__________________________________________________________________
__________________________________________________________________
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
Date of Report (Date of earliest event reported)
August 28,1998
EXCEL INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Indiana 1-8684 35-1551685
(State of (Commission File (I.R.S. Employer
Incorporation) Number) Identification No.)
1120 North Main Street 46514
Elkhart, Indiana (Zip Code)
(Address of pincipal offices)
Registrant's telephone number, including area code (219) 264-2131
N/A
(Former name or former address, if changed since last report)
__________________________________________________________________
__________________________________________________________________
Item 2. Acquisition or Disposition of Assets
The registrant, Excel Industries, Inc. an Indiana corporation
("Excel"), has purchased through its wholly-owned subsidiary, Excel
Industries Germany GmbH, a German limited liability company ("Excel
GmbH"), a number of shares of Schade GmbH, a German limited
liability company, equal to 70% of the aggregate share capital of
Schade GmbH, and a 56.67% participation in the fixed capital Schade
GmbH & Co. KG, a German limited partnership ("Schade KG") of which
Schade GmbH is the sole general partner. Excel also agreed that
Excel GmbH will make a contribution to the capital of Schade KG,
which contribution will increase Excel's participation in Schade KG
to 70%. The transaction was consummated on August 28, 1998 (the
"Closing").
Schade and its affiliated companies are engaged in the manufacture
and distribution of ornament and roof moldings, door frames,
plastic automobile body components (wind deflectors, air intakes
and ventilation covers), plastic automobile inside fittings or
equipment (center consoles, roof covers and panels as well as
sliding roof covers) and glass modules for the automotive industry.
The aggregate purchase price for the interests in Schade GmbH and
Schade KG was DM 17,036,400, or approximately U.S. $9,688,600 based
upon exchange rates reported by Telerate at 4 p.m. on August 28,
1998. The amount of Excel's agreed upon contribution to the capital
of Schade KG is DM 27,340,000, or approximately U.S.$15,548,258.
Funds for the purchase price for the interests and a portion of the
contribution will come from Excel's cash on hand. The remaining
portion of the funds for the contribution will come from an advance
of up to U.S.$10,000,000 under Excel's Amended and Restated Credit
Agreement dated as of April 29,1996, between Excel, the banks named
in such Credit Agreement, KeyBank, as agent, and
Harris Trust and Savings Bank, as co-agent.
Item 7. Financial Statements and Exhibits
7(a) and 7(b). It is impractical to file the financial
statements and pro forma financial information required by Items
7(a) and 7(b) with this report. This report will be amended as to
file such statements and information as soon as they are completed,
but in no event later than 60 days after the date this report must
be filed.
7(c). The following exhibits are furnished as required by
Item 7(c):
Exhibit
Number Description
2.1 Master Agreement dated March 13, 1998, by and between Excel
Industries, Inc., Hella KG Hueck & Co., certain limited
partners of Schade KG, certain shareholders of Schade
GmbH, and Schade KG.
2.2 Share and Partnership Interest Sales and Purchase Agreement
dated March 13, 1998, among Excel Industries, Inc., certain
limited partners of Schade KG, certain shareholders of
Schade GmbH, and Schade KG.
4.1 Shareholders' Agreement dated March 13, 1998 by and between
Excel Industries, Inc. and Hella KG Hueck & Co.
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.
EXCEL INDUSTRIES, INC.
Date: September 12, 1998
By: /s/ Joseph A. Robinson
_______________________________
Joseph A. Robinson, Secretary,
Treasurer and Chief Financial
Officer
EXHIBIT INDEX
Exhibit
Number Description
2.1 Master Agreement dated March 13, 1998, by and between Excel
Industries, Inc., Hella KG Hueck & Co., certain limited
partners of Schade KG, certain shareholders of Schade
GmbH, and Schade KG.
2.2 Share and Partnership Interest Sales and Purchase Agreement
dated March 13, 1998, among Excel Industries, Inc., certain
limited partners of Schade KG, certain shareholders of
Schade GmbH, and Schade KG.
4.1 Shareholders' Agreement dated March 13, 1998 by and between
Excel Industries, Inc. and Hella KG Hueck & Co.
Exhibit 2.1
Attachment A to Notarial Deed No. /1998 of the Notary
__________________, __________
Master Agreement
by and between
Hella KG Hueck & Co.
Rixbecker Str. 75
59552 Lippstadt
-hereinafter referred to as "Hella KG"-
represented by Stephan Zilles, Esq.
by virtue of a written Power of Attorney dated March 11, 1998
and
Jutta Hueck
Eugenie Friesenhausen
Elisabeth Behrend
Dr. Irmgard Hammerstein
Dorothee Hammerstein
Dr. Konstanze Thamer
Roland Hammerstein
Marianne Bracht
Dietrich Bracht-Frenzel
Brigitte Thomas
Cornelie Thomas-Scholler
Leonhard Thomas
Konstantin Thomas
Christoph Thomas
Prof. Dr. Gottfried Hueck
Dr.-Ing. Walter Hueck
Annelore Hueck
Claudia Hueck
Wolfgang Hueck
Dr. Anne-Rose Iber-Schade
Norbert Iber
Dr. Bettina Stubner
Cornelia lber-Rebentisch
Dr. Bernhard Iber
Dr. Carl Friedrich Schade
Marianne Schade
Dr. Carl-Albrecht Schade
Joachim Schade
Dr. Georg Friedrich Schade
Philip Mathias Schade
O.E. Hueck GmbH
Hueck & Ropke KG
- hereinafter collectively referred to as the "Sellers"-
represented by Roland Hammerstein, Esq.
by virtue of a written Power of Attorney dated February 4, 1998,
who is in his turn represented by Christoph F. Wetzler, Esq.
by virtue of a written Sub-Power of Attorney dated March 9, 1998,
and
Schade GmbH & Co. KG
57 Konigstrabe
58840 Plettenberg
represented by Christoph Wetzler, Esq.
by virtue of a written Power of Attorney dated March 12, 1998
- hereinafter referred to as "Schade KG" -
on the one side
and
Excel Industries, Inc.
1120 North Main Street
Elkhart, Indiana 46514, USA
- hereinafter referred to as the "Excel" -
represented by Harald Selzner, Esq.
by virtue of a written Power of Attorney dated March 12, 1998
and
Excel Industries, Inc.
1120 North Main Street
Elkhart, Indiana 46514, USA
- hereinafter referred to as the "Guarantor" -
represented by Harald Selzner, Esq.
by virtue of a written Power of Attorney dated March 12, 1998
on the other side.
The parties conclude the following
Master Agreement
A. Essential Elements of Transaction
1 . Excel wishes to acquire a 56.67% participation in the fixed
capital of Schade GmbH & Co. KG ("Schade KG"), with registered
offices in Plettenberg, Germany (HRA 10 Amtsgericht
Plettenberg), and a 70% participation in the share capital of
Schade KG's sole general partner, Schade
Geschaftsfuhrungsgesellschaft mbH ("Schade GmbH"), with
registered offices also in Plettenberg, Germany (HRB 486
Amtsgericht Plettenberg). Hella KG and the Sellers wish to
convey to Excel such participation in Schade KG and Schade
GmbH.
2. In consideration of the transfer of the participations in
Schade KG and Schade GmbH Excel shall, together with Hella KG
and as more specifically described in the Shareholders'
Agreement, make certain investments in, and make a further
contribution to the fixed capital quota of Schade KG, which
capital increase shall amount to DM 27.34 m
Hella KG shall make a further contribution to the fixed
capital quota of Schade KG, which capital increase shall
amount to DM 6 m
As a result, the aggregate fixed capital quota of Schade KG
shall thereafter amount to
DM 63.34 m
with capital quota of Excel in a nominal amount of DM 44.34 m
or 70.00 %
--------
and Hella KG in a nominal amount of DM 19 m
or 30.00%
--------
Hella KG and Excel have agreed, that of the further
contributions, as mentioned above, only a part should be
registered as further Liability Contribution ("Hafteinlage"),
whereas the remaining further contributions should be made as
a non-registered further Compulsory Contribution
("Pflichteinlage"). In greater detail, Hella KG and Excel
agree that the amount of DM 6 million to be paid by Hella KG
should be a non-registered further Compulsory Contribution,
whereas of the contribution amount of Excel of DM 27.34
million a partial amount of DM 13.34 million should be
registered as Liability Contribution and a further amount of
DM 14 million should be further non-registered Compulsory
Contribution. As a consequence of the above described capital
increase, Hella KG and Excel will have the following fixed
capital quota:
Hella KG
- Liability Contribution DM 13 m
- further non-registered Compulsory Contrib-
ution DM 6 m
-----------------
DM 19 m
Excel
- Liability Contribution DM 30.34 m
- further non-registered Compulsory Contrib-
ution DM 14.00 m
-----------------
DM 44.34 m
3. Excel further wishes to acquire from certain individual
Sellers their loans made to Schade KG in an amount of
DM 4,440,985.00
for a consideration in the same amount. The partners' loans
currently outstanding against Schade KG amount to a total of
DM 25,308,214.00.
Thus, there remains a partners' loans in a total amount of
DM 20,867,229.00.
After the assignment described in the preceding sentence both,
the loan amount assigned to Excel as well as the remaining
partners' loans shall be converted into ordinary loans under
terms and conditions more specifically described in Attachment
F hereto.
