English Version
SHARE PURCHASE AGREEMENT
between
(1) Sabine La Due, D-70599 Stuttgart, Birkenpilzstr. 9, represented by
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ by virtue of the notarized power of attorney dated
April 30, 1997 (see Exhibit 1)
(2) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇/▇▇. ▇▇▇▇▇, ▇▇▇,
represented by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ by virtue of the certified power
of attorney, dated December 06, 1997 (see Exhibit 1 a)
(3) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇. ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ represented
by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ by virtue of the certified power of attorney,
dated July 11, 1997 (see Exhibit 1 b)
(4) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
represented by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ by virtue of the certified
power of attorney, dated December 18, 1997 (see Exhibit 1 c)
(5) ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ # ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇, represented by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ by virtue of the
certified power of attorney, dated December 23, 1996 (see Exhibit 1 d)
(6) Birgit Self, ▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, represented
by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ by virtue of the certified power of attorney,
dated December 16, 1996 (see Exhibit 1 e)
(7) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ represented
by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ by virtue of the certified power of attorney,
dated December 23, 1996 (see Exhibit 1 f)
(8) ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇. ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
(9) ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-Pfauter, ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
represented by Prof. ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ by virtue of the notarized
power of attorney, dated February 25, 1997 (see Exhibit 2)
(10) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ represented
by Prof. ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ by virtue of the notarized power of attorney,
dated February 26, 1997 (see Exhibit 2 a)
(11) ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇-Seniorenstift, Thouretallee 3/App. 15,
D-71638 Ludwigsburg represented by ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ by virtue of
the general power of attorney dated 02.07.1996 (see Exhibit 2 b),
who herself is represented by Prof. ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ by virtue of the
notarized power of attorney, dated July 18, 1997 (see Exhibit 2 c)
(12) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇ in her
own name, represented by Prof. ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ by virtue of notorized
power of attorney dated July 18, 1997 (see Exibit 3) and as executrix
to the estate of ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, deceased on 17.08.1994, by virtue
of the letters testamentary dated 24.02.1995 (see Exhibit 3 a),
in turn represented by Prof. ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ by virtue of power of
attorney dated July 18, 1997 (see Exibit 3 b)
(13) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇. ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇, represented by
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇;
by virtue of the notarized power of attorney dated January 3,
1997 (see Exhibit 4)
(14) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
(15) ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Am Blutenanger 47 b, D-80995 Munchen
(16) ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇▇▇-▇▇▇. ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
(17) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇▇▇-▇▇▇. ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
(18) ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇▇▇-▇▇▇. ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
(19) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇-▇▇▇. ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
(20) ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇▇▇-▇▇▇. ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
(21) ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ GB-Eastcote, Pinner
(hereinafter, individually or collectively referred to as SELLERS)
and
(1) GW Acquisition Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇
represented by ▇▇▇▇▇ ▇▇▇▇▇, who is entitled to
represent GW Acquisition Corp. alone
(2) ▇▇▇▇▇▇▇ Maschinenfabrik GmbH with its seat in ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
represented by its managing director ▇▇▇▇ ▇▇▇▇▇▇▇, who is entitled
to represent ▇▇▇▇▇▇▇ Maschinenfabrik GmbH alone
(3) ▇▇▇▇▇▇▇-▇▇▇▇▇ Maschinen und Werkzeuge GmbH with its seat in ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇, represented by its managing director ▇▇▇▇ ▇▇▇▇▇▇▇, who
is entitled to represent ▇▇▇▇▇▇▇-▇▇▇▇▇ Maschinen und Werkzeuge GmbH
alone
(hereinafter, individually or collectively referred to as PURCHASERS)
-------------------------
dated 23 July 1997
-------------------------
regarding the sale and purchase of 100 % (hundred percent) of the
limited partnership capital of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH & Co.
(hereinafter referred to as the AGREEMENT)
Recitals
(A) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH & Co., a limited partnership
organized under the laws of Germany (hereinafter
referred to as the COMPANY) is registered with the
Trade Register at the Ludwigsburg Municipal Court
under number HRA 505. The general partner of the
COMPANY, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Verwaltungsgesellschaft
mit beschrankter Haftung, a limited liability
corporation organized under the laws of Germany
(hereinafter referred to as the GMBH), is
registered with the Trade Register at the
Ludwigsburg Municipal Court under the number HRB
244.
(B) The SELLERS and the GMBH respectively participate
as follows in the fixed capital of the COMPANY in
the total amount of DM 20,065,500.--:
(1) As general partner the GMBH with a contribution of DM 65,500.-
(2) As limited partners the SELLERS with the following
registered limited partnership capital contributions (i.e.
sum by which liability is limited as registered in
the Trade Register "Kommanditeinlagen"):
Sabine La Due, DM 193,843.--
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DM 1,789,733.--
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ DM 699,858.--
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ DM 193,452.--
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ DM 197,346.--
Birgit Self DM 193,453.--
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ DM 197,347.--
Georg ▇▇▇▇▇▇▇ ▇▇ 797,165.--
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-
▇▇▇▇▇▇▇ ▇▇ 3,106,973.--
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ DM 1,174,686.--
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ 205,060.--
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DM 2,038,299.--
in her own name and
as executrix to the
estate of ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, deceased on
17.08.1994
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DM 2,038,299.--
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ DM 205,060.--
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ DM 2,083,984.--
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ DM 1,946,206.--
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ DM 486,552.--
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DM 486,552.--
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ DM 486,552.--
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ DM 486,552.--
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ 993,028.--
DM 20,000,000.-- DM 20,000,000.--
total amount DM 20,065,500.--
(3) It is understood that the SELLERS number (17) through number
(20) also act as sub-participants according to sub-participation
agreements with the SELLER number(16).
(C) The registered share capital of the GMBH amounts to DM 65,500.--.
The share capital of the GMBH is entirely held by the COMPANY.
(D) The COMPANY has the following affiliates and participations:
GMBH
Pfauter Italia S.p.A., Bologna, Italy
Pfauter S.R.L., Bologna, Italy
Mecup / ▇▇▇▇▇▇▇-▇▇▇▇ Srl., Bologna, Italy (hereinafter collectively
referred to as PFAUTER ITALY)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.▇.▇., ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
American Pfauter Management Inc., Rockford, Illinois USA
American Pfauter L.P. ("APL"), Rockford, Illinois USA
Pfauter / ▇▇▇▇ Cutting Tools L.P. ("PMCT"), Rockford, Illinois USA
Pfauter Cutting Tools Inc., Rockford, Illinois USA ("PCTI")
German Machine Tool Service-Center Co. Ltd., Tianjin, China
These affiliates and participations are in the following collectively
or generally referred to as the "AFFILIATES". The capitalization and
ownership of these AFFILIATES are set forth in Schedule D.
The AFFILIATES are duly organized, validly existing and in good
standing under the laws of their respective jurisdictions.
Schedule D contains a list of each jurisdiction in which the
COMPANY and each of the AFFILIATES are licensed or qualified to
conduct business. Neither the ownership of the assets nor the
conduct of the business of the COMPANY and/or the AFFILIATES
requires them to be licensed or qualified in any other jurisdiction
in which the COMPANY and/or the AFFILIATES conduct business or
own any assets.
