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Exhibit 10.27
Partnership Agreement
of
X.X. Xxxxxxx GmbH & Co. KG
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INDEX
Preamble 1
Sec. 1 Business Name, Seat, Legal Form........................... 1
Sec. 2 Object of the Limited Partnership......................... 1
Sec. 3 Partners, Capital Participation, Liability................ 1
Sec. 4 Partners' Accounts........................................ 2
Sec. 5 Management, Representation, Exercise of Control........... 2
Sec. 6 Remuneration of the General Partner....................... 2
Sec. 7 Partners' Meeting......................................... 3
Sec. 8 Partners' Resolutions..................................... 3
Sec. 9 Business Year............................................. 4
Sec. 10 Annual Financial Statements............................... 4
Sec. 11 Application of Profits.................................... 5
Sec. 12 Withdrawals............................................... 5
Sec. 13 Term of the Partnership, Termination...................... 5
Sec. 14 Assignment of Interest.................................... 6
Sec. 15 Exclusion of a Limited Partner............................ 7
Sec. 16 Miscellaneous............................................. 8
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Preamble
X.X. Xxxxxxx GmbH & Co. KG is formed by a change of the legal
form of X.X. Xxxxxxx GmbH with its statutory seat in Eberbach/Baden (registered
in the Commercial Register of the Lower Court Heidelberg under HRB No. 957),
pursuant to today's shareholders' resolution, with effect as from the
registration of the new form in the Commercial Register of the Lower Court
Heidelberg. Thereby X.X. Xxxxxxx GmbH with its statutory seat in Eberbach/Baden
continues to exist with the same legal and economic identity in the new legal
form of GmbH & Co. KG with the business name X.X. Xxxxxxx GmbH & Co. KG. The
former shareholders of X.X. Xxxxxxx GmbH with its statutory seat in
Eberbach/Baden are the F&F Holding GmbH with its statutory seat in
Eberbach/Baden (registered in the Commercial Register of the Lower Court
Heidelberg under HRB 5361), Deutsche Gelatine-Fabriken Xxxxxx XX with statutory
seat in Eberbach/Baden (registered in the Commercial Register of the Lower Court
Heidelberg under HRB No. 3796) and X.X. Xxxxxxx Verwaltungs GmbH (presently
XXXXXXX Vierundsechzigste Verwaltungsgesellschaft mbH, presently registered in
the Commercial Register of the Lower Court of Hamburg under HRB 63412).
SEC. 1 BUSINESS NAME, SEAT, LEGAL FORM
(1) The business name of the Limited Partnership is X.X. Xxxxxxx
GmbH & Co. KG.
(2) The Limited Partnership has its seat in Eberbach/Baden.
(3) The business is organized as a Limited Partnership.
SEC. 2 OBJECT OF THE LIMITED PARTNERSHIP
(1) The purpose of the Limited Partnership is to be the fabrication
and distribution of capsules of gelatin and other materials, employing X.X.
Xxxxxxx Corporation capsule machines and patents and such other equipment,
procedures and/or methods as may be approved of by the corporate meeting, as
well as filling the capsules fabricated in this manner with all substances
suitable therefore, as well as fabrication and commerce in such substances which
are suitable for being filled in capsules.
(2) The Company shall be entitled to engage in other activities,
both in Germany and abroad, to purchase other companies, to invest therein, to
represent such companies, and to establish branch offices.
SEC. 3 PARTNERS, CAPITAL PARTICIPATION, LIABILITY
(1) General Partner shall become X.X. Xxxxxxx Verwaltungs GmbH with
its statutory seat in Eberbach/Baden with the entry of the new legal entity into
the Commercial Register. It holds a fixed capital participation (Capital Account
1) in the amount of DM 10.000.--.
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(2) Upon registration of the new legal form in the Commercial
Register, Limited Partners will become F&F Holding GmbH holding a fixed capital
participation (Capital Account I) in the amount of DM 4,584,900.-- and Deutsche
Gelatine-Fabriken Xxxxxx XX holding a fixed capital participation (Capital
Account I) in the amount of DM 4,405,100.--.
(3) The personal liability of the Limited Partners conforms to their
capital participation pursuant to sec. 3 subsec. 2 and shall be registered as
personal liability in the Commercial Register.