4. As a result, the Sellers and the Schade GmbH Shareholders
shall have ceased to be limited partners of Schade KG and
shareholders of Schade GmbH, respectively, and Excel shall
have acquired a 70% participation, and Hella KG shall have
acquired a 30% participation in both the fixed capital of
Schade KG and the share capital of Schade GmbH.
B. Implementation Measures
5. Sellers and Excel shall, therefore, enter into the Share and
Partnership Interest Sale and Purchase Agreement (Attachment
B to the present Notarial Deed) aimed at the transfer of
(i) shares in the aggregate nominal value of 70% of the share
capital of Schade GmbH
(ii) and partnership interests in the aggregate nominal amount
of approximately 56.67% of the fixed capital of Schade
KG.
The Sellers and Hella KG hereby expressly consent to the sale
and transfer of the relevant shares in the share capital of
Schade GmbH by the Schade GmbH Shareholders (as defined in
Sect. 6 below) to Excel.
6. Mrs. Eugenie Friesenhausen, Dr.-Ing. Walter Hueck, Mrs. Anne-Rose
Iber-Schade and Dr. Carl Friedrich Schade ("Schade GmbH
Shareholders"), who are the sole current shareholders of
Schade GmbH, shall sell and transfer to Hella KG, and Hella KG
shall purchase and acquire from them, their remaining
participation in Schade GmbH in the aggregate nominal amount
of 30% of Schade GmbH's share capital, so as to put into
alignment Hella KG's participation ratios in Schade KG and
Schade GmbH. The sale and transfer shall be effected by
operation of the Share Transfer Agreement (Attachment C to
this Notarial Deed).
7. Excel and Hella KG shall agree to
(i) an increase in the fixed capital quotas of Schade KG by
subscription to the following additional Liability
Contributions and further non-registered Compulsory
Contribution: in the case of Excel in the amount of
- Liability Contribution DM 13.34 m
- further non-registered Compulsory Contrib-
ution DM 14 m
-----------------
DM 27.34 m
and
in the case of Hella KG in the amount of
- further non-registered Compulsory Contrib-
ution DM 6 m
and
(ii) an amended Partnership Agreement for Schade KG and
Articles of Association of Schade GmbH pursuant to the
Shareholders' Agreement (Attachment D to this Notarial
Deed).
8. The Sellers, Schade KG and Excel shall agree to
(i) the assignment to Excel of a portion of the loan
currently outstanding to the Sellers pursuant to the
Assignment Agreement (Attachment E to this Notarial Deed)
and
(ii) the documentation of such loan (assigned and non-assigned
portion) pursuant to the Loan Agreement (Attachment F to
this Notarial Deed).
9. The Guarantor, being the ultimate parent company of Excel,
hereby guarantees the due performance of Excel's obligations
assumed under and in connection with this Agreement and
Attachments B through E to this Notarial Deed.
10. Any disputes or controversies arising out of or in connection
with this Agreement and Attachments B through E to this
Notarial Deed shall be settled by arbitration in accordance
with the Arbitration Agreement (Attachment G to this Notarial
Deed).
This Agreement shall be governed by the laws of the Federal
Republic of Germany.
____________________, this ______ day of _______________ 1998
____________________________________
( )
on behalf of Hella KG
____________________________________
( )
on behalf of the Sellers
____________________________________
( )
on behalf of Schade KG
____________________________________
( )
on behalf of Excel
____________________________________
( )
on behalf of the Guarantor
Exhibit 2.2
Attachment B to Notarial Deed No. ____/1998 of the Notary _________
Share and Partnership Interest Sale and Purchase Agreement
by and between
Jutta Hueck
Eugenie Friesenhausen
Elisabeth Behrend
Dr. Irmgard Hammerstein
Dorothee Hammerstein
Dr. Konstanze Thamer
Roland Hammerstein
Marianne Bracht
Dietrich Bracht-Frenzel
Brigitte Thomas
Cornelie Thomas-Scholler
Leonhard Thomas
Konstantin Thomas
Christoph Thomas
Prof. Dr. Gottfried Hueck
Dr.-Ing. Walter Hueck
Annelore Hueck
Claudia Hueck
Wolfgang Hueck
Dr. Anne-Rose Iber-Schade
Norbert Iber
Dr. Bettina Stubner
Cornelia Iber-Rebentisch
Dr. Bernhard Iber
Dr. Carl Friedrich Schade
Marianne Schade
Dr. Carl-Albrecht Schade
Joachim Schade
Dr. Georg Friedrich Schade
Philip Mathias Schade
O.E. Hueck GmbH
Hueck & Ropke KG
-hereinafter referred to collectively as the "Sellers" -
represented by Roland Hammerstein
by virtue of a written Power of Attorney dated February 4, 1998
who in his turn is represented by Christoph F. Wetzler, Esq.
by virtue of a written Sub-Power of Attorney dated March 9, 1998
on one side
and
Excel Industries, Inc.,
1120 North Main Street,
Elkhart, Indiana 46514, USA
represented by Harald Selzner, Esq.
by virtue of a written power of attorney dated March 12, 1998
- hereinafter referred to as the "Purchaser" -
and
Excel Industries, Inc.,
1120 North Main Street,
Elkhart, Indiana 46514, USA
represented by Harald Selzner, Esq.
by virtue of a written power of attorney dated March 12, 1998
- hereinafter referred to as the "Guarantor" -
on the other side.
Table of Contents
List of Definitions
Recitals
Sec. 1 Object of the Acquisition
Sec. 2 Sale and Purchase of Split Shares
Sec. 3 Sale and Purchase of Partnership Interest
Sec. 4 Purchase Price
Sec. 5 Effective Date
Sec. 6 Financial Statements
Sec. 7 Net Equity Guarantee
Sec. 8 Completion/Conduct of Business
Sec. 9 Warranties and Representations
Sec. 10 Remedies for Breach of Warranties
Sec. 11 Taxes and Social Security Contributions
Sec. 12 Non-Competition
Sec. 13 Costs and Fees
Sec. 14 Confidentiality/Joint Statements
Sec. 15 Assignment of Rights and Undertakings
Sec. 16 Antitrust Filings
Sec. 17 Dispute Resolutions/Experts
Sec. 18 Guarantee
Sec. 19 Miscellaneous
List of Definitions
Defined
Definition in Section:
- ----------- -----------
"Assignee" A company controlled by the
Purchaser to which Purchaser
may transfer or assign this
Agreement
Section 15
"Auditors" Schade auditors Section 6
"Capital
Quotas" Partnership interests in Schade KG Recitals
"Companies" Schade GmbH, Schade KG and the
Subsidiaries
Section 9
"Completion" Completion of the transactions
under this Agreement
Section 8
"Effective
Date" Date of economic effect of sale
and purchase of the Split
Shares and the Family
Partnership Interests
Section 5
"Effective Date
Financial
Statements" Consolidated financial
statements of the Companies as
of the Effective Date
Section 6
"Family Partnership
Interests" Fixed capital quotas held by
the Sellers
Recitals
"Financial
Statements" The financial statements of the
Companies as of June 30, 1995,
1996 and 1997
Section 9
"Guaranteed Net
Equity" Net equity value of DM 15,000,000 Section 7
"Guarantor" Excels Industries, Inc., as
listed on page 2 hereof
"Hella KG" Hella KG Hueck & Co. Recitals
"Hella Partnership
Interest" Fixed capital quota held by
Hella KG
Recitals
"Partnership Inter-
ests PurchasePrice" Interests Section 4
"Purchase
Price" Split Share Purchase Price and
Partnership Interests Purchase
Price
Section 4
"Purchaser" Excel Industries, Inc., as
listed on page 2 hereof
"Schade KG" Schade GmbH & Co. KG Recitals
"Schade
GmbH" Schade Geschaftsfuhrungsgesellschaft mbH Recitals
"Sellers" The persons listed on page 1 hereof
"Share-
holders" Dr. Anne-Rose Iber-Schade; Dr.
Carl Friedrich Schade; Dr.Ing.
Walter Hueck; Eugenie
Friesenhausen
Section 2
"Shares" Four shares with a nominal
value of DM 13,000 each in the
share capital of Schade GMBH
Recitals
"Split Share Section 4
Purchase
Price" Purchase Price for the Split
Shares
"Split Section 1
Shares" Four split shares with a normal
value of DM 9,100 each to be
transferred by the Shareholders
to the purchaser
"Subsid- Recitals
iaries" Subsidiaries and participations
directly or indirectly held by
Schade KG
Recitals
(A) Whereas Schade GmbH & Co. KG ("Schade KG") is a limited
partnership under German law with registered offices in
Plettenberg, Germany. Schade KG is registered with the
Commercial Register of the local court in Plettenberg under
registry no. HRA 10.
(B) Whereas Schade KG, through its wholly owned intermediate
holding companies Schade Handels- und Beteiligungs GmbH and
Schade GmbH Projektgesellschaft with a fully paid in share
capital in the aggregate nominal amount of DM 5,900,000 and DM
5,500,000, respectively, has subsidiaries and holds
participations as set forth in Annex B(1) to this Notarial
Deed.
