EXECUTION COPY
BUSINESS COMBINATION AGREEMENT
among
DAIMLER-BENZ AKTIENGESELLSCHAFT
CHRYSLER CORPORATION
and
OPPENHEIM AKTIENGESELLSCHAFT
Dated as of May 7, 1998
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TABLE OF CONTENTS
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ARTICLE I
DAIMLER-BENZ EXCHANGE OFFER
Section 1.1. The Daimler-Benz Exchange Offer ................................ 2
Section 1.2. Daimler-Benz Exchange Agent .................................... 3
Section 1.3. German Exchange Offer Documents ................................ 4
Section 1.4. U.S. Exchange Documents ........................................ 4
Section 1.5. Antidilution Protection for Daimler-Benz Exchange Offer Ratio .. 5
Section 1.6. Newco AG Name .................................................. 5
ARTICLE II
CHRYSLER MERGER
Section 2.1. Formation of Chrysler Merger Sub. .............................. 5
Section 2.2. Chrysler Merger ................................................ 6
Section 2.3. The U.S. Share Exchange ........................................ 6
Section 2.4. Conversion of Chrysler Common Stock in the Chrysler Merger ..... 6
Section 2.5. Exchange of Shares of Chrysler Common Stock .................... 8
Section 2.6. Treatment of Chrysler Stock Plans .............................. 10
Section 2.7. Redemption of Chrysler Preferred Stock ......................... 13
Section 2.8. Antidilution Protection for U.S. Exchange Ratio ................ 13
Section 2.9. Chrysler Merger Closing ........................................ 14
Section 2.10. Certificate of Incorporation ................................... 14
Section 2.11. By-laws ........................................................ 14
Section 2.12. Officers ....................................................... 14
Section 2.13. Board of Directors ............................................. 14
ARTICLE III
DAIMLER-BENZ MERGER
Section 3.1. Daimler-Benz Merger ............................................ 15
Section 3.2. Daimler-Benz Merger Closing .................................... 15
Section 3.3. Conversion of Daimler-Benz Ordinary Shares and Daimler-Benz ADSs
in the Daimler-Benz Merger ..................................... 15
Section 3.4. Exchange of Daimler-Benz ADSs .................................. 15
Section 3.5. Affiliates Letter .............................................. 17
Section 3.6. Treatment of Daimler-Benz Stock Plans .......................... 17
Section 3.7. Treatment of Daimler-Benz NEWS ................................. 18
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Section 3.8. Treatment of Daimler-Benz Subordinated Mandatory Convertible
Notes ...................................................... 18
Section 3.9. Antidilution Protection for Daimler-Benz Merger Exchange
Ratio ...................................................... 18
Section 3.10. Treatment of Fractional Shares ............................. 18
Section 3.11. Withholding Taxes .......................................... 19
Section 3.12. Singapore Depositary Shares ................................ 19
ARTICLE IV
NEWCO AG GOVERNANCE AFTER THE EFFECTIVE TIME
Section 4.1. Newco AG Governance after Effective Time ................... 20
Section 4.2. Integration Committee ...................................... 21
Section 4.3. Operational Headquarters ................................... 21
Section 4.4. Language ................................................... 21
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Corporate Organization ..................................... 21
Section 5.2. Subsidiaries ............................................... 22
Section 5.3. Capital Stock .............................................. 23
Section 5.4. Authority .................................................. 24
Section 5.5. Consents and Approvals; No Violation ....................... 24
Section 5.6. Financial Statements; SEC Filings .......................... 25
Section 5.7. Absence of Changes ......................................... 26
Section 5.8. Absence of Undisclosed Liabilities ......................... 26
Section 5.9. Litigation ................................................. 27
Section 5.10. Taxes ...................................................... 27
Section 5.11. Employee Benefit Plans ..................................... 28
Section 5.12. Labor and Employment Matters ............................... 28
Section 5.13. Information Provided By Representing Party ................. 29
Section 5.14. Ownership of Capital Stock ................................. 30
Section 5.15. Voting Requirements ........................................ 30
Section 5.16. Accounting Matters ......................................... 30
Section 5.17. Opinion of Financial Advisor ............................... 30
Section 5.18. Finders and Advisors ....................................... 31
Section 5.19. State Takeover Statutes; Stockholder Rights Plan ........... 31
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ARTICLE VI
NEWCO AG REPRESENTATIONS AND WARRANTIES
Section 6.1. Corporate Organization .................................... 31
Section 6.2. Capital Stock ............................................. 31
Section 6.3. Authority ................................................. 31
Section 6.4. Consents and Approvals; No Violation ...................... 32
Section 6.5. Information Provided By Newco AG .......................... 32
Section 6.6. Ownership of Capital Stock ................................ 33
Section 6.7. Accounting Matters ........................................ 33
Section 6.8. No Prior Activities ....................................... 33
ARTICLE VII
CONDUCT OF BUSINESS PENDING THE EFFECTIVE TIME
ARTICLE VIII
EMPLOYEE BENEFIT MATTERS
Section 8.1. Newco AG Retention/Personnel Policy ....................... 36
Section 8.2. Benefits .................................................. 36
Section 8.3. Employment Agreements ..................................... 37
ARTICLE IX
ADDITIONAL AGREEMENTS
Section 9.1. No Solicitation ........................................... 38
Section 9.2. Preparation of the F-4 Registration Statement, the Proxy
Statement/Prospectus and the U.S. Exchange Offer Documents;
Stockholders Meetings ..................................... 40
Section 9.3. Chrysler Stock Issuance ................................... 41
Section 9.4. Accountants' Comfort Letters .............................. 42
Section 9.5. Accountants' Pooling Letters .............................. 42
Section 9.6. Access to Information; Confidentiality .................... 42
Section 9.7. Takeover Statute .......................................... 43
Section 9.8. Indemnification, Exculpation and Insurance ................ 43
Section 9.9. Public Announcements ...................................... 44
Section 9.10. Affiliates ................................................ 44
Section 9.11. Stock Exchange Listings ................................... 45
Section 9.12. Stockholder Litigation .................................... 46
Section 9.13. Tax Treatment ............................................. 46
Section 9.14. Standstill Agreements; Confidentiality Agreements ......... 46
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Section 9.15. Conveyance Taxes ........................................ 46
Section 9.16. Certain Obligations of Newco AG ......................... 47
Section 9.17. Reasonable Best Efforts ................................. 47
ARTICLE X
CLOSING CONDITIONS
Section 10.1. Conditions to All Parties' Obligation to Close .......... 48
Section 10.2. Conditions to Daimler-Benz's and Newco AG's Obligation to
Close ................................................... 49
Section 10.3. Conditions to Chrysler's Obligation to Close ............ 50
Section 10.4. Further Condition to Obligations of Daimler-Benz and
Newco AG ................................................ 51
Section 10.5. Frustration of Closing Conditions ....................... 51
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
Section 11.1. Termination ............................................. 51
Section 11.2. Effect of Termination ................................... 53
ARTICLE XII
MISCELLANEOUS
Section 12.1. No Survival of Representations and Warranties ........... 53
Section 12.2. Fees and Expenses ....................................... 53
Section 12.3. Counterparts; Effectiveness ............................. 53
Section 12.4. Governing Law ........................................... 53
Section 12.5. Notices ................................................. 53
Section 12.6. Assignment; Binding Effect .............................. 55
Section 12.7. Severability ............................................ 55
Section 12.8. Enforcement of Agreement ................................ 56
Section 12.9. Entire Agreement; No Third-Party Beneficiaries .......... 56
Section 12.10.Reservation of Right to Revise Transaction .............. 56
Section 12.11.Extension of Time, Waiver, Etc .......................... 56
Section 12.12.Amendment ............................................... 57
Section 12.13.Interpretation .......................................... 57
Section 12.14.Responsibility for Obligations of Newco AG .............. 57
Section 12.15.Consent to Jurisdiction ................................. 57
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EXHIBIT INDEX
Exhibit A -- Annex of Defined Terms
Exhibit B-1 -- Form of Chrysler Affiliate Agreement
Exhibit B-2 -- Form of Daimler-Benz Affiliate Agreement
Exhibit C -- Form of Amended and Restated Certificate of Incorporation of
Chrysler Merger Sub
Exhibit D -- Form of By-laws of Chrysler Merger Sub
Exhibit E -- Designated Officers of Chrysler and Daimler-Benz
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BUSINESS COMBINATION AGREEMENT
BUSINESS COMBINATION AGREEMENT (this "Agreement"), dated as of May
7, 1998, among Daimler-Benz Aktiengesellschaft, an Aktiengesellschaft organized
and existing under the laws of the Federal Republic of Germany ("Daimler-Benz"),
Chrysler Corporation, a Delaware corporation ("Chrysler"), and Oppenheim
Aktiengesellschaft, an Aktiengesellschaft organized and existing under the laws
of the Federal Republic of Germany ("Newco AG").
WHEREAS, Daimler-Benz and Chrysler desire to combine their
respective businesses, stockholder groups, managements and other constituencies
in a merger-of-equals transaction upon the terms and subject to the conditions
of this Agreement;
WHEREAS, Daimler-Benz, Chrysler and Newco AG desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated by this Agreement;
WHEREAS, the Supervisory Board (Aufsichtsrat) of Newco AG and the
Management Board (Vorstand) of each of Daimler-Benz and Newco AG and the Board
of Directors of Chrysler have approved the transactions contemplated by this
Agreement in accordance with the laws of their respective jurisdictions of
organization and have authorized the execution and delivery of this Agreement;
WHEREAS, Deutsche Bank Atkiengesellschaft has informed Daimler-Benz
that such stockholder supports the transactions involving Daimler-Benz and Newco
AG contemplated by this Agreement;
WHEREAS, Tracinda Corporation has entered into a Stockholder's
Agreement, dated the date hereof, among Daimler-Benz, Chrysler and such
stockholder (the "Chrysler Stockholder's Agreement"), pursuant to which such
stockholder has agreed to vote all shares of Chrysler Common Stock owned by it
in favor of the transactions involving Chrysler contemplated by this Agreement
at the Chrysler Stockholders Meeting;
WHEREAS, for United States federal income tax purposes the parties
intend that (i) the Chrysler Exchange, (a) will qualify as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and/or (b) when integrated with the Daimler-Benz Exchange
Offer and taking into account the Daimler-Benz Merger, will be treated as a
transaction described in Section 351(a) of the Code, (ii) the Daimler-Benz
Exchange Offer either (a) when integrated with the Chrysler Merger and the U.S.