Unless specified in Schedule D neither the COMPANY nor any of the
AFFILIATES own any shares in any corporation or any interest in any
other partnership or other entity.
The COMPANY is not licensed, registered or qualified to conduct business
in any jurisdiction in the United States. The nature of its activities
does not require that it be so licensed or registered or qualified.
(E) Some of the SELLERS have granted sub-participations in their shares to
other individuals. These are stated in Schedule E and will be
terminated on or before the EFFECTIVE DATE with no unsatisfied rights
provided that the PURCHASERS have complied with their payment
obligations pursuant to sections 2.2. and 2.3.
(F) The parties hereto desire that pursuant to the terms and conditions of
this AGREEMENT the limited partners' shares held by the SELLERS in the
COMPANY (in the following collectively or generally referred to as the
SHARES) shall be sold and assigned to the PURCHASERS.
Now, therefore, the parties agree as follows:
1. Sale and Assignment of SHARES
1.1 The SELLERS number (2),(3),(8) to (13) and (15) to (21) hereby sell
and assign in accordance with the German law of obligations ("mit
schuldrechtlicher Wirkung") with effect from the EFFECTIVE DATE
(as defined in section 6.1 hereof) their SHARES to the PURCHASER
number (1). It is hereby understood, however, that the assignment
within the meaning of the real transfer of the shares ("mit dinglicher
Wirkung") shall only become effective upon the PURCHASER number (1)
being registered in the Ludwigsburg Trade Register as new limited
partner of the COMPANY by way of special legal succession.
PURCHASER number (1) hereby accepts this sale and assignment.
1.2 The SELLERS number (4) to (7) and (14) hereby sell and assign in
accordance with the German law of obligations ("mit schuldrechtlicher
Wirkung") with effect from the EFFECTIVE DATE their SHARES to the
PURCHASER number (2). It is hereby understood, however, that the
assignment within the meaning of the real transfer of the shares
("mit dinglicher Wirkung") shall only become effective upon the
PURCHASER number (2) being registered in the Ludwigsburg Trade
Register as new limited partner of the COMPANY by way of special
legal succession.
PURCHASER number (2) hereby accepts this sale and assignment.
1.3 The SELLER number (1) hereby sells and assigns in accordance with the
German law of obligations ("mit schuldrechtlicher Wirkung") with effect
from the EFFECTIVE DATE its SHARE to the PURCHASER number (3). It is
hereby understood, however, that the assignment within the meaning
of the real transfer of the shares ("mit dinglicher Wirkung") shall
only become effective upon the PURCHASER number (3) being registered
in the Ludwigsburg Trade Register as new limited partner of the
COMPANY by way of special legal succession.
PURCHASER number (3) hereby accepts this sale and assignment.
1.4 The sales and assignments pursuant to sections 1.1, 1.2 and 1.3.
hereof shall include as of the EFFECTIVE DATE all rights and
obligations arising from the SHARES including without limitation
the right to receive profits and the obligation to assume losses
as well as all credit and debit balances on the SELLERS' individual
accounts with the COMPANY. The assignments include all these rights
in the widest sense, insofar as nothing to the contrary is stipulated
elsewhere in this AGREEMENT. It is hereby understood, however,
that the PURCHASERS do not assume any personal obligations of the
SELLERS vis-a-vis third parties, including but not limited to tax
obligations.
1.5 By waiving the formalities and time-limits for the convening and
holding of a partners' meeting and the adoption of a resolution by
the partners, the SELLERS hereby consent to the abovementioned
assignments. The GMBH has given its relevant consent separately,
which the SELLERS hereby warrant.
2. Purchase Price / Payment
2.1 The total purchase price payable by the PURCHASERS for the SHARES
to the SELLERS shall amount to US $ 26,300,000.-- (in letters:
twenty-six million three hundred thousand US Dollars) less the
following payments, which have been made by the COMPANY or any
of the AFFILIATES, or which any of them is obligated to pay,
(i) $300,000 to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇; (ii) US $ 198,000 to ▇▇▇▇▇▇ ▇▇▇▇▇▇;
and (iii) the aggregate amount paid by the COMPANY or any AFFILIATE
of fees of attorneys, accountants and other consultants of SELLERS
in connection with the transactions contemplated by this AGREEMENT
which will not include however accountants' fees for the customary
auditing and tax services including but not limited to those
relating to the financial statements of the COMPANY and the
AFFILIATES as of December 31, 1996 and the interim financial
statements of the COMPANY and of the AFFILIATES as of the EFFECTIVE
DATE and furthermore will not include fees for services requested
by PURCHASERS or PURCHASERS' accountants and rendered by the
COMPANY'S and/or the AFFILIATES' accountants and consultants and
(iv) payments after 1 July 1996 to or for the benefit of the SELLERS
or to or for the benefit of persons affiliated to the SELLERS which
are not covered by this AGREEMENT, the Partnership Agreement of the
COMPANY and/or the AFFILIATES, the resolutions of Shareholder
Meetings or the Advisory Board as set forth in Schedule 6.2 and/or
by other contracts, especially pension, employment or consultancy
agreements between the COMPANY and the SELLERS or persons affiliated
to the SELLERS as set forth in the Schedules to this AGREEMENT.
The PURCHASERS shall not be entitled to seek payments from the SELLERS
for the amounts which have reduced the purchase price according to
(i) through (iv) above and will hold the SELLERS harmless from any
claims of the COMPANY and/or the AFFILIATES therefore.
The total purchase price is to be paid as follows:
(a) The purchase price payable by PURCHASER number (1)
for the SHARES stipulated in section 1.1 hereof shall
be 94.10% of the purchase price as stipulated in section
2.1. above. The individual allocation of this partial
purchase price to the SELLERS pursuant to section 1.1
hereof shall be agreed upon separately by these SELLERS
without the participation of PURCHASER number (1).
(b) The purchase price payable by PURCHASER number (2) for
the SHARES stipulated in section 1.2 hereof shall be
4.93% of the purchase price as stipulated in section
2.1. above. The individual allocation of this partial
purchase price to the SELLERS pursuant to section 1.2
hereof shall be agreed upon separately by these SELLERS
without the participation of PURCHASER number (2).
(c) The purchase price payable by PURCHASER number (3) for the
SHARE stipulated in section 1.3 hereof shall be 0.97% of
the purchase price as stipulated in section 2.1. above. The
individual allocation of this partial purchase price to the
SELLERS shall be agreed upon separately by the SELLERS without
the participation of PURCHASER number (3).
2.2 The purchase price less the HOLDBACK pursuant to section 2.3 hereof
is payable by way of checks guaranteed by Chase Manhattan Bank to be
delivered on the EFFECTIVE DATE. These bank guaranteed checks shall
be payable to and delivered to the SELLERS' representatives designated
in section 11.1 of this AGREEMENT (SELLERS' REPRESENTATIVES). With the
delivery of these checks guaranteed by Chase Manhattan Bank the
PURCHASERS shall have complied with all their obligations with respect
to the payment of the purchase price less the HOLDBACK.