(C) Whereas the sole general partner (Komplementar) of Schade KG
is Schade Geschafts-fuhrungsgesellschaft mbH, a German limited
liability company with registered offices in Plettenberg,
Germany, and registered with the Commercial Register of the
local Court in Plettenberg under registry no. HRB 486 ("Schade
GmbH"), with a fully paid in share capital in the aggregate
nominal amount of DM 52,000 divided into four shares in a
nominal amount of DM 13,000 each and held as follows:
Eugenie Friesenhausen one share of nominal DM 13,000
Dr.-Ing. Walter Hueck one share of nominal DM 13,000
Dr. Anne-Rose Iber-Schade one share of nominal DM 13,000
Dr. Carl Friedrich Schade one share of nominal DM 13,000
the aforementioned shares hereinafter referred to as the
"Shares."
(D) Whereas the Sellers, together with Hella KG Hueck & Co. of
Lippstadt, Germany, ("Hella KG") are limited partners
(Kommanditisten) of Schade KG holding the following fully paid
in partnership interests, fixed capital quota (feste
Kapitalanteile; Hafteinlage):
Name/Entity Fixed Capital Quota
Hella KG Hueck & Co. 13,000,000
Jutta Hueck 763,000
Eugenie Friesenhausen 275,000
Elisabeth Behrend 275,000
Dr. Irmgard Hammerstein 1,152,000
Dorothee Hammerstein 151,000
Dr. Konstanze Thamer 151,000
Roland Hammerstein 156,000
Marianne Bracht 619,000
Dietrich Bracht-Frenzel 458,000
Brigitte Thomas 498,000
Cornelie Thomas-Scholler 117,000
Leonhard Thomas 117,000
Konstantin Thomas 112,000
Christoph Thomas 112,000
Prof. Dr. Gottfried Hueck 378,000
Dr.-Ing. Walter Hueck 1,124,000
Annelore Hueck 238,000
Claudia Hueck 1,048,000
Wolfgang Hueck 420,000
Dr. Anne-Rose Iber-Schade 819,000
Norbert Iber 170,000
Dr. Bettina Stubner 113,000
Cornelia Iber-Rebentisch 113,000
Dr. Bernhard Iber 113,000
Dr. Carl Friedrich Schade 556,000
Marianne Schade 80,000
Dr. Carl-Albrecht Schade 80,000
Joachim Schade 80,000
Dr. George Friedrich Schade 80,000
Philip Mathias Schade 80,000
O.E. Hueck GmbH 4,283,000
Hueck & Ropke KG 2,269,000
----------
Total fixed capital $30,000,000
===========
hereinafter referred to as "Capital Quotas."
(E) Whereas Purchaser wishes to purchase
(i) shares equaling 70% of the aggregate share capital of
Schade GmbH of DM 52,000 i.e. shares in the aggregate
nominal amount of DM 36,400.
(ii) the Capital Quotas except the fixed capital quota held by
Hella ("Hella Partnership Interest") in the amount of DM
13,000,000 i.e. Capital Quotas in the aggregate amount of
DM 17,000,000.
("Family Partnership Interests")
and Sellers wish to sell such shares and Family Partnership
Interests, respectively, to Purchaser pursuant to the terms
and conditions set forth hereinafter.
(F) Whereas the remaining shares in Schade GmbH equaling 30% of
Schade GmbH's share capital shall be transferred under a
separate agreement to Hella KG.
NOW, THEREFORE, the parties agree as follows:
Section 1
Object of the Acquisition
(1) The Sellers shall sell to Purchaser, and Purchaser shall
purchase from the Sellers, the Family Partnership Interests.
(2) Eugenie Friesenhausen, Dr.-Ing. Walter Hueck, Dr. Anne-Rose
lber-Schade and Dr. Carl Friedrich Schade, shall each sell to
Purchaser, and Purchaser shall purchase from each of them, a split
share with a nominal value of DM 9,100 ("Split Shares") out of
their respective shares, each having a nominal value of DM 13,000.
(3) The transfer and assignment of the Family Partnership
Interests and the Split Shares shall be effected, after the
occurrence of all events :stated in Section 8(2) hereof, by
operation of separate assignment and transfer agreements at
Completion, as defined and more specifically described in Section
8 below, with economic effect as of the Effective Date defined in
Section 5 below.
Section 2
Sale and Purchase of Split Shares
(1) Eugenie Friesenhausen, Dr.-Ing. Walter Hueck, Dr. Anne-Rose
lber-Schade and Dr. Carl Friedrich Schade, (the "Shareholders"),
respectively, hereby split their shares in the nominal value of DM
13,000 each into two split shares (Teilgeschaftsanteile) of a
nominal value of DM 9,100 and a nominal value of DM 3,900,
respectively, for the purpose of the sale and purchase stated in
Subsection (2) below. The Shareholders herewith expressly consent
to such split and the sale, purchase and transfer of the Split
Shares of a nominal value of DM 9,100 to the Purchaser as provided
in Section 4 para (1) of Schade GmbH's Articles of Association.
The partners of Schade KG have granted their required consent in
Section 5 of the Master Agreement of even date. Schade KmbH
through its managing directors has approved the split and the sale,
purchase and transfer of the Split Shares in a written document
attached as Annex 2.1 to this Notarial Deed.
(2) Subject to the terms and conditions of this Agreement, the
Shareholders hereby sell their Split Shares, i.e.,
2.1 Mrs. Eugenie Friesenhausen sells her split share of a
nominal value of DM 9,100
2.2 Dr.-Ing. Walter Hueck sells his split share of a nominal
value of DM 9,100
2.3 Dr. Anne-Rose lber-Schade sells her split share of a
nominal value of DM 9,100
2.4 Dr. Carl Friedrich Schade sells his split share of a
nominal value of DM 9,100
to the Purchaser who hereby accepts such sales.
(3) The sales are effected with all rights, obligations and
privileges attached to the Split Shares, including the right to
participate in profits, free and clear of all and any third party
rights or third party security interests of any nature whatsoever,
commencing as of the Effective Date as defined in Section 5 hereof
(4) The Split Shares are fully paid in and the capital
contributions have not been repaid.
(5) The assignment of the Split Shares shall be effected at
Completion by a separate assignment agreement. Schade GmbH shall
be notified of the assignment by the acting Notary at Completion.
(6) The Shareholders sell to the Purchaser which accepts such sale
the Split Shares even if such Split Shares have denominations other
than shown in this Section 2 and/or are held by the Shareholders
severally, jointly or in partnership in a form other than as shown
in this Section 2. Differences in the allocation of value to the
Shareholders shall be settled in relation between the Shareholders.
Section 3
Sale and Purchase of Partnership Interests
(1) Subject to the terms and conditions of this Agreement, each of
the Sellers hereby sells the Family Partnership Interest ascribed
to her/him in the Recitals above to the Purchaser who hereby
accepts such sales.
Upon the transfer of the Family Partnership Interest Purchaser
with the acquired Family Partnership Interest shall become limited
partner of Schade KG while the Sellers cease to be limited partners
of Schade KG without being entitled to any claims for any reason
whatsoever against Schade KG arising out of such transfer.
(2) The sales are effected with all rights, obligations and
privileges attached to the Family Partnership Interests as from the
Effective Date, including the fixed capital (Festkapital), the
other revenue reserves (andere Gewinnrucklagen) and balances on all
partners' accounts
except
(i) the capital accounts II old (Kapitalkonten II) amounting
in aggregate to DM 25,308.214.00 (see para. (6) below);
(ii) the capital accounts II new (Kapitalkonten II a) a
compilation of which as of June 30, 1997 is set forth in
Annex 3.2 hereto (which shall be fully settled/withdrawn
by the respective Sellers prior to Completion); and
(iii) profits for the current fiscal year allocable to
the Sellers, if any, and not required to set off an
existing shortfall in the capital accounts I
(Kapitalkonten) and capital accounts II new
(Kapitalkonten IIa) of the respective Sellers a
preliminary estimate of which, based on current
management forecast, would be up to DM 200,000.00;
and free and clear of all and any third party rights or third party
security interests of any nature whatsoever.
The Purchaser is aware that also Hella KG might be entitled to
withdrawal from the capital account II new (Kapitalkonto IIa)
because of a profit allocation for the current fiscal year a
preliminary estimate of which, based on current management
forecast, would be up to DM 1.8 million.
(3) The Sellers hereby further sell and transfer to the Purchaser
which accepts such sale and transfer
(i) all other rights and claims which they may have against
the Companies and
(ii) all tangible and intangible assets owned in whole or in
part by the Sellers which serve or are destined to serve
the business of the Companies
except to the extent that any such rights and claims and assets are
to remain with the Sellers pursuant to the expressed provisions of
this Agreement and Annex 3.3.
The transfer of such rights and claims and assets shall become
effective however only upon the assignment of the Family
Partnership Interests pursuant to para. (8) below.
(4) The Sellers sell to the Purchaser which accepts such sale the
Family Partnership Interests even if such participations have
denominations other than shown in the recitals hereof and/or are
held by the Sellers severally, jointly or in partnership in a form
other than as shown in the recitals. Differences in the allocation
of value to the Seller shall be settled in relation between the
Sellers.
(5) The partners of Schade KG have approved the sale and transfer
of the Family Partnership Interests by partners' resolution dated
February 4, 1998 a copy of which is attached hereto as Annex 3.5.
(6) The Sellers' claims under their capital accounts II old
(Kapitalkonten II) shall be partially assigned to the Purchaser or
its Assignee and thereafter together with the remainder converted
into ordinary loans pursuant to the stipulations and subject to the
conditions set forth in Attachment F to this Notarial Deed.
