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Exhibit 10.1
 
SALE AND PURCHASE AND TRANSFER AGREEMENT - B
 
 
 
 
 
 
 
 
 
 
REGARDING THE SALE AND PURCHASE AND TRANSFER OF A PARTNERSHIP INTEREST IN
SAUERESSIG GMBH + CO. KG
 
 
 
 
MARCH 29, 2011

 

   
0088098-0000002 FR:7615098.1
 

 
 

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SALE AND PURCHASE AND TRANSFER AGREEMENT –B
 

 
by and among
 
Mr. Kilian Saueressig,
 
Lünten Nork 123, 48691 Vreden, Germany,
 
 (hereinafter referred to as the "Seller"),
 
Matthews International Holding GmbH,
 
Rudolf-Diesel-Straße 16, 52428 Jülich, Germany,
 
(hereinafter referred to as the "Purchaser "),
 

 
Matthews International Corporation,
 
2 North Shore Center, Pittsburgh, USA,
 
(hereinafter referred to as the "Guarantor"),
 

 
The Seller, the Purchaser and the Guarantor hereinafter collectively referred to
as the "Parties" and each of them as a "Party",
 

 
Saueressig GmbH + Co. KG,
Gutenbergstraße 1-3, 48691 Vreden, Germany,
 
(hereinafter referred to as the "Company"),
 

 
and
 

 
Saueressig Geschäftsführungsgesellschaft mbH,
Gutenbergstraße 1-3, 48691 Vreden, Germany,
 
(hereinafter referred to as the "General Partner").
 

 

 
0088098-0000002 FR:7615098.1
 
 

 
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CONTENTS
 
Clause Page
 
1.
CORPORATE OWNERSHIP / STRUCTURE OF THE ACQUISITION 
6

 
1.1
Particulars of the Company 
6

 
1.2
Partnership Capital of the Company 
6

 
1.3
Seller’s Accounts 
6

 
1.4
Signing Date; Effective Date 
7

2.
SALE AND PURCHASE AND TRANSFER OF THE PARTNERSHIP INTEREST AND OF THE SELLER'S
LOAN AND PRIVATE ACCOUNTS 
7

 
2.1
Sale and Purchase of the Partnership Interest 
7

 
2.2
Sale and Purchase of the Seller's Loan and Private Accounts 
7

 
2.3
Transfer of Partnership Interest and of Seller's Loan and Private Accounts 
7

 
2.4
Approval of Shareholders 
8

3.
PURCHASE PRICE; SELLER'S LOAN AND PRIVATE ACCOUNTS PURCHASE PRICE; CONDITIONS OF
PAYMENT; BANK GUARANTEE 
9

 
3.1
Purchase Price; Seller's Loan and Private Accounts Purchase Price 
9

 
3.2
Due Date; Seller's Account; Company's Account 
9

 
3.3
Default 
10

 
3.4
No Right to Set-Off or to Withhold 
10

 
3.5
Bank Guarantee and Assignment by way of Security 
10

4.
CANCELLED 
11

5.
SELLER’S GUARANTEES 
11

6.
COVENANTS 
12

 
6.1
Signing Covenants 
12

 
6.2
After-Signing Covenants 
12

 
6.3
Covenant not to Compete 
13

7.
GUARANTOR'S GUARANTEE 
14

8.
TAXES AND COSTS 
14

 
8.1
Taxes on Earnings 
14

 
8.2
Transfer Taxes 
14

 
8.3
Value Added Tax 
14

 
8.4
Costs and Fees 
14

9.
NOTICES 
14

 
9.1
Form of Notice 
14

 
9.2
Notices to Seller 
15

 
9.3
Notices to Purchaser 
15

 
9.4
Notices to Guarantor 
15

 
9.5
Change of Address 
16

 
9.6
Copies to Advisors 
16

10.
MISCELLANEOUS 
16

 
10.1
Governing Law 
16

 
10.2
Arbitration 
16

 
10.3
Business Day 
17

 
10.4
Amendments, Supplementations 
17

 
10.5
Language 
17

 
10.6
Headings 
17

 
10.7
Annexes 
17

 
10.8
Entire Agreement; Termination of Option Agreement; Replacement of SPA-A;
Settlement 
17

 
10.9
Severability 
18

 
0088098-0000002 FR:7615098.1
 
 

 
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INDEX OF ANNEXES
 

 
Annex 2.3(a)
Copy of the already signed filing of the assignment of the Partnership Interest
with the Commercial Register

 
Annex 2.4
Copy of the already signed Shareholders’ approval resolution

 
Annex 3.5 (a)
Declaration of confirmation by Citizens Bank with regard to the Bank Guarantee

 
Annex 3.5 (b)
Bank Guarantee

 
Annex 6.1(a)
Amendment Agreement to the Sale and Purchase and Transfer Agreement between the
Company (as seller) and the Seller (as purchaser) regarding the sale and
purchase and transfer of a partnership interest in Devine GmbH & Co. KG

 
Annex 6.1(b)
Termination Agreement to the service agreement of the Seller as managing
director of the General Partner between the General Partner, the Seller and the
Company

 
Annex 6.1(c)
Termination Agreement to the Commission Agreement between the Seller and the
Company relating to McAirlaids' potential purchase orders

 
Annex 6.1(d)
Resolution of the Company

 
Annex 6.1(e)
Resolution of the General Partner

 

 

 
0088098-0000002 FR:7615098.1
 
 

