What is understood by "Closing" in Article 11 only applies in German law on certain conditions. These conditions are met if the conclusion of the contract the commitment transaction under German law coincides with the transfer the disposition transaction under German law.

The disposition transaction may be formulated as follows under German law:

"Transfer of Title: All rights, title and interest to seller's Assets is hereby transferred to purchaser and purchaser hereby assumes all rights and duties associated with seller's Assets".

If the two aforesaid independent legal transactions do not coincide time-wise namely the commitment transaction and the disposition transaction there is initially only a contractual commitment on the parties to perform the disposition transaction when the commitment transaction is concluded. The buyer of a business only becomes the owner of such business when the disposition transaction has been performed. For this reason, it would be agreed in Article 11 under German law when the contractual transaction between the parties is to take place and on what date the assets, rights and obligations are to pass from the seller to the buyer.

The additional submission obligations of the seller and the buyer envisaged in Article 11 may be included in the contractual agreement under German law whereby the date of the submission then relates to the disposition transaction, i.e. upon the transfer of assets, rights and obligations.

When reference is made to "Closing" in Article 11, this would therefore be replaced by "Transaction" in an agreement for the purchase and sale of a company under German law. This then relates to a contractual obligation to carry out the in rem performance transaction on a certain date. In view of the fact that the commitment transaction and performance transaction are normally very close together time-wise in German practice, a ruling such as the one provided in Article 11 of the master contract would probably not be necessary in 90 % of all agreements for the purchase and sale of a company under German law.

For further information please contact Dr Erich Michel, Wessing Berenberg-Gossler Zimmermann Lange, Freiherr-Vom-Stein-Strasse 24-26, Frankfurt am Maim 60323, Frankfurt, Germany- Tel: +496 997 1300, Fax: +496 997 130100.

You may also wish to read through related Wessing Berenberg-Gossler Zimmermann Lange. You can view the entire archive via the Internet on Business Monitor Online (http://www.businessmonitor.co.uk), or via your online provider by entering "Wessing Berenberg-Gossler Zimmermann Lange" and "Business Monitor" as a free text search.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.