regulation, common law rule or administrative
practice of any government, governmental department, agency or
regulatory body including (without prejudice to the generality of the
foregoing) any increase in the rates of taxes or any imposition of
taxes or any withdrawal or relief from taxes not actually in effect
at the TRANSFER DATE;
10.3.7 the procedures set forth in ARTICLE 10 para. 2 or ARTICLE 13 below
were not observed by PURCHASER or the TARGET COMPANIES and to the
extent that such failure impedes SELLER'S ability to pursue its
rights under this AGREEMENT.
36
10.4 SELLER shall not be liable for any PURCHASER CLAIM, if and to the
extent either PURCHASER or any of the TARGET COMPANIES has caused
("verursacht oder mitverursacht") such PURCHASER CLAIM after the
TRANSFER DATE. When calculating the amount of the liability of SELLER
under this AGREEMENT all advantages in connection with the relevant
matter shall be taken into account ("Vorteilsausgleich") and SELLER
shall not be liable under this AGREEMENT in any respect of any
PURCHASER CLAIM for any losses suffered by PURCHASER or the TARGET
COMPANIES to the extent of any corresponding savings by or net
benefit to the PURCHASER or any affiliate of PURCHASER arising
therefrom.
10.5 The Parties are in agreement that the remedies which PURCHASER, or
any of the TARGET COMPANIES, may have against SELLER are solely
governed by this AGREEMENT, and the remedies provided for by this
AGREEMENT shall be the exclusive remedies available to PURCHASER, or
any of the TARGET COMPANIES. Any further rights and claims on
whatever legal basis the PURCHASER may have, including but not
limited to any rights of repeated performance ("Nacherfullung"), any
rights of rescission e.g. for non-fulfilment (in part), any right to
rescind ("Rucktritt") this AGREEMENT or to require the winding up
("Ruckabwicklung") or the alteration ("Anpassung") of the transaction
contemplated hereunder (e.g. by way of "Schadensersatz statt der
Leistung" or "Storung oder Wegfall der Geschaftsgrundlage"), or the
reduction of the purchase price ("Minderung"), and/or any claims for
breach of pre-contractual obligations ("culpa in contrahendo"), or
ancillary obligations ("positive Forderungsverletzung") or
reimbursement of costs ("Aufwendungsersatz") or damages
("Schadensersatz") other than expressly regulated under this
Agreement, except claims for wilful deceit ("arglistige Tauschung"),
are hereby expressly excluded and waived by PURCHASER.
10.6 Apart from the agreements on the condition contained in ARTICLE 8
above, SELLER is not liable for any deficiencies ("Sachmangel")
within the meaning of Section 434 German Civil Code or deficiencies
in title ("Rechtsmangel") within the meaning of Section 453 German
Civil Code. The PARTIES expressly agree that the agreements on the
condition contained in ARTICLE 8 above do not constitute guarantees
("Garantien") within the meaning of Section 444 of the German Civil
Code.
37
10.7 Any and all claims of PURCHASER in connection with the transaction
contemplated in this AGREEMENT may only be asserted by the PURCHASER
if the PURCHASER`S CLAIMS determined in accordance with this
AGREEMENT exceed an amount of EUR 100,000 (in words: Euro one hundred
thousand) in each single event and in total an amount of EUR
3,000,000 (in words: Euro three million). In the event that the
latter amount is exceeded, SELLER shall only be liable for the amount
exceeding the said threshold ("Freibetrag"), i.e. the balance between
the threshold and the recoverable PURCHASER'S CLAIM.
10.8 The SELLER shall only be liable for any potential claim of PURCHASER
in connection with the transaction contemplated in this AGREEMENT -
irrespective of the legal basis upon which such claims are based -
all together up to a maximum amount of EUR 25,000,000 (in words: Euro
twenty five million). For the avoidance of doubt this limitation of
liability applies to any and all claims, rights, demands etc. which
might occur against SELLER in connection with the transaction
contemplated in this AGREEMENT.