 
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PREAMBLE
 
WHEREAS, the Seller and the Purchaser are registered with the Commercial
Register of the Lower Court (Amtsgericht) at Coesfeld as sole limited partners
(Kommanditisten) of Saueressig GmbH + Co. KG (hereinafter referred to as the
"Company"), with the Seller holding 22 per cent and with the Purchaser holding
78 per cent of the fixed partnership interests (Kommanditanteile) in the
registered partnership capital of the Company, and the Company is the sole
shareholder of its sole general partner (Komplementär) Saueressig
Geschäftsführungsgesellschaft mbH (hereinafter referred to as the "General
Partner") which has no fixed partnership interest in the registered partnership
capital of the Company;
 
WHEREAS, the Seller is also engaged as managing director of the General Partner
and therefore of the Company;
 
WHEREAS, the Purchaser, a limited liability company duly organized under the
laws of Germany, is an indirectly wholly-owned subsidiary of the Guarantor, a
company duly organized under the laws of Pennsylvania;
 
WHEREAS, on February 25, 2008, the Seller and the Guarantor agreed upon an
option agreement as amended on May 7, 2008 (hereinafter referred to as the
"Option Agreement") concerning the sale and purchase and transfer of all of the
partnership interests of the Seller in the Company to the Guarantor or to one of
its subsidiaries (like the Purchaser) under certain conditions;
 
WHEREAS, in accordance with the Option Agreement, the Guarantor has provided to
the Seller an irrevocable standby letter of credit issued by Citizens Bank of
Pennsylvania in the amount of EUR 8,500,000.00 (hereinafter - together with all
amendments thereto - referred to as "Bank Guarantee") and the Guarantor
(respectively the Purchaser) has transferred and assigned the Purchaser's
Partnership Interest (as defined in Clause 1.2(b)) to the Seller by way of
security (Sicherungsabtretung), both as security for the payment of the purchase
price due to the exercise of the option rights by the Seller under the Option
Agreement;
 
WHEREAS, on June 2, 2010 the Parties agreed to execute the Option Agreement in
amended form waiving any rights and obligations that could have been constituted
so far under the terms of the Option Agreement; thus the Parties agreed upon a
sale and purchase and transfer agreement dated June 2, 2010 concerning the sale
and transfer of all of the Seller's partnership interests in the Company and of
all of the Seller's Loan and Private Accounts (as defined in Clause 1.3(a)) to
the Purchaser with commercial effect (mit wirtschaftlicher Wirkung) as of
October 1, 2011 (hereinafter referred to as "SPA-A");
 
WHEREAS, the Parties now wish to replace the SPA-A with this Agreement with
effect as of Signing Date and to sell and to transfer all of the Seller's
partnership interests in the Company and all of the Seller's Loan and Private
Accounts (as defined in Clause 1.3(a)) to the Purchaser with commercial effect
(mit wirtschaftlicher Wirkung) as of April 1, 2011 (hereinafter also referred to
as "SPA-B"); the validity of the Annexes referred to in the SPA-A shall not be
affected by this SPA-B unless otherwise stipulated in this SPA-B;
 

 
NOW, THEREFORE, the Parties hereto agree as follows:

 
0088098-0000002 FR:7615098.1
 
 

 
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1.
CORPORATE OWNERSHIP / STRUCTURE OF THE ACQUISITION

 
1.1
Particulars of the Company

 
Saueressig GmbH + Co. KG (hereinafter referred to as the "Company") is a limited
partnership (Kommanditgesellschaft) duly organized under the laws of Germany
with registered office at Vreden/Germany and registered with the Commercial
Register of the Lower Court (Amtsgericht) at Coesfeld under HRA 2299. The sole
general partner (Komplementär) of the Company is Saueressig
Geschäftsführungsgesellschaft mbH (hereinafter referred to as the "General
Partner"), a limited liability company (Gesellschaft mit beschränkter Haftung)
duly organized under the laws of Germany with registered office at
Vreden/Germany and registered with the Commercial Register of the Lower Court at
Coesfeld under HRB 3919.
 
1.2
Partnership Capital of the Company

 
The registered partnership capital (Kommanditkapital) of the Company amounts to
EUR 3,000,000.00 (in words: three million Euros) (hereinafter referred to as the
"Partnership Capital"). The Partnership Capital is divided into the following
fixed partnership interests (Kommanditanteile), registered in the Commercial
Register, held by the Seller and the Purchaser as sole limited partners
(Kommanditisten) of the Company as follows:
 
 
(a)
one fixed partnership interest in the amount of EUR 660,000.00 (in words: six
hundred sixty thousand Euros), corresponding to 22 per cent of the fixed
partnership interests in the Partnership Capital, held by the Seller and

 
 
(b)
one fixed partnership interest in the amount of EUR 2,340,000.00 (in words: two
million three hundred forty thousand Euros), corresponding to 78 per cent of the
fixed partnership interests in the Partnership Capital, held by the Purchaser
(hereinafter referred to as the "Purchaser's Partnership Interest").

 
The fixed partnership interest held by the Seller as set forth in Clause 1.2(a)
above, together with any and all rights pertaining thereto pursuant to Clause
2.1 (hereinafter referred to as the "Partnership Interest"), shall be sold and
transferred to the Purchaser as set forth in Clause 2.1 and Clause 2.3(a). The
General Partner has no fixed partnership interest in the Partnership Capital.
 