2.3 As security for the obligations of the SELLERS to provide indemnifi-
cation pursuant to section 3 of this AGREEMENT a partial amount of
US $2,000,000 (in letters: two million US Dollars)(HOLDBACK) of the
total purchase price shall be paid by the PURCHASERS in proportion
to the SHARES acquired by each PURCHASER into an escrow account with
the escrow agent (ESCROW AGENT) named in the escrow agreement set forth
in Exhibit I (ESCROW AGREEMENT). The payment shall be made by way
of delivery of checks guaranteed by Chase Manhattan Bank on the
EFFECTIVE DATE to the ESCROW AGENT. The ESCROW AGENT shall administer
this escrow account and make disbursements therefrom in accordance
with the provisions of the ESCROW AGREEMENT, and SELLERS' REPRESEN-
TATIVES and their duly authorized successors pursuant to the ESCROW
AGREEMENT, are hereby authorized by the SELLERS to execute the ESCROW
AGREEMENT on their behalf and to act on their behalf as specified in
the ESCROW AGREEMENT.
The credit balance on the escrow account after deduction of any payments
to which the PURCHASERS are entitled pursuant to section 3 hereof shall
be paid out to the SELLERS (A) 2 (two) years after the EFFECTIVE DATE
or (B) 2 (two) months after PURCHASERS' last notice of claim prior to
the expiration of such two year-period, whichever is later, except to
the extent that (i) amounts have been paid to PURCHASERS or are being
held subject to determination of the amount, if any, to which
PURCHASERS may be entitled, pursuant to agreement of PURCHASERS and
SELLERS' REPRESENTATIVES or a court order or arbitral decision, with
respect to any claims of the PURCHASERS pursuant to section 3 hereof
or (ii) arbitration is pending between PURCHASERS and SELLERS'
REPRESENTATIVES with respect to any such claims, or (iii) PURCHASERS
and SELLERS' REPRESENTATIVES reach agreement on an extension of such
period. If the PURCHASERS file a petition for arbitration pursuant to
section 11.7. hereof prior to the expiration of such period in order to
preserve their contractual rights hereunder the SELLERS may not invoke
that such a petition is premature, even though the fact or extent of
any breach of warranty or the fact or amount of any damage sustained
by the PURCHASERS has not yet been determined provided that such facts
existed on or before the expiration of such period.
3. Warranties of the SELLERS / Remedies of the PURCHASERS
3.1 Vis-a-vis the PURCHASERS the SELLERS warrant within the meaning of
section 459 subsection 2 of the German Civil Code ("BGB") the following
with effect of the date of this AGREEMENT and the EFFECTIVE DATE. All
references to Schedules in this section 3 are to the Schedules to the
Disclosure Letter dated the date of this AGREEMENT and delivered to the
PURCHASERS by the SELLERS simultaneously with the execution of this
AGREEMENT. On the EFFECTIVE DATE the SELLERS shall provide PURCHASERS
with a further Disclosure Letter confirming that the SCHEDULES
referred to in the aforementioned Disclosure Letter are still valid
as of the EFFECTIVE DATE or if this is not the case set forth therein
any changes and/or deviations therefrom that have occurred since the
date of this AGREEMENT. It is understood, however, that the SELLERS
shall cause the COMPANY and/or the AFFILIATES not to enter into any
transactions outside the ordinary course of business during the period
between the date of this AGREEMENT and the EFFECTIVE DATE without prior
written consent of the PURCHASERS.
3.1.1 The statements in the recitals and in section 1.5 with respect to
the COMPANY, the GMBH and the AFFILIATES are correct. Complete and
correct copies of the COMPANY's Limited Partnership Agreement and the
GMBH's Articles of Association as well as the Articles of Association
and Limited Partnership Agreements of APL and PMCT as presently in
force are set forth in Schedule 3.1.1.
3.1.2 The SELLERS are owners of the SHARES. These are free of encumbrances
of any third party rights and in particular on the EFFECTIVE DATE free
of sub-participation rights as set forth in detail in recital (E) above.
None of the SELLERS is restricted by marital agreements in the
execution of and the fulfilment of the obligations resulting from
this AGREEMENT. The spouses of the SELLERS have so far as required
given their consent in accordance with the provisions of section 1365
of the German Civil Code to the sale and assignment of the SHARES.
The SHARES do not represent all or substantially all of the assets
of any of the SELLERS within the meaning of section 419 of the German
Civil Code. SELLER (13) however cannot provide this warrenty.
Therefore SELLER (12) shall hold harmless the PURCHASERS from any
obligations the PURCHASERS may have under Section 419 German Civil Code.
There are no other shares or any other rights in the COMPANY, the
GMBH or the AFFILIATES or the SHARES than those specified herein in
this AGREEMENT and its Schedules with the exception of a silent
participation in the COMPANY by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, the terms of
which are set forth in Schedule 3.1.2.
3.1.3 The SELLERS' power of disposal of the SHARES is not limited.
3.1.4 The share capital of the GMBH has been fully paid in and has not
been repaid in whole or in part in any way. The limited partnership
capital contributions of the SELLERS have also been fully paid in
and, apart from the exceptions set forth in Schedule 3.1.4, have
not been repaid in whole or in part.
3.1.5 The financial statements as of 28 December 1996 of PMCT and the
financial statements as of 31 December 1996 of the COMPANY and the
other AFFILIATES set forth in Schedule 3.1.5 fairly present the
financial position and the results of operations for the COMPANY
and the AFFILIATES with respect to the relevant dates and periods
covered by these financial statements with the exception of those
liabilities of the COMPANY that are set forth in Schedule 3.1.5.a.
These financial statements were prepared on the basis of the
books and records of the COMPANY and the AFFILIATES, respectively,
in accordance with the principles of correct accounting applied
for the COMPANY and, as far as the AFFILIATES are concerned in
accordance with the accounting principles generally accepted in
those countries where the registered offices of the AFFILIATES
are located.
3.1.6 With the exception of the events relating to the COMPANY and the
AFFILIATES set forth in Schedule 3.1.6, none of the following
events has occurred with respect to PMCT after 28 December 1996
and with respect to the COMPANY and the other AFFILIATES after
31 December 1996, unless especially permitted in this AGREEMENT:
(i) payments of dividends or withdrawals ("Entnahmen") or other
transfer of assets in any kind to the SELLERS or other
shareholders of the AFFILIATES;
(ii) transactions outside the ordinary course of business;
(iii) any material changes in the financial conditions, assets,
liabilities or business operations; and to the best knowledge
and belief of the SELLERS no such material changes are likely
to occur;
(iv) substantial amendments, supplements or terminations of material
agreements to which the COMPANY and the AFFILIATES are a party;
(v) the grant of any increase in the compensation of officers or
employees(including any such increase pursuant to any bonus,
pension, profit sharing or other plan) other than customary
increases on a periodic basis or required by agreement or
understanding in the ordinary course of business and in
accordance with past practice.