10.9 Unless expressly stated otherwise or required by mandatory statutory
law, any and all claims, rights, demands etc. of the PURCHASER in
connection with the transaction contemplated in this AGREEMENT shall
terminate and expire ("verjahren") on December 31, 2003. Section 203
of the German Civil Code shall not apply to this AGREEMENT.
10.10 In regard to PURCHASER'S CLAIMS in connection with the agreements on
the condition according to ARTICLE 8 paras. 1.1, 1.2, 1.3, 1.5, 1.6
and 1.7 - the period of limitation in para. 10.9 above is extended
until June 30, 2007.
38
10.11 The period of limitation stated above in para. 10.9 is also extended
for agreements on the condition according to ARTICLE 8 para. 4.3 to a
period of six months after the respective TAXES (as defined in
ARTICLE 8 para. 4.3) have been finally assessed by the competent
authority, in any case, however, at the latest on June 30, 2006.
10.12 As regards to PURCHASER'S claim for the fulfilment of SELLER'S to
assign SELLER'S RECALCULATED FINANCING RECEIVABLES to be assigned by
SELLER to PURCHASER according to Article 3 para. 7 above neither the
limitations set out in Article 10 para.7 nor the limitations set out
in Article 10 para. 8 shall apply.
ARTICLE 11
----------
Transfer of the ACQUIRED BUSINESS,
----------------------------------
Post-Contractual Cooperation
----------------------------
11.1 Following the TRANSFER DATE, PURCHASER will and the TARGET COMPANIES
will grant SELLER and SELLER'S GROUP COMPANIES and their counsels,
financial advisors, auditors and other representatives a right,
during normal business hours on reasonable notice, to inspect the
books and records of the ACQUIRED BUSINESS in respect to the ACQUIRED
BUSINESS concerning the period of time up until the TRANSFER DATE and
after the TRANSFER DATE provided that such a right to inspection is
asserted for tax reasons, for reasons of defending against claims of
PURCHASER or any third parties, for the fulfilment of contractual or
legal obligations or for any other good reasons. The PURCHASER will
procure that TARGET COMPANIES will act accordingly. SELLER and
SELLER'S GROUP COMPANIES are entitled to take copies of such books
and records for the above-mentioned purposes and - to the extent that
SELLER or a SELLER'S GROUP COMPANY require original documents - the
PURCHASER will forward such books and records to SELLER and SELLER
shall return them immediately after the reason for the right to
inspection has expired.
39
11.2 All and any current (i.e. at this date of the AGREEMENT) internet
protocol addresses of the ACQUIRED BUSINESS remain with SELLER and
SELLER'S GROUP COMPANIES. The PURCHASER and the TARGET COMPANIES have
to undertake with best efforts all actions and measures, if any, that
the above obligation is duly complied with, including its technical
implementation, of the TRANSFER DATE.
11.3 Except as for insurance policies directly entered into by the TARGET
COMPANIES, all insurance policies of the TARGET COMPANIES expire upon
the TARGET COMPANIES ceasing to be part of SELLER'S GROUP, i.e. upon
the TRANSFER DATE. PURCHASER shall ensure commercially adequate
insurance coverage for the TARGET COMPANIES which shall also cover
all liabilities arising after the TRANSFER DATE including liabilities
with respect to products marketed prior to the TRANSFER DATE and
which shall be in effect on the TRANSFER DATE. PURCHASER shall
provide SELLER with proof of compliance with the foregoing obligation
by way of submission of copies of certificates of insurance policies
to SELLER.
11.4 To the extent that SELLER'S liability be revised because of measures
of the kind described in ss. 172 para. 4 German Commercial Code (HGB)
which are carried out by PURCHASER or its legal successors after the
TRANSFER DATE, the PURCHASER shall fully indemnify SELLER from and
against this liability. Unless otherwise provided in this AGREEMENT,
PURCHASER accepts and assumes any and all risks, obligations and
liabilities resulting out of or in connection with the ACQUIRED
BUSINESS irrespective of their legal basis and the date as of which
they arise. The PURCHASER shall indemnify SELLER and SELLER'S GROUP
COMPANIES from and against any and all such risks, obligations and
liabilities.
