<PAGE> 1
UNITED STATES
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 1834
DECEMBER 14, 1995 (NOVEMBER 30, 1995)
-------------------------------------
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
MICROS SYSTEMS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
MARYLAND 0-9993 52-1101488
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(STATE OR OTHER JURIS- (COMMISSION FILE (IRS EMPLOYER
DICTION OF INCORPORATION) NUMBER) IDENTIFICATION NO.)
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<TABLE>
<S> <C>
12000 BALTIMORE AVENUE
BELTSVILLE, MARYLAND 20705-1291
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (301) 210-6000
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TOTAL NUMBER OF PAGES OF THIS REPORT:
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
Description of Acquisition. As previously announced on November 30,
1995, a wholly-owned subsidiary of MICROS Systems, Inc. (the subsidiary and
MICROS Systems, Inc. individually and collectively referred to herein as
"MICROS" or the "Company") has purchased Fidelio Software GmbH of Germany
("Fidelio"), the leading information systems provider for the global hotel
industry. MICROS, which had owned 30% of Fidelio, purchased the remaining
70% of stock for approximately $28,800,000, effective December 1, 1995.
The three stockholders from whom MICROS purchased the remaining 70% stock
of Fidelio are: Dietmar Mueller, Dietrich von Boetticher and Keith Gruen.
MICROS was able to fund the cost of the acquisition through a combination
of internally generated cash reserves and a line of credit currently in
effect with NationsBank, N.A. The foregoing description is qualified in
its entirety by reference to the Purchase and Transfer Agreement dated
November 30, 1995, and the Agreement dated May 12, 1993, which are filed
hereto as Exhibit 2.1 and 2.2, respectively.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired. The Company is
unable at the present time to include herein the financial statements required
by Rule 3-05(b) of Regulation S-X under the Securities Act of 1933, as
amended. In accordance with Item 7 of Form 8-K, these Financial Statements
will be filed as soon as practicable but in no event later than February 13,
1996.
(b) Pro Forma Financial Information. The Company is unable
at the present time to include herein the pro forma financial information
required by Article 11 of Regulation S-X. In accordance with Item 7 of Form
8-K, the pro forma financial information will be filed as soon as practicable
but in no event later than February 13, 1996.
(c) Exhibits.
2.1 Purchase and Transfer Agreement dated November 30, 1995.
2.2 Agreement dated May 12, 1993.
99.1 Financial Statements of Acquired Business.*
99.2 Pro Forma Financial Information.*
99.3 Press Release of Registrant dated November 30, 1995.
---------------
*To be filed by amendment on or before February 13, 1996.
<PAGE> 3
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, THE REGISTRANT HAS DULY CAUSED THIS CURRENT REPORT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
MICROS SYSTEMS, INC.
--------------------
(REGISTRANT)
BY: /s/ RONALD J. KOLSON
--------------------------
RONALD J. KOLSON
EXECUTIVE VICE PRESIDENT/
CHIEF OPERATING OFFICER
DATE: DECEMBER 14, 1995
<PAGE> 1
1. Dr. Rainer Magold, attorney-at-law, Bethmannstrasse 50-54, 60311
Frankfurt am Main, according to his own cognisance not acting in his
own name but - as agent without authority of representation
("Vertreter ohne Vertretungsmacht") - on behalf of
1.1 DIETMAR MuLLER-ELMAU, genannt Muller, resident for business
purposes at Arabellastrasse 17, 81925 Munich, F.R.G.;
and
1.2 DIETRICH VON BOETTICHER, resident for business purposes at
Widenmayerstrasse 4, 80538 Munich, F.R.G.;
and
1.3 KEITH GRUEN, resident for business purposes at Arabellastrasse
17, 81925 Munich, F.R.G.;
and
2. DR. WOLFGANG FRITZEMEYER, attorney-at-law, Bethmannstrasse 50-54,
60311 Frankfurt am Main, F.R.G., according to his own cognisance not
acting in his own name but - as agent without authority of
representation ("Vertreter ohne Vertretungsmacht") - on behalf of
2.1 MICROS SYSTEMS HOLDING GmbH, having its corporate offices at
Hoechster Bahnstrasse 2a, 65929 Frankfurt, F.R.G., a
wholly-owned subsidiary of MICROS Systems, Inc., represented
by Bernard Jammet, its Managing Director ("Geschaftsfuhrer");
and
2.2 MICROS SYSTEMS, INC., a company under the laws of the State of
Maryland, having its registered office at 12000 Baltimore
Avenue, Beltsville, MD 20705, U.S.A., represented by A. L.
Giannopoulos, its President and Chief Executive Officer.
<PAGE> 2
The Deponents requested to have the recording of this notarial deed done in the
English language. The Notary is in command of the English language and has
assured himself that the Deponents are also in command of the English language.
After having been informed about their respective rights by the Notary, the
Deponents waived their right to receive a written translation of this deed.
The Notary informed the Deponents that one of the attorneys of Doser Amereller
Noack has advised MICROS Systems Holding GmbH and MICROS Systems, Inc. in
connection with the transactions effected by and referred to in this notarial
deed and that - in view of the fact that the Notary is one of the partners of
Doser Amereller Noack - the Deponents and the parties represented by the
Deponents are entitled to request the notarization of the notarial deed by
another notary. Irrespective of this, the Deponents, also on behalf of the
parties represented by the Deponents, requested that the notarization of this
deed be performed by the Notary.
Thereafter, the Deponents asked for the notarization of the following
PURCHASE AND TRANSFER AGREEMENT
between
1. DIETMAR MULLER, GEN. ELMAU
and
2. DIETRICH VON BOETTICHER
and
3. KEITH GRUEN
(hereinafter collectively referred to as the "Sellers")
as well as
4. MICROS SYSTEMS HOLDING GmbH
(hereinafter referred to as "Buyer")
<PAGE> 3
and
5. MICROS SYSTEMS, INC.
PREAMBLE:
A. FIDELIO SOFTWARE GmbH, a company under the laws of the Federal
Republic of Germany having its corporate offices at Arabellastrasse
17, 81925 Munich (the "Company"), is registered in the Trade Register
of the municipal court at Munich under no. HRB 82753. The Company's
stated capital is DM 200,000.
B. The Sellers and the Buyer are currently holding between them 100% of
the Company's stock as follows:
1. Dietmar Muller: two interests (Geschaftsanteile) in the
aggregate nominal value of DM 77,000 (38.5% of the stated
capital of the Company), of which one is in the nominal value
of DM 55,000 (27.5%) and the other in the nominal value of DM
22,000 (11%);
2. Dietrich von Boetticher: two interests in the aggregate
nominal value of DM 35,000 (17.5 % of the stated capital of
the Company), of which one is in the nominal value of DM
25,000 (12.5%) and the other in the nominal value of DM 10,000
(5%);
3. Keith Gruen: two interests in the aggregate nominal value of
DM 28,000 (14% of the stated capital of the Company), of which
one is in the nominal value of DM 20,000 (10%) and the other
in the nominal value of DM 8,000 (4%);
4. MICROS Systems Holding GmbH: six interests in the aggregate
nominal value of DM 60,000 (30% of the stated capital of the
Company) split as follows:
a. DM16,500 (8,25%);
b. DM16,500 (8,25%);
c. DM 7,500 (3,75%);
d. DM 7,500 (3,75%);
e. DM 6,000 (3,00%); and
f. DM 6,000 (3,00%).
<PAGE> 4
C. The Sellers intend to sell, and the Buyer intends to acquire,
the remaining 70% of the stock in the Company currently
held by the Sellers pursuant to Section 2.2 (b) of that
certain Acqusition Agreement dated 12 May 1993, attached as
Annex I to the notarial deed dated May 12/13, 1993, roll
number S 1096/93 issued by Notar Dr. Graf von Stosch of
Munich (hereafter referred as the "1993 Agreement").
D. The Company has received loans from:
1) Dietmar Muller: DM 1,907,814.56, on which interest has
accrued through November 30, 1995 in the amount of DM
112,469.96;
2) Dietrich von Boetticher, which has been repaid, but on
which interest remains due as of November 30, 1995 in the
amount of DM 25,049.55; and
3) Keith Gruen DM 693,750.75, on which interest has accrued
through November 30, 1995 in the amount DM 40,895.57;
(the "Sellers' Loans")
The parties agree as follows:
1. ASSIGNMENT
1.1 The Sellers agree to sell and assign, and hereby sell and assign, all
of their remaining interests in the Company listed under their
respective names in Section B of the Preamble (hereafter referred as
"Shares") to the Buyer. The assignment shall include all rights
ancillary to such Shares, including all claims to dividends relating
to the ongoing business year 1995 (the "Assignment"). The Buyer
agrees to accept and hereby accepts the Assignment.
1.2 The Assignment shall be made with effect as of December 1, 1995,
12:01 a.m. CET (the "Effective Date").
1.3 In the event that
a. the Purchase Price as per Section 2.1 below; and/or
b. the payments to be made as per Section 4.1 below
<PAGE> 5
should not have been credited to the Sellers' accounts, except for
reasons within the Sellers' control, by December 15, 1995, the
Sellers, and each of them, shall have the right to withdraw from this
Agreement by unilateral written notice to the Buyer and the Shares
shall be deemed reassigned to the Seller concerned upon receipt of
such notice by the Buyer. Upon such reassignment, Seller or Sellers,
as the case may be, shall repay to Buyer any and all monies received
hereunder.
