MEMORANDUM OF ASSOCIATION
Name and registered domicile of the Company
The Company shall be named xy GmbH.
The Company shall have its registered domicile in Stuttgart.
The objects for which the Company is established are to carry on all or any of the business or businesses of designing, manufacturing and distributing software for computer-assisted robots.
The Company shall be entitled to engaging in all transactions and measures which seem necessary or beneficial for the achievement of the objects of the Company, in particular to founding branches and subsidiaries and to acquiring interests in other enterprises or to establishing other companies.
The Company shall exist for an unlimited period of time starting with the date of registration of the Company in the Commercial Register.
Stated capital and capital contributions
The Company’s stated capital shall amount to € 25,500.00.
The following shareholders shall subscribe to the stated capital, which shall be fully paid immediately as follows:
Mr. A.A., graduate engineer, share capital of €8,500.00 as contribution in kind,
Mr. B.B., graduate engineer, share capital of € 8,500.00 as contribution in kind,
Mr. C.C., Master of Business Administration, share capital of € 8,500.00 as cash contribution.
Mr. AA and Mr. BB are the sole shareholders of a company named AA & BB Industrierobotersoftware GbR, which has its registered domicile in Aachen and in which both of them have an equal share participation.
The shareholders AA and BB perform their contribution in kind by means by bringing in their equity interest to the above-mentioned civil law company (GbR). The value of each contribution shall be assumed according to the attached tax balance sheet stating a book value of respectively DM 30,000.00. Out of this sum, DM 17,000.00 shall be charged to each contribution. The remaining amount of DM 13,000.00 shall be booked to the Company as a loan by the contributing shareholder.
The entire company with all its assets and liabilities shall be contributed according to the attached tax balance sheet as of 31st December 1996 and the contract on contribution to capital. The contribution shall be effective from 1st January 1997 00:00 taking into account the additions and decreases in assets occurring since this point in time when the business is run properly. From 1st January 1997 00:00 the Company is run on the account of the shareholders
Shareholder CC shall pay 100% of his cash contributions at par immediately.
Obligation to render services
Each shareholder shall, on account of his employment contract, render services for the Company, unless he should be exempted from this obligation by means of a resolution adopted by shareholders.
The Company shall have one or several managing directors.
The managing directors shall be appointed and removed as well as exempted from the exclusive service clause by the shareholders’ resolution.
Powers of representation
If there is only one managing director, the Company shall be solely represented by him. If there are two or several managing directors, the Company shall be represented by joint signatures of two managing directors or joint signatures of a managing director together with a procurist. It is possible to introduce alterations to the power of representation of the managing directors by means of the shareholders’ resolution, in particular it is possible to exempt one or all managing directors from limitations under § 181 of the Civil Code.
The power of representation granted to the managing directors towards third parties shall not be limited due to restrictions with respect to the management board as provided for by law or by the Memorandum of Association.
Several managing directors shall be responsible for managing the businesses of the Company unless it is otherwise determined by means of the shareholders’ resolution, in particular those concerning the Company’s internal rules.
Each managing director shall be responsible for managing the Company in compliance with the provisions and restrictions as set forth by law, the Memorandum of Association, the shareholders’ resolutions as well as by the Executive Service Agreement.
In order to carry on any of the businesses exceeding the scope of objects for which the Company was established, the managing directors shall obtain a prior consent by means of the shareholders’ resolution.
Resolutions shall be passed by a simple majority of votes cast by all shareholders unless mandatory statutory provisions or the Memorandum of Association provide otherwise.
Resolutions concerning the following issues shall be passed by 75% of votes cast:
any amendments to the Memorandum of Association
dissolution of the Company
resolutions under §§ 6, 7 and 8 of the Memorandum of Association.
The voting right shall be determined in accordance with the share in the stated capital subscribed to – each € 50 of the stated capital subscribed to grant one vote.
Each shareholders’ resolution shall be taken down in the minutes. The minutes shall be signed by the managing directors and the shareholders shall receive a copy thereof.
Lodging an appeal of any kind against a shareholders’ resolution shall be admissible only within one month after the resolution has been passed.
Proceedings at shareholders’ meetings
Resolutions of the shareholders shall be passed at a shareholders’ meeting.
A resolution shall be as effective as if the same had been passed at a shareholders’ meeting if all the members for the time being entitled to receive notice and attend and vote at shareholders’ meetings, in the written, oral or other form declare their consent for the resolution to be passed or to the form of the vote. A resolution so passed shall not be effective with respect to any matter required by the law to be solved at a shareholders’ meeting.
Calling a meeting
A shareholders’ meeting shall be called by a managing director. Shareholders’ meetings shall be held at the Company’s corporate seat unless a resolution of the shareholders provides otherwise.
A shareholders’ meeting shall be convened at least once a year to resolve the annual closing of accounts within eight months after the end of a business year. At the abovementioned shareholders’ meeting, decisions shall be made on the audit and approval of the annual closing of the accounts, on the use of the net profits and on the giving of a release to the managing directors. A shareholders’ meeting shall be furthermore convened if it appears to the managing director to be in the interest of the Company or in cases as provided for by the law.
A shareholders’ meeting shall be convened by inviting the shareholders by registered mail which shall be sent to the address last notified to the Company by the respective shareholder of the Company or by means of a delivery of an acknowledgement of receipt. The minimum notice period for convocation is two weeks, counting neither the day of sending the invitations nor the day on which the meeting is held. The invitation shall contain the information on the objects of resolutions to be passed.
