drop-down and transfer agreement - wacker neuson group · 2019. 9. 20. · commercial register at...

Final Draft of the

Drop-down and Transfer Agreement

regarding Wacker Neuson SE

dated 4 April 2011

Wacker Neuson SE Executive Board

Richard Mayer Martin Lehner Günther Binder

Wacker Neuson Produktion GmbH & Co. KG The Management

Helmut Bauer Dr.-Ing. Michael Fischer Andreas Krüger

Wacker Neuson Vertrieb Europa GmbH & Co. KG The Management

Werner Schwind

Wacker Neuson Vertrieb Deutschland GmbH & Co. KG The Management

Bernd Peiler

This translation is provided for information purposes only and for your convenience. The Annexes to this draft agreement have not been translated. The German version shall govern in all instances. In the event of discrepancies between the German and the English version, the German version shall prevail.

Wacker Neuson SE / Drop-down and Transfer Agreement Page 1 of 58

Document no. /2011


On this day, …… of the year two thousand and eleven

- ………. 2011 -

the following individuals appeared before me,

Dr. Bernhard Schaub Notary Public in Munich,

at the offices of Wacker Neuson SE, Preußenstraße 41, 80809 Munich, which I visited at the

request of the persons present:

1) Mr Richard Mayer,

born on 26/03/1962,

Business address: Preußenstraße 41, 80809 Munich,

identified using his official photo identification card

and

Mr. Günther Binder,

born on 28/06/1965,



Mr. Mayer and Mr. Binder are not acting in their own names, but on behalf of

Wacker Neuson SE, based in Munich,

entered in the Commercial Register of Munich under Register No. HRB 177 839,


as members of the company’s Executive Board, solely authorised to represent the

company,


2) Mr. Helmut Bauer,

born on 30/04/1969



and

Dr. Michael Fischer,

born on 08/04/1968,



and

Mr. Andreas Krüger,

born on 27/03/1957



Mr Bauer, Dr. Fischer und Mr Krüger are not acting in their own names, but on behalf of

Wacker Neuson PGM Verwaltungs GmbH, entered in the Commercial Register of Munich

under Register No. HRB 184 289, business address: Preußenstraße 41, 80809, Munich,

as Executive Directors solely authorised to represent the company,

with Wacker Neuson PGM Verwaltungs GmbH in turn acting on behalf of

Wacker Neuson Produktion GmbH & Co. KG, based in Munich, entered in the

Commercial Register of Munich under Register No. HRA 95158, business address:

Preußenstraße 41, 80809 Munich,

as the company’s personally liable partner.

3) Mr. Werner Schwind,

born on 02/11/1956,




here not acting in his own name, but on behalf of

Wacker Neuson SEM Verwaltungs GmbH, entered in the Commercial Register of Munich


as Executive Director solely authorised to represent the company,

Wacker Neuson SEM Verwaltungs GmbH, in turn acting on behalf of

Wacker Neuson Vertrieb Europa GmbH & Co. KG, entered in the Commercial Register

of Munich under Register No. HRA 95807, business address: Preußenstraße 41, 80809

Munich,


4) Mr. Bernd Peiler,

born on 12/09/1953,


here in turn not acting in his own name, but on behalf of

Wacker Neuson SGM Verwaltungs GmbH, entered in the Commercial Register of Munich


as Executive Director solely authorised to represent the company,

Wacker Neuson SGM Verwaltungs GmbH, in turn acting on behalf of

Wacker Neuson Vertrieb Deutschland GmbH & Co. KG, based in Munich and entered in

the Commercial Register of Munich under Register No. HRA 95808, business address:

Preußenstraße 41, 80809 Munich,


Representation arrangements shall be made separately. At the request of those present, I hereby certify the statements made in my presence according to the following:


A. Drop-down and Transfer Agreement

PRELIMINARY REMARKS

(A) Wacker Neuson SE (hereinafter referred to as "WN SE”) is a listed European public

company under German law, based in Munich and entered in the Commercial Register of

the Regional Court in Munich under Register No. HRB 177839. Its equity capital is

currently € 70,140,000.00 and is divided into 70,140,000 registered common shares (no-

par shares) with a proportional amount of the equity capital amounting to € 1.00 per

individual share.

(B) Wacker Neuson Produktion GmbH & Co. KG (formerly: Blitz 10-852 GmbH & Co. KG),

based in Munich and entered in the Commercial Register of the Regional Court of Munich

under Register No. HRA 95158, is a shelf company acquired for the purposes of the drop-

down planned in this drop-down agreement (hereinafter also referred to as “PGM KG”).

WN SE is the sole limited partner of PGM KG with a fully paid and non-repaid limited

partner capital contribution of EUR 500.00 (in words: five hundred Euro), which is identical

to the liability deposit entered in the Commercial Register. Wacker Neuson PGM

Verwaltungs GmbH (formerly: Blitz 10-851 GmbH), based in Munich and entered into the

Commercial Register at the District Court in Munich under Register No. HRB 184289

(hereinafter also referred to as "KPG") is the sole personally liable associate, who has not

invested in the fixed limited partner capital (hereinafter also referred to as "fixed capital".

The sole associate of KPG in turn is PGM KG itself, which holds 25,000 business shares

in the general partner with a nominal value of EUR 25,000.00 in total (in words: Euro

twenty-five thousand). PGM KG is therefore organised as a “consolidated unit company”.

(C) Wacker Neuson Vertrieb Europa GmbH & Co. KG (formerly: Blitz 10-868 GmbH & Co.

KG), based in Munich and entered in the Commercial Register of the Regional Court of

Munich under Register No. HRA 95807, is a shelf company acquired for the purposes of

the drop-down planned in this drop-down agreement (hereinafter also referred to as “SEM KG”). WN SE is the sole limited partner of SEM KG with a fully paid and non-repaid

limited partner capital contribution of EUR 500.00 (in words: five hundred Euro), which is

identical to the liability deposit entered in the Commercial Register. Wacker Neuson SEM

Verwaltungs GmbH (formerly: Blitz 10-867 GmbH), based in Munich and entered in the


(hereinafter also referred to as "KSE") is the sole personally liable associate, who has not

invested in the fixed limited partner capital (hereinafter also referred to as "fixed capital").

Sole associate of KSE in turn is SEM KG itself, which holds 25,000 business shares in the


general partner with a nominal value of EUR 25,000.00 in total (in words: Euro twenty-five

thousand). SEM KG is therefore organised as a “consolidated unit company”.

(D) Wacker Neuson Vertrieb Deutschland GmbH & Co. KG (formerly: Blitz 10-870 GmbH &

Co. KG), based in Munich and entered in the Commercial Register of the Regional Court

of Munich under Register No. HRA 95808, is a shelf company acquired for the purposes

of the drop-down planned in this drop-down agreement (hereinafter also referred to as

“SGM KG”). WN SE is the sole limited partner of SGM KG with a fully paid and non-repaid

limited partner capital contribution of EUR 500.00 (in words: five hundred Euro), which is

identical to the liability deposit entered in the Commercial Register. Wacker Neuson SGM

Verwaltungs GmbH (formerly: Blitz 10-869 GmbH), based in Munich and entered in the


(hereinafter also referred to as "KSG") is the sole personally liable associate, who has not

invested in the fixed limited partner capital (hereinafter also referred to as “fixed capital”).

Sole associate of KSG in turn is SGM KG itself, which holds 25,000 business shares in

the general partner with a nominal value of EUR 25,000.00 in total (in words: Euro twenty-

five thousand). SGM KG is therefore organised as a “consolidated unit company”.

(E) The purpose of WN SE is the development, manufacture and sale of machines, devices,

tools and processes and the provision of all associated services. WN SE also holds

business shares and participations in those national and foreign companies described in

more detail in Annex E, which are also mainly involved in the manufacturing, sale, hire

and servicing of construction equipment and machines (these business shares and

participations are hereinafter referred to jointly with the limited partner shares in PGM KG,

SEM KG and SGM KG as the “HQM Participations”).

(F) Previously, WN SE has been organised as a parent company in Germany, i.e. various

operative divisions are included within the same legal unit, partially through dependent

branch offices and industrial facilities. The Executive Board and Supervisory Board of WN

SE are of the opinion that the creation of a holding structure in which WE SE will have the

function of an executive management and functional holding company for the purposes of

standardised management will support the integration of the Group and the management

of the company divisions Production, Sales and Logistics. In its role as parent company of

an industrial group, the holding company shall provide services of an administrative,

financial, commercial and technical nature at a charge for its affiliated companies.

Against this background, the Executive Board has, with the approval of the Supervisory

Board, decided to transfer to PGM KG, SEM KG and SGM KG (these companies are

hereinafter also referred to as “Subsidiaries”) the entire operational business of WN SE,


manly defined by the three business divisions Production, Sales Europe and Sales

Germany, which are described in more detail below, with the exception of central staff and

company functions and the HQM Participations in accordance with this Drop-down and

Transfer Agreement (hereinafter the “Drop-down Agreement”).

The following individual measures have been planned:

(G) Within the scope of its operational business, WN SE produces light equipment in

Germany (also referred to within the company as “Production Germany Munich” or

“PGM”), among other things. This division includes the departments PMG Sales

Management, Export, Security, the production units Focus Manufacturing 1 (concrete

technology), Focus Manufacturing 2 (compaction), Focus Manufacturing 3 (break-up

technology and Focus Manufacturing 5 (replacement parts) at the Reichertshofen site,

focus manufacturing administration, a hardening shop, tool construction, a training centre,

saw and convulsion processing, tool grindery, tool store administration, steel construction,

a paint finishing shop, test substance monitoring, incoming goods, disposition, purchasing,

PGM accounting, personnel, research and development, product marketing, product

management and quality management and a training centre at the Reichertshofen site

(this operational division is hereinafter referred to collectively as “PGM Division”). The

PGM Division also has businesses and plant sections in Reichertshofen and Munich.

(H) WN SE also manages the European Sales and Logistics Division within the scope of its

operations (also referred to as “Sales Europe Munich" or “SEM” within the company). This

area includes, among other things, all logistical functions for Europe in the areas of light

equipment and (light and compact) replacement parts. All internal and external customers

of the current company WN SE are supplied with light equipment and replacement parts

from the Logistics Centre at the Karlsfeld site. The Division also includes the departments

Data Processing, SEM Sales (support for international customers, key accounts),

Marketing and SEM Accounting (this operational area is hereinafter collectively referred to

as “SEM Division”). The SEM Division has businesses and plant sections in Karlsfeld and

Munich.

(I) WN SE also provides a direct sales service within the scope of its operational business,

which currently includes over 68 branches (also referred to as “Sales Germany Munich” or

“SGM” within the company), which includes the departments Administration, SGM

Accounting and Sales, Servicing, Second-Hand Devices and Rental Business (Rental) for

Germany (this operational area of business is hereinafter collectively referred to as “SGM Division"). The SEGM Division has businesses and plant section at the sites in Munich,

Gotha and at those regional sales offices and branches listed in Annex I.


(J) The PGM Division, SEM Division and SGM Division will each be completely transferred,

i.e., each along with their allocated agreements, accounts, liabilities and assets, including

any property required for operations, to PGM KG, SEM KG and SGM KG by way of a

drop-down.

(K) In the following clauses 2.3, 3.3, 4.3 and 5 of this Drop-down Agreement, the PGM

Division, SEM Division and SGM Division shall each be described separately (the

business areas to be divested, for example the assets, liabilities and other legal

relationships they embody, are hereinafter also referred to as the “Drop-down Assets”).

The HQM Participations, the section of HQM's business operations described in more

detail in Clause 5 below, including the accompanying contractual relationships, and the

other assets not allocated to the Drop-down Assets in accordance with Clauses 2.3, 3.3

and 4.3 below, shall remain the property of WN SE. The organisational unit, in addition to

the remaining assets, which will remain the property of WN SE, shall hereinafter be

collectively referred to as “HQM Division” and the assets, liabilities and other legal

relationships which embody it shall be referred to as “Remaining HQM Assets".

Now therefore, Wacker Neuson SE, Wacker Neuson Produktion GmbH & Co. KG, Wacker Neuson

Vertrieb Deutschland GmbH & Co. KG and Wacker Neuson Vertrieb Europa GmbH & Co. KG

enter into the following


1. PARTICIPATING LEGAL ENTITIES

1.1 WN SE is participating in the drop-down as the transferring legal entity.

1.2 PGM KG, SEM KG and SGM KG are participating in the drop-down as absorbing legal

entities.

1.3 As the transferring legal entity, WN SE holds 100% of the fixed limited partner capital of

PGM KG, SEM KG and SGM KG. As the personally liable partner with no capital share,

KPG participates in PGM KG, KSE in SEM KG and KSG in SGM KG.

2. DROP-DOWN OF THE PGM DIVISION TO PGM KG

2.1 Drop-down and transfer of assets

As the transferring legal entity, WN SE shall transfer the PGM Division from its assets (the

PGM Division or the assets, liabilities and other legal relationships are hereinafter also

referred to as “PGM Drop-down Assets”) as an entirety with all rights and obligations and

pursuant to the specifications in Clause 2.3 below by way of drop-down for transfer


pursuant to Section 123 (3) 1 UmwG (German Reorganisation Act), with the continuation

of WN SE, to the accepting PGM KG as the absorbing legal entity. The Remaining HQM

Assets pursuant to Clause 5 are in all cases excluded from the transfer.

2.2 Consideration by PGM KG, provision of shares

2.2.1 In consideration for the transfer of the PGM Drop-down Assets pursuant to Clause 2.1 to

PGM KG, WN SE’s stake in PGM KG's fixed capital of € 500.00 shall be increased by

€ 4,999,555.00 to € 5,000,000.00. WN SE shall remain the sole limited partner of PGM

KG. WN SE’s liability contribution entered in the Commercial Register shall also be

increased to € 5,000,000.00. KPG shall remain the personally liable and sole partner

authorised to manage the business with no share of the fixed capital.