1.3
Seller’s Accounts

 
 
(a)
The Company keeps for the Seller the following accounts: a fixed capital account
(Festkapitalkonto) and a reserve account (Rücklagenkonto) (hereinafter
collectively referred to as the "Seller's Capital and Reserve Accounts") as well
as a loan account (Darlehenskonto) for loans granted by the Seller to the
Company and a private account (Privatkonto) as well as a separate loss carry
forward account (Verlustvortragskonto) (hereinafter collectively referred to as
the "Seller's Loan and Private Accounts"). The Seller's Loan and Private
Accounts shall include the profits of the Company in the amount of EUR
770,000.00 pertaining to the Seller for the period October 1, 2010 until and
including March 31, 2011.

 
 
(b)
The Seller's Capital and Reserve Accounts as of the Effective Date (as defined
in Clause 1.4) shall be sold and transferred to the Purchaser together with the
Partnership Interest as set forth in Clause 2.1 and Clause 2.3(a). The Seller's
Loan and Private Accounts as of the Effective Date shall be sold and transferred
to the Purchaser in accordance with Clause 2.2 and Clause 2.3(b).

 
 
 
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1.4
Signing Date; Effective Date

 
For the purposes of this agreement (hereinafter referred to as the "Agreement")
the "Signing Date" shall mean the date this Agreement is signed (hereinafter
referred to as the "Signing Date"), and the "Effective Date" shall mean April 1,
2011, 00:00 hours (German time) (herein referred to as the "Effective Date").
 

 
2.
SALE AND PURCHASE AND TRANSFER OF THE PARTNERSHIP INTEREST AND OF THE SELLER'S
LOAN AND PRIVATE ACCOUNTS

 
2.1
Sale and Purchase of the Partnership Interest

 
The Seller hereby sells, and the Purchaser hereby purchases from the Seller,
upon the terms and conditions of this Agreement, the Partnership Interest in the
Company with commercial effect (mit wirtschaftlicher Wirkung) as of the
Effective Date. The sale and purchase of the Partnership Interest hereunder
shall include any and all rights pertaining to the Partnership Interest,
including, without limitation, the rights to receive profits and the obligations
to bear losses generated from the Effective Date, and the accounts balances in
the Seller’s Capital and Reserve Accounts as of the Effective Date, including
any and all rights in the relation of the Company and the Seller reflected in
and pertaining to the Seller’s Capital and Reserve Accounts. The Seller is
entitled to a proportional share in the profits of the Company in the amount of
EUR 770,000.00 for the period starting from October 1, 2010 until and including
March 31, 2011.
 
2.2
Sale and Purchase of the Seller's Loan and Private Accounts

 
The Seller hereby sells, and the Purchaser hereby purchases from the Seller,
upon the terms and conditions of this Agreement, any and all rights in the
relation of the Company and the Seller reflected in and pertaining to the
Seller's Loan and Private Accounts as of the Effective Date with commercial
effect (mit wirtschaftlicher Wirkung) as of the Effective Date.
 
2.3
Transfer of Partnership Interest and of Seller's Loan and Private Accounts

 
 
(a)
Subject to the Transfer Conditions set forth in Clause 2.3(c), the Seller hereby
transfers and assigns (abtreten), and the Purchaser hereby accepts the transfer
and assignment, upon the terms and conditions of this Agreement, of the
Partnership Interest in the Company with commercial effect (mit wirtschaftlicher
Wirkung) as of the Effective Date.

 

 
 
Such assignment of the Partnership Interest to the Purchaser by way of singular
succession (Sonderrechtsnachfolge) shall be, (i) as regards the internal
relations between the Seller and the Purchaser, effective as of the Effective
Date and (ii) with effect vis-à-vis any third party, effective with the
registration of the Purchaser as sole limited partner of the Company in the
Commercial Register. In view of the period between the date of payment of the
Purchase Price and the Seller's Loan and Private Accounts Purchase Price by the
Purchaser and the date of registration of the Purchaser as sole limited partner
of the Company in the Commercial Register (hereinafter referred to as the
"Interim Period"), the Seller shall hold the Partnership Interest for the
Purchaser in trust (treuhänderisch) without any additional consideration. The
Seller furthermore empowers (bevollmächtigt) the Purchaser to execute any and
all rights pertaining to the Partnership Interest during the Interim Period.
Apart from that, the Parties expressly agree that the Seller shall solely be
entitled to execute his respective rights as limited partner of the Company as
far as instructed by the Purchaser.

 
 
 
7

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The Parties shall make sure that the Seller, the Purchaser and the managing
directors (Geschäftsführer) of the General Partner of the Company shall instruct
the notary to forward the already signed filing to the Commercial Register,
attached hereto as Annex 2.3(a), without undue delay (unverzüglich) after the
receipt of a joint confirmation of payment to be issued jointly by the Seller
and the Purchaser as set forth in Clause 2.3(d). In the event that the
Commercial Register rejects the registration of the assignment of the
Partnership Interest in the Company to the Purchaser with the Commercial
Register on the basis of the filing signed and notarized on the signing date of
the SPA-A, the Parties shall make sure that the Seller, the Purchaser and the
managing directors (Geschäftsführer) of the General Partner of the Company shall
update and/or amend the filing accordingly without undue delay (unverzüglich)
and to forward this filing to the Commercial Register without undue delay
(unverzüglich) afterwards.
 
 
(b)
Subject to the Transfer Conditions set forth in Clause 2.3(c), the Seller hereby
transfers and assigns (abtreten), and the Purchaser hereby accepts the transfer
and assignment, upon the terms and conditions of this Agreement, any and all
rights in the relation of the Company and the Seller reflected in and pertaining
to the Seller's Loan and Private Accounts as of the Effective Date.