3.1.7 With the exception of the normal retentions of title and the
security rights of banks set forth in Schedule 3.1.7, the COMPANY
and the AFFILIATES have good and marketable title to all of their
assets listed in the financial statements pursuant to section 3.1.5
or acquired since the relevant dates of these financial statements
(except assets sold or otherwise disposed of subsequently to such
dates in the ordinary course of business), free and clear of any
rights of third parties.
3.1.8 Schedule 3.1.8 lists all real property owned by the COMPANY, APL
and PMCT and all real property and buildings leased by them. With
the exception of the real property situated in Daimler Street 3/5 in
Ludwigsburg, all real properties and the structures thereon are in
satisfactory condition, consistent with their present use. None of
these plants and structures, or use thereof contravenes or violates
any laws, decrees or orders by a governmental authority in any
material respect.
3.1.9 So far as not otherwise set forth in Schedule 3.1.9
(i) neither the COMPANY nor any of the AFFILIATES are involved in
any court or arbitration proceedings either as plaintiff
or as defendant or any other type of intervening party;
(ii) with the exception of the alleged patent infringement set forth
in Schedule 3.1.20 no circumstances are known from which can be
inferred that the COMPANY or any of the AFFILIATES are threat-
ened with orders, judgments or decrees of any court or other
tribunal ordering or requiring the COMPANY or any of the
AFFILIATES to take any action of any kind with respect to its
business operations or assets.
3.1.10 Within the time and manner prescribed by law or, if it was not the
case, without negative legal consequences, the COMPANY and the
AFFILIATES have filed all federal, state or local tax returns and/or
tax returns of foreign countries, provinces and other governing
bodies having jurisdiction to levy taxes upon them including, without
limitation, withholding tax returns; Schedule 3.1.10 lists for each
of the COMPANY and the AFFILIATES the last tax return for each tax
filed. Copies of these documents have been submitted to the
PURCHASERS prior to the signature of this AGREEMENT. For such
period of time up to the EFFECTIVE DATE for which taxes will become
due, such taxes (i) have been paid in full, (ii) are provided for
in the financial statements of the COMPANY and the AFFILIATES
pursuant to section 3.1.5 or (iii) will be pursuant to the interim
financial statements as of the EFFECTIVE DATE prepared on a
consistent basis unless anything to the contrary is stated in
Schedule 3.1.10.
The COMPANY and APL and PMCT have each been determined to be a
partnership for United States tax purposes and have been consistently
treated as such for all matters of United States taxation since the
time such determination was relevant under United States tax law.
No audits of federal, state, local or foreign tax returns of the
COMPANY or any of the AFFILIATES are currently in progress, nor is
any audit announced. Schedule 3.1.10 indicates for both the COMPANY
and the AFFILIATES the periods for which tax audits have been carried
out by the respective fiscal authorities and the taxes covered by
such audits.
No taxes other than those paid (i) according to the tax returns
described or listed pursuant to this section 3.1.10 or (ii) provided
for in the financial statements of the COMPANY and the AFFILIATES
pursuant to section 3.1.5 or pursuant to the interim financial
statements as of the EFFECTIVE DATE for the respective period
or (iii) set forth in Schedule 3.1.10 shall be payable by the
COMPANY or the AFFILIATES for any periods prior to the EFFECTIVE DATE.
3.1.11 To SELLERS' best knowledge, the COMPANY and the AFFILIATES are not
violating any laws and regulations applicable to the conduct of their
business, and they are in possession of all official permits material
to the conduct of their business as presently operated.
3.1.12 To SELLERS' best knowledge, the COMPANY, APL and PMCT are insured
against all material risks customary for the business pursuant to
the insurance policies set forth in Schedule 3.1.12 and none of the
insurances will terminate upon the transfer of the SHARES to the
PURCHASERS.
3.1.13 Schedule 3.1.13 contains a complete list of all employees and managing
directors of the COMPANY and the AFFILIATES including their position,
salary, termination period, entrance date and other particularities.
Schedule 3.1.13 further contains a complete list of all shop
agreements ("Betriebsvereinbarungen"), collective bargaining
agreements ("Tarifvertrage") and comparable rules and regulations
applicable to the COMPANY and the AFFILIATES, including without
limitation "employee benefit plans" as defined in Section 3 (3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA") with respect to the AFFILIATES located in the United
States, and all contributions required by law for such benefit
plans have been timely made, and there are no funding deficiencies
for current benefit plans or any liabilities for plans that have
been terminated or otherwise wound up. There have been no violations
of ERISA reporting requirements and nothing has occurred with
respect to the operation of any AFFILIATE United States plan that
would cause the loss of qualification or the imposition of any penalty,
tax, or other liability.
Schedule 3.1.13 further includes a complete list of all pension claims
("Pensionsverpflichtungen und Anwartschaften") related to the employees
and managing director of the COMPANY and the AFFILIATES, and Schedule
3.1.13.a separately sets forth a complete list of all pension claims
of any SELLERS or former limited partners and other persons related to
SELLERS or former limited partners as well as the consultancy agreement
with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, dated October 10, 1984 (see Schedule 3.1.13 b),
including the terms and amounts of each such claim.
Except as set forth in Schedule 3.1.13
(i) no unfair labour practice complaint is pending against the
COMPANY or any of the AFFILIATES before any governmental
agency or other judicial or administrative forum, and no
labour strike or other labour trouble affecting the COMPANY
or the AFFILIATES is pending;
(ii) no organisation or representation question ("Fragen
hinsichtlich der Zusammensetzung des Betriebsrats")is
pending in respect of any employees of the COMPANY or the
AFFILIATES; and
(iii) there is no shop agreement, collective bargaining agreement
or similar contract or arrangement with regard to pension
rights or profit or turnover participation of employees or
similar benefits.
3.1.14 Except as set forth in Schedule 3.1.14 the following is true for the
COMPANY, APL, PMCT and PFAUTER ITALY for all periods of time prior
to the EFFECTIVE DATE:
(i) no releases of environmentally hazardous substances have
occurred except pursuant to an environmental permit or
otherwise authorised by applicable environmental laws or
regulations;
(ii) no measures have to be taken in order to comply with obli-
gations under environmental aspects stipulated by laws,
decrees or orders by the competent governmental authorities
nor have any such measures not been fully performed and
completed;
(iii) there are no pending or threatened claims relating to environ-
mental aspects and, to the best knowledge of the SELLERS,
there are also no facts or circumstances which reasonably
could be expected to form the basis of one or more of such
claims;
(iv) no underground storage tanks (USTs) are currently located at
any of the premises, and all prior USTs were properly
removed, and any contaminated soil or ground water properly
remediated in accordance with all applicable environmental
laws, decrees and orders of governmental authorities;
(v) no asbestos, radon, PCBs or equipment or material containing
asbestos, radon or PCBs that are required under current law
to be removed or remediated is currently located at any of
the premises;
(vi) There are no environmental conditions at any of the premises
or any other facts, circumstances or conditions which
reasonably could be expected to substantially restrict
or prevent the ownership, occupancy, use or transferability
of any of the premises within present use.
(vii) all of the premises have been operated in compliance with
all applicable environmental laws, decrees and orders by
governmental authorities;
(viii) all environmental permits required for the operation of the
premises have been obtained, are in effect, are being complied
with in all respects, upon their present terms with no
modifications or required approvals from governmental
authorities.
