Exhibit 2.1
Roll of Deeds No. 36/2004
RECORDED
in Frankfurt am Main on July 30/July 31, 2004
Before me the undersigned Lawyer
Dr. Hubertus Kolster
as officially appointed Deputy of the Notary
Prof. Dr. Alexander Riesenkampff
with place of business
Friedrich-Ebert-Anlage 44
60325 Frankfurt am Main
appeared today in the office of Linklaters Oppenhoff & Radler, Mainzer
Landstrasse 16, 60325 Frankfurt am Main, where I appeared upon request of the
appearing parties:
1. Markus Florian Stephanblome, Rechtsanwalt, date of birth April 29, 1974
resident: Cimbernstr. 33 40545 Dusseldorf place of business Freshfields
Bruckhaus Deringer, Freiligrathstrasse 1, D-40479 Dusseldorf identified by
his German Identity Card No. 1543593068
The person appeared under 1. declared that in the following, he does not
act in his own name, but on behalf of
WP Domus Limited Liability Company (LLC)
466 Lexington Avenue
New York, N.Y. 10017 USA
(hereinafter referred to as "Seller").
He submitted a duly executed power of attorney dated July 26,
2004 (without Secretary Certificate and Apostille). Notarial
certified copy of such power of attorney is attached hereto.
2. Mr. Peter Schulz, date of birth June 13, 1964
resident: Josef-Ritz-Weg 88, 81673 Munchen
identified by his German Identity Card No. 4027077511
The person appeared under 2. declared that in the following, he does act in
his own name and, furthermore, on behalf of Mr. Wilhelm Kaiser, date of
birth April 23, 1966, resident: Breitenbachstrasse 13, 82515 Wolfratshausen
(Mr. Schulz and Mr. Kaiser hereinafter individually referred to as a
"Manager", collectively the "Management").
Mr. Schulz submitted a duly executed power of attorney of Mr. Kaiser, dated
July 29, 2004. Notarial certified copy of such power of attorney is
attached hereto.
3. Dr. Markus Kapplinger, Rechtsanwalt, date of birth September 3, 1973,
resident: Kuglerstrasse 18, 10439 Berlin place of business Linklaters
Oppenhoff & Radler, Mainzer Landstrasse 16, 60325 Frankfurt am Main -
identified by his German Identity Card No. 2536052748
The person appeared under 3. declared that in the following, he does not
act in his own name, but on behalf of
Invacare GmbH & Co. KG
Dehmer Str. 66
Bad Oeynhausen
(hereinafter referred to as the "Purchaser")
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which company will be represented by Invacare Verwaltungs GmbH, which is
represented by its managing director Mark Prosser.
Dr. Kapplinger submitted a duly executed power of attorney, signed by the
aforesaid managing director, dated July 29, 2004. Notarial certified copy
of such power of attorney is attached hereto.
Furthermore, Dr. Kapplinger presented certified excerpts of the Commercial
Register of the Lower Court in Bad Oeyenhausen of Invacare GmbH & Co. KG
(HRA No. 2461) and Invacare Verwaltungs GmbH (HRB No. 3367), both dated
July 23 2004. Upon an inspection to this excerpts the Notary hereby
confirms, that Invacare GmbH & Co. KG shall be represented by Invacare
Verwaltungs GmbH, and that Invacare Verwaltungs GmbH shall be represented
by its managing director Mark Prosser, acting alone.
4. Mr. Fabian Ehlers, Rechtsanwalt, date of birth September 8, 1964 resident:
Bohmerstrasse 14, 60322 Frankfurt am Main place of business Linklaters
Oppenhoff & Radler, Mainzer Landstrasse 16, 60325 Frankfurt am Main -
identified by his German Identity Card No. 4011877187
the person appeared under 4. declared that in the following, he does not
act in his own name, but on behalf of
Invacare Corporation
One Invacare Way
Elyria, OH 44035
USA
(hereinafter referred to as the "Purchaser's Guarantor").
He submitted a duly executed power of attorney, dated July 17, 2004
(without Apostille). Notarial certified copy of such power of attorney is
attached hereto.
If in the following "notary" is recorded this means at the same time the
officially appointed Deputy of the notary.
Prior to the following notarization the notary asked the deponents about any
prior involvement pursuant to ss. 3 sub. 1 No. 7 Notarization Act and he
explained this clause. The deponents denied such prior involvement. Therefore, a
prohibition of involvement of the notary does not exist.
The persons appearing requested that this deed should be recorded in the English
language. The notary, who is in command of the English language, ascertained
that the persons appearing are also in command of the English language. After
having been advised accordingly, the persons appearing waived their right to be
assisted by a sworn interpreter and to have a written translation of this deed.
Before entering into the notarisation the notary advised the appeared persons
about possible consequences resulting from the fact that sufficient
confirmations with respect to the rights of representation could not be
presented as of yet.
The persons appeared parties then requested the notarisation of the attached
================================================================================
Sale and Purchase Agreement
Regarding the Sale and Purchase
of All Shares in WP Domus GmbH
================================================================================
by and among
WP Domus LLC
(hereinafter referred to as the "Seller"),
Mr. Peter Schulz and Mr. Wilhelm Kaiser
(hereinafter individually referred to as a "Manager",
collectively the "Management"),
Invacare GmbH & Co. KG
(hereinafter referred to as the "Purchaser")
And
Invacare Corporation
(hereinafter referred to as the "Purchaser's Guarantor"),
the Seller, the Management, the Purchaser and the Purchaser's Guarantor
hereinafter collectively referred to as the "Parties", and each of them as a
"Party".