 
 
(c)
The transfer of the Partnership Interest and the transfer of the Seller's Loan
and Private Accounts to the Purchaser shall be subject to the satisfaction of
the following conditions precedent (hereinafter collectively referred to as the
"Transfer Conditions"):

 
 
(i)
The payment of the Purchase Price and the Seller's Loan and Private Accounts
Purchase Price by the Purchaser has been effected in accordance with Clauses 3.1
and 3.2.

 
 
(ii)
The assignment of the Partnership Interest in the Company to the Purchaser as
set forth in Clause 2.3(a) has been recorded in the Commercial Register.

 
 
(d)
After the effectuation of the payment of the Purchase Price and the Seller's
Loan and Private Accounts Purchase Price by the Purchaser in accordance with
Clauses 3.1 and 3.2, the Seller is obliged to issue, together with the
Purchaser, a joint confirmation of payment to the notary in order to enable the
notary to forward the filing to the Commercial Register as set forth in Clause
2.3(a).

 
2.4
Approval of Shareholders

 
The Seller, the Purchaser and the General Partner have approved the sale and
transfer of the Partnership Interest and of the Seller's Loan and Private
Accounts to the Purchaser according to Art. 12 para. 2 and Art. 10 para. 3
second sentence of the Company's partnership agreement. A copy of the resolution
is attached to this Agreement as Annex 2.4.
 

 
3.
PURCHASE PRICE; SELLER'S LOAN AND PRIVATE ACCOUNTS PURCHASE PRICE; CONDITIONS OF
PAYMENT; BANK GUARANTEE

 
3.1
Purchase Price; Seller's Loan and Private Accounts Purchase Price

 
 
(a)
The purchase price to be paid by the Purchaser for the Partnership Interest as
sold and purchased in accordance with Clause 2.1 shall be equal to

 
EUR 19,324,401.00
 
 
 
8

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(in words: nineteen million three hundred twenty four thousand four hundred one
Euros)
 
(hereinafter referred to as the "Purchase Price").
 
 
(b)
The purchase price to be paid by the Purchaser for the Seller's Loan and Private
Accounts as sold and purchased in accordance with Clause 2.2 shall be equal to

 

EUR 1,233,345.00
 
(in words: one million two hundred thirty three thousand three hundred forty
five Euros).
 
This amount is hereinafter referred to as the "Seller's Loan and Private
Accounts Purchase Price" and shall not be part of the Purchase Price pursuant to
Clause 3.1(a).
 
3.2
Due Date; Seller's Account; Company's Account

 
 
(a)
On April 22, 2011, 00:00 German Time (hereinafter referred to as the "Due
Date"), the Purchase Price and the Seller's Loans and Private Accounts Purchase
Price shall become due and payable and the Purchaser shall pay the Purchase
Price as follows:

 
 
(i)
EUR 19,141,511.00 (in words: nineteen million one hundred forty one thousand
five hundred eleven Euros) to the following bank account of the Seller
(hereinafter referred to as "Seller's Account"):

 
bank:                                           Sparkasse Hamburg
 
account number:                                           1265422848
 
sort code (Bankleitzahl):                                           20050550
 
IBAN:                                                      IBAN DE86 2005 0550
1265 4228 48
 
SWIFT:                                           HASP DE HH XXX
 

 
 
(ii)
EUR 1,416,235.20 (in words: one million four hundred sixteen thousand two
hundred thirty five point twenty Euros) - to fulfil Seller's payment obligations
vis-à-vis the Company under Clause 3 of the Sale and Purchase and Transfer
Agreement between the Company (as seller) and the Seller (as purchaser)
regarding the sale and purchase and transfer of a partnership interest in Devine
GmbH & Co. KG attached to SPA-A as Annex 6.1 (a) in the amended version attached
hereto as Annex 6.1 (a) - to the following bank account of the Company
(hereinafter referred to as "Company's Account"):

 

 

 
bank:                                           Sparkasse Westmünsterland
 
account number:                                           51010247
 
sort code (Bankleitzahl):                                           40154530
 
IBAN:                                                      DE74 4015 4530 0051
0102 47
 
SWIFT:                                           WELADE3WXXX.
 
 
 
9

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(b)
On Due Date the Seller's Loan and Private Accounts Purchase Price shall become
due and payable and the Purchaser shall pay the Seller's Loan and Private
Accounts Purchase Price to the Seller’s Account named in Clause 3.2 (a) (i).

 
 
(c)
The Seller shall notify the Purchaser without undue delay ("unverzüglich") of
the receipt of the full payment pursuant to Clause 3.2 (a) (i). The Company
shall notify the Seller and the Purchaser without undue delay ("unverzüglich")
of the receipt of full payment pursuant to Clause 3.2 (a) (ii).

 
 
(d)
All payments owed by one of the Parties under this Agreement shall be paid by
way of irrevocable wire transfer – to be credited on the same day – free of any
costs and fees.

 
3.3
Default

 
If the Purchaser is in default of a payment in the amount of at least EUR
1,000.00 owed under this Agreement for more than 5 days, the Purchaser shall owe
- for the time the Purchaser is in default - a contractual fine in the amount of
EUR 2,500.00 per day starting from the sixth day of default earliest however
starting and including the day the Seller has informed the Purchaser by written
notice of the default. An amount of default less than EUR 1,000.00 shall be
interests-bearing at a fixed rate of 12 per cent p. a. for the time the
Purchaser is in default. Interest shall be calculated on the basis of actual
days elapsed and a calendar year with 360 days.
 
3.4
No Right to Set-Off or to Withhold

 
Any right of the Purchaser to set-off and/or to withhold any payments due under
this Agreement is hereby expressly waived and excluded except for claims which
are undisputed or res iudicatae.
 