Share Exchange, will be treated as a transaction described in Section 351(a) of
the Code or (b) if integrated with the Daimler-Benz Merger, will qualify as a
reorganization within the meaning of Section 368(a) of the Code, and (iii) this
Agreement shall be, and is hereby, adopted as a plan of reorganization for
purposes of Section 368(a) of the Code;
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WHEREAS, the parties intend that the Chrysler Merger, together with
the U.S. Share Exchange, will qualify for an exception to the general rule of
Section 367(a)(1) of the Code;
WHEREAS, for German tax purposes the Daimler-Benz Exchange Offer and
the Daimler-Benz Merger are intended not to result in the recognition of any
gain or loss by Newco AG, Daimler-Benz and stockholders of Daimler-Benz;
WHEREAS, for financial reporting purposes the parties intend that
the transactions contemplated by this Agreement will be accounted for as a
"pooling-of-interests" transaction under United Stated generally accepted
accounting principles ("US GAAP"); and
WHEREAS, capitalized terms used in this Agreement and not elsewhere
defined shall have the respective meanings set forth in Exhibit A hereto;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, Daimler-Benz, Chrysler and Newco AG agree
as follows:
ARTICLE I
DAIMLER-BENZ EXCHANGE OFFER
Section 1.1. The Daimler-Benz Exchange Offer. Promptly after the
Daimler-Benz Stockholder Approval and the vote necessary to obtain the Chrysler
Stockholder Approval and so long as this Agreement has not been terminated in
accordance with Section 11.1, Newco AG shall commence an offer (the
"Daimler-Benz Exchange Offer"), which may consist of one offer made in the
United States and one made elsewhere, to (i) the holders of Ordinary Shares of
DM 5 nominal value each of Daimler-Benz or the corresponding no par value share,
as the case may be (the "Daimler-Benz Ordinary Shares"), to exchange, subject to
the Daimler-Benz Exchange Offer Conditions, one no par value Ordinary Share of
Newco AG (the "Newco Ordinary Shares") for each Daimler-Benz Ordinary Share held
by such holder, and (ii) the holders of Daimler-Benz American Depositary Shares
representing Daimler-Benz Ordinary Shares ("Daimler-Benz ADSs") to exchange,
subject to the Daimler-Benz Exchange Offer Conditions, one Newco American
Depositary Share representing one Newco Ordinary Share ("Newco ADSs") for each
Daimler-Benz ADS held by such holder (such one-for-one exchange offered in the
foregoing clauses (i) and (ii) being referred to herein as the "Daimler-Benz
Exchange Offer Ratio"). The obligation of Newco AG to issue Newco Ordinary
Shares in exchange for Daimler-Benz Ordinary Shares and to cause the issuance of
Newco ADSs in exchange for Daimler-Benz ADSs, in each case tendered pursuant to
the Daimler-Benz Exchange Offer, shall be subject only to this Agreement not
having been terminated pursuant to Section 11.1 and to the satisfaction or
waiver (if permissible under this Agreement and effected in accordance with
Section 12.11) of (1) the condition that such number of Daimler-Benz Ordinary
Shares and Daimler-Benz ADSs which in the aggregate represent at least that
number of outstanding
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Daimler-Benz Ordinary Shares required for the transactions contemplated by this
Agreement to be accounted for as a "pooling-of-interests" under US GAAP shall
have been validly tendered, not withdrawn and available for purchase immediately
prior to the Daimler-Benz Exchange Offer Expiration Date (the "Minimum
Condition"); and (2) the conditions set forth in Article X of this Agreement,
other than the condition set forth in Section 10.1(i) (together with the Minimum
Condition, the "Daimler-Benz Exchange Offer Conditions"). The Minimum Condition
shall not be waived and the Daimler-Benz Exchange Offer Ratio shall not be
amended without the written consent of both Chrysler and Daimler-Benz; provided,
however, if the number of Daimler-Benz Ordinary Shares and Daimler-Benz ADSs
validly tendered, not withdrawn and available for purchase immediately prior to
the Daimler-Benz Exchange Offer Expiration Date shall not satisfy the Minimum
Condition, but shall be in excess of 80% of the capital stock of Daimler-Benz on
a Fully Diluted Basis (the "80% Minimum"), the Minimum Condition shall mean the
80% Minimum unless Chrysler and Daimler-Benz otherwise agree. The expiration
date of the Daimler-Benz Exchange Offer shall initially be the date which is 30
days after commencement of the Daimler-Benz Exchange Offer (such date, as it may
be extended as provided herein, the "Daimler-Benz Exchange Offer Expiration
Date") and, if any of the Daimler-Benz Exchange Offer Conditions is unsatisfied
at such time and if requested by either Chrysler or Daimler-Benz, or if
requested by either Chrysler or Daimler-Benz pursuant to clause (ii) below,
shall be extended by Newco AG from time to time thereafter until the earliest of
(i) the maximum period permitted under the German Takeover Code
(Ubernahmekodex der Borsensachverstandigenkommission beim Bundesministerium der
Finanzen) (the "German Takeover Code") or as otherwise approved by the Executive
Office of the Takeover Commission (Ubernahmekommission pursuant to the German
Takeover Code) (the "Executive Office of the Takeover Commission"), (ii) the
close of business (Frankfurt time) on the day on which Daimler-Benz and Newco AG
have publicly announced that all of the Daimler-Benz Exchange Offer Conditions
shall have been satisfied or that they have been duly waived (or, if later, a
date that is five business days following the initial expiration date, if either
Chrysler or Daimler-Benz shall have requested Newco AG to extend the
Daimler-Benz Exchange Offer Expiration Date to such date) and (iii) such time as
this Agreement is terminated in accordance with Section 11.1. Subject only to
the conditions set forth above, at the earliest practicable time following the
Daimler-Benz Exchange Offer Expiration Date, Newco AG shall accept for exchange
and shall exchange all Daimler-Benz Ordinary Shares and Daimler-Benz ADSs
validly tendered and not withdrawn (the "German Share Exchange") and shall
effect the German Share Exchange in accordance with applicable law by
registering the increase of the Newco AG stated share capital in kind with the
commercial register (Handelsregister) for Newco AG.
Section 1.2. Daimler-Benz Exchange Agent. Newco AG shall appoint a
bank or trust company or other independent financial institution reasonably
satisfactory to Daimler-Benz and Chrysler to act as exchange agent for the
Daimler-Benz Exchange Offer (the "Daimler-Benz Exchange Agent"). Newco AG shall
enter into an Exchange Agent Agreement with the Daimler-Benz Exchange Agent in
form and substance reasonably satisfactory to Daimler-Benz and Chrysler, which
agreement shall set forth the duties, responsibilities and obligations of the
Daimler-Benz Exchange Agent consistent with the terms of this Agreement. The
Daimler-Benz Exchange Agent shall accept the Daimler-Benz Ordinary Shares and
Daimler-Benz ADSs tendered pursuant to the
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Daimler-Benz Exchange Offer and contribute such Daimler-Benz Ordinary Shares and
Daimler-Benz ADSs upon satisfaction or waiver of the Daimler-Benz Exchange Offer
Conditions to Newco AG in exchange for Newco Ordinary Shares and Newco ADSs,
respectively. Subject to Section 9.16, such exchange shall be effected in
accordance with Sections 52 and 183 et seq. (including in particular
Section 187) of the German Stock Corporation Law (Aktiengesetz) by registering
the contribution in kind agreement (Einbringungsvertrag) and the increase of the
Newco AG stated share capital with the commercial register (Handelsregister) for
Newco AG.
Section 1.3. German Exchange Offer Documents. As soon as practicable
prior to the date that the Daimler-Benz Exchange Offer commences, Newco AG shall
inform all German stock exchanges on which the Daimler-Benz Ordinary Shares are
listed, the German Federal Supervisory Authority for Securities Trading
(Bundesaufsichtsamt fur den Wertpapierhandel) and the Executive Office of the
Takeover Commission about the content of the Daimler-Benz Exchange Offer. Not
later than one day prior to the date that the Daimler-Benz Exchange Offer
commences, Newco AG shall issue a combined listing and sales prospectus pursuant
to the German Stock Exchange Law (Borsengesetz) and the German Sales Prospectus
Law (Wertpapier-Verkaufsprospektgesetz) (the "German Prospectus"), and on the
date that the Daimler-Benz Exchange Offer commences, Newco AG shall publish an
exchange offer pursuant to the German Takeover Code, each with respect to the
Daimler-Benz Exchange Offer (the "German Exchange Offer Documents"). The German
Exchange Offer Documents shall contain the recommendation of the Board of
Management (Vorstand) of Daimler-Benz that holders of the Daimler-Benz Ordinary
Shares accept the Daimler-Benz Exchange Offer and tender the Daimler-Benz
Ordinary Shares into the Daimler-Benz Exchange Offer.
Section 1.4. U.S. Exchange Documents. (a) As promptly as practicable
on the date of commencement of the Daimler-Benz Exchange Offer, Newco AG shall
file with the U.S. Securities and Exchange Commission ("SEC") a Tender Offer
Statement on Schedule 14D-1 (together with all amendments and supplements
thereto, the "Schedule 14D-1"). The Schedule 14D-1 shall contain or shall
incorporate by reference an offer to purchase containing the information
included or incorporated by reference in the Proxy Statement/Prospectus and the
forms of the related letter of transmittal and all other ancillary offer
documents.
(b) As promptly as practicable on the date of commencement of
the Daimler-Benz Exchange Offer, Daimler-Benz shall file with the SEC a Tender
Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together with
all amendments and supplements thereto, the "Schedule 14D-9"), which shall
contain the recommendation of the Board of Management (Vorstand) of Daimler-Benz
that holders of Daimler-Benz Ordinary Shares and Daimler-Benz ADSs who are U.S.
Persons accept the Daimler-Benz Exchange Offer and tender their Daimler-Benz
Ordinary Shares and Daimler-Benz ADSs into the Daimler-Benz Exchange Offer. The
Schedule 14D-1 and the Schedule 14D-9 together with all amendments and
supplements thereto are referred to herein collectively as the "U.S. Exchange
Offer Documents." The German Exchange Offer Documents together with the U.S.
Exchange Offer Documents are collectively referred to hereinafter as the
"Exchange Offer Documents."
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Section 1.5. Antidilution Protection for Daimler-Benz Exchange Offer
Ratio. If, between the date of this Agreement and the Daimler-Benz Exchange
Offer Expiration Date, the outstanding Newco Ordinary Shares, Daimler-Benz
Ordinary Shares or shares of Chrysler Common Stock shall have been changed into
a different number of shares or a different class by reason of any
reclassification, recapitalization, stock split, combination, or exchange of
shares or a stock dividend or dividend payable in any other securities shall be
declared with a record date within such period, or any similar event shall have
occurred, the Daimler-Benz Exchange Offer Ratio shall be appropriately adjusted
to provide to the holders of Daimler-Benz Ordinary Shares and Daimler-Benz ADSs
the same economic effect as contemplated by this Agreement prior to such event.
Section 1.6. Newco AG Name. Unless Newco AG's legally registered
name shall previously have been established as such, promptly following the
consummation of the Daimler-Benz Exchange Offer, Newco AG, Daimler-Benz and
Chrysler shall cause the name of Newco AG to be changed and legally registered
in all appropriate jurisdictions as "Daimler Chrysler Aktiengesellschaft."
ARTICLE II
CHRYSLER MERGER
Section 2.1. Formation of Chrysler Merger Sub. As promptly as
possible following the date hereof, Newco AG shall appoint a United States bank
or trust company or other independent financial institution in the United States
reasonably satisfactory to Daimler-Benz and Chrysler to act as exchange agent
for the U.S. Share Exchange and the delivery of the U.S. Merger Consideration to
former stockholders of Chrysler (the "U.S. Exchange Agent"). Following such
appointment, the U.S. Exchange Agent or Chrysler shall cause to be incorporated
pursuant to the DGCL a corporation which shall be a constituent company in the
Chrysler Merger ("Chrysler Merger Sub"). Daimler-Benz, Newco AG and Chrysler
shall enter into an Exchange Agent Agreement with the U.S. Exchange Agent in
form and substance reasonably satisfactory to Daimler-Benz and Chrysler, which
agreement shall set forth the duties, responsibilities and obligations of the
U.S. Exchange Agent consistent with the terms of this Agreement. Solely to
accommodate the transactions described in this Article II, the U.S. Exchange
Agent shall hold all of the issued and outstanding shares of common stock, par
value $.01 per share, of Chrysler Merger Sub (the "Chrysler Merger Sub Common
Stock").
Section 2.2. Chrysler Merger. Upon the terms and subject to the
conditions of this Agreement and in accordance with the DGCL, at the Effective
Time, Chrysler Merger Sub shall be merged with and into Chrysler (the "Chrysler
Merger"), and Chrysler shall be the surviving corporation in the Chrysler Merger
(the "U.S. Surviving Corporation"). The corporate existence of Chrysler, with
all its purposes, rights, privileges, franchises, powers and objects, shall
continue unaffected and unimpaired by the Chrysler Merger and, as the U.S.
Surviving Corporation, it shall
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be governed by the laws of the State of Delaware and succeed to all rights,
assets, liabilities and obligations of Chrysler Merger Sub in accordance with
Section 259(a) of the DGCL. The separate existence and corporate organization of
Chrysler Merger Sub shall cease at the Effective Time.
