SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
June 13, 1996
(Date of Report)
(Date of earliest event reported)
JOHN WILEY & SONS, INC.
(Exact name of registrant as specified in its charter)
New York
---------
(State or jurisdiction of incorporation)
0-11507 13-5593032
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Commission File Number IRS Employer Identification Number
605 Third Avenue, New York, NY 10158-0012
- ----------------------------- ----------------------------------
Address of principal Zip Code
executive offices
Registrant's telephone
number, including area code: (212) 850-6000
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This is the first page of a three page document.
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Item 2. Acquisition or Disposition of Assets
On June 13, 1996, the Company completed the acquisition of
a 90% interest in the German based VCH Publishing Group
(VCH) through the purchase of 90% of the shares of VCH
Verlagsgesellschaft mbH from Pallas Investment Group, the
German Chemical Society and the German Pharamaceutical
Society for approximately $100 million in cash. The German
Chemical Society and German Pharamaceutical Society retain
the 10% minority ownership.
VCH has annual revenues of approximately $60 million and
publishes nearly 100 scholarly and professional journals,
as well as more than 500 books annually, with a backlist
of 3,000 titles. VCH is a leading scientific, technical,
and professional publisher in chemistry and related
disciplines. The group also includes Akademie Verlag, a
science and humanities publisher; Ernst & Sohn, an
architecture and civil engineering publisher; Academy
Group, a London based architecture and design publisher;
and Chemical Concepts, an electronic chemical database
publisher.
The transaction was initially financed through available
cash balances, existing lines of credit, and a $75 million
bridge line of credit from Morgan Guaranty Trust
Company of New York and its assigns. The Company currently
anticipates that the acquisition will dilute income per share
for approximately two years following the acquisition. The
extent and duration of the dilution will depend primarily
on the amoritzation of intangibles, financing costs, and
VCH's future operating results.
Item 7. Financial Statements, Pro Forma FinancialInformation,
and Exhibits
(a) Financial Statements
As of the date of filing this Current Report
on Form 8-K, it is impracticable for the Company
to provide the financial statements required by this
Item 7(a). In accordance with Item 7(a)(4) of Form
8-K, such financial statements shall be filed by
amendment to this Form 8-K no later than 60 days
after June 28, 1996.
(b) Pro Forma Financial Information
As of the date of filing this Current Report
on Form 8-K, it is impracticable for the Company
to provide the pro forma financial information
required by this item 7(b). In accordance with Item
7(b) of Form 8K, such financial statements shall
be filed by
amendment to this Form 8-K no later than 60 days
after June 28, 1996.
(c) Exhibits
2.1 Purchase and Assignment Agreement dated May
7, 1996 among the Company and VCH Publishing
Limited Partnership.
2.2 Purchase and Assignment Agreement dated May
7, 1996 among the Company and Gesellschaft
Deutscher Chemiker e.V. and Deutsche
Pharmazeutische Gesellschaft e.V.
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
John Wiley & Sons, Inc.
/s/ Robert D. Wilder
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Robert D.Wilder
Senior Vice President
and Chief Financial Officer
Date: June 20, 1996
HMWW/Wiley-Pallas-VCH/Purchase and Assignment
Agreement/endg./ST005406/May 6, 1996
Purchase and Assignment Agreement
among
1. VCH Publishing Limited Partnership,
c/o United Corporate Services Inc.,
15 East North Street,
Dover, Delaware 19901, USA
an American limited partnership organized and existing
under the laws of the State of Delaware
- hereinafter referred to as "Seller" or "Pallas" -
on the one side
and
2. John Wiley & Sons, Inc.
605 Third Avenue
New York, N.Y. 10158-0012, USA
an American stock corporation organized and existing
under the laws of the State of New York,
- hereinafter referred to as "Buyer" -
on the other side
Introduction
(1) Seller owns the following shares in VCH Verlagsgesell
schaft mbH, Weinheim, Germany, registered in the
Commercial Register at the Lower Court Mannheim under
HRB 508W with a stated capital in the nominal amount of
DM 4.687.500,-- (hereinafter: "Company" or "VCH"):
one share in the nominal amount of DM 562,500
one share in the nominal amount of DM 150,000
one share in the nominal amount of DM 62,500
one share in the nominal amount of DM 2,037,500
DM 2,812,500
<PAGE>
(2) The balance of the share capital of VCH is held as
follows:
(i) Gesellschaft Deutscher Chemiker e.V.
Varrentrappstrasse 40
D-60486 Frankfurt am Main
Federal Republic of Germany
- hereinafter referred to as "GDCh" -
holds one share in the nominal amount of
DM 1,687,500 (representing 36 % of the share
capital).
(ii) Deutsche Pharmazeutische Gesellschaft e.V.,
registered in Berlin, Federal Republic of Germany,
c/o Im Kleeacker 30, 72072 Tubingen, Prof. Dr.
H.P.T. Ammon
- hereinafter referred to as "DPhG" -
holds
one share in the nominal amount of DM 137,500
one share in the nominal amount of DM 50,000
DM 187,500
representing 4 % of the share capital.
(3) The Company holds shares in various subsidiaries as
listed in Exhibit 1(3) hereto (the Company and its
subsidiaries shall hereinafter be referred to as the "VCH
Group", as set out in Exhibit 1(3)).
Sale and Transfer
(1) Seller hereby sells and transfers to the Buyer all of its
shares in the Company in the nominal amounts of
DM 562,500.--,
DM 150,000.--,
DM 62,500.--,
DM 2,037,500.--
(hereinafter "Pallas Shares").
The Pallas Shares are fully paid in.
The Buyer hereby purchases the Pallas Shares and accepts
the transfer of the Pallas Shares.
<PAGE>
(2) The transfer of the Pallas Shares shall be subject to the
conditions precedent (aufschiebende Bedingungen) of
(i) clearance by the German Federal Cartel Office as set
forth in Section 7 which shall be notified by either
party to the acting notary by submission of a
photocopy of the clearance letter, or by submitting
adequate evidence for the expiration of the periods
during which a prohibition order could be issued,
and
(ii) payment of the purchase price pursuant to Section 3
(2) and (3) less any deduction on account of the
Purchase Price reduction pursuant to Section 3 (5)
(b) which was notified in writing to the acting
notary as provided in Section 3 (5) (b), and
(iii) the Buyer having received evidence of the validity
of the declarations made in the name of Seller in
this Agreement as set out in Exhibit 2 (2). A
written confirmation by the Buyer to the acting
notary that it has received such evidence shall
constitute full proof of the occurrence of this
condition precedent. The seller shall be entitled to
submit to the notary such evidence as is set out in
Exhibit 2 (2) which shall also constitute full
proof of such occurence.
Seller undertakes to procure such evidence as soon
as possible.
(3) The sale and transfer of the Pallas Shares shall include
all rights to profits for the fiscal year commencing on
January 1, 1996 and all retained profits of earlier
years, if any.
(4) Simultaneous herewith, Buyer will acquire from GDCh and
DPhG further shares in the Company, amounting to a total
of approx. 30% (together with the Pallas Shares 90%) of
the share capital.
Seller hereby waives its right of preemption pursuant to
the Articles of Association of the Company in relation to
the acquisition by Buyer of shares in the Company from
GDCh and/or DPhG, as set forth in the preceding
paragraph.
<PAGE>
(5) As soon as all conditions precedent set forth in para.
(2) have occurred, Seller and Buyer shall make a joint
statement to this effect to the notary, which statement
shall be kept with the notary's files and shall
constitute full proof of such occurrence (except for
clearance by the Federal Cartel Office, which shall be
evidenced by a photocopy of the clearance letter or
adequate evidence for the expiration of the periods
during which a prohibition order could be issued). The
possibility to prove the occurrence of any of the
conditions precedent through other means shall remain
unaffected.