3.5
Bank Guarantee and Assignment by way of Security

 
 
(a)
The Parties agree that the Bank Guarantee provided by the Guarantor to the
Seller under the Option Agreement and under the SPA-A in amended form shall also
serve for the benefit of the Seller as security for the timely and duly
fulfilment of the payment of the Purchase Price and the Seller’s Loan and
Private Accounts Purchase Price in accordance with Clauses 3.1 and 3.2 of this
SPA-B. The issuing bank, Citizens Bank of Pennsylvania, has declared its
confirmation in this respect and the Guarantor has delivered the original of the
declaration of confirmation to the Seller on the Signing Date; a copy is
attached hereto as Annex 3.5(a).

 
 
(b)
The Guarantor shall ensure that the Bank Guarantee remains effective until the
payment of the Purchase Price and the Seller's Loan and Private Accounts
Purchase Price is effected in accordance with Clauses 3.1 and 3.2 above. After
the Bank Guarantee having become ineffective or after the Seller has received
full payment of the Purchase Price and the Sellers' Loan and Private Accounts
Purchase Price in accordance with Clauses 3.1 and 3.2 of this Agreement, the
Seller shall return the original of the Bank Guarantee attached hereto as a copy
as Annex 3.5 (b) and the original of the declaration of confirmation attached
hereto as a copy as Annex 3.5 (a) without undue delay (unverzüglich) – upon
consultation - to Dr. Tomas STERKENBURGH, Karl-Heinz ROLVERING or Markus
PENNEKAMP or - if these persons are not available - to the legal advisors of the
Purchaser in their office in Cologne (address as set forth under Clause 9.3 of
this Agreement). If the Seller neglects to return the original of the Bank
Guarantee and the original of the declaration of confirmation attached hereto as
copy as Annexes 3.5 (b) and 3.5 (a) within three Business Days after having
received full payment of the Purchase Price and the Seller's Loan and Private
Accounts Purchase Price in accordance with this Clause 3.5 (b), the Seller shall
be obliged to pay a contractual fine to the Purchaser in the amount of EUR
1,000.00 per day starting from the fourth Business Day of having received full
payment of the Purchase Price and the Seller's Loan and Private Accounts
Purchase Price until the day of the return of the original of the Bank Guarantee
and the original of the declaration of confirmation to Dr. Tomas STERKENBURGH,
Karl-Heinz ROLVERING or Markus PENNEKAMP or - if these persons are not available
- to the legal advisors of the Purchaser in their office in Cologne.

 
 
 
10

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(c)
The Parties agree that the Purchaser's Partnership Interest assigned by way of
security (Sicherungsabtretung) to the Seller in accordance with the Option
Agreement (hereinafter - together with the confirmation relating thereto -
referred to as "Assignment by way of Security") shall now serve for the benefit
of the Seller as additional security for the timely and duly fulfilment of the
payment of the Purchase Price and the Seller's Loan and Private Accounts
Purchase Price in accordance with Clauses 3.1 and 3.2 of this Agreement. For
reasons of precaution, the Purchaser hereby confirms this Assignment by way of
Security. Thus, the Purchaser hereby transfers and assigns and the Seller hereby
accepts the transfer and assignment of the Purchaser's Partnership Interest by
way of security with immediate effect.

 
 
(d)
If the Purchase Price and the Seller's Loan and Private Accounts Purchase Price
are not timely and fully paid by the Purchaser in accordance with Clauses 3.1
and 3.2, the Seller shall be entitled firstly to draw on the Bank Guarantee
after prior written notification, and in case the Bank Guarantee is insufficient
for the satisfaction of Seller's claims pursuant to Clause 3, the Seller shall
be entitled to sell the Purchaser's Partnership Interest assigned to the Seller
by way of security pursuant to Clause 3.5 (c) without holding on (freihändig) or
to utilize it otherwise, whereas the Purchaser shall be entitled to any excess
proceeds resulting out of this utilization. Up to this date the Purchaser shall
be entitled to exercise any and all rights and obligations pertaining to the
Purchaser's Partnership Interest. In particular, without limitation, the
Purchaser shall be entitled to participate in all profits and losses pertaining
to the Purchaser's Partnership Interest.

 
 
(e)
The Parties agree that the Assignment by way of Security shall be terminated on
the date on which the payment of the Purchase Price and the Seller's Loan and
Private Accounts Purchase Price is effected in accordance with Clauses 3.1 and
3.2 above. The Seller hereby reassigns to the Purchaser, and the Purchaser
hereby accepts the reassignment of the Purchaser's Partnership Interest together
with any and all rights pertaining thereto to the Purchaser under the
precondition that the Purchase Price and the Seller's Loan and Private Accounts
Purchase Price have been fully paid in accordance with Clauses 3.1 and 3.2
above.

 

 
4.
CANCELLED

 

 
5.
SELLER’S GUARANTEES

 
 
(a)
The Seller hereby guarantees to the Purchaser by way of an independent promise
of guarantee pursuant to Clause 311 para. 1 BGB (selbständiges
Garantieversprechen im Sinne des § 311 Abs. 1 BGB) that the statements in Clause
1 hereof regarding the Partnership Interest and the Seller’s accounts are
complete and correct. The Partnership Interest has been validly issued, is fully
paid-up, has not been reduced by losses or withdrawals and is not encumbered by
any obligatory or in rem third-party rights, in particular there are no rights
of pre-emption, rights of use, trust relationships, typical or atypical
subparticipations, other options, voting agreements or other third-party rights
effecting the assignment of the Partnership Interest.