40
11.5 Except as explicitly expressed in Article 8 para. 5.4, the PURCHASER
shall indemnify, defend and hold harmless SELLER and SELLER'S GROUP
COMPANIES from and against any environmental pollution or
contamination, including risks, obligations and liabilities resulting
out of or in connection with any release or threatened release of any
substance, material or any other emission into the environment, the
neighbourhood or on the real estate property owned, used or
previously owned or used by the any of the TARGET GROUP COMPANIES or
the ACQUIRED BUSINESS.
11.6 PURCHASER will ensure - or use its best efforts (to the extent
commercially feasible, "wirtschaftlich zumutbar") - that immediately
after the date hereof the assets attributable to SELLER or SELLER'S
GROUP COMPANIES which secure liabilities of TARGET COMPANIES,
including but not limited to financing liabilities, and all other
securities, e.g. comfort letters, guarantees, etc. furnished by
SELLER and/or SELLER`S GROUP COMPANIES to secure the financing and/or
obligations and/or liabilities and/or risks of the ACQUIRED BUSINESS
("SECURITIES") will be released as of the TRANSFER DATE. PURCHASER
will procure - or use its best efforts (to the extent commercially
feasible, "wirtschaftlich zumutbar") - that all SECURITIES will be
handed over to SELLER at CLOSING according to ARTICLE 5 para. 4.2,
and release, indemnify, defend and hold harmless SELLER and SELLER`S
GROUP COMPANIES from all obligations and liabilities arising out of
or in connection with the SECURITIES as of and after the TRANSFER
DATE. To the extent that PURCHASER will need third party consents
and/or actions for the declarations and/or actions to be taken
according to this para. 7, PURCHASER will use best efforts to obtain
such consents or actions (to the extent commercially feasible,
"wirtschaftlich zumutbar").
11.7 After the TRANSFER DATE, PURCHASER, the TARGET COMPANIES and other
PURCHASER'S AFFILIATES, SELLER and SELLER'S GROUP COMPANIES shall,
upon request, cooperate in good faith with SELLER, SELLERS' GROUP
COMPANIES and PURCHASER, respectively, by furnishing any additional
information, executing and delivering any additional documents and
instruments, and doing any and all such other things as may be
required by the respective SELLER, SELLER'S GROUP COMPANIES and/or
PURCHASER and necessary to consummate the transactions contemplated
in this AGREEMENT.
41
11.8 PURCHASER and SELLER shall review in good faith the services, supply,
distribution and other agreements governing intra group services
within SELLER'S GROUP ("konzerninterne ▇▇▇▇▇▇- und
Leistungsvertrage") ("INTRA GROUP AGREEMENTS") already existing as of
the date hereof between TARGET COMPANIES and SELLER'S GROUP
COMPANIES. PURCHASER will decide whether to terminate the INTRA GROUP
AGREEMENTS according to their respective terms and conditions or
whether to mutually modify them together with SELLER in order to
comply with arm's length principles. To the extent certain intra
group services provided as of the date hereof are not covered by the
INTRA GROUP AGREEMENTS, PURCHASER will decide whether to enter into
agreements about such intra group services for a transition period up
to 12 (twelve) months.
ARTICLE 12
----------
SELLER'S Covenants Pending CLOSING,
-----------------------------------
Conduct of the ACQUIRED BUSINESS
--------------------------------
12.1 Pending CLOSING, SELLER shall subject to para. 2 below undertake
measures so that:
12.1.1 each TARGET COMPANY shall (i) carry on its business materially the
same ("im wesentlichen ubereinstimmend") with past practice, (ii)
maintain their properties, machinery and equipment in the same
condition as they are as of the date hereof and (iii) not sell,
assign, encumber, ▇▇▇▇▇ ▇ ▇▇▇▇ on or dispose of any properties,
machinery or equipment except as in the ordinary course of business
consistent with past practice.