Purchase Price/Payment/Escrow Account
(1) The aggregate purchase price payable to the Seller for
the Pallas Shares (including the right granted to Buyer
under the covenant not to compete in Section 11 hereof)
shall be DM 104,300,000 (in words Deutsche Mark one
hundred and four million three hundred thousand) subject
to adjustment pursuant to para. (5) below (hereinafter:
"Purchase Price").
(2) DM 26,075,000 (in words: Deutsche Mark twenty-six million
seventy-five thousand) of the Purchase Price (less the
amount of any Purchase Price reduction under para. (5)
(b)) shall be transferred within five banking days of the
occurrence of the condition precedent pursuant to Section
2 (2) (iii) into the escrow account referred to in para.
(6) below (hereinafter: "Escrow Account") and shall be
released therefrom as provided in hereinafter.
(3) DM 77,877,500 (in words: Deutsche Mark seventy-seven
million eight hundred seventy-seven thousand five
hundred) of the Purchase Price (being the amount set
forth in para. (1) minus the amount paid into the Escrow
Account pursuant to para. (2) minus the amount set forth
in para. (5) (a)), less the amount of any Purchase Price
reduction under para. (5) (b) not yet deducted from the
payment pursuant to para. (2), shall be payable to Seller
within five banking days of the occurrence of the latest
of the conditions precedent of Section 2 (2)(i) and (iii)
(the date of such occurrence hereinafter: "Closing
Date").
Payment shall be made into the following bank account of
Seller:
Bank: Barclays Bank PLC, St. Helier, Channel
Islands, Guernsey
Account no.: 88619633
Bank code: 204505
Account name: PI Publishing Advisors S.A.
<PAGE>
(4) The Purchase Price shall be subject to interest as
follows:
(a) Any interest on the amount of DM 26,075,000 to be
paid into the Escrow Account pursuant to para (2)
shall be for the account of the Buyer up to and
including the day falling five banking days after
the Closing Date, and shall be released to Buyer as
provided in para. (8) (b).
(b) As from the day falling five banking days after the
Closing Date the Seller shall be entitled to
interest at the German Federal Bank discount rate
plus 2 % p.a. on the amount standing to the credit
of the Escrow Account from that day on. Should the
accrued interest on the amount standing to the
credit of the Escrow Account exceed the interest
which would have accrued on the basis of the above
interest rate, the excess shall be released to
Buyer. Should the accrued interest on the amount
standing to the credit of the Escrow Account fall
short of the interest which would have accrued on
the basis of the above interest rate, the amount of
the shortfall shall be paid by Buyer to Seller.
(c) In case of late payment (Zahlungsverzug), Buyer shall pay
interest at an increased rate, namely the German Federal
Bank discount rate plus 3 % p.a.
(5) The Purchase Price shall be reduced as follows:
(a) The Purchase Price shall be reduced by DM 347,500 on
account of any tax liabilities. This amount has
already been taken into consideration as a deduction
in the calculation of the amount payable under para.
(3) above. Buyer shall not have any further claims,
with respect to any taxes payable by the Company for
any period.
(b) The Purchase Price shall be further reduced by
69.5 % of any amount by which the sum of
- bank debt and
- shareholder loans and
- factored receivables as yet unpaid by the debtors
of the Company, in all cases as of April 30, 1996,
exceeds DM 15,000,000 (Deutsche Mark fifteen
million). The amount of the excess shall be
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(i) determined by Arthur Andersen & Co. GmbH
Wirtschaftsprufungsgesellschaft, Stuttgart,
acting as arbiter (Schiedsgutachter) for both
parties (the parties to use best efforts to
arrange that such determination is made within
five working days of the date hereof), and
(ii) notified to the acting notary by either of both
parties, and
(iii) shall be deducted from the Purchase Price
payments as provided in paras. (2) and (3) or
shall otherwise be released from the Escrow
Account as provided in para (9) (b).
(6) The Escrow Account shall be a notarial trust account
(Notaranderkonto) opened by the acting notary
(hereinafter: "Escrow Agent"). The Escrow Account will be
operated in accordance with the provisions of the
following paragraphs.
(7) The deposit shall be held by the Escrow Agent in an
interest bearing account with all interest earned thereon
to be treated as part of the deposit.
(8) On the day falling 5 banking days after the Closing Date:
(a) the Escrow Agent shall release DM 15,645,000
(Deutsche Mark fifteen million six hundred forty-
five thousand), less any deduction made pursuant to
para. (2) on account of Purchase Price reduction
under para. (5) (b), from the Escrow Account to
Seller and shall pay such amount to the Seller's
bank account shown in para. (3) above;
(b) the Escrow Agent shall release the amount of accrued
interest to Buyer and shall pay such amount to a
bank account notified by Buyer to the Escrow Agent.
(9) The remaining amount of DM 10,430,000 (Deutsche Mark ten
million fourhundred and thirty thousand) shall be
administered as follows:
(a) Seller shall be entitled to require Buyer to declare
a release of money standing to the credit of the
Escrow Account at any time after September 30, 1997,
in the amount of the balance standing to the credit
of the Escrow Account at that time, less the amount
of any claim of Buyer against Seller under this
Agreement (including, without limitation, claims
based on deliberate misconduct relating to this
Agreement) still existing and notified by Buyer to
Seller in writing with specification as to the basis
of the claim, without the statute of limitation
having expired at that time or any time thereafter.
<PAGE>
(b) Buyer shall be entitled to require Seller to declare
a release of money standing to the credit of the
Escrow Account
(i) if Arthur Andersen GmbH & Co. has determined
pursuant to para. (5) (b) that the sum of bank
debt, shareholder loans and factored
receivables of the Company as of April 30, 1996
exceeds DM 15,000,000, in the amount of 69.5 %
of the excess (except if such excess has
already been deducted pursuant to para. (2) or
(3) above); or
(ii) if Buyer has any other claims against Seller
under this Agreement (including, without
limitation, claims based on deliberate
misconduct relating to this Agreement) still
existing and notified by Buyer to Seller in
writing with specifation as to the basis of the
claim, without the statute of limitation having
expired at that time or any time thereafter, in
the amount of such claims.
(c) Should the Federal Cartel Office prohibit the
transaction, the Escrow Agent, against adequate
proof of the prohibition order, shall promptly pay
all sums standing to the credit of the Escrow
Account to Buyer, except if the parties jointly
appeal against such order as provided in 7 (3).
(d) If Buyer initiates legal proceedings against Seller
and Seller contests the validity of these
proceedings for reason of
(i) service upon the agent for service of process
appointed by Seller not being effective
vis-a-vis Seller, or the agent refusing to
accept service, or the Seller not appointing a
new agent in case the agent appointed herein
is, for whatever reason, no longer able to
perform its function, or
(ii) the Seller not having a place of jurisdiction
in Germany or
(iii) the Seller having lost its ability to sue or to
be sued on account of not existing any longer
or for any other reason,
the Escrow Agent shall, after having received
adequate evidence of the Seller so contesting the
validity of the proceedings release from the Escrow
Account such amount as is requested by Buyer from
Seller in the legal proceedings.
(10) Except as provided in para. (8) and para. (9) (c) and (d)
the Escrow Agent shall only be entitled to release money
from the Escrow Account if
<PAGE>
(i) he has received written confirmation from Buyer and
Seller that a certain amount is to be released, or
(ii) he has received a copy (Ausfertigung) of a final
court decision requiring Buyer or Seller, as the
case may be, to release money from the Escrow
Account.
(11) When releasing money, the acting notary shall be entitled
to deduct his fees from the amount standing to the credit
of the Escrow Account from time to time, but not from the
amount released.
(12) In case of late payment (Zahlungsverzug) of Buyer of more
than 3 weeks with the amounts payable under para. (2) or
(3), Seller shall be entitled to rescind this Agreement
subject to
(i) instructing the Escrow Agent to release all moneys
which may stand to the credit of the Escrow Account
at that time to Buyer, less a fixed sum of DM
500,000 for contract costs to be paid to Seller, and
(ii) having given Buyer after expiry of the 3 weeks
adequate written notice of its intention to rescind,
and giving Buyer a grace period of not less than 5
banking days.