 
 
 
11

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(b)
Furthermore the Seller hereby guarantees to the Purchaser by way of an
independent promise of guarantee pursuant to Clause 311 para. 1 BGB
(selbständiges Garantieversprechen im Sinne des § 311 Abs. 1 BGB) that on the
Effective Date the Seller's Loan and Private Accounts total at least an amount
of EUR 1,233,345.00 provided however that the profit share in the amount of EUR
770,000.00 pertaining to the Seller for the period October 1, 2010 until and
including March 31, 2011 has been added to and the amount of EUR 170,000.00
pursuant to 6.2 (b) of this Agreement has been deducted from the Seller's Loan
and Private Accounts in accordance with the shareholder resolution attached
hereto as Annex 6.1 (d). Starting from Signing Date the Seller is not entitled
to any further withdrawals from the Seller's Loan and Private Accounts.

 
 
(c)
The Purchaser shall not be entitled to further warranty rights.

 

 
6.
COVENANTS

 
6.1
Signing Covenants

 
The Purchaser and the Seller shall ensure that the following agreements will be
concluded and the following resolutions will be passed on the Signing Date:
 
 
(a)
The amendment agreement concerning the sale and purchase and transfer agreement
between the Company (as seller) and the Seller (as purchaser) regarding the sale
and purchase and transfer of a partnership interest in Devine GmbH & Co. KG,
attached hereto as Annex 6.1(a),

 
 
(b)
the termination agreement to the managing director agreement of the Seller as
managing director of the General Partner between the General Partner, the Seller
and the Company, attached hereto as Annex 6.1(b), and

 
 
(c)
the termination agreement to the commission agreement between the Seller and the
Company relating to McAirlaids' potential purchase orders, attached hereto as
Annex 6.1(c).

 
 
(d)
the resolution of the Company, attached hereto as Annex 6.1(d).

 
 
(e)
the resolution of the General Partner, attached hereto as Annex 6.1(e).

 
6.2
After-Signing Covenants

 
 
(a)
Between the Signing Date and the Effective Date, the Purchaser and the Guarantor
shall refrain from and they have to ensure that the Company refrains from any
measures in order to manipulate the profits of the Company and/or the
distribution of the profits amongst the shareholders of the Company to Seller's
disadvantage.

 
 
(b)
As to be agreed on in the Company's resolution attached hereto as Annex 6.1 (d),
the Seller shall be entitled,in his function as shareholder of the Company, to
reward certain employees of the Company with bonus payments in the total gross
amount of EUR 170,000.00 (in words: one hundred seventy thousand Euros)
(hereinafter referred to as "Bonus Payment Amount") prior to the Effective Date.
For this purpose, the Seller and the Purchaser shall agree in the Company's
resolution attached hereto as Annex 6.1 (d) that the Seller and the Purchaser
instruct the Company prior to March 31, 2011 to pay on the Seller's behalf and
on his account bonus payments to certain employees already nominated by the
Seller in Annex A to the Company's resolution attached hereto as Annex 6.1 (d)
by withdrawing the Bonus Payment Amount from his Seller's Loan and Private
Accounts with effect to March 31, 2011. The Purchaser herewith explicitly and
irrevocably grants his consent to this employee reward procedure.

 
 
 
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(c)
The Purchaser, the Company and the General Partner shall use their best efforts
that the Seller will be withdrawn as managing director in all subsidiaries and
participations of the Company.

 
6.3
Covenant not to Compete

 
 
(a)
For the Seller, the statutory prohibition of competition pursuant to Section 112
subsection 1 of the German Commercial Code (Handelsgesetzbuch (HGB)) shall apply
correspondingly, with the addition that the Seller may not act either
independently or dependently or in an advisory capacity, not even occasionally
or indirectly, outside of the Company and/or its subsidiaries
(Tochtergesellschaften) in their fields of activity as of the Signing Date, no
matter whether or not these activities will be continued thereafter. Likewise,
holding an equity interest in competitive businesses - except for participations
in form of stock and convertibles - also as silent partner or subpartner shall
be inadmissible. The territorial scope of application of this prohibition of
competition comprises the European Union and EFTA.

 
 
(b)
The Seller is obligated to observe the non-competition clause pursuant to Clause
6.3(a) until September 30, 2013.

 
 
(c)
The Seller hereby irrevocably declares that he waives any compensation payments
which may arise for his benefit due to his retirement as a limited partner from
the Company or due to his retirement from the management of the Company or of a
Company's affiliate. The Parties agree that the postcontractual prohibition of
competition set forth in this Clause 6.3 shall be compensated by the Purchase
Price to be paid under this Agreement.

 
 
(d)
Notwithstanding the generality of Clause 6.3(a), the Seller shall be entitled to
be engaged in the business of Devine GmbH & Co. KG as limited partner or its
legal successor, as managing director of Devine Verwaltungs-GmbH (its general
partner) or its legal successor and representative of Devine GmbH & Co. KG or
its legal successor, provided however, neither the Seller nor Devine
Verwaltungs-GmbH nor Devine GmbH & Co. KG nor their respective legal successors
nor an affiliate of these companies compete with the Company and/or its
subsidiaries in their fields of activity as of the Signing Date in terms of
Clauses 6.3(a) and 6.3(b). For the avoidance of doubt, the Parties agree that
the engagement of the Seller in the following businesses shall not be deemed a
competitive business of the Company and/or its subsidiaries in terms of Clauses
6.3(a) and 6.3(b): the production and processing of tools or components with
free-form surfaces, their distribution and marketing, separately or together
with shaped or grained foils as well as all other steps required for their
manufacture or sale.