2.2.2 The contribution for the stake of WN SE in the fixed capital of PGM KG pursuant to

Clause 2.2.1, which is to be newly created, i.e. increased, corresponds to the net

accounting value according to commercial law (assets minus liabilities) of the PGM Drop-

down Assets on the Effective Drop-down Date. If this net accounting value exceeds the

nominal amount of the capital share provided pursuant to Clause 2.1.1 (amounting to €

4,999,500.00), the difference shall be paid into PGM KG's reserves account / capital

account II. No payment shall be owed by PGM KG for this remaining amount.

2.2.3 WN SE is not required to make any cash payments.

2.2.4 WN SE has the right to a share in the profits from its increased capital share in PGM KG

from the Effective Drop-down Date onwards. The provisions in Clause 7.5 regarding the

postponement of the Effective Drop-down Date apply correspondingly.

2.3 PGM Drop-down Assets

WN SE shall transfer the PGM Division as an entirety with all assets and liabilities

indirectly and directly allocated to this division, with the exception of those items which are

allocated to the Remaining HQM Assets, SEM Drop-down Assets and SGM Drop-down

Assets.

The PGM Drop-down Assets therefore include:

• all tangible and intangible assets,

• all obligations and liabilities, uncertain liabilities, contingent liabilities, future and

conditional accounts receivable in addition to

• all employment contracts and other contractual and legal obligations, including those

under public law, and other legal relationships of all kinds


associated with WN SE at the time of completion (Clause 8.1), which serve, aim to serve

the PGM Division, otherwise relate to the PGM Division or are to be allocated to it

economically, through the factual connection with the PGM Division described in more

detail in letter G of the preliminary remark, its employees defined in Annex 2.3a or through

explicit listing in the Annexes of this Drop-down Agreement, irrespective of whether these

items can be listed on the balance sheet or not, or whether they have actually been

included on the balance sheet or not. According to the wishes of the Parties, the PGM

Drop-down Assets in particular include all assets and liabilities which represent a

significant basis of operations for the PGM Division as a separable part of the business

operations.

Those assets and liabilities which have been allocated to the pro-forma balance sheet

attached as Annex 2.3b and through allocation in WN SE’s accounting pursuant to the

cost centre plans for the PGM Division attached to this Annex are to be particularly

included without being limited thereto, in the drop-down to PGM KG, unless otherwise

determined in Clauses 2.3, 3.3, 4.3 and 5.

The following assets, liabilities and legal relationships listed individually below in Clauses

2.3.1 to 2.3.7 will particularly be transferred, although this is not an exhaustive list,

provided that and insofar as they have not been expressly allocated to the Remaining

PQM Assets according to Clause 5, the SEM Drop-down Assets pursuant to Clause 3.3 or

the SGM Drop-down Assets pursuant to Clause 4.3.

2.3.1 Intangible assets

(a) All of WN SE’s intangible assets included in the PGM Division, in particular all

inventions relating exclusively to the PGM Division, technical and operational know-

how (even if not protected by commercial property rights), business and operational

secrets, patents, utility patents, design patents, patent applications, rights of use for

industrial property rights, processes and formulae, including the embodiment of

such items (samples, drawings, copies etc.).

Those design patents, patents and utility patents and the corresponding applications

and inventions, even if the latter have been recorded and saved for further

processing, but have not yet been formally reported, listed in Annex 2.3.1 (a) are

therefore particularly included in the PGM Drop-down Assets.

All trademarks and rights to internet domains held by WN SE allocated to the

Remaining HQM Assets pursuant to Clauses 5.1.1 and 5.1.2 are expressly

excluded.


(b) All rights to software used exclusively within the PGM Division, including software

exclusively adapted, internally developed for or licensed to this division and all

further updates to this software.

The software and company software licences owned by WN SE allocated to the

Remaining HQM Assets pursuant to Clause 5.1.3 in addition to the software

allocated to the SEM Drop-down Assets pursuant to Clause 3.3.1 (b), in particular

the software used by the IT department in the SEM Division, which will be centrally

available to the other companies in the future within the scope of company service

agreements.

(c) All rights and obligations arising from those contractual or other legal relationships

underlying or associated with the transferred intangible assets pursuant to lit. (a)

and (b), in particular licence and usage agreements.

(d) WN SE’s client and supplier base, insofar as the corresponding client and supplier

agreements pursuant to Clause 2.3.7 are transferred to PGM KG.

Insofar as WN SE is only jointly entitled to the transferred intangible assets pursuant to

Clause 2.3.1 of this agreement, it shall transfer the corresponding joint entitlement.

2.3.2 Fixed assets, financial assets

The following fixed assets, including all rights and obligations underlying these items and

contractual or other legal relationships which are associated with them:

(a) All Property listed in Annex 2.3.2(a) (hereinafter referred to as “PGM Property”) with

all of the main elements, accessories and stock, along with all rights associated with

ownership (Section 96 of the German Civil Code (BGB) and all encumbrances

entered into Sections II and III of the respective Land Register, including all

obligations as an owner of land or buildings and public easements, irrespective of

their entry into a Public Easement Register, including all rental agreements

associated with the PGM Property.

WN SE's Property in Munich-Milbertshofen, along with the accompanying buildings

and external facilities, is allocated to the Remaining HQM Assets pursuant to

Clause 5.2.1. In the future, PGM PG shall rent various parts of buildings and rooms

in the new company headquarters located in this area from WN SE, in particular

those offices used by PGM Division employees in addition to the Testing Hall. A

corresponding agreement shall be concluded after the completion date.

(b) All chattels belonging to the PGM Division which are part of WN SE’s assets, in

particular all technical equipment and machines in addition to other facilities,


operational and business equipment, low-value economic goods, facilities being

constructed, each including all claims arising from advance payments which have

been made in addition to all other chattels, in particular those which are located

within the perimeter limits of the PGM Property, in storage at Bachstraße 3, 85309

Pörnbach-Puch, or in those properties, buildings and rooms to be rented by PGM

KG in the future as listed in lit (a), in each case to the extent that these items are not

expressly allocated exclusively to the SEM, SGM or HQM Divisions in Clauses 3.3,

4.3 or 5.

On the Effective Drop-down Date, the transferred and balanced chattels in the

assets have been determined on the basis of PGM KG’s pro-forma balance sheet

pursuant to Annex 2.3b and their allocation in WN SE's accounts according to the

cost centre plans attached to this balance sheet.

Other loans allocated exclusively to the PGM Division shall also be transferred, including

all rights and obligations from underlying and associated contractual or other legal

relationships. As of the Effective Drop-down Date, the transferred other loans are based

on SGM KG’s pro-forma balance sheet pursuant to Annex 2.3b and its allocation in WN

SE's accounts according to the cost centre plans attached to this balance sheet.

2.3.3 Inventories

All stock owned by WN SE and allocated exclusively to the PGM Division, in particular raw

materials, additives and operating supplies, incomplete products and services, completed

products and goods, each including all claims to advance payments which have been

made and all other chattels forming part of the circulating assets, in particular those which

are located within the perimeter limits of the PGM Property, stored at Bachstraße 3, 85309

Pörnbach-Puch to be transferred pursuant to Clause 2.3.2 lit. (a) or those properties,

buildings and rooms to be rented by PGM KG in the future as listed in lit (a), in each case

unless these properties have been expressly allocated to the SEM, SGM or HQM

Divisions, and in each case including all rights and obligations arising from contractual or

other legal relationships underlying or associated with these items.

On the effective Drop-down date, the transferred stock is based on PGM KG’s pro-forma

balance sheet in Annex 2.3b and its allocation in WN SE's accounts according to the cost

centre plans attached to this balance sheet.

2.3.4 Accounts receivable and other assets

All of WN SE’s accounts receivable from deliveries and services belonging to the PGM

Division. All other rights and claims of any kind, in particular and not exclusively those


types included in the transferred ownership of assets described in Clause 2.3 and those

for the exclusive or non-exclusive use or employment of intangible or intangible assets

which belong to the PGM Division, those which result from the agreements and legal

relationships transferred to PGM KG pursuant to Clause 2.3.7, credits, claims for

compensation and all other rights and claims, irrespective of their nature, which are

associated with the accounts receivable described above. This particularly includes

accounts receivable connected to the sale and delivery of production and replacement

parts to associated companies of WN SE, for which the PGM Division shall act as a toll

manufacturer, in particular for Kramer-Werke GmbH, Weidemann GmbH and Wacker

Neuson Linz GmbH.

On the effective Drop-down date, the transferred accounts receivable on the balance

sheet are based on PGM KG’s pro-forma balance sheet pursuant to Annex 2.3b.

2.3.5 Assets at banks, active accruals and deferrals, other assets

(a) Those bank accounts, deposit accounts, etc. of WN SE listed in Annex 2.3.5(a),

including credit balances and deposits recorded on the Effective Drop-down Date in

Annex 2.3.5(a), the agreements with banks underlying these accounts, deposits,

etc., in addition to the resulting rights and obligations.

(b) All other assets in WN SE’s circulating assets which are to be exclusively allocated

to the PGM Division.

(c) AWN SE's active accruals and deferrals allocated to the PGM Division and their

underlying legal relationships as defined in PGM KG’s pro-forma balance sheet on

the Effective Drop-down Date pursuant to Annex 2.3b and the cost centre plans

attached to this balance sheet.

(d) All other assets which are exclusively part of the PGM Division which do not need to

be or cannot be included in the balance sheet, in particular all other in personam or

in rem rights of way, fencing and ownership rights, land charges, beneficial

interests, land easements and limited personal easements and other in rem or in

personam land rights and similar rights against third parties or other property

owners, in particular those which secure the construction, use or development of

assets or property included in PGM’s Drop-down Assets.

(e) All receivables, rights and claims for existing ancillary and preferential rights in the

sense of Section 401 of the German Civil Code (BGB) and support and security

interests, including the securities for the receivables and claims to be transferred,


such as charges on property, debt guarantees, etc. which have been transferred

pursuant to this clause 2.3.

2.3.6 Liabilities, obligations and other expenses

The PGM Drop-down Assets also in particular include, but are not exclusively limited to,

all of WN SE's liabilities and obligations which are exclusively allocated to the PGM

Division, including WN SE’s uncertain, contingent and future liabilities when their legal

foundations have already been established. These particularly include

(a) All of WN SE’s conditional or unconditional obligations and liabilities resulting from

deliveries and services that have an order reference in the ERP system, from

received advance payments and orders, product warranties and product liabilities,

breaches of environmental regulations, including the regulations regarding

abandoned sites owned by the PGM Division, and from bonds and guarantees,

including other liabilities and including public charges and obligations under public

law, in particular those obligations and charges which are currently unknown and

which will only exist in the future.

As of the Effective Drop-down Date, the transferred liabilities from services and

deliveries are as stated in the balance sheet and the other liabilities in PGM KG’s

pro-forma balance sheet pursuant to Annex 2.3b.

(b) All conditional or unconditional obligations and liabilities from all employment

relationships and liabilities, from payment terms for employee inventions and

pension obligations for all employees in the PGM Division pursuant to Clause 2.3 lit.

7 lit. (a) below, and to other employees transferred to PGM KM.

(c) All liabilities towards associated companies to be allocated exclusively to the PGM

Division. This in particular applies to all liabilities from the sale of production parts or

parts for use in so-called service kits from Wacker Neuson Corporation, USA, or its

Subsidiaries and liabilities towards Drillfix AG, Switzerland, from licence

agreements.

(d) Uncertain liabilities, including pension liabilities, bonuses for employees, process

and liability risks, irrespective of the type, which underlie the reserves exclusively

allocated to the PGM Division.

If WN SE provided sureties for the aforementioned liabilities and obligations, the claim for

repayment of these securities shall be transferred to PGM KG.


2.3.7 Contracts and other legal relationships

As of the PGM Effective Drop-down Date, all of WN SE’s contractual relationships and

other legal relationships shall particularly be allocated to the PGM Division, irrespective of

whether they are of a private or public nature, including agreement supplements and

additional agreements and together with the resulting rights and obligations. The following

shall particularly also be transferred:

(a) All employment contracts with employees currently existing at WN SE, which are

allocated to the PGM Division and which are described in more detail in Annex 2.3a,

including any possible existing obligations (in particular expectancy pension rights)

for operational old-age provisions, liability insurance for operational maintenance

interests and other commitments of a provisional nature, which shall be transferred

to PGM KG pursuant to Sections 613a (1) 1 of the German Civil Code (BGB) and

324 of the German Restructuring Act (UmwG). All of WN SE's agreements which

have been concluded with third parties for the benefit of those employees described

in more detail in Annex 2.3a, or which affect these employees in any other way, are

also included, in particular the existing direct insurance policies for these employees

at Deutscher Ring Lebensversicherungs-AG, no. LF 0540 07.

PGM KG shall become liable for all rights and obligations arising from agreements

made by WN SE to secure the existing semi-retirement accounts pursuant to

Section 8a of the German Partial Retirement Act (Altersteilzeitgesetz). PGM KG

shall particularly take over the position of pledger with regard to the security funds at

Commerzbank Aktiengesellschaft, Frankfurt a.M., the deposit and accounts listed in

Annex 2.3.7 (a), along with the balances on the Effective Drop-down Date as stated

in this Annex. The semi-retirement accounts shall therefore remain unaffected.

These means of security form an assessment unit together with the corresponding

other reserves and shall therefore not be shown in the balance sheet as securities

in the investment assets.

On the Effective Drop-down Date, PGM KG shall furthermore accept all rights and

obligations arising from the agreements made by WN SE to secure the existing

work-time accounts pursuant to Sections 7e SGB (Social Security Code) Book IV

and following. PGM KG shall particularly take over the position of trust or, with

regard to the security funds (shares in funds) at DAB bank AG, Munich, the deposits

and accounts listed in Annex 2.3.7 (a) along with the stated balances and, with

regard to the capital assets in the form of a direct investment in the insurer’s reserve

stock at Allianz Lebensversicherungs-AG, Stuttgart, under group agreement nos.