Warranties; Remedies
(1) Seller hereby warrants (section 459 para. 2 German Civil
Code) and guarantees (section 305 German Civil Code) as
of the date hereof, as follows:
(a) The Seller has all necessary authority, and has
taken all steps prescribed by applicable law or its
constitutional documents or otherwise, to enter into
this transaction, and has validly authorised the
persons acting in its name in the context of this
Agreement.
(b) The stated capital of the Company in the nominal
amount of DM 4,687,500.-- is fully paid in;
contributions in kind have been valued at not more
than market value; no part of the stated capital has
been paid back to any of the shareholders presently
holding the Pallas Shares or those shareholders
having held Pallas Shares in the past; the Pallas
Shares represent 60 % of the stated capital of the
Company.
<PAGE>
(c) Seller owns the shares sold and transferred
hereunder, and the Company owns the shares in the
Subsidiaries as shown in Exhibit 1(3); Seller has
the unencumbered right to transfer to the Buyer
title to the Pallas Shares; there are no liens,
encumbrances or claims of any kind or nature on or
against the shares sold and transferred hereunder or
the shares in any other company of VCH Group; all
issued shares of the Company have been duly and
validly issued. The provisions of parts C and D
referred to in 13 para. 2 of the Articles of
Association of the Company have become obsolete, and
none of the shareholders of the Company is bound by
these provisions any longer.
(d) The Company is a corporation duly organised and
validly existing under the laws of the Federal
Republic of Germany and has the power to own its
properties and to carry on its business as it is now
being conducted; there are no joint ventures, silent
partnerships or sub-participations or similar
arrangements, except as shown in Exhibit 5(1)(d).
(e) Seller has provided Buyer with the consolidated
audited financial statements of VCH Group, signed by
the auditors, for the fiscal years 1993, 1994 and
1995 (the "Financial Statements");
the Financial Statements 1995 present a true and
fair view of the net worth, financial position and
results of the Group, and
the Financial Statements 1995 have been prepared in
compliance with German generally accepted accounting
principles, consistently applied, without changing
the valuation principles, unless shown in the notes.
To the best of Seller's knowledge all pension
liabilities are reflected as a provision with the
maximum possible amount under section 6a Income Tax
Act.
(f) All tangible fixed assets (Sachanlagen) and tangible
current assets (Vorrate) of the Company are in a
good condition, normal wear and tear excepted;
except for retentions of title arising in the
ordinary course of business and statutory pledges,
the companies belonging to VCH Group have good title
to all assets reflected in the Financial Statements
1995 or not reflected only for reason of their low
value ("geringwertige Wirtschaftsguter") (except as
disposed in the ordinary course of business since
January 1, 1996); the assets and inventories of the
Company are not encumbered with rights of third
parties, unless shown in the Financial Statements,
and except collateral for bank loans entered into in
the normal course of business.
<PAGE>
(g) Neither the Company nor any other company belonging
to VCH Group has granted a guarantee, suretyship
(Burgschaft) or other indebtedness for third
parties' liabilities, except in favour of other
companies of VCH Group in which VCH holds at least
60 % of the shares, and except as reflected in the
1995 Financial Statements, and except for a
declaration of subordination made by the Company in
relation to its claims against Verlagsservice
Sudwest GmbH, Waghausel.
(h) To the best of the Seller's knowledge:
(i) VCH Group does not infringe intellectual prop
erty rights of third parties; however, Seller
declares that companies belonging to VCH Group
may in some cases, which are not material in
the aggregate, infringe copyrights of their
authors by electronic media use of works, and
(ii) third parties do not infringe the intellectual
property rights owned by VCH Group except for
isolated and immaterial infringements in
certain parts of the world not including the
U.S.A. and Europe, and
(iii) the companies of VCH Group are not involved in
lawsuits with a value ("Streitwert") in each
case of more than DM 50,000, or relating in
each case to assets with a value of more than
DM 50,000.
(i) To the best of Seller's knowledge, since
December 31, 1995 the Company has continued to
operate its business in the ordinary course, and no
material adverse change has occurred.
(j) All of the material agreements of the Company listed
in Exhibit 5(1)(j) are validly existing; none of
such agreements has been terminated, amended or has
expired without having been renewed on equally
favourable terms; the management of the Company is
not aware of the intention of the respective other
parties to such agreements to terminate or not to
renew these agreements on or following April 30,
1996 or in connection with the execution of this
Agreement, except as disclosed on Exhibit 5(1)(j).
(k) Exhibit 5(1)(k) contains a correct general
description of the situation as to unpublished books
of VCH Group, and a complete list of all journals
published but not owned by VCH Group, and a complete
list of all journals published by VCH Group where
the ownership situation is in dispute.
<PAGE>
(l) Buyer has been given access to certain information
material, the table of contents of which is attached
as Exhibit 5(1)(l). This material was up-to-date
and not misleading in any material respect.
(m) Seller became a shareholder of the Company in 1991.
In the context of the 1991 transaction, no warranty
claims were raised by either party against the
other.
(n) On the basis of German generally accepted accounting
principles consistently applied, the losses of VCH
Group in the first four months of 1996 do not exceed
the losses in the first half year of 1995.
(2) To the extent that the representations and warranties
refer to the Seller's best knowledge, the knowledge of
the following persons shall be attributed to Seller:
(a) The members of the Economic Board
(Wirtschaftsbeirat) of the Company to the extent
they have been appointed by Seller;
(b) The following members of the management of the
Company:
- the managing director (Geschaftsfuhrer)
- Dr. Peter Golitz
- the finance director, Mr. Heilbrunn.
(3) In the event that any representation or warranty
hereunder should turn out to be incorrect in whole or in
part, the Seller shall pay damages to the Buyer in order
to put it in the position as if the representation or
warranty had been correct, provided that
(i) if the damage relates directly to the Pallas Shares
(e.g., defect of title) Seller shall pay to Buyer
the full amount of such damage,alternatively
(ii) if the damage relates to the Company or any other
company of VCH Group, Seller shall pay to Buyer 82 %
of such damage.
(4) The Buyer shall be estopped from making any claim for
breach of any representation or warranty hereunder to the
extent that such claim is based on circumstances which
are properly disclosed in this Agreement including its
Exhibits. Buyer shall have no direct claim under para.
(3) against the natural persons who are general partners
of the Seller.
(5) Buyer is only entitled to assert claims under this 5 if
the amounts of such claims against Seller exceed in the
aggregate DM 200,000 and then only for the amount
exceeding DM 200,000.
<PAGE>
(6) All claims for breach of a representation (guarantee as
set forth in para. (1)) or warranty hereunder shall be
limited in the aggregate to an amount of DM 10,430,000
(Deutsche Mark ten million four hundred and thirty
thousand). Buyer shall not have any claims, with respect
to any taxes payable by the Company for any period except
as set forth in Section 3 (5) (a).
(7) The aforementioned provisions represent the full and
entire agreement of the parties with regard to any
representations and warranties of the Sellers. Any
further claims by the Buyer for a reduction of the
purchase price, rescission or payment of damages, whether
on the basis of violation of pre-contractual duties of
care, voidability (Anfechtbarkeit) or on any other cause
of action, shall be excluded. Claims based upon
deliberate misconduct ("vorsatzliches Handeln") are not
limited by any of the provisions of this Agreement.
(8) Payments of the Seller made according to this 5
constitute in the relationship between the Seller and
Buyer a reduction of the purchase price.
Statute of Limitations
(1) All claims of the Buyer arising under this Agreement
against the Seller shall be time-barred on September 30,
1997. For claims based upon deliberate misconduct
("vorsatzliches Handeln"), the statutory limitation
periods shall apply.