TABLE OF CONTENTS
INDEX OF DEFINITIONS..........................................................7
INDEX OF ANNEXES .............................................................13
PREAMBLE .............................................................15
SECTION 1 CORPORATE OWNERSHIP / STRUCTURE OF THE ACQUISITION...........16
SECTION 2 SALE AND PURCHASE OF THE SHARES; RIGHTS TO PROFITS...........20
SECTION 3 PURCHASE PRICE; PRELIMINARY PURCHASE PRICE;
CONDITIONS OF PAYMENT........................................21
SECTION 4 EFFECTIVE DATE STATEMENTS....................................25
SECTION 5 CLOSING; CLOSING CONDITIONS..................................28
SECTION 6 SELLER'S AND MANAGEMENT'S GUARANTIES.........................32
SECTION 7 REMEDIES FOR BREACH OF SELLER'S GUARANTIES OR
MANAGEMENT'S GUARANTIES......................................45
SECTION 8 TAXES........................................................52
SECTION 9 PURCHASER'S GUARANTIES.......................................58
SECTION 10 COVENANTS....................................................59
SECTION 11 CONFIDENTIALITY / PRESS RELEASES.............................64
SECTION 12 ASSIGNMENT OF RIGHTS AND UNDERTAKINGS........................65
SECTION 13 PURCHASER'S GUARANTOR........................................66
SECTION 14 COSTS AND TAXES..............................................66
SECTION 15 NOTICES......................................................67
SECTION 16 FINDERS' FEE.................................................70
SECTION 17 MISCELLANEOUS................................................70
INDEX OF DEFINITIONS
Accounting Principles shall mean the accounting principles of
the Companies attached as Annex 0 hereto
Affiliate(s) shall mean affiliated companies within the
meaning of Sections 15 et seq. AktG,
including, for the avoidance of doubt, with
respect to the Seller, the Seller's members
Agreement shall have the meaning ascribed to it in
the Preamble
AktG shall mean German Stock Corporation Act
(Aktiengesetz)
BGB shall mean German Civil Code (Burgerliches
Gesetzbuch)
Business shall have the meaning ascribed to it in
the Preamble
Business Day shall have the meaning ascribed to it in
Section 17.3
Cash shall have the meaning ascribed to it in
Section 3.1.3
Cash Statement shall have the meaning ascribed to it in
Section 4.1.1
Closing shall have the meaning ascribed to it in
Section 5.1
Closing Condition(s) shall have the meaning ascribed to it in
Section 5.2
Closing Date shall have the meaning ascribed to it in
Section 5.1
Code shall have the meaning ascribed to it in
Section 8.5 (2)
Company shall have the meaning ascribed to it in
Section 1.1
Companies shall have the meaning ascribed to it in
Section 1.3.3 (5)
Companies' Shares shall have the meaning ascribed to it in
Section 1.3.3 (5)
Consequential Damages shall have the meaning ascribed to it in
Section 7.1.1
Consolidated Financial
Statements shall have the meaning ascribed to it in
Section 6.2.2
Debt Statement shall have the meaning ascribed to it in
Section 4.1.2
De Minimis Amount shall have the meaning ascribed to it in
Section 7.3
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Deutsche Bank Shares shall have the meaning ascribed to it in
Section 1.3.1 (1)
DH AG shall mean Domus Homecare AG
Disclosed Documents shall have the meaning ascribed to it in
Section 7.4
Domus Companies shall have the meaning ascribed to it in
Section 1.3
Effective Date shall have the meaning ascribed to it in
Section 1.6
Effective Date Accounts shall have the meaning ascribed to it in
Section 4.1
Effective Date Statements shall have the meaning ascribed to it in
Section 4.1.3
Encumbrance shall have the meaning ascribed to it in
Section 6.4.2 (1)
Environmental Claim shall mean any and all administrative
or judicial actions, suits, orders,
claims, liens, investigations,
complaints, requests for information,
proceedings, or other written
communication pursuant to or relating to
any Environmental Law by any Person based
upon, alleging, asserting, or claiming
any actual (i) violation of or liability
under any Environmental Law or any permit
or approval thereunder, or (ii) liability
for investigatory costs, cleanup costs,
removal costs, remedial costs, response
costs, natural resource damages,
property damage, personal injury,
fines, or penalties related to
pollution, contamination or any
Hazardous Material at any location
Environmental Laws shall mean any laws, ordinances, codes of
conduct, regulations (including technical
standards), administrative guidelines,
policies and orders (including European
Community and other supranational acts),
as each may be amended from time to time,
(i) which (as legislative objective or in
the individual case) have as a purpose or
effect the protection of (or
consequences to) the environment, safety
and health of employees, workers or other
Persons, including the public; (ii)
relate to consequences of damages to
the environment, workers or the public;
(iii) which classify, regulate,
call for the remediation of, require
reporting with respect to, or list or
define air, water, groundwater, solid
waste, hazardous or toxic substances,
materials, pollutants or contaminants;
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(iv) which regulate, relate to or govern
any activity regarding Hazardous
Materials or materials containing
Hazardous Materials; (v) or which apply
to zoning, planning and construction of
buildings or facilities. For the
avoidance of doubt, the Federal Soil
Contamination Act(Bundesbodenschutzgesetz)
and the Federal Soil Contamination
Ordinance (Bundesbodenschutzverordnung)
are Environmental Laws.
Estimated Effective Date
Statements shall have the meaning ascribed to it in
Section 3.2
Euribor shall mean the rate at which euro interbank
term deposits are offered by one prime bank
to another prime bank and which is
published at 11.00 a.m. CET on the
Moneyline Telerate pages 248 - 249
Facility Agreement shall have the meaning ascribed to it in
Section 5.5.3
Financial Debt shall have the meaning ascribed to it in
Section 3.1.2
Financial Statements shall have the meaning ascribed to it in
Section 6.2.2
Fixed Purchase Price
Component shall have the meaning ascribed to it in
Section 3.1.1
German GAAP shall mean German generally accepted
accounting principles
Hazardous Materials shall mean any toxic, hazardous,
infectious or radioactive substance,
material, product or waste, or any
pollutant or contaminant, including
those substances, materials, products
and wastes defined in or regulated
or addressed by any Environmental
Laws; petroleum and petroleum products
including crude oil and any fractions
thereof; natural gas, synthetic gas, and
any mixtures thereof; and asbestos
HGB shall mean German Commercial Code
(Handelsgesetzbuch)
Indemnified Litigation shall have the meaning ascribed to it in
Section 10.6.4
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Information Memorandum shall have the meaning ascribed to it in
the Preamble
Intellectual Property Rights shall have the meaning ascribed to it in
Section 6.4.4 (1)
Key Employee(s) shall have the meaning ascribed to it in
Section 6.4.7 (2)
Leased Real Property shall have the meaning ascribed to it in
Section 6.4.2
Legal Terms shall have the meaning ascribed to it in
Section 16.5.2
Management shall collectively mean the Managers
Management Accounts shall mean the written financial
data prepared by DH AG with respect to the
consolidated Business and relating to the
six months period ended 30 June 2004
comprised of a balance sheet and an income
statement
Management's Knowledge shall have the meaning ascribed to it in
Section 6.6
Management's Liability Cap shall have the meaning ascribed to it in
Section 7.2.2
Manager each of Mr. Peter Schulz and Mr. Wilhelm
Kaiser
Manager's Liability Cap shall have the meaning ascribed to it in
Section 7.2.2
Material Agreement(s) shall have the meaning ascribed to it in
Section 6.4.6
Material Assets shall have the meaning as defined in
Section 6.4.3
Neutral Auditor shall have the meaning ascribed to it in
Section 4.4
Nominee shall have the meaning ascribed to it in
Section 2.3
Notices shall have the meaning ascribed to it in
Section 15.1
Objections shall have the meaning ascribed to it in
Section 4.4
Owned Real Property shall have the meaning as ascribed to it in
Section 6.4.2
Party(ies) shall have the meaning as defined on the
cover page
Person shall mean any individual, legal entity or
governmental body
Preliminary Purchase Price shall have the meaning ascribed to it in
Section 3.2
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Purchaser Invacare GmbH & Co. KG
Purchaser's Account shall have the meaning ascribed to it in
Section 3.4.2
Purchaser's Auditor shall have the meaning ascribed to it in
Section 4.2
Purchaser's Guarantor Invacare Corporation
Purchase Price shall have the meaning ascribed to it in
Section 3.1
Purchase Price Adjustment shall have the meaning ascribed to it in
Section 3.3
Real Property shall have the meaning ascribed to it in
Section 6.4.2
Registered Share Capital shall have the meaning ascribed to it in
Section 1.2
Relevant Companies shall have the meaning ascribed to it in
Section 7.5.2
Reports shall mean the PwC Vendor's Due Diligence
Reports, the L.E.K. Vendor's Market Due
Diligence Presentation and the Freshfields
Bruckhaus Deringer Vendor's Legal Due
Diligence Report, in each case as made
available to the Purchaser
Revised Effective Date
Statements shall have the meaning ascribed to it in
Section 4.3
SEC shall mean the U.S. Securities and Exchange
Commission
Seller WP Domus LLC
Seller's Account shall have the meaning ascribed to it in
Section 3.4.1
Seller's Auditor shall have the meaning ascribed to it in
Section 4.1.3
Seller's Knowledge shall have the meaning ascribed to it in
Section 6.6
Seller's Liability Cap shall have the meaning ascribed to it in
Section 7.2.2
Share(s) shall have the meaning ascribed to it in
Section 1.2
Signing Date shall have the meaning ascribed to it in
Section 1.6
Subordinated Loan
Agreements shall have the meaning ascribed to it in
Section 1.5
Subsidiary(-ies) shall have the meaning ascribed to it in
Section 1.3
Tax(es) shall have the meaning ascribed to it in
Section 8.1
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Taxing Authority shall have the meaning ascribed to it in
Section 8.1
Tax Contest shall have the meaning ascribed to it in
Section 8.6.2
Third Party(-ies) shall mean any individual
person, legal entity or other subject
having legal capacity (Rechtsfahigkeit)
which is not party to this Agreement
Threshold shall have the meaning ascribed to it in
Section 7.3
U.S. GAAP shall mean generally accepted
accounting principles in the United States
of America
Warburg Pincus shall have the meaning ascribed to it in
Section 11.2
Working Capital shall have the meaning ascribed to it in
Section 3.1.4
Working Capital Statement shall have the meaning ascribed to it in
Section 4.1.3
WPGV shall mean WP Gesundheits Verwaltungs GmbH
INDEX OF ANNEXES
Annex 0 Accounting Principles
Annex 2.2 Share Transfer Agreement
Annex 3.2 Estimated Effective Date Statements
Annex 5.5.1 (b) Members of the DH AG supervisory board to resign
Annex 5.5.1 (e) Guarantee Letter by Warburg Pincus Ventures L.P. and
Warburg Pincus Ventures International L.P.