42
12.1.2 each TARGET COMPANY will put appropriate independent funding
facilities in place to be able to continue to operate its business in
the ordinary and usual course of business after the TRANSFER DATE;
12.1.3 each TARGET COMPANY shall pay all taxes which become due before the
TRANSFER DATE;
12.1.4 no dividend, repayment of share capital or partnership interest or
profit distribution shall be declared, paid or made by any TARGET
COMPANY;
12.1.5 all transactions between each TARGET COMPANY on the one hand and
SELLER'S GROUP on the other hand shall be conducted on an arm's
length basis.
12.2 All obligations in para.1 of this ARTICLE 12 shall only be imposed to
the extent they are legally permissible. Nothing in this ARTICLE 12
shall limit SELLER'S right to complete including such steps but not
limited to those listed in Exhibit 12.2 which serve the transfer of
the ACQUIRED BUSINESS to the TARGET COMPANIES and the consummation of
the CONTRIBUTION AGREEMENT. In the event of a breach of ARTICLE 12 by
SELLER ARTICLE 10 (except of ARTICLES 10 paras. 7 and 8) shall apply
accordingly.
12.3 If on the day of CLOSING the net equity (Eigenkapital) of Demag
Mobile Cranes GmbH & Co. KG is negative, SELLER shall contribute to
the capital reserve account (capital account (II)) of Demag Mobile
Cranes GmbH & Co. KG such amount which is necessary to equalize the
negative net equity ("Equity Contribution") prior to the Transfer
Date.
43
For purposes of this para. 12.3 the net equity of Demag Mobil Cranes
GmbH & Co. KG shall be its book equity as shown in its tax balance
sheet (excluding the "Sonderbilanz") determined in accordance with
German GAAP subject to German tax rules to be considered for the
preparation of the tax balance sheet. The amount of the Equity
Contribution shall be jointly determined by PWC and PURCHASER'S
AUDITOR in writing as of the day of Closing.
The Equity Contribution shall be made in the form of a waiver by
Seller as of the day of Closing and prior to the TRANSFER DATE of the
corresponding amount of the SELLER'S FINANCING RECEIVABLES existing
as of the date of the Equity Contribution.
ARTICLE 13
----------
Involvement in Legal Matters,
-----------------------------
THIRD PARTY CLAIMs
------------------
13.1 If the TARGET COMPANIES and/ or PURCHASER are sued or threatened to
be sued by a third party, including without limitation any government
agencies, or if the TARGET COMPANIES or PURCHASER are subjected to
any audit or examination by any tax authority (herein "THIRD PARTY
CLAIM"), which may give rise to a PURCHASER CLAIM or any other claim
against a member of SELLER'S GROUP, PURCHASER shall give SELLER
prompt notice of such THIRD PARTY CLAIM. PURCHASER shall ensure that
SELLER shall be provided access to all relevant information and
documents in the possession of the PURCHASER, PURCHASER'S AFFILIATES
or the TARGET COMPANIES and provide other reasonable assistance
relevant to the THIRD PARTY CLAIM, be given reasonable opportunity to
comment or discuss with PURCHASER any measures which SELLER proposes
to take or to omit in connection with a THIRD PARTY CLAIM, and in
particular SELLER shall be given an opportunity to comment on,
participate in, and review any reports and all relevant tax and
social security audits or other measures and receive without undue
delay copies of all relevant orders ("Bescheide") of any authority.
44
No admission of liability shall be made by or on behalf of the
PURCHASER or the TARGET COMPANIES and the THIRD PARTY CLAIM shall not
be compromised, disposed of or settled without the prior written
consent of the SELLER, which consent shall not be unreasonably
withheld. Further, SELLER shall be entitled at its own discretion and
at SELLER'S sole costs to take such action (or cause the PURCHASER or
the TARGET COMPANIES to take such action) as it shall deem necessary
to avoid, dispute, deny, defend, resist, appeal, compromise or
contest such THIRD PARTY CLAIM (including making counter claims or
other claims against third parties) in the name of and on behalf of
the PURCHASER or the TARGET COMPANIES concerned and the PURCHASER
will give and cause the TARGET COMPANIES to give such information and
assistance, as described above, including access to premises and
personnel and including the right to examine and copy or photograph
any assets, accounts, documents and records for the purpose of
avoiding, disputing, denying, defending, resisting, appealing,
compromising or contesting any such claim or liability as SELLER or
its professional advisors may reasonably request. SELLER agrees to
use all such information confidentially only for such purpose.
