Measurement: 2. Sale, Purchase And Assignment Of The Shares 9
The following excerpt is from the company's SEC filing
HZ and GB hereinafter
collectively referred to as the "Sellers" and individually as a "Seller", and the Sellers and
the Purchaser collectively referred to as the "Parties" and each of them as a "Party".
AThe Purchaser is a German limited
liability company created and existing under the laws of the Federal Republic of Germany registered with the commercial register
(Handelsregister) at the Local Court (Amtsgericht) of Dortmund under number HRB 8534.
BSensotherm Temperatursensorik GmbH is a German limited liability company with registered address
at Königsweiherstrasse. 5, 90455 Nuremberg, Germany, and registered with the commercial register at the local court of Nuremburg
under number HRB 13049 ("German Target"). The stated share capital of the German Target amounts to DEM 100,000,
consisting of two shares in the nominal amounts of DEM 60,000 and DEM 40,000, respectively (collectively the "GmbH Shares").
The GmbH Share in the nominal amount of DEM 60,000 is held by HZ ("HZ GmbH Share") and the GmbH Share in the nominal
amount of DEM 40,000 is held by GB ("GB GmbH Share"). The GmbH Shares are fully paid up.
CSecon Kft. is a Hungarian limited liability company with registered address at 9900 Körmend,
Olcsai-Kiss Z tér 3.1., floor 3, Hungary, and registered with the Hungarian companies' register of the court of registration
of Szombathely under registration number 18-09-109386 ("Hungarian Target"). The stated share capital of the Hungarian
Target amounts to HUF 3,000,000, consisting of two shares in the nominal amount of HUF 1,500,000 and HUF 1,500,000, respectively
(collectively the "Kft Shares"). One Kft Share in the nominal amount of HUF 1,500,000 is held by HZ ("HZ
Kft Share") and the other Kft Share in the nominal amount of HUF 1,500,0000 is held by GB ("GB Kft Share").
The Kft Shares are fully paid up.
DThe German Target and the Hungarian Target are hereinafter collectively and individually referred
to as the "Targets" and "Target", respectively. The GmbH Shares and the Kft. Shares are hereinafter
collectively and individually referred to as the "Shares".
EThe Sellers wish to sell and assign to the Purchaser, and the Purchaser wishes to purchase and
accept the assignment from the Sellers of the Shares, in accordance with and subject to the terms and conditions of this Agreement.
188.8.131.52references to "Sections" and "Schedules" are references to Sections of and
Schedules to this Agreement and references to this Agreement include the Schedules;
184.108.40.206references to a "person" includes any individual, partnership, body corporate, corporation
sole or aggregate, state or agency of a state, and any unincorporated association or organisation, in each case whether or not
having separate legal personality;
220.127.116.11Words such as "hereof", "herein" or "hereunder" refer (unless otherwise
required by the context) to this Agreement as a whole and not to a specific provision of this Agreement;
18.104.22.168The term "affiliated company" or "affiliate" shall have the meaning assigned
to it in section 15 of the German Stock Corporation Act (Aktiengesetz) (verbundenes Unternehmen).
1.2.3For the purposes of this Agreement, "Business Day" means a day on which banks
are open for business in Dortmund and Nuremberg, Federal Republic of Germany.
Subject to the terms and conditions
of this Agreement, each Seller hereby sells his Shares to the Purchaser, and the Purchaser hereby purchases the Shares of each
Seller, as follows:
2.1.1GB hereby sells the GB GmbH Share and the GB Kft Share to the Purchaser, and the Purchaser hereby
purchases the GB GmbH Shares and the GB Kft Shares; and
2.1.2HZ hereby sells the HZ GmbH Share and the HZ Kft Share to the Purchaser, and the Purchaser hereby
purchases the HZ GmbH Shares and the HZ Kft Shares.
The Shares shall be sold to the
Purchaser with economic effect (mit wirtschaftlicher Wirkung) as of the Closing Date, 24:00 CET, with all rights and obligations
pertaining thereto, provided, however, that the right to any profits for periods prior to and including the Closing Date, which
have not been distributed to the Sellers, shall belong to the Purchaser.
Each Seller hereby assigns his
respective Shares to the Purchaser, and the Purchaser hereby accepts the assignment of the Shares of each Seller, as follows:
2.3.1GB hereby assigns the GB GmbH Share and the GB Kft Share to the Purchaser, and the Purchaser hereby
accepts such assignments; and
2.3.2HZ hereby assigns the HZ GmbH Share and the HZ Kft Share to the Purchaser, and the Purchaser hereby
accepts such assignments.
The assignment of the Shares
is contingent upon (aufschiebend bedingt gemäß § 158 Abs. 1 BGB) payment of the Initial Purchase
Price to the Sellers in accordance with Section 3.4.1.
In order to validly effect the
transfer of the Kft Shares to the Purchaser, on the Closing Date, the Parties shall enter into a local transfer deed governed by
Hungarian law and execute all related corporate documents by which the Kft Shares shall be transferred to the Purchaser essentially
in the form as attached hereto as Schedule 2.3 ("Local Transfer Deed").
2.4.1Waiving all form and notice requirements as to the calling and holding of a shareholders' meeting,
the Sellers hereby convene and hold an extraordinary shareholders' meeting of the Targets, wherein each Seller approves of the
sale and transfer of the Shares of the respective other Seller under this Agreement and waives any pre-emption rights with respect
to the Shares each Seller may have under the articles of association of either Target or any other agreements entered into between
the Sellers. Copies of the relevant shareholders' resolution and waivers are attached hereto as Schedule 2.4.1.
2.4.2For Hungarian law purposes, the Sellers undertake to deliver a respective shareholders' resolution
with respect to the Hungarian Target on the Closing Date, essentially in the form as attached hereto as Schedule 2.4.2 ("Local
The base purchase price for the
Shares ("Base Purchase Price") amounts to EUR 5,200,000 (in words: Euro five
million two hundred thousand) and is subject to the adjustment set forth in Section 3.2.
3.2.1Any Cash held by the Targets on the Closing Date shall be added to the Base Purchase Price, any
Debt owed by the Targets on the Closing Date shall be deducted from the Base Purchase Price, and any Working Capital Balance shall
be added to or deducted from the Base Purchase Price, as the case may be ("Final Purchase Price").
3.2.2No later than five (5) Business Days before the contemplated Closing Date, as agreed between the
Parties, the Sellers shall provide to the Purchaser in writing their good faith estimate of the Cash held by the Targets on the
Closing Date, any Debt owed by the Targets on the Closing Date, and the amount of the Working Capital Balance, and shall, on the
basis of such good faith estimates provide to the Purchaser a good faith estimate of the Final Purchase Price ("Initial
of the Share Purchase Price, the Cash, the Debt and the Working Capital Balance shall be based on the then current accounting records
of the Targets under due consideration of the applicable Generally Accepted Accounting Principles (GAAP) and shall be conducted
with due care and in good faith. The calculation basis shall be disclosed to the Purchaser and all such calculations and estimates
shall be reasonably acceptable to the Purchaser.
3.2.3The amounts of Cash, Debt and the Working Capital Balance, as well as the Final Purchase Price
shall be finally determined on the basis of the "Closing Date Balance Sheet". An example for the calculation of
Cash, Debt, the Working Capital Balance and the Final Purchase Price is attached hereto as Schedule 3.2.3.
3.3.1"Cash" shall mean, as on the Closing Date, the aggregate amounts of cash and cash
equivalents, including, without limitation, any credit balances with credit institutions and cheques.