2. PURCHASE PRICE
2.1 In consideration of the Assignment, the Buyer shall pay a purchase
price of DM 41,255,000 (Deutsche Mark forty-one million two hundred
fifty-five thousand) on November 30, 1995 (the "Purchase Price") as
follows:
a. by certified bank check
(i) DM 22,000,000 to Dietmar Muller;
(ii) DM 10,000,000 to Dietrich von Boetticher;
(iii) DM 8,000,000 to Keith Gruen;
b. by bank transfer
(i) DM 690,250 to Dietmar Muller;
(ii) DM 313,750 to Dietrich von Boetticher;
(iii) DM 251,000 to Keith Gruen.
The Buyer and MICROS Systems, Inc. shall jointly and severally be
liable for the payment of the Purchase Price.
2.2 The Purchase Price shall be adjusted as follows:
a. If the November 30 Profits, as defined below, times 70%,
exceed DM 1,255,000, the Purchase Price shall be increased by
an amount equivalent to such excess.
b. If, on the other hand, the November 30 Profits, times 70%,
are lower than DM 1,255,000, the Purchase Price shall be
reduced by an amount equivalent to such shortfall, but in no
event to less than
<PAGE> 6
DM 40,000,000, and each Seller shall jointly and severally be
liable to repay the shortfall to the Buyer.
"November 30 Profits", as used herein, shall mean the distributable
earnings (Ergebnis) generated by the Company (less the cost of the
Allrevision Report, as defined below, and not including the
dividends, if any, that the companies in which the Company is holding
participations could have distributed to the Company) during the
eleven months ending on November 30, 1995, determined under German
law after all taxes, including trade tax (Gewerbesteuer) and
corporate income tax (Korperschaftsteuer).
2.3 The November 30 Profits shall be determined as follows:
a. The parties, each individually, shall cause Allrevision
Allgemeine Revisions- und Beratungsgesellschaft mbH of Munich
("Allrevision") to determine the November 30 Profits and to
prepare a written report setting out and supporting the
November 30 Profits (the "Allrevision Report"), established in
accordance with all applicable German accounting principles
and applying, without limitation, strictly the principle of
consistency, and to submit the Allrevision Report to all
parties hereto as soon as practicable and in no event later
than March 31, 1996. Since the Allrevision Report will be
part of the audit of the annual accounts, the cost of the
Allrevision Report shall be borne by the Company.
b. The Buyer shall be entitled to have the Allrevision Report
audited by Price Waterhouse or another auditing firm of the
Buyer's choice and at the Buyer's expense.
c. In the event that either the Buyer or one or more of the
Sellers give written notice to the respective other party,
within sixty (60) days from receipt of the Allrevision Report,
to the effect that it objects against the Allrevision Report
with substantiated reasons, the November 30 Profits shall be
finally determined - with binding effect on the parties - by
an independent expert (Schiedsgutachter) to whom the
Allrevision Report, the written objections and any other
relevant materials (including the report, if any, prepared by
the auditor retained by Buyer) shall be made available. If
the parties should be unable to agree on such expert within
one month from the date on which one of them submitted an
objection to the respective other party, the expert shall be
nominated by the president of the CPA Chamber
(Wirtschaftspruferkammer) in Munich among the Munich offices
of Arthur Andersen, Coopers &
<PAGE> 7
Lybrand, Deloitte & Touche, Ernst & Young and KPMG. The
payments to be made pursuant to the preceding Section 2.2, if
any, shall be made within thirty (30) days from the day on
which the expert's report shall have been submitted to the
parties. If the expert unequivocally confirms the view of one
party, the respective other party shall bear the fees charged
by the expert; otherwise, the expert shall split the fees
reasonably as the expert sees fit.
d. In the event that neither party gives notice as provided in
subparagraph (c), the November 30 Profits set out in the
Allrevision Report shall be deemed agreed, and the payments to
be made pursuant to the preceding Section 2.2 shall be payable
within seventy-five (75) days from the day on which the
Allrevision Report shall have been submitted to the parties.
3. SELLERS' WARRANTIES AND REPRESENTATIONS
3.1 RESTATEMENT: The Sellers hereby restate and confirm
a. the representations and warranties regarding ownership of the
Shares etc. set out in Section 2.2 (f) (iv) of the 1993
Agreement. Should any of these representations and warranties
not be materially accurate as of the date hereof (the "Option
Closing", as defined in the 1993 Agreement), the Sellers shall
have the rights set out in Article VI of the 1993 Agreement;
b. the restrictive covenant set out in Section 4.2 (b) of the
1993 Agreement. In the event of a violation of the said
restrictive covenant, the Sellers shall have the rights set
out in Section 4.2 (c) of the 1993 Agreement.
3.2 NO FURTHER CLAIMS: The parties agree that neither the Buyer nor any
other company controlled by, controlling or under the same control as
MICROS Systems, Inc, (the "MICROS Group") shall have any right or
claim in respect of the delivery of the Shares and/or the business
and/or financial situation of the Company, including the right to
withdraw from this Agreement and to request the return of the
Purchase Price or to claim damages, over and above the rights
specifically set out in this Agreement and the 1993 Agreement. For
the avoidance of doubt, nothing in this Agreement shall be read to
mean that any representations and warranties provided under the 1993
Agreement which have expired
<PAGE> 8
in the meantime shall be revived and/or to limit the Buyer's rights
in the event of fraud.
4. BUYER'S WARRANTIES AND REPRESENTATIONS
4.1 SELLERS' LOANS: The Sellers' Loans shall be repaid, and all interest
accrued thereon shall be paid, to the Sellers as set out in Section D
of the Preamble, by certified bank check on November 30, 1995.
4.2 HOLD HARMLESS CLAUSE: The Buyer and MICROS Systems, Inc., represent
and warrant that effective as of the date hereof, the Sellers shall
be indemnified and held harmless from any guarantee or other security
of whatever nature, if any, (and that are reflected in the financial
statements of the Company delivered to the Buyer or MICROS Systems,
Inc., prior to the date hereof) that they may have issued in order to
secure liabilities incurred by the Company or any of its
subsidiaries, including in particular guarantees granted to car
leasing companies, BHF Bank, Hypobank and/or Commerzbank.
4.3 SERVICE AGREEMENTS: Dietmar Muller-Elmau and Keith Gruen shall be
released from their duties to provide services to the Company under
their existing Service Agreements (as attached to the 1993 Agreement
as Exhibits M and N) as of the Effective Date, without prejudice to
their claims to compensation and other benefits under such Service
Agreements as provided in the drafts attached to the 1993 Agreement,
but at the current compensation and car level.
4.4 INDEMNIFICATION, WITHDRAWAL: Should any of the foregoing warranties
not be materially accurate as of the date hereof, the Buyer and
MICROS Systems, Inc. jointly and severally shall indemnify the
Sellers with respect to any direct damages that the Sellers incur.
Otherwise, except in the event of fraud with respect to the
representations and warranties set out above on the part of the
Buyer, the Sellers shall not be entitled to claim damages and/or to
withdraw from this Agreement and to request the return of the Shares.
5. GENERAL
<PAGE> 9
To the extent not expressly provided otherwise in this Agreement, the
provisions of Article V (Joint Covenants) and Article VII (Miscellaneous) of
the 1993 Agreement shall apply.
* * *
Finally, the Deponents declared that Fidelio Software GmbH does not own real
property.
The above protocol was read to the Deponents by the Notary, was approved by
them and was personally signed by them and the Notary as follows:
/s/ DIETMAR MuLLER-ELMAU
----------------------------------
DIETMAR MuLLER-ELMAU
/s/ DIETRICH VON BOETTICHER
----------------------------------
DIETRICH VON BOETTICHER
/s/ KEITH GRUEN
----------------------------------
KEITH GRUEN
/s/ MICROS SYSTEMS HOLDING GmbH
----------------------------------
MICROS SYSTEMS HOLDING GmbH
/s/ MICROS SYSTEMS, INC.
----------------------------------
MICROS SYSTEMS, INC.
<PAGE> 1
AnlageI
AGREEMENT made as of the 12th day of May, 1993 by MICROS SYSTEMS, INC.
("Buyer"), a Maryland corporation, and by DIETMAR MUELLER-ELMAU, a citizen of
the Federal Republic of Germany, DIETRICH VON BOETTICHER, a citizen of the
Federal Republic of Germany, and KEITH GRUEN, a citizen of the United States of
America (collectively, the "Shareholders") and by FIDELIO SOFTWARE GmbH (the
"Company"), a Gesellschaft mit beschrankter Haftung organized under the laws of
the Federal Republic of Germany, having its registered office at
Widenmayerstrasse 6/III D-8000 Munchen 22 and being registered in the Register
of Commerce of the municipal court at Munchen under No. HRB 82753. The
Shareholders currently own all the capital stock of the Company. The Company
currently owns shares of the outstanding capital stock of Fidelio Software
Corporation ("Fidelio US"), a Delaware corporation, Fidelio Software France
S.A.R.L. ("Fidelio France"), a limited liability company organized under the
laws of the Republic of France, and Fidelio Software U.K. Limited ("Fidelio
UK"), a private limited company organized under the laws of England
(collectively, the "Principal Subsidiaries").