SEC. 4 PARTNERS' ACCOUNTS
(1) The following accounts shall be kept for each partner:
a fixed capital account
(Capital Account I)
a floating capital account as clearing
account (Capital Account II)
a Loss Carry Forward Account
(2) The Capital Account I shall record the fixed capital
contribution of the partners; this account does not bear interest.
(3) The Capital Account II shall record all capital transactions
between the Limited Partnership and the respective partner, and profits shall be
credited thereto in accordance with sec. 11 subsec. 3 (e.g., advance profits
pursuant to [section] 11 para. 2, withdrawals, remuneration for activities,
interest). The Capital Account II bears an interest at a rate of 2% p.a. above
the respective discount rate of Deutsche Bundesbank. Interest shall be expense
of the Company.
(4) Losses attributable to a partner shall be booked to the Loss
Carry Forward Account.
SEC. 5 MANAGEMENT, REPRESENTATION, EXERCISE OF CONTROL
(1) Only the general partner is entitled and obliged to manage and
represent the Limited Partnership. The General Partner itself and its managing
directors are released from the restrictions of sec.181 Civil Code for business
transactions with the Limited Partnership.
(2) The Limited Partners' right to objection according to sec. 164
Commercial Code is excluded.
SEC. 6 REMUNERATION OF THE GENERAL PARTNER
(1) As long as the General Partner acts on behalf of the Limited
Partnership, the Limited Partnership shall reimburse all costs and expenses for
the management, which includes also any salaries and other payments to a
Geschaftsfuhrer employed with the General Partner.
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(2) The General Partner shall receive in addition a yearly
remuneration to be paid before the allocation of profits to the partners at the
end of each business year amounting to 10% of its paid in capital as reflected
in its balance sheet at the beginning of the business year.
(3) Amounts payable to the General Partner pursuant to this Section
are expenses of the Company.
SEC. 7 PARTNERS' MEETING
(1) Each managing director of X.X. Xxxxxxx Verwaltungs GmbH and each
Limited Partner may convene a Shareholders' Meeting if this appears necessary in
the interest of the Limited Partnership.
(2) The ordinary Shareholders' Meeting shall take place annually at
the registered office of the Limited Partnership within eight months after the
end of the business year. In this Shareholders' Meeting, the X.X. Xxxxxxx
Verwaltungs GmbH shall report on the position of the Limited Partnership, and
the Limited Partners shall decide on the approval of the annual statement of
accounts, the exoneration of the services of X.X. Xxxxxxx Verwaltungs GmbH and
the appointment of the auditor.
(3) The Shareholders' Meeting shall be convened by a managing
director of X.X. Xxxxxxx Verwaltungs GmbH or by a Limited Partner in writing by
registered letter, by telegram, telex or telecopy. The invitation must give the
date, place (must be in Germany), and the agenda. The invitation must be sent in
time so that, taking into account existing communications situation, the
invitation will be received at least two weeks before the date of the meeting.
(4) The Shareholders' Meeting shall be chaired by the person elected
by the Limited Partners with a simple majority of the votes cast.
(5) Minutes shall be prepared of a Shareholders' Meeting, which must
be signed by the chairperson. These minutes shall state the place and date of
the meeting, the participants, the items on the agenda, all motions and the
results of the votes. A copy of the minutes shall be sent straight away to each
shareholder and to each member of the Beirat of X.X. Xxxxxxx Verwaltungs GmbH.
SEC. 8 PARTNERS' RESOLUTIONS
(1) The decisions to be made by the Partners in connection with the
affairs of the Limited Partnership shall be made by passing of a resolution.
Shareholders' resolutions shall be passed in Shareholders' Meetings. They may
also be passed outside Shareholders' Meetings by writing, by telex, by telegram,
by telefax or by telephone, if no Limited Partner objects to this procedure.
(2) Unless something different is expressly stipulated in mandatory
provisions of the law or in this Partnership Agreement, shareholders'
resolutions shall require a majority of the votes of all Shareholders entitled
to vote. Each Partner has as many votes as fixed capital
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contributions are credited in full DM 100.-- on the Capital Account I. R.P.