Annex 5.5.2 Waiver Statements relating to ESOP II and ESOP III
Annex 5.5.3 Assignment and Assumption Agreement between, inter
alia, DH AG, Deutsche Bank, the Purchaser
Annex 6.2.1 (1) List of Articles of Association of certain
Subsidiaries
Annex 6.2.1 (2) Minority Shareholders in Swiss Subsidiaries
Annex 6.2.2 (1) (Consolidated) Financial Statements
Annex 6.4.1 (1) (Consolidated) Financial Statements
Annex 6.4.2 (1) Real Property owned by the Companies
Annex 6.4.2 (2) Real Property leased or rented by the Companies
Annex 6.4.2 (4) Expropriation
Annex 6.4.3 Material Assets
Annex 6.4.4 (1) Intellectual Property Rights
Annex 6.4.4. (3) Software Licences
Annex 6.4.5 Compliance with Law
Annex 6.4.6 Material Agreements
Annex 6.4.7 (1) Collective Bargaining Agreements
Annex 6.4.7 (2) Key Employees
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Annex 6.4.8 Insurance Policies
Annex 6.4.9 Litigation
Annex 6.4.10 Ordinary Course of Operation
Annex 6.4.11 Hazardous Materials
Annex 6.6 List of Individuals relevant for Seller's Knowledge
Annex 7.1.3 Managers' Liability
Annex 7.4 Documents disclosed in the Data Room
Annex 8.2.1 Taxes
PREAMBLE
WHEREAS, the Seller is a Limited Liability Company duly organized under the laws
of Delaware, the members of which are Warburg, Pincus Ventures L.P. and Warburg,
Pincus Ventures International L.P.;
WHEREAS, the Purchaser is a Limited Partnership (Kommanditgesellschaft) with a
Limited Liability Company as general partner (GmbH & Co. KG) duly organized
under the laws of Germany with registered offices in Bad Oeynhausen;
WHEREAS, WP Domus GmbH is the majority shareholder of Domus Homecare AG being
the holding company of a group of companies which belong to Europe's leading
manufacturers of innovative, high-quality mobility aids and bathroom safety
products for elderly and handicapped people. The business of the group of
companies directly or indirectly owned by Domus Homecare AG comprises the
manufacturing and distribution of bath lifts, other bathroom safety products,
walkers, power drives for wheelchairs and power wheelchairs (such business,
taken as a whole, hereinafter also referred to as the "Business");
WHEREAS, the Seller has determined to sell all of its shares in WP Domus GmbH,
and the Purchaser wishes to acquire these shares;
WHEREAS, a confidential information memorandum prepared by Rothschild GmbH dated
March 2004 (hereinafter referred to as the "Information Memorandum"), has been
made available to the Purchaser prior to the negotiation and signing of this
sale and purchase agreement (hereinafter referred to as the "Agreement");
WHEREAS, the Managers of DH AG in consideration of the Purchaser agreeing to
enter into this Agreement have agreed to give various guaranties relating to the
Business on the terms set out herein;
NOW, THEREFORE, the Parties hereto agree as follows:
SECTION 1
CORPORATE OWNERSHIP / STRUCTURE OF THE ACQUISITION
1.1 Particulars of the Company
WP Domus GmbH (hereinafter referred to as the "Company") is a limited
liability company (Gesellschaft mit beschrankter Haftung) organized under
the laws of Germany with registered offices at Munich and registered with
the Commercial Register of the Lower Court (Amtsgericht) at Munich under
HRB 139980.
1.2 Share Capital of the Company
The registered share capital (Stammkapital) of the Company amounts to EUR
100,000 (in words: one hundred thousand Euros) (hereinafter referred to as
the "Registered Share Capital"). The Registered Share Capital is divided
into the following shares, all of which are held by the Seller (hereinafter
collectively referred to as the "Shares", each a "Share"):
(1) one Share with a par value (Nennbetrag) of EUR 25,000 (in words:
twenty five thousand Euros); and
(2) one Share with a par value of EUR 75,000 (in words: seventy five
thousand Euros).
1.3 Subsidiaries of the Company; Companies' Shares
The Company holds shares or interests, directly or indirectly, in the
following wholly-owned or majority-owned subsidiaries (hereinafter
collectively referred to as the "Subsidiaries" or the "Domus Companies",
and each of them as a "Subsidiary"):
1.3.1 Germany
(1) The Company holds 98.2 per cent of the share capital (Grundkapital) of
Domus Homecare AG, Munich, a German stock corporation
(Aktiengesellschaft) registered with the commercial register of the
Lower Court of Munich under HRB 128656 (hereinafter referred to as "DH
AG"). The entire share capital of DH AG amounts to EUR 7,800,000 and
is divided into 7,800,000 non par value registered shares (auf den
Namen lautende Stuckaktien). The remaining 1.8 per cent of the
registered share capital are held by Deutsche Bank Luxembourg S.A.
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(hereinafter referred to as the "Deutsche Bank Shares") and will be
sold and transferred to the Company, together with all rights
pertaining to the Deutsche Bank Shares, including, without limitation,
the rights to receive dividends which are not yet distributed, before
or at Closing, and the payment of the purchase price for such shares
which the Purchaser will make at Closing pursuant to Section 5.5.5
below shall be deemed to have been made by the Company on the
Effective Date (thereby reducing the Purchase Price due hereunder).
(2) DH AG holds 100 per cent of the registered share capital
(Stammkapital) of WP Gesundheits Verwaltungs GmbH, Munich, a German
limited liability company (Gesellschaft mit beschrankter Haftung)
registered with the commercial register of the Lower Court at Munich
under HRB 145182 (hereinafter referred to as "WPGV"). The entire
registered share capital of WPGV amounts to EUR 25,000 and is divided
into one share in the amount of EUR 25,000.
(3) DH AG holds a general partner's interest (Komplementaranteil) with a
participation in the capital (Kapitalanteil) in the amount of EUR
357,546.42 (99.9 per cent) in Ulrich Alber GmbH & Co. KG, Albstadt, a
German limited partnership (Kommanditgesellschaft) registered with the
commercial register of the Lower Court at Albstadt under HRA 1319. The
sole limited partner of Ulrich Alber GmbH & Co. KG is WPGV with a
limited partner's interest (Kommanditanteil) which participates in the
capital in an amount of EUR 357.90 (0.1 per cent). Such participation
is held by WPGV as trustee (Treuhander) of DH AG which is the
beneficial owner of such participation.