13.2 PURCHASER will instruct TARGET COMPANIES accordingly to involve
SELLER and/or SELLER'S GROUP COMPANIES in all judicial and extra
judicial disputes arising or being continued after the TRANSFER DATE
which might result in a claim against SELLER and/or SELLER'S GROUP
COMPANIES. SELLER is to be notified if such a dispute arises within a
reasonable time ("unverzuglich") after such dispute has become known
to PURCHASER or a TARGET COMPANY and to be informed in detail about
the current state of such dispute. SELLER has to be granted the
opportunity to participate in and comment on disputes and to the
extent legally permissible entitled to assert, at SELLER'S sole
costs, all offensive and defensive measures, in particular legal
remedies including the acknowledgement of claims, abandonment of
claims or settlement; para. 1 shall apply accordingly.
45
ARTICLE 14
----------
Merger Control
--------------
14.1 The PURCHASER and/or - if legally required - the Seller will
immediately ("sofort") file the necessary applications with regard to
the acquisitions contemplated in this AGREEMENT with the competent
cartel authorities, at least the ones mentioned in ARTICLE 5 para.
1.1 - any remaining ones as soon as possible - to the extent that
such filing has not yet been effected. The PARTIES shall furnish
complete and correct information and details due to be given to the
competent cartel authorities. To the extent that third parties have
to participate on behalf of PURCHASER or the SELLER in the process of
filing or giving of information, PURCHASER and/or the SELLER shall be
liable for the third parties involved on their behalf to effect the
filing and to give complete and correct information and all details
in a timely fashion.
14.2 The applications will be prepared by the SELLER and the PURCHASER in
close collaboration. Immediately ("sofort") after conclusion of this
AGREEMENT, PURCHASER and SELLER will contact the competent cartel
authorities in a manner still to be jointly determined in order to
procure a decision of the competent cartel authorities to be obtained
as soon as possible. The PARTIES will inform each other on a regular
basis on the progress of the application proceedings. Each Party
shall bear its own filing costs, including the charges of the
respective lawyers and accountants, in respect of obtaining the
approval of the cartel authorities. The administrative costs incurred
in connection therewith, particularly charges of the respective
cartel authorities, are to be borne by the relevant filing PARTY.
46
14.3 In the event that an order of prohibition is issued and/or can only
be averted by giving certain commitments, SELLER and PURCHASER may
enter into negotiations with the competent cartel authorities in
order to lift the conditions of prohibition to the satisfaction of
the competent cartel authorities by way of giving appropriate and
reasonable undertakings.
ARTICLE 15
----------
Other Provisions
----------------
15.1 SELLER is entitled to rescind ("Rucktritt") by notification to
PURCHASER this AGREEMENT in whole or in part if
15.1.1 one or more of the conditions set forth in ARTICLE 5 para. 1 have not
been fulfilled at the latest by September 30, 2002;
15.1.2 PURCHASER and/or PURCHASER'S AFFILIATES do not fully and timely
fulfil their obligations contained herein or resulting out of this
AGREEMENT between the period from the date of signing of this
AGREEMENT until the TRANSFER DATE; SELLER shall inform PURCHASER
about its intent to exercise its right to rescind under this para.
1.2 10 (ten) BUSINESS DAYS in advance; PURCHASER within such time
period shall have the right to cure any breach of its obligations
contained herein or resulting out of this AGREEMENT and any damages
resulting from such breach;
15.1.3 PURCHASER and/or PURCHASER'S AFFILIATES fail to undertake actions
necessary in order to fulfil the conditions precedent set out in
ARTICLE 5 para. 1 within two weeks after having received a written
request from SELLER as to that effect;
47
15.2 PURCHASER is entitled to rescind by notification to SELLER this
AGREEMENT in whole or in part if one or more of the conditions set
forth in ARTICLE 5 para. 1 have not been fulfilled at the latest by
March 31, 2003;
15.3 In the cases referred to in paras. 1 and 2 above, the PARTIES
undertake to implement any measure which is conducive to effect a
dissolution of the legal relations established in connection with
this ▇▇▇▇▇▇▇▇▇.▇▇.▇▇. 346 ff. BGB shall apply (with the exception
ofss.347 para. 1 sentence 2 andss. 347 para. 2 sentence 2 German
Civil Code).