3.3.2"Debt" shall mean, as on the Closing Date, the aggregate amounts of (i) any debt
for borrowed money, including, without limitation, money borrowed from banks or other financial institutions, (ii) any indebtedness
evidenced by any note, bond, debenture, draft of bills of exchange or other debt security, (iii) any indebtedness for the deferred
purchase price of property or services with respect to which a person is liable, contingently or otherwise, as obligor or otherwise
(other than trade payables and other current liabilities incurred in the ordinary course of business), (iv) any commitment by which
a person assures a creditor against loss (including contingent reimbursement obligations with respect to letters of credit), (v)
any indebtedness guaranteed in any manner by a person (including guarantees in the form of an agreement to repurchase or reimburse,
but excluding the endorsement of checks or other negotiable instruments for deposit or collection), (vi) any indebtedness secured
by a lien on a person’s assets, (vii) any outstanding letter of credit, sight draft, performance bond or similar surety obligation;
(viii) any obligation for the payment or repayment of money, whether present or future, actual or contingent, sole or joint; (ix)
provisions for contingent liabilities and/or anticipated losses, including, without limitation, provisions for contingent liabilities
arising from Taxes, litigation, social and pension schemes, accrued holidays and overtime; and (x) any interest, principal, prepayment
penalty, fees or expenses to the extent paid in respect of those items listed in clauses (i) through (ix) of this defined term,
including interest accrued up to and including the Closing Date.
3.3.3"Working Capital" shall mean (i) the sum of all accounts receivable, including
trade and miscellaneous accounts receivable, and inventory less (ii) the sum of accounts payables, and "Working Capital
Balance" shall mean the amount by which the Working Capital as determined on the Closing Date exceeds or falls short,
as the case may be, the Target Working Capital by more than 15%. "Target Working Capital" means the amount of
Working Capital of each Targets as of 30 June 2013 as shown in the respective Interim Financial Statements (as defined in Section
3.4.1On the Closing Date, the Purchaser shall pay the Initial Purchase Price (less the Escrow Amount
which shall be paid into the Escrow Account as described in Section 4.2 below) into the respective Seller's bank accounts as set
forth in Section 3.5.2.
3.4.2If and to the extent the Final Purchase Price is lower than the Initial Purchase Price, each Seller
shall pay any difference to the Purchaser (into an account timely designated by the Purchaser in writing) within ten (10) Business
Days after the amount of the Final Purchase Price has been finally determined in accordance with the provisions set forth in Section
3.4.3If and to the extent the Final Purchase Price is higher than the Initial Purchase Price, the Purchaser
shall pay any difference to each Seller within ten (10) Business Days after the amount of the Final Purchase Price has been finally
determined in accordance with the provisions set forth in Section 3.6.
3.4.4The Initial Purchase Price and the Final Purchase Price, respectively, shall be split between the
Sellers as follows: 60% are payable to HZ and 40% are payable to GB.
3.5.1Any payments under this Agreement shall be made by irrevocable wire transfer of immediately available
funds, free of bank and other charges. Any such payment shall be deemed duly and timely made only upon the irrevocable and unconditional
crediting of the amount payable to the relevant bank account on, and on a value date no later than, the relevant due date.
3.5.2All payments owed by the Purchaser to the Sellers under or in connection with this Agreement shall
be wired, unless notified otherwise by the respective Seller in writing at least five (5) Business Days ahead of the relevant due
date, into the following accounts in accordance with Section 3.4.4:
22.214.171.124HZ: 60% of the portion of the Initial Purchase Price payable to HZ pursuant to Section 3.4.4 shall
be paid to the account at Sparkasse Nuremberg, No. 0570962548, Sort Code 760 501 01, and 40% of the portion of the Initial Purchase
Price payable to HZ pursuant to Section 3.4.4 shall be paid to the account at Deutsche Bank, No. 044425700, Sort Code 760 700 12.
In case of payments owed to HZ in accordance with Section 3.4.3, relevant payments shall be made to the account at Sparkasse Nuremberg.
3.6.1As soon as possible after the Closing Date, the Purchaser shall prepare and deliver to the Sellers
(i) the Closing Date Balance Sheet together with (ii) a supplemental report setting forth, on the basis of the Closing Date Balance
Sheet, the Cash, the Debt and the Final Purchase Price, all according to the terms of this Agreement. The Closing Date Balance
Sheet shall be prepared in accordance with the relevant local GAAP as consistently applied with past practice, maintaining the
same accounting and valuation principles, methods and rules.
3.6.2If the Sellers do not object in writing to any of the contents and items under points (i) and (ii)
of the above Section 3.6.1 or otherwise fails to respond within twenty (20) Business Days after its delivery to
it ("Review Period"), the Closing Date Balance Sheet, the Cash, the Debt and the Final Purchase Price as indicated
therein shall automatically become final and binding on the Parties.
3.6.3In the event that the Sellers object to any of the contents and items under points (i) and (ii)
of the above Section 3.6.1 ("Challenged Items") within the Review Period, the Sellers and the Purchaser shall
promptly meet and endeavor to reach an agreement as to the Challenged Items. If the Sellers and the Purchaser finally reach an
agreement in writing on the Challenged Items, then the so amended Closing Date Balance Sheet, the Cash, the Debt and the Final
Purchase Price shall become final and binding on the Parties.
3.6.4If the Sellers and the Purchaser are unable to reach an agreement within fifteen (15) Business
Days after the end of the Review Period, either Party may present the matter to a neutral auditor from an auditing firm of international
standing and reputation ("Neutral Auditor"). If the Parties cannot agree on the person of the Neutral Auditor
within fifteen (15) Business Days of either Party’s written request, the Neutral Auditor shall at the request of either Party
be appointed by the German Institute of Chartered Accountants (Institut der Wirtschaftsprüfer in Deutschland e.V.)
after consideration of the proposals and comments by the Parties.
3.6.5Unless jointly instructed otherwise by the Parties, the Neutral Auditor shall limit its decisions
to the issues in dispute, but shall on the basis of such decisions and the undisputed parts of the Closing Date Balance Sheet determine
the Cash, the Debt and the Final Purchase Price. To the extent necessary, the Neutral Auditor shall also be entitled to decide
on the interpretation of this Agreement. The Neutral Auditor shall act as an expert (Schiedsgutachter) and not as an arbitrator.
The Parties shall make available to the Neutral Auditor all documents, data and other information in their possession reasonably
required by the Neutral Auditor to make the required determinations. The Neutral Auditor shall immediately submit copies of all
documents, data and other information made available by a Party to the respective other Party. Before deciding on the issues put
to the Neutral Auditor by the Parties, the Neutral Auditor shall grant the Parties the opportunity to present their respective
positions, which shall include the opportunity of at least one oral hearing in the presence of both Parties and their professional
advisers. The Parties shall instruct the Neutral Auditor to use its best efforts to deliver its written opinion with reasons for
the decisions as soon as reasonably practical, but not later than ninety (90) days after the issues in dispute have been referred
to the Neutral Auditor. Except for manifest error or intentional fault, the Neutral Auditor's decisions on the Closing Date Balance
Sheet, the Cash, the Debt and the Final Purchase Price shall be final and binding on the Parties.
3.6.6The costs for the preparation of the Closing Date Balance Sheet shall be borne by the Purchaser
and the Sellers in equal shares. The costs for the review and preparation of objections, if any, to the Closing Date Balance Sheet
shall be borne by the Sellers. The costs of the Neutral Auditor shall be borne by the Parties in proportion to their respective
win and loss.
On the Closing Date, the Parties
will execute the escrow instructions pursuant to Schedule 4.1 ("Escrow Instructions") with the officiating
Notary ("Trustee"). The Parties hereby undertake to make any declarations and to perform any acts required for
the execution and the implementation of the Escrow Instructions.