5/766718 (until 28.2.2011) and 5/868522/2 (from 1.2.2011), each with the balances

stated in the Annex as of the Effective Drop-down Date. The work-time accounts

shall therefore remain unaffected.

(b) All of WN SE's agreements, insofar as these are to be allocated exclusively to the

PGM Division. These particularly also include those agreements described below in

Clause 6.3 which affect several companies, insofar as partial allocation to the PGM

Division is possible by way of a distribution of assets pursuant to Clause 6.3 below.

This includes, for instance,

- Rental, tenancy, lease and other use and transfer agreements, in particular

those regarding those properties, buildings, facilities and other assets

transferred pursuant to this Clause 2.3 and other office and business

equipment, in addition to associated servicing and maintenance agreements.

- Contracts regarding the acquisition or sale of objects transferred pursuant to

this Clause 2.3,

- Purchasing, consultation, service and business provision agreements, plant,

supply and disposal, account management and financing agreements,

- General service and delivery agreements with suppliers and customers,

including associates agreement regarding tools and forms

- General service and delivery agreements with buyers

- Plant trader agreements, representative agreements and

- (Production) licence and usage agreements, research and development

agreements, cooperation agreements, framework agreements and licence

agreements.

The term “agreement” in the sense used above includes all written and verbal

agreements, arrangements and undertakings, in addition to all offers made by or to

WN SE.

A rental agreement for an external storage area in Bachstraße 3, 85309 Pörnbach-

Puch has been allocated to the PGM Division. The main supplier agreements for the

PGM Division are listed in Annex PGM-7.

The main delivery agreements in the PGM Division are listed in Annex 2.3.7(b)/1.

Those suppliers who supply parts to the PGM Division for production and the SEM

Division for the provision of replacement parts are listed in Annex 2.3.7(b)/2. In this

respect, a division is to be made in accordance with Clause 6.2 and corresponding


framework agreements are to be concluded after the Effective Date of Completion,

which apply to both PGM KG and SEM KG.

The main trader agreements for the Export Department in the PGM Division are

listed in Annex 2.3.7(b)/3. It is hereby noted that, for logistic processing reasons,

PGM KG shall deliver the products it manufactures to SEM KG, after which they

shall then be sold on to the traders by SEM KG. The same applies with regard to

third parties for which the PGM Division produces OEM products. In this respect, all

agreements, accounts payable and liabilities associated with these traders and the

buyers of OEM products manufactured for third parties in the PGM Division shall be

allocated to the SEM Drop-down Assets, with PGM Division supporting SEM KG in

the future with regard to the technical and specialist maintenance of these

agreements.

Insofar as WN SE itself buys products from the OEM manufacturers, the

agreements, accounts receivable and liabilities shall also be allocated to the SEM

Drop-down Assets, as for reasons of logistical planning, SEM KG shall purchase

these devices and distribute them within the Group, with PGM KG supporting SEM

KG in the future with regard to the technical and specialist maintenance of these

agreements

After the completion date, PGM KG and SEM KG shall enter into appropriate

agreements with each other and the affected third parties to regulate the

abovementioned processes for export traders, buyers of the OEM products

manufactured in the PGM Division for third parties and for OEM manufacturers in

detail.

(c) All contractual relationships with external consultants, service providers etc. which

relate to the HR department (attached to the PGM Division).

(d) All of WN SE’s agreements concluded with associated companies, which

exclusively affect the PGM Division, in particular purchase, sale and delivery

agreements and licence agreements as described in more detail in Clauses 2.3.4

and 2.3.6 (c), in addition to agreements regarding the services of the Training

Centre TGR for associated companies.

(e) All rights and obligations, accounts payable and liabilities towards external service

providers regarding the operation of the canteen at the Munich and Reichertshofen

sites.


(f) All rights and obligations, accounts payable and liabilities, private and public

contractual relationships and all rights and obligations arising from national and

foreign concessions under public law, authorisations, permits and other entitlements

of any kind which are associated with WN SE's sales office in Dubai (the official

description is Wacker Construction Equipment AG Representative Office, Sultan

Business Centre, near Lamcy Plaza, Office No. 229, Dubai, United Arab Emirates),

its business operations, assets or employees.

(g) All rights and obligations arising from national and foreign concessions, approvals,

authorisations and other entitlements of any kind relating to public law (hereinafter

referred to as “entitlements relating to public law”) which are allocated to the PGM

Division and arise from all

- authorisations for those facilities which require authorisation and other

operational authorisations transferred to PGM KG according to this

agreement,

- approvals for the property, buildings and other structures, including building

authorisations transferred to PGM KG according to this agreement,

- any permits and approvals relating to water regulations which affect the GM

Division,

- business licences for the locations and operations allocated to the PGM

Division, in addition to

- authorisations, certifications and approvals for specific devices produced in the

PGM Division, such as permissions for a specific type of device,

(h) All of WN SE’s memberships in associations and federations, insofar as these relate

exclusively to the PGM Division, each including all associated rights and obligations.

(i) All other rights and contractual relationships, in addition to WN SE's rights and

obligations which are to be allocated exclusively to the PGM Division, in particular

those described in more detail in Annex 2.3.7(i).

(j) All of WN SE’s procedural legal relationships and other legal relationships relating to

procedural law and arbitral procedures, irrespective of whether WN SE is involved

as a party or in any other way (e.g. as an intervener or third party admitted to the

proceedings), insofar as they are related to the assets to be dropped down and

transferred to PGM KG or otherwise exclusively affect the business operations of

the PGM Division, and the existing investment agreements with the accompanying

attorneys.


(k) WN SE’s accumulated deficits relating to trade tax shall be transferred to the

absorbing company PGM KG to the extent that they would be allocated to the

separable part of the business operations being taken over, i.e. the PGM Division, in

a way which is in accordance with their cause. Furthermore, Clause 5.7.12 below

also applies to tax situations.

3. DROP-DOWN OF THE SEM DIVISION TO SEM KG


As the transferring legal entity, WN SE shall transfer the PGM Division from its assets (the

SEM Division or the assets, liabilities and other legal relationships are hereinafter also

referred to as “SEM Drop-down Assets”) as an entirety with all rights and obligations and


pursuant to Section 123 (3) 1 UmwG (German Reorganisation Act), with continuation of

WN SE, to the accepting company SEM KG as the absorbing legal entity. The Remaining

HQM Assets pursuant to Clause 5 are in all cases excluded from the transfer.

3.2 Consideration by SEM KG, provision of shares

3.2.1 In consideration for the transfer of the SEM Drop-down Assets pursuant to Clause 3.1 to

SEM KG, WN SE’s stake in SEM KG's fixed capital of € 500.00 shall be increased by

€ 4,999,555.00 to € 5,000,000.00. WN SE shall remain the sole limited partner of SEM


increased to € 5,000,000.00. KSE shall remain the personally liable and sole associate


3.2.2 The contribution for the stake of WN SE in the fixed capital of SEM KG pursuant to Clause

3.2.1, which is to be newly created, i.e. increased, corresponds to the net accounting

value according to commercial law (assets minus liabilities) of the SEM Drop-down Assets

on the Effective Drop-down Date. If this net accounting value exceeds the nominal amount

of the capital share provided pursuant to Clause 3.2.1 (amounting to € 4,999,500.00), the

difference shall be paid into the reserves account / Capital Account II of SEM KG. No

payment shall be owed by SEM KG for this remaining amount.


3.2.4 WN SE has the right to a share in the profits from its increased capital share in SEM KG


postponement of the effective drop-down day apply correspondingly.


3.3 SEM Drop-down Assets

Pursuant to Clause 3.1, WN SE shall transfer the SEM Division as an entirety with all

assets and liabilities indirectly and directly allocated to this division, with the exception of

those items which are allocated to the Remaining HQM Assets, PGM Drop-down Assets

and SGM Drop-down Assets.

The SEM Drop-down Assets therefore include:






associated with WN SE at the time of completion (Clause 8.1), which serve or aim to

serve the SEM Division, otherwise relate to the SEM Division or are to be allocated to it

economically, through the factual connection with the SEM Division described in more

detail in letter H of the preliminary remark, its employees defined in Annex 3.3 or through

explicit definition as part of the SEM Division in the Annexes of this Drop-down

Agreement, irrespective of whether these items can be listed on the balance sheet or not,

or whether they have actually been included on the balance sheet or not. According to the

wishes of the Parties, the SEM Drop-down Assets in particular include all assets and

liabilities which represent a significant basis of operations for the SEM Division as a

separable part of the business operations.



cost centre plans for the SEM Division attached to this Annex are in particular included

without being limited thereto in the drop-down to SEM KG, unless expressly determined

otherwise in Clauses 2.3, 3.3, 4.3 and 5.


3.3.1 to 3.3.7 will in particular be transferred, although this is not an exhaustive list, if and

insofar as they have not been expressly allocated to the Remaining HQM Assets

according to Clause 5, the PGM Drop-down Assets pursuant to Clause 2.3 or the SGM

Drop-down Assets pursuant to Clause 4.3.


(a) All intangible assets belonging to the SEM Division in WN SE’s investment assets,

in particular all technical and operational expertise, business and operational


secrets, processes and formulae, including the embodiment of such items (samples,

drawings, recipes etc.) relating exclusively to the SEM Division.

In particular, all trademarks and rights to internet domains held by WN SE allocated

to the Remaining HQM Assets pursuant to Clauses 5.1.1 and 5.1.2 are expressly

excluded. The trademarks and all rights of WN SE in internet domains which have

been allocated to the Remaining HQM Assets pursuant to Clauses 5.1.1 and 5.1.2,

in addition to WN SE’s design patents, patents and utility patents, which have been

allocated to the PGM Drop-down Assets pursuant to Clause 2.3.1 (a).

(b) All rights to software used exclusively within the SEM Division, including software

exclusively adapted, internally developed or licensed for this division and all further

updates to this software. This also includes software which the (IT department

connected to the SEM Division) will provide centrally in the future for the other

participating companies within the scope of company service agreements.

WN SE’s software and company software licences allocated to the Remaining HQM

Assets pursuant to Clause 5.1.3 are expressly excluded.





agreements pursuant to Clause 3.3.7 are transferred to SEM KG. With regard to

settlement for export traders in the PGM Division, buyers of OEM products

manufactured for third parties in the PGM Division and OEM suppliers in the PGM

Division, please see Clause 2.3.7 (b).



3.3.2 Fixed assets, financial assets



(a) All property listed in Annex 3.3.2(a) (hereinafter referred to as “SEM Property”) with

all of the main elements, accessories, stock, along with all rights associated with

ownership (Section 96 BGB (German Civil Code)) and all encumbrances entered

into Sections II and III of the respective Land Register, including all obligations as

an owner of land or buildings and public easements, irrespective of their entry into a


public easement register, including all rental agreements associated with the SEM

Property.

WN SE's Property in Munich-Milbertshofen, along with the accompanying buildings

and external facilities, are allocated to the Remaining HQM Assets pursuant to

Clause 5.2.1. In the future, SEM KG shall rent various parts of the buildings and

rooms in the new company headquarters located in this area from WN SE, in

particular those offices used there by SEM Division employees in addition to the

Testing Hall. A corresponding agreement shall be concluded after the completion

date.

(b) All chattels belonging to the SEM Division which are part of WN SE’s assets, in

particular all other facilities, operational and business equipment, low-value

economic goods, in addition to all other chattels in the assets, in particular those

which are located within the boundaries of the SEM properties to be transferred

pursuant to lit. (a) or those properties, buildings and rooms to be rented by SEM KG

in the future as listed in lit (a), in each case unless these properties have been

expressly allocated to the PGM, SGM or HQM Divisions pursuant to Clauses 2.3,

4.3 or 5.


assets have been determined on the basis of SEM KG’s pro-forma balance sheet

pursuant to Annex 2.3b and their allocation in WN SE's accounts according to these

attached cost centre plans.

Other loans allocated exclusively to the SEM Division shall also be transferred, including



on SEM KG’s pro-forma balance sheet pursuant to Annex 2.3b and its allocation in WN


3.3.3 Inventories

All stock owned by WN SE and allocated exclusively to the SEM Division, in particular raw


products and goods, each including all claims to advance payments which have been

made and all other chattels in the circulating assets, in particular those which are located

within the SEM Property pursuant to Clause 3.3.2 lit. (a) or those properties, buildings and

rooms to be rented by SEM KG in the future as listed in Clause 3.3.2 lit (a), in each case

unless these properties have been expressly allocated to the PGM, SGM or HQM

Divisions pursuant to clauses 2.3, 4.3 or 5, and in each case including all rights and


obligations arising from contractual or other legal relationships underlying or associated

with these items.

On the effective Drop-down date, the transferred stock is based on SEM KG’s pro-forma




All of WN SE’s accounts receivable from deliveries and services belonging to the SEM

Division, all other rights and claims of any kind, in particular and not exclusively those

included in the transferred ownership of assets described in Clause 3.3 and those for the

exclusive or non-exclusive use or employment of tangible or intangible assets which

belong to the SEM Division, those which result from the agreements and legal

relationships transferred to SEM KG pursuant to Clause 3.3.7, credit and claims for


associated with the accounts receivable described above.

All of WN SE’s existing rights and claims towards associated companies associated

exclusively with the SEM Division. These particularly include accounts receivable for the

delivery of goods and replacement parts from WN SE's associated companies after the

Effective Drop-down Date due to the future role of SEM KG as a central “hub”, in

particular for light equipment products, in addition to accounts receivable from export

traders and buyers of OEM products manufactured in the PGM Division for third parties

pursuant to Clause 2.3.7 lit. (b).

On the effective Drop-down date, the transferred accounts receivable on the balance

sheet as based on SEM KG’s pro-forma balance sheet pursuant to Annex 2.3b.