Buyer currently desires to acquire 15% of the capital stock of the Company.
To accomplish the sale and transfer of capital stock ofthe Company and to set
forth certain other arrangements among the parties, the parties agree as
follows:
ARTICLE I
SALE OF STOCK
1.1 COMPANY STOCK. The aggregate share capital of the Company
amounts to DM 200,000 (DM two hundred thousand) and the shares in the Company
are owned as follows
(i) Dietmar Mueller - Elmau, shares in the nominal amount totaling
DM 110.000;
(ii) Dietrich von Boetticher, shares in the nominal amount totaling
DM 50.000;
(iii) Keith Gruen, shares in the nominal amount totaling DM 40.000
The Shareholders hereby sell and assign to Buyer shares in the Company in the
aggregate nominal amount of DM 30,000 (Deutsche Mark thirty thousand) (the
"Shares"), which shares correspond to 15% of the aggregate share capital of the
Company in the nominal amount of DM 200,000, as follows:
(a) The share of Dietmar Mueller-Elmau as described above under
1.1 (i) is consisting of two partial shares of DM 55.000,-- each, one
of them acquired at the formation of the company; Dietmar Mueller-Elmau
hereby sells and assigns out of this share, acquired at the formation of
the company, a partial share in the nominal amount of DM 16.500,-- to Buyer.
-1-
<PAGE> 2
(b) The share of Dietrich von Boetticher as described above under
1.1 (ii) is consisting of two partial shares of DM 25.000,--
each, one of them acquired at the formation of the company;
Dietrich von Boetticher hereby sells and assigns out of this
share, acquired at the formation of the company, a partial
share in the nominal amount of DM 7.500,-- to Buyer.
(c) The share of Keith Gruen as described above under 1.1 (iii) is
consisting of two partial shares of DM 20.000,-- each, one of
them acquired at the formation of the company; Keith Gruen
hereby sells and assigns out of this share, acquired at the
formation of the company, a partial share in the nominal
amount DM 6.000,-- to Buyer.
Buyer hereby accepts the sale and assignment of the Shares as described above.
Such sale and assignment shall include all rights ancillary to the Shares,
including all claims to dividends relating to the ongoing fiscal year 1993.
The assignment of the Shares shall become effective upon payment of the
consideration by Buyer to the Shareholders in accordance with Section 1.2. The
Company hereby irrevocably gives any consent required for the division,
assignment and sale of the Shares.
1.2 CONSIDERATION. As consideration for the Shares, and the other
agreements of the Shareholders herein, at the Closing, Buyer shall pay to the
Shareholders a total of DM 5,000,000, as follows:
(a) DM 2,750,000 to Dietmar Mueller-Elmau,
(b) DM 1,250,000 to Dietrich von Boetticher,
(c) DM 1,000,000 to Keith Gruen,
1.3 CLOSING DATE. The notarization of this Agreement shall be
deemed the Closing. The date and time of the Closing is called the "Closing
Date."
1.4 DELIVERIES BY BUYER. At the Closing Buyer shall deliver to
each of the Shareholders a bank or certified check drawn on a bank that has
offices for the payment of funds in both the United States of America and
Germany, payable to their respective orders in the amount of the consideration
set forth in Section 1.2, and such other certificates and documents as the
Shareholders, the Company or their counsel may reasonably request.
1.5 DELIVERIES BY SHAREHOLDERS. At the Closing the Shareholders
shall deliver to Buyer evidence that the Articles of Association (Satzung) of
the Company have been amended to read as set forth in Exhibit A. Such
amendment will be filed with the competent Commercial Register.
1.6 OTHER ACTIONS. AT THE CLOSING:
(a) Buyer and the Company shall enter in the Loan
Agreement attached hereto as Exhibit B and Buyer shall make the loan to the
Company provided for therein.
(b) The Company, Buyer, Shareholders and/or the
respective Principal Subsidiaries, as indicated therein, shall enter into the
following agreements:
-2-
<PAGE> 3
(i) Fidelio User License Agreement attached hereto as
Exhibit C,
(ii) License and Support Agreement - F&B attached hereto
as Exhibit D,
(iii) License and Support Agreement - POS attached hereto
as Exhibit E,
(iv) License and Support Agreement - attached hereto as
Exhibit F,
(v) Interoffice License and Support Agreement - Fidelio
France attached as Exhibit G,
(vi) Interoffice License and Support Agreement - Fidelio
UK attached hereto as Exhibit H,
(vii) Interoffice License and Support Agreement - Fidelio
USA attached hereto as Exhibit I,
(viii) Commercial Agency Agreement - Fidelio/Micros attached
hereto as Exhibit J,
(ix) Commercial Agency Agreement - Micros/Fidelio attached
hereto as Exhibit K,
(x) Software Development Cooperation Agreement attached
hereto as Exhibit L,
(xi) Employment Agreement between the Company and Dietmar
Mueller-Elmau attached hereto as Exhibit M,
(xii) Employment Agreement between the Company and Keith
Gruen attached here to as Exhibit N.
(xiii) DSI Agreement between the Company and DSI attached
hereto as Exhibit O.
(xiv) General conditions for Licenses, Supplies and
Services to Dealers attached hereto as Exhibit P.
-3-
<PAGE> 4
ARTICLE II
OPTIONS
2.1 ADDITIONAL SHARES
(a) The Shareholders hereby irrevocably offer to sell
and assign (the "Additional Sale") to Buyer additional shares in the Company in
the aggregate nominal amount of DM 30,000 (Deutsche Mark thirty thousand)
(hereafter collectively referred to as the "Additional Shares"), which shares
correspond to 15% of the aggregate share capital of the Company in the nominal
amount of DM 200,000 as follows:
(i) Dietmar Mueller-Elmau hereby irrevocably offers to
Buyer to sell and assign a share in the nominal
amount of DM 16,500 (DM sixteen thousand five
hundred) out of his remaining share in the nominal
amount of DM 38.500 (DM thirty eight thousand five
hundred). For such purpose the remaining share in
the nominal amount of DM 38.500 (DM thirty eight
thousand five hundred) is divided into a share in
the nominal amount of DM 22.000 (DM twenty two
thousand and a share in the nominal amount of DM
16.500 (DM sixteen thousand five hundred), such
division to become effective simultaneously with
the notarization of the acceptance of the offer to
sell and assign the share in the nominal amount of
DM 16.500 (DM sixteen thousand five hundred) as
described above.
(ii) Dietrich von Boetticher hereby irrevocably offers
to sell and assign a share in the nominal amount
of DM 7.500 (DM seven thousand five hundred) out of
his remaining share in the nominal amount of DM
17.500 (DM seventeen thousand five hundred). For
such purpose the remaining share in the nominal
amount of DM 17.500 (DM seventeen thousand five
hundred) is divided into a share in the nominal
amount of DM 10.000 (DM ten thousand) and a share
in the nominal amount of DM 7.500 (DM seven
thousand five hundred), such division to become
effective simultaneously with the notarization of
the acceptance of the offer to sell and assign the
share in the nominal amount of DM 7.500 (DM seven
thousand five hundred) as described above.
(iii) Keith Gruen hereby irrevocably offers to sell and
assign a share in the nominal amount of DM 6.000
(DM six thousand) out of his remaining share in the
nominal amount of DM 14.000 (DM fourteen
thousand). For such purpose the remaining share
in the amount of DM 14.000 is divided into a share
in the nominal amount of DM 8.000 (DM eight
thousand) and a share in the nominal amount of DM
6.000 (DM six thousand), such division to become
effective simultaneously with the notarization of
the acceptance of the offer to sell and assign a
share in the nominal amount of DM 6.000 (DM six
thousand) as described above.
-4-
<PAGE> 5
The Additional Sale of the Additional Shares shall include all rights ancillary
to the Additional Shares, including all claims to dividends relating to the
fiscal year during which the Additional Sale is closed.
(b) Buyer shall have the right to accept the
Additional Sale at any time not later than the earlier of (i) December 31,
1996, or (ii) 90 days after Buyer is furnished with audited consolidated
financial statements of the Company, and its subsidiaries for the immediately
preceding fiscal year, prepared in accordance with German generally accepted
accounting principles, consistently applied, showing net earnings before taxes
exceeding DM 3,300,000 together with a written representation and warranty of
the Shareholders that, to the best of the Shareholders' knowledge, no material
adverse changes affecting the business of the Company on a consolidated basis
have occurred and the business of the Company has been conducted only in the
ordinary course since the end of such fiscal year. The acceptance of the
Additional Sale by Buyer shall be notarized by a German Notar (the "Additional
Closing"). Such acceptance shall be deemed to have been effected in time if it
has been notarized within the period provided for in the first sentence of this
Section 2.1(b). Such acceptance shall become effective at the time of such
notarization. In case a pre-merger notification to the Federal Cartel Office
pursuant to Section 24 a para. 1 sentence 2 German Code on Competition
Restraints ("GWB") is required, the sale and assignment shall not become
effective until the earlier of (i) the expiration of the Federal Cartel
Office's period for review pursuant to Section 24 a para. 2 GWB or (ii) receipt
by the parties of written notice from the Federal Cartel Office that the
Additional Sale will not be prohibited. If such notification is required, the
parties shall cooperate in making such filings with the Federal Cartel Office
as may be required.