On the Closing Date, the Purchaser
will pay out of the Initial Purchase Price an amount of EUR 500,000 (in words: Euro five hundred thousand) ("Escrow Amount")
into the escrow account established with the Trustee, as described in the Escrow Instructions ("Escrow Account").
The Escrow Amount shall serve as security for all claims of the Purchaser against the Sellers under or in connection with this
The Escrow Amount, respectively
the reduced Escrow Amount in the event of any claims of the Purchaser against the Seller, remains in the Escrow Account for a period
of twelve (12) months as of the Closing Date and will be paid (i) to the Sellers after the expiry of the above period, including
accrued interest, if and to the extent the Purchaser did not bring any claims against any of the Sellers or the Sellers under or
in connection with this Agreement before the competent arbitral tribunal according to Section 11.11 or, to the extent another court
is competent under this Agreement, before such court, and (ii) to the Purchaser, including accrued interest, upon presentation
of a final and binding arbitral award or judgment against any of the Seller or the Sellers regarding any claims under or in connection
with this Agreement or a corresponding settlement between the affected Parties. Otherwise the Parties may dispose of the Escrow
Amount by corresponding written instructions to the Trustee.
The Parties undertake to make
any declarations to the Trustee and to perform any acts required for the disbursement of the Escrow Amount to the respective Party
according to the provisions of this Agreement.
The Parties bear the Trustee's
costs in equal portions to the extent such costs are not covered by accrued interest on the Escrow Amount.
The signing and closing of this
Agreement shall occur on the same date ("Closing Date") and shall take place at the offices of the officiating
Notary in Essen or at such other location as mutually agreed upon by the Parties, where the Closing Actions, the occurrence of
which in their entirety shall constitute the "Closing", shall be taken as set forth in Section 5.2 below.
5.2.1Vermietungsgemeinschaft Dr. Zitzmann und Bernitz, Nuremberg, and the German Target have entered
into the amendment agreement to the lease agreement for the lease of office, production and storage spaces (including 12 parking
lots) at Kreuzsteinstraße 1a, Nuremberg, Germany, dated 7 February 1995 (as amended on 21 January 2004) as attached hereto
as Schedule 5.2.1, providing the German Target with the right to terminate the lease agreement by two months' written notice
to the end of any month.
5.2.2Vermietungsgemeinschaft Dr. Zitzmann und Bernitz, Nuremberg, has transferred to the German Target,
and the Sellers have initiated the re-registration process with the German Patent and Trademark Office to register the German Target
as owner of, any Intellectual Property Rights as shown in Schedule 5.2.2.
5.2.3Vermietungsgemeinschaft Dr. Zitzmann und Bernitz, Nuremberg, has transferred to the German Target
the assets pertaining to the business of the German Target as shown in Schedule 5.2.3.
5.2.4Vermietungsgemeinschaft Dr. Zitzmann und Bernitz, Nuremberg, and the German Target have terminated
the intellectual property license agreement regarding the licensing of certain Intellectual Property with effect as of the 30 June
2013 in connection with the transfer of such Intellectual Property as set out in Section 5.2.2 and no liabilities remaining on
the German Target, and to consent to the transfer of EP 1 196 747 by the German Target to Beru AG under the technology transfer
and patent acquisition agreement dated 22/23 June 2009. The approval of Vermietungsgemeinschaft Dr. Zitzmann und Bernitz, Nuremberg,
is attached hereto as Schedule 5.2.4.
5.2.5The Sellers have terminated their respective managing director services agreements with the Targets
with no further liability attached to the Targets and resigned from their position as managing directors of each Target with effect
as of the Closing Date. The documents evidencing the aforementioned transactions are attached hereto as Schedule 5.2.4.
5.2.6The Targets, the Sellers and its affiliates, including Vermietungsgemeinschaft Dr. Zitzmann und
Bernitz, Nuremberg, have fully settled any outstanding intra-group balances existing among themselves, including without limitation
any balances existing between the Targets, prior to the date hereof without any obligation remaining on the part of any Target
vis-à-vis the Sellers or their respective affiliates.
At Closing, the Sellers shall
demonstrate to the Purchaser originals of the documentation referred to above and in Section 2.4.1 and shall provide evidence to
the satisfaction of the Purchaser that all intra-group balances among the Targets, the Sellers and its affiliates, including Vermietungsgemeinschaft
Dr. Zitzmann und Bernitz, Nuremberg, have been fully settled prior to the date hereof.
On the Closing Date, the Parties
shall take the following actions, or cause those actions to be taken (collectively, the "Closing Actions" and
each a "Closing Action") in the order set out below:
5.3.4The Sellers shall execute the Local Corporate Waivers and the Parties shall enter into the Local
Transfer Deed, and the Sellers, Vermietungsgemeinschaft Dr. Zitzmann und Bernitz, Nuremberg, and H-Tech BT, Hungary, shall waive
any and all present or future claims (irrespective on which legal ground they are based and whether they are known or unknown)
they may have against the Targets, including, without limitation, any claims they may have pursuant to the shareholders' resolution
of the German Target dated 10 January 2011, but excluding any claims Vermietungsgemeinschaft Dr. Zitzmann und Bernitz, Nuremberg,
and H-Tech BT, Hungary, may have under the present lease agreements with the Targets, essentially in the form as attached hereto
as Schedule 5.3.4.
5.3.5The Purchaser and the Seller shall collectively adopt a shareholders' resolution regarding the
removal of the incumbent management and the appointment of the new managing directors of each Target, substantially in the form
as attached hereto as Schedule 5.3.5.
5.3.6Each Seller shall enter with the German Target into the respective employment agreement in the
form as attached hereto as Schedule 5.3.6.
6.1.1The Sellers hereby guarantee to the Purchaser in the form of an independent guarantee undertaking
(selbständiges Garantieversprechen) pursuant to section 311 paragraph 1 of the German Civil Code that the statements
set forth in this Section 6 (collectively the "Sellers' Guarantees" and each a "Sellers' Guarantee")
are true and correct on the Closing Date.
6.1.2The scope and content of the Sellers' Guarantee contained in this Section 6, as well as each
Seller's liability arising therefrom shall be exclusively defined by the provisions of this Agreement (including, without limitation,
the limitations on the Purchaser's rights and remedies set forth in Section 7 below), which shall be an integral part of the
Sellers' Guarantees, and no Guarantee of the Sellers shall be construed as a guarantee (Garantie für die Beschaffenheit
der Sache oder Haltbarkeit der Sache) of the Sellers within the meaning of sections 443 and 444 of the German Civil Code.
6.1.3For the purpose of this Agreement, "Sellers' Knowledge" means the actual knowledge
(positive Kenntnis) as well as the knowledge implied by reasonable inquiry (Kennenmüssen) of any Seller as of
the date hereof.
The Sellers have all requisite
powers and authority to execute, deliver, and perform this Agreement and each other document contemplated thereby and to perform
the transactions contemplated by this Agreement. The consent of the spouse of HZ pursuant to section 1365 of the German Civil Code
(BGB) is attached hereto as Schedule 6.2.1; the Parties understand that section 1365 BGB is not applicable to GB.
This Agreement and each other document
contemplated hereby constitute legal, valid and binding obligations of the Sellers, enforceable against the Sellers under applicable
laws in accordance with its respective terms.
The execution and consummation
of this Agreement by the Sellers and the performance of the transactions contemplated hereunder (i) do not violate any applicable
law or any judicial or governmental order (gerichtliche oder behördliche Verfügung) by which any of the Sellers
is bound, (ii) and do not require any approvals, consents or permits. There are no proceedings or investigations whatsoever pending
or threatened against any of the Sellers or its respective affiliates which would prevent or materially delay the consummation
of the transaction contemplated under this Agreement.