(2) The expiry period of any claim of the Buyer shall be
suspended by any written assertion of such claim vis-a-
vis Seller, provided that the Buyer must commence
judicial proceedings within three months after receipt of
the written assertion by the Seller but not before
expiration of the relevant contractual or statutory
expiry period.
Merger Control
(1) Buyer shall without delay notify the German Federal
Cartel Office of this transaction pursuant to Section 24a
German Statute against Trade Restraints
("Kartellgesetz").
(2) Seller shall assist and join the Buyer in the
notification proceedings and, upon request, shall submit
to the Buyer all information necessary for such purpose.
Buyer shall keep Seller informed on the proceedings.
<PAGE>
(3) Should a prohibition order be issued by the Federal
Cartel Office, the parties shall discuss how to proceed,
it being understood that no party shall be obliged to
agree to appeal jointly against the order. This Agreement
shall be considered void (auflosende Bedingung) in case a
prohibition order is issued and is not appealed against
jointly by Seller and Buyer within the periods prescribed
by law, except for the provision of Section 3 (9) (c),
and no party shall have a claim against the other in such
case.
Waivers
Seller hereby confirms that, subject to the payment by the
Purchaser of the Purchase Price hereunder, neither it nor any
of its Affiliates ("verbundene Unternehmen" within the meaning
of Sections 15 ff of the German Stock Corporation Law) nor any
company or partnership in which it owns or controls (whether
directly or indirectly) 25 % or more of the share capital will
have any further claims of any type against the Company or
members of VCH Group.
Conduct of Business until Transfer of Shares
The Seller shall procure that the business of VCH Group will
be continued in the usual and orderly manner in the period be
tween the signing of this Agreement and the time that the
transfer of the Pallas Shares becomes effective. The Seller
will keep Buyer permanently posted on the business of VCH
Group, and will procure that Buyer representatives have access
to the premises, and will consult with Buyer prior to taking
part in important business decisions including without
limitation the taking on of financial debt.
Confidentiality
The Seller undertakes to keep confidential all business and
operating secrets of VCH Group and not to disclose them to any
third party. Buyer undertakes to keep confidential all
business and operating secrets of VCH Group and not to
disclose them to any third party until the Closing Date. It
will deliver the respective records which it holds to Buyer
promptly after the Closing Date.
Non-Competition Covenant
(1) The Seller undertakes not to compete until December 31,
1998 with VCH Group or its legal successors. The Seller
will therefore neither establish a competitive enterprise
nor participate in a competitive enterprise nor assist
any competitive enterprise in any other form. For the
avoidance of doubt, this covenant does not bind the
general and limited partners of the Seller.
(2) For each case of violation the Seller will, after having
been warned off, pay a contractual penalty of DM 100,000.
In the event of a continued violation the contractual penalty
is owed for each one month period without the
requirement of being warned off again. The right to request
that the Seller ceases and desists, and the right to
request damages remains unaffected.
(3) Restrictions of the right to compete contained in the
Articles of Association of VCH shall not be cancelled or
modified by this provision. For the avoidance of doubt,
this covenant does not bind the general and limited
partners of the Seller.
Public Announcements
Buyer and the Seller will in respect of this agreement not
cause to be made any press announcement without prior thereto
having obtained the consent of the other contracting parties.
The consent may not be unreasonably withheld.
It is known to the Seller that Buyer may be obliged to
publicly announce the subject of this agreement.
Assignment
Neither Buyer nor the Seller are entitled to transfer without
the consent of the other contracting party rights or
obligations arising from out of this Agreement to a third
party (for this purpose, "third party" shall not include
Affiliates of Buyer, provided Buyer guarantees the prompt
performance of all obligations under this Agreement
transferred to the relevant Affiliate).
<PAGE>
Miscellaneous
(1) Any notices and other communications in connection with
this Agreement shall be in writing and shall be delivered
or sent by registered mail, telex or telefax to the
following persons and addresses or such other addresses
as the parties may hereinafter notify to each other:
If to Seller: to the address set out on page 1
with a copy to: the service agent set out below
If to the Buyer: to the address set out on page 1
with one copy to: Mr. Richard Rudick, 605 Third
Avenue, New York, NY 10158-0012
and one copy to: the service agent set out below.
The parties hereby appoint, and undertake to maintain,
the following agents for service of process
(Zustellungsbevollmachtigte) in Germany:
Seller: Herr Rechtsanwalt und Notar Christian
Brodersen, Doser Amereller Noack,
Bethmannstrasse 50 - 54, 60311 Frankfurt
Buyer: Herrn Rechtsanwalt Dr. Klaus-Dieter Stephan,
Bockenheimer Landstrasse 51 - 53, 60325
Frankfurt
(2) The costs and expenses of this Agreement including tax,
legal, financial advisory and brokerage costs and fees
shall be borne by the party commissioning the respective
costs. The notarial costs of this Agreement and the
Federal Cartel Office Fees shall be borne by the Buyer.
Seller guarantees that the Company will not be charged
any brokerage or similar fees in the context of this
transaction.
(3) Exhibits to this Agreement constitute an integral part of
this Agreement.
(4) This Agreement and its Exhibits comprise the Agreement
between the parties concerning the subject of the
Agreement and replace all oral or written declarations of
intention made by the parties in connection with the
contractual negotiations. Changes of and amendments to
this Agreement shall be made in writing.
<PAGE>
(5) This Agreement and any disputes which may arise therefrom
shall be governed by and construed in accordance with the
laws of the Federal Republic of Germany (without giving
effect to its conflict of laws principles) excluding the
laws governing the international sale of goods. Exclusive
jurisdiction shall vest in the courts of Frankfurt am
Main regarding all disputes arising out of this
Agreement.
(6) In the event that one or more provisions of this
Agreement shall be, or shall be deemed to be, invalid or
unenforceable, or if this Agreement is incomplete, the
validity and enforceability of the other provisions of
this Agreement shall not be affected thereby. In such a
case the parties hereto agree hereby on such valid and
enforceable provision or on provisions completing this
Agreement which are commensurate with the commercial
intent of this Agreement.
HMWW/Wiley-GDCh-DPhG-VCH/Purchase and Assignment
Agreement/endg./ST005421/May 6, 1996
Purchase and Assignment Agreement
among
1. Gesellschaft Deutscher Chemiker e.V.
Varrentrappstrasse 40
D-60486 Frankfurt am Main
Federal Republic of Germany
- hereinafter referred to as "GDCh" -
2. Deutsche Pharmazeutische Gesellschaft e.V., registered
in Berlin, c/o Prof. Dr. H.P.T. Ammon, Im Kleeacker 30,
72072 Tubingen
- hereinafter referred to as "DPhG" -
- GDCh and DPhG hereinafter collectively
referred to as the "Sellers" -
on the one side
and
3. John Wiley & Sons, Inc.
605 Third Avenue
New York, N.Y. 10158-0012, USA
an American stock corporation organized and existing
under the laws of the State of New York,
- hereinafter referred to as "Buyer" or "Wiley" -
on the other side
Introduction
(1) Sellers own the following shares in VCH Verlagsgesell
schaft mbH, Weinheim, Germany, registered in the
Commercial Register at the Lower Court Mannheim under
HRB 508W with a stated capital in the nominal amount of
DM 4.687.500,-- (hereinafter: "Company"):
(a) GDCh owns one share in the nominal amount of
DM 1,687,500 (representing 36 % of the share
capital). The share is fully paid in.
(b) DPhG owns
<PAGE>
one share in the nominal amount of DM 137,500
one share in the nominal amount of DM 50,000
DM 187,500
representing 4 % of the share capital.
The shares are fully paid in.