Section 2.3. The U.S. Share Exchange. Upon the terms and subject to
the conditions of this Agreement, as soon as possible after the Effective Time,
Newco AG will issue the U.S. Merger Consideration to the U.S. Exchange Agent for
the account of the former stockholders of Chrysler, and the U.S. Exchange Agent
will contribute, for the account of the former stockholders of Chrysler, all of
the issued and outstanding shares of Surviving Corporation Common Stock to Newco
AG as a transfer in kind (the "U.S. Share Exchange"). Subject to Section 9.16,
such exchange shall be effected in accordance with Sections 52 and 183 et
seq. (including in particular Section 187) of the German Stock Corporation Law
(Aktiengesetz) by registering the contribution in kind agreement
(Einbringungsvertrag) and the increase of the Newco AG stated share capital with
the commercial register (Handelsregister) for Newco AG. At the Effective Time,
the obligation of the parties to effect the U.S. Share Exchange shall be
unconditional.
Section 2.4. Conversion of Chrysler Common Stock in the Chrysler
Merger. At the Effective Time, by virtue of the Chrysler Merger and without any
action on the part of the holder of any share of common stock, par value $1.00
per share, of Chrysler (including the associated preferred share purchase
rights, the "Chrysler Common Stock"):
(a) The Chrysler Common Stock which is held by Chrysler as
treasury stock (or held by any wholly owned Subsidiary of Chrysler) shall
be cancelled and retired and shall cease to exist, without any conversion
thereof, and no payment shall be made with respect thereto.
(b) Each share of Chrysler Common Stock issued and outstanding
immediately prior to the Effective Time (other than any shares canceled
pursuant to Section 2.4(a)) shall be converted into the right to receive,
upon surrender of the certificate formerly representing such share of
Chrysler Common Stock pursuant to Section 2.5, that fraction of a Newco
ADS expressed as a decimal carried to 4 digits which results from the
computation in the Exchange Ratio Formula. Such decimal fraction of a
Newco ADS is referred to herein as the "U.S. Exchange Ratio" and the Newco
Ordinary Shares (including those represented by Newco ADSs) to be issued
in the Chrysler Merger are referred to herein as the "U.S. Merger
Consideration." Notwithstanding the foregoing, prior to the delivery of
the Newco ADSs to the U.S. Exchange Agent pursuant to Section 2.5 for the
account of the former stockholders of Chrysler in the U.S. Share Exchange,
each such stockholder shall, in addition to his, her or its right to
receive such Newco ADSs, have a continuing ownership interest in the U.S.
Surviving Corporation identical in all respects to his, her or its
ownership interest in Chrysler immediately prior to the Effective Time,
such ownership interest to be extinguished automatically upon such
delivery of Newco ADSs to the U.S. Exchange Agent.
(c) The Exchange Ratio Formula shall be the following:
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Exchange Ratio = 103.4929 x (DP x DAP) + SOP
------------------------
(DAP x DP) x (DAP + SOP)
As used in the Exchange Ratio Formula, the following terms have the
following meaning:
"DAP" refers to Daimler-Benz's adjusted price per Daimler-Benz
Ordinary Share and is herein defined to mean (i) that number of Deutsche
Marks equal to 190.8 minus the sum of (A) the per Daimler-Benz Ordinary
Share regular annual dividend in respect of the year 1997 payable on or
about May 28, 1998, plus (B) the per Daimler-Benz Ordinary Share amount of
the Special Distribution payable on or about June 15, 1998, or (ii) in the
event that Daimler-Benz fails to pay its previously announced Special
Distribution payable on or about June 15, 1998, that number of Deutsche
Marks equal to 185.09 minus the per Daimler-Benz Ordinary Share regular
annual dividend in respect to the year 1997 payable on or about May 28,
1998.
"SOP" refers to Daimler-Benz's Schutt aus/Hol zuruck share
offering proceeds and is herein defined to mean (i) the aggregate amount
of net proceeds, expressed in Deutsche Marks, received by Daimler-Benz in
respect of its global offering of rights to acquire Daimler-Benz Ordinary
Shares and Daimler-Benz ADSs, which is currently scheduled to become
effective on or about June 8, 1998, and which is described generally in
the Registration Statement (File No. 333-8662) filed with the SEC on April
22, 1998 (the "Rights Offering"), divided by (ii) 516,748,337 if the
Rights are not distributed to the holders of the Notes or 523,299,381 if
the Rights are distributed to such holders; provided that SOP shall equal
0 if the Rights Offering is canceled or otherwise is not consummated.
"DP" refers to the Rights Offering discounted price expressed
as a percentage of the then current market price and is herein defined to
mean that decimal fraction carried to four digits determined by dividing
(1) the offering price per new Daimler-Benz Ordinary Share (expressed in
Deutsche Marks) in the Rights Offering by (2) the reported last sale price
per Daimler-Benz Ordinary Share on the FSE, as reported by the FSE, on the
last full trading day which immediately precedes the public announcement
of the price at which a holder of a Right will be entitled to purchase a
Daimler-Benz Ordinary Share pursuant to the Rights Offering; provided that
DP shall equal 1 if the Rights Offering is canceled or otherwise is not
consummated.
(d) Each share of Chrysler Merger Sub Common Stock issued and
outstanding immediately prior to the Effective Time shall continue to be
an issued and outstanding share of common stock, par value $.01 per share,
of the U.S. Surviving Corporation ("Surviving Corporation Common Stock").
7
<PAGE> 14
Section 2.5. Exchange of Shares of Chrysler Common Stock.
(a) U.S. Exchange Fund. The aggregate U.S. Merger
Consideration transferred by Newco AG to the U.S. Exchange Agent pursuant to
Section 2.3, together with any dividends or other distributions with respect to
Newco ADSs to be made pursuant to Section 2.5(c), is referred to herein as the
"U.S. Exchange Fund."
(b) Exchange Procedures. Promptly after the Effective Time,
the U.S. Exchange Agent will mail to each former record holder of shares of
Chrysler Common Stock entitled to receive U.S. Merger Consideration pursuant to
Section 2.4(b) a form of letter of transmittal which shall specify that the
delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of a certificate or certificates formerly representing shares of
Chrysler Common Stock ("Old Chrysler Certificates") to the U.S. Exchange Agent
and instructions for use in effecting the surrender to the U.S. Exchange Agent
of Old Chrysler Certificates in exchange for Newco ADSs. The letter of
transmittal shall contain such other terms and conditions as Daimler-Benz and
Chrysler reasonably specify. Upon surrender of an Old Chrysler Certificate to
the U.S. Exchange Agent, together with a letter of transmittal duly executed and
completed in accordance with the instructions thereto, and any other documents
reasonably required by the U.S. Exchange Agent or Daimler-Benz and Chrysler, (i)
the holder of such Old Chrysler Certificate shall be entitled to receive in
exchange therefor (x) a certificate registered in the name of such holder
representing the number of whole Newco ADSs and any fractional Newco ADS into
which the shares previously represented by such Old Chrysler Certificate shall
have been converted at the Effective Time and (y) if applicable, a check payable
to such holder representing the payment of any dividends and distributions
pursuant to Section 2.5(c), and (ii) such Old Chrysler Certificate shall
forthwith be cancelled. If any cash is to be paid to, or any certificate
representing Newco ADSs is to be issued in the name of, a person other than the
person in whose name the Old Chrysler Certificate so surrendered in exchange
therefor is registered, it shall be a condition of the payment or issuance that
the Old Chrysler Certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
exchange shall pay any transfer or other taxes required by reason of the payment
of cash to, or the issuance of a certificate representing Newco ADSs in the name
of, a person other than the registered holder of the Old Chrysler Certificate so
surrendered or shall establish to the satisfaction of the U.S. Exchange Agent
and Newco AG that such tax has been paid or is not applicable. Until surrendered
in accordance with the provisions of this Section 2.5 and subject to the third
sentence of Section 2.4(b), each Old Chrysler Certificate shall, at and after
the Effective Time, represent for all purposes only the right to receive Newco
ADSs and any dividends and distributions as provided in Section 2.5(c), if any.
(c) Dividends; Distributions. No dividends or other
distributions declared after the Effective Time on Newco Ordinary Shares
underlying the Newco ADSs and payable to the holders of record thereof after the
Effective Time shall be paid to the holder of any unsurrendered Old Chrysler
Certificates with respect to which the Newco ADSs shall have been issued in the
Chrysler Merger. All such dividends or other distributions shall be paid by
Newco AG to the U.S. Exchange Agent (on behalf of holders of unsurrendered Old
Chrysler Certificates) and shall be
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<PAGE> 15
included in the U.S. Exchange Fund, in each case until such Old Chrysler
Certificates shall be surrendered as provided herein, but (i) upon such
surrender there shall be paid to the person in whose name the certificates
representing such Newco ADSs shall be issued the amount of dividends theretofore
paid with respect to such Newco ADSs as of any date subsequent to the Effective
Time, and (ii) at the appropriate payment date or as soon as practicable
thereafter, there shall be paid to such person the amount of dividends with a
record date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such Newco ADSs, subject in any
case to any applicable abandoned property, escheat and similar laws. No interest
shall be payable with respect to the payment of such dividends on surrender of
outstanding Old Chrysler Certificates.
(d) Final Settlement. From and after the Effective Time, the
holders of Old Chrysler Certificates shall cease to have any rights with respect
to such shares except as otherwise provided herein or by applicable law. All
rights to receive cash, if any, and Newco ADSs into which shares of Chrysler
Common Stock shall have been converted pursuant to this Article II shall be
deemed to have been paid or issued, as the case may be, in full satisfaction of
all rights pertaining to such shares of Chrysler Common Stock.
(e) Transfer Books. After the Effective Time, there shall be
no further registration of transfers on the stock transfer books of the U.S.
Surviving Corporation of shares of Chrysler Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time, Old
Chrysler Certificates are presented to the U.S. Surviving Corporation, they
shall be cancelled and exchanged for cash or certificates representing Newco
ADSs, or both, in accordance with the procedures set forth in this Article II.
(f) Affiliates Letter. Notwithstanding anything to the
contrary contained herein, for purposes of qualifying the transactions
contemplated hereby for "pooling-of-interests" accounting treatment under
Opinion No. 16 "Business Combinations" of the Accounting Principles Board of the
American Institute of Certified Public Accountants ("APB No. 16") and applicable
SEC rules and regulations, no Newco ADSs or cash shall be delivered to a person
who is an affiliate of Chrysler unless such person has executed and delivered an
agreement in the form of Exhibit B-1 or unless Chrysler and Daimler-Benz shall
have determined that the transactions contemplated by this Agreement will not be
accounted for as a "pooling-of-interests" under US GAAP because of other
circumstances.
(g) Termination of U.S. Exchange Fund. Any portion of the U.S.
Exchange Fund that remains undistributed to the holders of the Old Chrysler
Certificates one year after the Effective Time shall be delivered by the U.S.
Exchange Agent to a depositary bank designated by Newco AG, upon demand,
whereupon such depositary bank shall hold the U.S. Exchange Fund on behalf of
holders of unsurrendered Old Chrysler Certificates, and any holders of the Old
Chrysler Certificates who have not theretofore complied with this Section 2.5
shall thereafter look only to Newco AG or such depositary bank for payment of
their claim for U.S. Merger Consideration and any dividends or distributions
with respect to Newco ADSs and Newco AG shall
9
<PAGE> 16
cause the depositary bank to satisfy such claim. Such depositary bank shall
maintain an office in the City of New York where holders of Old Chrysler
Certificates may comply with this Article II.
(h) Withholding Taxes. Each of the U.S. Exchange Agent and
Newco AG shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of Old Chrysler
Certificates such amounts as it is required to deduct and withhold with respect
to the making of such payment under the Code, or any provision of state, local
or non-U.S. tax law. To the extent that amounts are so withheld by the U.S.
Exchange Agent or Newco AG, as the case may be, such withholdings shall be
treated for all purposes of this Agreement as having been paid to the holder of
the Old Chrysler Certificate in respect of which such deduction and withholding
was made by the U.S. Exchange Agent or Newco AG, as the case may be.
(i) No Liability. None of Daimler-Benz, Chrysler, the U.S.
Surviving Corporation, Newco AG or the U.S. Exchange Agent shall be liable to
any person in respect of any Newco ADSs, any dividends or distributions with
respect to Newco Ordinary Shares underlying such Newco ADSs or any cash from the
U.S. Exchange Fund, in each case delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(j) Lost, Stolen or Destroyed Certificates. If any Old
Chrysler Certificate shall have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming such Old Chrysler
Certificate to be lost, stolen or destroyed and, if required by the U.S.