126.96.36.199Each Target is duly established and validly existing under the laws of its respective place of
incorporation with full power and authority to own, lease and operate its respective business and properties.
188.8.131.52No Target is a party to any joint venture, consortium, partnership or other syndicate, and does
not own, directly or indirectly, any capital stock, shares, interests, participations or other shareholding in any other company
or business enterprise.
184.108.40.206The copies attached hereto as Schedule 220.127.116.11 are the complete, up-to-date and correct
articles of associations of the Targets as in effect as of the date hereof.
18.104.22.168The document attached hereto as Schedule 22.214.171.124 is a copy of the commercial register excerpts
of the Targets reflecting the recordings relevant to the respective Target as of the date hereof.
126.96.36.199No bankruptcy, insolvency, judicial composition or comparable proceedings have been initiated or
applied for under any applicable laws against the Targets or any of the Sellers, nor have any legal proceedings or other enforcement
measures been initiated or applied for with respect to any property or other assets of the Targets or any of the Sellers. To the
Sellers' Knowledge, there exist no circumstances that would justify the opening of such proceedings. No Target has ceased or suspended
payments, and no debt settlement arrangement with respect to any Target, or other compromise or arrangement between any Target
and any of its creditors, has been proposed or approved.
188.8.131.52Other than the managing director services agreements between each Seller and the respective Targets,
there exist no other agreements or contracts between the Targets, on the one hand, and the Sellers (or any of their affiliates
or relatives), on the other hand. Any transactions between the Sellers (and their affiliates or relatives) and the Targets have
been performed at arms' length.
made in the Background B and C are correct and accurate. The Sellers are the sole and unrestricted shareholders of the Targets.
The Shares are validly issued, fully paid up and are free and clear of any encumbrances (Belastungen), security interests,
and pending assignments and there are, at the Closing Date, no preemptive rights, rights of first refusal, claims, options, trust
relationships or other rights of any third party with respect to the Shares (other than those which are waived by the Local Corporate
Waivers in respect of the Kft Shares). There are no outstanding subscriptions, options, conversion rights, warrants or other agreements
or commitments of any nature whatsoever (either firm or conditional) applicable to the Shares or obliging any Target to issue,
deliver, sell or cause to be issued, delivered or sold, any additional quotas, shares or other equity interests in any Target,
or obliging any Target to grant, extend or enter into any such agreement or commitment. Except as specifically provided in the
articles of associations of any Target or in applicable rules of law, there are no rights of first refusal, pre-emptive rights
or other similar agreements (whether by the Sellers or otherwise) obliging any Target or the Sellers to offer any quotas or shares
to any person and none of the Shares were issued in violation of any pre-emptive or similar rights.
184.108.40.206Each Target's financial statements consisting of a balance sheet as of 31 December 2012, a profit
and loss statement for the period between 1 January and 31 December 2012 and notes, which are attached as Schedule 220.127.116.11(1)
(the "Financial Statements"), as well as each Target's interim financials consisting of a balance sheet as of
30 June 2013, a profit and loss statement for the period between 1 January and 30 June 2013, which are attached as Schedule
18.104.22.168(2) (the "Interim Financial Statements"), are consistent in all material respects with the books and
records of the relevant Target and have been prepared in accordance with applicable local GAAP as consistently applied with past
practice, maintaining the same accounting and valuation principles, methods and rules, and fairly present a true and fair view
of the assets and liabilities (Vermögenslage), financial condition (Finanzlage) and results of operations (Ertragslage)
of the relevant Target as of 31 December 2012 and 30 June 2013, respectively.
22.214.171.124The balance sheets included in the Financial Statements and the Interim Financial Statements are
complete and correct with respect to the assets and liabilities items to be shown therein, including each specific amount. Nevertheless,
the assets and other balance sheet items were capitalised only if and to the extent that mandatory law required it. Any permissible
depreciations and value adjustments (Abschreibungen und Wertberichtigungen) and all accruals (Rückstellungen)
were made to the maximum extent allowed by law. The results of the ordinary business operations (Ergebnis der ordentlichen Geschäftstätigkeit)
of the Targets as defined in section 298 para. 1 in conjunction with section 275 para. 2 no. 14 or para. 3 no. 13 of the German
Commercial Code (HGB) or other similar rules in applicable foreign jurisdictions were not influenced by any exceptional
incidents. The risk involving future developments were accurately reflected in each case.
126.96.36.199The books and documents of each Target are correct and complete and are duly kept in compliance
with the applicable legal requirements. Above all, the Targets have always performed, both fully and properly, their duties of
retention according to section 257 HGB and any comparable provisions under applicable foreign jurisdictions.
188.8.131.52All accounts receivables reflected in the Financial Statements and the Interim Financial Statements
resulted from bona fide sales transactions in the ordinary course of business on commercially reasonable terms. The accounts
receivables which are reflected in the Interim Financial Statements are still outstanding or were collected and accounted for in
the ordinary course of business and the specific value adjustments and the lump sum value adjustments made for them in the Interim
Financial Statements are sufficient to cover any uncollectible accounts receivables.
184.108.40.206As of the date hereof, the Targets do not have any liabilities (whether contingent, liquidated,
known or unknown, matured or unmatured, determined or undetermined) other than those accounted or accrued for in their full amount
in the Interim Financial Statements except for liabilities arising in the ordinary course of business in respect of regular obligations
as of 30 April 2013.
220.127.116.11No dividend, interim dividend or other distribution (including any advance payments for such distributions
or any hidden distributions) has been made by the Targets other than indicated in the Financial Statement s and the Interim Financial
From 1 January 2012 until the date
hereof, the business operations of the Targets have been conducted in the ordinary course of business and substantially in the
same manner as before.
18.104.22.168"Tax" or "Taxes" for the purposes of this Agreement shall mean
all taxes, tax prepayments, social security contributions, duties, customs, public fees and charges, as well as levies of all kind,
regardless of whether directly or indirectly owed, and any and all interest or special charges for late payment or late performance
related to the aforementioned taxes, social security contributions, duties, public fees and charges, as well as levies of all kind.
22.214.171.124Each Target has duly and timely prepared and filed (or has had timely filed on its behalf), in
accordance with all applicable laws, all Tax returns, statements, reports, returns regarding social security contributions and
forms required to be filed with respect to any Tax period ending prior to or on the Closing Date ("Tax Returns").
All such Tax Returns are true and correct in all material respects, and each Target has paid the Taxes shown on its Tax Returns
or otherwise assessed, levied and due and payable by the respective Target, including related penalties and/or interest, if any,
to the extent that such Taxes, penalties and/or interest have become due. There is no question relating to any such Tax Return
or report that, if determined adversely to the Target, would result in the assertion of any deficiency for any Tax, interest or
penalties of any kind. Each of the Targets has withheld and reclaimed any Taxes required to be withheld or reclaimed on or prior
to the Closing Date and, if required, has paid or deposited such Taxes with the applicable taxing authorities. There is no liability
for any Taxes due or owing from any predecessor company or any company merged with any of the Targets. There are no audits, actions,
proceedings, investigations, claims or assessments pending or threatening with respect to Taxes payable by any Target. All Taxes
of any Target that are due and payable have been timely paid in full. There are no outstanding waivers of any statute of limitations
with respect to any extension of a period for the assessment of any Taxes.
126.96.36.199As of the date hereof, there are no liens or perfected security interests on any of the assets
of any Target that arose or to the Sellers' Knowledge are threatened in connection with any failure (or alleged failure) to pay
any Tax or file any Tax return.