(2) The balance of the share capital of VCH is held as follows:
VCH Publishing Limited Partnership,
c/o United Corporate Services Inc.,
15 East North Street,
Dover, Delaware 19901, USA
an American limited partnership organized and existing
under the laws of the State of Delaware, USA
(hereinafter referred to as "Pallas")
owns
one share in the nominal amount of DM 562,500
one share in the nominal amount of DM 150,000
one share in the nominal amount of DM 62,500
one share in the nominal amount of DM 2,037,500
DM 2,812,500
_ hereinafter referred to as the "Pallas Shares" -
(3) The Company holds shares in various subsidiaries as
listed in Exhibit 1(3) hereto (the Company and its
subsidiaries shall hereinafter be referred to as the "VCH
Group", as set out in Exhibit 1(3)).
<PAGE>
Sale and Transfer
(1) GDCh hereby sells and transfers to Wiley out of its 36 %
participation in VCH, a partial share corresponding to
approx. 27 % of the share capital of VCH. For this
purpose GDCh hereby splits its share in VCH in the
nominal amount of DM 1,687,500 in two partial shares in
the nominal amount of DM 1,265,600 and DM 421,900, and
sells and transfers to Wiley the partial share in the
nominal value of DM 1,265,600 (such share being referred
to hereinafter as the "GDCh Share"). Wiley hereby
purchases the GDCh Share and accepts the transfer.
(2) DPhG hereby sells and transfers to Wiley out of its 4 %
participation in VCH a partial share corresponding to
approx. 3 % of the share capital of VCH. For this purpose
DPhG hereby splits its fully paid in share in VCH in the
nominal amount of DM 50,000 in two partial shares in the
nominal amount of DM 3,100 and DM 46,900, and sells and
transfers to Wiley the partial share in the nominal
amount of DM 3,100 and its fully paid in share in VCH in
the nominal amount of DM 137,500 (such shares being
referred to hereinafter as the "DPhG Shares"). Wiley
hereby purchases the DPhG Shares and accepts the
transfer.
(3) The transfer of the GDCh Share and of the DPhG Shares
shall be subject to the conditions precedent
(aufschiebende Bedingungen) of
(i) clearance by the German Federal Cartel Office as set
forth in Section 7 which shall be notified by either
of the parties to the acting notary by submission of
a photocopy of the clearance letter, or by
submitting adequate evidence for the expiration of
the periods during which a prohibition order could
be issued, and
(ii) payment of the purchase price pursuant to Section 3
(2) and (3) less any deduction on account of the
Purchase Price reduction pursuant to Section 3 (5)
(b) which was notified in writing to the acting
notary as provided in Section 3 (5) (b), and
(iii) the Buyer having entered into an agreement for the
acquisition of the Pallas Shares, as set forth in
para. (4) of this 2; and all conditions precedent
for the sale and transfer of the Pallas Shares
having occurred, except for the condition precedent
of the acquisition of the GDCh and DPhG Shares, and
<PAGE>
(iv) the Buyer having received satisfactory evidence of
the authority to act of the persons acting for GDCh
and DPhG. A written confirmation by the Buyer to the
acting notary that it has received such satisfactory
evidence, or a certified excerpt from the
Vereinsregister together with a certified copy of
the Statutes, evidencing the authority of the
persons signing this Agreement on behalf of GDCh and
DPhG shall constitute full proof of the occurrence
of this condition precedent.
GDCh and DPhG undertake to procure such evidence as
soon as possible.
Buyer shall be entitled to waive the conditions precedent
pursuant to (iii) and (iv) by written statement to the
acting notary.
(4) By separate agreement, Wiley will acquire from Pallas all
of its shares in VCH.
(5) As soon as all conditions precedent for the sale and
transfer of the GDCh Shares and DPhG Shares have
occurred, Sellers and Buyer shall submit a joint
statement to this effect to the acting notary, which
statement shall be kept with the notary's files and shall
constitute full proof of such occurrence (except for
clearance by the Federal Cartel Office, which shall be
evidenced by a photocopy of the clearance letter from the
Federal Cartel Office or adequate evidence for the
expiration of the periods during which a prohibition
order could be issued). The possibility to prove the
occurrence of any of the conditions precedent through
other means shall remain unaffected.
(6) As a result of the acquisition of the GDCh Shares, DPhG
Shares and Pallas Shares by Wiley, the share capital of
VCH of DM 4,687,500 will be held as follows:
Wiley GmbH will hold shares in the nominal amount of
DM 562,500
DM 150,000
DM 62,500
DM 2,037,500
DM 1,265,600
DM 137,500
DM 3,100
DM 4,218,700 (89.99 %)
GDCh will hold one share
in the nominal amount of DM 421,900 (9.0005 %)
<PAGE>
DPhG will hold one share
in the nominal amount of DM 46,900 (1.0005 %)
total share capital: DM 4.687,500
(7) The sale and transfer of the GDCh and DPhG Shares shall
include all rights to profits for the fiscal year
commencing on January 1, 1996 and all retained profits of
earlier years, if any.
(8) GDCh and DPhG hereby waive their right of preemption
pursuant to the Articles of Association of the Company in
relation to the acquisition by Buyer of shares in the
Company from Pallas, as set forth in the paragraph (4) of
this 2.
Purchase Price/Payment/Escrow Account
(1) The aggregate purchase price payable to the Sellers for
the GDCh Shares and the DPhG Shares (including the right
granted to Buyer under the covenant not to compete in
Section 11 hereof) shall be DM 45,700,000 (in words
Deutsche Mark forty-five million seven hundred thousand)
subject to adjustment pursuant to para. (5) below
(hereinafter: "Purchase Price"). The Sellers shall be
responsible for dividing this amount between themselves.
Should for any reason Buyer have to make a payment only
to one of the Sellers, Buyer shall be entitled to proceed
on the assumption that the division shall be
proportionate to the shareholdings sold by GDCh and DPhG.
(2) DM 11,425,000 (in words: Deutsche Mark eleven million
four hundred twenty-five thousand) of the Purchase Price
(less the amount of any Purchase Price reduction under
para. (5) (b)) shall be transferred within five banking
days of the occurrence of the condition precedent
pursuant to Section 2 (3) (iii) (except for Federal
Cartel Office clearance and except for any condition
precedent for the sale and transfer of the Pallas Shares
relating to payments to be made by Buyer to Pallas) and
Section 2 (3) (iv) into the escrow account referred to in
para. (6) below (hereinafter: "Escrow Account") and shall
be released therefrom as provided hereinafter.
<PAGE>
(3) (a) DM 34,122,500 (in words: Deutsche Mark thirty-four
million one hundred twenty-two thousand five hundred)
of the Purchase Price (being the amount set forth in
para. (1) minus the amount paid into the Escrow Account
pursuant to para. (2) minus the amount set forth in
para. (5) (a)), less the amount of any Purchase Price
reduction under para. (5) (b) not yet deducted from
the payment pursuant to para. (2), shall be payable
to the Sellers within five banking days of the
occurrence of the latest of the conditions precedent of
2 (3)(i), (iii) and (iv) (the date of such occurrence
hereinafter: "Closing Date").
Payments shall be made into the following bank
account of Sellers:
Bank: Dresdner Bank AG Frankfurt am Main
Account no.: 4900200
Bank code: 500 800 00
GDCh and DPhG confirm that Buyer is entitled to
make payment into this bank account for both of the
Sellers.
(b) Now payment shall be due under 2 and 3 (a)
prior to Buyer having received satisfactory evidence for
the company having approved of the splitting of
Shares contemplated in 2 (1) and 2 (2).
(4) The Purchase Price shall be subject to interest as
follows:
(a) Any interest on the amount of DM 11,425,000 to be
paid into the Escrow Account shall be for the
account of the Buyer up to and including the day
falling five banking days after the Closing Date,
and shall be released to Buyer as provided in para.
(8) (b).