Surviving Corporation, Newco AG or the U.S. Exchange Agent, the posting by such
person of a bond in such reasonable amount as such entity may direct as
indemnity against any claim that may be made against it with respect to such Old
Chrysler Certificate, the U.S. Exchange Agent shall issue in exchange for such
lost, stolen or destroyed Old Chrysler Certificate the U.S. Merger Consideration
and, if applicable, any unpaid dividends and distributions on shares of Newco
Ordinary Shares deliverable in respect thereof, in each case pursuant to this
Agreement.
Section 2.6. Treatment of Chrysler Stock Plans. (a) Subject to the
consummation of the Chrysler Merger, immediately prior to the Effective Time
each outstanding Chrysler Employee Stock Option will become exercisable, and
shall be deemed to be exercised, and (i) if the transactions contemplated by
this Agreement are accounted for as a "pooling-of-interests" under APB No. 16,
will then be converted (and such Chrysler Employee Stock Option will be
extinguished) into a right to receive that number of whole Newco ADSs and any
fractional Newco ADS determined in accordance with the following formula:
Option Shares x (Closing Value - Exercise Price) x 1.02
-------------------------------------------------------
ADS Closing Price
or (ii) if subclause (i) is not applicable, will be settled (and such Chrysler
Employee Stock Option will be extinguished) in an amount of cash to be paid by
Chrysler (and not directly or indirectly reimbursed by Newco AG or Daimler-Benz)
and determined in accordance with the following formula: Option Shares x
(Closing Value - Exercise Price), where "Option Shares" is the number
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<PAGE> 17
of shares of Chrysler Common Stock subject to the Chrysler Employee Stock
Option; "Closing Value" is the closing per share price of Chrysler Common Stock
as reported in The Wall Street Journal for the last trading day prior to the
Effective Time; "Exercise Price" is the per share exercise price for shares
subject to the Chrysler Employee Stock Option; and "ADS Closing Price" is the
closing per share price of a Daimler-Benz ADS as reported in The Wall Street
Journal for the last trading day prior to the Effective Time. As soon as
practicable following the Effective Time and immediately prior to the U.S. Share
Exchange, Chrysler shall deliver to the U.S. Exchange Agent the aggregate number
of shares of Chrysler Common Stock issuable pursuant to the deemed exercise
provided in this Section 2.6(a) and, subject to Section 9.16, for contribution
in kind to Newco AG by the U.S. Exchange Agent on behalf of the Chrysler
Employee Optionholders.
(b) Subject to the consummation of the Chrysler Merger,
immediately prior to the Effective Time each outstanding Chrysler performance
share award shall be deemed vested in accordance with the terms of Chrysler's
1991 Stock Compensation Plan and (i) if the transactions contemplated by this
Agreement are accounted for as a "pooling-of-interests" under APB No. 16, shall
be settled with that number of whole Newco ADSs and any fractional Newco ADS
determined in accordance with the following formula:
Performance Shares x Closing Value x 1.02
-----------------------------------------
ADS Closing Price
or (ii) if subclause (i) is not applicable, shall be settled in an amount of
cash to be paid by Chrysler (and not directly or indirectly reimbursed by Newco
AG or Daimler-Benz) and determined in accordance with the following formula:
Performance Shares x Closing Value where "Performance Shares" is the number of
shares of Chrysler Common Stock subject to the performance share award. As soon
as practicable following the Effective Time and immediately prior to the U.S.
Share Exchange, Chrysler shall transmit to the U.S. Exchange Agent the aggregate
number of shares of Chrysler Common Stock subject to outstanding performance
share awards, subject to Section 9.16, for contribution in kind into Newco AG by
the U.S. Exchange Agent on behalf of the holders of performance share awards.
(c) Subject to the consummation of the Chrysler Merger,
immediately prior to the Effective Time, each outstanding Chrysler stock unit
shall be deemed vested in accordance with the terms of Chrysler's 1996
Non-employee Director Stock Unit Plan and (i) if the transactions contemplated
by this Agreement are accounted for as a "pooling-of-interests" under APB No.
16, shall be settled with that number of whole Newco ADSs and any fractional
Newco ADS determined in accordance with the following formula:
Closing Value x 1.02
--------------------
ADS Closing Price
or (ii) if subclause (i) is not applicable, shall be settled in an amount of
cash to be paid by Chrysler (and not directly or indirectly reimbursed by Newco
AG or Daimler-Benz) and equal to the Closing
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<PAGE> 18
Value. As soon as practicable following the Effective Time and immediately prior
to the U.S. Share Exchange, Chrysler shall transmit to the U.S. Exchange Agent
the aggregate number of shares of Chrysler Common Stock subject to outstanding
stock units, subject to Section 9.16, for contribution in kind into Newco AG by
the U.S. Exchange Agent on behalf of the holders of stock units.
(d) Subject to the consummation of the Chrysler Merger
immediately prior to the Effective Time, each outstanding Chrysler restricted
stock unit award shall be deemed vested in accordance with the terms of
Chrysler's 1991 Stock Compensation Plan and (i) if the transactions contemplated
by this Agreement are accounted for as a "pooling-of-interests" under APB No.
16, shall be settled with that number of whole Newco ADSs and any fractional
Newco ADS determined in accordance with the following formula:
Restricted Stock Units x Closing Value x 1.02
---------------------------------------------
ADS Closing Price
or (ii) if subclause (i) is not applicable, shall be settled in an amount of
cash to be paid by Chrysler (and not directly or indirectly reimbursed by Newco
AG or Daimler-Benz) and determined in accordance with the following formula:
Restricted Stock Units x Closing Value, where "Restricted Stock Units" is the
number of shares of Chrysler Common Stock subject to the restricted stock unit
award. As soon as practicable following the Effective Time and immediately prior
to the U.S. Share Exchange, Chrysler shall transmit to the U.S. Exchange Agent
the aggregate number of shares of Chrysler Common Stock subject to outstanding
restricted stock unit awards, subject to Section 9.16, for contribution in kind
into Newco AG by the U.S. Exchange Agent on behalf of the holders of restricted
stock unit awards.
(e) To the extent that any person would otherwise be entitled
to receive a fraction of a Newco ADS pursuant to this Section 2.6, such fraction
shall be treated in accordance with Section 3.10.
(f) If the transactions contemplated by this Agreement are
accounted for as a "pooling-of-interests" under APB No. 16, as soon as
practicable following the Effective Time, Newco AG shall cause the U.S. Exchange
Agent to deliver to the former holders of Chrysler Employee Stock Options,
Chrysler performance share awards, Chrysler stock units and Chrysler restricted
stock unit awards, the Newco ADSs payable pursuant to this Section 2.6. If the
transactions contemplated by this Agreement are not accounted for as a
"pooling-of-interests" under APB No. 16, as soon as practicable following the
Effective Time, Chrysler shall deliver to the former holders of Chrysler
Employee Stock Options, Chrysler performance share awards, Chrysler stock units
and Chrysler restricted stock unit awards, any cash amount payable pursuant to
this Section 2.6.
(g) If the transactions contemplated by this Agreement are
accounted for as a "pooling-of-interests" under APB No. 16, Newco AG and
Chrysler shall establish a mechanism whereby each person who is permitted to
sell Newco ADSs received pursuant to this Section 2.6 without registration under
the Securities Act can sell all or a portion of such Newco ADSs through
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<PAGE> 19
open market sales of such Newco ADSs to be effected by a broker selected by
Chrysler and reasonably satisfactory to Daimler-Benz. Chrysler shall, at least
ten days prior to the Effective Time, identify the broker to whom such holders
may direct sales orders. Newco AG shall deliver (or cause the U.S. Exchange
Agent to deliver) the aggregate number of Newco ADSs subject to all such sales
orders received prior to the Effective Time to the broker as soon as practicable
thereafter, but no later than five business days after the Effective Time and
any holder directing such a sales order shall bear the cost of all expenses,
including all commissions, related thereto.
(h) Chrysler agrees to use its reasonable best efforts, if the
transactions contemplated by this Agreement shall be accounted for as a
"pooling-of-interests" under APB No. 16, to take such actions (including, but
not limited to, adopting all required amendments) with respect to (i) all
compensation and benefit plans and arrangements and (ii) all awards outstanding
under such plans or arrangements, in each case that are required to enable the
transactions contemplated by this Agreement to be accounted for as a
"pooling-of-interests" under APB No.
16.
Section 2.7. Redemption of Chrysler Preferred Stock. Prior to the
Effective Time, Chrysler shall have redeemed all outstanding shares of Series A
Convertible Preferred Stock, par value $1.00 per share, of Chrysler (the
"Chrysler Preferred Stock") in the manner contemplated by and pursuant to the
terms and procedures set forth in the Certificate of Designation, Preferences
and Rights with respect to the Chrysler Preferred Stock.
Section 2.8. Antidilution Protection for U.S. Exchange Ratio. If,
between the date of this Agreement and the Effective Time, the outstanding Newco
Ordinary Shares, Daimler-Benz Ordinary Shares or shares of Chrysler Common Stock
shall have been changed into a different number of shares or a different class
by reason of any reclassification, recapitalization, stock split, combination or
exchange of shares or a stock dividend or dividend payable in any other
securities shall be declared with a record date within such period, or any
similar event shall have occurred, the U.S. Exchange Ratio shall be
appropriately adjusted to provide to the holders of Chrysler Common Stock the
same economic effect as contemplated by this Agreement prior to such event.
Section 2.9. Chrysler Merger Closing. Immediately following
consummation of the Daimler-Benz Exchange Offer, the closing of the Chrysler
Merger (the "Chrysler Merger Closing") shall be held at 10:00 a.m. at the
offices of Debevoise & Plimpton, 875 Third Avenue, New York, New York, or at
such other place and time as the parties shall agree. At the Chrysler Merger
Closing, a certificate of merger shall be executed and acknowledged by Chrysler
Merger Sub and Chrysler and delivered to the Secretary of State of the State of
Delaware for filing as provided by the DGCL and, upon completion of such filing,
the Chrysler Merger shall become effective as set forth herein and in such
certificate. The time the Chrysler Merger becomes effective is referred to
herein as the "Effective Time."
Section 2.10. Certificate of Incorporation. Upon the formation of
Chrysler Merger Sub, its Certificate of Incorporation shall be substantially in
the form of Exhibit C hereto (the "Chrysler Merger Sub Charter"), and such
Chrysler Merger Sub Charter will continue to be in effect
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<PAGE> 20
immediately prior to the Effective Time. The Chrysler Merger Sub Charter shall
be the Certificate of Incorporation of the U.S. Surviving Corporation, until the
same shall thereafter be altered, amended or repealed in accordance with the
DGCL and such Certificate of Incorporation.
Section 2.11. By-laws. Newco AG, Daimler-Benz and Chrysler will take
all action necessary to ensure that the By-laws of Chrysler Merger Sub,
substantially in the form of Exhibit D hereto (the "Chrysler Merger Sub
By-laws"), will be in effect immediately prior to the Effective Time. The
Chrysler Merger Sub By-laws shall be the By-laws of the U.S. Surviving
Corporation, until the same shall thereafter be altered, amended or repealed in
accordance with the DGCL, the Amended and Restated Chrysler Merger Sub Charter
and such By-laws.
Section 2.12. Officers. The officers of Chrysler Merger Sub
immediately prior to the Effective Time, who shall be reasonably acceptable to
Chrysler and Daimler-Benz, shall be the officers of the U.S. Surviving
Corporation, and such individuals shall serve until their successors shall have
been elected and shall qualify.
Section 2.13. Board of Directors. The directors of Chrysler Merger
Sub immediately prior to the Effective Time, who shall be reasonably acceptable
to Chrysler and Daimler-Benz, shall be the directors of the U.S. Surviving
Corporation, and such individuals shall serve until their successors shall have
been elected and shall qualify.