3.1.15 Schedule 3.1.15 lists the names and addresses of every bank and
other financial institution in which the COMPANY, APL and PMCT
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.
3.1.16 To SELLERS' best knowledge the fixed assets of the COMPANY, APL
and PMCT are in satisfactory operating condition subject to
ordinary wear and tear, with the exception of the buildings on
the real property situated in Daimler Street 3/5 in Ludwigsburg.
3.1.17 To SELLERS' best knowledge Schedule 3.1.17 contains a list of the
ten largest customers of the COMPANY as well as of APL and PMCT.
To SELLERS' best knowledge none of such customers has given notice
terminating, cancelling or threatening to terminate or cancel any
contract or relationship with the COMPANY or the named AFFILIATES,
and the SELLERS are not aware of any material deterioration of any
such relationship. Reference is made to the termination of the
exclusive dealer agreement with the firm Kanzaki with effect
from 31.12.1996.
3.1.18 Except as set forth in Schedule 3.1.18, to SELLERS' best knowledge
none of the COMPANY's or AFFILIATES' principal suppliers has for
the past two fiscal years given notice terminating, cancelling or
threatening to terminate or cancel any contract or relationship
with the COMPANY or the named AFFILIATES; and the SELLERS are not
aware of any material deterioration of any such relationship.
3.1.19 Except as set forth Schedule 3.1.19 no product liability claims
are pending or to SELLERS' best knowledge threatened to be initiated
against the COMPANY, APL, PMCT or PFAUTER ITALY.
3.1.20 The COMPANY, APL and PMCT are owners or licensees of all intellectual
property rights including intellectual property rights set forth in
Schedule 3.1.20 and of the know-how required to conduct their
business. Except as set forth in Schedule 3.1.20, no proceedings
because of infringement of rights are pending or threatened to be
initiated. Schedule 3.1.20 lists all patents, patent applications,
trademarks and licenses of any intellectual property owned or
licensed by or to the COMPANY, APL or PMCT except of ordinary hard
and software standard licences.
3.1.21 To SELLERS' best knowledge, except as set forth in Schedule 3.1.21
all contracts or agreements to which the COMPANY, APL or PMCT
are a party have been performed by the COMPANY, APL or PMCT pursuant
to the respective contractual terms and conditions, unless the
non-performance of obligations was justified and with respect to
none of the contracts or agreements any contractual violations,
non-performances or late performances have occurred or have been
announced or are reasonably to be expected on the part of the
COMPANY, APL or PMCT or on the part of the respective contract
partner.
Except as set forth in Schedule 3.1.21 or any other provision of
or Schedule to this AGREEMENT, neither the COMPANY nor the
AFFILIATES are party to any agreement, contract, lease or licence
(i) which involves payment by it or them subsequent to the date
of this AGREEMENT or the EFFECTIVE DATE of more than US
$200,000 (in letters two hundred thousand US Dollars)in any
12-month period; or
(ii) which has a remaining term of more than 12 (twelve) months
and cannot on or any time after the first anniversary of the
EFFECTIVE DATE be terminated by it on 90 (ninety) or fewer
days notice without material penalty to it; or
(iii) relating to the lease of any material personal property; or
(iv) restricting their ability to engage in any material line of
business.
3.1.22 Schedule 3.1.22 lists all loans, loan engagements, credit and
overdraft facilities, promissory notes or other evidence of
indebtedness relating to the borrowing or lending of money,
guarantees of indebtedness or other obligations of third parties,
mortgages, pledges, grants of security interest in or pledges
of assets, derivative transactions or securities of any kind
to which the COMPANY or any of the AFFILIATES is a party including
any amount outstanding and owed by the COMPANY and/or any of the
AFFILIATES.
3.1.23 Neither the COMPANY nor any of the AFFILIATES has any material
liabilities or obligations which are not reflected in the
financial statements pursuant to section 3.1.5 hereof or a
Schedule except liabilities or obligations incurred in the ordinary
course of business after the relevant date of those financial
statements disclosure of which are not required by section 3.
3.1.24 To SELLERS' best knowledge with regard to all accounts receivable
reflected in the financial statements of the COMPANY, APL and
PMCT pursuant to section 3.1.5 of this AGREEMENT and those which
have arisen in the ordinary course of business of the COMPANY, APL
and PMCT since the relevant date of the financial statements there
are no reasons for possible loss of any claims in excess of the
usual bad debt reserve.
3.1.25 The value at which the inventory of the COMPANY, APL and PMCT is
shown in the financial statements pursuant to section 3.1.5 reflects
the inventory valuation policy utilized by the COMPANY, APL and PMCT
and is in accordance with the principles of correct accounting as
consistently applied.
The COMPANY, APL or PMCT do not hold any items of inventory on
consignment except as set forth in Schedule 3.1.25.
3.1.26 The SELLERS have disclosed any information which they must consider
as being relevant for the decision of the PURCHASERS to enter into
this AGREEMENT at all or at the terms and conditions provided for
herein.
3.1.27 Whenever the term "best knowledge" is used in connection with any
of the SELLERS' foregoing warranties in this section 3.1 such
term shall not be limited to the knowledge of the SELLERS of certain
circumstances relating to a specific warranty but shall include
the knowledge of the GMBH the COMPANY and, where applicable, the
AFFILIATES, as well as that of their managing directors and senior
executives.
3.1.28 With the exception of the representations and warranties mentioned
in sections 3.1.1 through 3.1.27 above the SELLERS give no further
representations and warranties.
3.2 With regard to the PURCHASERS' claims in case of breach of warranties
by the SELLERS the following shall apply:
3.2.1 If any of the SELLERS' warranties in section 3.1 hereof is totally
or partially incorrect the PURCHASERS shall promptly upon becoming
aware thereof notify the SELLERS' REPRESENTATIVES of such incorrect-
ness and request to be placed in the position that they would have
been in, had the warranty been correct. If, after a period of 6
(six) weeks after receipt of such notification the SELLERS have not
done so, they shall be jointly and severally liable vis-a-vis the
PURCHASERS for any damages incurred by the PURCHASERS, the COMPANY
or any of the AFFILIATES, as a result of such total or partial
incorrectness. The PURCHASERS shall be entitled to be reimbursed
from the HOLDBACK by the amount of and restricted to damages
resulting from such incorrectness. However the PURCHASERS are not
entitled to be reimbursed from the HOLDBACK to the extent the
PURCHASERS, for the purpose of preserving customer relationships,
intentionally fail to make a good faith reasonable effort to resolve
claims vis-a-vis third parties, the fulfillment of which would
reasonably be expected to eliminate or reduce warranty claims against
the SELLERS; provided, however, in no event shall good faith
reasonable efforts require PURCHASERS to threaten or commence
litigation against a third party. However PURCHASERS' failure to
litigate will not limit the right of SELLERS in an arbitration
proceeding pursuant to section 3.2.5. to attempt to establish that
the claim was a valid one. The above claims of the PURCHASERS do
not require fault on the part of the SELLERS. Any claims by the
PURCHASERS for incorrect warranties or for defects ("Fehler")
other than those provided in section 3 hereof and the ESCROW
AGREEMENT shall be excluded.
