(1) Except for the obligation to provide compensation pursuant to section 304, a control agreement or a profit and loss absorption agreement must include the obligation of the other contracting party, upon a corresponding demand being made by an external stockholder, to purchase the latter’s shares of stock in return for an appropriate settlement payment determined in the agreement.
(2) The agreement must provide for the following as settlement payment:
1. where the other contracting party is a stock corporation or public partly limited partnership, which is not controlled by another company, in which no majority ownership interest is held and which has its seat in a Member State of the European Union or in another state party to the Agreement creating the European Economic Area: the allotment of own shares in this company,
2. where the other contracting party is a stock corporation or public partly limited partnership controlled by another company or in which a majority ownership interest is held, and the controlling enterprise is a stock corporation or public partly limited partnership having its seat in a Member State of the European Union or in another state party to the Agreement creating the European Economic Area: either the allotment of shares of stock in the controlling company or in the company holding a majority of the ownership interest, or a cash settlement,
3. in all other cases, a cash settlement.
(3) If shares of stock in some other company are allotted by way of settlement payment, then the settlement payment is to be deemed appropriate if the shares of stock are allotted in the ratio in which shares of stock in the other company would have to be allotted to one share of stock in the company in the case of a merger; in this context, compensation for indivisible residual amounts may be provided by additional cash payments. The appropriate cash settlement must take account of the company’s circumstances as given at the time its general meeting adopts the resolution regarding the agreement. It is to accrue interest from the expiry of that day onwards on which the control agreement or the profit and loss absorption agreement entered into force at five percentage points per annum above the respectively applicable basic rate of interest pursuant to section 247 of the Civil Code; the assertion of further-reaching damages is not precluded.
(4) The obligation to purchase the shares of stock may be limited in time. At the earliest, the time limit ends two months following the date on which notice of the entry of the agreement’s existence in the Commercial Register pursuant to section 10 of the Commercial Code has been given by publication. Where a petition has been filed to have the court specified in section 2 of the Act on Valuation Proceedings under Corporate Law determine the compensation or the settlement payment, the time limit will end at the earliest two months following the day on which notice of the decision as to the last petition ruled on has been given by publication in the Federal Gazette.
(5) The action for avoidance of the resolution adopted by the general meeting of the company to consent to the agreement or to its amendment pursuant to section 295 (2) may not be based on the fact that the settlement payment provided for in the agreement is not appropriate. Should the agreement not provide for any settlement payment at all, or a settlement payment that does not comply with subsections (1) to (3), the court specified in section 2 of the Act on Valuation Proceedings under Corporate Law will determine, upon a corresponding petition having been filed, the settlement payment that is to be granted under the agreement. In the cases governed by subsection (2) no. 2, and where the agreement provides for the allotment of shares of stock in the controlling company or in the company holding a majority of the ownership interest, the court in this context is to determine the ratio in which such shares of stock are to be allotted, and if the agreement does not provide for the allotment of shares of stock in the controlling company or in the company holding a majority of the ownership interest, the court is to determine the appropriate cash settlement. Section 304 (4) applies accordingly.