(c) Upon the effectiveness of the acceptance of the
Additional Sale by Buyer (the "Effective Date"), the Additional Shares are
deemed to have been sold and assigned to Buyer subject to the following terms
and conditions:
(i) Buyer shall pay a purchase price of DM 5,000,000, payable by
bank or certified checks upon such effectiveness as follows:
- Dietmar Mueller-Elmau: DM 2,750,000
- Dietrich von Boetticher: DM 1,250,000
- Keith Gruen: DM 1,000,000
------------
Total DM 5,000,000
(ii) The assignment of the Additional Shares shall become effective
upon payment of the purchase price by Buyer to the
Shareholders in accordance with Section 2.1 (c)
(i) and shall include all rights ancillary to the Additional
Shares, including all claims to dividends relating to the
fiscal year during which the Additional Sale is closed.
(iii) Each Shareholder, on his own behalf and without assuming the
joint and several liability on behalf of the other
Shareholders, represents and warrants to the Buyer, that to
the best of his knowledge, effective as of and at the
Effective Date
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<PAGE> 6
- the Shareholders are the owners of the Additional
Shares and are entitled to sell and assign to
Buyer the full legal and beneficial ownership of
such shares, such shares are not encumbered with
any rights or claims of any third parties, such
shares are not subject to receivership,
executorship or any restrictions under family or
probate law, and the transfer of such shares is not
subject to the approval of any third party;
- the Additional Shares do not constitute all or
substantially all of the assets of any of the
Shareholders;
- the consolidated financial statements of the
Company and its subsidiaries for the fiscal year
immediately preceding the Additional Closing have
been prepared in accordance with German generally
accepted accounting principles, consistently
applied; in particular, all pension obligations are
set out in these financial statements, regardless
of whether they concern non-vested or vested
pension rights or merely voluntary arrangements,
with their partial values (Teilwerte) determined by
actuarial mathematical methods; and
- no material adverse changes affecting the
business of the Company have occurred and the
business of the Company has been conducted only
in the ordinary course since the end of such
fiscal year.
(iv) Should any of these warranties and representations be
incorrect, in whole or in part, and as a result thereof Buyer
should sustain damages, each Shareholder shall indemnify and
hold Buyer harmless as set forth in Article VI.
(d) The Company hereby irrevocably gives its consent
to the Additional Sale provided for in this Section 2.1.
2.2 Option Shares
(a) The Shareholders hereby irrevocably grant to the
Buyer the right to acquire all or part of the remaining shares in the Company
(hereafter collectively referred to as the "Option Shares") provided that (i)
the Additional Closing of the Additional Sale has occurred on or before the
Option Share Closing, and (ii) the Option Shares with respect to which the
Buyer exercises its right constitute, in the aggregate, not less than 21% of
the aggregate share capital of the Company.
(b) Buyer shall exercise its right to acquire the
Option Shares by giving notice in writing to the Shareholders, on or before
December 31, 1999, specifying the percentage interest in the Company which
shall be sold to Buyer.
(c) The Shareholders retain the right to sell all or
any portion of the Option Shares to any third party, provided that any such
proposed sale shall be subject to the right of first refusal granted to Buyer
in Section 2.4 and to the right of first refusal granted to Buyer in Section
2.4 and to the right of first refusal granted to each shareholder in the
Company's Articles of Association (Satzung).
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<PAGE> 7
(d) Once the Buyer has exercised its right under
Section 2.2 (a) to acquire the Option Shares with respect to a portion of the
Option Shares only, such right shall expire with regard to the remaining Option
Shares, without prejudice to the Buyer's right to acquire further shares in the
Company pursuant to the rights of first refusal granted in the Company's
Articles of Association and in Section 2.4 hereof.
(e) If Buyer exercises its right pursuant to this
Section 2.2, the Shareholders and Buyer shall have the sale and assignment of
the Option Shares to be acquired by Buyer notarized by a German Notar (the
"Option Closing") not later than 90 days after the receipt of the notice by
shareholders pursuant to Section 2.2 (b) hereof. In case a premerger
notification to the Federal Cartel Office pursuant to Section 24 a para. 1
sentence 2 German Code on Competition Restraints ("GWB") is required, the sale
and assignment shall not become effective until the earlier of (i) the
expiration of the Federal cartel Office's period for review pursuant to Section
24 a para. 2 GWB or (ii) receipt by the parties of written notice from the
Federal Cartel Office that the assignment of the Option Shares will not be
prohibited (the "Option Effective Date"). If notification to the Federal
Cartel Office is required, the parties shall cooperate in making such filings
with the Federal Cartel Office as may be required. In case the merger is
prohibited by the Federal Cartel Office, the sale and the assignment of the
Option Shares shall be deemed to have not been concluded.
(f) Upon the effectiveness of the sale and the
assignment of the Option Shares to be acquired by Buyer, such shares are deemed
to have been sold and assigned to Buyer subject to the following terms and
conditions:
(i) Buyer shall pay a purchase price for the Option Shares
acquired by Buyer in an amount equal to
- the average consolidated annual net earnings before
taxes of the Company and its subsidiaries (which shall
not include the Principal Subsidiaries) during the
last three fiscal years immediately preceding the
fiscal year in which the Buyer exercises its right
to acquire the Option Shares, as reflected on the
audited consolidated financial statements of the
Company and its subsidiaries for such years,
prepared in accordance with German generally
accepted accounting principles consistently
applied,
- multiplied by eleven,
- multiplied by the percentage interest which the Option
Shares acquired by Buyer represent in relation to the
aggregate share capital of the Company.
For example, if in 1997 Buyer exercises its right to
acquire Option Shares, representing a 30% interest in the
aggregate share capital of the Company,and if the average
consolidated annual net earnings before taxes of the Company
and its subsidiaries during the fiscal years 1994, 1995 and
1996 were DM 10 million, the purchase price payable by Buyer
would be 11 x DM 10,000,000 = DM 110,000,000 x 30% = DM
33,000,000.
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<PAGE> 8
Notwithstanding the foregoing, the minimum purchase price for
the Option Shares acquired by the Buyer shall be
- DM 30,000,000 for a 21% interest in the aggregate share
capital of the Company,
- DM 204,081 for each additional percentage point of
interest in the aggregate share capital of the Company
and
- DM 40,000,000 for a 70% interest in the aggregate share
capital of the Company.
(ii) The purchase price shall be paid by Buyer at the Option
Closing, or, in case pre-merger notification is required, 30
days after the Option Effective Date by bank or certified
checks to be delivered to Dietmar Mueller-Elmau.
(iii) The assignment of the Option Shares acquired by Buyer shall
include all rights ancillary to such Option shares, including
all claims to dividends relating to the fiscal year of the
Option Closing and subsequent years.
(iv) Each Shareholder, on his own behalf and without assuming the
joint and several liability on behalf of the other
Shareholders, represents and warrants to the Buyer that, to the
best of his knowledge, effective as of and at the Option
Closing, and, if applicable, the Option Effective Date,
- the Shareholders are the owners of the Option Shares
acquired by Buyer and are entitled to sell and assign to
Buyer the full legal and beneficial ownership of such
shares, such shares are not encumbered with any rights or
claims of any third parties, such shares are not subject
to receivership, executorship or any restrictions under
family or probate law, and the transfer of such shares is
not subject to the approval of any third party;
- the Option Shares acquired by Buyer do not constitute
all or substantially all of the assets of any of the
Shareholders;
- the consolidated financial statements of the Company
and its subsidiaries for the last three fiscal years
immediately preceding the fiscal year in which the
Buyer exercises its right to acquire the Option Shares
have been prepared in accordance with German generally
accepted accounting principles, consistently applied; in
particular, all pension obligations are set out in these
financial statements, regardless of whether they concern
non-vested or vested pension rights or merely voluntary
arrangements, with their partial values (Teilwerte)
determined by actuarial mathematical methods; and
- no material adverse changes affecting the business of the
Company have occurred and the business of the Company
has been conducted only in the ordinary course since the
last fiscal year immediately preceding the fiscal year in
which the Buyer exercises its right to acquire the Option
Shares.
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<PAGE> 9
(v) Should any of the warranties and representations be incorrect,
in whole or in part, the Shareholders shall indemnify and
hold Buyer harmless as set forth in Article VI.
(g) The Company hereby irrevocably gives its consent
to the division, if any, sale and assignment of the Option Shares acquired
by the Buyer under this Section 2.2.
2.3 RESALE. If the Buyer does not exercise its right to acquire
the Additional Shares in accordance with Section 2.1, Buyer hereby offers to
assign the Shares back to the Shareholders together with all shares in the
Principal Subsidiaries which Buyer has acquired pursuant to the Subsidiary
Agreement (defined in Section 7.7). The Shareholders shall have the right to
accept this offer by jointly giving notice to Buyer within ninety days from the
expiry of the deadline act out in Section 2.1 (b); provided that the
Shareholders shall first have caused the Company to pay to the Buyer principal
and interest as provided for in Section 2.2 (c) of the loan Agreement between
the Buyer and the Company of even date hereof. In consideration of the
assignment of the Shares back to the Shareholders, as well as the shares in the
Principal Subsidiaries, the Shareholders jointly and severally agree to pay to
Buyer an amount equal to the initial purchase price for the Shares plus the
purchase price for the shares in the Principal Subsidiaries in cash upon
notarization of the assignment of the Shares back to the Shareholders.