(a) Those bank accounts, deposit accounts etc. of WN SE listed in Annex 3.3.5(a),

including those credit balances and deposit levels recorded on the Effective Drop-

down Date as listed in Annex 3.3.5(a), including the agreements with banks

underlying these accounts, deposits etc., in addition to the resulting rights and

obligations underlying agreements with banks in addition to the resulting rights and

obligations.

(b) All other circulating assets of WN SE which are to be exclusively allocated to the

SEM Division, in particular advance payments made by customers of the SEM

Division.


(c) WN SE's active accruals and deferrals allocated to the SEM Division and their

underlying legal relationships as defined in SEM KG’s pro-forma balance sheet on



(d) All other assets which are exclusively part of the SEM Division which do not need to



interests, land easements and limited personal easement and other in rem or in


owners, in particular those which secure the construction, use or development of

assets or property included in SEM’s Drop-down Assets.





pursuant to this Clause 3.3.


The SEM assets also particularly include, but are not exclusively limited to, all of WN SE's

liabilities and obligations which are exclusively allocated to the SEM Division, including

WN SE’s uncertain, contingent and future liabilities when their legal foundations have

already been established. These particularly include

(a) All of WN SE’s conditional or unconditional obligations and liabilities from deliveries

and services that have an order reference in the ERP system and which are to be

allocated to the SEM Division, those from received advance payments and orders,

product warranties and product liabilities, breaches of environmental regulations,

including regulations regarding abandoned sites owned by the SEM Division, and

from bonds and guarantees, including other liabilities and including public charges

and obligations under public law, in particular those obligations and charges which

are currently unknown and which will only exist in the future. These particularly

include the customs duty guarantee and diverse take-back obligations pursuant to

Annex SEM 3.3.6(a).


deliveries are as stated in the balance sheet and the other liabilities in SEM KG’s



(b) All conditional or unconditional obligations and liabilities from all employment

relationships and liabilities from payment claims for employee inventions and

pension obligations for all employees in the SEM Division pursuant to Clause 3.3.7

lit. (a) below, and other employees transferred to SEM KG.

(c) All of WN SE’s liabilities towards associated companies to be allocated exclusively

to the SEM Division. These particularly also include all of WN SE’s liabilities towards

associated companies resulting from the acquisition of products and replacement

parts for which the SEM Division acts as a central “hub” for the transfer of WN SE’s

goods within Europe.



allocated to the SEM Division.

If WN SE provided securities for the aforementioned accounts payable and obligations, the

claim for repayment of these securities shall be transferred to SEM KG.


As of the SEM Effective Drop-down Date, all of WN SE’s contractual relationships and

other legal relationships, irrespective of whether they are of a private or public nature,

including agreement supplements and additional agreements and together with the

resulting rights and obligations, shall particularly be included in the SEM Division. The

following shall particularly also be transferred:

(a) All existing employment contracts with employees currently at WN SE which are

allocated to the SEM Division and which are described in more detail in Annex 3.3,




to SEM KG pursuant to Sections 613a (1) 1 of the German Civil Code (BGB) and

324 of the Restructuring Act (UmwG). All of WN SE's agreements which have been

concluded with third parties for the benefit of those employees described in more

detail in Annex 3.3 or which affect these employees in any other way are also

included, in particular the existing direct insurance policies for these employees at

Deutscher Ring Lebensversicherungs-AG, no. LF 0540 06.

SEM KG shall become liable for all rights and obligations arising from agreements


Section 8a of the Partial Retirement Act (Altersteilzeitgesetz). SEM KG shall


particularly take over the position of pledger with regard to the security funds at


Annex 2.3.7(a) along with the balances stated in the Annex on the Effective Drop-

down Date. The semi-retirement accounts shall therefore remain unaffected. These

means of security form an assessment unit together with the corresponding other

reserves and shall therefore not be shown in the balance sheet as securities in the

investment assets.

On the Effective Drop-down Date, SEM KG shall furthermore accept all rights and


work-time accounts pursuant to Sections 7e of the Social Security Code (SGB)

Book IV ff. SEM KG shall particularly take over the position of trustor with regard to

the security funds (shares in funds) at DAB bank AG, Munich, the deposits and

accounts listed in Annex 2.3.7(a) with the stated balances and with regard to the

capital assets in the form of a direct investment in the insurer’s reserve stock at

Allianz Lebensversicherungs-AG, Stuttgart, under group agreement nos. 5/766718

(until 28.2.2011) and 5/868522/3 (from 1.2.2011), each with the balances stated in

the Annex on the Effective Drop-down Date. The work-time accounts shall therefore

remain unaffected.

(b) All of WN SE’s agreements, insofar as these are to be allocated exclusively to the

SEM Division. These particularly also include those agreements described below in

Clause 3.3, which affect several companies, insofar as their partial allocation to the

SEM Division is possible by way of a distribution of assets pursuant to Clause 6.3

below.



those regarding properties, buildings, facilities and other assets transferred

pursuant to this Clause 3.3 and other office and business equipment, in

addition to associated servicing and maintenance agreements.


this Clause 3.3,

- Contracts with OEM suppliers and agreements with buyers of products which

are manufactured for these buyers as OEM products.




- General service and delivery agreements with suppliers and customers, and

- Logistics and transportation agreements.


agreements, arrangements and undertakings in addition to all offers made by or to

WN SE.

The main delivery agreements in the PGM Division are listed in Annex 3.3.7(b).

Those suppliers who supply parts to the PGM Division for production and the SEM

Division for the provision of replacement parts are listed in Annex 2.3.7(b)/2. In this

respect, a division is to be made in accordance with Clause 6.2 and corresponding

framework agreements are to be concluded after the Effective Date of Completion,

which apply to both PGM KG and SEM KG.

The provisions agreed upon in Clause 2.3.7 (b) apply to the future settlement of

business with export traders, buyers of OEM products manufactured for third parties

in the PGM Division and OEM suppliers, between PGM KG and SEM KG, in

addition to business with the affected third parties.

(c) All contractual relationships with external consultants, service providers, etc.,

including agreements with internet providers regarding the provision of web space

and servers, which relate to the IT department (attached to the SEM Division).

(d) All of WN SE’s agreements concluded with associated companies, which

exclusively affect the SEM Division, in particular in connection with the acquisition

and sale of construction equipment and replacement parts as described in more

detail in Clauses 3.3.4 and 3.3.6 (c), but also agreements regarding the provision of

logistics services, services provided by the departmental area SSC Europe,

services relating to the organisation and execution of trade fairs and services

relating to marketing, insofar as these are carried out by employees in the SEM

Division.

(e) All rights and obligations arising from national and foreign concessions, approvals,


referred to as “entitlements relating to public law”) which are allocated to the SEM

Division and arising from all

- approvals for those facilities which require authorisation and other operational

authorisations transferred to SEM KG according to this agreement,

- approvals for the SEM property, buildings and other structures, including

building authorisations transferred to SEM KG according to this agreement,


- any permits and approvals relating to water regulations which affect the SEM

Division,

- business licences for the locations and operations allocated to the SEM

Division,

- authorisations and permits for specific devices, e.g. type authorisations,

- import/export authorisations, agreements and arrangements associated with

the import/export of construction devices and other items.

(f) All of WN SE’s memberships in associations and federations, insofar as these relate

exclusively to the SEM Division, each including all associated rights and obligations.

(g) All other rights and contractual relationships, in addition to WN SE's rights and

obligations which are to be allocated exclusively to the SEM Division, in particular

those described in more detail in Annex 3.3.7 (g).

(h) All of WN SE’s procedural legal relationships and other legal relationships relating to




transferred to SEM KG or otherwise exclusively affect the business operations of

the SEM Division, as well as existing investment agreements with the

accompanying attorneys.

(i) WN SE’s accumulated deficits relating to trade tax shall be transferred to the

absorbing company SEM KG to the same extent that they would be allocated to the

separable part of the business operations being taken over, i.e. the SEM Division, in

a way which is in accordance with their cause. Furthermore, Clause 5.7.12 below

also applies to tax situations.

4. DROP-DOWN OF THE SGM DIVISION TO SGM KG


As the transferring legal entity, WN SE shall transfer the SGM Division from its assets (the

SGM Division or the assets, liabilities and other legal relationships are hereinafter also

referred to as “SGM Drop-down Assets”) as an entirety with all rights and obligations and


pursuant to Section 123 (3) 1 UmwG (German Reorganisation Act), with continuation of

WN SE, to the accepting SGM KG as the absorbing legal entity. The Remaining HQM

Assets pursuant to Clause 5 are in all cases excluded from the transfer.


4.2 Consideration by SGM KG, provision of shares

4.2.1 In consideration for the transfer of the SGM Drop-down Assets pursuant to Clause 4.1 to

SGM KG, WN SE’s stake in SGM KG's fixed capital of € 500.00 shall be increased by

€ 4,999,555.00 to € 5,000,000.00. WN SE shall remain the sole limited partner of SGM


increased to € 5,000,000.00. KSE shall remain the personally liable and sole associate


4.2.2 The contribution to the stake of WN SE in the fixed capital of SGM KG pursuant to Clause

4.2.1, which is to be newly created, i.e. increased, corresponds to the net accounting

value according to commercial law (assets minus liabilities) of the SGM Drop-down Assets

on the Effective Drop-down Date. If this net accounting value exceeds the nominal amount

of the capital share provided pursuant to Clause 4.2.1 (amounting to € 4,999,500.00), the

difference shall be paid into the reserves account / Capital Account II of SEM KG. No

payment shall be owed by SGM KG for this remaining amount.


4.2.4 WN SE has the right to a share in the profits from its increased capital share in SGM KG


postponement of the effective drop-down date apply correspondingly.

4.3 Drop-down SGM Assets

Pursuant to Clause 4.1, WN SE shall transfer the SGM Division as an entirety with all

assets and liabilities indirectly and directly allocated to this division, with the exception of

those items which are allocated to the Remaining HQM Assets, SEM Drop-down Assets

and PGM Drop-down Assets.

The SGM Drop-down Assets therefore include:






associated with WN SE at the time of completion (Clause 8.1), which serve or aim to

serve the SGM Division, otherwise relate to the SGM Division or are to be allocated to it

economically, through the factual connection with the SGM Division described in more

detail in letter G of the preliminary remark, its employees defined in Annex 4.3 or through


explicit listing in the Annexes of this Drop-down Agreement, irrespective of whether these

items can be listed on the balance sheet or not, or whether they have actually been

included on the balance sheet or not. According to the wishes of the Parties, the SGM

Drop-down Assets particularly include all assets and liabilities which represent a

significant basis of operations for the SGM Division as a separable part of the business

operations.



cost centre plans for the SGM Division attached to this Annex are particularly included

without being limited thereto in the drop-down to SGM KG, unless expressly determined

otherwise in Clauses 2.3, 3.3, 4.3 and 5.


4.3.1 to 4.3.7 will particularly be transferred, although this is not an exhaustive list, if and

insofar as they have not been expressly allocated to the Remaining HQM Assets

according to Clause 5, the SEM Drop-down Assets pursuant to Clause 3.3 or the PGM

Drop-down Assets pursuant to Clause 2.3:


(a) All intangible assets in WN SE’s assets, in particular all technical and operational

expertise exclusively relating to the SGM Division, business and operational

secrets, processes and formulae, including the embodiment of such items (samples,

drawings, recipes etc.).

In particular, all trademarks and rights to internet domains held by WN SE allocated

to the Remaining HQM Assets pursuant to Clauses 5.1.1 and 5.1.2 are expressly

excluded. The trademarks and all rights of WN SE in internet domains which have

been allocated to the Remaining HQM Assets pursuant to Clause 2.3.1 (a), in

addition to WN SE’s design patents, patents, utility patents, etc. which have been

allocated to the PGM Drop-down Assets pursuant to Clause 2.3.1 (a).

(b) All rights to software used exclusively within the SGM Division, including software

exclusively adapted, internally developed or licensed to this division and all further

updates to this software.

The software and company software licences owned by WN SE and allocated to the

Remaining HQM Assets pursuant to Clause 5.1.3 in addition to the software

allocated to the SEM Drop-down Assets pursuant to Clause 3.3.1 (b), in particular

the software used by the IT department in the SEM Division, which will be centrally


available to the other companies in the future within the scope of company service

agreements.





agreements pursuant to Clause 4.3.7 are transferred to SGM KG.



4.3.2 Fixed assets



(a) All property listed in Annex 4.3.2(a) (hereinafter referred to as “SGM Property”) with

all of the main elements, accessories, stock, along with all rights associated with

ownership (Section 96 of the German Civil Code (BGB)) and all encumbrances

entered into Sections II and III of the respective Land Register, including all

obligations as an owner of land or buildings and public easements, irrespective of

their entry into a public easement register, including all rental agreements

associated with the SGM properties.

WN SE's real estate in Munich-Milbertshofen, along with the accompanying

buildings and external facilities, are allocated to the Remaining HQM Assets

pursuant to Clause 5.2.1. In the future, SGM KG shall rent various parts of buildings

and rooms in the new company headquarters located in this area from WN SE, in

particular those offices used there by SGM Division employees in addition to the

Testing Hall. A corresponding agreement shall be concluded after the completion

date.

(b) All chattels belonging to the SGM Division which are part of WN SE’s assets, in

particular all technical equipment and machines in addition to other facilities,

operational and business equipment, low-value economic goods, facilities being

constructed, each including all claims arising from advance payments which have

been made in addition to all other chattels, in particular those which are located at

the edges of the SGM properties to be transferred pursuant to lit. (a) or those

properties, buildings and rooms to be rented by SGM KG in the future as listed in lit

(a) or in Annex 4.3.2(b), in each case unless these properties have been expressly


allocated to the SEM, PGM or HQM Divisions. In the balance sheet, the so-called

“AfA Pool” shall also be exclusively allocated to the SGM Drop-down Assets.


assets have been determined on the basis of SGM KG’s pro-forma balance sheet

pursuant to Annex 2.3b and their allocation in WN SE's accounts according to the

attached cost centre plans.