Xxxxxxx Verwaltungs GmbH shall not have a vote.
(3) The following Partners' resolutions shall require a majority of
75% of the votes of all partners entitled to vote:
a) Exoneration of the actions of the General Partner
and enforcement of damages claimed against it;
b) Conclusion, alteration and termination of contracts
between the Company and a shareholder or an
enterprise associated with a shareholder, unless
something to the contrary is provided in the
individual contracts, and transactions of the
Company which are directly or indirectly of
considerable importance for a shareholder;
c) Amendments of the Articles of Incorporation;
d) Dissolution of the Partnership.
(4) Resolutions of the Partners shall be recorded in the Minutes of
the Shareholders' Meeting or, if they are passed outside a Partners' Meeting, in
special minutes to be prepared and signed by a Geschaftsfuhrer of X.X. Xxxxxxx
Verwaltungs GmbH, showing how the individual Partners voted and the result of
the vote, unless mandatory provisions of law stipulate notarization. Each
Partner shall receive a copy of the Minutes without delay.
(5) The incorrectness of a Partners' resolution can only be asserted
by filing a complaint within a prescriptive period of three months after receipt
of the copy pursuant to para. (4) above. After expiry of this period, any defect
shall be deemed remedied.
SEC. 9 BUSINESS YEAR
The business year runs from April 1 to March 31 of the following
year.
SEC. 10 ANNUAL FINANCIAL STATEMENTS
(1) X. X. Xxxxxxx Verwaltungs GmbH has to establish the annual
accounts for the previous business year within six months after the termination
of such business year based on generally applicable provisions of the commercial
law, the provisions of this Partnership Agreement as well as the provisions
regarding the determination of the profits under applicable tax law as far as
those do not deviate from mandatory commercial laws, and has to present these
accounts immediately to the auditor determined by Partners' resolution for
review.
(2) X. X. Xxxxxxx Verwaltungs GmbH has to present the audited annual
accounts and the review report immediately to the Beirat of the General Partner
and to present this together with the comments of the Beirat at the latest with
the invitation to the ordinary Partners' Meeting to all Partners. The annual
accounts shall be determined by Partners' resolution.
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(3) If the income tax general and separate profit determination is
based on balance sheet items which deviate from the annual accounts within the
meaning of subpara. (2), in such a case the annual accounts which follow the
final decision by tax audit have to be adjusted accordingly as far as this is
permitted by commercial law.
SEC. 11 APPLICATION OF PROFITS
(1) After any allocations pursuant to Section 11 subsec. 2, the
Limited Partners shall participate in profits and losses in proportion to their
fixed capital accounts (sec. 4 subsec. 2). The rules regarding the limitation of
personal liability of limited partners remain unaffected. Amounts pursuant to
sec. 6 of this agreement shall be credited to the Capital Account II of the
General Partner prior to profit allocation and regardless of whether a profit in
this amount exists.
(2) In the process of distributing profit or loss, effects of trade
tax on income resulting from partner's supplementary balance sheet have to be
allocated to such shareholder as profit or loss first, who gave reason for these
effects of trade tax on income.
(3) The profit shall be credited to the partners' account pursuant
to the following provisions:
a) As far as the Loss Carry Forward Account shows a
loss carried forward, this loss shall first be
offset.
b) Any exceeding profits shall be credited to the
Capital Account II.
SEC. 12 WITHDRAWALS
(1) The general partner may withdraw the compensation pursuant to
sec. 6 subsec. 1 from its Capital Account II as soon as such costs or expenses
arise. The remuneration for the assumption of personal liability pursuant to
sec. 6 subsec. 2 can be withdrawn at the end of the respective business year.
(2) Withdrawals by the Limited Partners can only be made from the
Capital Accounts II, if as a balance in favor of the Limited Partner exists.
Withdrawals for the payment of taxes on income from the Partnership and its
assets as well as the interest on the capital account II are always possible.
Sec. 13 Term of the Partnership, Termination
(1) Upon registration of the new legal form in the Commercial
Register the Limited Partnership continues to exist as X.X. Xxxxxxx GmbH & Co.
KG for an unlimited term.
(2) It can be terminated effective at the end of a calendar year,
but the first time being only March 31, 2008.