(7) All amounts due on account of the Family Partnership Interests
are fully paid in and have not been repaid. They correspond with
the limit of personal liability (Hafteinlage) of the Sellers as
presently reflected in the Commercial Register.
The Purchaser is aware that the fixed capital quota (Hafteinlage)
of the Sellers as of June 30, 1997 have been reduced by losses of
Schade KG as set forth in Annex 3.7 to this Notarial Deed.
(8) The assignments of the Family Partnership Interests shall be
effected, subject to the condition precedent (aufschiebende
Bedingung) of the registration thereof with the Commercial Register
at Completion by way of succession in title (Sonderrechtsnachfolge)
by a separate assignment agreement. The application for
registration of the assignment of the Family Partnership Interests
with the Commercial Register shall also be effected at Completion.
The Family Partnership Interests purchased by Purchaser shall be
consolidated upon the assignment by operation of law into one
single limited partnership interest of a nominal value of DM
17,000,000.
Section 4
Consideration
(1) The consideration for the Split Shares amounts to
DM 36,400.00 (in words: German Marks thirty six thousand four
hundred)
- hereinafter the "Split Share Purchase Price" -
(2) The purchase price for the Family Partnership Interests
amounts to
DM 17 million (in words: German Marks seventeen million)
- hereinafter the "Partnership Interests Purchase Price" -
(Split Share Purchase Price and Partnership Interests Purchase
Price are collectively referred to as the "Purchase Price.")
(3) The Purchase Price together with 5.5 p.a. interest thereon for
the time from the Effective Date until payment shall become due and
payable at Completion against simultaneous assignment of the Family
Partnership Interests and the Split Shares and delivery of a Bank
Guarantee on First Demand in the form as per Annex 4.3 hereto in
the amount of DM 1,500,000 by the Sellers to the Purchaser which
shall be returned on March 31, 2000 provided that the Purchaser has
not exercised his rights under such Bank Guarantee on or before
such date because of a damage claim arising out of a breach of the
Sellers obligations under this Agreement. Payment shall be
effected by wire transfer free of any costs and fees into the
account no 600 3966 of Verkaufergemeinschaft Schade KG with
Deutsche Bank AG in Lippstadt (Bank Reference No. 416 700 27) who
shall be responsible for the allocation of the Purchase Price among
the Sellers or another bank account jointly nominated by the
Sellers on or before the date of the occurrence of the latest
condition precedent set forth in Sections 8.2.1 and 8.2.2 below.
(4) The Purchaser shall, indemnify the Sellers against, and hold
the Sellers free of, any claims of creditors under Sections 171 Abs. 1
and/or 172 Abs. 4 HGB in the context of a reimbursement of capital
contributions (Einlagenrukgewahr), after the Effective Date to the
extent that such reimbursement was made to the Purchaser.
(5) The Purchaser shall indemnify the former general partners of
Schade KG, Dr. Anne Rose lber-Schade, Dr. Karl-Friedrich Schade and
Dr.-Ing. Walter Hueck from any claims of creditors of Schade KG
pursuant to Section 160 subsect. 3 HGB to the extent that the respective
obligations and liabilities of Schade KG are reflected or reserved
for in the Financial Statements and provided that Hella KG shall
partially assume any liabilities of the Purchaser under this
indemnification undertaking in the relation of its Capital Quota to
the total Capital Quota of Schade KG after the consummation of the
transactions contemplated in this Agreement.
The indemnification undertaking of the Purchaser pursuant to the
preceding sentence shall also apply to claims of creditors of
Schade KG in respect of obligations and liabilities which are not
or not adequately reserved for or reflected in the Financial
Statements provided, however, that (i) the indemnification
obligation of the Purchaser shall be limited to 50% of any such
claims of the creditors of Schade KG, (ii) the Purchaser shall have
no indemnification obligation to the extent that the Sellers have
represented and warranted in this Agreement that respective
obligations and liabilities of Schade KG giving raise to such claim
of creditors of Schade KG do not exist, and (iii) Hella KG shall
partially assume the indemnification obligation of the Purchaser in
the proportion of its Capital Quota to the total Capital Quota in
Schade KG after the consummation of the transactions contemplated
in this Agreement, and (iv) the maximum liability of the Purchaser
is limited in the aggregate to DM 10,000,000.
Dr. Anne Rose Iber-Schade, Dr. Karl-Friedrich Schade and Dr.-Ing.
Walter Hueck shall indemnify the Purchaser from all claims of
Creditors of Schade KG pursuant to Section 160 subsect. 3 HGB to the
extent that Purchaser or Hella KG have not undertaken to indemnify
Dr. Anne Rose lber-Schade, Dr. Karl-Friedrich Schade and Dr.-Ing.
Walter Hueck from such claims of creditors of Schade KG.
Section 5
Effective Date
(1) The sale and purchase of the Split Shares and the Family
Partnership Interests shall take economic effect among the parties
as of July 1, 1998 ("Effective Date").
(2) As of the Effective Date, all rights, obligations and
privileges attached to the Split Shares and the Family Partnership
Interests, including the right to participate in profits and losses
of the Companies, and subject to the limitations set forth in
Section 3 herein, shall be vested with the Purchaser.
Section 6
Effective Date Financial Statements
(1) Sellers will procure the establishment of financial statements
consisting of balance sheets and profit and loss account statements
of the Companies, as well as consolidated financial statements of
the Schade KG for the period starting July 1, 1997 to the Effective
Date ("Effective Date Financial Statements") as soon as reasonably
possible after the Effective Date but no later than August 15,
1998. The Effective Date Financial Statements shall be established
on the basis of a physical inventory according to the accounting
policies and principles described in Annex 6.1 which shall be
consistent with past practice.
(2) The Effective Date Financial Statements shall be audited by
Schade KG's auditors ("Schade-Auditors") within 1 month from the
establishment of the Effective Date Financial Statements pursuant
to Section 6.1 above. The cost connected with the preparation of
the Effective Date Financial Statements as well as the audit by the
Schade Auditors shall be fully reflected and reserved for in the
Effective Date Financial Statements.
The audit by the Schade Auditors shall in particular address the
compliance with the accounting principles set forth in Annex 6.1
hereto.
The Schade auditors shall submit their auditors report ("Schade-Auditors
Report") to the Sellers and the Purchaser within three
business days after the preparation of the Schade-Auditors Report.
(3) The Sellers and the Purchaser shall have the right to have the
Effective Date Financial Statements and the Schade-Auditors Report
reviewed at their expense by their auditors within ten business
days from receipt of Schade-Auditors Report.
The cost of the review by the auditors of the Sellers or the
Purchaser shall not be reflected in the Effective Date Financial
Statements.
The Sellers and the Purchaser and their auditors shall be entitled
to participate in the physical stock taking and shall have full
access to all books, records and assets of the Companies and to the
relevant personnel of the Companies already in the course of the
establishment of the Effective Date Financial Statements in order
to avoid any undue delay in such review of the Effective Date
Financial Statements and the Schade-Auditors Report.
(4) If neither party contradicts the Effective Date Financial
Statements and the Schade-Auditors Report within ten business days
after receipt thereof, the Effective Date Financial Statements as
established by the Companies and the Schade-Auditors Report
including corrections, if any, set forth therein, to the Effective
Date Financial Statements shall become binding upon all parties for
the purposes of this Agreement.
To the extent that the Sellers or the Purchaser contradict the
Effective Date Financial Statements and the Schade's Auditor report
including corrections, if any, to the Effective Date Financial
Statements set forth therein within the period for contradiction
set forth above and the auditors of the Sellers and the Purchaser
cannot agree upon the points of contention raised by way of
contradiction within one month after receipt of the last
contradiction, the disputed items shall be referred to the expert
following the procedure described in Section 17.2 below which shall
determine with binding effect for all parties how the points of
contention shall be settled.
The cost of the experts proceeding shall be allocated as described
in Section 17.2 of below.
Section 7
Net Equity Guarantee
(1) The Sellers guarantee to the Purchaser that the Effective Date
Financial Statements will show a net equity value (Eigenkapital
pursuant to Section 266 (3) A HGB) of the Companies on a consolidated
basis of not less than DM 15,000,000 (in words: German Marks
fifteen million) (the "Guaranteed Net Equity"). The Guaranteed Net
Equity is to be determined in accordance with Annex 6.1.
(2) If there is a shortfall of the consolidated net equity value
from the Guaranteed Net Equity the Purchaser shall have a right to
withdraw (zurucktreten) from this Agreement by giving written
notice to the Sellers. The right to withdraw from this Agreement
can only be exercised within 30 days from receipt of (i) the
audited Effective Date Financial Statements or (ii) the decision of
the expert pursuant to Section 6 para. (3) above.
Section 8
Completion/Conduct of Business
(1) Within 5 business days from the occurrence of the latest
condition precedent defined in Subsection 2.1 and 2.2 below, the
Sellers and the Purchaser, or their representatives, shall meet and
effect the following ("Completion") provided that Purchaser has not
withdrawn from this Agreement pursuant to Subsection 2.3 below:
1.1 assignment of the Split Shares and the Partnership
Interests in the form of the assignment deeds attached
hereto as Annex 8.1 (Split Shares and Family Partnership
Interests).
The assignment of the Partnership Interest and the Split Shares
shall be notarized by a Swiss Notary Public. The assignment of the
Split Shares shall be repeated in notarized form by a German Notary
Public in the form of the assignment deed attached hereto as Annex
8. l.B.