Other loans allocated exclusively to the SGM Division shall also be transferred, including



on SGM KG’s pro-forma balance sheet pursuant to Annex 2.3b and its allocation in WN


4.3.3 Inventories

All stock owned by WN SE and allocated exclusively to the SGM Division, in particular raw


products and goods, each including all claims to receive advance payments which have

been made and all other chattels in the circulating assets, in particular those which are

located within the SGM Properties pursuant to Clause 4.3.2 lit. (a) or those properties,

buildings and rooms to be rented by SGM KG in the future as listed in lit (a) or in Annex

4.3.2(b), in each case to the extent that these items are not expressly allocated

exclusively to the SEM, PGM or HQM Divisions in Clauses 3.3, 2.3 or 5, and in each case

including all rights and obligations arising from the contractual or other legal relationships

underlying these properties or connected to them.

On the Effective Drop-down Date, the transferred stock is based on SGM KG’s pro-forma




All of WN SE’s accounts receivable from deliveries and services belonging to the SGM

Division. All other rights and claims of any kind, in particular and not exclusively those

types included in the transferred ownership of assets described in Clause 4.3 and those

for the exclusive or non-exclusive use or employment of intangible or intangible assets

which belong to the SGM Division, those which result from the agreements and legal

relationships transferred to SGM KG pursuant to Clause 4.3.7, credit and claims for


associated with the accounts receivable described above.


On the Effective Drop-down Date, the transferred accounts receivable on the balance

sheet are based on SGM KG’s pro-forma balance sheet pursuant to Annex 2.3b.


(a) Those bank accounts, deposit accounts etc. of WN SE listed in Annex 4.3.5(a),

including those credit balances and deposits recorded on the Effective Drop-down

Date as listed in Annex 4.3.5(a), including the agreements with banks underlying

these accounts, deposits, etc., in addition to the resulting rights and obligations.

(b) All other assets of WN SE’s circulating assets which are to be exclusively allocated

to the SGM Division, in particular advance payments made by customers of the

SGM Division.

(c) WN SE's active accruals and deferrals allocated to the SGM Division and their

underlying legal relationships as defined in SGM KG’s pro-forma balance sheet on



(d) All other assets which are exclusively part of the SGM Division which do not need to



interests, land easements and limited personal easements and other in rem or in


owners, in particular those which present the construction, use or development of

assets or property included in SGM’s Drop-down Assets.





pursuant to this Clause 4.3.


The SGM assets also particularly include, but are not exclusively limited to, all of WN SE's

accounts payable and obligations which are exclusively allocated to the SGM Division,

including uncertain accounts payable, possible accounts payable and future accounts

payable of WN SE, where their legal foundations have already been established. These

particularly include

(a) All of WN SE’s conditional or unconditional obligations and liabilities from deliveries

and services that have an order reference in the ERP system and which are to be


allocated to the SGM Division, those from advance payments and orders, product

warranties and product liabilities, breaches of environmental regulations, including

regulations regarding abandoned sites owned by the SGM Division, and from bonds

and guarantees, including other liabilities and including public charges and

obligations under public law, in particular those obligations and charges which are

currently unknown and which will only exist in the future. These particularly include

the rental guarantees for the rented regional sales offices and branches operated by

the SGM Division as listed in Annex SGM 4.3.6(a)/1 and those take-back

obligations towards customers of the SGM Division listed in Annex SGM 4.3.6(a)/2.


deliveries are as stated in the balance sheet and the other liabilities in SGM KG’s


(b) All conditional or unconditional obligations and accounts payable from all

employment relationships and liabilities, from payment claims for employee

inventions and any pension obligations for all employees in the SGM Division

pursuant to Clause 4.3.7 lit. (a) below and to other employees transferred to SGM

KG.

(c) All liabilities towards associated companies to be allocated exclusively to the SGM

Division. These particularly include liabilities towards Kramer-Werke GmbH and

Wacker Neuson Linz GmbH from the purchase of compact construction machines

and replacement parts in addition to liabilities towards Weidemann GmbH resulting

from the purchase of compact construction machines, in each case for sale in

Germany.



allocated to the SGM Division, and procedural and liability risks, irrespective of the

type, and

(e) Active accruals and deferrals on the liabilities side allocated exclusively to the SGM

Division and the underlying uncertain liabilities and legal relationships as defined in

SGM KG’s pro-forma balance sheet on the Effective Drop-down Date pursuant to

Annex 2.3b and the cost centre plans attached to this balance sheet.

If WN SE provided sureties for the aforementioned accounts payable and obligations, the

claim for repayment of these securities shall be transferred to SGM KG.



The SGM Drop-down Assets particularly include all of WN SE’s contractual relationships

and other legal relationships, irrespective of whether they are of a private or public nature,

including agreement supplements and additional agreements, together with the resulting

rights and obligations, if they are exclusively allocated to the SGM Division. The following

shall particularly also be transferred:

(a) All employment contracts with employees currently existing at WN SE, which are

allocated to the SGM Division and which are described in more detail in Annex 4.3,




to SGM KG pursuant to Sections 613a (1) 1 of the German Civil Code (BGB) and

324 of the German Restructuring Act (UmwG). All of WN SE's agreements which

have been concluded with third parties for the benefit of those employees described

in more detail in Annex 4.3 or which affect these employees in any other way are

also included, in particular the existing direct insurance policies for these employees

at Deutscher Ring Lebensversicherungs-AG, no. LF 0540 04.

SGM KG shall become liable for all rights and obligations arising from agreements


Section 8a of the German Partial Retirement Act (Altersteilzeitgesetz). SGM KG

shall particularly take over the position of pledger with regard to the security funds at


Annex 2.3.7(a) along with the balances stated in the annex on the Effective Drop-

down Date. The semi-retirement accounts shall therefore remain unaffected. These

means of security form an assessment unit together with the corresponding other

reserves and shall therefore not be shown in the balance sheet as securities in the

investment assets.

On the Effective Drop-down Date, SGM KG shall furthermore accept all rights and


work-time accounts pursuant to Sections 7e SGB (Social Security Code) Book IV

and following. SGM KG shall particularly take over the position of trustor with regard

to the security funds (shares in funds) at DAB bank AG, Munich, the deposits and

accounts listed in Annex 2.3.7(a) with the stated balances and with regard to the

capital assets in the form of a direct investment in the insurer’s reserve stock at

Allianz Lebensversicherungs-AG, Stuttgart, under group agreement nos. 5/766718


(until 28.2.2011) and 5/868522/4 (from 1.2.2011), each with the balances stated in

the Annex on the Effective Drop-down Date. The work-time accounts shall therefore

remain unaffected.

(b) All of WN SE's agreements, insofar as these are to be allocated exclusively to the

SGM Division. These particularly also include those agreements described below in

Clause 6.3, which affect several companies, insofar as partial allocation to the SGM

Division is possible by way of a distribution of assets pursuant to Clause 6.3 below.



those regarding those properties, buildings, facilities and other assets

transferred pursuant to this Clause 4.3 and other office and business

equipment, in addition to associated servicing and maintenance agreements,


this Clause 4.3,

- Certain insurance agreements allocated exclusively to the SGM Division,



- General service and supply agreements with suppliers and customers,

including rental and service agreements, in particular with those customers

listed in Annex 4.3.7(b)/1, and

- Plant trader agreements, representative agreements.


agreements, arrangements and undertakings in addition to all offers made by or to

WN SE.

The main rental agreements of the SGM Division, in particular those relating to the

German regional sales offices and sales branches not owned by WN SE, are listed

in Annex 4.3.2(b). The relevant rent guarantees also allocated to the SGM Division

are listed in Annex 4.3.6(a)/1.

The main delivery agreements for the SGM Division are listed in Annex 4.3.7(b)/2.

The insurance agreements exclusively allocated to the SGM Division are listed in

Annex SGM 4.3.7(b)/3; Clause 5.7.6 also applies.

(c) All of WN SE’s agreements concluded with associated companies, which

exclusively affect the SGM Division, in particular purchase and delivery agreements


in connection with the acquisition of compact construction equipment and their

replacement parts as described in more detail in Clause 4.3.6 (c).

(d) All rights and obligations arising from national and foreign concessions, approvals,


referred to as “entitlements relating to public law”) which are allocated to the SGM

Division and arising from all

- approvals for those facilities which require authorisation and other operational

authorisations transferred to SGM KG according to this agreement,

- approvals for the SGM property, buildings and other structures, including

building authorisations transferred to SGM KG according to this agreement,

- any permits and approvals relating to water regulations which affect the SGM

Division, and

- business licences for the locations and operations allocated to the SGM

Division.

(e) All of WN SE’s memberships in associations and federations, insofar as these relate

exclusively to the SGM Division, each including all associated rights and obligations.

(f) All other rights and contractual relationships, in addition to WN SE's rights and

obligations which are to be allocated exclusively to the SGM Division.

(g) All of WN SE’s procedural legal relationships and other legal relationships relating to




transferred to SGM KG or otherwise exclusively affect the business operations of

the SGM Division, and the existing investment agreements with the accompanying

attorneys.

(h) WN SE’s accumulated deficits relating to trade tax shall be transferred to the

absorbing company SGM KG to the extent that they would be allocated in a

distribution to the separable part of the business operations being taken over, i.e.

the SGM Division, in a way which is in accordance with their cause. Furthermore,

Clause 5.7.12 below also applies to tax situations.

5. REMAINING HQM ASSETS

All assets, economic goods, tangible and intangible rights, liabilities and legal

relationships which are not expressly allocated to Drop-down Assets pursuant to Clauses


2.3, 3.3 or 4.3 above and which cannot be allocated according to the provisions of Clause

6.3 (physical division) and with the application of the interpretation provisions in Clauses

9.2 and 19.3 shall neither be dropped down nor transferred to one of the Subsidiaries but

shall remain the property of WN SE pursuant to Section 6.4 Clause 6.5 remains

unaffected. In particular all assets and liabilities in the HGM Division and related

contractual relationships are expressly excluded from the transfers.

The Remaining HQM Assets which are not to be transferred therefore particularly include

the following, unless otherwise determined in this Clause 5:






associated with WN SE provided that, through the factual connection with the HQM

Division described in more detail in lit. K of the preliminary remarks, they serve the

employees described in Annex 5 or through explicit inclusion in the Annexes of this Drop-

down Agreement relating to the HQM Division which serve the HQM Division, otherwise

affect the HQM Division or are to be economically allocated to it, irrespective of whether

these items can be listed on the balance sheet or not, or whether they have actually been

included on the balance sheet or not, but particularly without being limited to these, those

which are allocated to the HQM Division in the pro-forma balance sheet attached as

Annex 2.3b and through allocation in WN SE's accounting pursuant to the cost centre

plans attached to this Annex.

The following assets, liabilities and legal relationships which are particularly established

as being part of the Remaining HQM Assets (and therefore remain with WN SE in all

cases) are listed in Clauses 5.1 to 5.7 below. The provisions of subsection 1 above and

Clauses 6.3 to 6.5 shall remain unaffected by this indicative list.

5.1 Intangible assets

5.1.1 All of WN SE’s trademark rights, in particular those listed in Annex 5.1.1, including all

related rights of use and licence agreements, in particular including the licence agreement

regarding the use of the Neuson brand with PIN Privatstiftung, Linz, Austria.

5.1.2 The rights to all of WN SE's internet domains, in particular those listed in Annex 5.1.2.


5.1.3 The software licences listed in Annex 5.1.3 which are still to be managed centrally by WN

SE in the future as company licences and which shall be made available to the absorbing

Subsidiaries within the scope of suitable service agreements which are still to be

concluded. New supplemental modules for the SAP system and those currently being

developed, in addition to the associated rights, obligations and contractual relationships,

shall be retained.

5.2 Fixed assets

5.2.1 Those properties listed in Annex 5.2.1 (hereinafter referred to as “HQM Properties”), along

with all rights associated with ownership (Section 90 of the German Civil Code (BGB) and

all significant elements, accessories, inventory and all encumbrances entered into

Sections II and III of the respective Land Register, including all obligations as owner of

land, buildings and public easements, irrespective of their entry in a public easement

register, in addition to all rental agreements which may be associated with the HQM

Properties.

The property in Japan (28-4 2-chome, Minami Kamata, Ota-ku Tokyo, Building Number

28-4-2), which is to be sold, shall also remain in the hands of WN SE along with all rights

and obligations in addition to existing agreements of all types associated with this

property.

5.2.2 Those chattels in WN SE's assets which are not allocated to the Drop-down Assets

pursuant to Clauses 2.3, 3.3 or 4.3 above, in particular all technical equipment and

machines, low-value economic goods, facilities being constructed, each including all

claims arising from advance payments in addition to all other chattels in the assets, in

particular those which are exclusively allocated to the HQM Division and those which are

within the boundaries of the retained HQM Properties (with the exception of those rooms

used by the employees of the PGM, SEM and SGM Divisions, which shall be rented by

the absorbing Subsidiaries in the future).

On the Effective Drop-down Date, the retained chattels in the assets on the balance sheet

have been determined on the basis of WN SE’s pro-forma balance sheet pursuant to

Annex 2.3b and their allocation in WN SE's accounts according to the attached cost

centre plans.

5.3 Financial assets, HQM Participations

5.3.1 All of WN SE’s financial assets, in particular all stakes in associated companies, loans to

associated companies, loans to companies with which a distribution of ownership exists,

securities in the assets (as of the Effective Drop-down Date, these exist only in the form of


securities for semi-retirement assets, see Clause 5.7.2) and other participations, in

particular those HQM Participations listed in Annex E, including all limited partner’s shares

in PGM KG, SGM KG and SEM KG, to the extent that these limited partner’s shares were

taken over within the scope of this drop-down as increased fixed capital shares, in each

case in addition to all associated capital accounts. For clarification, it is also established

that WN SE has also acquired all business shares in KPG, KSE and KSG, which were in

the meantime sold and transferred to PGM KG, SEM KG and SGM KG in return for a

corresponding credit entry in the respective capital reserves account with no cash

compensation (bank deposit). These shares and all associated rights and obligations

remain with the respective Subsidiaries.