3.2.2 The PURCHASERS shall only be entitled to indemnification pursuant
to section 3.2.1 hereof if the total damages suffered or incurred
by the PURCHASERS exceed US $ 300,000.00 (in letters: three hundred
thousand US Dollars), and shall in that event be entitled to
indemnification for all such damages, limited however to section
3.2.3.
3.2.3 The aggregate amount for which the PURCHASERS will be entitled to
indemnification for damages suffered or incurred as a result of
breaches of warranties pursuant to section 3.2.1 hereof shall not
exceed the amount of US $ 2,000,000.00 (in letters: two million US
Dollars), i.e. the total amount of the HOLDBACK.
3.2.4 The limitations of sections 3.2.1 through 3.2.3 above are not
applicable to incorrectnesses regarding the ownership of the
SHARES and the shares in the AFFILIATES as shown in Schedule D.
Insofar, general German Law shall apply.
Furthermore, sections 3.2.1 through 3.2.3 above shall not apply
to withdrawals made by any of the SELLERS contrary to the provisions
in sections 3.1.6 (i) and/or 6.2. Such inadmissible withdrawals
shall be fully repaid by the respective SELLER(S) to the COMPANY
and/or the AFFILIATE(S) in question. Any further claims by the
PURCHASERS with regard to such inadmissible withdrawals shall be
excluded and the PURCHASERS shall hold the SELLERS harmless from
any such further claims by the COMPANY and/or the AFFILIATES.
3.2.5 Any claims of the PURCHASERS based on incorrect warranties, (i) the
validity of which has not been acknowledged by SELLERS'REPRESENTATIVES
or (ii) which have not been asserted within a period of either (A) 2
(two) years after the EFFECTIVE DATE or (B) 2 (two) months'after
PURCHASERS' last notice of claim prior to the expiration of such
2-year period, whichever is later, by initiating arbitration
proceedings pursuant to section 11.7 hereof, shall be excluded.
3.3 SELLERS hereby release, with effect from the EFFECTIVE DATE any
management personnel of the COMPANY or any of the AFFILIATES who
are retained as management personnel by any of them or the PURCHASERS
following the EFFECTIVE DATE from any claims they, or any of them may
have against such management personnel, except for intentional
misbehaviour of such management personnel. The SELLERS however
warrant with effect to the EFFECTIVE DATE that they have no
knowledge of such intentional misbehaviour.
4. Warranties and Obligations of the PURCHASERS / Remedies of
the SELLERS
4.1 The PURCHASERS warrant to the SELLERS within the meaning of section
459 subsection 2 of the German Civil Code as follows:
4.1.1 Each of the PURCHASERS is organized and validly existing under the
laws of the country or state of its respective registered offices.
The PURCHASERS and their representatives have all the requisite power
and authority to enter into this AGREEMENT.
4.1.2 None of the PURCHASERS is a party to, subject to or bound by any
agreement or judgment or decree of any court or governmental authority
which would prevent the execution or performance of this AGREEMENT by
the PURCHASERS or the acceptance of the sale and assignment of
the SHARES pursuant to the terms of this AGREEMENT.
4.1.3 With the exception of the representations and warranties mentioned
in sections 4.1.1, 4.1.2 above and 4.3.4 below the PURCHASERS give
no further representations and warranties.
4.2 If any of the PURCHASERS' warranties in section 4.1 hereof is totally
or partially incorrect the SELLERS shall promptly notify the
PURCHASERS of such incorrectness and request from the PURCHASERS
to be placed in the position that they would have been in, had the
warranty been correct. If after a period of 6 (six) weeks after
receipt at such notification the PURCHASERS have not done so, they
shall be jointly and severally liable for any damages incurred by
the SELLERS as a result of such total or partial incorrectness,
subject to the same limitations and procedures except that
relating to the HOLDBACK specified with respect to indemnification
by SELLERS of PURCHASERS in section 3.2.1 - 3.2.4 hereof.
4.3 The PURCHASERS assume the following obligations vis-a-vis the SELLERS:
4.3.1 The PURCHASERS shall keep the SELLERS' REPRESENTATIVES informed
without undue delay of all material developments regarding all
judicial and extra-judicial disputes which arise or continue after
the EFFECTIVE DATE so far as these affect the PURCHASERS' claims vis-
a-vis the SELLERS pursuant to section 3 of this AGREEMENT.
4.3.2 If the PURCHASERS notify the SELLERS' REPRESENTATIVES that they have
decided not to defend or prosecute a dispute pursuant to section
4.3.1 the SELLERS' REPRESENTATIVES may assume the defence or
prosecution of such dispute. The reasonable costs arising out of
such defence or prosecution shall be paid out of the HOLDBACK if
the defence or prosecution fails. If the defence or prosecution
is successful the PURCHASERS shall pay reasonable costs of such
defence or prosecution which are not otherwise reimbursed not
however to exeed 50% of (i) the recovery against a third party
or (ii) the amount claimed by an unsuccessful third party.
4.3.3. Although the SELLERS shall be responsible for the filing of their
tax returns with respect to the SHARES which relate to the assessment
periods up to the EFFECTIVE DATE, the PURCHASERS shall assist the
SELLERS in the preparation of these tax returns if and to the
extent that material and information relating hereto is available at
the COMPANY or any of its AFFILIATES. The SELLERS shall be entitled
to decide on the contents of the declaration to be submitted to the
relevant tax authorities for the uniform and separate profit
allocation ("einheitliche und gesonderte Gewinnfeststellung") for
1996 of the COMPANY and/or the AFFILIATES, with the exception of
the reporting related to the redemption of certain PMCT-Partnership
interests in May of 1996, which shall be decided jointly by the
parties hereto.
The contents of such declarations for 1997 up through the EFFECTIVE
DATE shall be jointly decided by the parties hereto, with the
exception of elections under US Internal Revenue Code section 754,
which shall be at the PURCHASERS' discretion.
4.3.4 The PURCHASERS will guarantee payment of the COMPANY'S obligations
with respect to the pension claims of SELLERS or former limited
partners and other persons related to SELLERS or former limited
partners set forth in Schedule 3.1.13.a and the claims of SELLER
number 2 according to his consultancy agreement in Schedule 3.1.13 b.
5. Anti-Trust law
5.1 The parties hereto have jointly filed a pre-merger notification to
the Federal Cartel Office ("Bundeskartellamt") which is presently
being reviewed there.
5.2 The parties undertake to take all necessary measures and steps
vis-a-vis the Federal Cartel Office to obtain as soon as possible
the approval for the assignment of the SHARES to the PURCHASERS.
For this purpose the parties shall exchange all information relating
to the pre-merger notification and comply promptly with all inquiries
and requests of the Federal Cartel Office. They shall keep each other
apprised of the status of the proceedings at the Federal Cartel Office.