(b) As from the day falling five banking days after the
Closing Date the Sellers shall be entitled to
interest at the German Federal Bank discount rate
plus 2 % p.a. on the amount standing to the credit
of the Escrow Account from that day on. Should the
accrued interest on the amount standing to the
credit of the Escrow Account exceed the interest
which would have accrued on the basis of the above
interest rate, the excess shall be released to
Buyer. Should the accrued interest on the amount
standing to the credit of the Escrow Account fall
short of the interest which would have accrued on
the basis of the above interest rate, the amount of
the shortfall shall be paid by Buyer to Sellers.
<PAGE>
(c) In case of late payment (Zahlungsverzug), Buyer
shall pay interest at an increased rate, namely the
German Federal Bank discount rate plus 3 % p.a.
(5) The Purchase Price shall be reduced as follows:
(a) The Purchase Price shall be reduced by DM 152,500
(Deutsche Mark one hundred fifty-two thousand five
hundred) on account of any tax liabilities. This
amount has already been taken into consideration as
a deduction in the calculation of the amount payable
under para. (3) above. Buyer shall not have any
further claims, with respect to any taxes payable by
the Company for any period.
(b) The Purchase Price shall be further reduced by
30.5 % of any amount by which the sum of
- bank debt and
- shareholder loans and
- factored receivables as yet unpaid by the debtors
of the Company, in all cases as of April 30, 1996,
exceeds DM 15,000,000 (Deutsche Mark fifteen
million). The amount of the excess shall be
(i) determined by Arthur Andersen & Co. GmbH
Wirtschaftsprufungsgesellschaft, Stuttgart,
acting as arbiter (Schiedsgutachter) for both
parties (the parties to use best efforts to
arrange that such determination is made within
five working days of the date hereof), and
(ii) notified to the acting notary by either of both
parties, and
(iii) deducted from the Purchase Price payments as
provided in paras. (2) and (3) or shall
otherwise be released from the Escrow Account
as provided in para (9) (b).
(6) The Escrow Account shall be a notarial trust account
(Notaranderkonto) opened by the acting notary
(hereinafter: "Escrow Agent"). The Escrow Account will be
operated in accordance with the provisions of the
following paragraphs.
(7) The deposit shall be held by the Escrow Agent in an
interest bearing account with all interest earned thereon
to be treated as part of the deposit.
<PAGE>
(8) On the day falling 5 banking days after the Closing Date:
(a) the Escrow Agent shall release DM 9,140,000
(Deutsche Mark nine million one hundred forty
thousand), less any deduction made pursuant to para.
(2) on account of Purchase Price reduction under
para. (5) (b), from the Escrow Account to Sellers
and shall pay such amount to the Sellers' bank
account shown in para. (3) above;
(b) the Escrow Agent shall release the amount of accrued
interest to Buyer and shall pay such amount to a
bank account notified by Buyer to the Escrow Agent.
(9) The remaining amount of DM 2,285,000 (Deutsche Mark two
million two hundred eighty-five thousand) shall be
administered as follows:
(a) Sellers shall be entitled to require Buyer to
declare a release of money standing to the credit of
the Escrow Account at any time after September 30,
1997, in the amount of the balance standing to the
credit of the Escrow Account at that time, less the
amount of any claim of Buyer against Sellers under
this Agreement (including, without limitation,
claims based on deliberate misconduct relating to
this Agreement but excluding claims based on the
agreements contained in Exhibits 14, $ 15 (1) to
(3) and 16) still existing and notified by Buyer
to Sellers in writing with specifation as to the
basis of the claim, without the statute of
limitation having expired at that time, or at any
time thereafter.
(b) Buyer shall be entitled to require Sellers to
declare a release of money standing to the credit of
the Escrow Account
(i) if Arthur Andersen GmbH & Co. has determined
pursuant to para. (5) (b) that the sum of bank
debt, shareholder loans and factored
receivables of the Company as of April 30, 1996
exceeds DM 15,000,000, in the amount of 30.5 %
of the excess (except if such excess has
already been deducted pursuant to para. (2) or
(3) above);
(ii) if Buyer has any other claims against Sellers
under this Agreement (including, without
limitation, claims based on deliberate
misconduct relating to this Agreement but
excluding claims based on the agreements
contained in Exhibits 14, 15 (1) to (3) and
16) still existing and notified by Buyer to
Sellers in writing with specification as to the
basis of the claim, without the statute of
limitation having expired at that time or any
time thereafter, in the amount of such claims.
<PAGE>
(c) Should the Federal Cartel Office prohibit the
transaction, the Escrow Agent, against adequate
proof of the prohibition order, shall promptly pay
all sums standing to the credit of the Escrow
Account to Buyer, except if the parties jointly
appeal against such order as provided in 7 (3).
(10) Except as provided in para. (8) and para. (9) (c)
the Escrow Agent shall only be entitled to release money
from the Escrow Account if
(i) he has received written confirmation from Buyer and
Sellers that a certain amount is to be released, or
(ii) he has received a copy (Ausfertigung) of a final
court decision requiring Buyer or Sellers, as the
case may be, to release money from the Escrow
Account.
(11) When releasing money, the acting notary shall be entitled
to deduct his fees from the amount standing to the credit
of the Escrow Account from time to time, but not from the
amount released.
(12) In case of late payment (Zahlungsverzug) of Buyer of more
than 3 weeks with the amounts payable under para. (2) or
(3), Sellers shall be entitled to rescind this Agreement
subject to
(i) instructing the Escrow Agent to release all moneys
which may stand to the credit of the Escrow Account
at that time to Buyer, less a fixed sum of DM
200,000 for contract costs to be paid to Sellers,
and
(ii) having given Buyer after expiry of the 3 weeks
adequate written notice of its intention to rescind,
and giving Buyer a grace period of not less than 5
banking days.
Title to Pallas Shares
(1) In view of Pallas having become a shareholder in 1991 as
a result fo acquiring shares from GDCh and DPhG and as a
matter of utmost precaution, GDCh and DPhG waive any
right which they might have to challenge the validity of
such sale and transfer, whether for reason of an alleged
lack of the authority to act or for any other reason.
(2) Sellers undertake to take, upon Buyer's request and at
Buyer's cost, all steps which are useful in order to
secure Buyer's title to the Pallas Shares and GDCh Share
and DPhG Shares. Should Buyer for this purpose require
Sellers to transfer shares in the Company, any and all
liability of Sellers shall be excluded, including without
limitation under 434 German Civil Code.
<PAGE>
Warranties; Remedies
(1) Sellers hereby warrant (section 459 para. 2 German Civil
Code) and guarantee (section 305 German Civil Code) as of
the date hereof, as follows:
(a) Sellers have all necessary authority, and have taken
all steps prescribed by applicable law or their
constitutional documents or otherwise, to enter into
this transaction, and have validly authorised the
persons acting in their names in the context of this
Agreement.
<PAGE>
(b) The stated capital of the Company in the nominal
amount of DM 4,687,500.-- is fully paid in;
contributions in kind have been valued at not more
than market value; no part of the stated capital has
been paid back to any of the shareholders presently
holding the GDCh Share and DPhG Shares or those
shareholders having held the GDCh Share or DPhG
Shares in the past; the GDCh Share and DPhG Shares
represent roughly 30 % of the stated capital of the
Company.
(c) Each of the Sellers owns the shares sold and
transferred by it hereunder, and the Company owns
the shares in the Subsidiaries as shown in Exhibit
1(3); each of the Sellers has the unencumbered right
to transfer to the Buyer title to the shares sold by
it hereunder; there are no liens, encumbrances or
claims of any kind or nature on or against the
shares sold and transferred hereunder or the shares
in any other company of VCH Group; all issued shares
of the Company have been duly and validly issued.
The provisions of parts C and D referred to in 13
para. 2 of the Articles of Association of the
Company have become obsolete, and none of the
shareholders of the Company is bound by these
provisions any longer.
(d) The Company is a corporation duly organised and
validly existing under the laws of the Federal
Republic of Germany and has the power to own its
properties and to carry on its business as it is now
being conducted; there are no joint ventures, silent
partnerships or sub-participations or similar
arrangements, except as shown in Exhibit 5(1)(d).