188.8.131.52All claims and elections that have been made by any Target prior to the date hereof are valid and
have been made within the statutory time limits, and none of the claims or elections is in dispute, or, to the Sellers' Knowledge,
will be withdrawn.
184.108.40.206As of the date hereof, no Target has received any written Tax ruling or entered into any
written and legally binding agreement with a Tax authority, which would affect the Tax situation of any Target in any time period
after the Closing Date. No Target has waived any statute of limitations in respect of Taxes or have agreed to or applied for any
extension of time with respect to a Tax assessment or deficiency.
220.127.116.11Each Target has and will have, prior to the Closing Date, preserved and retained complete Tax records
to the extent required by law.
18.104.22.168Prior to the Closing Date, no Target has been a party to any scheme or arrangement the main purpose
of which was to avoid Taxes.
22.214.171.124Schedule 126.96.36.199 contains a complete and correct list of all real property lease agreements
entered into by any Target ("Leases"). The Leases have not been cancelled, otherwise terminated or materially
amended or modified within the past twelve (12) months prior to the date hereof, except as otherwise set forth in Schedule
188.8.131.52The possession and quiet enjoyment of the leased real property by the Targets has not been disturbed
and there are no legal disputes pending or threatened with respect to the Leases or the use or the occupancy of the leased real
property or the operation of any Target's business thereon. Neither any Target nor any other party to the Leases is in material
breach or default under such Leases, and no event has occurred or circumstances exist, which, with the delivery of notice, the
passage of time or both would constitute such a breach or default or cause or permit the termination, modification or acceleration
of rent under such Leases.
184.108.40.206No security deposit or portion thereof deposited with respect to the Leases has been applied in
respect of a breach or default under such Lease which has not been re-deposited in full and no Target owes, or will owe in the
future, any brokerage commissions or finder’s fees with respect to the Leases.
220.127.116.11No Target has subleased, licensed or otherwise granted any person the right to use or occupy the
leased real property or any portion thereof and no Target has assigned as collateral or granted any other security interest in
the Leases or any interest therein. No Target has received any written notice from any local or central governmental authority
that materially restricts the use of any leased or otherwise used real property. There is no easement, right-of-way agreement,
license, sublease, occupancy agreement or like instrument with respect to any of the above real property that would have a material
adverse effect on any of the Targets use of such real property.
18.104.22.168The consummation of the transactions contemplated herein does not require the consent of any party
to such Lease, will not result in a breach or default under such Lease, or cause such Lease to cease to be valid and enforceable
and will not give the respective counterparty to the Leases any right to terminate or modify the respective Leases.
22.214.171.124The Targets hold all environmental permits necessary for the conduct of their respective business
on the leased real property and are in all material aspects in compliance with all such environmental permits.
126.96.36.199There are no pending administrative (verwaltungsrechtliche), criminal (strafrechtliche)
or civil (zivilrechtliche) court proceedings regarding any alleged non-compliance by the Targets with environmental laws,
or regarding any alleged release of Hazardous Materials. There are no threatened proceedings or circumstances that would lead to
any such proceedings against any of the Targets or that would lead to the obligation to remove any contamination on the leased
real property. The Targets are and at all times have been in all material respects in compliance with all applicable environmental
laws, including without limitation, as may be applicable to the ownership, use, occupation, control, possession and rental of all
prior and current real estate or facilities that are or were owned, possessed or used by the Targets.
188.8.131.52No equipment or improvements used in the operations of the Targets presently require or may require
any expenditure of funds or any removal, closure, updating, modification or replacement to comply with environmental laws and licenses.
To the Sellers' Knowledge, no release of Hazardous Materials has migrated to or from, or threatens to migrate to or from, the soil,
surface water, or groundwater of any current facility. To the Sellers' Knowledge, there are no conditions existing at any site
to which the Targets have sent Hazardous Materials at any time for transportation, transfer, recycling, treatment, storage, or
disposal, which require any investigation, remedial action, removal action, corrective action, or other environmental response
action pursuant to environmental laws.
184.108.40.206The Targets have not concluded any agreements under public or private law regarding the treatment
or removal of any damage to the environment and are not in the process of negotiating any such agreements.
220.127.116.11"Hazardous Materials" for the purposes of this Section 6.2.10 shall mean any substance,
waste, material, chemical, compound or mixture which is defined, listed, designated, described or characterized under environmental
laws or under any rules, guidances, policies, or regulations promulgated thereunder, as hazardous, toxic, a contaminant, a pollutant
or words of similar import, and includes without limitation any asbestos, polychlorinated biphenyls, petroleum (including crude
oil or any fraction or distillate thereof), natural gas, natural gas liquids, and liquefied natural gas.
18.104.22.168Each Target is the legal and beneficial owner of all fixed assets and inventories which are necessary
to conduct its business as conducted as at the Closing Date and is the legal and beneficial owner of all fixed assets reflected
in the Interim Financial Statements or acquired since 1 January 2013 (including the fixed assets acquired in accordance with Section
5.2.3), except for fixed assets and inventories which (i) have been disposed of in the ordinary course of business or (ii) are
subject to (x) customary retention of title arrangements, (y) statutory liens or (z) any security rights disclosed in the Interim
Financial Statements, or (iii) are currently used by any Target by virtue of lease or sublease agreements as set forth in Schedule
22.214.171.124Subject to the limitations set forth in Section 126.96.36.199, each Target is free to dispose of its
assets and inventories in any manner, and no such disposition violates any obligation of any Target. The assets and inventories
owned by the Targets are sufficient to conduct the business of the relevant Target as currently conducted.
188.8.131.52The fixed assets and inventories owned or used by any Target consist of items of good and usable
quality fit for the purpose for which they were procured and all routine maintenance has been performed when due and no capital
expenditures relating to the fixed assets have been deferred. None of the fixed assets or inventories (legally or beneficially)
owned by any Target are damaged, or defective, except to the extent such items of fixed assets have been depreciated in accordance
with applicable German GAAP, consistently applied, or for which adequate reserves have been provided in the Interim Financial Statements.
184.108.40.206"Intellectual Property Rights" shall mean any and all intellectual property rights
and similar rights, regardless of whether registered in a public register or whether registrable, as well as - where appropriate
- any applications with respect to such rights, including, without limitation, patents, trademarks, utility models, design patents,
domain names and copyrights. "Know-How" shall mean all information not present in the public domain (held in whatever
form, including, without limitation, information comprised in or derived from formulae, designs, specifications, drawings, component
lists, manuals, instructions) relating to the business of an undertaking (including, without limitation, procurement, research
and development, information technology, quality management, marketing, logistics, sales and distribution and customer relationship).
220.127.116.11Schedule 18.104.22.168 sets forth a complete and correct list of all Intellectual Property Rights
owned by any Target, including, without limitation, the Intellectual Property Rights acquired in accordance with Section 5.2.2
(the "Owned Intellectual Property"). The Owned Intellectual Property is valid, subsisting and enforceable and
all renewal fees have been paid and other administrative steps have been taken which are required for the registration or maintenance
of the Owned Intellectual Property to the extent they are registered or eligible for registration. Each Target has taken all necessary
steps to maintain and protect the Owned Intellectual Property owned by them, and to the Sellers' Knowledge no third party has challenged
the same. At any time, each Target has adequately protected the Know-How relating to its business as described under Schedule
22.214.171.124 (the "Target's Know-How") against access by the respective Target's competitors.
126.96.36.199No Target uses and needs any Intellectual Property Rights for its business operations to the extent
and in the manner as heretofore operated other than the Owned Intellectual Property and the Targets' Know-How.