6. Effective Date / Allocation of Results
6.1 The EFFECTIVE DATE within the meaning of this AGREEMENT shall be the
last day of the month of the fulfilment, or waiver by the PURCHASERS of
all conditions precedent pursuant to section 9 hereof except of
section 9.1.6. and 9.1.7, which requires mutual waiver of the
contracting parties, or another earlier date the parties hereto
may mutual agree. On the EFFECTIVE DATE the management of the GMBH,
the COMPANY and the AFFILIATES shall pass to the PURCHASERS and
their business shall be conducted on PURCHASERS' account.
6.2 The SELLERS shall be entitled to the results of the COMPANY for
the fiscal year 1996 and the period between 01 January 1997 and the
EFFECTIVE DATE. For the latter period interim financial statements
shall be jointly prepared by the parties hereto in order to ascertain
the results of the COMPANY's operations.
Notwithstanding the foregoing the SELLERS, however, shall only be
entitled to withdrawals ("Entnahmen") for the fiscal year 1996 and
the period between 01 January 1997 and the EFFECTIVE DATE to the
extent that such withdrawals are admissible under the COMPANY's
Limited Partnership Agreement (Schedule 3.1.1) and/or resolutions
by the COMPANYS' shareholders or Advisory Board in accordance
with the Limited Partnership Agreement prior to 01 July 1996 as set
forth in detail in Schedule 6.2. Furthermore, payments and
withdrawals to SELLERS or former limited partners and other persons
related to SELLERS or former limited partners with regard to
pension, employment or consultancy agreements as set forth in
Schedule 6.2 a. or in any other Schedule to this AGREEMENT shall
also be admissible. Payment of such aforementioned withdrawals and
payments may also be claimed after the EFFECTIVE DATE. However,
SELLERS shall not be entitled to any withdrawals, and no such
withdrawals shall be made, whether before or after the EFFECTIVE
DATE, with respect to any taxes which may be payable as a result of
the sale of the SHARES pursuant to the AGREEMENT or gifts or other
transfers of such Limited Partnership interests by present or former
limited partners which have taken place after June 1, 1996. No other
withdrawals or payments irrespective of their legal nature shall be
due from the COMPANY or any of its AFFILIATES to the SELLERS. However,
any withdrawals or payments that were actually made by or for the
benefit of the SELLERS or former limited partners and other persons
related to SELLERS or former limited partners for periods before
January 1, 1996 shall remain unaffected.
The COMPANY, and its successor, shall be entitled to any refund of
US-taxes paid by any SELLER or his or her transferor whether directly
or indirectly, for which such SELLER or transferor received a tax
withdrawal from the COMPANY or any AFFILIATE for any period or
periods beginning 01 January 1996 and ending on or prior to the
EFFECTIVE DATE. Each SELLER shall promptly provide the COMPANY or
its successor, with copies of any tax filings for which such refunds
are claimed, and a certificate of an accountant specifying the portion
of such refund applicable to a withdrawal from the COMPANY or its
successor, and promptly notify the COMPANY, or its successor, of
receipt of any such refund, and pay to the COMPANY, or its successor,
the portion thereof applicable to a withdrawal, and will cooperate
with the COMPANY, and its successor, as reasonably requested by it
to effect, or enable it to effect, such refunds.
7. Replacement of Officers
7.1 The members of the Advisory Board of the COMPANY and the relevant
bodies of the AFFILIATES shall resign from their offices with
effect from the EFFECTIVE DATE. Their remuneration for the current
fiscal year 1997 shall be reduced proportionally.
7.2 Those managing directors of the GMBH and the AFFILIATES whose
resignations are requested by PURCHASERS not later than the date
of this AGREEMENT or 10 (ten) days prior to the EFFECTIVE DATE,
whichever is later, shall also resign from their offices with effect
from the EFFECTIVE DATE.
Their employment contracts, which otherwise remain in force, will be
adjusted in separate negotiations.
Post contractual rights and obligations such as pension rights remain
unaffected, provided that they are disclosed in the AGREEMENT in
Schedule 7.2.
8. Registration in the Trade Register
On the EFFECTIVE DATE the parties hereto shall validly and irrevocably
apply for all registrations in the Trade Register required as a result
of this AGREEMENT.
9. Conditions Precedent
9.1 The validity of this AGREEMENT shall be subject to satisfaction, or
waiver by PURCHASERS or by both contracting parties pursuant to
section 6.1. of the following conditions precedent:
9.1.1 Final and conclusive approval of the transaction pursuant hereto by
the Federal Cartel Office;
9.1.2 Resignation of all members of the Advisory Board and members of the
relevant bodies of the AFFILIATES pursuant to section 7.1 hereof;
9.1.3 Resignation of the managing directors requested by PURCHASERS
pursuant to section 7.2 hereof;
9.1.4 PURCHASER number (1), ▇▇▇▇▇▇▇ Corp. or any other company affiliated
to ▇▇▇▇▇▇▇ Corp., shall have purchased for US-$ 9.7 mio. on or
before the EFFECTIVE DATE the 23.8% of partnership interests of PMCT
that the COMPANY does not presently own. PURCHASERS shall cause
PURCHASER number (1) and/or ▇▇▇▇▇▇▇ Corp. and/or any other company
affiliated to ▇▇▇▇▇▇▇ Corp. to use reasonable good faith efforts to
purchase such interest on terms acceptable to it.
9.1.5 The COMPANY shall have sold all shares of ENGRENASA owned by it or
any of the AFFILIATES, without any claims, cost to or recourse against
the COMPANY or the AFFILIATES, so that neither it nor any of them,
nor from and after the EFFECTIVE DATE the PURCHASERS, shall have any
obligations or liabilities whatsoever, contingent or otherwise, to or
with respect to ENGRENASA. SELLERS shall furnish PURCHASERS on
the EFFECTIVE DATE documentation in form and substance satisfactory
to them evidencing such sale and indemnification of them and the
COMPANY against any liabilities relating to ENGRENASA.
9.1.6 The ESCROW AGREEMENT shall have been executed by PURCHASERS, SELLERS'
REPRESENTATIVES and the ESCROW AGENT.
9.1.7 Checks guaranteed by Chase Manhattan Bank handed over to SELLERS'
REPRESENTATIVES pursuant to section 2.2 and to the ESCROW AGENT
pursuant to section 2.3.
9.1.8 SELLERS shall have submitted to PURCHASERS duly signed and certified
applications for registrations pursuant to section 8.
9.1.9 Submission of evidence satisfactory to the PURCHASERS by those
SELLERS that have granted sub-participations in their SHARES pursuant to
recital (E) that those sub-participations have been terminated with
no unsatisfied rights.
9.2 Should any of the forementioned conditions precedent not be fulfilled,
or be waived by the PURCHASERS, by (for the time being) 30 July 1997
then each party hereto shall be entitled, subject to the provisions
relating to costs pursuant to section 10 hereof, to cancel this
AGREEMENT by written notice to the other party.
10. Costs
10.1 The transfer costs of this AGREEMENT, i.e., notarial and Trade
Register fees, publication costs and filing fees under the ▇▇▇▇-▇▇▇▇▇-
▇▇▇▇▇▇ Act and of the Federal Cartel Office (but excluding the fees
of any advisors) or any real estate transfer tax ("Grunderwerbsteuer")
that become due as a result of this AGREEMENT shall be paid by the
PURCHASERS.