5.3.2 In this respect, WN SE shall retain all rights and obligations, liabilities and accounts

payable towards those associated companies which are not expressly allocated to specific

Drop-down Assets, in particular to the extent that these rights and obligations are not

associated with the purchase or sale of products or replacement parts, but rather with the

foundation of the company, including associate loans and accepted loans granted, in

addition to all obligations resulting from sureties, guarantees, patronages and other

assumptions of liability accepted by WN SE for HQM participation.

Corresponding claims by WN SE against associated companies resulting from company

services shall also be retained. From the Date of Completion onwards, individual services

shall be provided and invoiced separately by the absorbing companies, for example SEM

KG shall provide logistics, IT and trade fair and marketing services, in addition to services

provided by the Sales Support Centre Europe, while PGM KG shall provide services

associated with the training centre in Reichertshofen and by the HR and Strategic

Purchasing Departments in the PGM Division. The retained accounts receivable from

associated companies shown on the balance sheet are indicated in the pro-forma balance

sheet of WN SE pursuant to Annex 2.3b and their allocation to WN SE’s accounts is

shown in the cost centre plan attached to this balance sheet.

5.4 Accounts receivable and other assets

Unless allocated to the Drop-down Assets in Clauses 2.3, 3.3 or 4.3, in particular where

exclusively relevant to the HQM Division, all of WN SE’s accounts receivable from

deliveries and services, all other rights and claims of any kind, in particular and not

exclusively those types included in the transferred ownership of assets as described in

this Clause 5 and those for the exclusive or non-exclusive use or employment of

intangible or intangible assets which belong to the HQM Division, those which result from

agreements and legal relationships to be retained pursuant to this Clause 5, loan claims


and claims for compensation in addition to all other rights and claims, irrespective of their

nature, which are associated with the accounts receivable described above. The retained

accounts receivable are shown on the pro-forma balance sheet of WN SE pursuant to

Annex 2.3b and their allocation to WN SE’s accounts is shown in the cost centre plan


5.5 Securities, participations, assets at banks, active accruals and deferrals, other assets, claims

5.5.1 All of WN SE’s liquid funds, in particular all assets at all banks, credit institutions and other

establishments with their respective balances on the Effective Drop-down Date, in addition

to the cheque, exchange and cash balances of WN SE, all of the above including any

arranged respective security rights, even if these are not ancillary, however in each case

with the exception of the bank account balances which have been allocated to the PGM

Drop-down Assets, SEM Drop-down Assets or SGM Drop-down Assets pursuant to

Clauses 2.3.5 (a), 2.3.7(a), 3.3.5 (a) or 4.3.5(a) and are listed in Annexes 2.3.5(a),

3.3.5(a) or 4.3.5(a), including the agreements with banks underlying the accounts,

deposits, etc. in addition to the resulting rights and obligations. The accounts, deposits,

etc. to be retained, together with their balance on the effective merger date, are

indicatively shown in Annex 5.5.1.

5.5.2 All other assets which are not allocated to the Drop-down Assets, in particular those which

are exclusively part of the HQM Division and which do not need to be or cannot be

included in the balance sheet, in particular all other in personam or in rem rights of way,

fencing and ownership rights, land charges, beneficial interests, land easements and

limited personal easement and other in rem or in personam land rights and similar rights

against third parties or other property owners, in particular those which guarantee the

construction, use or development of assets or property included in HQM’s Remaining

Assets.

5.5.3 All ancillary and preferential rights for the retained receivables, rights and claims in the

sense of Section 401 BGB (German Civil Code), in addition to support and security

interests, including the securities for the receivables and claims to be transferred.

5.5.4 WN SE's active accruals and deferrals allocated to the HQM Division and their underlying

legal relationships as defined in WN SE’s pro-forma balance sheet on the Effective Drop-

down Date pursuant to Annex 2.3b and the cost centre plans attached to this balance

sheet.


5.6 Equity, liabilities, obligations and other expenses

5.6.1 The company’s equity under trade law pursuant to Section 266 (3 A) of the German

Commercial Code (HGB), all of the company’s own shares held by WN SE on the Date of

Completion in addition to possible profit reserves for own shares.

5.6.2 All conditional or unconditional obligations and liabilities from all employment relationships

and liabilities, from payment claims for employee inventions and pension obligations for all

employees in the HQM Division pursuant to Clause 5.7.1 lit. (a) below and for employees

remaining at WN SE.

5.6.3 Those liabilities of WN SE from deliveries and services not allocated to the Drop-down

Assets pursuant to Clauses 2.3, 3.3 or 4.3 above, in addition to other liabilities, in

particular those with no order reference in the ERP system and all liabilities which are not

exclusively allocated to the HQM Division. The retained liabilities from deliveries and

services and other liabilities as shown on the balance sheet are indicated in the pro-forma

balance sheet of WN SE pursuant to Annex 2.3b and their allocation to WN SE’s accounts

is shown in the cost centre plan attached to this balance sheet.

5.6.4 All existing accounts payable at WN SE from ongoing payments in the company pension

plan for employees who left the company before the Effective Drop-down Date or the Date

of Completion in addition to non-lapsable expectancy pension rights for those employees,

in particular with regard to the employees listed in Annex 5.6.4, who have claims on the

basis of the pension scheme dated 7 September 1978, in its valid version of 15 January

1985.

5.6.5 All accounts payable which are associated with the preparation, review and publication of

the annual financial statement and consolidated financial statement of WN SE on 31

December 2010 and the publication and release of corresponding financial reports, in

addition to all accounts payable which are associated with the calling and execution of the

Annual General Meeting of WN SE for the 2010 business year.

5.6.6 Unless allocated to the Drop-down Assets, in particular with regard to the HQM Division,

all accounts payable underlying reserves at WN SE, in addition to corresponding

procedural and liability risks of any kind. This particularly includes the bank guarantee by

the HypoVereinsbank AG no. 91.101.874 given to Landeshauptstadt München to secure

the creation of specific areas and buildings pursuant to the urban construction agreement

of 30/04/2002 regarding WN SE's property in Munich-Milbertshofen described as

"Gelände West" in Annex 5.2.1.


5.7 Contracts and other legal relationships, claims

5.7.1 All existing employment contracts with employees currently at WN SE, which are allocated

to the HQM Division and which are described in more detail in Annex 5, including any

possible existing obligations (in particular expectancy pension rights) for operational old-

age provisions, reinsurances in the interest of company’s pension benefits and other

undertakings of a pension character, in particular the existing direct insurance policies

with Deutscher Ring Lebensversicherungs-AG, no. LF 0540 05.

WN SE shall retain all rights and obligations arising from the agreements concluded by

WN SE to secure the existing working time credit account assets pursuant to Sections 7e

of the German Security code (SGB) IV ff. relating to the employees of the HQM Division.

WN SE shall in particular retain its trustor position relating to the securities (fund shares)

at DAB bank AG, Munich, the deposits and accounts listed in Annex 2.3.7 (a) with the

stated balances and with regards to the capital assets in the form of a direct investment

into the actuarial reserve stock of the insurer at Allianz Lebensversicherungs-AG,

Stuttgart, under group contract no. 5/766718 (until 28.2.2011) and 5/868522/1 (from

1.2.2011), each with the balance stated in the Annex by the Effective Drop-down Date.

The guarantee for the working time credit account shall therefore be unaffected.

5.7.2 All ongoing management service agreements, in addition to those which ended before the

Effective Drop-down Date, which were concluded with WN SE and its legal predecessors,

including associated rights and obligations (in particular expectancy pension rights) of the

company benefit scheme, reinsurances in the interest of company’s pension benefits and

other undertakings of a pension character, including all agreements with external

personnel services associated with the search for a new Chairman of the Executive

Board.

5.7.3 Those legal relationships and agreements associated with or referring to the IPO of WN

SE, which are listed in Annex 5.7.3, in addition to the resulting claims, rights, accounts

payable and other obligations.

5.7.4 All insurance agreements of WN SE described in more detail in Annex 5.7.4, including

credit, operational and product liability, fire, combustion and business interruption in

addition to D&O insurance. The Subsidiaries shall, where affected, be included in the

insurance cover within the scope of WN SE’s company policies once the drop-down

becomes effective. The parties shall make appropriate agreements for this purpose,

including with regard to the continued insurance contributions, unless individual charges

are already made to each company by the respective insurer.


5.7.5 Unless allocated to the Drop-down Assets, all credit and bank agreements of WN SE, in

particular those described in more detail in Annex 5.7.5.

5.7.6 All rights and claims, accounts payable and other obligations of WN SE resulting from the

company acquisition, cooperation, merger and similar agreements described in more

detail in Annex 5.7.6 and in connection with any ongoing negotiations for agreements of a

comparable nature.

5.7.7 WN SE’s voluntary transfer of losses pursuant to Section 264 (4) 2 HGB (German

Commercial Code) relating to the company's acquisition of Kramer-Werke GmbH and

Weidemann GmbH in the 2011 business year.

5.7.8 All other legal relationships of a private or public law nature relating exclusively to the

HQM properties, including the supply and disposal agreements relating to these

properties, but in particular the existing general planning agreement of 25/11/2005 and

05/12/2005 regarding the construction of the new Group headquarters with the associated

service and construction agreements, in addition to all agreements for the development

and possible sale of those properties collectively referred to as “Gelände West” in Annex

5.2.1 in Munich-Milbertshofen, including the urban development agreement relating to the

Gelände West entered into with the city of Munich on 30/03/2002 and the later fixed

agreement of 7/12/2004.

5.7.9 Insofar as these are not expressly allocated to the Drop-down Assets, all of WN SE’s

rights and obligations arising from national and foreign concessions, authorisations,

permits and other entitlements of any kind of a public law nature, in particular to the extent

that they are allocated to the HQM Division and/or relate to the HQM properties.

5.7.10 WN SE’s legal and contractual relationships in addition to WN SE’s rights and obligations

which are not exclusively allocated to the Drop-down Assets, insofar as they are not

legally accessible for a division of assets pursuant to Clause 6.3, in particular those

agreements and legal relationships which affect only the HQM Division, e.g. consultant,

financing, tax consultant, legal consultant, accountant and bank agreements and other

delivery agreements.


agreements, arrangements and undertakings, in addition to all offers made by or to WN

SE.

5.7.11 All of WN SE’s procedural legal relationships and other legal relationships relating to

procedural law and arbitral procedures, irrespective of whether WN SE is involved as a

party or in any other way (e.g. as an intervener or third party admitted to the proceedings),


insofar as they are not expressly allocated to the Drop-down Assets, in particular to the

extent that they are associated exclusively with the assets remaining at WN SE or

otherwise exclusively affect the business operations of the HQM Division and the existing

investment agreements with the accompanying attorneys.

5.7.12 All of WN SE’s tax, tax assessment repayments and tax refund claims, in addition to all

tax liabilities and tax procedural law relationships of WN SE, shall expressly remain at WN

SE, even if they are associated with one of the dropped down divisions - subject to legal

transfer. Accumulated deficits relating to trade tax shall be transferred to the absorbing

Subsidiaries to the extent that they would be allocated in a distribution in accordance with

their cause to the separable part of the business operations and divisions being taken

over.

6. OTHER AGREEMENTS REGARDING THE DISTRIBUTION OF ASSETS, BACKUP CLAUSE

6.1 The pro-forma balance sheets for WN SE, PGM KG, SEM KG and SGM KG, which have

been extracted from WN SE’s Closing Balance, have been attached to this drop-down

agreement in Annex 2.3b as evidence, showing the assets and liabilities of WN SE as of

1st January 2011 according to the differentiated assets distributed according to Clauses

2.3, 3.3, 4.3 and 5 above, including a list in which all existing accounts of WN SE are

clearly allocated to the differentiated assets pursuant to Clauses 2.3, 3.3, 4.3 and 5

above.

The descriptions used in these pro-forma balance sheets, cost centre plans and asset

balance lists, in particular the accounts, profit centre and asset classes, have been taken

from the accounting system SAP and accompanying interface systems of WN SE on the

effective date of 1st January 2011, so that no further measures are required to determine

which items in the assets and liabilities each form the separable part of the business

operations PGM Division, SEM Division and SGM Division to be dropped down.

The provisions of Clause 7.2, according to which the drop-down will be based on WN SE’s

Closing Balance of 31 December 2010, and in Clause 6.2, according to which the balance

of the assets to be dropped down on the Effective Drop-down Date are authoritative for

the scope of the transferred assets, remain unaffected.

6.2 The balance of the respective Drop-down Assets on the Effective Drop-down Date is

relevant for the scope of the transferred assets. The additions to and deductions from the

assets until the Date of Completion shall be taken into account during the transfer.


Accordingly, those assets allocated to the respective business areas are also included in

the respective Drop-down Assets, including surrogates which have been received or

created by the respective Drop-down Assets as of the Date of Completion.

Correspondingly, those assets allocated to the Drop-down Assets in accordance with this

agreement shall also not be transferred to the respective Subsidiaries if they were sold

before the Date of Completion or do not exist at WN SE as of the Date of Completion.

Possible surrogates shall replace them.

Other property, rights, liabilities, uncertain liabilities, possible liabilities, contractual

relationships and other legal relationships, risks and charges purchased by WN SE up to

the Date of Completion, insofar as these are to be allocated to the respective separable

part of the business operation or Drop-down Assets.

Insofar as WN SE owns or co-owns the transferred assets or acquires them in the future,

the ownership or co-ownership shall be transferred. To the extent that WN SE only has

expectancy rights for conditional acquisition of ownership of its assets transferred under

reservation of title, it shall transfer these expectancy rights to the respective absorbing

Subsidiary.