188.8.131.52None of the Owned Intellectual Property or Targets' Know-How is subject to any litigation or administrative
proceedings, and, to the Sellers' Knowledge, there exist no circumstances which would justify such litigation or proceedings in
the future. To the Sellers' Knowledge, no third party is infringing, misappropriating or otherwise violating any Intellectual Property
Rights owned by any Target or the Target's Know-How. Each Target, in the conduct of its business, does not infringe, misappropriate
or otherwise violate the Intellectual Property Rights or Know-How of any third party and has not done so during the past five years
prior to the Closing Date. There is no claim pending or threatened regarding the foregoing, and no third party has asserted any
claim regarding the foregoing (including, without limitation, through any demand letter or offer to license any Intellectual Property
184.108.40.206The computer systems, including the software, hardware, networks and interfaces used by any Target
(collectively the "Systems") are sufficient for their respective current business operations. All Systems are
owned or licensed to, as the case may be, and operated by any Target and are under their respective sole control. No Systems have
experienced any breakdowns or usage failures in the past twelve (12) months prior to the Closing Date that have caused a material
interruption of the business operations of any Target at one or several operational sites.
220.127.116.11Without limiting the generality of the foregoing, each Target has all right, title and interest
in and to all Intellectual Property Rights developed by its employees.
18.104.22.168All contracts entered into by any Target ("Contract(s)") are valid, binding and
enforceable in accordance with its respective terms with regard to the obligations of the other party thereto and were entered
in the ordinary course of business. Each of the Contracts shall be in full force and effect without penalty in accordance with
its terms upon Closing; in particular, none of the Contracts contains any change of control provisions.
22.214.171.124Each Target has performed all material obligations required to be performed by them when due and
are not in breach of, nor have received any third party’s claim for a breach of any Contract and, to the Sellers' Knowledge,
there is no breach or cancellation or anticipated breach or cancellation by any of the respective other parties to any Contract.
126.96.36.199Schedule 6.2.14 includes a list of all employees of the Targets at the date hereof ("Employee(s)")
and correctly indicates the date of commencement of their employment, salary, position, and any special benefits. There is no other
individual (whether former Employee or not) having a right or claim to be considered an Employee. At the date hereof, none of the
Employees has communicated his or her intention to terminate nor has been served with notice to terminate their employment by any
Target. There is no term of employment for any Employee which provides that a change of control in any Target shall entitle the
Employee to treat the change of control as amounting to a breach of contract or entitling him to any benefit or modification of
the terms of employment or payment whatsoever, or entitling him to treat himself as redundant or otherwise dismissed or released
from any obligation.
188.8.131.52Other than statutory pension rights, no pension or retirement schemes or similar commitments or
arrangements with any Employees exist or have been made or promised by any Target. No Target has works council or is a member of
any employers association or bound by any collective bargaining agreements or shop agreements.
184.108.40.206Each Target has in the last three fiscal years prior to the date hereof not experienced, and to
the Sellers' Knowledge there is not threatened, any strike, work stoppage or other collective labour or works council controversy
or dispute of any material nature.
220.127.116.11Each Target is in material compliance with all laws and regulations dealing with employment matters,
including, but not limited to, wages, hours, vacation, working conditions for its Employees, hiring of disabled workers and fixed
term employment agreements. All compensation and withholding obligations of any Target to or in respect of its current and former
Employees have been fulfilled when due or have been properly provided for in the Interim Financial Statements. No Target employs
any Employees, who are deemed false self-employees (Scheinselbständige) under German law and other applicable laws.
18.104.22.168There is no employment-related charge, complaint, grievance, investigation, inquiry or obligation
of any kind, pending or to the Sellers' Knowledge threatened in any forum, relating to an alleged violation or breach by any Target
(or the Employees) of any law, regulation or contract and no Employee has committed any act or omission giving rise to liability
for any violation or breach of such type.
22.214.171.124Each Target holds all permits, concessions and licenses, which are required under applicable laws
in order to conduct its business as presently conducted. Each Target conducts its business in material compliance with all permits,
concessions and licenses, which are required under applicable laws.
126.96.36.199To the Sellers' Knowledge, there are no threats of any revocations or restriction or subsequent
orders relating to any such permits, concessions or licenses.
188.8.131.52Each Target is, and has always been conducted in full compliance with all applicable permits, concessions
and licenses and any regulations applicable to the business of the relevant Target (including, without limitation, regulations
regarding safety, occupational health and safety). None of the products or services delivered or rendered by any Target contravene
or violate any applicable regulations.
184.108.40.206No Target is restricted by any agreement from carrying on their business in any geographic area,
product line, product segment, customer segment or critical product component.
220.127.116.11Each Target and its respective officers and employees, within the exercise of the respective Target's
business, have always fully complied with applicable European Union and German antitrust laws.
18.104.22.168Each Target has filed or caused to be filed all reports, notifications and filings with, and has
paid all regulatory fees to, the applicable governmental entity necessary to maintain all of the permits in full force and effect.
As of the date of this Agreement, no Target has received any written notice of a proceeding by a governmental entity relating to
the revocation, cancellation or termination of any permit.
22.214.171.124Neither any Target nor any of its directors, officers, agents or employees has, for or on behalf
any Target, (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political
activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political
parties or campaigns.
126.96.36.199To the Sellers' Knowledge, no employee has provided or is providing information to any law enforcement
agency regarding the commission or possible commission of any crime or the violation or possible violation of any law by any Target.
188.8.131.52Schedule 184.108.40.206 contains a list of the respective Target's TOP 5 customers and suppliers
as measured by the business volume for fiscal year 2012. No such supplier or customer has during the last two (2) years materially
decreased or limited or threatened to materially decrease or limit, its provision or receipt of services or supplies to or from
any of the Targets. No termination, cancellation or material limitation of, or any material modification or change in, the business
relationship of any of the Targets has occurred or has been threatened by any such supplier or customer.
220.127.116.11There have been no claims raised by any customer of any of the Targets in the last two (2) years
prior to the Signing Date with respect to any defective products sold and/or manufactured by any of the Targets, and the Sellers
are not aware of any such defective products, from which it could be assumed that the components or the design of the relevant
product or the production process itself is defective or not in accordance with applicable industry standards. No customer claims
with respect to any defective products exceeding an amount of EUR 500 per single event and customer and EUR 5,000 in the aggregate
per all customers are currently pending against any of the Targets.
At the date hereof, no pending
and threatened cases of litigation, either before a court or an arbitral tribunal, and administrative proceedings in which the
Targets are involved, either as plaintiff, defendant or otherwise, as well as any settlement agreements under which any obligations
are outstanding or continuing. To the Sellers' Knowledge, there is no reason to believe that any other litigation, claim or proceedings
may be brought or threatened against any Target.
Each Target is in possession of
the insurance policies as listed in Schedule 6.2.18. All such insurance agreements have been in full force and effect and
have been adequate for the operation of the business of the relevant Target for the last five years up to and including the Closing
Date. All insurance premiums due thereon have been timely paid in full when due, and no notice of cancellation or termination thereof
has been received by any Target. No outstanding claims are pending under any insurance policy. No Target has made or received any
cancellation or termination of any insurance, which has not been substituted by an equivalent new insurance.
No Target has incurred any obligation
nor is it liable for brokerage or finders’ fees or agents’ commissions or similar payments to be made in connection
with the transactions contemplated by this Agreement.
All information supplied to the
Purchaser and its advisors by the Sellers or the Targets prior to the date hereof is correct, complete and not misleading. Any
facts relating to the Shares, the Targets and their respective business operations which a prudent business person would in its
reasonable judgment consider important in order to be able to properly evaluate the chances and risks involved in the acquisition
of the Targets have been fully disclosed to the Purchaser.