10.2 SELLERS and PURCHASERS, 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.
Notwithstanding the foregoing provision the PURCHASERS shall not be
entitled to seek payments from the SELLERS for the amounts which
have reduced the purchase price according to section 2.1 (iii) and
will hold the SELLERS harmless from any claims of the COMPANY and/or
the AFFILIATES therefore.
11. Concluding Provisions
11.1 All notices and other communications required or permitted hereunder
shall be made in writing to the following representatives of the
parties hereto:
For the SELLERS nos. (9)-(13): For the SELLERS nos. (1)-(8)
and nos. (14)-(21):
Prof. ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Schutze & Partner ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 12
70190 Stuttgart 80333 Munchen
For the PURCHASERS: with copy to:
▇▇▇▇▇▇▇ Corporation Nixon, Hargrave, Devans &
▇▇▇▇▇ LLP
President Clinton Square
P.O. Box 22970 P.O. Box 1051
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other addresses as any of the foregoing may have designated
in writing.
11.2 Unless specifically provided for in other provisions hereof, the
parties hereto shall cooperate in good faith in order to consummate
this AGREEMENT and take all actions and render all statements that
are necessary herefore.
11.3 This AGREEMENT including all Exhibits and Schedules mentioned herein
supersedes any other written and/or oral agreement that may have
been made or entered into by the PURCHASERS and the SELLERS prior to
the execution of this AGREEMENT relating to the matters contemplated
herein. This AGREEMENT and such Exhibits and Schedules constitute the
entire agreement by and between the parties hereto and such Exhibits
and Schedules shall constitute an integrating part of this AGREEMENT.
Any amendment to this AGREEMENT must be made in writing and signed by
the parties, or their authorized representatives in order to be
valid. This requirement shall also apply to the waiver of this written
form requirement.
11.4 This AGREEMENT including all Exhibits and Schedules mentioned herein
finally sets forth all claims, rights and obligations of the parties
hereto with respect to the subject matter hereof. It is understood
that neither party shall have any claims against the other party
unless specified herein for whatever legal nature including but not
limited to claims for damages or rescission of this AGREEMENT.
11.5 The parties hereto shall treat any confidential information disclosed
in the course of the negotiations of this AGREEMENT as confidential
whereby the term "confidential information" shall cover all facts
and circumstances which are not publicly known, in particular trade
and business secrets.
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 sub-participants in the SELLERS' SHARES, any
direct or indirect shareholder of the PURCHASERS or to any third
party providing any financing to or investment in the PURCHASERS or
their affiliates and related parties, or to any professional advisors.
The parties will endeavour to jointly agree on press releases
relating to this AGREEMENT. The PURCHASERS shall have the right to
release and file any information required by law.
The confidentiality agreement dated 20 September 1996 between the
COMPANY and ▇▇▇▇▇▇▇ Corporation shall remain in full force and
effect until the EFFECTIVE DATE.
11.6 If any provision of this AGREEMENT is or becomes invalid this shall
not affect the validity of the other provisions of this AGREEMENT.
The parties hereto shall replace the invalid provision by such valid
regulation which comes closest to the economic purpose of the invalid
provision. The same shall apply to any gaps in this AGREEMENT
necessary to carry out the intentions of the parties hereto.
11.7 This AGREEMENT shall be governed by the laws of the Federal Republic
of Germany. All disputes arising in connection with this AGREEMENT
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, and conducted in the English
language in London pursuant to the Arbitration Agreement between the
parties hereto set forth in Exhibit II. In as far as the above Rules
do not provide procedural regulations the German Code of Civil
Procedure shall apply.
11.8 This AGREEMENT shall be binding on and inure to the benefit of the
parties hereto, their successors and assigns.
12. Contractual language
This Agreement has been prepared in both English and German versions
and the parties have agreed on the translations and have signed
both versions. If, however, it is determined that there is any
inconsistency between the English version and the German version,
the German version will prevail.
/s/ Sabine La Due /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ La Due GW Acquistion Corp., represented
by ▇▇▇▇▇ ▇▇▇▇▇, who is entitled to
represent GW Acquisition Corp. alone
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Maschinenfabrik GmbH,
represented by its managing director
▇▇▇▇ ▇▇▇▇▇▇▇, who is entitled to
represent ▇▇▇▇▇▇▇ Maschinenfabrik
GmbH alone
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇ Maschinen und
Werkzeuge GmbH, represented
by its managing director ▇▇▇▇ ▇▇▇▇▇▇▇,
who is entitled to represent ▇▇▇▇▇▇▇-
▇▇▇▇▇ Maschinen und Werkzeuge
GmbH alone
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Birgit Self
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ Georg Pfauter
Georg Pfauter
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-Pfauter
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇-▇▇▇▇ Pfauter
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/a/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Signatures of contracting parties
▇▇▇▇▇▇▇ Corporation, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇.▇. agrees that
effective from the EFFECTIVE DATE it will guarantee payment on first
demand of the COMPANYS', the PURCHASERS' or their respective successors'
or assigns' obligations pursuant to section 4.3.4. of the above AGREEMENT
that the COMPANY, the PURCHASERS or their respective successors or
assigns have failed to fulfill within a period of two weeks following the
date on which they were due, if SELLERS demand to ▇▇▇▇▇▇▇ Corporation
so states.
Rochester, 23 July 1997
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ Corp.
Exhibits and Schedules to Agreement
The following exhibits and schedules to the Agreement are not filed
herewith, but the Company will furnish supplementally a copy of any such
omitted exhibit or schedule to the Commission upon request:
Exhibits 1,1 a, b, c, d, e and f - Powers of attorney
Exhibits 2, 2 a, b and c - Powers of attorney
Exhibits 3, 3 a, and b - Powers of attorney
Exhibit 4 - Power of attorney
Exhibit I - Escrow Agreement
Exhibit II - Arbitration Agreement
Schedule D - Jurisdictions in which licensed or qualified to do
business, and entities in which own any interest
Schedule E - Sub-participations
Schedules to Disclosure Letter:
Schedule 3.1.1 - Affiliate corporate documents
Schedule 3.1.2 - Silent participation
Schedule 3.1.4 - Payment of limited partnership contributions
Schedule 3.1.5 - Financial statements
Schedule 3.1.6 - Withdrawals, transactions outside the ordinary course,
material changes
Schedule 3.1.7 - Rights of third parties
Schedule 3.1.8 - Real property
Schedule 3.1.9 - Legal proceedings
Schedule 3.1.10 - Tax
Schedule 3.1.12 - Insurance policies
Schedule 3.1.13 - Employee, pension, labor and consultancy matters
Schedule 3.1.14 - Environmental
Schedule 3.1.15 - Bank accounts, powers of attorney
Schedule 3.1.17 - Largest customers
Schedule 3.1.18 - Notices by principal suppliers
Schedule 3.1.19 - Product liability claims
Schedule 3.1.20 - Intellectual property
Schedule 3.1.21 - Defaults; major contracts
Schedule 3.1.22 - Loans and agreements