6.3 Insofar as agreements in the sense of Clauses 2.3, 3.3, 4.3 or 5 above are neither

exclusively allocated to one of the three separable parts of the business operations PGM

Division, SEM Division or SGM Division, nor allocated exclusively to the HQM Division,

these shall - where legally possible - be transferred to the respective Subsidiary within the

scope which is to be allocated to the relevant legal relationship of the respective business

area (division of assets). The division of assets results in an increase in the number of

agreements with the consequence that (additional) agreements with one or more

Subsidiaries will exist for the respective contractual partner when the drop-down becomes

effective. If a partial allocation of the affected legal relationships is not legally possible, the

legal relationship shall remain fully with WN SE. WN SE and the respective Subsidiaries

shall regulate their internal relationships in the same manner as they would have if the

division of assets had occurred. Furthermore, WN SE and the respective Subsidiaries

shall endeavour to conclude separate agreements in the future, insofar as this is not

contradicted by economic considerations.

6.4 In cases of doubt remaining even after the interpretation of this agreement with the

application of the provisions in Clauses 9.1, 9.2 and 19.3, assets, liabilities, agreements

and legal positions which cannot be allocated pursuant to the provisions defined herein

shall remain with WN SE.


6.5 WN SE and the respective Subsidiaries shall create internal relationships with regard to

assets, accounts payable, agreements, procedural legal relationships and other legal

relationships which shall remain with WN SE pursuant to Clause 6.4 above, but which

previously (also) affected one or more of the dropped down areas of the business, in such

a way as they would be if this had been transferred in this scope to the respective

Subsidiary with effect from the Effective Drop-down Date onwards, in the scope in which

the assets, accounts payable, agreements, procedural legal relationships or other legal

relationships are to be allocated to the respective area of business (economic division).

7. EFFECTIVE DROP-DOWN DATE, CLOSING BALANCE, EFFECTIVE TAX TRANSFER DATE, CONTINUANCE OF BOOK VALUES, POSTPONEMENT OF EFFECTIVE DATES

7.1 The transfer of the Drop-down Assets between WN SE and the Subsidiaries shall take

place with retroactive effect in each case to 1 January 2011, 00:00 (hereinafter referred to

as “Effective Drop-down Date”).

From the beginning of the Effective Drop-down Date onwards, all transactions and

business shall be for the account of the respective Subsidiary, to the extent that they

affect the respective Drop-down Assets (Clauses 2.3, 3.3 and 4.3). WN SE and the

respective Subsidiaries shall place each other in such a position as though the affected

area of business of WN SE or the respective Drop-down Assets had already been

transferred to the respective Subsidiary on the Effective Drop-down Date.

From the Effective Drop-down Date onwards, the benefits, risks, burdens and dangers of

the respective transferred assets shall be regarded as having been passed to the

respective absorbing Subsidiary.

7.2 The audited annual financial statement of WN SE as of 31 December 2010 include the

unrestricted auditor’s certificate of the annual auditor selected by the company’s annual

general meeting, Rölfs WP Partner AG Wirtschaftsprüfungsgesellschaft, Munich. WN SE’s

balance sheet as of 31st December 2010, which forms part of this annual financial

statement, shall form the basis of the drop-down as a Closing Balance (hereinafter

referred to as “Closing Balance”).

7.3 The effective tax transfer date is 31st December 2010, 24:00 in each case (pursuant to

Section 20 (8) of the German Transformation Tax Act (UmwStG). The absorbing

companies shall continue the book values of the transferred assets and accounts payable

in the trade and tax balance sheets of the company executing the drop-down as of 31

December 2010, tax-neutrally in their trade and tax absorbing balance sheets pursuant to


Section 24 (2) 2 UmwStG. The company executing the drop-down and absorbing

companies are also bound by their tax balance sheets in the event of later changes to the

tax book values, for example on the basis of an external tax assessments. The drop-down

shall therefore take place on the basis of trade and tax balances with no exposure of

hidden reserves.

7.4 No reduction of capital will take place at WN SE as a result of the drop-down, as WN SE

will receive additional fixed capital shares in the absorbing Subsidiaries in consideration

for the transfer of assets in each case (active exchange) and shall solely participate in its

fixed capital both before and after the drop-down.

7.5 Should the drop-down not be entered into the Commercial Register of the company

executing the drop-down by the end of 31 January 2012, 1 January 2012, 00:00 shall

apply, in a departure from Clause 7.1, as the Effective Drop-down Date, and 31 December

2011, 24:00 shall apply, in a departure from Clause 7.3, as the effective tax transfer date.

In this case the drop-down shall be based on WN SE’s balance sheet prepared for 31

December 2011 as the Closing Balance. In the event of a further delay of the entry

beyond 31st January of the following year, the Effective Drop-down Date and the effective

tax transfer date, in addition to the effective date of the underlying Closing Balance, shall

be postponed by a further year, in each case in accordance with the provisions above.

8. ENTRY INTO FORCE OF THE DROP-DOWN, TRANSFER OF OWNERSHIP

8.1 The transfer of the respective Drop-down Assets of WN SE to the respective Subsidiary

shall take place with in rem effect at the time the drop-down is entered in the Commercial

Register of WN SE as the transferring legal entity (referred to above and hereinafter as

the “Date of Completion”).

8.2 WN SE and the Subsidiaries agree that any right of possession to the transferred assets

shall be passed on to the respective Subsidiary on the Date of Completion. Should these

items not be transferred on the Date of Completion, this transfer shall be replaced by the

agreement that WN SE shall keep the items for the respective absorbing Subsidiary

without charge pursuant to Section 930 of the German Civil Code (BGB). Should Dropped

down Assets be in the possession of third parties, WN SE shall transfer its claim for

recovery of property to the respective absorbing Subsidiary on the Date of Completion.

8.3 The absorbing Subsidiaries shall receive all business documents, including all deeds

required to exercise the rights transferred to them, on the effective transfer date.

The absorbing Subsidiaries shall store the books and other business documents for WN

SE during the legal retention periods and shall ensure that WN SE can gain access to and


make copies of these business documents, insofar as it has a justifiable interest in doing

so (e.g. for tax, warranty and accounting reasons).

8.4 In the event of official and court proceedings, in particular in the event of external tax

assessments and tax and other legal disputes relating to the Drop-down Assets, the

parties shall provide each other with mutual support. They shall particularly provide each

other with all information and documents which are required or appropriate to fulfil tax and

other official requirements or to provide evidence for tax authorities or other authorities

and courts and to provide each others’ employees with a reasonable amount of support.

9. INDIVIDUAL TRANSFER

9.1 Insofar as certain elements of the assets and liabilities, rights, agreements and

membership rights, which are to be transferred to a Subsidiary according to this

agreement, have not been transferred to the absorbing Subsidiary upon entry of the drop-

down by law (Section 131 (1) 1 UmwG), irrespective of the legal reason, WN SE shall

separately transfer these elements of the assets and liabilities or legal relationships to the

absorbing Subsidiary according to the respective applicable regulations. The respective

absorbing Subsidiary shall accept the transfer.

9.2 The provisions in Clause 9.1 particularly apply to assets which represent a significant

basis of operation for the respective dropped down division (PGM, SEM or SGM) as a

separable part of the business operation under tax law and which are used by the

respective dropped down division (PGM, SEM or SGM), even if

(a) these are not expressly listed in Clauses 2.3, 3.3 and 4.3,

(b) they did not become the legal or economic property of WN SE until after the valid

execution of this Drop-down and Transfer Agreement, but before the Date of

Completion, or

(c) it was not recognised at the right time that these constituted a significant operational

basis, despite corresponding attempts to clarify the issue.

9.3 At the request of WN SE, the respective absorbing Subsidiary shall complete all required

or appropriate trade and measures until the transfer becomes effective and provide all

required or appropriate statements which they would have been required to complete or

submit, had the transfer already taken place on the effective date, in particular all trade,

measures and statements which are required or appropriate to fulfil those contractual or

other obligations still to be met by WN SE until the transfer. If this is required, the parties

shall enter into separate business supply agreements on this subject.


9.4 Clauses 9.1 and 9.3 apply correspondingly in reversed cases if certain items in WN SE’s

assets, which are not to be transferred according to this agreement, have been allocated

to a specific Drop-down Asset for legal reasons or in error, and are nevertheless

transferred to a Subsidiary. These provisions furthermore apply if an item has been

transferred to a Subsidiary even though it should have been allocated to another

Subsidiary pursuant to the provisions of this Drop-down Agreement.

9.5 WN SE and the respective absorbing Subsidiary shall set up their internal relationship as

though the alternative transfers had also taken place pursuant to Clause 9.1 above in an

external relationship on the Effective Drop-down Date. The provisions in Clauses 7.1 and

8.1 regarding the Effective Drop-down Date and the Date of Completion remain

unaffected.

10. OBLIGATIONS TO CO-OPERATE

10.1 WN SE and the Subsidiaries shall submit all statements, prepare all documents and take

all other measures and legal actions which are required or appropriate for the transfer of

the Drop-down Assets and associated rights, agreements and membership rights

pursuant to this Drop-down agreement.

The parties furthermore undertake to duly submit all required declarations and other

statements relating to the Drop-down Agreement to national and foreign officials and

mutually to support each other in this regard.

10.2 Should further requirements emerge or should authorisations by a third party or legal

actions under public law need to be obtained, the parties undertake to submit all required

statements and take all necessary actions, in particular to use their best mutual

endeavours to obtain any required authorisations, etc. for the transfer of a specific item to

the Subsidiary designated in this Drop-down Agreement.

10.3 Insofar as a transfer to be made in an external relationship is not possible, only possible at

unreasonably high expense or is inexpedient, the parties shall arrange their internal

relationship as though the transfer had taken place in the external relationship on the

Effective Drop-down Date. The provisions of Clause 7.1 and 8.1 regarding the Effective

Drop-down Date and Date of Completion remain unaffected. In such cases, the parties

shall at least provide the intended recipient with the affected asset for the duration of their

operation for long-term use or to provide him with economic possession in any other way.

11. SERVICES AND OTHER CO-OPERATIONS

11.1 When the drop-down comes into force, WN SE on one side and the Subsidiaries on the

other side undertake to continue providing the same services as at the time they are


exchanged between the business divisions within WN SE and which are still required after

the drop-down or which are required in the future as a result of the drop-down, in

particular pursuant to Clause 6.5 above. The aforementioned provision is to be replaced

at a later date through the execution of agreements regarding the provision of services.

WN SE and the Subsidiaries have yet to fully establish the content of these agreements.

11.2 WN SE undertakes to ensure that services required after the Effective Drop-down Date by

other companies associated with WN SE shall continue to be provided by the respective

Subsidiary. The aforementioned provision is to be replaced at a future date through the

execution of an agreement regarding the provision of services between the respective

Subsidiary and the respective associated company. The content of these agreements has

yet to be fully established.

11.3 Insofar and to the extent that agreements (with the exception of employment and

appointment agreements to be transferred pursuant to clause 5.7.2 or retained pursuant

to Clauses 2.3.7 (a), 3.3.7 (a), 4.3.7 (a)), which have previously affected several

Subsidiaries, are allocated exclusively to WN SE or a Subsidiary in this Drop-down

Agreement, WN SE and the Subsidiaries undertake to work together to ensure that no

benefits or detriment occurs for WN SE and the respective Subsidiaries to whom the

agreement has not been allocated.

11.4 The provisions of Clause 11.3 above shall, wherever possible, be replaced by the

conclusion of an agreement regarding the separation of existing agreements or a co-

operation by WN SE and the Subsidiaries regarding individual agreements allocated

exclusively to WN SE or a Subsidiary, the content of which has yet to be established by

WN SE and the Subsidiaries.

12. SPECIAL RIGHTS AND BENEFITS

12.1 No rights in the sense of Section 126 (1) 7 of the German Reorganisation of Companies

Act (UmwG) shall be granted. Measures in the sense of Section 126 (1) 7 UmwG have not

been planned.

12.2 The members of the Executive Boards and Supervisory Boards of WN SE, KSE and

KSG’s (the managing partners of PGM KG, SEM KG and SGM KG), the executive

managers of these general partner companies and the annual auditors of WN SE, PGM

KG, SEM KG and SGM KG have and will not receive any special benefits in the sense of

Section 126 (1) 8 UmwG.


12.3 By way of precaution, attention is drawn to the fact that Mr. Werner Schwind (a member of

the Management Board at Wacker Neuson SE) is also sole executive of KSE and also the

only personally liable managing partner of SEM KG.

13. CONSEQUENCES OF THE DROP-DOWN FOR EMPLOYEES AND THEIR REPRESENTATIVES

13.1 Wacker Neuson SE employed approx. 1,079 members of staff on the Effective Drop-down

Date. Of this total, 33 employees work in the HQM Division, 457 in the PGM Division, 95

in the SEM Division and 494 in the SGM Division.

13.2 Upon transfer of management by the Subsidiaries, although no later than when the drop-

down becomes effective, i.e. upon entry of the drop-down into the Commercial Register of

Wacker Neuson SE as the transferring legal entity, the following transfers shall take place

pursuant to Section 324 UmwG in conjunction with Section 613 a (1) BGB.

(a) all of PGM KG’s employment contracts allocated to the PGM Division and listed in

Annex 2.3a.

(b) all of SEM KG’s employment contracts allocated to the SEM Division and listed in

Annex 3.3.

(c) all of SGM KG’s employment contracts allocated to the SGM Division and listed in

Annex 4.3.

The respective Subsidiaries shall become the new employers of those employees

allocated to the individual businesses or partial businesses in the respective business

areas when the drop-down comes into effect or upon transfer of the management power,

and shall fully accept the rights and obligations arising from these employment

relationships, unless the employees reject the transfer of their employment relationship

pursuant to Section 613 a (6) of the German Civil Code (BGB).

13.3 The employees of WN SE listed in Annex 5 shall remain employees of WN SE. This

applies to those employees working in the HQM Division.

13.4 All employees affected by the drop-down and associated transfer of their employment

relationships shall be informed in due form and within the stipulated period within the

scope of the legal obligation to inform pursuant to Section 613 a (5) of the German Civil

Code (BGB) and shall be informed of their right of refusal and the consequences pursuant

to Section 613 a (6) of the German Civil Code (BGB).