2.4 BUYER'S RIGHT OF FIRST REFUSAL.
(a) No Shareholder shall sell, pledge or otherwise transfer,
encumber or dispose of any of his interest in the share capital of the Company
except as expressly permitted by this Agreement.
(b) If a Shareholder desires to sell all or any part of his Option
Shares to any third party other than a Shareholder, Buyer shall have a right of
first refusal with respect to such Shares as follows:
(i) The Shareholder (the "Seller") desiring to sell
all or part of his Option Shares (the "Offered
Shares") shall give notice thereof to Buyer as provided
in Section 7.6 hereof. Such notice shall be accompanied
by a certified copy of the proposed contract of sale,
setting forth in detail all terms and conditions of the
transaction and identifying the purchaser of the
offered Shares.
(ii) If Buyer desires to exercise the right of first
refusal granted by this Section 2.4 with respect
to the Offered Shares, Buyer shall give notice to the
Seller as provided in Section 7.6 hereof and to all
other Shareholders within 30 days from the receipt of
the notice from the Seller.
(iii) The right of first refusal may be exercised by
Buyer only with respect to all of the Offered
Shares.
(iv) Within 60 days after the expiration of the notice
period set forth in paragraph (b) (ii) above, Buyer
and the Seller shall notarize the sale of the Offered
Shares on the terms and conditions as set forth in
the notice for sale of the Seller inaccordance with
paragraph (b)(i) above, except that the price to
be paid by Buyer for the Offered Shares shall be the
lower of
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<PAGE> 10
the price as set forth in the proposed contract of
sale or a price determined as set forth in Section
2.2(f)(i).
(v) If Buyer does not exercise the right of first
refusal with respect to the Offered Shares, the
Seller shall be free within 30 days after the
expiration of the notice period set forth in paragraph
(b)(ii) above, to notarize the sale on the terms and
conditions and to the purchaser, set forth in the
notice for sale given in accordance with paragraph
(b)(i) above.
2.4(c) Among the parties hereto, the right of first refusal in this
Section 2.4 takes precedence over any right of first refusal in the Articles of
Association, and the parties agree to act among themselves in a manner that
will effectuate the right of first refusal in this Section 2.4.
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<PAGE> 11
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDERS AND COMPANY
A. JOINT REPRESENTATIONS
The Shareholders and the Company, jointly and severally, represent and
warrant to Buyer as follows:
3.1 COMPANY CORPORATE ORGANIZATION, POWER, ETC. The Company is a
Gesellschaft mit beschrankter Haftung, duly organized and validly existing
under the laws of the Federal Republic of Germany, and has the corporate power
and authority and all necessary licenses, permits and authorizations to carry
on its business as now being conducted and to own and operate the properties
and assets now owned and being operated by it. The Articles of Association
(Satzung) of the Company as in effect on the date hereof are attached hereto as
Exhibit A. No proceeding for the amendment of the Articles of Association
(Satzung) of the Company has been taken or is pending except as contemplated
herein. No proceeding for the merger, consolidation, sale of assets and
business or dissolution of the Company has been taken or is pending.
3.2 COMPANY CAPITALIZATION; STOCK OWNERSHIP. (a) The aggregate
share capital of the Company amounts to DM 200,000 and the shares in the
Company are owned as follows:
(i) Dietmar Mueller-Elmau
shares in the nominal amount totaling DM 110.000
(ii) Dietrich von Boetticher
shares in the nominal amount totaling DM 50.000
(iii) Keith Gruen
shares in the nominal amount totaling DM 40.000
----------------
Total DM 200.000
All of such shares are fully paid and non-assessable. None of the Company and
the Shareholders is a party to or bound by any contract, agreement or
arrangement (other than this Agreement) to issue, sell or otherwise dispose of
or to redeem, purchase or otherwise acquire any shares or any other security of
the Company or any other security exercisable or exchangeable for or
convertible into any shares or any other security of the Company, and, except
for this Agreement, there is no outstanding option, warrant or other right to
subscribe for or purchase, or contract, agreement or arrangement with respect
to any shares or any other security of the Company or any other security
exercisable or convertible into any shares or any other security of the
Company.
(b) The Shareholders are entitled to sell and
assign to Buyer the full legal and beneficial ownership of the Shares. The
Shares are not encumbered with any rights or claims of any third parties. The
shares are not subject to receivership, executorship or any restrictions under
family or probate law, and the transfer of the Shares is not subject to the
approval of any third party. The Shares do not constitute all or substantially
all of the assets of any of the Shareholders.
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<PAGE> 12
3.3 SUBSIDIARIES AND OTHER EQUITY INVESTMENTS. (a)
Except as set forth in Schedule 3.3, the Company does not own, directly or
indirectly (through any subsidiaries), beneficially or of record, any shares of
capital stock of any corporation or any equity investment in any partnership,
association or other business organization. The entities listed on Schedule
3.3 are referred to as the "Subsidiaries."
(b) No extraordinary financial payments to the
Company from any of the Subsidiaries have been made since January 1, 1993,
other than in the ordinary course of business.
3.4 Corporate Matters. (a) The written documentation
furnished to buyer correctly and completely sets forth the following:
(i) Each jurisdiction in which the
Company has qualified to do business as a foreign enterprise and the name and
address of its statutory or registered agent and statutory or registered office
in each jurisdiction and in its jurisdiction of incorporation or organization.
(ii) The names of the Company's managing
directors (Geschaftsfuhrer) and any person holding general or special power of
attorney for the Company.
(b) The minute books and other corporate records
of the Company are complete and correct and reflect all transactions required
to be reflected therein. Complete and correct copies of such minute books and
records, and of all the charter documents and bylaws, as amended to date, of
the Company have been furnished to Buyer.
(c) There are no partnership interests or other
participating interests which would grant to any person a right to a share in
the profits or in the assets of the Company or a vote in the Company's affairs.
The silent partnership agreement with Dietrich von Boetticher has been
terminated effective as of December 31, 1992 in accordance with the Agreement
attached hereto as Exhibit SP.
(d) No resolutions authorizing the payment of
dividends have been adopted by the Company's shareholders and no dividends have
been distributed since January 1, 1993.
(e) No financial payments have been made to the
Shareholders since January 1, 1993, in the form of salary, bonus, personal
expense reimbursement, or in any other form, and the Shareholders are not
entitled to any such payments, other than in the ordinary course of business.
(f) The Shareholders have not been informed by
any German tax authority as to constructive dividends having been paid by the
Company.
3.5 NO VIOLATION. As of the Closing Date, neither the
execution, delivery and performance of this Agreement nor the consummation of
any of the transactions contemplated hereby nor, after such consummation, the
continued operation of the business of the Company and the Principal
Subsidiaries:
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<PAGE> 13
(a) will violate or conflict with the Articles of
Association of the Company, the certificate of incorporation and bylaws of
Fidelio US, the "status" of Fidelio France or the memorandum of association and
articles of association of Fidelio UK, or the organizational documents of any
of the other Subsidiaries,
(b) will conflict with or result in any breach of
or default under any provision of any contract, agreement or investment
instrument of any kind to which any of the Company or the Subsidiaries is a
party or by which any of the Company or the Subsidiaries is bound or to which
any property or asset of any of them is subject,
(c) will cause any acceleration of, or give any
person any right to accelerate, the maturity of any instrument or other
obligation to which any of the Company or the Subsidiaries is a party or by
which any of the Company or the Subsidiaries is bound or with respect to which
any of the Company or the Subsidiaries is an obligor or guarantor, or
(d) will result in the creation or imposition of
any lien, claim, charge, restriction, equity or encumbrance of any kind
whatsoever upon or give to any other person any interest or right (including
any right of termination or cancellation) in or with respect to any of the
properties, assets, business, agreements or contracts of any of the
Subsidiaries.
(3.6) FINANCIAL STATEMENTS. (a) The Company has furnished
to Buyer copies of the consolidated and consolidating balance sheets of the
Company and its subsidiaries as at December 31, 1992, and the related
statements of income and retained earnings for the twelve-month period then
ended.
(b) Such consolidated balance sheet presents
fairly and accurately the consolidated financial position of the Company and
its subsidiaries as at the date thereof, and the related statements of income
and retained earnings present fairly and accurately the consolidated results of
the operations of the Company and its subsidiaries for the period then ended in
conformity with generally accepted accounting principles in effect in Germany
applied on a consistent basis; in particular, all pension obligations are set
out in these financial statements regardless of whether they concern non-vested
or vested pension rights or merely voluntary arrangements with their partial
values (Teilwerte) determined by actuarial mathematical methods.
(c) No uncollectible accounts receivable are
reflected on said balance sheets without provision for an adequate reserve
therefor. All payments and obligations made or performed or to be made or
performed under the silent partner agreement or in connection with the
termination thereof are reflected on said balance sheets. As at December 31,
1992, there was no liability or contingency of any nature that was not fully
reflected or provided for on the balance sheets referred to in Section 3.6(a).