15.4 Rights and obligations resulting from this AGREEMENT may only be
transferred or assigned by PURCHASER and/or PURCHASER'S AFFILIATES
and/ or TARGET COMPANIES with the prior written consent of SELLER
which consent shall not be unreasonably withheld. This restriction
does not apply to a transfer or assignment by SELLER or SELLER'S
GROUP or to a transfer or assignment by PURCHASER to a PURCHASER'S
AFFILIATE. Such an assignment has no impact on the obligations and
restrictions imposed on the PURCHASER or PURCHASER'S AFFILATES or the
SELLER or the SELLER'S GROUP, respectively, hereunder. Each reference
in this AGREEMENT to PURCHASER shall be and mean a reference to
PURCHASER'S ASSIGNEE, as the case may be.
15.5 Unless otherwise expressly agreed upon in this AGREEMENT, any
transfer taxes, stamp duties and charges (including those incurred in
connection with antitrust clearances), costs (including any costs for
registration of intellectual property rights) and fees, including any
notarial fees, incurred in connection with the execution and
consummation of this AGREEMENT shall be borne by the PURCHASER.
Furthermore, each PARTY shall bear the costs for its own advisors and
auditors unless otherwise expressly agreed upon in this AGREEMENT.
48
15.6 To the extent this Agreement provides for actions, obligations,
and/or declarations to be taken by PURCHASER`S AFFILIATES, PURCHASER
shall ensure that PURCHASER`S AFFILIATES fully comply with such
obligations. To the extent this Agreement provides for actions,
obligations, and/or declarations to be taken by SELLER`S GROUP,
SELLER shall ensure that SELLER'S GROUP fully complies with such
obligations.
15.7 Memoranda or other communications or notifications as required by or
conducive to this AGREEMENT shall be made in writing and in English.
They shall be addressed to the following departments: for the
PURCHASER to:
Terex Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attn.: ▇▇▇▇ ▇ ▇▇▇▇▇, Senior Vice President,
Secretary and General Counsel
and a copy to:
Coudert ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
Attn.: ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇.
for SELLER to:
Siemens AG
Corporate Finance Post Closing (CF T 6 PCM)
Attn.: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
49
and in legal affairs with
a copy to:
Siemens AG
Corporate Legal Department (CF L13)
Attn.: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇ Englisch
Wittelsbacherplatz 2
D-80333 Munchen
15.8 The PARTIES undertake to instruct with best efforts SELLER'S GROUP
COMPANIES and, respectively, PURCHASER'S AFFILIATES to entere into
separate asset sale and purchase agreements regulating the sale,
purchase and transfer of assets attributable to the ACQUIRED BUSINESS
(including, but not limited to, fixed assets, inventories,
liabilities, contracts and employment relationships, if any)
currently held by subsidiaries of Demag Cranes and Components GmbH in
Australia, Austria, Denmark, Italy, South Africa and USA in the
overall net amount of EUR 4.191.000 (in words: Euro four million one
hundred ninety-one thousand). The PARTIES furthermore agree that the
PURCHASE PRICE comprises the assets mentioned above.
15.9 PURCHASER undertakes to instruct TARGET COMPANIES to pay, without
undue delay, all amounts received by TARGET COMPANIES for the
▇▇▇▇▇▇▇▇, port technology and Ergoteck business activities currently
conducted by the TARGET COMPANIES to the relevant debtor of the
receivables as defined in Exhibit 1.13 para. 3 within SELLER'S GROUP.