1.2 delivery of an application for registration of the
assignment of the Family Partnership Interests duly
signed (notariell beglaubigt) by all Sellers.
1.3 delivery of the Bank Guarantee as per Annex 4.3 hereto by
Sellers.
1.4 1.1 through 1.3 simultaneously against payment of the
Purchase Price by the Purchaser.
(2) Prior to Completion, the following conditions precedent must
have occurred:
2.1 the one month period or the four month period provided in
Section 24a of the German Act against Restraints of
Competition (GWB) shall have lapsed without the Federal
Cartel Office (Bundeskartellamt) having issued a
statement that it commenced an investigation into the
merger project or that it prohibits the merger project
contemplated hereunder, respectively.
2.2 The Effective Date Financial Statements show a
consolidated net equity value at least equal to the
Guaranteed Net Equity or the time period specified in
Section 7(2) above for Purchaser's right to withdraw has
expired without Purchaser having exercised such right.
2.3 In case that prior to the date of Completion the
representations and warranties set forth in Section 9
below have shown to be incorrect to an extent giving
raise to a claim of the Purchaser in excess of DM
1,500,000 the Purchaser may withdraw (zurucktreten) from
this Agreement by giving written notice to the Sellers.
The right to withdraw from this Agreement in this case
can only be exercised on or before the date of
Completion.
If the conditions precedent set forth in Subsection 2.1 and 2.2
above do not occur by March 31, 1999, the Sellers (acting jointly)
and the Purchaser shall have a right to withdraw from this
Agreement, unless they are responsible for the non-occurrence of
the respective conditions precedent.
(3) Sellers shall use their best efforts to ensure that the
Companies operate their businesses in the ordinary course of
business during the time from the date hereof through Completion.
Sellers undertake to inform Purchaser immediately upon becoming
aware of any material adverse event or change with regard to the
warranties and representations under this Agreement. The Sellers
shall procure that the transactions set forth in Annex 8.3 shall
only be taken after consultation and agreement with Purchaser and
Purchaser in connection therewith shall have access to all
personnel, assets, books and records of the Companies. In addition
the Sellers shall procure that the Companies shall enable Purchaser
to further reasonably familiarize itself with all aspects of the
business of the Companies. Sellers obligation under this
subsection shall be interpreted to ensure that economically
Purchaser acquires the Family Partnership Interests and the Split
Shares with economic effect as of the Effective Date (Section
5(1)).
(4) The Sellers undertake to pay within two weeks from Completion
to the Companies an aggregate amount equivalent to all withdrawals
within the meaning of this Subsection (4) made by the Sellers from
the Companies since the Effective Date and not repaid or set off
between the Effective Date and Completion except for payments in
respect of pension claims set forth in Annex 3.3.
Withdrawals within the meaning of this Subsection (4) are without
limitation all payments in cash or in kind on any legal basis
whatsoever b, the Companies to the Sellers and/or their relatives
within the meaning of Section 15 of the tax code 1977 ("Relatives")
and/or companies other than the Companies which are directly or
indirectly controlled by the Sellers and/or their Relatives
("Controlled Companies") including without limitation the transfer
of assets, payments under lease, license, loan, employment,
advisory or similar agreements, payments of balances on capital
loan or other accounts of the Sellers with the Companies and the
payment of interest on such accounts, the declaration or payment of
a dividend and the granting of other valuable benefits.
(5) Except as expressly set forth in this Agreement, all legal
relations between the Sellers and the Companies and all rights and
claims of the Sellers against the Companies shall terminate as of
the date of Completion and no obligation or liability whatsoever
shall arise for the Companies or the Purchaser from such
termination. The Sellers shall procure that the same applies to
all legal relations between Relatives and/or Controlled Companies
and the Companies and to all rights and claims of Relatives and/or
Controlled Companies against the Companies and will, if necessary,
hold the Companies and the Purchaser fully harmless in good time.
The provisions of this Subsection (5) shall not apply to claims and
rights which remain with the Sellers pursuant to Annex 3.3.
(6) The Sellers shall procure that upon the request of the
Purchaser all members of Supervisory and Advisory Boards and other
similar bodies, if any, of the Companies will resign from their
positions as of the date of Completion and that no obligation or
liability whatsoever will arise for the Companies or the Purchaser
from such resignations.
Section 9
Warranties and Representations
(1) The Sellers represent and warrant (gewahrleisten) within the
meaning of Section 463 BGB in favour of the Purchaser the following
regarding the Companies to be true and correct as of today and the
Effective Date.
1.1 The corporate organization of the Companies is as
described in the Recitals and Annex (B)1 hereto. The
Companies are validly existing. The Articles of
Association and partnership agreements of the Companies
listed in Annex 9.1.1 were made available to the
Purchaser. No amendments or alterations thereof,
including share capital increases, have been resolved or
applied for registration, where applicable.
1.2 The Sellers/Shareholders are the sole and unrestricted
owners of the Split Shares or the Family Partnership
Interests, respectively, which the relevant
Shareholder/Seller can freely dispose of and which are
not encumbered with any rights of third parties or any
charge of whatsoever nature except for beneficiaries of
subparticipation rights which will cease to exist on the
Completion Date with effect as of the Effective Date.
The statements in the Recitals hereof about the Companies
and the participations therein are correct in every
respect. The participations in the Companies are fully
paid, non-assessable and free of secondary
(Nachschubpflichten) or other obligations or
restrictions.
Persons and companies other than those shown in the
Recitals and Annex (B)1 hereof after Completion do not
hold any direct or indirect interest of any type
whatsoever in the Companies and there are no claims for
the granting of any such interest nor are there any
claims for the transfer of such participations.
Except for the Articles of Association/partnership
agreements, the profit and loss pooling agreement between
Schade Handels- und Beteiligungs GmbH and Schade KG and
the fiduciary agreement between Mr. Erich Menrath and
Schade Handels- und Beteiligungs GmbH relating to Schade
Portuguesa Lda. listed in Annex 9.1.1 hereto, there are
no agreements, resolutions or promises concerning (i) the
relationship between the Companies and their
shareholders/partners (ii) the corporate/partnership
relations of the Companies or (iii) the appointment of
members of any board of the Companies nor are there any
obligations to enter into such agreements, resolutions or
promises.
1.3 The Sellers warrant and represent that their respective
Family Partnership Interests do not constitute their
entire or almost their entire assets, respectively, in
terms of Section 419, 1365 of the German Civil Code
(Burgerliches Gesetzbuch).
1.4 The financial statements of the Companies, is of June 30,
1995, 1996 and 1997, which were delivered to the
Purchaser prior to the day hereof and which are attached
for purpose of evidence in Annex 9.1.4A hereto,
("Financial Statements") and the Effective Date Financial
Statements comply with the provisions of all relevant
statutes and have been prepared in accordance with
generally accepted accounting principles, consistently
applied, and are true and accurate in all material
respects and under the applicable generally accepted
accounting and valuation principles as described in Annex
6.1 hereof. Special reference is made to disclosures set
forth in Annex 6.1 relating to pension liabilities.
The consolidated profit of the Companies as shown in the
management accounts (Management-Informationsbericht)
presented on January 20, 1998 which has been calculated
on the basis of a physical stocktaking as of December 31,
1997 and in accordance with the principles set forth in
Annex 6.1 consistently applied with past practise after
all taxes but before personal income tax of the Sellers
in respect of Schade KG in the period between July 1,
1997 and December 31, 1997 amounted to no less than DM
7,850,000.
Since June 30, 1997 the Companies have only been
conducted within the normal and ordinary course of
business except for the merger of Marsh Design Ltd. into
Schade UK Ltd. and the projected sale of 25% of the
shares in CKD-Binder GmbH. Since that time, no
extraordinary business event or legal arrangement has
occurred or been entered into and there has also not been
any event which by itself or together with other events
has materially adversely affected the assets or the
profit situation of the Companies.
All salary and wage increases granted since June, 30,
1997 were required under Collective Bargaining Agreements
or if that was not the case were within the normal scope
except as disclosed in Annex 9.1.4B hereto.
1.5 The compilation of the capital accounts II new as of June
30, 1997 as set forth in Annex 3.2 hereto is true and
correct. There have been no withdrawals within the
meaning of Section 8(4) above from the Companies since
June 30, 1997 other than those set forth in Annex 9.1.5.
1.6 Except as disclosed in the Financial Statements or in
Annex 9.1.6 to this Agreement, there are not any
guarantees, mortgages, pledges or other obligations for
liabilities of third parties on behalf of the Companies
or for liabilities of the Companies granted by third
parties.
1.7 The Companies are not party to any agreement or
undertaking outside the ordinary course of business,
e.g., currency options or commodity transactions other
than for hedging the normal level of supplies necessary
for the operation of the business. All agreements
entered into by the Companies and their
partners/shareholders, as the case may be, or their
affiliated persons or entities have been concluded, and
are performed, at arms' length conditions.
1.8 All fixed assets as shown in the Financial Statements
belonging or attributable to the Companies are their sole
property, not subject to any rights or privileges of
third parties, except those disclosed on Annex 9.1.8A
hereto, and the current assets as listed in the Financial
Statements are not subject to any rights or privileges of
third parties except as such assets may be subject to
statutory liens and retention of title clauses in the
ordinary course of business and except as disclosed in
Annex 9.1.8B.