(4) DH AG holds a general partner's interest with a participation in the
capital in the amount of EUR 168,608.67 (99.9 per cent) in Aquatec
GmbH & Co. KG, Isny i.A., a German limited partnership registered with
the commercial register of the Lower Court at Ravensburg under HRA
967. The sole limited partner of Aquatec GmbH & Co. KG is WPGV with a
limited partner's interest which participates in the capital in an
amount of EUR 168.78 (0.1 per cent). Such participation is held by
WPGV as trustee of DH AG which is the beneficial owner of such
participation.
1.3.2 Sweden
(1) DH AG is the sole shareholder of Dolomite Holding AB, Gislaved,
Sweden, registered under no. 556551-6878. The registered share capital
of Dolomite Holding AB amounts to SEK 100,000 and is divided into
1,000 shares with a par value of SEK 100.
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(2) Dolomite Holding AB is the sole shareholder of Dolomite AB, Gislaved,
Sweden, registered under no. 556509-6673. The registered share capital
of Dolomite AB amounts to SEK 100,000 and is divided into 1,000 shares
with a par value of SEK 100.
1.3.3 France, Austria, Switzerland, Canada
(1) DH AG is the sole shareholder of Mobitec S.a.r.l., Venissieux, France,
registered with the Registre du Commerce des Societes de Lyons under
no. B 403457302. The registered share capital of Mobitec S.a.r.l.
amounts to EUR 274,450.00 and is divided into 8,000 shares of EUR
34.30 each.
(2) DH AG is the sole shareholder of Mobitec Mobilitatshilfen Ges.m.b.H.,
Tiefgraben, Austria, registered with the local court of Wels in the
Company Book (Firmenbuch) under no. B F N 53543 s. The registered
share capital of Mobitec Mobilitatshilfen Ges.m.b.H. amounts to EUR
72,672.83 and is divided into 1 share of EUR 72,672.83.
(3) DH AG holds 97 shares in the amount of CHF 1,000 each in the
registered share capital of Mobitec Rehab AG (formerly: Alber AG),
Wurenlos, Switzerland, registered with the commercial register of the
canton Aargau under CH-400.3.010.321-B. The entire share capital of
Mobitec Rehab AG amounts to CHF 100,000 and is divided into 100 shares
with a nominal amount of CHF 1,000 each. The remaining three shares in
Mobitec Rehab AG in which DH AG does not hold legal title are held for
reason of local corporate law only by Messrs. Peter Schulz, Giovanni
Borrelli and Christian Biedermann-Rok as trustees of DH AG. Each of
these three individuals holds one share in the nominal amount of CHF
1,000. Accordingly, DH AG is the beneficial owner of such shares as DH
AG may request at any time that these three individuals transfer their
shares to DH AG for a nominal consideration.
(4) Mobitec Rehab AG is the majority shareholder of Alber GmbH, Wurenlos,
Switzerland, registered with the commercial register of the canton
Aargau under CH-400.4.025.214-7. The entire share capital of Alber
GmbH amounts to CHF 20,000 and is divided into two shares, one share
with a nominal amount of CHF 19,000 held by Mobitec Rehab AG and one
share with a nominal amount of CHF 1,000 held by Christian
Biedermann-Rok for reasons of local corporate law only as trustee of
Mobitec Rehab AG. Accordingly, Mobitec Rehab AG is the beneficial
owner of such share as Mobitec Rehab AG may request at any time that
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Christian Biedermann-Rok transfers his share to Mobitec Rehab AG for a
nominal consideration.
(5) DH AG is the sole shareholder of Dolomite Homecare Products Inc.,
Markham, Canada, registered under no. 257756-9. The registered share
capital of Dolomite Homecare Products Inc. amounts to CAD 1,325,000
and is divided into 1,000 non par value shares.
The Company and its Subsidiaries are hereinafter collectively referred
to as the "Companies". The shares and interests in the Company and its
Subsidiaries are hereinafter also referred to as the "Companies'
Shares".
1.4 Profit and Loss Pooling Agreement
DH AG and WPGV entered into a profit and loss pooling agreement
(Ergebnisabfuhrungsvertrag) dated 28 August 2003. Apart from this
agreement, no further enterprise agreements within the meaning of Section
291 et seq. AktG (Unternehmensvertrage im Sinne der ss.ss. 291 ff. AktG)
exist to which the Seller or any of the Companies is a party.
1.5 Subordinated Loan Agreements
The Seller has extended to DH AG a subordinated loan on 23 December 2002 as
evidenced by a subordinated loan agreement between the Seller and DH AG
dated 10 February 2004. Each of Seller's two shareholders has extended to
DH AG a subordinated loan pursuant to amended and restated subordinated
loan agreements between each of Seller's shareholders and DH AG originally
dated 17 December 1997, 26 March 1998 and 25 August 1998 (as amended and/or
restated on 16 April 1998, 18 December 1998, 29 March 1999, 19 May 1999 and
19 December 2003). The three subordinated loans referred to in the two
preceding sentences are hereinafter referred to as the "Subordinated Loan
Agreements". Other than the aforementioned arrangements, there are no loans
or borrowings between the Seller and its Affiliates (other than the
Companies) on the one part and the Companies on the other part.
1.6 Signing Date; Effective Date
For the purposes of this Agreement the "Signing Date" shall mean the date
this Agreement is signed on (hereinafter referred to as the "Signing
Date"), and the "Effective Date" shall mean 24:00 hours (German time) of
the last day of the calendar month immediately preceding the calendar month
in which the Closing occurs (hereinafter referred to as the "Effective
Date").
SECTION 2
SALE AND PURCHASE OF THE SHARES; RIGHTS TO PROFITS
2.1 Sale and Purchase of the Shares; Rights to Profits
The Seller hereby sells, and the Purchaser hereby purchases, upon the terms
and conditions of this Agreement, the Shares with commercial effect (mit
wirtschaftlicher Wirkung) as of the Effective Date. The sale and purchase
of the Shares hereunder shall include any and all rights pertaining to the
Shares, including, without limitation, the rights to receive dividends that
are not yet distributed. For the avoidance of doubt it is agreed that all
profits and losses of the Companies for the previous fiscal years and for
the current fiscal year up to and including the Effective Date will be
taken into account for the calculation of the Purchase Price in accordance
with Section 3.1.
2.2 Separate Transfer Document
The Seller and the Purchaser agree that the Shares sold and purchased
hereunder are not transferred by virtue of this Agreement but will be
transferred with effect "in rem" (mit dinglicher Wirkung) at the Closing by
means of a separate notarial transfer deed substantially in the form as
attached hereto as Annex 2.2.
2.3 Purchaser's Nominee
The Purchaser shall be entitled to nominate one or more of its Affiliates
(hereinafter individually referred to as a "Nominee") to acquire title to
the Shares or any part thereof. Such nomination shall be made in writing to
the Seller at least five Business Days prior to the Closing (as defined
below). Upon such nomination, each Nominee shall assume all rights and
obligations, and shall otherwise assume the position, of the Purchaser
hereunder. Purchaser hereby guarantees by way of an independent promise of
guaranty pursuant to Section 311 para. 1 BGB the proper fulfillment of all
of the obligations of each of the Nominees pursuant to this Agreement, in
particular, but not limited to, the payment of the Purchase Price together
with interest on the Closing Date.