(e) Sellers have provided Buyer with the consolidated
audited financial statements of VCH Group, signed by
the auditors, for the fiscal years 1993, 1994 and
1995 (the "Financial Statements");
the Financial Statements 1995 present a true and
fair view of the net worth, financial position and
results of the Group;
The Financial Statements 1995 have been prepared in
compliance with German generally accepted accounting
principles, consistently applied, without changing
the valuation principles, unless shown in the notes.
To the best of the Sellers' knowlege all pension
liabilities are reflected as a provision with the
maximum possible amount under section 6a Income Tax
Act.
<PAGE>
(f) All tangible fixed assets (Sachanlagen) and tangible
current assets (Vorrate) of the Company are in a
good condition, normal wear and tear excepted;
except for retentions of title arising in the
ordinary course of business and statutory pledges,
the companies belonging to VCH Group have good title
to all assets reflected in the Financial Statements
1995 or not reflected only for reason of their low
value ("geringwertige Wirtschaftsguter") (except as
disposed in the ordinary course of business since
January 1, 1996); the assets and inventories of the
Company are not encumbered with rights of third
parties, unless shown in the Financial Statements,
and except collateral for bank loans entered into in
the normal course of business.
(g) Neither the Company nor any other company belonging
to VCH Group has granted a guarantee, suretyship
(Burgschaft) or other indebtedness for third
parties' liabilities, except in favour of other
companies of VCH Group in which VCH holds at least
60 % of the shares, and except as reflected in the
1995 Financial Statements, and except for a
declaration of subordination made by the company in
relation to its claims against Verlagsservice
Sudwest GmbH, Waghausel.
(h) To the best of the Sellers' knowledge:
(i) VCH Group does not infringe the intellectual
property rights of third parties; however,
Sellers declare that companies belonging to VCH
Group may in some cases, which are not material
in the aggregate, infringe copyrights of their
authors by electronic media use of works, and
(ii) third parties do not infringe the intellectual
property rights owned by VCH Group except for
isolated and immaterial infringements in
certain parts of the world not including the
U.S.A. and Europe, and
(iii) the companies of VCH Group are not involved in
lawsuits with a value ("Streitwert") in each
case of more than DM 50,000, or relating in
each case to assets with a value of more than
DM 50,000.
(i) To the best of Sellers' knowledge, since
December 31, 1995 the Company has continued to
operate its business in the ordinary course, and no
material adverse change has occurred.
<PAGE>
(j) All of the material agreements of the Company listed
in Exhibit 5(1)(j) are validly existing; none of
such agreements has been terminated, amended or has
expired without having been renewed on equally
favourable terms; the management of the Company is
not aware of the intention of the respective other
parties to such agreements to terminate or not to
renew these agreements on or following April 30,
1996 or in connection with the execution of this
Agreement, except as disclosed in Exhibit 5(1)(j).
(k) Exhibit 5(1)(k) contains a correct general
description of the situation as to unpublished books
of VCH Group, and a complete list of all journals
published but not owned by VCH Group, and a complete
list of all journals published by VCH Group where
the ownership situation is in dispute.
(l) Buyer has been given access to certain information
material, the table of contents of which is attached
as Exhibit 5(1)(l). This material was up-to-date
and not misleading in any material respect.
(m) Pallas became a shareholder of the Company in 1991
by way of acquisition of shares from GDCh and DPhG.
In the context of the 1991 transaction, no warranty
claims were raised by either party against the
other.
(n) On the basis of German generally accepted accounting
principles consistently applied, the losses of VCH
Group in the first four months of 1996 do not exceed
the losses in the first half year of 1995.
(2) To the extent that the representations and warranties
refer to the Sellers' best knowledge, the knowledge of
the following persons shall be attributed to the
respective Seller:
(a) The managing director (Geschaftsfuhrer) of GDCh;
(b) the members of the Prasidium (being the Vorstand
within the meaning of Section 26 German Civil Code)
of GDCh;
(c) the members of the Vorstand (within the meaning of
Section 26 German Civil Code) of DPhG;
(d) The members of the Economic Board (Wirtschafts
beirat) of the Company to the extent they have been
appointed by Sellers or any of them.
<PAGE>
(3) In the event that any representation or warranty
hereunder should turn out to be incorrect in whole or in
part, the Sellers shall pay damages to the Buyer in order
to put it in the position as if the representation or
warranty had been correct, provided that
(i) if the damage relates directly to the GDCh Share or
DPhG Shares (e.g., defect of title), each of the
Sellers shall pay to Buyer the full amount of such
damage relating to the shares sold by it hereunder,
alternatively
(ii) if the damage relates to the Company or any other
company of VCH Group, Sellers shall pay to Buyer
18 % of such damage.
(4) The Buyer shall be estopped from making any claim for
breach of any representation or warranty hereunder to the
extent that such claim is based on circumstances which
are properly disclosed in this Agreement including its
Exhibits.
(5) Buyer is only entitled to assert claims under this
Section 5 if the amounts of such claims against Sellers
exceed in the aggregate DM 100,000 and then only for the
amount exceeding DM 100,000.
(6) All claims for breach of a representation (guarantee as
set forth in para. (1)) or warranty hereunder shall be
limited in the aggregate to an amount of DM 2,285,000
(Deutsche Mark two million two hundred eighty-five
thousand). Buyer shall not have any claims with respect
to any taxes payable by the Company for any period except
as set forth in Section 3 (5) (a).
(7) The aforementioned provisions represent the full and
entire agreement of the parties with regard to any
representations and warranties of the Sellers. Any
further claims by the Buyer for a reduction of the
purchase price, rescission or payment of damages, whether
on the basis of violation of pre-contractual duties of
care, voidability (Anfechtbarkeit) or on any other cause
of action, shall be excluded. Claims based upon
deliberate misconduct ("vorsatzliches Handeln") are not
limited by any of the provisions of this Agreement.
(8) Payments of the Sellers made according to this 5
constitute in the relationship between the Sellers and
Wiley a reduction of the purchase price.
<PAGE>
Statute of Limitations
(1) All claims of the Buyer arising under this Agreement
against the Sellers shall be time-barred on September 30,
1997. For claims based upon deliberate misconduct
("vorsatzliches Handeln"), the statutory limitation
periods shall apply.
(2) The expiry period of any claim of the Buyer shall be
suspended by any written assertion of such claim vis-a-
vis Sellers, provided that the Buyer must commence
judicial proceedings within three months after receipt of
the written assertion by the Sellers (but not before
expiration of the relevant contractual or statutory
expiry period).
Merger Control
(1) Buyer shall without delay notify the German Federal
Cartel Office of this transaction pursuant to Section 24
a German Statute against Trade Restraints
("Kartellgesetz").
(2) Sellers shall assist and join the Buyer in the
notification procedure and, upon request, shall submit to
the Buyer all information necessary for such purpose.
Buyer shall keep Sellers informed on the proceedings.
(3) Should a prohibition order be issued by the Federal
Cartel Office, the parties shall discuss how to proceed it
being understood that no party shall be obliged to agree to
appeal jointly against the order. This Agreement shall be
considered void (auflosende Bedingung) in case a prohibition
order is issued and is not appealed against jointly by
Sellers and Buyer within the periods prescribed by law,
except for the provision of Section 3 (9) (c), and no
party shall have a claim against the other in such case.
<PAGE>
Waivers
Sellers hereby confirm that, subject to the payment by the
Purchaser of the Purchase Price hereunder, neither they nor
any of their Affiliates ("verbundene Unternehmen" within the
meaning of Sections 15 ff the German Stock Corporation Law)
nor any company or partnership in which any of them owns or
controls (whether directly or indirectly) 25 % or more of the
share capital will have any further claims of any type against
the Company or members of VCH Group, except for claims under
the agreements annexed hereto as Exhibits including their pre-
decessor agreements which are currently in force, and except
for the claim for repayment of the shareholder loan granted to
the Company.