1.9 The Companies have all tangible and intangible assets,
licences, authorizations, consents, approvals and public
permits which in each and any of the aforementioned cases
are necessary and material for the manufacture, promotion
and distribution of their products and the proper
carrying on of its businesses and operation of its
machinery and equipment in the countries they are
incorporated or making business in except for the
business permit for the new plant in Carregado, an
application for which is pending. To the extent that
assets are not owned by the Companies they are leased or
licensed in the ordinary course of business on nominal
market terms.
1.10 Annex 9.1.10A hereto is a complete list of patents,
service marks, trademarks, registered designs, design
rights, business trade names, copyrights and any other
intellectual property rights, and applications therefor
("Intellectual Property Rights"), to which the companies
hold title, or have the unrestricted right to use, unless
indicated otherwise therein. Except as referred to in
Annex 9.1.10B hereto, the Companies have not licensed
anyone to use any of the Intellectual Property Rights.
There is no pending infringement proceeding against, or
by, the Companies, and no claims of any third party
challenging a use or ownership of any Intellectual
Property Right of the Companies have been raised against
any of the Companies. In respect of all Intellectual
Property Rights and all applications for registration,
all renewal and other fees have been paid as and when due
and all other steps necessary for the prosecution,
maintenance or protection of the registrations or
applications have been taken as and when due. To the
best of the Sellers knowledge none of these Intellectual
Property Rights is subject to cancellation or
nullification or any material rights of prior users or
infringes rights of third parties.
1.11 Except for the contracts, agreements and promises
described in Annex 9. 1.11 hereto (collectively
"Contractual Obligations") the Companies are not subject
to any Contractual Obligations of the type set forth in
Annex 9. 1.11 hereto.
The information on the contents of the Contractual
Obligations in Annex 9.1.11 is complete and correct in
all material respects. The Contractual Obligations are
valid and enforceable against the parties thereto and
neither the Companies nor to the best of the Sellers'
knowledge the respective other party has breached or is
in default under Contractual Obligations to any material
degree. The execution and the consummation of this
Agreement for legal reasons to the best of the Sellers
knowledge will not result in any change, termination or
right to change or termination of any Contractual
Obligations in any repayment of any grants tax advantages
or comparable benefits of any kind whatsoever granted to
the Companies, in the acceleration of any material
obligation or liability of the Companies or in the
reduction or termination of any supply or delivery
relations between the Companies and their suppliers and
customers.
1.12 Annex 9.1.12 hereto contains a complete and correct list
of the ten largest customers and the ten largest
suppliers.
1.13 Annex 9.1.13 hereto contains a complete and correct list
of all built-up and vacant real estate or rights in or to
all real estate, all buildings improvements and
constructions owned by the Companies on real estate owned
by third parties reflected in the Financial Statements or
which have been acquired by the Companies in the
meantime.
The Companies have full and unrestricted title or
unrestricted claim to and possession of such real estate,
rights, buildings, improvements and constructions ("Plant
Real Estate"). The Companies have not disposed of or
taken any steps to dispose of the Plant Real Estate and
are not under any commitment to dispose of any of it.
Except for the encumbrances listed in Annex 9.1.13
hereto, the Plant Real Estate is not subject to any
encumbrances, restrictions or rights of third parties and
no application for the registration of any encumbrance,
restriction or right of third parties in the land
register has been filed nor have the Companies granted or
committed to grant any such rights to third parties or
have subjected or are committed to subject the Plant Real
Estate to any such encumbrances or restrictions.
All securities listed in Annex 9.1.13 secure only
liabilities of the Companies which are properly reflected
in the Effective Date Financial Statements.
All buildings, improvements and constructions on the
Plant Real Estate ("Plant Buildings") to the best of the
Sellers knowledge taking into consideration their age and
current use are in good and serviceable condition normal
wear and tear excepted. The Plant Buildings neither
encroach on property owned by third parties nor are they
in violation of any rights of third parties or municipal
zoning plans or other legal provisions. All permits
required for the Plant Buildings have been properly
granted. The condition and the present use of the Plant
Real Estate including the Plant Buildings do not violate
any building regulations or applicable administrative and
other legal provisions.
1.14 The list of insurance policies of the Companies attached
in Annex 9.1.14 hereto is complete and correct. All
premiums due under the above policies have been duly paid
and since July 1, 1997 no material insurable damages have
occurred which are not covered by such insurance
policies.
1.15 Except as set forth in Annex 9.1.15A hereto, the
Companies are not party to material lawsuits or other
court actions or similar proceedings before a Court of
Justice, an administrative authority or arbitration panel
and no material injunction or similar order of
prohibition has been granted against the Companies.
To the best of the Sellers' knowledge, except as set
forth in Annex 9.1.15B no circumstances are known to
exist which might reasonably be expected to provide a
basis for such lawsuits, actions or similar proceedings.
The Companies are not subject to any judgement, decree or
settlement which materially restricts or impairs them in
certain business measures, in the acquisition or
disposition of assets in competition or in the operation
of their business.
1.16 No product liability claims are pending against the
Companies, and to the best of Seller's knowledge, there
is no reason to believe that such claims might be brought
against the Companies. To the best of the Sellers
knowledge all products manufactured and/or distributed by
the Companies conform to legal and other applicable
provisions including defined standards.
1.17 Beyond the findings and assessments stated in (i) the
"Bericht uber Umweltprufung August 1995 Teil 1
(Input/Output-Analyse) Gesetzliche Bestimmungen und
behordliche Auflagen" by Rautenberg Industrieberatung fur
technisches Controlling GmbH, Ludenscheid, (ii) the
reports established by Colonia Versicherung dated July
20, 1995, August 14, 1995 and September 4, 1995, (iii)
the "Erganzende umwelttechnische Untersuchungen, CZ
Strakonize, Werk Blatna," by Institut Fresenius,
Fresenius Umwelt Consult and (iv) the "Eloxalanlage auf
dem Betriebsgelande der Firma Schade KG, Plettenberg -
Gefahrdungsabschatzung -" prepared by Grundbauinstitut in
Dortmund, Dr. Ing. Ulrich Hofer, Dipl. Ing. Siegmar
Biedebach, dated March 2, 1998, the Sellers are not aware
of any contamination of ground, building or groundwater
that, according to applicable statutes as of the date
hereof, are to be cured by the Companies. To the best of
Sellers' knowledge, the Companies operate their
businesses in accordance with environmental legislation
applicable as of the date hereof. Special reference is
made to the administrative order of the district
authorities at Arnsberg dated November 28, 1997 (7.
Anderungsbescheid der Bezirksregierung Amsberg vom 28.
November 1997, AZ: 54.1.14 - II.962.78 - 88/88), which
has been made available to the Purchaser.
1.18 To the best of the Sellers' knowledge except for normal
start-up-risks in connection with the introduction of new
products there are no particular circumstances
specifically relating to the Companies which could be
reasonably expected to materially adversely affect the
business of the Companies after the Effective Date.
(2) With the exception of Section 11 below (Taxes and Social
Security Contributions), the above warranties and representations
are exclusive. No further warranties and representations are given
by the Sellers.
(3) The knowledge of Wolfgang Krappe, Jurgen von Heyden and Erich
Menrath and the knowledge of the Sellers professional advisors
retained in connection with the transactions set forth in this
Agreement. is deemed to be the knowledge of the Sellers to the
extent that representations and warranties set forth in this
Section 9 are qualified by the Sellers' knowledge or the best of
the Sellers' knowledge provided that in respect of the professional
advisors such knowledge falls within the area of competence of such
advisor. The knowledge of one individual Seller is also
attributable to the other Sellers.
Section 10
Remedies for Breach of Warranties
(1) If any warranties stated in Section 9 above and Section 11
below should not be true and correct, Purchaser or at the
discretion of Purchaser the Companies shall be compensated by the
Sellers for the damage resulting therefrom. This applies, however,
only if and to the extent that the damage resulting from such
breach of warranties is not reserved for in the Effective Date
Financial Statements . The Sellers' liability pursuant to this
Section 10 and Section 11 below except for a breach of the
representations and warranties in Section 9.1.2 and 9.1.3 shall not
be joint and several (gesamtschuldnerisch) and each individual
Seller's liability pursuant to this Section 10 and Section 11 below
shall be pro rata limited to the proportion of the fixed capital
quota of such individual Seller to the total fixed capital quota as
specified above under Recital D. The maximum liability of each
individual Seller under this Section 10 and Section 11 below shall
be limited to the proportionate part of the Purchase Price to which
such individual Seller is entitled pursuant to this Agreement.
(2) The Purchaser shall have warranty claims under para. (1) above
only if and to the extent that the aggregate claims exceed DM
200,000. A defect or a breach of a warranty or a situation serving
as the factual basis for a claim under Section 9, 10 and 11 of this
Agreement which were known to the Purchaser or the Guarantor or
their professional advisors as of the date hereof, preclude the
Purchaser from making a claim relating to such defect, breach or
situation provided that in respect of the professional advisors
such knowledge falls within the area of competence of such advisor.
(3) Claims for a breach of warranty under this Section shall
become time-barred on March 31, 2000, except as otherwise provided
in this Agreement and except with respect to any defects in the
title to the Split Shares and the Family Partnership Interest. The
rights of the Purchaser pursuant to Section 123, 476 and 826 BGB shall
remain unaffected.