ARTICLE III
DAIMLER-BENZ MERGER
Section 3.1. Daimler-Benz Merger. As soon as practicable following
the date hereof, Newco AG and Daimler-Benz shall enter into a merger agreement
pursuant to Section 5 of the German Transformation Act (Umwandlungsgesetz) which
shall be in form and substance reasonably satisfactory to Daimler-Benz and
Chrysler (the "German Merger Agreement"). In accordance with the German Merger
Agreement, the German Stock Corporation Law (Aktiengesetz) and the German
Transformation Act (Umwandlungsgesetz) (the "German Stock Corporation Law
(Aktiengesetz)" and, together with the German Transformation Act
(Umwandlungsgesetz), the "GSCL"), Daimler-Benz shall be merged with and into
Newco AG (the "Daimler-Benz Merger"), and Newco AG shall be the surviving
corporation in the Daimler-Benz Merger (the "German Surviving Corporation"). As
a consequence of the Daimler-Benz Merger, the corporate existence of
Daimler-Benz will cease and Newco AG will succeed to all rights, assets,
liabilities and obligations of Daimler-Benz in accordance with the GSCL.
Section 3.2. Daimler-Benz Merger Closing. As soon as possible
following the U.S. Share Exchange, the Daimler-Benz Merger shall be effected in
accordance with applicable law by registering the merger with the commercial
registers (Handelsregister) for Daimler-Benz and Newco AG, and the parties shall
make all other filings and recordings required under the GSCL. The time
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<PAGE> 21
the Daimler-Benz Merger becomes effective is hereinafter referred to as the
"German Effective Time."
Section 3.3. Conversion of Daimler-Benz Ordinary Shares and
Daimler-Benz ADSs in the Daimler-Benz Merger. At the German Effective Time, by
virtue of the Daimler-Benz Merger and without any action on the part of the
holder of any Daimler-Benz Ordinary Shares, the stockholders of Daimler-Benz
(other than Daimler-Benz or Newco AG) shall automatically become stockholders of
Newco AG. Each Daimler-Benz Ordinary Share shall embody solely the right to
receive one Newco Ordinary Share in exchange for such Daimler-Benz Ordinary
Share, and each Daimler-Benz ADS shall embody solely the right to receive one
Newco ADS in exchange for such Daimler-Benz ADS (such exchange ratio being
referred to herein as the "Daimler-Benz Merger Exchange Ratio" and the Newco
Ordinary Shares, including those represented by the Newco ADSs, to be issued in
the Daimler-Benz Merger are referred to herein as the "Daimler-Benz Merger
Consideration").
Section 3.4. Exchange of Daimler-Benz ADSs.
(a) Exchange Procedures. Newco AG shall instruct the
depositary bank for the Newco ADSs to mail to each former holder of record of
Daimler-Benz ADSs entitled to receive the Daimler-Benz Merger Consideration
pursuant to Section 3.3 a form of letter of transmittal which shall specify that
the delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of a certificate or certificates formerly representing
Daimler-Benz ADSs ("Old Daimler-Benz ADRs") to the depositary bank and
instructions for use in effecting the surrender to the depositary bank of Old
Daimler-Benz ADRs in exchange for Newco ADSs. The letter of transmittal shall
contain such other terms and conditions as Newco AG specifies. Upon surrender of
an Old Daimler-Benz ADR to the depositary bank, together with a letter of
transmittal duly executed and completed in accordance with the instructions
thereto, and any other documents reasonably required by the depositary bank or
Newco AG, (i) the holder of such Old Daimler-Benz ADR shall be entitled to
receive in exchange therefor (x) an ADR registered in the name of such holder
representing the number of whole Newco ADSs into which the shares previously
represented by such Old Daimler-Benz ADR shall have been converted at the German
Effective Time and (y) if applicable, a check payable to such holder
representing the payment of any dividends and distributions pursuant to Section
3.4(b), and (ii) such Old Daimler-Benz ADR shall forthwith be cancelled. If any
cash is to be paid to, or any certificate representing Newco ADSs is to be
issued in the name of, a person other than the person in whose name the Old
Daimler-Benz ADR so surrendered in exchange therefor is registered, it shall be
a condition of the payment or issuance that the Old Daimler-Benz ADR so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and that the person requesting such exchange shall pay any transfer or other
taxes required by reason of the payment of cash to, or the issuance of a
certificate representing Newco ADSs in the name of, a person other than the
registered holder of the Old Daimler-Benz ADR so surrendered or shall establish
to the satisfaction of Newco AG that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions of this Section
3.4, each Old Daimler-Benz ADR shall, at and after the German Effective Time,
represent for all purposes only
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<PAGE> 22
the right to receive Newco ADSs and any dividends and distributions as provided
in Section 3.4(b), if any.
(b) Dividends; Distributions. No dividends or other
distributions declared after the German Effective Time on Newco Ordinary Shares
underlying Newco ADSs and payable to the holders of record thereof after the
German Effective Time shall be paid to the holder of any unsurrendered Old
Daimler-Benz ADR with respect to which the Newco ADSs shall have been issued in
the Daimler-Benz Merger until such Old Daimler-Benz ADRs shall be surrendered as
provided herein, but (i) upon such surrender there shall be paid to the person
in whose name the depositary receipt representing such Newco ADSs shall be
issued the amount of dividends theretofore paid with respect to such whole Newco
ADSs as of any date subsequent to the German Effective Time, and (ii) at the
appropriate payment date or as soon as practicable thereafter, there shall be
paid to such person the amount of dividends with a record date after the German
Effective Time but prior to surrender and a payment date subsequent to surrender
payable with respect to such whole Newco ADSs, subject to any applicable
abandoned property, escheat and similar laws. No interest shall be payable with
respect to the payment of such dividends on surrender of outstanding Old
Daimler-Benz ADRs.
(c) Final Settlement. From and after the German Effective
Time, the holders of Old Daimler-Benz ADRs shall cease to have any rights with
respect to the Daimler-Benz ADSs evidenced thereby except as otherwise provided
herein or by applicable law. All rights to receive cash, if any, and Newco ADSs
into which Daimler-Benz ADSs shall have been converted pursuant to this Article
III shall be deemed to have been paid or issued, as the case may be, in full
satisfaction of all rights pertaining to such Daimler-Benz ADSs.
(d) Transfer Books. After the German Effective Time, there
shall be no further registration of transfers on the transfer books of the
relevant depositary banks of Daimler-Benz ADSs which were outstanding
immediately prior to the German Effective Time. If, after the German Effective
Time, Old Daimler-Benz ADRs are presented to the relevant depositary, they shall
be cancelled and exchanged for cash or depositary receipts representing
depositary shares of Newco AG, or both, in accordance with the procedures set
forth in this Article III.
(e) Termination of Merger Exchange Fund. Any portion of Newco
ADSs or distributions payable pursuant to Section 3.4(b) that remains
undistributed to the holders of the Old Daimler-Benz ADRs one year after the
German Effective Time shall be delivered to a depositary bank designated by
Newco AG, upon demand by Newco AG, whereupon such depositary bank shall hold
such remaining portion on behalf of holders of unsurrendered Old Daimler-Benz
ADRs, and any holders of the Old Daimler-Benz ADRs who have not theretofore
complied with this Section 3.4 shall thereafter look only to Newco AG for
payment of their claim for the Daimler-Benz Merger Consideration and any
dividends or distributions with respect to Newco ADSs. Such depositary bank
shall maintain an office in the City of New York where holders of Old
Daimler-Benz ADRs may comply with this Article III.
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<PAGE> 23
Section 3.5. Affiliates Letter. Notwithstanding anything to the
contrary contained herein, for "pooling-of-interests" accounting treatment under
APB No. 16 and applicable SEC rules and regulations, no Newco Ordinary Shares
shall be delivered to a person who is an affiliate of Daimler-Benz for purposes
of qualifying the transactions contemplated hereby unless such person has
executed and delivered an agreement in the form of Exhibit B-2 or unless
Chrysler and Daimler-Benz shall have determined that the transactions
contemplated by this Agreement will not be accounted for as a
"pooling-of-interests" under US GAAP because of other circumstances.
Section 3.6. Treatment of Daimler-Benz Stock Plans. (a) Upon
effectiveness of the Daimler-Benz Merger, all outstanding Daimler-Benz Employee
Stock Options will become stock options of Newco AG in accordance with Section
23 of the German Transformation Act (Umwandlungsgesetz) (or such other
instruments as shall meet the requirements of such Section 23 and shall be
agreed to by Chrysler and Daimler-Benz), and from and after the date of the
effectiveness of the Daimler-Benz Merger shall be convertible into Newco
Ordinary Shares (rather than Daimler-Benz Ordinary Shares) in accordance with
their terms.
(b) Daimler-Benz agrees to take all actions (including, but
not limited to, adopting all required amendments) with respect to (i) all
compensation and benefit plans and arrangements and (ii) all awards outstanding
under such plans or arrangements, in each case that are required to enable the
transactions contemplated by this Agreement to be accounted for as a
"pooling-of-interests" under APB No. 16.
Section 3.7. Treatment of Daimler-Benz NEWS. Upon effectiveness of
the Daimler-Benz Merger, all Warrants which are convertible into newly issued
Daimler-Benz Ordinary Shares will become Warrants of Newco AG in accordance with
Section 23 of the German Transformation Act (Umwandlungsgesetz) and, from and
after the date of effectiveness of the Daimler-Benz Merger, will entitle the
holder thereof to purchase Newco Ordinary Shares (rather than Daimler-Benz
Ordinary Shares) in accordance with their terms. With respect to the Warrants
which are convertible into outstanding Daimler-Benz Ordinary Shares, Newco AG
and Daimler-Benz will take all actions necessary to ensure that such Warrants
will be convertible, as of the effectiveness of the Daimler-Benz Merger, into
Newco Ordinary Shares (rather than Daimler-Benz Ordinary Shares) in accordance
with the terms of the Warrants.
Section 3.8. Treatment of Daimler-Benz Subordinated Mandatory
Convertible Notes. Upon the effectiveness of the Daimler-Benz Merger, the 5 3/4%
Subordinated Mandatory Convertible Notes due June 14, 2002 (the "Notes"),
including Notes represented by American Depositary Notes ("ADNs") and DM Book
Entry Securities ("DM BESs"), issued by Daimler-Benz will become Notes of Newco
AG in accordance with Section 23 of the German Transformation Act
(Umwandlungsgesetz) and, from and after the date of effectiveness of the
Daimler-Benz Merger, will be convertible into Newco Ordinary Shares (rather than
Daimler-Benz Ordinary Shares) in accordance with their terms. Newco AG and
Daimler-Benz will take all actions necessary to ensure that the ADNs and DM BESs
will be convertible, as of the effectiveness of the Daimler-Benz Merger, into
Newco ADSs (rather than Daimler-Benz ADSs) in accordance with their terms.
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Section 3.9. Antidilution Protection for Daimler-Benz Merger
Exchange Ratio. If, between the date of this Agreement and the German Effective
Time, the outstanding Newco Ordinary Shares, Daimler-Benz Ordinary Shares or
shares of Chrysler Common Stock shall have been changed into a different number
of shares or a different class by reason of any reclassification,
recapitalization, stock split, combination, or exchange of shares or a stock
dividend or dividend payable in any other securities shall be declared with a
record date within such period, or any similar event shall have occurred, the
Daimler-Benz Merger Exchange Ratio shall be appropriately adjusted to provide to
the holders of Daimler-Benz Ordinary Shares the same economic effect as
contemplated by this Agreement prior to such event.
Section 3.10. Treatment of Fractional Shares.
(a) As promptly as practicable following the Effective Time,
the U.S. Exchange Agent will determine the excess of (i) the aggregate number of
Newco ADSs delivered to the U.S. Exchange Agent over (ii) the aggregate number
of whole Newco ADSs to be distributed in connection with the Chrysler Merger
(such excess being referred to herein as the "Excess Shares"). Following the
Effective Time the U.S. Exchange Agent will, on behalf of the former
stockholders of Chrysler, sell the Excess Shares at then-prevailing prices on
the New York Stock Exchange (the "NYSE") in the manner provided in Section
3.10(b).