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SEC. 14 ASSIGNMENT OF INTEREST
(1) Transfer of interests in the Limited Partnership or portions
thereof effective before the period ending March 31, 2008 shall require prior
consent by way of a Limited Partners' resolution passed with a majority of 75%
of the votes of the Limited Partners entitled to vote. With respect to the
interest of X.X. Xxxxxxx Verwaltungs GmbH in the Limited Partnership, such
consent is also required after March 31, 2008.
(2) The transfer is only enforceable if the transferor transfers at
the same time a corresponding equivalent share of the share capital of X.X.
Xxxxxxx Verwaltungs GmbH (Share) to the transferee. The corresponding transfer
of the Share is only and insofar necessary as such transfer is required to
achieve the corresponding equal interests of the transferee in the X.X. Xxxxxxx
Verwaltungs GmbH and in the Limited Partnership.
(3) With the transfer of such interest or a part thereof to a third
party according to subsections (1) and (2), the legal position of the transferor
shall pass to the transferee with respect to the capital account and the
loss-carry-forward account fully or to a respective part, disregarding any
further liability of the transferor for a debt, if any. The transferee shall
have declared his consent to such transfer as soon as this becomes effective.
(4) The consent set forth in para. (1) shall not be required for
transfers of interests or portions thereof:
a) from Deutsche Gelatine-Fabriken Xxxxxx XX to wholly
owned subsidiaries and vice versa, and from one
wholly owned subsidiary to another;
b) from F+F Holding GmbH to wholly owned subsidiaries
of X.X. Xxxxxxx Corporation or of F+F Holding GmbH
and vice versa, and from one wholly owned
subsidiary to another;
c) in the cases described in paras. (5) and (6);
d) after March 31, 2008 F+F Holding GmbH or Deutsche
Gelatine-Fabriken Xxxxxx XX or their legal
successors within the meaning of para. (4) a) and
b) may transfer their interests in the Limited
Partnership by sale or exchange to third parties
other than those listed in sec. 14 (4) a) and b)
subject, however, to a Vorkaufsrecht - preemptive
right - (as set forth in [section] [section] 504 et
seq. BGB - German Civil Code) of the other Limited
Partner subject to the modification that the price
to be paid by the other Limited Partner shall be
the price agreed to by the third party (ies) or the
fair market value of such shares as determined by
experts approved by both Limited Partners,
whichever is lower. If both Limited Partners cannot
agree on an expert to make the determination of
such fair market value, then such expert shall be
selected by the president of the Chamber
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of Industry and Commerce responsible for the
location of the registered office of the
Corporation.
(5) If more than fifty per cent of the shares of X.X. Xxxxxxx
Corporation or Deutsche Gelatine-Fabriken Xxxxxx XX are acquired by a person or
legal entity not a member or affiliated with or related by blood or marriage to
a member of the Xxxxxxx, Koepff or Xxxxxx families and such transaction has not
been approved by a majority of the governing body of the entity whose shares are
so transferred (the Board of Directors in the case of X.X. Xxxxxxx Corporation
and the Supervisory Board in the case of Deutsche Gelatine-Fabriken Xxxxxx XX),
the Limited Partner confronted with this change shall be entitled to declare
within six months after the change of ownership has become known to it that it
either elects to sell its interest to the other Limited Partner or to acquire
the interest of the other Limited Partner. The price of acquisition of interests
from the other Limited Partner shall be the fair market value of such interest
as agreed between the Limited Partners, or, lacking such agreement, 112.5 % of
the fair market value fixed by the expert approved by both Limited Partners. If
both Limited Partners cannot agree on the expert to make the determination of
such fair market value, then such expert shall be selected by the president of
the Chamber of Industry and Commerce responsible for the location of the
registered office of the Corporation.
(6) Para. (5) shall apply accordingly if a subsidiary of X.X.
Xxxxxxx Corporation or of Deutsche Gelatine-Fabriken Xxxxxx XX which holds the
interests in the Limited Partnership is no longer wholly owned by X.X. Xxxxxxx
Corporation or Deutsche Gelatine-Fabriken Xxxxxx XX, and if this fact is not
altered immediately upon request of the other Limited Partner, at the latest
within three months; it shall not depend on the consent of the competent body of
X.X. Xxxxxxx Corporation or of Deutsche Gelatine-Fabriken Xxxxxx XX.