(4) Any other claims of whatsoever nature including for culpable
breach of precontractual obligations (culpa in contrahendo) shall
be excluded except in the event of gross negligence (grobe
Fahrlassigkeit) or fraud (Vorsatz/Arglist). The right to rescind
(Wandlung) or to reduce the Purchase Price (Minderung) is expressly
excluded.
(5) The Sellers shall be given the right and opportunity to defend
on behalf of the Purchaser and/or the Companies , at their own
risk, discretion and expense, any action brought, or claim made,
against the Purchaser and/or the Companies which might result in a
liability of the Sellers towards the Purchaser and/or the Companies
in connection with or under this Agreement to the extend legally
permissible. For this purpose, Sellers shall be promptly informed
by Purchaser of any such action or claim, and have reasonable
access, at its own expense and during ordinary business hours, to
the books and records of the Companies.
Section 11
Taxes and Social Security Contributions
(1) The Sellers warrant and represent that, the Effective Date
Financial Statements reserve or provide in full for all taxes,
custom duties, public dues and social security charges (other than
personal income tax of the Sellers in respect of Schade KG)
including penalties and interest thereon for which the Companies ,
may have become, or may hereafter become, liable to be assessed in
respect of, or by reference to, its profits, assets or operations
in respect of the period through the Effective Date.
(2) The Sellers warrant and represent that, with respect to
Subsection (1) above, the Companies, as per the Effective Date,
have filed all required tax and social security contribution
returns and have paid all the taxes and social security
contributions, which have become due and have retained all taxes,
social security charges and other charges to be retained and paid
by them by the due date to the respective recipient and have paid
all delay charges and penalties.
(3) If and to the extent that taxes or social security
contributions are payable in respect of any period prior to the
Effective Date against the Companies which have not been satisfied
or reserved or provided for in the Financial Statements, Sellers
shall compensate Purchaser for such amounts. This applies,
however, only if and to the extent that the damage resulting from
such breach of warranties is not reflected in the Effective Date
Financial Statements.
(4) If and insofar as additional taxes (Mehrsteuem) are equalized
by tax reductions (Mindersteuern), which the Companies would not
have obtained otherwise (e.g. because of allocation to different
tax periods), there shall be no obligation to compensate for the
additional taxes.
(5) Claims under this Section shall be time-barred within six (6)
months from the date by which an additional assessment
(Festsetzung) or amended assessment by the competent administration
becomes res judicata (rechts- oder bestandskraftig), the latest
however 10 years after the date of Completion except for
assessments by the competent administration because of tax
avoidance.
(6) The Sellers are entitled (at their own costs) to participate
in the handling and negotiations of tax field- audits covering
periods prior to and up to the Effective Date. Binding
declarations to the tax authorities which may have consequences for
the Sellers shall be made by the Purchaser and or the Companies
only in agreement with the Sellers. The Sellers assume
corresponding obligations vis-a-vis the Companies and the
Purchaser. Purchaser will provide without delay full information
to Sellers or their counsel concerning any tax or other public
contribution audit and of any attempt by the relevant authorities
to make any charge or disallow any relief or allowance for any such
period. Purchaser shall, for such purpose, see to it that the
Companies shall give to Sellers and their advisors full access to
the books and records of the relevant company after reasonable
notice during normal business hours. If no agreement can be
reached with the authorities with regard to any disputed tax or
other public contribution item, Purchaser shall file, or cause the
relevant company to file, any remedy and/or appeal against the
decree or other decision following the instruction of the Sellers
or an individual Seller. The costs of such proceedings shall be
home by the Sellers or by the individual Seller requesting such
filing.
Section 12
Non-Competition
(1) The Sellers hereby undertake not, directly or indirectly, to
compete with the business as presently conducted by the Companies
for a period of three years following the date hereof by
establishing, participating in, advising or consulting for,
directly or indirectly, a business engaged in the manufacture or
distribution of similar or identical products or rendering similar
or identical products, or rendering similar or identical services
to customers as at present manufactured, distributed and/or
rendered by the Companies. This shall not apply to their
participation in Hella KG and its affiliated companies and in
Kunststoffwerk Voerde, Hueck & Schade GmbH & Co. KG/Voerde
Verwaltungsgesellschaft mbH, which companies shall not be
restricted in their current activities. Moreover, Hella KG shall
not be restricted from manufacturing and distributing front-ends
which contain components identical with or similar to those
contained in the Companies' production programme. The above shall
also apply to any investment by any Seller or Controlled Company in
any company or business active in the respective business of Schade
KG and the Subsidiaries as presently conducted, except for any
investment in a company listed on a Stock Exchange, such investment
not to exceed 10% of the outstanding stock of such company and the
Sellers' participation in Hella KG Hueck & Co. and their affiliated
companies.
(2) In the event of a breach of the aforementioned undertaking,
the relevant Seller, in each case of violation, shall pay to the
Purchaser a lump sum damage compensation of DM 50,0000 if he does
not cease such breach within a reasonable period of time to be
fixed in a warning notice to be sent by Purchaser. Any breach
lasting for a period of more than four weeks shall be deemed a
separate act for the purpose of this provision. The right to
obtain or apply for any other remedy, including damages,
preliminary injunction or any other relief, shall remain unaffected
except that any penalty paid shall be set off against any claim for
damages.
Section 13
Costs and Fees
(1) Each party shall bear its own costs and expenses in connection
with the preparation and implementation of this Agreement,
including any and all professional fees of their advisers, expenses
for representation and out-of-pocket costs.
(2) Any costs and taxes due in the course of the implementation of
the transactions contemplated hereunder except real estate transfer
tax (Grunderwerbssteuer) (if any), in particular, but not limited
to, notarial fees, registration costs, if any, and fees assessed by
the antitrust administrations and the costs of the due diligence
review effected or to be effected by the Purchaser shall be borne
by the Purchaser.
Section 14
Confidentiality/Joint Statements
(1) Sellers and Purchaser agree to keep confidential and secret
the existence and contents of this Agreement from third parties,
except if obliged to disclose and to give notice of such disclosure
to or by any court or administrative authority or otherwise.
(2) Seller and Purchaser may mutually agree upon the language of
an official press release and additional information to be released
to the press, labour representatives, customers and the business
community relating to the acquisition and the future policy of the
businesses acquired hereunder.
Section 15
Assignment of Rights and Undertakings
(1) The Purchaser may transfer or assign this Agreement or any
rights and obligations hereunder to any other company controlled by
Purchaser (the "Assignee"), or may perform any undertakings and
obligations hereunder through such Assignee. The Purchaser and the
Guarantor remain, however, fully liable for the performance of the
obligations under this Agreement by the Assignee.
(2) The restrictions provided in this clause shall apply, mutatis
mutandis, to the shares or interests in the Assignee.
Section 16
Antitrust Filings
The Purchaser and the Seller shall fully cooperate in making
a joint filing, or in making separate filings, to the competent
antitrust authorities and in seeking to obtain as soon as possible
any approval which may be required from any such authority with
respect to this Purchase Agreement and the assignment of the shares
provided by this Agreement. The parties are aware that the
purchase of the Shares is subject to pre-merger-notification to the
German Federal Cartel Office (Bundeskartellamt). Purchaser will
make such notification without undue delay after the day hereof.
The Seller shall see to it that the Companies participate in the
preparation and the filing of such prenotification.
Section 17
Dispute Resolution/Experts
(1) Any disputes and controversies arising out of or in connection
with this Agreement shall be settled in accordance with a separate
arbitration agreement as per Attachment G to this Notarial Deed.
(2) In the event that the parties cannot reach agreement pursuant
to Section 6(3) upon any disputed balance sheet items in connection
with the Effective Date Financial Statements and/or the valuation
or assessment of any such items within the period defined in
Section 6(3) third sentence, such dispute or controversy shall be
settled at either party's request by way of referral to an expert
as described below.
(a) If the parties cannot reach agreement, the parties shall
appoint an expert. They shall deliver to the expert
reasoned opinions describing their positions within 2
weeks from the appointment of the expert. Within the
scope and limits set by the two opinions as delivered,
the expert shall deliver his opinion.
(b) If the parties cannot agree on who shall be appointed as
the expert within a period of 10 days after the written
proposal by either of the parties then the expert shall
be appointed upon request of either party by the German
Institute of Chartered Accountants (Institut der
Wirtschaftsprufer). The expert shall not have been
employed by any party or their affiliated companies.
Upon request of either party, the expert shall be
appointed from a major international accounting firm.
(c) The parties shall be given the opportunity to present
their case to the expert in writing and orally. The
expert shall discuss with the parties, and give reasons
with respect to, the various issues from which he wants
to deviate.
(d) Accounting and valuation standards and criteria as
referred to or defined in this Agreement or its Annexes
shall be binding upon the expert.
(e) The expert's decision shall be final and binding for the
parties. However, the expert shall not decide upon legal
issues.
(f) The parties shall advance and bear all fees, costs and
expenses of the expert upon first written request in
equal parts. The fees, cost and expenses of the expert
and the professional advisors of the parties finally
shall be borne by the parties pursuant to Section 91 sequ. ZPO.
Section 18
Guarantee
The Guarantor guarantees (Schuldbeitritt) the Sellers that the
Purchaser shall fully perform all its obligations under or in
connection with this Agreement and its attachments.