(b) The sale of the Excess Shares by the U.S. Exchange Agent
will be executed on the NYSE through one or more member firms and will be
executed in round lots to the extent practicable. The U.S. Exchange Agent will
use reasonable efforts to complete the sale of the Excess Shares as promptly
following the Effective Time as, in its sole judgment, is practicable consistent
with obtaining the best execution of such sales in light of prevailing market
conditions. Until the net proceeds of such sale or sales have been distributed
to the holders of Chrysler Common Stock, the U.S. Exchange Agent will hold such
proceeds in trust for such holders (the "Common Shares Trust"). All commissions,
transfer taxes and other out-of-pocket transaction costs, including the expenses
and compensation of the U.S. Exchange Agent incurred in connection with such
sale of the Excess Shares shall be paid from the Common Shares Trust. The U.S.
Exchange Agent will determine the portion of the Common Shares Trust to which
each holder of Chrysler Common Stock is entitled, if any, by multiplying the
amount of the aggregate net proceeds comprising the Common Shares Trust by a
fraction, the numerator of which is the amount of the fractional share interest
to which such holder of Chrysler Common Stock is entitled (after taking into
account all such shares held at the Effective Time by such holder) and the
denominator of which is the aggregate amount of fractional share interests to
which all holders of Chrysler Common Stock are entitled pursuant to the Chrysler
Merger. Each of the former stockholders of Chrysler entitled to cash in lieu of
fractional Newco ADSs shall be responsible for all costs related to the sales of
Excess Shares pursuant to this Section 3.10(b).
(c) As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of Chrysler Common Stock with
respect to fractional share interests, the U.S. Exchange Agent will make
available such amounts to such holders.
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Section 3.11. Withholding Taxes. Newco AG shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of Daimler-Benz Ordinary Shares or the Old Daimler-Benz
ADRs such amounts as it is required to deduct and withhold with respect to the
making of such payment under the Code, or any provision of state, local or
non-U.S. tax law. To the extent that amounts are so withheld by Newco AG, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of Daimler-Benz Ordinary Shares or the Old Daimler-Benz
ADRs in respect of which such deduction and withholding was made by Newco AG.
Section 3.12. Singapore Depositary Shares. Singapore Depositary
Shares representing Daimler-Benz Ordinary Shares shall for all purposes under
this Agreement be treated in the same manner as Daimler-Benz ADSs. Newco AG and
Daimler-Benz shall make appropriate arrangements with the depositary bank for
the Singapore Depositary Shares to fully effect this result.
ARTICLE IV
NEWCO AG GOVERNANCE AFTER THE EFFECTIVE TIME
Section 4.1. Newco AG Governance after Effective Time. Daimler-Benz,
Chrysler and Newco AG agree that after the Effective Time, Newco AG shall have a
corporate governance structure reflecting that the transactions contemplated
herein are a merger of equals. Without the intention to interfere with the
rights and powers of Newco's Shareholders meeting, Supervisory Board and the
Management Board (Vorstand) and subject to Sections 95 et seq., Section
84 of the German Stock Corporation Law and Sections 6 et seq. of the
Co-determination Law of 1976, they will recommend to their respective
shareholders and organizational bodies the following:
(a) Newco AG Articles of Association (Satzung) and Management Board
(Vorstand) Rules of Procedure (Geschaftsordnung). The Articles of Association
(Satzung) of Newco AG and the Management Board (Vorstand) Rules of Procedure
(Geschaftsordnung) of Newco AG, in each case, following the Effective Time,
shall be in form and substance reasonably acceptable to Daimler-Benz and
Chrysler.
(b) Newco AG Supervisory Board. Until the Newco AG Supervisory Board
has to be composed in accordance with the Co-determination Law of 1976, the
Newco AG Supervisory Board shall be composed of twelve members representing the
shareholders, six of whom shall have been recommended, immediately prior to the
Effective Time, by Daimler-Benz from the then-current non-employee
representative members (Anteilseignervertreter) of the Supervisory Board of
Daimler-Benz and six of whom shall have been recommended, immediately prior to
the Effective Time, by Chrysler from the then-current outside members of the
Board of Directors of Chrysler. For the period thereafter, the Newco AG
Supervisory Board shall consist of twenty members (Section 7 of the
Co-determination Law of 1976); five of the members of the restructured Newco AG
Supervisory Board shall have been recommended by Daimler-Benz from non-employee
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representative members (Anteilseignervertreter) of the Supervisory Board of
Daimler-Benz and five of the members shall have been recommended by Chrysler
from the outside members of the Board of Directors of Chrysler.
(c) Chairman of the Supervisory Board (Aufsichtsrat). For a
period of not less than two years following the Effective Time, the current
Chairman of Daimler-Benz's Supervisory Board (Aufsichtsrat) shall continue to be
Chairman of the Newco AG Supervisory Board.
(d) Composition of Newco AG Management Board (Vorstand). The
Management Board (Vorstand) of Newco AG shall consist of 18 members. In general,
50% of such members shall be those designated by Chrysler, and 50% of such
members shall be those designated by Daimler-Benz, and there will be two
additional members with responsibility for Daimler-Benz's non-automotive
businesses. For three years following the Effective Time, Jurgen E. Schrempp and
Robert J. Eaton shall be the Co-CEOs and Co-Chairmen (Vorstandsvorsitzende) of
the Management Board (Vorstand) of Newco AG and members of the Office of the
Chairmen of Newco AG. If any person designated as a member of the Office of the
Chairman or the Management Board of Newco AG ceases to be a full-time employee
of either Chrysler or Daimler-Benz at or before the Effective Time,
Daimler-Benz, in the case of any such employee of Daimler-Benz on the date
hereof or any such employee to be designated by Daimler-Benz, or Chrysler, in
the case of any such employee of Chrysler on the date hereof or any such
employee to be designated by Chrysler, shall designate another person to serve
in such person's stead.
Section 4.2. Integration Committee. The Newco AG Management Board
(Vorstand) shall establish an Integration Committee with consultative function
which shall consist of the Co-Chairmen of the Management Board of Newco AG, who
shall also serve as Co-Chairmen of the Integration Committee, and 12 members
(including such Co-Chairmen), 50% of which shall be designated by Chrysler and
50% of which shall be designated by Daimler-Benz.
Section 4.3. Operational Headquarters. Following the Effective Time,
Newco AG shall maintain two operational headquarters: one located at the current
headquarters of Daimler-Benz, and one located at the current headquarters of
Chrysler.
Section 4.4. Language. Following the Effective Time, English shall
be the official language for the management of Newco AG.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Except as set forth in the Daimler-Benz Disclosure Schedule or as
disclosed in the Daimler-Benz Pre-Agreement Filings or as otherwise contemplated
by this Agreement, Daimler-Benz hereby represents and warrants to Chrysler and
except as set forth in the Chrysler Disclosure Schedule or as disclosed in the
Chrysler Pre-Agreement Filings or as otherwise contemplated by this Agreement,
Chrysler hereby represents and warrants to Daimler-Benz, in each case as set
forth in this Article V, with the party making such representations and
warranties being referred to as the "Representing Party." Notwithstanding the
foregoing, any representation or warranty which expressly refers to Daimler-Benz
or Chrysler is being made solely by Daimler-Benz or Chrysler, as the case may
be.
Section 5.1. Corporate Organization. The Representing Party is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has the corporate power and
authority to own, operate and lease all of its properties and assets and to
carry on its business as it is now being conducted or presently proposed to be
conducted, except where the failure to be in good standing would not reasonably
be expected to have a Material Adverse Effect. The Representing Party is duly
qualified to do business and is in good standing (to the extent the concepts of
"qualification to do business" and "good standing" exist) in all jurisdictions
where its ownership, operation or leasing of property or assets or the conduct
of its business requires it to be so qualified, except in such jurisdictions, if
any, where the failure to be so qualified or in good standing would not,
individually or in the aggregate, have a Material Adverse Effect. The
Representing Party, its Subsidiaries and their respective employees hold all
permits, licenses, variances, exemptions, orders, registrations and approvals of
all Government Entities which are required for the operation of the businesses
of the Representing Party and its Subsidiaries as currently conducted (the
"Company Permits"), except where the failure to have any such Company Permits
individually or in the aggregate would not have a Material Adverse Effect.
Chrysler has made available to Daimler-Benz true and complete copies of its
Certificate of Incorporation and By-Laws and Daimler-Benz has made available to
Chrysler a true and complete copy of its Memorandum and Articles of Association
(Satzung), Management Board (Vorstand) Rules of Procedure (Geschaftsordnung) and
English translations thereof.
Section 5.2. Subsidiaries. (a) Each Subsidiary of the Representing
Party is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, has the corporate power and
authority to own, operate or lease all of its properties and assets and to carry
on its business as it is now being conducted or presently proposed to be
conducted and is duly qualified to do business and is in good standing (to the
extent the concepts of "qualification to do business" and "good standing" exist)
in each jurisdiction where its ownership, operation, or leasing of property or
the conduct of its business requires such qualification, except in such
jurisdictions, if any, where the failure to be so organized, existing, in good
standing or qualified would not have a Material Adverse Effect. Each
Representing Party has made available to the other
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Representing Party a copy of the certificate of incorporation, by-laws,
Memorandum and Articles of Association (Satzung), Management Board (Vorstand)
Rules of Procedure (Geschaftsordnung) or other similar documents for each of its
Significant Subsidiaries.
(b) Each Representing Party is, directly or indirectly, the
record and beneficial owner of approximately that percentage of the outstanding
shares of capital stock of each of its Significant Subsidiaries which is set
forth opposite the name of each such Significant Subsidiary in Section 5.2(b) of
the Representing Party's Disclosure Schedule. There are no outstanding (i)
securities of the Representing Party or any of its Significant Subsidiaries
convertible into or exchangeable or exercisable for shares of capital stock or
other voting securities or ownership interests in any of the Representing
Party's Significant Subsidiaries, (ii) warrants, calls, options or other rights
to acquire from the Representing Party or any of its Significant Subsidiaries,
or any obligations of the Representing Party or any of its Significant
Subsidiaries to issue, any capital stock, voting securities or other ownership
interests in, or any securities convertible into or exchangeable or exercisable
for, any capital stock, voting securities or ownership interests in any of the
Representing Party's Significant Subsidiaries, or (iii) obligations of the
Representing Party or any of its Significant Subsidiaries to repurchase, redeem
or otherwise acquire any such outstanding securities of the Representing Party's
Significant Subsidiaries or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities. All of the outstanding shares of capital
stock of each of the Representing Party's Significant Subsidiaries have been
validly issued and are fully paid, non-assessable and free of preemptive rights,
and the shares owned, directly or indirectly, by such Representing Party are
owned free and clear of all Encumbrances, except for such Encumbrances which
would not, individually or in the aggregate, have a Material Adverse Effect.
Section 5.3. Capital Stock. (a) Section 5.3(a) of the Representing
Party's Disclosure Schedule sets forth as of April 30, 1998:
(i) the number of authorized shares of each class or series
of capital stock of the Representing Party;
(ii) the number of shares of each class or series of capital
stock of the Representing Party which are issued and
outstanding;
(iii) the number of shares of each class or series of capital
stock which are held in the treasury of such
Representing Party;
(iv) the number of shares of each class or series of capital
stock of the Representing Party which are reserved for
issuance, indicating each particular reservation; and
(v) the aggregate number of shares of each class or series
of capital stock subject to employee stock options or
other rights to purchase or receive capital stock
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granted under such Representing Party's stock option or
other stock based employee or non-employee director
benefit plans.
(b) Promptly following the date hereof, the Representing Party
shall furnish a supplement to its Disclosure Schedule setting forth as of a date
within 30 days preceding the date of this Agreement the number of shares of each
class or series of capital stock of such Representing Party which are subject to
employee stock options or other rights to purchase or receive capital stock
granted under such Representing Party's stock option or other stock based
employee benefit plans, indicating the name of the plan, identifying the
employee or director by number (not by name), the date of grant and the exercise
price thereof.
(c) There are no authorized, issued, reserved for issuance or
outstanding (i) shares of capital stock or voting securities of the Representing
Party, (ii) securities of the Representing Party convertible into or
exchangeable for shares of capital stock or voting securities of the
Representing Party, (iii) warrants, calls, options or other rights to acquire
from the Representing Party or any of its Subsidiaries, or any obligation of the
Representing Party or any of its Subsidiaries to issue, any shares of capital
stock or voting securities or securities convertible into or exchangeable or
exercisable for capital stock or voting securities of the Representing Party,
and (iv) there are no outstanding obligations of the Representing Party to
repurchase, redeem or otherwise acquire any such securities or to issue, deliver
or sell, or cause to be issued, delivered or sold, any such securities.