50
ARTICLE 16
----------
Confidentiality, Announcements, Non-Compete Covenant
----------------------------------------------------
16.1 The Confidentiality Agreement signed by SELLER and PURCHASER on
November 11, 2001 (attached hereto as Exhibit 16.1) shall remain in
full force and effect with respect to all confidential information as
defined in the Confidentiality Agreement which has been disclosed
before and/or after the date of this Agreement by each PARTY to the
other, SELLER'S GROUP and/or its representatives and/or its
representatives as defined in the Confidentiality Agreement up until
the TRANSFER DATE and for a period of 5 (five) years thereafter, if
and to the extent that confidential information is concerned that
relates to the ACQUIRED BUSINESS. With the exception of a written
press release to be agreed upon by the PARTIES, the PARTIES shall not
inform any third parties of the conclusion nor the contents of this
AGREEMENT, except for company members of the TARGET COMPANIES,
administrative bodies, boards of directors, and supervisory boards or
advisors of the PARTIES to the extent necessary for the preparation,
execution and consummation of this Agreement. Notwithstanding the
foregoing, each of the PARTIES shall be authorized, after
consultation with the other PARTY, to provide third parties with any
and all of the above information which is subject to prohibition if
and to the extent that this information must be provided for
regulatory reasons which may arise, especially due to orders given by
authorities, judgements resulting from court disputes, registrations
or similar proceedings. The obligations under this paragraph shall
survive any termination of this AGREEMENT.
16.2 The Parties shall not make any announcements or notifications to
third parties, in particular press releases, concerning the terms and
conditions of this AGREEMENT, except as provided for in this
Agreement or due to the applicable laws, before checking the contents
thereof with and receiving the written approval of the other Party,
which consent will not be unreasonably withheld or delayed.
51
16.3 For a term of 3 (three) years following the TRANSFER DATE, SELLER`S
GROUP will not engage in or carry out any research, development,
production or distribution of mobile telescopic and lattice boom
cranes being the products of the ACQUIRED BUSINESS as of the TRANSFER
DATE ("PRODUCTS"), provided, however, that this obligation shall
neither apply:
(i) to the research, development, production and /or
distribution of PRODUCTS which are sold or distributed by
SELLER'S GROUP COMPANIES as an integral part of other
products or in combination with other products or within
its projects, systems and/or services businesses
(COMBINATION PRODUCTS), nor
(ii) to the research, development, production and / or
distribution of PRODUCTS which are spare-parts to
COMBINATION PRODUCTS, nor
(iii) to companies held or acquired by financial investment
companies of SELLER`S GROUP for financial investment
purposes, nor
(iv) to the spare part supply for cranes produced by the
▇▇▇▇▇▇▇▇ business unit of SELLER before 1990, nor
(v) to companies acquired by SELLER'S GROUP COMPANIES being
not exclusively active in the research, development,
production and/or distribution of products being
competitive products to the PRODUCTS; if, however, the
competitive activities of the acquired company represent
more than 25 % of the turn-over of the acquired company as
of the acquisition date and the puchase price of such
acquisition exceeds EURO 100,000,000 (in words: Euro one
hundred million) and SELLER'S GROUP COMPANIES directly
and/or indirectly participate in excess of 50% of the
share capital and the voting rights in such company,
SELLER'S GROUP COMPANIES shall undertake to offer those
competitive activities for sale at reasonable terms, if
such divestiture is possible and legally permissible and
SELLER'S GROUP COMPANIES are in a position to undertake
this sale.
52
16.4 SELLER`S GROUP undertakes not to use the name "Demag" or any other
similar name for business purposes of the ACQUIRED BUSINESS (except
for the resale of products, of combination products and spare parts
to combination products as stated under Art. 16 para. 3 above).
16.5 For the period of 2 (two) years following the TRANSFER DATE, SELLER'S
GROUP undertakes not to actively solicit such persons as conclusively
listed in Exhibit 16.5.
ARTICLE 17
----------
Final Provisions
----------------
17.1 Amendments and supplements to this AGREEMENT including this provision
require written form unless notarization is legally required.