Conduct of Business until Transfer of Shares
The Sellers shall reasonably endeavour to procure that the
business of VCH Group will be continued in the usual and
orderly manner in the period between the signing of this
Agreement and the time that the transfer of the GDCh Shares
and DPhG Shares becomes effective. The Sellers will keep Wiley
permanently posted on the business of VCH Group, and will
procure that Wiley representatives have access to the
premises, and will consult with Wiley prior to taking part in
important business decisions including without limitation the
taking on of financial debt.
Confidentiality
The Sellers undertake to keep confidential all business and
operating secrets of VCH Group and not to disclose them to any
third party. Buyer undertakes to keep confidential all
business and operating secrets of VCH Group and not to
disclose them to any third party until the Closing Date.
Non-Competition Covenant
(1) Each of the Sellers undertakes not to compete until
December 31, 1998 with VCH Group or its legal successors.
The Sellers will therefore neither establish a
competitive enterprise nor participate in a competitive
enterprise nor assist any competitive enterprise in any
other form.
The above non-competition undertaking does not apply in
the following cases:
<PAGE>
- for any activities in connection with the journals
"Farbe und Lack", "Fresenius Zeitschrift fur
analytische Chemie", and "Tenside, Surfactants,
Detergents",
- for new book projects or other new publications and
any other projets for which VCH has any kind of
right of first refusal, should VCH decide not to
exercise its option for such new book projects,
other new publications or projects under the terms
of the Cooperation Agreement (Exhibit 15 (3)),
- for any Journals if VCH's rights with respect to
such Journal terminate pursuant to Paragraph 7 of
the general publishing agreement (Exhibit 15 (1));
- for any lectures and proceedings volumes, which
contain material presented at events organized by
GDCh. However, VCH shall be given the opportunity to
publish the works at terms and conditions accepted
by GDCh. VCH shall respond to GDCh's request to
publish such works in a timely manner.
- for the development of on-line chemistry data bases
with FIZ Chemie and FIZ Karlsruhe.
(2) For each case of violation the Sellers will, after having
been warned off, pay a contractual penalty of DM 20,000.
In the event of a continued violation the contractual pen-
alty is owed for each one month period without the re
quirement of being warned off again. The right to request
that the Sellers or any of them cease and desist, and the
right to request damages remains unaffected.
(3) Restrictions of the right to compete contained in the
Articles of Association of VCH shall not be cancelled or
modified by this provision.
Public Announcements
Wiley and the Sellers will in respect of this Agreement not
cause to be made any press announcement without prior thereto
having obtained the consent of the other contracting parties.
The consent may not be unreasonably withheld.
It is known to the Sellers that Wiley may be obliged to
publicly announce the subject of this agreement.
<PAGE>
Assignment
Neither Buyer nor the Sellers are entitled to transfer without
the consent of the other contracting party rights or
obligations arising from out of this Agreement to a third
party (for this purpose, "third party" shall not include
Affiliates of Buyer, provided Buyer guarantees the prompt
performance of all obligations under this Agreement
transferred to the relevant Affiliate).
Profit and Loss Pooling and Control Agreement
(1) Wiley or a company affiliated with Wiley intends to
conclude with VCH a profit and loss pooling and/or
control agreement as set forth in Exhibit 14. The
Sellers in their capacity as shareholders of VCH
undertake to support any shareholder resolution proposed
by Wiley in order to approve a control and profit and
loss pooling agreement substantially in line with Exhibit 14.
(2) The parties agree that Wiley shall not be obliged to
acquire the shares of GDCh and DPhG by way of analogous
application of section 305 Stock Corporation Act, and
Sellers hereby waive any right they may have in this
connection. Wiley accepts such waiver.
(3) Wiley contemplates to convert VCH into a partnership, a
GmbH & Co. KG, in which GDCh and DPhG would either be
limited partners or in which GDCh and DPhG would
participate via a GmbH held by them. The Sellers in their
capacity as shareholders of VCH undertake to support a
shareholder resolution proposed by Wiley GmbH in order to
approve such a conversion, subject to such conversion not
creating a disadvantage for Sellers which is more than
immaterial.
General Publishing Agreement/Individual Publishing
Agreements/Cooperation Agreement
(1) Wiley shall cause VCH to, and GDCh shall, enter into a
General Publishing Agreement as set forth in
Exhibit 15(1). Wiley shall cause VCH to, and DPhG
shall, also discuss and agree, on the basis of the
General Publishing Agreement with GDCh but reasonably
taking into account relevant differences, on a General
Publishing Agreement.
(2) Wiley shall cause VCH to, and GDCh shall, enter into the
Transitional Agreement set forth in Exhibit 15(2).
<PAGE>
(3) Wiley and GDCh shall enter into a Cooperation Agreement
as set forth in Exhibit 15(3).
Articles of Association of VCH
Wiley and the Sellers shall change the Articles of Association
of VCH substantially as shown in Exhibit 16.
Several Liability
(1) GDCh and DPhG shall be liable hereunder severally and not
jointly.
(2) For monetary obligations, GDCh shall bear 9/10
(nine/tenth) and DPhG shall bear 1/10 (one tenth) of the
amount.
Miscellaneous
(1) Any notices and other communications in connection with
this Agreement shall be in writing and shall be delivered
or sent by registered mail, telex or telefax to the
following persons and addresses or such other addresses
as the parties may hereafter notify to each other:
If to Sellers: Gesellschaft Deutsche Chemiker e.V.,
Varrentrappstrasse 40
D-60486 Frankfurt am Main
Federal Republic of Germany
Geschaftsfuhrung
Herrn Prof. Dr. Dr. h.c. H. tom Dieck,
such notice also being valid vis-a-vis
DPhG
with a copy to: Bruckhaus Westrick Stegemann
Dr. Konstantin Mettenheimer, business
address: Taunusanlage 11, 60329
Frankfurt am Main
<PAGE>
If to the Buyer: John Wiley & Sons, Inc., Attn: Richard
Rudick, General Counsel,
605 Third Avenue, New York,
N.Y. 10158-0012
with a copy to: Hengeler Mueller Weitzel Wirtz
Dr. Klaus-Dieter Stephan, business
address: Bockenheimer Landstrasse
51-53, 60325 Frankfurt am Main
(2) DPhG hereby grants GDCh a power-of-attorney to act in the
name of DPhG, and to enter into any agreement and to make
and accept and receive any declarations and to take any
action in the name of DPhG, in the context of this
Agreement and the transactions contemplated herein.
(3) The costs and expenses of this Agreement including tax,
legal, financial advisory and brokerage costs and fees
shall be borne by the party commissioning the respective
costs. The notarial costs and Federal Cartel Fees of this
Agreement shall be borne by the Buyer. Sellers guarantee
that the Company will not be charged any brokerage or
similar fees in the context of this transaction.
(4) Exhibits to this Agreement constitute an integral part of
this Agreement.
(5) This Agreement and its Exhibits comprise the Agreement
between the parties concerning the subject of the
Agreement and replace all oral or written declarations of
intention made by the parties in connection with the
contractual negotiations. Changes of and amendments to
this Agreement shall be made in writing.
(6) This Agreement and any disputes which may arise therefrom
shall be governed by and construed in accordance with the
laws of the Federal Republic of Germany (without giving
effect to its conflict of laws principles) excluding the
laws governing the international sale of goods. Non-
exclusive jurisdiction shall vest in the courts of
Frankfurt am Main regarding all disputes arising out of
this Agreement.
(7) In the event that one or more provisions of this
Agreement shall be, or shall be deemed to be, invalid or
unenforceable, or if this Agreement is incomplete, the
validity and enforceability of the other provisions of
this Agreement shall not be affected thereby. In such a
case the parties hereto agree hereby on such valid and
enforceable provision or on provisions completing this
Agreement which are commensurate with the commercial
intent of this Agreement.