Section 5.4. Authority. The Representing Party has the corporate
power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by Chrysler and the consummation by Chrysler of the transactions contemplated
hereby have been duly authorized by the Board of Directors of Chrysler, and,
except for the Chrysler Stockholder Approval, no other corporate action on the
part of Chrysler is necessary to authorize this Agreement or the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by Daimler-Benz, including the consummation by Daimler-Benz of the transactions
contemplated hereby, have been duly authorized by the Management Board
(Vorstand) of Daimler-Benz, and, except for the approval of the Supervisory
Board (Aufsichtsrat) of Daimler-Benz and the Daimler-Benz Stockholder Approval,
no other corporate action on the part of Daimler-Benz is necessary to authorize
this Agreement or the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Representing Party and (assuming
this Agreement constitutes a valid and binding obligation of the other
Representing Party and of Newco AG and assuming the Supervisory Board
(Aufsichtsrat) approval referred to in the preceding sentence) is a valid and
binding agreement of the Representing Party, enforceable against such
Representing Party in accordance with its terms.
Section 5.5. Consents and Approvals; No Violation. (a) Except where
the failure to make any filing with, or to obtain any permit, authorization,
consent or approval of, any Governmental Entity would not prevent or materially
delay the consummation of the transactions contemplated hereby or otherwise
prevent the Representing Party from performing in all material
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respects its obligations under this Agreement, or would not individually or in
the aggregate have a Material Adverse Effect, no filing with, and no permit,
authorization, consent or approval of, any Governmental Entity is necessary for
the execution, delivery and performance of this Agreement by the Representing
Party and the consummation by such Representing Party of the transactions
contemplated hereby.
(b) Neither the execution, delivery or performance of this
Agreement by the Representing Party nor the consummation by such Representing
Party of the transactions contemplated hereby, will (i) violate or conflict with
any provision of the certificate of incorporation, Memorandum and Articles of
Association (Satzung), the Management Board (Vorstand) Rules of Procedure
(Geschaftsordnung) or by-laws or other similar governing documents of the
Representing Party or any of its Subsidiaries, (ii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation, vesting,
payment, exercise, acceleration, suspension or revocation) under any of the
provisions of any note, bond, mortgage, deed of trust, security interest,
indenture, license, contract, agreement, plan or other instrument or obligation
to which the Representing Party or any of its Subsidiaries is a party or by
which any of them or any of their properties or assets may be bound, (iii)
violate any order, writ, injunction, decree, judgment, statute, rule or
regulation applicable to the Representing Party or its Subsidiaries or any of
their respective properties or assets, (iv) result in the creation or imposition
of any Encumbrance on any asset of the Representing Party or any of its
Subsidiaries, or (v) cause the suspension or revocation of any permit, license,
governmental authorization, consent or approval necessary for the Representing
Party or any of its Subsidiaries to conduct its business as currently conducted,
except in the case of clauses (ii), (iii), (iv) and (v) for violations,
breaches, defaults, terminations, cancellations, accelerations, creations,
impositions, suspensions or revocations which would not or would not be
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect or prevent the consummation of the transactions contemplated hereby.
Section 5.6. Financial Statements; SEC Filings. (a) The consolidated
balance sheets of the Representing Party and its consolidated Subsidiaries as of
December 31, 1996 and December 31, 1997, and the related consolidated statements
of earnings cash flows for each of the two fiscal years ended December 31, 1997
and 1996, incorporated by reference in the Annual Reports on Form 10-K in the
case of Chrysler and the Annual Reports on Form 20-F in the case of Daimler-Benz
for the fiscal years ended December 31, 1997 and 1996, respectively, as filed
with the SEC, and the unaudited consolidated balance sheet of Chrysler as of
March 30, 1997, and the related unaudited consolidated statements of income and
cash flows for the three-month period then ended included in the Quarterly
Report on Form 10-Q of Chrysler for the quarterly period ended March 30, 1997,
as filed with the SEC, copies of all of which have been made available by each
Representing Party to the other (collectively, the "Representing Party's
Financial Statements"), complied as to form, as of their respective dates of
filing with the SEC, in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with US GAAP applied on a consistent
basis, except as reflected in the Representing Party Financial Statements, and
present fairly the consolidated financial position
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of the Representing Party and its consolidated Subsidiaries at the dates and the
consolidated results of operations of the Representing Party and its
Subsidiaries for the periods stated therein subject, in the case of unaudited
interim statements, to normal year-end adjustments. The Representing Party
Financial Statements referred to in this Agreement shall be deemed to include
any notes to such financial statements.
(b) Since January 1, 1996, each Representing Party and its
Subsidiaries that is required to make filings under the Securities Act of 1933,
as amended (the "Securities Act"), or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), has filed with the SEC all forms, reports and
documents required to be filed by it pursuant to the Securities Act and the
Exchange Act, all of which, as of their respective filing dates, complied in all
material respects with all applicable requirements of the Securities Act and the
Exchange Act. Each Representing Party has heretofore made available to the other
a true and complete copy of (i) each final prospectus and definitive proxy
statement filed by it or any of its Subsidiaries with the SEC since January 1,
1996, and (ii) each report filed by it or any of its Subsidiaries with the SEC
since January 1, 1996 (the documents referred to in clauses (i) and (ii) being
hereinafter referred to as the "Representing Party's Filings" and such of the
Representing Party's Filings as have been filed on or before the date hereof
being referred to as the "Representing Party's Pre-Agreement Filings."). None of
the Representing Party's Pre-Agreement Filings as of the respective dates on
which they were filed with the SEC contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
Section 5.7. Absence of Changes. Except as disclosed in the
Representing Party's Pre-Agreement Filings and except as contemplated by this
Agreement, since the date of the Representing Party's latest financial
statements included in such Representing Party's Pre-Agreement Filings, the
Representing Party and its Subsidiaries have conducted their respective
businesses in the ordinary course consistent with past practice and there has
not been:
(a) any Material Adverse Effect;
(b) any material change in the method of accounting or
accounting practice of the Representing Party and its Subsidiaries, other than
changes required by US GAAP;
(c) any direct or indirect redemption, purchase or other
acquisition of any shares of capital stock of the Representing Party or any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) in respect of such capital stock, other
than regular quarterly cash dividends in the case of Chrysler and regular annual
cash dividends in the case of Daimler-Benz;
(d) (i) any increase in the compensation payable or to become
payable by the Representing Party or any of its Subsidiaries to any of their
respective officers or employees, other than increases in the ordinary course of
business and substantially consistent with past practice,
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increases required by union contracts and increases specifically approved in
writing by the other Representing Party or (ii) any increase or modification in
any bonus, pension, insurance or other employee benefit, plan, payment or
arrangement made to, for or with respect to employees not in the ordinary course
of business and consistent with past practice or (iii) entry into or amendment
of any employment agreement or other employment arrangement with any employee of
the Representing Party or any of its Subsidiaries which employment agreement or
amendment provides or may provide compensation and benefits in excess of
$1,000,000 to any individual in any 12-month period; or
(e) any issuance of shares of capital stock other than
pursuant to currently outstanding stock options or other similar stock based
employee benefit awards.
Section 5.8. Absence of Undisclosed Liabilities. There are no
liabilities of the Representing Party or any of its Subsidiaries of any kind
whatsoever, whether or not accrued and whether or not contingent or absolute,
determined or determinable, that are material to such Representing Party and its
Subsidiaries taken as a whole, other than (a) liabilities disclosed or provided
for in such Representing Party's Financial Statements, (b) liabilities disclosed
in the Representing Party's Filings or disclosed as liabilities on the
Representing Party's Disclosure Schedule, (c) liabilities incurred on behalf of
the Representing Party in connection with this Agreement and the transactions
contemplated hereby, (d) liabilities not required to be disclosed under US GAAP,
and (e) liabilities incurred in the ordinary course of business consistent with
past practice since the date of the Representing Party's latest financial
statements included in such Representing Party's Pre-Agreement Filings, none of
which, either individually or in the aggregate, are reasonably likely to have a
Material Adverse Effect.
Section 5.9. Litigation. There are no claims, actions, suits,
proceedings or investigations pending or, to the knowledge of the Representing
Party, threatened against such Representing Party or any of its Subsidiaries or
any of their respective assets before any Governmental Entity which,
individually or in the aggregate, have a reasonable likelihood of resulting in a
Material Adverse Effect. Neither the Representing Party nor any of its
Subsidiaries is subject to any outstanding order, writ, injunction or decree
which reasonably has had or could be expected to have a Material Adverse Effect.
Section 5.10. Taxes. (a) The Representing Party and each of its
Subsidiaries have timely filed or caused to be filed (or there has been timely
filed on their behalf) or will timely file or cause to be filed all income Tax
Returns and all other material Tax Returns required by applicable law to be
filed on or prior to the date hereof, or requests for extensions to file such
Tax Returns have been filed, granted and have not expired, except to the extent
that such failures to file or to have extensions granted that remain in effect
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect. All such Tax Returns are complete and accurate in all
material respects, except to the extent that such failures to be complete or
accurate individually or in the aggregate would not reasonably be expected to
have a Material Adverse Effect. The Representing Party and each of its
Subsidiaries have paid (or there has been paid on their behalf) all
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Taxes shown as due on such Tax Returns, and the most recent Representing Party's
Financial Statements contained in the Representing Party's Filings reflect an
adequate reserve in accordance with US GAAP for all Taxes payable by the
Representing Party and its Subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements, except for
inadequately reserved Taxes that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect. No deficiencies for
any Tax have been proposed in writing, asserted or assessed, in each case by any
taxing authority, against the Representing Party or any of its Subsidiaries for
which there are not adequate reserves, except for deficiencies that individually
or in the aggregate would not reasonably be expected to have a Material Adverse
Effect.
(b) Except as contemplated by Sections 2.6, 3.6 and 8.2 of
this Agreement, any amount or other entitlement that could be received (whether
in cash or property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer or director
of Chrysler or any of its affiliates who is a "disqualified individual" (as such
term is defined in proposed Treasury Regulation Section 1.280G-1) under any
employee benefit plan or other compensation arrangement currently in effect
would not be characterized as an "excess parachute payment" or a "parachute
payment" (as such terms are defined in Section 280G(b)(1) of the Code).
Section 5.11. Employee Benefit Plans. (a) As soon as practicable
(but in any event within 30 business days) following the date hereof, each
Representing Party shall provide the other with a true and complete list of each
material deferred compensation, incentive compensation, stock purchase, stock
option and other equity compensation plan, program, agreement or arrangement;
each material severance or termination pay, medical, surgical, hospitalization,
life insurance and other "welfare" plan, fund or program (within the meaning of
Section 3(1) of ERISA); each material profit-sharing, stock bonus or other
"pension" plan, fund or program (within the meaning of Section 3(2) of ERISA);
each material employment, termination or severance agreement; and each other
material employee benefit plan, fund, program, agreement or arrangement, in each
case that is sponsored, maintained or contributed to or required to be
contributed to by the Representing Party or by any trade or business, whether or
not incorporated (an "ERISA Affiliate"), that together with the Representing
Party would be deemed a "single employer" within the meaning of Section 4001(b)
of ERISA, or to which the Representing Party or an ERISA Affiliate is a party,
whether written or oral, for the benefit of any employee or former employee of
the Representing Party or any of the Representing Party's Subsidiaries and
whether or not subject to ERISA (with respect to a Representing Party, the
"Plans").
(b) Each Plan has been administered and operated in compliance
with its terms and applicable law in all material respects, including, without
limitation, in accordance with the Code and ERISA and the comparable provisions
of any foreign law.
(c) There are no liabilities of the Representing Party or any
ERISA Affiliate with respect to any Plan, other than (i) liabilities disclosed
or provided for in such
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Representing Party's Financial Statements and (ii) liabilities none of which,
either individually or in the aggregate, are reasonably likely to have a
Material Adverse Effect.