Section 19
Miscellaneous
(1) Sellers hereby appoint Dr. Siegfried Elsing, Rechtsanwalte
Ho1ters & Elsing, Dussldorf as the person authorized to make and
accept with legally binding effect for all Sellers all declarations
under this Agreement or in consummation thereof in particular but
not limited to, to receive service of documents or notices also in
the context of the introduction of proceedings for the resolution
of disputes. The appointment is valid until receipt by Purchaser
of a notice announcing a change of the authorized person, which
person must have a residence or corporate seat in Germany.
(2) This Agreement is subject to German law. Adherence to the law
of the place where this Agreement is notarized shall be sufficient
in all matters of form.
(3) Amendments and alterations must be in writing and with express
reference to this Agreement, unless notarization or any other form
is required.
(4) If any of the foregoing provisions shall become or be held
invalid, ineffective or unenforceable, all other provisions shall
remain in full force and effect. The invalid, ineffective or
unenforceable provision shall be deemed to be automatically amended
and replaced, without the necessity of further action by the
Parties hereto, to such form, substance, time and measure as shall
be valid, effective and enforceable and as shall accomplish as far
as possible the purpose and intent of the invalid, ineffective or
unenforceable provision. The aforesaid shall apply, mutatis
mutandis, to any situation not contemplated and/or covered by this
Agreement.
_________________, this _______ day of _____________________, 1998.
_________________________________
( )
on behalf of the Sellers
_________________________________
( )
on behalf of the Purchaser
_________________________________
( )
on behalf of the Guarantor
Exhibit 4.1
Attachment D to Notarial Deed No.___/1998 of the Notary ____
Shareholders' Agreement
by and between
Excel Industries, Inc.
120 North Main Street
Elkhart, Indiana 46514, USA,
represented by Harald Selzner, Esq.
- hereinafter "Excel" -
and
Excel Industries, Inc.,
120 North Main Street
Elkhart, Indiana 46514, USA
represented by Harald Selzner, Esq.
- hereinafter the "Guarantor" -
on one side
and
Hella KG Hueck & Co.,
Rixbecker Strabe 75,
59552 Lippstadt, Germany
represented by Stephan Zilles, Esq. by virtue of a Power of
Attorney dated March 11, 1998
- hereinafter "Hella KG" -
on the other side.
Recitals
(A) WHEREAS Excel and Hella KG will, subject to the registration
of Excel as a limited partner (Kommanditist) with the Commercial
Register, be the sole limited partners of Schade GmbH & Co. KG
("Schade KG"), a German law limited partnership with registered
offices at Plettenberg, registered with the Commercial Register of
Plettenberg under registry no. HRA 10, and the sole shareholders of
Schade KG's sole general partner (Komplementar), Schade
Geschaftsfuhrungsgesellschaft GmbH ("Schade GmbH").
(B) WHEREAS Excel and Hella KG (collectively the "Parties") wish
to
(i) amend the Partnership Agreement of Schade KG and the
Articles of Association of Schade GmbH and
(ii) to define certain principles governing the business of,
and the conduct of the further management in, Schade
GmbH, Schade KG and its subsidiaries.
(C) WHEREAS the Parties wish to increase Excel's and Hella KG's
participation in Schade KG's fixed capital by way of increasing
the fixed nominal capital quota (feste Kapitaleinlage).
NOW, THEREFORE, the Parties hereto agree as follows:
PART I.
SHAREHOLDERS' AGREEMENT
Section 1
Allocation of Results
(1) Excel and Hella KG agree that the profits of Schade KG as
well as the profits of the subsidiaries of Schade KG shall be
distributed to the respective shareholders/partners as follows:
(a) Excel and Hella KG agree that (except for
withdrawals of Excel and Hella KG from Schade KG necessary to
pay their personal income tax/corporate income tax in respect
of profits of Schade KG) no profits shall be
distributed/withdrawn from Schade KG and/or its subsidiaries
unless the Equity as defined hereinafter of the respective
company, profits of which are to be distributed/withdrawn,
amounts to at least 33.3% of the balance sheet total
(Bilanzsumme, Section 266(3) HGB).
The equity for these purposes shall mean the equity ("Equity")
within the meaning of Section 266(3) A HGB. In respect of
Schade KG the equity shall be the sum of the balances on
capital accounts I and III as set forth in the new Partnership
Agreement as set forth in Section 6 below.
(b) As soon and as long as the Equity amounts to at
least 33.3% of the balance sheet total (Bilanzsumme) of such
company all profits of such company shall be
distributed/withdrawn to/by the respective shareholder or
Excel/Hella KG in their entirety to the extent permissible
under the law or the Partnership Agreement; provided, however,
that the Equity shall not be reduced below 33.3% of the
balance sheet total (Bilanzsumme) by such
distribution/withdrawal.
(c) Deviations from the policy set forth above shall
only be allowed if Excel and Hella so unanimously resolve.
(2) Excel and Hella KG shall ensure that this distribution
policy is followed both by Schade KG and by all of Schade KG's
subsidiaries. Excel and Hella KG in particular exercise their
shareholders' rights accordingly.
Section 2
Arm's Length Clause
All transactions carried out between
(1) any of the Companies (as defined in the Share and
Partnership Interest Sale and Purchase Agreement of even date).
(2) Schade KG and the Parties hereto or any of their
respective affiliates, and
(3) any member of the Schade KG Group and the Parties hereto
or any of their respective affiliates.
shall be at arm's length terms and in accordance with normal market
conditions.
Section 3
Change of the Name of Schade GmbH
Excel and Hella KG further agree that in the event that Schade
GmbH is no longer General Partner of Schade KG, they will ensure
that Schade GmbH at once changes its name in such a way that the
word "Schade" will be deleted.
Section 4
Increase of Schade KG's Equity
(1) Immediately following the registration of Excel as a
Limited Partner of Schade KG, Excel and Hella KG are obligated to
make a further contribution to the fixed capital quota of Schade KG
in a total amount of DM 33,340,000.00.
(2) Excel and Hella KG hereby agree that from this further
contribution only a part shall be registered as further Liability
Contribution ("Hafteinlage"), whereas, the remaining further
contribution should be paid as a non-registered further Compulsory
Contribution ("Pflichteinlage").
(3) More specifically, Excel and Hella KG shall make the
following contributions:
Excel:
- Liability Contribution
(Hafteinlage) DM 13,340,000.00
in addition to the already existing Liability
Contribution
(Hafteinlage) DM 17,000.000.00
- Further non-registered Compulsory Contribution
(Pflichteinlage) DM 14,000,000.00
Hella KG:
- further non-registered Compulsory Contribution
(Pflichteinlage) DM 6,000,000.00
-----------------
DM 33,340,000.00
(4) After the capital increase Excel and Hella KG shall hold
the following participations in the fixed capital quota:
Excel (Gesamtpflichteinlage) DM 44,340,000.00
-----------------
out of which a partial amount of DM 30,340,000.00
represents Excel's Liability Contribution (Hafteinlage)
Hella KG (Gesamtpflichteinlage) DM 19,000.000.00
-----------------
out of which a partial amount of DM 13,000.000.00
represents Hella KG's Liability Contribution
(Hafteinlage)
(5) Excel's total liability contribution of DM 30,340,000.00
shall be one unitary liability contribution (eine einheitliche
Hafteinlage).
PART II.
New Articles of Association/new Partnership Agreement
Section 5
New Articles of Association of Schade GmbH
Immediately following the registration of Excel as Limited
Partner of Schade KG, Excel and Hella KG shall amend the Articles
of Association of Schade GmbH as it is described in greater detail
in Annex 1 to this Agreement.
Section 6
New Articles of Partnership of Schade KG
Immediately following the registration of Excel as Limited
Partner of Schade KG, Excel and Hella KG shall amend the Articles
of Partnership of Schade KG as it is described in greater detail in
Annex 2 to this Agreement.
Section 7
Interim Period
For the time period until the new Articles of Association of
Schade GmbH and the new Partnership Agreement of Schade KG shall be
entered into as described in the above mentioned Sections 5 and 6,
Schade KG and Excel already now agree that within their internal
relationship, they will act as if the new Partnership Agreement and
the new Articles of Association have already become effective.
PART III
General Provisions
Section 8
Guarantee
The Guarantor herewith guarantees the due performance of
Excel's obligations under and in connection with this Agreement.
Section 9
Miscellaneous
(1) This Agreement is subject to the laws of Germany.
(2) In case of contradiction or discrepancy between the
Company's Articles of Association and this Agreement, the latter
shall prevail.
(3) Amendments and alterations must be in writing and with
express reference to this Agreement, unless notarization or any
other form is required.
(4) This Agreement and any rights and obligations hereunder
may not be assigned and/or transferred in whole or in part without
prior written consent of the other party hereto.
(5) If any of the foregoing provisions shall become or be
held invalid, ineffective or unenforceable, all other provisions
shall remain in full force and effect. The invalid, ineffective or
unenforceable provision shall be deemed to be automatically amended
and replaced, without the necessity of further action by the
Parties hereto, to such form, substance, time and measure as shall
be valid, effective and enforceable and as shall accomplish as far
as possible the purpose and intent of the invalid, ineffective or
unenforceable provision. The aforesaid shall apply, mutatis
mutandis, to any situation not contemplated and/or covered by this
Agreement.
Made at _______________, this ____ day of __________,1998.
Hella KG Hueck & Co.
by:_________________________
____________________________
( )
Excel Industries, Inc.
by:_________________________
____________________________
( )
Guarantor
by:_________________________
____________________________
( )