3.7 NO UNDISCLOSED LIABILITIES, ETC. Except for the
transactions contemplated by this Agreement:
(a) Since December 31, 1992, neither the Company
nor any of the Subsidiaries has incurred any material liability or obligation
(absolute, accrued, contingent or otherwise) of any nature, other than
liabilities and obligations incurred in the ordinary course of business; and
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<PAGE> 14
(b) Since December 31, 1992, neither the Company
nor any of the Subsidiaries has acquired any accounts receivable that are known
to be or are believed to be uncollectible, and the frequency and amounts of
payments received by the Company or any of the Subsidiaries, as the case may
be, with respect to accounts receivable reflected on the balance sheets as at
December 31, 1992, do not, in retrospect, render inadequate the respective
reserves for uncollectible accounts receivable set forth on such balance
sheets.
3.8 PROPERTIES AND ASSETS. (a) Shareholders and Company
have made available to Buyer the following,
(i) a description of each lease of real
property (and any amendment thereto) to which the Company or any of the
Subsidiaries is a party (whether as lessor or lessee or otherwise) (it being
understood that the Company owns no real property other than a commercial
building owned by Fidelio Thailand in respect of which Shareholders have no
knowledge of any environmental or other liabilities), each such lease being in
full force and effect;
(ii) a description of each item of
personal property owned by the Company or any of the Subsidiaries which has a
book value (before allowance for depreciation or amortization) in excess of DM
100,000;
(iii) a description of each lease of
personal property (and any amendment thereto) to which the Company is a party
(whether as lessor or lessee or otherwise) with a monthly rent in excess of DM
100,000.
(b) Each of the Company and the Subsidiaries has
good and marketable title to all of its properties and assets, including,
without limitation, (i) all those used in its business, and (ii) those
reflected in the balance sheets as at December 31, 1992 (except as sold or
otherwise disposed of in the ordinary course of business) subject to no
mortgage, pledge, conditional sales contract, lien, security interest, right of
possession in favor of any third party, claim or other encumbrance other than
in the ordinary course of business. Subsequent to December 31, 1992, neither
the Company nor any of the Subsidiaries has sold or disposed of any of its
properties or assets or obligated itself to do so except in the ordinary course
of business. The respective facilities, machinery, furniture, office and other
equipment of the Company and the Subsidiaries that are used in their business
are in good operating condition and repair, subject only to the ordinary wear
and tear of business, and neither the Company nor the Subsidiaries, nor any
property or asset owned or leased by the Company or any of the Subsidiaries, is
in violation of any applicable ordinance, regulation or building, zoning,
environmental or other law in respect thereof.
3.9 TAX RETURNS AND RELATED MATTERS. All tax and
information documents and returns required to have been filed by the Company or
any of the Subsidiaries prior to the date of this Agreement have been duly
filed, and each such return reflects, based on past practice consistently
applied, the income, franchise or other tax liability and all other information
required to be reported thereon, and all income, franchise employment, and
other taxes shown as due on such returns have been paid. There is no question
known to any of the Company or the Shareholders relating to any such return
that, if determined adversely, would result in the assertion of any deficiency
for any tax or interest or penalties in connection therewith. None of the
Company or the Subsidiaries has (i) agreed to any extension of the statute of
limitations applicable to the assessment or collection of any taxes, nor (ii)
since December 31, 1992, incurred any tax liability as a result of any
transaction not in the ordinary course of business.
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<PAGE> 15
3.10 CONTRACTS. The Shareholders will make available to
Buyer all intercompany and other contracts entered into by any of the Company
or the Principal Subsidiaries with any of the other of them.
In addition, at any time in the future, at the convenience of
the Buyer, presumably when Buyer is in the respective country, the Shareholders
and the Company will afford Buyer access to intercompany contracts and leases
of personal or real property on file at any other subsidiary.
3.11 LITIGATION. Except as set forth in Schedule 3.11,
there is no action, suit, proceeding or investigation, either at law or in
equity or in arbitration, or before any commission or other administrative
authority in any jurisdiction, of any kind now pending or threatened, or, to
the best knowledge of the Company and the Shareholders, contemplated involving
the Company or any of the properties or assets of the Company. None of the
Company or the Subsidiaries or any of their respective properties or assets is
subject to any judicial or administrative judgment, order, decree or restraint.
3.12 INTELLECTUAL PROPERTY.
Schedule 3.12 contains a list of the important
trademarks, trade names, service marks, trade secrets and other proprietary
rights necessary to conduct its business and operations, and, to their best
knowledge, none of the company and the Subsidiaries has infringed any
copyright, patent, trademark, trade name, service mark, trade secret, or other
proprietary right of any other person. None of the Company and the
Shareholders knows of any potential claim of infringement of any copyright,
patent, trademark, trade name, service mark, trade secret or other proprietary
right that has not been asserted but that, if asserted, would materially
adversely affect the Company's or any Subsidiary's financial condition,
business or operations.
3.13 BUSINESS. (a) All properties and operations of the
Company and each of the Subsidiaries are insured for its benefit, in amounts
deemed adequate by its board of directors or management, against all risks
usually insured against by persons conducting similar operations in the
localities where such operations are conducted under valid and enforceable
policies issued by insurers of recognized responsibility.
(b) All transactions of the Company and the
Subsidiaries with outside business concerns are conducted on an arm's-length
basis. None of the directors, officers, stockholders or employees of the
Company or the Subsidiaries has any direct or indirect ownership, profit
participation or other interest in outside business enterprises with which the
Company or any of the Subsidiaries has had material purchases or sales or with
which it otherwise conducts business other than in the ordinary course of
business and in an arm's length manner.
3.14 NO BROKER. No one acting pursuant to the
Shareholders' or the Company's authority is entitled to any commission or fee
as a finder or broker in connection with the transactions contemplated by this
Agreement.
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<PAGE> 16
B. INDIVIDUAL SHAREHOLDER REPRESENTATIONS
Each Shareholder on his own behalf and without assuming the joint and
several liability on behalf of the other Shareholders represents and warrants
to the Buyer as follows:
3.1B ABSENCE OF CERTAIN CHANGES. Since December 31, 1992, neither
the Company nor any of the Subsidiaries has:
(a) had any change in its condition (financial or
otherwise), operations (present or prospective), business (present or
prospective), properties, assets, or liabilities other than changes in the
ordinary course of business which individually and in the aggregate have not
been materially adverse;
(b) suffered any damage, destruction or loss of physical
property (whether or not covered by insurance) affecting its condition
(financial or otherwise) or operations (present or prospective) other than
damage, destruction or loss incurred in the ordinary course of business which
individually and in the aggregate have not been materially adverse;
(c) issued, sold or otherwise disposed of, or agreed to
issue, sell or otherwise dispose of, any capital stock or any other security of
the Company or any of the Subsidiaries, as the case may be, or granted or
agreed to grant any option, warrant or other right to subscribe for or to
purchase any capital stock or any other security of the Company or any of the
Subsidiaries;
(d) incurred or agreed to incur any indebtedness for
borrowed money, other than in the ordinary course of business;
(e) paid or obligated itself to pay for fixed assets or
in connection with any other transaction other than in the ordinary course of
business.
(f) suffered any material loss or waived any substantial
right other than in the ordinary course of business;
(g) sold, transferred or otherwise disposed of, or agreed
to sell, transfer or otherwise dispose of, any assets or canceled, or agreed to
cancel, any material amount of assets, other than in the ordinary course of
business;
(h) mortgaged, pledged or subjected to any charge, lien,
claim or encumbrance, or agreed to mortgage, pledge or subject to any charge,
lien, claim or encumbrance, any of its properties or assets, other than in the
ordinary course of business, which mortgages, pledges or encumbrances
individually and in the aggregate have not been materially adverse;
(i) declared, set aside or paid any dividend (whether in
cash, property or stock) with respect to any of its capital stock or redeemed,
purchased or otherwise acquired, or agreed to redeem, purchase or otherwise
acquire, any of its capital stock;
(j) increased, or agreed to increase, the compensation or
bonuses or special compensation of any kind of its managing directors
(Geschaftsfuhrer), officers, employees or agents over the rate being paid to
them on December 31, 1992, (except for increases in respect of Dietmar
Mueller-Elmau and Keith Gruen to DM 18,000 per month) other than usual merit
and/or cost of living increases pursuant to customary arrangements consistently
followed, or adopted or
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<PAGE> 17
increased any benefit under any insurance, pension or other employee benefit
plan, payment or arrangement made to, for or with any such officer, employee or
agent;
(k) made or permitted any material amendment or
termination of any material contract, agreement or license to which it is a
party other than in the ordinary course of business;
(l) had any resignation or termination of employment of
any of its key officers or employees (other than Ralf Tuerk) or knows of any
impending or threatened resignation or resignations or termination or
terminations of employment that would have a material adverse effect on its
operations (present or prospective) or business (present or prospective);
(m) had any labor trouble or knows of any impending or
threatened labor trouble;
(n) made any change in its accounting methods or
practices with respect to its condition, operations, business, properties,
assets or liabilities;
(o) entered into any transaction not in the ordinary
course of business;
(p) suffered the loss of any client that accounts for
more than 10% of annual revenues ("major client") or received any notice or
advice that any major client of the Company or any Subsidiary intends to cease
to be a major client of the Company or any Subsidiary or intends to decrease
substantially the amount of its business with the Company or any Subsidiary for
any reason whatsoever including consummation of the transactions described
herein.