SECTION 3
PURCHASE PRICE; PRELIMINARY PURCHASE PRICE; CONDITIONS OF PAYMENT
3.1 Purchase Price
The Purchase Price to be paid by the Purchaser for the Shares as sold and
purchased hereunder shall be the aggregate of:
3.1.1A fixed amount of EUR 190,000,000.00 (in words: one hundred ninety million
Euros) (hereinafter referred to as the "Fixed Purchase Price Component");
minus
3.1.2 the consolidated nominal amount of
(1) interest or non-interest bearing debt obligations of the Companies to
banks, financial or other similar institutions as well as all amounts
owed by any of the Companies to the Seller or its shareholders (or any
other Affiliate of the Seller) pursuant to the Subordinated Loan
Agreements (to the extent not waived or deemed to have been waived
before or at the Effective Date) or otherwise;
(2) any dividends declared but unpaid (except for dividends payable to any
of the Companies);
(3) all obligations for deferred purchase price payments relating to the
acquisition of fixed assets (Anlagevermogen);
(4) the net present value as of the Effective Date of all obligations of
the Companies as lessee under leases that have been or, in accordance
with applicable generally accepted accounting principles are required
to be recorded as capitalized leases, i.e. as debt;
(5) the amount of the net present value of all pension liabilities of the
Companies calculated under U.S. generally accepted accounting
principles (SFAS 87), less the fair value of pension plan assets;
(6) all Tax liabilities shown or provided by way of an accrual
(Ruckstellung) in the Effective Date Accounts (taking into account the
tax effects of the payments deemed to be made on the Effective Date
under Section 5.5.2 (settlement payments under ESOP II and III)); such
Tax accrual shall be determined based on the trial balances (Bilanz
und Gewinn- und Verlustrechnung in Kontenform) and the monthly
management reporting for each of the Companies for the period of 1
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January 2004 up to and including the Effective Date under the
generally accepted accounting principles of the respective countries
in which the Companies are located, as if it would have been for a
fiscal year end closing; and
(7) all interest accrued but unpaid and charges due as of the Effective
Date and all prepayment penalties or other penalties, in relation to
any of the above and all other costs, fees and expenses (excluding for
the avoidance of doubt interest accrued in the period between the
Effective Date and the Closing Date and cash collateral or bank
guaranty as set forth in the assignment and assumption agreement
mentioned in Section 5.5.3) to be paid or taken into account for the
purchase price of the loan under the Facility Agreement payable to
Deutsche Bank and other banks under the assignment and assumption
agreement mentioned in Section 5.5.3 (such payments deemed to be due
on the Effective Date),
(hereinafter referred to as "Financial Debt"), each as existing or deemed
to be existing as at the Effective Date;
plus
3.1.3the consolidated amount of cash and cash equivalents within the meaning of
Section 266 para 2 (B) (IV) HGB as well as the consolidated amount of
securities (sonstige Wertpapiere) within the meaning of Section 266 para. 2
lit. (B) (III) (3) HGB (hereinafter referred to as "Cash"), each as
existing as at the Effective Date, including for the avoidance of doubt
payments made by direct debits not yet credited to one of the Companies'
bank accounts.
plus
3.1.4 the amount, if any, by which the balance of
(1) the consolidated amount of the inventory within the meaning of Section
266 para 2 (B) (I) HGB and the accounts receivable within the meaning
of Section 266 para 2 (B) (II) (1) HGB (Forderungen aus Lieferungen
und Leistungen), less
(2) the consolidated amount of the trade accounts payable and the
prepayments received within the meaning of Section 266 para 3 (C) (3)
and (4) HGB (erhaltene Anzahlungen auf Bestellungen und
Verbindlichkeiten aus Lieferungen und Leistungen) as well as vouchers
payable liabilities for goods and/or services received for which an
invoice has not yet been received (ausstehende Rechnungen und/oder
Fremd-leistungen)
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for the Companies (hereinafter referred to as "Working Capital"), each
existing as per the Effective Date, exceeds EUR 9,900,000 (in words:
nine million nine hundred thousand Euros);
minus
3.1.5the amount, if any, by which the Working Capital (for the avoidance of
doubt, including any Working Capital below zero) existing as per the
Effective Date, falls short of EUR 8,900,000 (in words: eight million nine
hundred thousand Euros);
(hereinafter referred to as the "Purchase Price").
3.2 Preliminary Purchase Price
As of the date of this Agreement and based on the financial
information provided by the Seller to the Purchaser, the Parties have
estimated and agreed in the form of the Effective Date Statements (as
defined below) the Financial Debt, the Cash and any adjustment
resulting from a Working Capital excess or shortfall as shown in each
case in the estimated Effective Date Statements attached hereto as
Annex 3.2 (the "Estimated Effective Date Statements"). Based on the
Fixed Purchase Price Component and the Financial Debt, the Cash and
any adjustment resulting from the Working Capital excess or shortfall
as shown in the Estimated Effective Date Statements, the Parties have
agreed on a preliminary purchase price of EUR 145,637,605 (in words:
hundred forty five million six hundred thirty seven thousand six
hundred and five Euros) (heretofore and hereinafter referred to as the
"Preliminary Purchase Price"). On the Closing Date, the Preliminary
Purchase Price becomes due and payable and the Purchaser shall pay the
Preliminary Purchase Price to the Seller into the Seller's Account (as
defined in Section 3.4.1 below) by way of wire transfer - to be
credited on the same day - free of any costs and fees.
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3.3 Purchase Price Adjustment
If on the basis of the Effective Date Statements (as defined in and finally
agreed or determined in accordance with Section 4 below), the Purchase
Price is higher than the Preliminary Purchase Price, the Purchaser shall
pay to the Seller an amount equal to the amount by which the Purchase Price
exceeds the Preliminary Purchase Price. If, on the basis of the Effective
Date Statements, the Preliminary Purchase Price is higher than the Purchase
Price, the Seller shall pay to the Purchaser an amount equal to the amount
by which the Preliminary Purchase Price exceeds the Purchase Price. Any
such amount to be paid by either Purchaser or the Seller (hereinafter
referred to as the "Purchase Price Adjustment") shall be paid as follows:
3.3.1Any Purchase Price Adjustment owed by the Purchaser shall be paid by the
Purchaser by way of wire transfer - to be credited on the same day - free
of any costs and fees ten Business Days after the Effective Date Statements
have become final and binding upon the Parties in accordance with Section 4
below to the Seller's Account.
3.3.2Any Purchase Price Adjustment owed by the Seller shall be paid by the
Seller by way of wire transfer - to be credited on the same day - free of
any costs and fees ten Business Days after the Effective Date Statements
have become final and binding upon the Parties in accordance with Section 4
below to the Purchaser's Account (as defined in Section 3.4.2 below).
3.4 Seller's Account; Purchaser's Account
3.4.1All payments owed by the Purchaser to the Seller under this Agreement
shall be paid by the Purchaser by irrevocable wire transfer to the Seller's
bank account held by Warburg, Pincus Ventures International, LP and kept
with JP Morgan Chase New York, SWIFT code CHASUS 33, account number
323063098 for further credit to WP Domus LLC (hereinafter referred to as
the "Seller's Account") or any other account to be nominated by the Seller
to the Purchaser in writing at least five Business Days prior to the
Closing Date.
