Attention is again drawn to the fact that a difference is made in the master contract between the "present date" and the "closing date". The inclusion of all the these related clauses in a share purchase and share transfer agreement only makes sense under German law is there is not a quite significant period of time between the contractual commitment transaction and the in rem transaction, in this case the transfer of shares. In German practice, the transfer of shares normally takes places immediately after the conclusion of the contractual commitment transaction, however.

The subject matter of the agreement is stipulated in Article 2. It is specified that the seller will sell the shares in the company to the buyer free of all and any encumbrances. Article 2 also specifies the method of calculating the purchase price and the modalities for the payment of the purchase price. The calculation of the purchase price is based on financial statements as of the relevant date. The agreement also includes the appointment of an independent expert if there is a difference of opinion between the parties concerning the preparation of the financial statements. The calculation of the purchase price in this way is also customary in German practice and under German law in the case of share purchase and transfer agreements. The possibility included in Article 2 of committing the seller to pay an amount to the buyer if a so-called negative purchase price arises from the financial statements as of the relevant date is permissible under German law and is also customary.

The compensation date agreement between the parties included in Article 2, i.e. a specification of the date for the payment of the purchase price or any negative purchase price, is permissible 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.

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