(q) received any notice or advice that any major client,
or any customer of any major client, is insolvent or is, or anticipates
becoming, insolvent, has made or contemplates making an assignment for the
benefit or creditors or has had appointed or sought the appointment of, a
custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) for itself or any substantial part of its property or
otherwise any steps have been taken for the winding up or liquidation of its
affairs.
3.2B COMPLIANCE WITH LAWS. To the best of the knowledge of the
Shareholders, (i) the Company has obtained all consents, authorizations and
approvals or absences of disapprovals under all statues, laws, ordinances,
regulations, rules, judgments, decrees and orders of any court or governmental
agency, board, bureau, body, department or authority or of any other person
required to be obtained by it in connection with the execution delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby; (ii) the Company has complied with and is in compliance
with all statues, laws, ordinances, regulations, rules, permits, judgments,
orders or decrees applicable to it and its properties, assets, operations and
business, and there does not exist any basis for any claim of default under or
violation of any such statute, law, ordinance, regulation, rule, judgment,
order or decree except such defaults or violations, if any, that in the
aggregate do not and will not materially and adversely affect the property,
operations, financial condition or prospects of any of the Company or the
Subsidiaries; and (iii) the Company makes and keeps current all books and
records that its required to make and keep under any applicable law.
3.3B GOVERNMENTAL AUTHORIZATIONS AND REGULATIONS. To the best of
the knowledge of the Shareholders, (i) the Company holds all licensees,
franchises, permits, and other authorizations, approvals of any registrations
with all governmental agencies, boards, bureaus,
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<PAGE> 18
bodies, departments and authorities and all other entities required to carry on
its business as now conducted and has filed all applications and reports
required to be filed with any governmental agency, board, bureau, body,
department or authority or the organization; (ii) all of such licenses,
franchises, permits and other authorizations are valid and in full force and
effect; (iii) each such application, report or other document filed by the
Company with any governmental agency, board, bureau, body, department or
authority is complete and correct in all material respects and not misleading
in any material respect; and (iv) the Company has not received any notice that
any governmental authority or to the person intends to cancel, terminate or not
to renew any such license, franchise, permit or the governmental authorization.
The Company will furnish to Buyer from time to time true, complete and correct
copies of all such licenses, franchises, permits and other authorizations and
all applications, reports, documents, enforcement agreements, complaints and
inspection reports relating to it filed or received from and after the date of
this Agreement.
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<PAGE> 19
ARTICLE IV
COVENANTS OF COMPANY AND SHAREHOLDERS
Each of the Company and the Shareholders, jointly and severally,
covenants and agrees with Buyer as follows:
4.1 ACCESS, INFORMATION AND DOCUMENTS. At such time as Buyer
notifies the Shareholders in writing that it is considering making an
additional investment in the Company, as contemplated by Article II hereof,
being either the Additional Share purchase and/or an Option Share purchase that
would result in Buyer owning at least 51% of the Company, from and after such
date (the "Investment Period") each of the Company, the Subsidiaries and the
Shareholders shall allow to Buyer and its agents and representatives
(including, but not limited to, accountants, lawyers and appraisers) full and
complete access upon reasonable notice during normal working hours to any of
the properties, assets, books, records and other documents of any of the
Company and the Subsidiaries to enable Buyer to make such examination of the
business, properties, assets, books records, and other documents of the Company
and the Subsidiaries, as the case may be, as Buyer may determine, and shall
furnish to Buyer such information and copies of such documents and records as
Buyer shall reasonably request. As part of such examination Buyer may make
such inquiries of such persons having business relationships with any of the
Company and the Subsidiaries (including suppliers, licensees, distributors,
clients and customers) as Buyer shall determine and each of the Company, the
Shareholders and the Subsidiaries shall cooperate fully with Buyer in
connection therewith. If a year end audit period coincides cooperate fully
with buyer in connection therewith. If a year end audit period coincides with
the Investment Period, the Company will complete such audit by April 30.
4.2 Conduct of Business. From and after the date hereof, except
as consented to by Buyer in writing:
(a) The Company shall provide to Buyer, within 30 days of
the last day of each month, consolidated monthly profit-and-loss statements and
related financial reports, as of the end of each such month, presented in
accordance with German GAAP in a consistent fashion and prepared in accordance
with past practice.
(b) For successive five year periods, after each of the
Closing Date, the Additional Closing and the Option Closing, each of the
Shareholders agrees that he will not directly or indirectly own, manage,
operate, join, control or participate in the ownership, management, operation
or control of, or be connected in any manner with, any business operating in
the relevant product and geographic market in which the Company has been active
at the time of the Closing Date, the Additional Closing and the Option Closing
respectively.
(c) In case the Shareholders - acting together or
individually - violate the prohibition of competition under Section 4.2 (b),
the Shareholders, each on his own behalf and without assuming the joint and
several liability for the others, shall be liable to pay to Buyer for each case
of violation a penalty in the amount of 15% of the turnover achieved by the
violation, at least, however, in the amount of DM 50,000. In case of a
continued violation, at least the penalty of DM 50,000 has to be paid for each
two weeks' period of violation. The right of Buyer to claim damages and
injunctive relief against a Shareholder who violates the prohibition of
competition shall remain unaffected.
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<PAGE> 20
ARTICLE V
JOINT COVENANTS
The Company, the Shareholders and Buyer covenant and agree as follows:
5.1 CONFIDENTIAL INFORMATION. At all times, the Company, the
Shareholders and Buyer shall each use reasonable efforts to preserve and
maintain the Company's and the Subsidiaries' proprietary information and trade
secrets and to prevent their disclosure to any third person and shall not use
any such proprietary information and trade secrets for personal advantage,
except this obligation shall not apply to information that (a) is a matter of
public knowledge; (b) has been or is hereafter published other than through it
or them; (c) is required to be disclosed by law; or (d) is lawfully obtained
from a third person without restrictions of confidentiality.
5.2 PRESS RELEASES, ETC. From and after the date of this
Agreement, the Shareholders, the Company and Buyer will not, without the prior
written consent of the other (which will not be unreasonably delayed or
denied), issue any press release or similar communication or send any notice to
clients, guarantors, participants or third parties relating to the transactions
contemplated in this Agreement, other than any necessary disclosures and
filings with governmental agencies, including the United States Securities and
Exchange Commission; however, Buyer may make such disclosures as are
appropriate or required for a public company.
ARTICLE VI
INDEMNIFICATION
6.1 INDEMNIFICATION OBLIGATIONS. Should any of the
representations of the Shareholders or the Company prove to be incorrect, Buyer
shall have only the right to resell to the Shareholders all the shares
purchased at the Closing, the Additional Closing and the Option Closing and
receive back the aggregate amount of DM paid in respect of such shares
purchased, in which event Buyer shall also sell to the Shareholders the shares
in the Principal Subsidiaries which Buyer has acquired pursuant to the
Subsidiary Agreement and shall receive the aggregate amount paid in respect of
the shares in the Principal Subsidiaries.
6.2 SURVIVAL OF THE INDEMNIFICATION. The obligations of the
parties under this Article VI shall continue for one year after each of the
Closing Date, the Additional Closing, and the Option Closing, except that with
respect to tax liabilities such obligations shall continue until the later of
one year after the Closing Date or six months after the statute of limitations
with respect thereto has expired, that with respect to third party claims said
obligations shall continue until the expiration of six months after the claims
have been finally adjudicated and that with respect to representations and
warranties pursuant to Sections 2.1(c) and 2.2(f) such obligations shall
continue until one year after the closing at which they are deemed to have been
made.
ARTICLE VII
MISCELLANEOUS
7.1 FEES AND EXPENSES. All fees and expenses related to
this Agreement shall be borne by the party having incurred such expenses,
except for the fees charged by the Notar to notarize this Agreement and the
assignments contemplated by this Agreement, which shall be borne by the Buyer
in connection with the sales of the Shares to Buyer and by the Shareholders in
connection with any resale of the Shares to the Shareholders.
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<PAGE> 21
7.2 ATTORNEY IN FACT. Dietrich von Boetticher and Keith Gruen
hereby irrevocably appoint Dietmar Muller-Elmau as their attorney in fact with
the right to grant subpowers, to give and to accept any notice to be given or
to be received by the Shareholders pursuant to this Agreement in accordance
with Section 7.6 and to represent each of them in the closing of the sale and
assignment or resale and assignment of the Shares and of the sale of the
Additional Shares and the Option Shares and to receive and give receipts for
the consideration to be paid to the Shareholders for any such shares and to
agree to such terms as he deems appropriate. During any period of disability
or other case of impossibility, he may appoint a sub-attorney to carry out his
duties hereunder.
7.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All statements
contained in any certificate or other instrument delivered by or on behalf of
the Company, the Shareholders or Buyer pursuant to this Agreement shall be
deemed representations and warranties hereunder by the party delivering such
certificate or instrument. Each of the representations, warranties or
agreements made by the Company, the Shareholders and Buyer in this Agreement or
pursuant hereto shall survive the Closing and any investigation conducted by or
on behalf of any of them.