7.1.1If and to the extent any of the statements made in the Sellers' Guarantees set forth in Section 6
is untrue, incomplete or inaccurate, or if the Seller breaches any of its obligations under this Agreement ("Breach"),
the Sellers - being jointly and severally liable (haften gesamtschuldernisch) - shall put the Purchaser in the position
in which the Purchaser would be in had the Breach not occurred (Naturalrestitution) or – at the election of the Purchaser
- the Sellers shall pay monetary damages (Schadensersatz in Geld) to the Purchaser for Losses (as defined below) suffered
by the Purchaser as a result of such Breach, in each case subject to the limitations set forth in this Agreement.
7.1.2For the purpose of this Agreement, "Losses" shall mean any and all liabilities,
reasonable costs and expenses and other damages within the meaning of sections 249 et seq. of the German Civil Code
7.1.3Any indemnification payments made by the Seller(s) pursuant to this Agreement shall be treated
as an adjustment of the Final Purchase Price.
7.2.1either the Purchaser, or (following the Closing Date) its respective representatives have caused
or participated in causing (verursacht oder mitverursacht) or have aggravated such Breach of the Sellers' Guarantees or
any Losses resulting therefrom or failed to mitigate Losses pursuant to Section 254 of the German Civil Code (BGB);
7.2.2the matter underlying the Breach of the Sellers' Guarantees has been expressly and specifically
taken into account in the Interim Financial Statements as a write-off (Abschreibung), value adjustment (Wertberichtigung),
liability (Verbindlichkeit) or provision (Rückstellung), excluding general adjustments (e.g.,
Pauschalwertberichtigungen) or provisions were made therein for the relevant risk category.
The Seller's aggregate liability
for any Breaches of the Sellers' Guarantees shall be limited to the amount of EUR 1,000,000 (in words: Euro one million), provided
however that the Sellers' aggregate liability for any Breaches of the Sellers' Guarantees pursuant to Sections 6.2.1, 6.2.2, 6.2.3,
6.2.4, 6.2.5, 6.2.6, 6.2.7 and 6.2.10 shall be limited to the amount of the Final Purchase Price. The limitation of liability set
forth in this Section 7.3 shall not apply to any claims, rights and remedies based on gross negligence, fraud (arglistige Täuschung)
or willful misconduct (Vorsatz).
7.4.1Any claims of the Purchaser arising under this Section 7 shall be time-barred (verjähren)
upon expiration of a period of twelve (12) months after the Closing Date, except as otherwise set forth in Sections 7.4.2 and 7.4.3.
7.4.2All claims of the Purchaser for the Breach of the Sellers' Guarantees contained in Sections 6.2.1,
6.2.2, 6.2.3, 6.2.4, 6.2.5, 6.2.6 and 6.2.10 shall be time-barred upon expiration of a period of five (5) years after the Closing
7.4.3All claims of the Purchaser for the Breach of the Sellers' Guarantees contained in Section 6.2.7
shall be time-barred upon the expiration of a period of six (6) months after the competent tax authorities have made a final and
binding tax assessment (formell und materiell bestandskräftig) with respect to the facts giving rise to such claims
or in accordance with the statutory provisions.
7.4.4The claims arising as a result of intentional breaches (Vorsatz) within the meaning of Section
202 of the German Civil Code (BGB) shall be time-barred upon expiry of the statutory time limitation period.
7.5.1The remedies which the Purchaser and the Guarantor may have against the Seller for a Breach of
the Sellers' Guarantees shall solely be governed by this Agreement and shall be the exclusive remedies available to the Purchaser
and the Purchaser, to the extent permitted by law, agrees to accept the Shares without relying upon any express or implied representations
or warranties of any nature. The foregoing sentence shall not apply to any claims, rights and remedies based on gross negligence,
fraud (arglistige Täuschung) or willful misconduct (Vorsatz) by any of the Sellers.
In the event of any claim, action,
suit or proceeding, including audits and examinations, asserted or initiated against the Purchaser and/or any of the Targets to
which Sellers may be liable under this Agreement ("Third Party Claim"), the Purchaser will inform the Sellers
within a reasonable period of time in writing of any such Third Party Claim. To the extent the participation of the Sellers is,
in the discretion of the Purchaser, useful and/or required to defend the Third Party Claim, the Purchaser will request the Sellers
to participate, and, to the maximum extent permitted by law, join, at their own cost, in the defense of the relevant Third Party
Claim. To this end, the Purchaser will provide the Sellers copies of all documents setting forth the Third Party Claim and its
underlying facts and circumstances and request from the Sellers their respective legal and factual view on the circumstances underlying
the Third Party Claim. Without the prior approval and the giving of instructions by the Purchaser, the Sellers shall not be entitled
to conduct any direct negotiations or discussions with the third party raising the Third Party Claim.
The Sellers as joint and several
debtors hereby indemnify and hold harmless the Purchaser or, at the election of the Purchaser, the relevant Target from and against:
9.1.1all Taxes not yet paid, to the extent such Taxes have not been included in the Closing Date Balance
Sheet as an accrual, which have been or will be assessed against any of the Targets and that relate to the period prior to and
including the Closing Date or that result from actions taken prior to or on the Closing Date; and
9.1.2any secondary liability against any of the Targets for Taxes which relate
to the period prior to and including the Closing Date or that result from actions taken prior to or on the Closing Date.
9.2.1The Purchaser will inform the Sellers regarding
the initiation of a field audit or other procedures conducted on any of the Targets that could
result in a claim according to Section 9.1. Section 8 applies
9.2.2Upon request of the Sellers, the Purchaser will provide the Sellers
with copies of the Tax Returns of the relevant Target for the periods prior to and including
the Closing Date.
The Sellers' obligation to settle
any of the Purchaser's claims pursuant to Section 9.1 shall become due and payable ten (10) Business Days after the relevant Target
has received a Tax notice from the competent Tax authorities which gives rise to the Purchaser's claims pursuant to Section 9.1.
The Purchaser's claims pursuant
to Section 9.1 become time-barred six (6) months after the tax assessment for the relevant Tax has become final and non-appealable
(materiell und formell bestanskräftig).
9.5.1The Sellers as joint and several debtors hereby indemnify and hold harmless the Purchaser or, at
the election of the Purchaser, the Hungarian Target from and against any claims, actions, damages, losses, costs and expenses (including
reasonable attorneys' fees) resulting from or in connection with the potential obligation of the Hungarian Target to repay any
subsidies granted to the Hungarian Target by the Hungarian National Development Agency under an agreement dated 11 October 2011
(GOP-2.1.1.-11/A-2011-0906) due to the transactions contemplated under this Agreement.
9.5.2The Sellers as joint and several debtors hereby indemnify and hold harmless the Purchaser or, at
the election of the Purchaser, the Hungarian Target from and against any claims, actions, damages, losses, costs and expenses (including
reasonable attorneys' fees) resulting from or in connection with the potential non-compliance of the Hungarian Target with Hungarian
employment laws, in particular, the practice of the Hungarian Target to conclude fixed-term contracts with its employees and to
extend them on a month by month basis.
For a period of three (3) years
after Closing, the Sellers and their respective affiliates shall not anywhere in the world engage, manage, operate, join in the
management or operation with or provide marketing, research or support or other professional services to any person in any area
in which any of the Targets has conducted business prior to the Closing Date or engage in any activity which would, directly or
indirectly, compete with or result in competition with the business operations of any of the Targets as being continued by the
Purchaser as of the Closing Date.