SEC. 15 EXCLUSION OF A LIMITED PARTNER
(1) The Limited Partners can resolve to exclude a Limited Partner
without the consent of such Limited Partner, if:
a) execution measures are taken upon the share of the
Limited Partner and if these are not warded off
immediately by him upon written request by a
Limited Partner;
b) bankruptcy proceedings or court composition
proceedings are legally opened against the assets
of the Limited Partner or if the opening of such
proceedings if refused due to lack of assets;
c) another important cause lies in the person of the
Limited Partner which makes it impossible for the
remaining Limited Partners to continue the
Partnership with him.
(2) Instead of excluding a Limited Partner, the Limited Partners can
according to para. (1) resolve to transfer part or all of the Interest of the
Limited Partner concerned to a person
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to be named in the resolution who is prepared to accept the interest, provided
he acquires at the same time, a corresponding share of the General Partner.
(3) The resolutions according to paras. (1) and (2) shall require a
majority of the votes of all Limited Partners entitled to vote. The Limited
Partner concerned shall not be entitled to vote.
(4) Exclusion and assignment shall not depend upon a
counter-performance to be effected concurrently.
(5) In the event that a Limited Partner is excluded or that,
instead, his interest is transferred, the Limited Partner concerned shall be
entitled to payment of compensation. The party liable for payment of the
compensation shall be, in case of exclusion, the Limited Partnership, otherwise
the purchaser of the share.
(6) The compensation shall amount to 87.5 % of the fair market value
of the interest at the point in time when the exclusion or transfer was decided
by resolution (date of withdrawal). If no agreement is reached on the
compensation within three months after the date of withdrawal, it will be fixed
bindingly by an arbitrator, who will be appointed - upon application by the
Limited Partnership or the Limited Partner concerned - by the president of the
Chamber of Industry and Commerce competent for the location of the registered
office of the Limited Partnership if the parties cannot agree on the person of
the arbitrator either. The costs of the fixing of the compensation shall be
shared equally between the Limited Partnership and the Limited Partner
concerned.
(7) The compensation shall be paid in five equal yearly
installments. The first installment shall fall due at the end of the month
following that in which the amount of compensation is fixed. From the date of
withdrawal onwards, interest shall accrue on the compensation amount at a rate
2% above the discount rate of the German Federal Reserve Bank. The accumulated
interest shall be payable with each installment. It shall be possible to pay
part or all of the compensation at an earlier date.
SEC. 16 MISCELLANEOUS
(1) In the event that certain provisions or parts of provisions of
this agreement are or become unenforceable, invalid or void, the enforceability
or validity of the remaining provisions shall not be affected thereby. The
respective provision shall be replaced by a provision that comes as close as
possible to the partners' economic and legal intentions.
(2) Amendments of and additions to this Partnership Agreement
require written form for their validity unless a stricter form requirement is
provided by law. The written form requirement also applies to the amendment or
waiver of this written-form-clause.
(3) The determinative version of this agreement is the one written
in the German language. Therefore, in the case of different interpretation of
the German and the English text, the German version shall prevail.
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(4) All disputes or differences of opinion arising out of or
concerning these Articles or any breach hereof, shall, unless otherwise amicably
settled, be referred to and settled by arbitration. Arbitration shall take place
at the place of business or the domicile of the defendant, in accordance with
the provisions of the separate arbitration agreement made between the
shareholders, which is annexed to this Agreement.
Frankfurt am Main, den 29.11.1997
F&F Holding GmbH
durch
/s/ XX. XXXXXX XXXXX
-------------------------------------
(Xx. Xxxxxx Xxxxx aufgrand Vollmacht)
Deutsche Gelatine-Fabriken Xxxxxx XX
durch
/s/ XXXXXX MAAB
-------------------------------------
(Xxxxxx Maab aufgrand Vollmacht)
X.X. Xxxxxxx Verwaltungs GmbH
durch
/s/ XX. XXXXXX TROLITZSCH
-------------------------------------
(Xx. Xxxxxx Trolitzsch aufgrand
Vollmacht und Untervollmacht)
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