7.4 ASSURANCE OF FURTHER ACTION. From time to time and without
further consideration from Buyer, but at Buyer's expense, each of the Company
or the Shareholders shall cooperate fully with Buyer and shall execute and
deliver, or cause to be executed and delivered, to Buyer such further
instruments of sale, assignment, transfer and delivery and take such other
action as Buyer may reasonably request in order more effectively to sell,
assign, transfer, deliver and reduce to the possession of Buyer any and all of
the Shares and consummate the transactions contemplated hereby.
7.5 WAIVER. The parties hereto may by written agreement (unless
notarial form is required in which case the agreement has to be notarized) (i)
extend the time for or waive or modify the performance of any of the
obligations or other acts of the parties hereto or (ii) waive any inaccuracies
in the representations and warranties contained in this Agreement or in any
documents delivered pursuant to this Agreement.
7.6 NOTICES. All notices, requests or other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or mailed first class certified mail postage prepaid addressed as
follows: if to Buyer, to 12000 Baltimore Avenue, Beltsville, Maryland
20705-1291 Attention: President (with a copy to John T. Connor, Jr., Sills
Cummis Zuckerman Radin Tischman Epstein & Gross, One Riverfront Plaza, Newark,
New Jersey 07102); if to the Company or the Shareholders, to Dietmar
Mueller-Elmau, c/o the Company address first above written (with a copy to
Dietrich von Boetticher, v. Boetticher, Kornig & Partner, Widenmayerstrasse 4,
8000 Munichen 22) or to such other address as may have been furnished in
writing to the party giving to notice by the party to whom notice is to be
given.
7.7 ENTIRE AGREEMENT. This Agreement (including the exhibits and
Schedules hereto) together with the agreement ("Subsidiary Agreement") of even
date herewith relating to the Company's sale of shares of the Principal
Subsidiaries to Buyer (which has been notarized by the acting Notary) embodies
the entire agreement among the parties and there are no agreements,
representations or warranties, oral or written, among the parties other than
those set forth or provided for herein or therein. The letter dated February
16, 1993 of Mr. Mueller-Elmau to Louis M. Brown, Jr., is superseded by this
Agreement and shall have no effect with respect to the rights and obligations
of the parties and the interpretation of this Agreement. This Agreement may
not
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<PAGE> 22
be modified or changed, in whole or in part, except by a supplemental agreement
signed by each of the parties, unless notarial form is required, in which case
the supplemental agreement has to be notarized.
7.8 RIGHTS UNDER THIS AGREEMENT; NONASSIGNABILITY. This Agreement
shall bind and inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors and assigns but shall not be
assignable by any party without prior written consent of the other parties.
Nothing contained in this Agreement is intended to confer upon any person,
other than the parties to this Agreement and their respective heirs, legal
representatives, successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
7.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Federal Republic of Germany.
7.10 DISPUTE RESOLUTION. Any disputes under or in connection with
this Agreement shall exclusively be submitted to the courts of Munich.
7.11 SEVERABILITY. If any provision of this Agreement should be or
become invalid or unenforceable, the validity and enforceability of the other
provisions hereof shall not be affected. The respective provision shall be
deemed replaced by a provision that is valid and enforceable and corresponds
most closely to the economic intent of the parties as evidenced by the original
provision. This provision shall apply also if it should become apparent that
this Agreement is incomplete in a fashion that requires an amendment.
7.12 HEADINGS; REFERENCES TO SECTIONS, EXHIBITS AND SCHEDULES. The
headings of the Sections of this Agreement are solely for convenience of
reference and shall not limit or otherwise affect the meaning of any of the
terms or provisions of this Agreement. The references herein to Sections,
Exhibits and Schedules, unless otherwise indicated, are references to sections
of and exhibits and schedules to this Agreement.
The Schedules mentioned before are essential parts of this "Anlage" and to this
deed. They are referred to.
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Schedule 3.11
Pending Disputes Involving Fidelio Software GmbH
1. Fidelio Software GmbH vs. Europa Park Hotel HVT GmbH and Mr. Reinhard
Baumhogger, Landgericht Munchen I, Docket No. 21 0 23938/91
In this suit, which was instituted on December 13, 1991, Fidelio
claimed originally DM 257,441.92 for software licenses, hardware
supplies and certain services. In May of 1992, DM 234,091.50 were
paid, whereupon the legal proceedings were suspended. The remaining
claim of Fidelio, including interest and reimbursement of legal fees,
is approximately DM 40,000. In appears possible to settle at DM
20,000.
2. Fidelio Software GmbH vs. Data Print GmbH, Berlin, Landgericht Berlin,
Docket No. 104 0 14/92
This is a suit for DM 55,480.21 for software license fees and certain
services. Data Print is defending itself on the ground that the
software supplied by Fidelio was defective. Consequently, the court
has commissioned an expert's opinion. Whether or not the suit is
successful will largely depend on the conclusions to which the expert
will come.
Munich, April 21, 1993
Dr. Ulrich Lohmann
Rechtsanwalt
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<PAGE> 24
FIDELIO GmbH PURCHASE OPTIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1/2 YEAR 1/2 YEAR 7 MONTHS 7 MONTHS
50/50 100 50/50 100 $35 $38 $40 $45
CASH 5.8% $ 0.10 $ 0.10 $ 0.09 $ 0.09
DEBT 6.8% $ 0.10 $ 0.09 $ 0.09 $ 0.08
EQUITY $ 0.07 $ 0.08 $ 0.09 $0.10
</TABLE>
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<PAGE> 25
Schedule 3.3
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Fidelio Corporation (USA) 95% GmbH 5 % Joe Marko
- -------------------------------------------------------------------------------------------------------------------
Fidelio Hong Kong Ltd. 79 % GmbH 20 % Ch. Harrison 1 % D. Muller-Elmau
- -------------------------------------------------------------------------------------------------------------------
Fidelio Thailand Ltd. 49 % GmbH 36% Ectsasy 15 % Somboon Sukhev
- -------------------------------------------------------------------------------------------------------------------
Fidelio France S. a. r. l. 100% GmbH
- -------------------------------------------------------------------------------------------------------------------
Fidelio U.K. Ltd. 99 % GmbH 10 % promised to 1% D. Muller-Elmau
Joseph Martino
- -------------------------------------------------------------------------------------------------------------------
Fidelio Singapore Ltd. founded 80 % GmbH 20% Charmian
Jan. 1993 Harrison
- -------------------------------------------------------------------------------------------------------------------
Fidelio Italy s.r.l. 51 % GmbH 49 % SMK
- -------------------------------------------------------------------------------------------------------------------
Fidelio Nextware GmbH 100 % GmbH
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 1
[MICROS SYSTEMS, INC. PRESS RELEASE LETTERHEAD]
RELEASE DATE: NOVEMBER 30, 1995 CONTACT: TOM GIANNOPOULOS
PRESIDENT/CEO
(301) 210-8090
FOR IMMEDIATE RELEASE
MICROS ACQUIRES FIDELIO SOFTWARE GMBH
BELTSVILLE, MARYLAND....MICROS Systems, Inc., a leading supplier of
information systems to the hospitality industry, today announced that it has
completed the acquisition of Fidelio Software GmbH of Germany, the leading
information systems provider for the global hotel industry. MICROS, which had
owned 30% of Fidelio, purchased the remaining 70% for approximately
$28,800,000.
Fidelio develops, licenses, and services software products for the
lodging industry worldwide. Fidelio's suite of hotel information systems
include: hotel front desk, back office, food and beverage systems, sales and
catering systems and central reservation systems.
Fidelio, founded in 1987, has become the premier provider of hotel
information systems with over 3,700 installations in 97 countries. Fidelio
revenues for calendar 1994 were approximately 50,000,000 DM, and revenues for
the first nine months of calendar 1995 were approximately 60,000,000 DM.
Recently, Fidelio acquired Executive Technologies, Inc., based in Naples,
Florida, a software development house specializing in Oracle-based central
reservation systems (CRS)/property management systems (PMS) software packages
for the lodging industry.
The MICROS acquisition of Fidelio brings together the preeminent
worldwide leader in restaurant information systems with the preeminent
worldwide leader in hotel information systems. Common hotel customers of the
two companies include: Hilton International, Intercontinental, Forte, Hyatt
International, Sheraton, Radisson, Wyndham, Reso, Group Concorde, Swissotel,
Moevenpick, Kempinski, Mandarin Oriental and Shangri-La.
According to Tom Giannopoulos, MICROS' President and CEO, "Now that the
acquisition of Fidelio has been completed, MICROS can actively promote on a
global basis an additional line of sophisticated, state-of-the-art software
products for the lodging industry." Mr. Giannopoulos further stated that
"Together, MICROS and Fidelio can now achieve the important goal of providing
unified, seamless, and fully integrated technology solutions for hotel
customers."
Dietmar Mueller-Elmau, a former stockholder of Fidelio, will continue
to serve as Fidelio's President. Mr. Mueller-Elmau stated that "We, at Fidelio,
are extremely pleased that the alliance is now complete. The two companies can
now focus fully on solidifying their unique technology and market strengths and
more effectively address the needs of our customers around the world."
MICROS stock is traded through NASDAQ under the stock symbol MCRS.
###