17.2 Any term or provision of this AGREEMENT which is or shall become
wholly or partially invalid or unenforceable shall not affect the
validity or enforceability of all remaining provisions. Instead of
the invalid or unenforceable provision the PARTIES shall agree on
such valid and enforceable provision which comes closest to the
economic purpose intended by the PARTIES with the invalid or
unenforceable provision. The same shall apply for an omission.
17.3 The headings of this AGREEMENT shall not affect the interpretation
thereof. The English terms, to which a German translation has been
added shall be interpreted through this AGREEMENT in accordance with
the meaning given to them by the German translation. Unless otherwise
provided, references to ARTICLES, paragraphs, Exhibits shall be to
ARTICLES, paragraphs, Exhibits of this AGREEMENT.
53
17.4 Unless otherwise expressly agreed and subject to compulsory foreign
laws being applicable to legal acts in rem, this AGREEMENT shall be
governed by and interpreted exclusively in accordance with the
substantive laws of the Federal Republic of Germany to the exclusion
of the conflict of laws provisions and of the UN-Convention on the
International Sale of Goods.
17.5 All disputes, controversies or differences arising out of or in
connection with this AGREEMENT including any question regarding its
existence, validity or termination (hereinafter referred to as
"DISPUTES") shall be settled by an amicable effort on the part of
both PARTIES. An attempt to arrive at a settlement shall be deemed to
have failed as soon as one of the PARTIES so notifies the other PARTY
in writing.
If such an attempt has failed, all DISPUTES shall be finally settled
under the Rules of Arbitration of the International Chamber of
Commerce, Paris (ICC) by three arbitrators in accordance with said
rules.
Each PARTY shall nominate one arbitrator to be confirmed by the
International Court of Arbitration under the applicable rules. Both
arbitrators shall agree on the third arbitrator within thirty days.
Should the two arbitrators fail, within the above time-limit to reach
agreement on the third arbitrator, he shall be appointed by the
International Court of Arbitration. If there are two or more
defendants, any nomination of an arbitrator by or on behalf of such
defendants must be by joint agreement between them. If such
defendants fail within the time-limit fixed by the International
Court of Arbitration, to agree on such joint nomination, the
proceedings against each of them must be separated.
The seat of arbitration shall be Frankfurt am Main, Germany. Unless
the PARTIES otherwise agree, the procedural law of this place shall
apply where the rules are silent.
54
The language to be used in the arbitration proceeding shall be
English.
The arbitration court shall also decide on the liability for costs
including the reimbursement of reasonable attorney fees.
17.6 This AGREEMENT constitutes the entire agreement and understanding
among the PARTIES with respect to the subject matter expressed
herein. All other agreements, especially previous ones, and
arrangements shall be cancelled and superseded completely by this
AGREEMENT upon signing in due form. All Exhibits to this AGREEMENT
form an integral part of this AGREEMENT. In case of any contradiction
between these Exhibits and the body of this AGREEMENT, the body of
this AGREEMENT shall prevail.
IN WITNESS THEREOF this Notarial Deed including the Exhibits hereto
- with the exception of certain balance sheets and other financial
statements, lists of items, titles, rights and obligations contained
in Exhibits 1.2.1, 1.4 and 8.2.2, in respect of which the persons
appearing waived the right ot have them read aloud and which instead
have been presented to the persons appearing, were acknowledged and
signed on each page by the persons appearing, and
- with further exception of Exhibit 1.2.2, which according to the
declarations of the person appearing shall be attached for
identification purposes only and the content of which therefore does
not form part of the declarations of the persons appearing in
notarial form,
by the acting Notary or in presence of the acting Notary.
55
has been read aloud to the persons appearing and was confirmed and approved by
the persons appearing. The persons appearing then signed this Deed. All this was
done at the day hereinbelow written in the presence of me, the Notary Public,
who also signed this Deed and affixed my official Seal.
Basel, this 16th (sixteenth) and 17th (seventeenth) day of May 2002 (two
thousand and two)
/s/ Hans ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
/s/ Gernot Steubner
-------------------------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Notary Public