3.4.2All payments owed by the Seller to the Purchaser under this Agreement
shall be paid by the Seller by irrevocable wire transfer to the Purchaser's
bank account kept with Bank One, NA, London, SWIFT code FNBC GB 2X, , sort
code 40-50-20 account number 7170394 (hereinafter referred to as the
"Purchaser's Account") or any other account to be nominated by the
Purchaser to the Seller in writing at least five Business Days prior to the
Closing Date.
3.5 Interest
The Purchase Price and any Purchase Price Adjustment shall bear interest at
the rate of 300 basis points over the one month rate Euribor p.a. as of the
next Business Day after the Effective Date, commencing as of the Effective
Date and (i) through the Closing Date in relation to the Purchase Price and
(ii) through the date of payment in relation to any Purchase Price
Adjustment. Interest shall be calculated on the basis of actual days
elapsed and a calendar year with 360 days. If any Party is in default
(Verzug) of payment with regard to the Purchase Price or the Purchase Price
Adjustment, the Purchase Price or the Purchase Price Adjustment shall bear
interest at the rate of 700 basis points over the one month rate Euribor
p.a. as for the time such Party is in default.
3.6 No Right to Set-off
Any right of the Purchaser or the Seller to set-off and/or to withhold any
payments due under this Agreement is hereby expressly waived and excluded
except for claims which are undisputed or res iudicatae.
SECTION 4
EFFECTIVE DATE STATEMENTS
4.1 Preparation of the Effective Date Statements
The Financial Debt, the Cash and the Working Capital of the Companies, each
existing as per the Effective Date, as well as any Purchase Price
Adjustment resulting therefrom, shall be determined on the basis of
consolidated effective date financial statements of the Company (the
"Effective Date Accounts") which are established for the purpose of
deriving the following statements therefrom:
4.1.1"Cash Statement" shall mean a statement showing only the Cash (as defined
herein and to be calculated in accordance with Section 3.1.3) of the
Companies as of the Effective Date;
4.1.2"Debt Statement" shall mean a statement showing only the Financial Debt
(as defined herein and to be calculated in accordance with Section 3.1.2)
of the Companies as of the Effective Date;
4.1.3"Working Capital Statement" shall mean a statement showing only the
Working Capital (as defined herein and to be calculated in accordance with
Sections 3.1.4 and 3.1.5) of the Companies as of the Effective Date;
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The Effective Date Accounts and the Cash Statement, the Debt Statement and
the Working Capital Statement derived therefrom are heretofore and
hereinafter collectively referred to as the "Effective Date Statements".
The draft of the Effective Date Statements shall be prepared by the Company
in cooperation with the Seller and examined by Ernst & Young AG
Wirtschaftsprufungsgesellschaft, Munich (hereinafter referred to as the
"Seller's Auditor") in accordance with German GAAP, subject to the
accounting principles used in the preparation of the Consolidated Financial
Statements (as defined in Section 6.2.2 (1) below) und such principles
consistently applied with past practice (regardless whether or not these
principles are set out in any accounting manuals of the Companies) and
subject to utilizing and continuing the same capitalization and election
rights, valuation and consolidation principles as used in preparation of
the Consolidated Financial Statements; provided, however, that the net
present value of pension liabilities and the fair value of the pension plan
assets (Section 3.1.2 (5)) shall be calculated in accordance with US-GAAP.
The Effective Date Statements shall be prepared as of the Effective Date.
4.2 Review and Delivery of Effective Date Statements to the Purchaser
The Seller shall until the Closing Date and the Purchaser shall after the
Closing Date, instruct the management of each of the Companies to
effectively assist Seller's Auditor in the review of the Effective Date
Statements, in particular by providing all information and documentation
requested by the Seller. The Effective Date Statements prepared by the
Company in cooperation with the Seller and reviewed by the Seller's Auditor
shall be delivered by the Seller to Ernst & Young AG,
Wirtschaftsprufungsgesellschaft, Frankfurt am Main or Dusseldorf (as
nominated by the Purchaser to the Seller no later than 35 days after the
Closing Date) (hereinafter referred to as the "Purchaser's Auditor") no
later than forty five days after the Closing Date. The Purchaser's Auditor
shall receive all necessary assistance and shall be given access to the
management of the Companies, and to all relevant documentation necessary
for reviewing the Effective Date Statements, however, excluding the working
papers of the Seller's Auditor.
4.3 Revised Effective Date Statements
The determination of the Financial Debt, the Cash and the Working Capital
of the Companies shall be based on the Effective Date Statements to the
extent that the Purchaser does not within forty five days after the receipt
of the Effective Date Statements provide the Seller with a written report
asserting that the Effective Date Statements received from the Seller do
not meet the provisions of this Agreement by way of stating specific
objections to that effect. In such event revised Effective Date Statements
shall be prepared by the Purchaser's Auditor and submitted to the Seller
within the very forty five days' period mentioned before which shall take
into account the changes that are necessary in the Purchaser's Auditor's
view (hereinafter referred to as the "Revised Effective Date Statements").
Seller's Auditor shall receive all necessary assistance and shall be given
access to the management of the Companies and to all documentation relevant
for reviewing the Revised Effective Date Statements, however, excluding the
working papers of the Purchaser's Auditor. If no written objections are
raised by the Seller within forty five days following the delivery of the
Revised Effective Date Statements by the Purchaser's Auditor, then the
Revised Effective Date Statements shall be final and binding on the Parties
and the determination of the Financial Debt, the Cash and the Working
Capital of the Companies, each existing as per the Effective Date, as well
as any Purchase Price Adjustment resulting therefrom, shall be based on the
Revised Effective Date Statements.
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4.4 Arbitration Proceedings
If, after the Seller having raised in time and due form its objections
against the Revised Effective Date Statements (hereinafter referred to as
the "Objections"), the Seller and the Purchaser cannot agree on the changes
to the Revised Effective Date Statements within thirty days following the
delivery of the Objections, each of Seller and Purchaser shall be entitled
to request the "Institut der Wirtschaftsprufer in Deutschland e.V.",
Dusseldorf, to appoint an auditor to act as an arbitrator
(Schiedsgutachter) (hereinafter referred to as the "Neutral Auditor") to
determine the correct amount of the Financial Debt, the Cash and the
Working Capital as at the Effective Date, if and to the extent such
positions are in dispute between the Seller and the Purchaser. The Neutral
Auditor shall decide on the issues in dispute within thirty Business Days
after being appointed by either Seller or Purchaser in accordance with the
principles set out in Section 4.1 above. The Neutral Auditor shall give the
Seller and the Purchaser adequate opportunity to present their views in
writing and at a hearing or hearings to be held in the presence of the
Seller and the Purchaser and their advisors. The Neutral Auditor shall give
reasons for its decision and on all issues, which are in dispute between
the Seller and the Purchaser. The Effective Date Statements as determined
by the Neutral Auditor shall be final and binding on the Parties subject to
Section 319 BGB.
4.5 Costs of Examination by Auditors
All costs arising out of or in connection with the examination by the
Seller's Auditor shall be borne by the Seller. All costs arising out of or
in connection with the examination by the Purchaser's Auditor shall be
borne by the Purchaser alone. In case of arbitration proceedings referred
to in Section 4.4 the Neutral Auditor may decide in its equitable
discretion upon the allocation of its costs and expenses, taking into
account the degree of success and defeat of each Party. Each Party shall
bear its own costs and the costs of its advisors and counsel.
SECTION 5
CLOSING; CLOSING CONDITION
5.1 Closing Conditions; Closing Date
The consummation of the transactions contemplated by this Agreement
(hereinafter referred to as "Closing") shall take place at the offices of
Freshfields Bruckhaus Deringer in Frankfurt am Main at 10:00 hours CET,
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five Business Days after the date on which the last of the Closing
Conditions set forth in Section 5.2 has been fulfilled, or at any other
time or place which the Seller and the Purchaser will mutually agree upon
(hereinafter referred to as "Closing Date").