If a shareholders’ meeting has not been duly convened, resolutions shall only be passed provided that all the members for the time being entitled to receive notice of and attend and vote at a meeting consent to it.
RULES GOVERNING COMPANY’S FINANCES
Business year and annual closing of accounts
The business year shall be the calendar year.
The managing directors shall draft the annual closing of the accounts within the first three months of the business year, unless the law provides for the annual closing of the accounts to be drafted within the first six months of the business year.
Distribution of profits
The shareholders shall be entitled to the annual surplus/net income for the respective year exclusive of profit retained, unless the amount has been – by means of a provision contained in Sec.
excluded from being distributed among the shareholders.
Making decisions on the distribution of the profits, the shareholders may retain them in the form of reserves formed out of profits, or bring them forward (accommodated surplus), or decide that the profits shall remain with the Company as a loan on conditions as set forth by a resolution of the shareholders.
The net profits shall be divided in accordance with the capital share.
TRANSFER AND DIVISION OF COMPANY’S SHARES
Transfer of shares
The transfer of company shares in whole or in part shall be subject to approval by the shareholders’ meeting passed by a qualified majority of three quarters of the votes cast.
Withdrawal of members
Each shareholder may declare to withdraw from the Company
at any time, if there is an important reason within the meaning of the general company law or
otherwise only six months before the end of a business year, for the first time as of 31st December 1999.
The notice of withdrawal shall take place in the form of a registered mail to the Company.
Each shareholder shall be obligated to withdraw from the Company without his consent,
when and as soon as bankruptcy or conciliation proceedings are started or a petition in bankruptcy is dismissed for insufficiency of assets – immediately,
by a resolution of shareholders – at a point in time determined by the resolution (the shareholder in question does not have the right to cast a vote as far as the resolution is concerned), not before the shareholder concerned has been notified of the resolution
if execution has been imposed on his capital share in the Company and not lifted within a period of two months, or
if an important reason relating to his person has emerged due to which further cooperation with the shareholder in question is unacceptable for the remaining shareholders, or
if the employment relationship of a shareholder, who is obligated under § 5 thereof to render services for the Company, terminates for any reason whatsoever; in the case of death of a shareholder Section (4) thereof shall be applicable.
Death of a shareholder
Heirs or legatees of a shareholder shall be obligated to withdraw from the Company.
The withdrawing shareholder or his heirs or legatees shall be obligated to transfer his or their participation in the share in accordance with a resolution passed by the majority of votes cast by the remaining shareholders (the shareholder concerned is not entitled to participate in the vote) to the Company itself, to one or several of its shareholders or to the third party named by the Company, or he shall be obligated to condone the seizure of his participation in the share.
In the case of the seizure of his participation in the share, the withdrawing shareholder or his heirs shall receive from the shareholder (or shareholders) who has acquired his participation in the share a lump sum settlement in accordance with this Memorandum.
The settlement for a withdrawing shareholder shall be established according to the value determined for the participation in the share, which arises upon application of provisions from the area of fiscal law in order to establish the general value of the participation in the share if it cannot be derived from sales (“Stuttgart procedure”). Such evaluation shall be conducted not later than at the end of the business year in which the shareholder’s notice of withdrawal is delivered to the Company or the exclusory decision is made. If the assessment of the Tax Office should still not be available on the deadline day for evaluation, the evaluation shall be conducted according to the preceding criteria and irrespective of the assessment of the Tax Office. No adjustments due to the later assessment of the Tax Office or due to the company audit shall follow.
The withdrawing shareholder shall be entitled to the part of the profit for the whole business year during which and at the end of which the shareholder is obligated to leave the Company; the part of the profit shall be determined according to the month during which or at the end of which the shareholder submitted the notice of withdrawal to the Company or he made the decision to withdraw.
Any disagreements as far as the amount and the calculation of the settlement are concerned shall be settled – upon filing an application by one of the parties – by a sworn expert of the competent Chamber of Industry and Commerce to the best of his fair judgement within the meaning of §§ 317 ff of the Civil Code. Any expenses incurred in connection with this decision shall be borne half by the withdrawn shareholder and half by the transferee.
The settlement sum shall be paid in five equal annual instalments; the first instalment is due six months after the withdrawal and the following instalments on a yearly basis thereafter. From the first day of the month in which the withdrawing shareholder is no longer entitled to profit under Sec. 2, an annual interest exceeding the Federal Bank’s discount rate by 2% shall be paid on the settlement from the amount still due.
Prohibition to compete
Each shareholder shall be prohibited from taking on, in addition to the work for this Company, secondary occupations or from engaging in independent enterprises – regardless of kind – without a prior consent by means of shareholders’ resolution in which he is not entitled to vote; above all, he shall be prohibited from doing business on his own or on someone else’s account in the branch of industry of the Company, neither occasionally nor on the recurrent basis, neither indirectly nor directly. Each shareholder shall be excluded from working in the branch of industry of the Company whether as employee, freelancer or in any other form. This prohibition to compete also includes investments of any kind in enterprises of the branch of industry of the Company.
Any notifications of the Company shall be published only in the German Federal Gazette or in any publishing body acting in its place.
All expenses incurred in connection with the establishing and registration of the Company (commercial register, notifications, consultancies, notary charges) shall be borne by the Company up to the amount of 10% of its nominal capital.