13.5 The individual Subsidiaries are jointly liable with WN SE for all liabilities of WN SE, among

others in particular those liabilities arising from the employment relationships which


existed before the drop-down became effective, Section 133 of the Reorganisation of

Companies Act (UmwG).

The liability of WN SE for accounts payable which are allocated to the individual

Subsidiaries in this Drop-down and Transfer Agreement requires these accounts payable

to become due within a period of five years after the drop-down and they form the basis of

claims against WN SE pursuant to Section 197 (1) 3-5 of the German Civil Code (BGB) or

are asserted in court, Section 133 (5) of the Reorganisation of Companies Act (UmwG).

Instead of the five-year period stipulated above, a period of ten years shall apply to any

claims based on pension scheme obligations existing before the drop-down became

effective due to the German Retirement Savings Act (BetrAVG). The respective

Subsidiary is liable for accounts payable which are not founded until after the drop-down

becomes effective.

13.6 The individual Subsidiaries have previously, i.e. before the drop-down, had no employees,

as all staff working in the former business areas were employees of WN SE. Works

councils are elected at the sites in Munich, Reichertshofen, Karlsfeld and

Unterschleißheim. WN SE has a general works council in addition to a group works

council and a SE works council. The identity of the operations at Reichertshofen, Karlsfeld

and Unterschleißheim shall remain unaffected by the drop-down. As a result, these works

councils shall remain in office. The operations at Reichertshofen are allocated to PGM

KG. The operations at Karlsfeld are allocated to SEM KG. The operations at

Unterschleißheim are allocated to SGM KG.

WN SE and the Subsidiaries have concluded a collective labour agreement with IG-Metall

pursuant to Section 3 of the Work Constitution Act (BetrVG), which forms a works council

(site works council) across the whole company for the Munich site, irrespective of the

drop-down, so that the existing works council shall remain in office. Furthermore, a cross-

company general works council shall also be formed for WN SE, PGM KG, SEM KG and

SGM KG, which shall take the same form as the previous general works council with

regard to the represented members of employees. No further general works council shall

be formed. The previously existing works council at group level and the SE works council

shall remain in office with no changes.

13.7 The previously applicable individual works agreements, general works agreements and

group works agreements shall remain in force as collective agreements following the entry

of the drop-down. This also applies to general works agreements which the former

general works council concluded with WN SE. The group work agreements shall also

remain effective for all employees.


13.8 No (group, general) speakers’ committees exist at either WN SE or the Subsidiaries. The

group works council of WN SE, as the group’s parent company, shall remain responsible

for the Subsidiaries within the scope of its legally allocated capacities after the entry of the

drop-down (Section 58 (1,2) of the German Works Constitution Act (BetrVG)), as the

group to which the companies belong shall not change for WN SE or the Subsidiaries as a

result of the drop-down.

13.9 The company agreement between WN SE and IG-Metall dated 3rd November 2009 in

addition to the supplementary collective labour agreement shall remain effective for the

Subsidiaries, both geographically and in terms of content, upon entry of the drop-down in

the responsible Commercial Register of WN SE, along with all associated rights and

obligations. The Subsidiaries shall also separately conclude the IG-Metall company

agreement by way of precaution.

13.10 A co-determinated Supervisory Board exists at WN SE on the basis of the agreement on

14th January 2009. The Supervisory Board consists of six members, two of which are

employee representatives, pursuant to (a) Art. 40 (2 and 3) of Council Regulation (EC) No

2157/2001 dated 8 October 2001 on the Statute for a European company (SE), (b)

Section 17 of SE Participation Act, (d) Section 14 of the Agreement regarding the

Participation of Employees in Wacker Neuson SE dated 14 January 2009 and (e) Section

8 (1) of the company’s Articles of Association. An SE works council also exists. The drop-

down shall have no effects with regard to the composition of the SE works council and the

representative participation of the employees on WN SE’s Supervisory Board.

13.11 Further changes to the corporate form or operational changes following the drop-down to

the Subsidiaries are currently not being planned by WN SE or the Subsidiaries.

13.12 The employees' right to future pension benefits from the company pension plan shall be

transferred to the Subsidiaries in accordance with Section 613 of the German Civil Code

(BGB) in conjunction with Section 324 of the UmwG (German Reorganisation Act).

13.13 The employees’ employment relationships transferred to the Subsidiaries cannot be

terminated due to the drop-down. Termination for other reasons is, however, still possible,

appropriately taking the relevant termination protection regulations into account. The legal

rights of the transferred employees with respect to termination of employment shall not be

affected as a result of the drop-down for a period of two years after entry of the respective

drop-down into the responsible Commercial Register of WN SE as the transferring legal

entity (Section 323 () of the German Reorganisation Act (UmwG).

13.14 WN SE’s Economic Committee has already been informed of the planned drop-down.


13.15 The draft of this agreement shall be passed on to WN SE’s works council, the general

works council and the group works council. The SE works council also receives a draft of

this agreement. A confirmation of correct submission to the works councils shall be

attached to the entry of the drop-down into the Commercial Register.

14. LIABILITY AND INDEMNITY

14.1 Insofar and to the extent that claims for liabilities and obligations in addition to liability

relationships are made against WN SE on the one hand or several Subsidiaries on the

other hand by creditors on the basis of the provisions of Section 133 of the German

Reorganisation Act (UmwG) or other legal or contractual provisions, which are allocated to

another party pursuant to the provisions of this Drop-down Agreement, this other party is

required to release the party (parties) from this type of commitment, obligation or liability

on first request.

Claims based on this Clause 14.1 shall become time-barred three months after the end of

the limitation period pursuant to Sections 133 (3 and 4), 19 (3) of the German

Reorganisation Act (UmwG).

Mandatory legal and contractual regulations, according to which a party is jointly liable for

commitments and claims in external relationships, remain unaffected.

14.2 All claims and rights of the respective Subsidiaries against WN SE due to the condition or

existence of the Drop-down Assets transferred in accordance with this Drop-down

Agreement or individual parts thereof are excluded. The exclusion also applies to all rights

and claims of any kind which a Subsidiary is entitled to assert on any legal grounds,

irrespective of whether this Subsidiary is aware of their entitlement, whether it is due or

unconditional and whether it exists today or shall only exist in the future.

15. EFFECTIVENESS, RESOLUTIONS OF APPROVAL

In order to be effective, this Drop-down and Transfer Agreement must be entered in the

Commercial Register of all participating legal entities and is subject to the approving

resolutions of WN SE's AGM and the Partners’ Meetings of all absorbing Subsidiaries.

16. LAND REGISTERS, REGISTERS FOR TRADEMARKS

16.1 It is being requested that, once the drop-down has become effective, the Land Registers

are to be corrected in accordance with this drop-down and transfer agreement.

Wacker Construction Equipment AG, Munich is still entered in the Land Register as the

owner of several of the properties transferred in this Drop-down Agreement. By way of

precaution, attention is drawn to the fact that Wacker Neuson SE was created from


Wacker Construction Equipment AG by changing its legal form, entered into the

Commercial Register on 18,02,2009, and is therefore the owner of these properties under

civil law.

The acting Notary Public is expressly instructed not to correct the Land Register entries

for the properties according to this Drop-down Agreement. The Notary Public is therefore

required to take no further action at present.

16.3 The future costs of the Land Register correction pursuant to Clauses 16.1 and 16.2 are to

be covered by the respective absorbing Subsidiary.

16.4 Once the drop-down comes into effect, the parties undertake to submit all statements and

take all legal actions which are required or appropriate for the correction of the registers

for patents, utility patents or design patents or other industrial property rights once the

drop-down comes into effect according to this Drop-down and Transfer agreement.

16.5 The costs of the register correction for industrial property rights pursuant to Clause 16.4

shall be covered by the absorbing Subsidiary.

17. DROP-DOWN AUDIT, DROP-DOWN REPORT, COMPENSATION OFFER

17.1 An audit of the drop-down is not required pursuant to Section 125 of the German

Reorganisation Act (UmwG).

17.2 A cash compensation offer is also not required pursuant to Section 125 in conjunction with

Section 29 of the German Reorganisation Act (UmwG).

17.3 The Executive Board of WN SE has prepared a drop-down report together with the

managing directors of KPG, KSE and KSG, in turn also acting as managing director of

PGM KG, SEM KG and SGM KG. This report was displayed in the offices of WN SE for

viewing by the shareholders before calling WN SE’s AGM, which was to pass a resolution

regarding the approval of the Drop-down Agreement.

18. ANNEXES

18.1 The preliminary comments in text form above and Clauses 1 to 18 of this Drop-down

Agreement form its main content. Its provisions are supplemented by Annexes, in addition

to a preceding Index to the Annexes, which are part of the agreement.

18.2 Should the wording of this Drop-down Agreement and the wording of its Annexes or the

Index to the Annexes differ, resulting in a lack of clarity as to which tangible and intangible

assets, rights or claims, accounts payable and receivable, agreements, including

employment contracts, are to be allocated to the individual business areas or not, the


wording of this agreement shall be decisive rather than the wording of the Annexes or

Index to the Annexes.

19. FINAL PROVISIONS

19.1 German law applies. The place of jurisdiction is Munich.

19.2 Amendments and supplements to this Drop-down Agreement, including this provision,

must be in writing unless notarial form is required. This also applies to the waiver of the

written form requirement.

19.3 Should a provision of this Drop-down Agreement be or become invalid or ineffective, or if

the Drop-down Agreement should not contain a required provision, this shall not affect the

validity of the remaining provisions of this Drop-down Agreement. The invalid or ineffective

provisions are to be replaced and the gap is to be filled with a legally valid provision which

reflects the intentions and economic goals of the Drop-down Agreement as closely as

possible or would have corresponded to the intentions of the Drop-down Agreement with

regard to the aim and purpose of this Drop-down Agreement, had the gap been

recognised. The same applies correspondingly if a provision of this Drop-down Agreement

is infeasible or cannot be entered into the Commercial Register currently or in the future.

B. Information, authorization, costs, copies I. The participants hereby authorize Ms. Andrea Kinne, Ms. Marie-Luise Hopfner, Ms.

Yvonne Plischke, Ms. Gina Sigmund, Ms. Roswitha Schurer and Ms. Michaela Ratschnig,

all employees of the Notary Public at the notary’s office of the certifying Notary Public,

each alone and independently of each other, as representatives with sole right of

representation, to submit all statements and take all measures required for the entry of

this document in the Commercial Register in the opinion of the register court, the

responsible Chamber of Trade and Commerce or other authorities, including any register

notifications. The authorization extends to purely editorial amendments to the drop-down

plan and its Annexes, also according to the version of the drop-down resolutions at the

AGMs of WN SE and at each of the partners’ meetings of PGM KG, SEM KG and SGM

KG. Authority with regard to the Commercial Register and Land Register office is

unlimited. This authority can be withdrawn at any time.

II. Unless expressly stated otherwise in this document, all costs incurred as a result of this

Drop-down Agreement and its execution shall be covered by WN SE. The same applies to

the certification costs for this document, any Commercial Register fees and other costs.


Any real estate transfer tax resulting from the drop-downs shall be covered by the

respective Subsidiary taking over the properties. The contractual parties assume that no

real estate transfer tax will be charged.

III. The Notary Public has particularly drawn attention to the following:

a) that the drop-down shall not become effective until it has been entered in the

Commercial Register of the transferring legal entity and a further prerequisite is that

the drop-down has first been entered in the Commercial Register of the transferring

company.

b) the effects of the entry pursuant to Section 131 f. of the German Reorganisation Act

(UmwG) and the liability provisions in the sense of Sections 133 and 134 of the

UmwG,

c) the applicability of Section 613 a of the German Civil Code (BGB),

d) possible claims for compensation pursuant to Sections 25 and 133 UmwG,

e) that further liability provisions may apply, in particular those in Sections 25 of the

German Commercial Code (HGB), 75 of the German Fiscal Code (AO).

IV. The following shall receive

a) copies of this document:

- the transferring company (two copies), for the attention of the legal

department

- each of the absorbing companies (one copy each), for the attention of the

legal department

b) certified copies:

- the Register Court in Munich;

- the responsible Land Register Offices

c) a basic copy

- with an announcement of sale: the responsible financial authorities (land

transfer tax office);

- the responsible tax authorities (corporate income tax office).

- Rölfs WP Partner AG Wirtschaftsprüfungsgesellschaft, Munich, for the

attention of Dr. Ritzer, Nymphenburger Straße 3b, 80335 Munich

Pursuant to Section 14 (1) of the Authentication Act (BeurkG), attention is drawn to Annexes E, I,

2.3a, 2.3b, 2.3.1(a), 2.3.5(a), 2.3.7(a), 2.3.7(b)/1, 2.3.7(b)/2, 2.3.7(b)/3, 2.3.7(i), 3.3, 3.3.5(a),


3.3.6(a), 3.3.7(b), 4.3, 4.3.2(b), 4.3.5(a), 4.3.6(a)/1, 4.3.6(a)/2, 4.3.7(b)/1, 4.3.7(b)/2, 4.3.7(b)/3, 5,

5.1.1, 5.1.2, 5.1.3, 5.5.1, 5.6.4, 5.7.3, 5.7.4, 5.7.5 and 5.7.6 in addition to the preceding Index to

the Annexes, which are attached to this document as an integral part. Those appearing before the

Notary Public have waived their right to have the aforementioned Annexes and Index to the

Annexes read; instead, the aforementioned Annexes and Index to the Annexes were presented to

them for their information, were approved by them and signed pursuant to Clause 14 of the

Authentication Act (BeurkG).

This deed

and Annexes 2.3.2(a), 3.3.2(a), 4.3.2(a) and 5.2.1 were furthermore read to those present by the

certifying Notary Public and have been approved and personally signed by them and the Notary

Public.

(signatures to follow)

drop-down and transfer agreement - wacker neuson group · 2019. 9. 20. · commercial register at...

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