5.2 Closing Conditions
The obligations of the Seller and the Purchaser to carry out the Closing
shall be subject to the satisfaction of the following conditions to Closing
(heretofore and hereinafter collectively referred to as the "Closing
Conditions", each a "Closing Condition"):
5.2.1The German Federal Cartel Office (Bundeskartellamt) shall have cleared the
transaction. This condition shall be deemed satisfied if (i) the Purchaser
and/or the Seller has received a written notice from the German Federal
Cartel Office that it will not prohibit the acquisition, or (ii) the German
Federal Cartel Office fails to notify the Purchaser and/or the Seller
within one month after the pre-merger filing in accordance with Section 40
para. 1 clause 1 of the German Act Against Restraints on Competition (GWB)
that it has commenced a formal investigation of the proposed acquisition,
or (iii) the German Federal Cartel Office fails to issue an order in
accordance with Section 40 para. 2 clause 1 GWB to the Purchaser and/or the
Seller within four months after receipt by the Federal Cartel Office of the
pre-merger filing, and no extension of the four-month period has been
agreed with the Federal Cartel Office. Neither the Purchaser nor the Seller
shall grant its consent and approval to any extension of the waiting
periods without the prior written consent of the respective other Party
involved.
5.2.2The Norwegian Competition Authority shall have cleared the transaction.
This condition shall be deemed satisfied if: (i) the Purchaser and/or the
Seller has received a written notice from the Norwegian Competition
Authority that it will not intervene in the transaction, or (ii) the
Norwegian Competition Authority fails to order, the Purchaser and/or the
Seller within 15 working days after the receipt of the standardized
notification, the submission of a complete notification in accordance with
Section 18 para. 3 of the Norwegian Competition Act, or (iii) the Norwegian
Competition Authority fails to notify the Purchaser and/or the Seller
within 25 working days after the receipt of a complete notification that it
might intervene against the transaction in accordance with Section 20 para.
2 of the Norwegian Competition Act.
5.2.3There shall not have occurred during a period of five weeks after the
Signing Date any circumstances, facts or matters after the Signing Date
which have or which are likely to have a material adverse effect on the
business, operations, properties, assets, financial condition or results,
in each case of the Business taken as a whole, excluding, however, any such
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circumstances, facts or matters which affect the markets generally or the
markets in which the Companies operate (for the avoidance of doubt
excluding in particular any changes to the available reimbursement
regulations or reimbursement levels) (hereinafter referred to as a
"Material Adverse Change").
5.3 Obligations with Respect to the Closing Conditions
The Seller and the Purchaser undertake to use their best efforts and to
cause the Closing Conditions to be satisfied as soon as possible. With
regard to the merger control clearance, the obligations of the Seller and
the Purchaser are more specifically set out in Section 10.1 below. The
Seller and the Purchaser shall inform each other in writing without undue
delay (unverzuglich) as soon as the Closing Conditions have been satisfied.
5.4 Consequences of Non-Satisfaction of the Closing Conditions
If the Closing has not occurred within four months plus five Business Days
after the Signing Date, the Seller or the Purchaser may rescind this
Agreement (Rucktritt vom Vertrag) by written notice to the other Parties
with a copy to the acting notary. Any rescission under this Section 5.4
shall be valid only if the recipient Party has received such written notice
of rescission prior to the date on which the relevant Closing Conditions
has been satisfied or waived. In case of (i) a rescission of the Agreement
under this Section 5.4 or (ii) if it becomes clear by objective measures
(objektive Massstabe) otherwise that the Closing will not occur and, in
each case, provided that the Closing Condition in Section 5.2.3 has been
satisfied (i.e. there has not occurred a Material Adverse Change in the
period indicated in Section 5.2.3), the Purchaser shall pay to the Seller
as full and final compensation a lump sum of EUR 6,000,000 (in words: six
million Euro) to compensate the Seller for any costs and expenses incurred
in connection with the transactions contemplated under this Agreement and
any loss of value to the Business. For the avoidance of doubt, if the
Seller were later to sell the Business for a consideration below the
consideration agreed between the Seller and the Purchaser in this
Agreement, the Seller shall have no right to claim such difference from the
Purchaser.
If this Agreement is rescinded in accordance with this Section, this
Agreement shall cease to have force and effect (without prejudice to claims
of any Party for breach of any of the terms hereof having occurred prior to
rescission) and shall not create any binding obligation between the Parties
except that this Section 5.4 with respect to the lump sum payment, Sections
11 (Confidentiality), 13 (Purchaser's Guarantor), 14 (Costs and Taxes), 15
(Notices) and 17 (Miscellaneous) shall remain in force and effect.
5.5 Actions on the Closing Date
At the Closing, the Parties shall simultaneously (Zug um Zug) take the
following actions:
5.5.1 The Seller shall deliver to the Purchaser
(a) a duly executed resignation letter (waiving all claims against the
Company), effective at or prior to the Closing Date, by Mr. Timothy
Curt, the sole managing director of the Company;
(b) duly executed resignation letters (waiving all claims against DH AG),
effective at or prior to the Closing Date, of all members of DH AG's
supervisory board (Aufsichtsrat) who are listed in Annex 5.5.1 (b);
(c) trust agreements or written confirmations from the legal holders of
the shares held as trustees of DH AG and Mobitec Rehab AG as referred
to in Sections 1.3.3 (3) and (4), confirming that the trustor may
request at any time that the trustees transfer their shares to the
trustor for a nominal consideration;
(d) the original of a shareholder's resolution of the Company appointing
such person or persons as new managing director(s) of the Company,
effective as of the Closing Date, as shall be notified by the
Purchaser to the Seller not later than five Business Days prior to the
Closing Date;
(e) a guarantee letter by Warburg Pincus Ventures L.P. and by Warburg
Pincus Ventures International L.P. by which the two funds guarantee
the proper fulfillment of all obligations of the Seller under this
Agreement, substantially in the form as attached hereto as Annex 5.5.1
(e);
(f) evidence that Deutsche Bank Luxembourg S.A. has transferred to the
Company with effect no later than the Closing Date the Deutsche Bank
Shares;
(g) a written waiver statement of the Banks (as defined in the draft
agreement on the assignment and assumption of claims and obligations
and the release of security attached hereto as Annex 5.5.3) with
respect to their pledge over the Shares and the Companies' Shares and
a release statement in respect of any other collateral, including land
charges, substantially in the form set forth in Annex 5.5.3;
(h) a copy of a waiver agreement relating to the Subordinated Loan
Agreements, executed and effected before the Effective Date subject
only to the condition subsequent (auflosende Bedingung) that Closing
will not occur.
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5.5.2The Seller shall deliver written waiver statements of Messrs. Peter Schulz,
Wilhelm Kaiser, Michael Grindborn, Lennart Magnusson, Marika Johansson,
Ralf Ledda, Bernd Engels, Thomas Birmanns, Marc Binder, Cornelia
Wetschorek, Klaus Schlebes and Jeff Smith by which they declare their
waiver of any and all rights pursuant to any employee stock options issued
to them substantially in the form of Annex 5.5.2; any payments to be made
in consideration of such waivers shall be deemed to have been made on the
Effective Date (thereby reducing the Purchase Price due hereunder).