Section 5.12. Labor and Employment Matters. (a) Except as
contemplated by Sections 2.6, 3.6 and 8.2 of this Agreement and except for
employment agreements and other arrangements which do not require the payment of
more than $200,000 per person, as soon as practicable (but in any event within
30 business days) following the date hereof, each Representing Party shall
provide the other with a true and complete list of each employment agreement or
any other arrangement or understanding with any employee that provides for the
payment of any consideration (including severance pay) by such Representing
Party or any of its Subsidiaries to such person as a result of the consummation
of any of the transactions contemplated by this Agreement, either alone or in
conjunction with the termination of such person's employment.
(b) (i) Except as disclosed by a Representing Party in writing
as soon as practicable (but in any event within 30 business days) following the
date hereof, neither the Representing Party nor any of its Subsidiaries is a
party to, or bound by, any material collective bargaining agreement or other
material contract, agreement, arrangement or understanding with a labor union or
labor organization; (ii) except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, there is no (1) unfair
labor practice, labor dispute (other than routine individual grievances) or
labor arbitration proceeding pending or, to the knowledge of the Representing
Party, threatened against the Representing Party or its Subsidiaries; (2)
activity or proceeding by a labor union or representative thereof to organize
any employees of the Representing Party or any of its Subsidiaries; or (3)
lockout, strike, slowdown, work stoppage or threat thereof by or with respect to
such employees; and (iii) since December 31, 1997, there has not been any
adoption or amendment in any material respect by the Representing Party or any
of its Subsidiaries of any material collective bargaining agreement or other
contract, agreement, arrangement or understanding with a labor union or labor
organization. Each of the Representing Party and its Subsidiaries is in
compliance with all laws regarding employment, employment practices, terms and
conditions of employment and wages, except for such noncompliance that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
Section 5.13. Information Provided By Representing Party. None
of the information provided or to be provided by the Representing Party
specifically for inclusion or incorporation by reference in (a) the F-4
Registration Statement will at the date the F-4 Registration Statement is
declared effective by the SEC contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading, (b) the Proxy Statement/Prospectus will, at the
date the Proxy Statement/Prospectus is first mailed to the Representing Party's
stockholders, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading, (c) the Exchange Offer Documents will, at the time of commencement
of the Daimler-Benz Exchange Offer or at the time of the expiration date of the
Daimler-Benz Exchange Offer, contain any untrue statement of a
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material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading, or (d) the merger report to be
prepared pursuant to Section 8 of the German Transformation Act
(Umwandlungsgesetz) in connection with the Daimler-Benz Merger will, at the time
the merger report is made available to the stockholders of Daimler-Benz in
connection with the Daimler-Benz Stockholders Meeting, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Notwithstanding
the foregoing, no representation or warranty is made by a Representing Party
with respect to any statements made in the F-4 Registration Statement, the Proxy
Statement/Prospectus or the Exchange Offer Documents based on information
provided by or on behalf of the other Representing Party for inclusion or
incorporation by reference in such documents or with respect to information
incorporated by reference in such documents from any of the other Representing
Party's Filings. Daimler-Benz represents and warrants to Chrysler that the F-4
Registration Statement and the Exchange Offer Documents will comply as to form
with all applicable provisions of law. Chrysler represents and warrants to
Daimler-Benz that the Proxy Statement/Prospectus will comply as to form with all
applicable provisions of law.
Section 5.14. Ownership of Capital Stock. To the knowledge of the
Representing Party, neither the Representing Party nor any of its affiliates
beneficially owns, directly or indirectly, any capital stock of the other
Representing Party or is a party to any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any capital stock
of the other Representing Party.
Section 5.15. Voting Requirements. (a) Chrysler represents and
warrants to Daimler-Benz that the affirmative vote at the Chrysler Stockholders
Meeting, which shall become effective upon consummation of the Daimler-Benz
Exchange Offer (the "Chrysler Stockholder Approval"), of the holders of a
majority of all outstanding shares of Chrysler Common Stock is the only vote of
holders of any class or series of Chrysler capital stock necessary to approve
and adopt this Agreement and the transactions contemplated hereby, including the
Chrysler Merger.
(b) Daimler-Benz represents and warrants to Chrysler that the
affirmative votes at the Daimler-Benz Stockholders Meeting (the "Daimler-Benz
Stockholder Approval") of the holders of 75% of the Daimler-Benz Ordinary Shares
represented at the Daimler-Benz Stockholders Meeting to approve and adopt (i)
this Agreement and the transactions contemplated hereby, including the
Daimler-Benz Exchange Offer, and (ii) the Daimler-Benz Merger are the only votes
of the holders of any class or series of Daimler-Benz capital stock necessary
for the consummation of the transactions contemplated by this Agreement.
Section 5.16. Accounting Matters. To its knowledge neither the
Representing Party nor any of its affiliates (as such term is used in Section
9.10) has taken or agreed to take any action that would prevent the transactions
contemplated by this Agreement from being accounted for as a
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"pooling-of-interests" under APB No. 16 and the Representing Party has no reason
to believe that such transactions will not qualify for "pooling-of-interests"
accounting treatment under APB No. 16.
Section 5.17. Opinion of Financial Advisors. Chrysler represents and
warrants to Daimler-Benz that Chrysler has received the opinion of CSFB, dated
the date of this Agreement, to the effect that, as of such date, the U.S.
Exchange Ratio is fair from a financial point of view to the holders of shares
of Chrysler Common Stock (other than Daimler-Benz and its affiliates).
Daimler-Benz represents and warrants to Chrysler that Daimler-Benz has received
the opinion of Goldman Sachs, dated the date of this Agreement, to the effect
that, as of such date, the Daimler-Benz Exchange Ratio pursuant to the Agreement
is fair from a financial point of view to the holders of Daimler-Benz Ordinary
Shares. For purposes of the opinion as expressed in this Agreement, the term
"Daimler-Benz Exchange Ratio" means the Daimler-Benz Exchange Offer Ratio and
the Daimler-Benz Merger Exchange Ratio, collectively, after taking into account
the Chrysler Merger.
Section 5.18. Finders and Advisors. Except for Goldman Sachs and
Deutsche Bank AG, whose fees shall be the sole responsibility of Daimler-Benz,
and CSFB, whose fees shall be the sole responsibility of Chrysler, no financial
advisor, broker, agent or finder has been retained by either Representing Party
in connection with this Agreement or any transaction contemplated hereby, and no
such financial advisor, broker, agent or finder is entitled to any fee or other
compensation on account of this Agreement or any transaction contemplated
hereby.
Section 5.19. State Takeover Statutes; Stockholder Rights Plan. (a)
Chrysler represents and warrants to Daimler-Benz that its Board of Directors has
taken all action necessary to ensure that Section 203 of the DGCL does not apply
to this Agreement and the transactions contemplated hereby.
(b) Chrysler represents and warrants to Daimler-Benz that its
Board of Directors has amended the Rights Agreement, dated as of February 5,
1998, between Chrysler and First Chicago Trust Company of New York (the
"Chrysler Rights Agreement") to render it inapplicable to the transactions
contemplated by this Agreement.
ARTICLE VI
NEWCO AG REPRESENTATIONS AND WARRANTIES
Newco AG represents and warrants to Chrysler as follows:
Section 6.1. Corporate Organization. Newco AG is an
Aktiengesellschaft duly incorporated and validly existing under the laws of the
Federal Republic of Germany and has the corporate power and authority to own,
operate and lease all of its properties and assets and to carry on its business
as it is now being conducted or presently proposed to be conducted.
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Section 6.2. Capital Stock. As of the date hereof, (a) 20,000 Newco
Ordinary Shares were issued and outstanding and owned by Sal. Oppenheim jr. &
Cie.; and (b) no other shares of capital stock were issued or outstanding.
Except as set forth in this Section 6.2, (1) there are not issued, reserved for
issuance or outstanding (i) any shares of capital stock or other voting
securities of Newco AG, (ii) any securities of Newco AG convertible into or
exchangeable or exercisable for shares of capital stock or voting securities of
Newco AG, or (iii) any warrants, calls, options or other rights to acquire from
Newco AG, or any obligation of Newco AG to issue, any capital stock, voting
securities or securities convertible into or exchangeable for or exercisable for
capital stock or voting securities of Newco AG, and (2) there are no outstanding
obligations of Newco AG to repurchase, redeem or otherwise acquire any such
securities or to issue, deliver or sell, or cause to be issued, delivered or
sold, any such securities.
Section 6.3. Authority. Newco AG has the corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery and, subject to completion of the actions
to be performed pursuant to Section 9.16, the performance of this Agreement by
Newco AG and the consummation by Newco AG of the transactions contemplated
hereby have been duly authorized by the general meeting of stockholders
(Hauptversammlung) of Newco AG, by the Supervisory Board (Aufsichtsrat) of Newco
AG and by the Management Board (Vorstand) of Newco AG, and no other corporate
action on the part of Newco AG is necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Newco AG and (assuming this Agreement constitutes a
valid and binding obligation of Daimler-Benz and Chrysler and, upon the actions
required by Section 9.16 being taken) is a valid and binding agreement of Newco
AG, enforceable against Newco AG in accordance with its terms. Newco AG has made
available to Daimler-Benz and Chrysler true and complete copies of its
Memorandum and Articles of Association (Satzung) and an English translation
thereof.
Section 6.4. Consents and Approvals; No Violation. (a) Except where
the failure to make any filing with, or to obtain any permit, authorization,
consent or approval of, any Governmental Entity would not prevent or delay the
consummation of the transactions contemplated hereby or otherwise prevent Newco
AG from performing its obligations under this Agreement, no filing with, and no
permit, authorization, consent or approval of, any Governmental Entity is
necessary for the execution, delivery and performance of this Agreement by Newco
AG and the consummation by Newco AG of the transactions contemplated hereby.
(b) Neither the execution, delivery or performance of this
Agreement by Newco AG nor the consummation by Newco AG of the transactions
contemplated hereby, will (i) violate or conflict with any provision of the
Memorandum and Articles of Association (Satzung) of Newco AG, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation,
vesting, payment, exercise, acceleration, suspension or revocation) under any of
the provisions of any note, bond, mortgage, deed of trust, security interest,
indenture, license, contract, agreement, plan or other instrument or obligation
to which Newco AG is a party or by which it or any of its properties or
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assets may be bound, (iii) violate any order, writ, injunction, decree,
judgment, statute, rule or regulation applicable to Newco AG or any of its
respective properties or assets, (iv) result in the creation or imposition of
any Encumbrance on any asset of Newco AG, or (v) cause the suspension or
revocation of any permit, license, governmental authorization, consent or
approval necessary for Newco AG to conduct its business as currently conducted.
Section 6.5. Information Provided By Newco AG. None of the
information provided or to be provided by Newco AG specifically for inclusion or
incorporation by reference in (a) the F-4 Registration Statement will, at the
date the F-4 Registration Statement is declared effective by the SEC, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, (b) the Proxy Statement/Prospectus will, at the date the Proxy
Statement/Prospectus is first mailed to the Chrysler stockholders, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading, (c) the report
to be prepared pursuant to Section 183(3) of the German Stock Corporation Law
(Aktiengesetz) in connection with the U.S. Share Exchange will, at the time of
delivery of the report to the commercial register, and the report to be prepared
pursuant to Section 52(3) of the German Stock Corporation Law (Aktiengesetz) in
connection with the U.S. Share Exchange will, at the time of its presentation to
the general meeting of stockholders of Newco AG, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (d) the Exchange
Offer Documents will, at the time of commencement of the Daimler-Benz Exchange
Offer or on the Daimler-Benz Exchange Offer Expiration Date, the report to be
prepared pursuant to Section 183(3) of the German Stock Corporation Law
(Aktiengesetz) in connection with the German Share Exchange will, at the time of
delivery of the report to the commercial register, and the report to be prepared
pursuant to Section 52(3) of the German Stock Corporation Law (Aktiengesetz) in
connection with the German Share Exchange will, at the time of its presentation
to the general meeting of stockholders (Hauptversammlung) of Newco AG and at the
time of its filing with the commercial register (Handelsregister), contain any
untrue statement of a material fact or omit to state a material fact required t