 

 
7.
GUARANTOR'S GUARANTEE

 
The Guarantor hereby guarantees by way of an independent promise of guarantee
pursuant to Clause 311 para. 1 BGB the proper fulfilment of all of the
obligations of the Purchaser pursuant to this Agreement, in particular, but not
limited to, the payment of the Purchase Price and the Seller’s Loan and Private
Accounts Purchase Price to the Seller.
 

 
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8.
TAXES AND COSTS

 
8.1
Taxes on Earnings

 
 
(a)
All taxes on earnings (Ertragsteuern) which result from this Agreement and its
execution shall be borne by those persons at which these taxes statutorily
arise.

 
 
(b)
As far as taxes on earnings, in particular, but not limited to, trade income tax
(Gewerbeertragsteuer) resulting from any and all sales and/or transfers of
partnership interests in the Company by the Seller to the Purchaser on the level
of the Company, the Seller shall reimburse the amount corresponding to these
taxes on earnings to the Company. The profit share in the amount of EUR
770,000.00 pertaining to the Seller for the period October 1, 2010 until March
31, 2011 pursuant to Clause 1.3 of this Agreement has already been reduced by
trade income tax; the Seller is not obliged under this Clause 8.1 to reimburse
the trade income tax pertaining to this amount to the Company.

 
 
(c)
Claims of the Purchaser under this Clause 8.1 shall be time-barred six months
after the final and binding assessment of the relevant taxes.

 
8.2
Transfer Taxes

 
All transfer taxes (including real estate transfer taxes) and any other charges
and costs which result from this Agreement and its execution shall be borne by
the Purchaser.
 
8.3
Value Added Tax

 
In case that supplies under this Agreement are subject to value added tax, the
respective amounts shall be increased by the amount corresponding to the value
added tax.
 
8.4
Costs and Fees

 
Each Party shall bear the costs and fees of its own advisors.
 

 
9.
NOTICES

 
9.1
Form of Notice

 
All declarations, notices or other communications hereunder (hereinafter
referred to as the "Notices") shall be done in writing - as far as no
notarization or other specific form is required under statutory law - in the
English or German language and delivered by hand or by courier or by facsimile
to the person at the addresses set forth below, or such other addresses as may
be designated by the respective Party to the other Parties in the same manner.
 
9.2
Notices to Seller

 
Any Notice to be given to the Seller hereunder shall be addressed as follows:
 
Kilian Saueressig
Lünten Nork 123
48691 Vreden
Germany
 
with a copy to:                                
 
 
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Allen & Overy LLP
 
Attn.: Thomas Austmann
 
Rheinisches Palais
 
Breite Strasse 27
 
40213 Duesseldorf
 
Germany
 
Fax: +49 211 28 06 7601.
 
9.3
Notices to Purchaser

 
Any Notice to be given to the Purchaser hereunder shall be addressed as follows:
 
Matthews International Corporation
 
Attn.: Brian D. Walters, Esq. (Legal Counsel)
 
Two North Shore Center
 
Pittsburgh
 
Pennsylvania 15222 (USA)
 
Fax: +1 412 442-8290

with a copy to:

Matthews International Holding GmbH
Attn.: Brian Dunn
Rudolf-Diesel-Straße 16
52428 Jülich
Germany
Fax: +49 2461 93 53 20
 
and a copy to:
 

Streck Mack Schwedhelm
Attn.: Dr. Heinz-Willi Kamps
Wilhelm-Schlombs-Allee 7-11
50858 Köln (Junkersdorf)
Germany
Fax: +49 221 49 29 299
 
9.4
Notices to Guarantor

 
Any Notice to be given to the Guarantor hereunder shall be addressed as follows:
 
Matthews International Corporation
 
Attn.: Brian D. Walters, Esq. (Legal Counsel)
 
Two North Shore Center
 
Pittsburgh
 
Pennsylvania 15222 (USA)
 
Fax: +1 412 442-8290

with a copy to:
 
Streck Mack Schwedhelm
 
Attn.: Dr. Heinz-Willi Kamps
 
Wilhelm-Schlombs-Allee 7-11
 
 
 
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50858 Köln (Junkersdorf)
 
Germany
 
Fax: +49 221 49 29 299
 
9.5
Change of Address

 
The Parties are to, without being legally obliged to, communicate any change of
their respective addresses set forth in Clauses 9.2 through 9.4 as soon as
possible in writing to the respective other Parties. Until such communication,
the address as hitherto shall be relevant.
 
9.6
Copies to Advisors

 
 
(a)
The receipt of copies of Notices by the Parties’ advisors shall not constitute
or substitute the receipt of such Notices by the Parties themselves.

 
 
(b)
Any Notice shall be deemed received by a Party regardless of whether any copy of
such Notice has been sent to or received by an advisor of such Party,
irrespective of whether the delivery of such copy was mandated by this
Agreement.

 

 
10.
MISCELLANEOUS

 
10.1
Governing Law

 
This Agreement shall be governed by, and construed in accordance with, the laws
of Germany, excluding the German conflicts of laws rules and further excluding
the United Nations Convention on Contracts for the International Sale of Goods
(CISG).
 
10.2
Arbitration

 
 
(a)
Any dispute, disagreement, controversy or claim arising out of or in connection
with this Agreement or its Annexes or the transactions contemplated hereby or
thereby shall be finally and exclusively settled in accordance with the Rules of
Arbitration of the German Institution of Arbitration e.V. (Deutsche Institution
für Schiedsgerichtswesen, DIS) without recourse to the ordinary courts of law.
The arbitral tribunal shall consist of three (3) arbitrators. The arbitration
shall take place in Duesseldorf. The arbitration shall be conducted in English
or German and written evidence (Beweismittel) may be submitted in English or
German.