For a period of three (3) years
after Closing, the Sellers and their respective affiliates shall not establish or acquire a participation or interest in any way
whatsoever, directly or indirectly, in any business or business entity (except as the holder of less than 1% of the issued and
outstanding stock of a publicly held corporation) which would, directly or indirectly, compete with the business operations of
any the Targets as conducted as at the Closing Date. The Sellers hereby guarantee that none of their respective affiliates will
breach the covenant of this Section 10.1.
The Sellers and their respective
affiliates shall not, directly or indirectly, acting alone, as a member of any partnership or other business entity, as a holder
of capital stock of any class of any corporation or other business entity (except as the holder of less than 1% of the issued and
outstanding stock of a publicly held corporation) for a period of three (3) years after the Closing Date, solicit or hire for employment
any current or future employee of any of the Targets and the Purchaser, respectively. The Sellers hereby guarantee that none of
their respective affiliates will breach the covenant of this Section 10.2.
In case of a breach of the covenants
set forth in Section 10.1 or 10.2 by any Seller or any of his affiliates, the Purchaser may request that the relevant Seller, or
any of his affiliates causing the breach, refrains from the current breach and any such breaches in the future. In addition, the
Seller concerned shall pay to the Purchaser for each breach of any covenant set forth in Section 10.1 or 10.2 a contractual penalty
in the amount of EUR 250,000. In the event of a continuing violation, for each additional month that the violation continues, the
Seller concerned shall pay a further contractual penalty in the amount of EUR 50,000. The claiming of further damages for any losses
incurred by the Purchaser and/or any other affiliate of the Purchaser due to actions prohibited by the aforesaid covenants shall
All notices, requests and other
communications hereunder shall be made in writing in the English language and shall be delivered by hand, by facsimile, certified
mail or reputable courier to the following addresses, or to such other recipients or addresses which may be designated by the respective
Party to the other Parties in the same manner:
The Purchaser shall bear any
and all transfer taxes (including real estate transfer taxes), stamp duties, fees in connection with the execution of this Agreement,
including notary fees (if any), and the implementation of the transactions contemplated hereby. Each Party shall pay its own expenses,
including the costs of its advisors, incurred in connection with the preparation of this Agreement.
Subject to the terms and conditions
of this Agreement, the Parties will use reasonable efforts to execute, or cause to be executed, all agreements and documents and
to take, or cause to be taken, all other actions necessary under applicable laws and regulations to consummate the transactions
contemplated by this Agreement.
Each Party shall keep confidential
and not disclose to any third party the contents of this Agreement and any confidential information regarding any other Party disclosed
to it in connection with this Agreement or its implementation, except as expressly agreed upon with the other Parties and except
as may be required in order to comply with the requirements of any applicable laws or the rules and regulations of any stock exchange
upon which any securities of the relevant Party or any of its affiliates are listed. The Purchaser shall be entitled to make a
press release or similar public announcement with respect to this Agreement or the transactions contemplated hereby upon signing
of this Agreement.
All Schedules to this Agreement
constitute an integral part of this Agreement and any reference to this Agreement shall be a reference to this Agreement and the
Schedules as a whole. In the case of a conflict between any Schedule and the provisions of this Agreement, the provisions of this
Agreement shall prevail.
This Agreement (together with
all Schedules hereto) shall comprise the entire agreement between the Parties concerning the subject matter hereof and shall supersede
and replace all prior oral and written declarations of intention made by the Parties in respect thereof. There are no side agreements
to this Agreement except where expressly referenced herein.
Any amendment or supplement to
or modification of this Agreement (together with all Schedules hereto), including this provision, shall be valid only if made in
writing, except where a stricter form (e.g., notarization) is required under applicable mandatory law.
If provisions in this Agreement
include English terms after which, in either the same provision or elsewhere in this Agreement, German terms have been inserted
in brackets and/or italics, the respective German terms alone and not the English terms shall be authoritative for the interpretation
of the respective provisions.
Wherever in this Agreement the
term "a Party" or "one Party" is used in contrast to "another Party" or "the other Party"
or with a similar expression, the Sellers are considered one Party as opposed to the Purchaser as the other Party and vice versa.
Save for the transfer of the
Kft Shares which shall be governed by the laws of Hungary, this Agreement shall be governed by and construed in accordance with
the laws of the Federal Republic of Germany, without regard to principles of conflicts of laws and excluding any applications of
the United Nations Convention on Contracts for the International Sale of Goods of April 11, 1980.
11.11.1All disputes, controversies or differences arising out of or in connection with this Agreement,
including any question regarding its existence, validity or termination ("Disputes") shall be settled amicably
by negotiation between the Parties within thirty (30) Business Days from the date of written notice of either Party of the existence
of such dispute.
11.11.2Failing such amicable settlement, all Disputes shall be finally settled under the Arbitration Rules
of the German Institution of Arbitration e.V. (Deutsche Institution für Schiedsgerichtsbarkeit e.V., "DIS")
applicable at the time of the initiation of the arbitration proceedings without recourse to the ordinary courts of law. The arbitral
tribunal shall consist of one arbitrator. The arbitrator shall be eligible for the office of a judge in Germany, of age 50 years
or older, and shall have significant experience in the M&A business. The arbitrator may also finally resolve upon the validity
of this arbitration agreement. Temporary relief (einstweiliger Rechtsschutz) before the courts of the competent jurisdiction
shall remain unaffected.
11.11.3The place of arbitration is Frankfurt am Main, Germany. Unless the Parties agree otherwise, the
procedural law of this place shall apply where the above mentioned arbitration rules of DIS are silent. The language of the arbitral
proceedings is English, provided, however, that any documents originating in the German language need not be translated.
11.11.4The arbitration court shall also decide on the liability for the costs of the arbitration proceeding
including the reimbursement of reasonable attorney fees.
11.11.5In the event that mandatory rules of the applicable law require any matter arising out of or in
connection with this Agreement and its execution to be decided upon by an ordinary court of law, the competent courts in Frankfurt
am Main shall have exclusive jurisdiction.
Except as expressly set forth
in this Agreement the Parties may not assign, delegate or otherwise transfer any of its rights or obligations under this Agreement
to any third party without the prior written consent of the other Party. Neither this Agreement nor any provision contained in
this Agreement is intended to confer any rights or remedies upon any person or entity other than the Parties, unless otherwise
The Purchaser and the Sellers
shall not, and shall cause their affiliates not to, enter into any transaction, which may prevent, delay or interfere with the
consummation of the transactions contemplated by this Agreement.
Should any provision of this
Agreement be or become, or be deemed to be or become, invalid or unenforceable as a whole or in part, the validity and enforceability
of the remaining provisions shall not be affected thereby. Any such invalid or unenforceable provision shall, to the extent permitted
by law, be deemed replaced by such valid and enforceable provision as comes closest to the economic intent and purpose of such
invalid or unenforceable provision. The same shall apply in the event that this Agreement contains any gaps (Vertragslücken).
The Parties are aware of the decision of the Federal Supreme Court (Bundesgerichtshof) of September 24, 2002. However, it
is the express intent of the Parties that this Section 11.14 shall not be construed as a mere reversal of the burden of proof (Beweislastumkehr)
but rather as a contractual exclusion of Section 139 of the German Civil Code (BGB) in its entirety.
the Purchaser, in addition
to the Sellers, is fully responsible for all outstanding contributions on the shareholding in the German Target that shall be overdue
as at the time of the registration;
he does not instruct on matters
of foreign law, in particular Hungarian law, and/or tax law. The appeared declared that they provide of own advice in all such
The individuals appearing requested the
Notary to register the acquisition of the shares in the German Target through the Purchaser with the German Target together with
a certified copy of this deed attached.
The above record was read to the appeared
by the Notary public, approved by them and then signed by them and the Notary public with their own signatures:
The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here.
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