 
 
(b)
In the event that applicable mandatory law requires any matter arising out of or
in connection with this Agreement and its implementation to be decided by an
ordinary court of law, the competent courts in Duesseldorf shall have the
exclusive jurisdiction.

 
10.3
Business Day

 
In this Agreement, "Business Day" means a day (other than a Saturday or Sunday)
on which banks are generally open for business in Frankfurt am Main, Germany.
 
10.4
Amendments, Supplementations

 
Any amendment or supplementation of this Agreement, including of this provision,
shall be valid only if made in writing, except where a stricter form (e.g.
notarization) is required under applicable law. Clause 9.1 shall apply mutatis
mutandis.
 
 
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10.5
Language

 
 
(a)
This Agreement is written in the English language (except that Annexes may be
partly in the German language). Terms to which a German translation has been
added shall be interpreted throughout this Agreement in the meaning assigned to
them by the German translation.

 
 
(b)
Any reference made in this Agreement to any types of companies or
participations, proceedings, authorities or other bodies, rights, institutions,
regulations or legal relationships (hereinafter collectively referred to as the
"Legal Terms") under German law shall extend to any corresponding or identical
Legal Terms under foreign law to the extent that relevant facts and
circumstances must be assessed under such foreign law. Where no corresponding or
identical Legal Terms under foreign law exist, such Legal Terms shall be
introduced as - functionally - come closest to the Legal Terms under German law.

 
10.6
Headings

 
The headings and sub-headings of the Clauses contained herein are for
convenience and reference purposes only and shall not affect the meaning or
construction of any of the provisions hereof.
 
10.7
Annexes

 
All Annexes attached hereto form an integral part of this Agreement.
 
10.8
Entire Agreement; Termination of Option Agreement; Replacement of SPA-A;
Settlement

 
 
(a)
This Agreement constitutes the full understanding of the Parties and the
complete and exclusive statements of the terms and conditions of the Parties’
agreements relating to the subject matter hereof and supersedes any and all
prior agreements and understandings, whether written or oral, that may exist
between the Parties with respect to the subject matter of this Agreement. Side
agreements to this Agreement do not exist.

 
 
(b)
Clause 10.8 (b) of the SPA-A shall remain unaffected by this Agreement.

 
 
(c)
The Parties agree that the SPA-A shall completely be replaced by this Agreement
with effect as of Signing Date unless explicitely otherwise provided for herein.
All and any claims and rights that may have arisen out of SPA-A until Signing
Date, shall be determined in future only in accordance with this Agreement.

 
 
(d)
Clause 10.8 (c) of this Agreement does not apply to the Annexes referred to in
the SPA-A unless otherwise stipulated in this Agreement.

 
 
(e)
By full payment of the Purchase Price and of the Seller’s Loan and Private
Accounts Purchase Price to the Seller in accordance with Clauses 3.1 and 3.2 of
this Agreement all and any - known or unknown - claims for whatever legal reason
of the Seller against the Purchaser, the Guarantor, the Company or the General
Partner and any - known or unknown - claims for whatever legal reason of the
Purchaser, the Guarantor, the Company or the General Partner against the Seller
shall be waived and become void. Sentence 1 does not apply to

 
 
(i)
any claims pursuant to this Agreement and any claims pursuant to the agreements
and resolutions referred to in Clause 6.1;

 
 
(ii)
any claims that are caused by intentionally committed criminal actions
("vorsätzlich begangene Straftat"). Criminal actions by means of this Agreement
are offences pursuant to Art. 12 para 2 of the German Criminal Code (StBG,
"Vergehen") and felonies pursuant to Art. 12 para 1 of the German Criminal Code
("Verbrechen").

 
 
 
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10.9
Severability

 
Should any provision of this Agreement be or become invalid, ineffective or
unenforceable as a whole or in part, the validity, effectiveness and
enforceability of the remaining provisions shall not be affected thereby. Any
such invalid, ineffective or unenforceable provision shall be deemed replaced by
such valid, effective and enforceable provision as comes closest to the economic
intent and the purpose of such invalid, ineffective or unenforceable provision
as regards subject-matter, amount, time, place and extent. The aforesaid shall
apply mutatis mutandis to any gap in this Agreement.
 

 
Duesseldorf/Germany, March 29, 2011
 

 
Seller                                                                           Purchaser
 

 

 
____________________________                                                                                     ___________________________________
 
Kilian
Saueressig                                                                           Matthews
International Holding GmbH
 
Brian Dunn
 

 
Guarantor
 

 

 
____________________________
 
Matthews International Corporation
 
Brian Dunn
 

 
Company                                                                           Company
 

 

 
____________________________                                                                                     ___________________________________
 
Dr. Tomas
Sterkenburgh                                                                           Karl-Heinz
Rolvering
 
Saueressig GmbH + Co.
KG                                                                                     Saueressig
GmbH + Co. KG
 
 
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General
Partner                                                                           General
Partner
 

 

 
____________________________                                                                                     ___________________________________
 
Dr. Tomas
Sterkenburgh                                                                           Karl-Heinz
Rolvering
 
Saueressig Geschäftsführungs
GmbH                                                                                     Saueressig
Geschäftsführungs GmbH
 

 

 
0088098-0000002 FR:7615098.1
 
 

 
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