5.5.3The Purchaser or one or more Affiliates of the Purchaser shall have
acquired from Deutsche Bank AG, Munich, and certain other banks all their
rights and obligations (by way of assignment and assumption -
Vertragsubernahme) under a certain EUR 83 million Term Loan and EUR 10
million Revolving Credit Facility Agreement dated 20 December 2002 between,
inter alia, DH AG, the Facility Agent and Deutsche Bank AG as Arranger (the
"Facility Agreement") pursuant to an assignment and assumption agreement
substantially in the form attached hereto as Annex 5.5.3.
5.5.4The Purchaser on behalf of and for the account of the Company shall pay to
Deutsche Bank Luxembourg S.A. the purchase price for the Deutsche Bank
Shares in an amount evidenced by the Seller to the Purchaser in writing no
later than three Business Days before the Closing Date.
5.5.5The Purchaser shall pay the Preliminary Purchase Price in accordance with
Sections 3.2 and 3.4.
5.5.6The Seller shall transfer the Shares to the Purchaser by way of a
separate notarial transfer deed as set out in Section 2.2.
SECTION 6
SELLER'S AND MANAGEMENT'S GUARANTIES
6.1 Form and Scope of Seller's Guaranties
The Seller hereby guarantees to the Purchaser by way of an independent
promise of guaranty pursuant to Section 311 para. 1 of the German Civil
Code (selbstandiges Garantieversprechen im Sinne des ss. 311 Abs. 1 BGB)
within the scope and subject to the requirements and limitations provided
in Section 7 hereof or otherwise in this Agreement that the statements set
forth in Section 6.2 are complete and correct as of the Signing Date and,
unless explicitly provided otherwise in this Section 6, on the Closing
Date. The Seller and the Purchaser agree and explicitly confirm that the
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guaranties in this Section 6 are not granted, and shall not be qualified
and construed as, quality guaranties concerning the object of the purchase
(Garantien fur die Beschaffenheit der Sache) within the meaning of Sections
443, 444 BGB, respectively, that Section 444 BGB shall not and does not
apply to the guaranties contained in this Section 6.
6.2 Seller's Guaranties
6.2.1 Corporate Issues and Authority of the Seller
(1) The statements in Section 1 hereof regarding the Companies are
complete and correct. The Companies have been duly established and are
validly existing under the laws of their respective jurisdiction.
Annex 6.2.1 (1) contains a true and correct list of the articles of
association (or equivalent documents) of the Companies. As from its
acquisition by the Seller as a shelf company, the sole activities of
the Company were to serve as holding company for the Business.
(2) The Companies' Shares have been validly issued, are fully paid in,
either in cash or in kind, are non-assessable (unterliegen keiner
Nachschusspflicht), have not been repaid and are free from any
encumbrances or other rights of Third Parties (except for the pledge
of certain Companies' Shares to the financing banks under the Facility
Agreement, which is to be released at the latest as of Closing), and
there are no pre-emptive rights, options, voting arrangements or other
direct or indirect rights of Third Parties to acquire any of the
Companies' Shares, in each case except under statutory law or under
the articles of association (or equivalent documents) listed in Annex
6.2.1 (1). Persons or companies other than the Seller and the
Companies do not hold any direct interest of any type in the Companies
- except for (i) the 140,400 shares in DH AG held by Deutsche Bank
Luxembourg S.A. which will be transferred to the Company at latest at
the Closing Date, (ii) the share pledges mentioned in the preceding
sentence and (iii) the shares held by the individuals as mentioned in
Sections 1.3.3 (3) and (4) - and there are no claims for the transfer
or creation of such interest. Except as disclosed in Annex 6.2.1 (2),
there are no silent partnership agreements with regard to any of the
Companies or other rights of third parties to participate in the
Companies' revenues, profits, assets or equity (or the value thereof).
(3) As of the Signing Date, no bankruptcy, insolvency or judicial
composition proceedings concerning any of the Companies have been
applied for and no circumstances exist which would require an
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application for any bankruptcy, insolvency or judicial composition
proceedings nor do any circumstances exist according to any applicable
bankruptcy or insolvency laws which would justify the avoidance of
this Agreement.
(4) The Seller is entitled to freely dispose of the Shares without such a
disposal infringing any rights of a Third Party.
(5) This Agreement constitutes a valid and binding obligation of the
Seller, enforceable under German law against the Seller in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar
laws relating to or affecting the rights of creditors generally and
except that the remedy of specific performance and injunctive relief
and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceedings may be brought.
(6) The execution and performance by the Seller of this Agreement and the
consummation of the transaction contemplated hereby are within the
limited liability company powers of the Seller and have been duly
authorized by all necessary corporate action on part of the Seller.
(7) The execution and performance by the Seller of this Agreement and the
consummation of the transaction contemplated herein do not (i) violate
the limited liability company agreement of the Seller or (ii) violate
any applicable law, regulation, judgment, injunction or order binding
on the Seller, and (iii) there is no action, law suit, investigation
or proceeding pending against, or to the Seller's Knowledge,
threatened against, the Seller before any court, arbitration panel or
governmental authority which in any manner challenges or seeks to
prevent, alter or delay the transaction contemplated herein.
6.2.2 Consolidated Financial Statements; Financial Statements
(1) The Management has delivered to the Purchaser the audited consolidated
financial statements of DH AG as of 31 December 2003 (including the
notes and the audit report thereto) (the "Consolidated Financial
Statements") as well as the audited financial statements as of 31
December 2003 of the Company (including the notes and the audit report
thereto) (the "Financial Statements"). Except as disclosed in Annex
6.2.2 (1), the Consolidated Financial Statements and the Financial
Statements have been prepared in accordance with German GAAP and
German rules of orderly book-keeping (Grundsatze ordnungsgemasser
Buchfuhrung) on a consistent basis in accordance with the Accounting
Principles and present a true and fair view, within the meaning of
Section 264 para. 2 HGB, of the assets and liabilities
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(Vermogenslage), financial condition (Finanzlage) and results of
operation (Ertragslage) of the Companies for the period referenced
therein.
(2) To the Seller's Knowledge, the Management Accounts, having regard to
the purpose for which such Management Accounts have been prepared and
subject to such limitations as are inherent in the preparation of
management accounts, have been prepared in accordance with German GAAP
as used for the preparation of the Consolidated Financial Statements
and on a consistent basis therewith and correctly state in all
material respects the results, assets and liabilities for the period 1
January 2004 through 30 June 2004 on a cumulative basis.
(3) There are no outstanding retainers, loyalty bonuses and other
incentives or payment promises made or to be paid to employees of the
Companies in connection with the sale of the Business.
6.2.3 Other
(1) To the Seller's Knowledge, the statements contained in the
Management's Guaranties set forth below are true and correct.
(2) The statements in Section 6.4.3, 6.4.5, 6.4.9 and 6.4.10 (1), (2),
(3), (4), (5), (6), (9), (11), (12) if applied to the Company, are
correct. The Company does not own Real Property and, apart from its
Managing Director, does not have any employees.
6.3 Form and Scope of Management's Guaranties
The Management hereby guarantees to the Purchaser, each Manager
individually, by way of an independent promise of guaranty pursuant to
Section 311 para. 1 of the German Civil Code (selbstandiges
Garantieversprechen im Sinne des ss. 311 Abs. 1 BGB) within the scope and
subject to the requirements and limitations provided in Section 7 hereof or
otherwise in this Agreement that the statements set forth in Section 6.4
are complete and correct as of the Signing Date and, unless explicitly
provided otherwise in this Section 6, on the Closing Date. The Management
and the Purchaser agree and explicitly confirm that the guaranties in this
Section 6 are not granted, and shall not be qualified and construed as,
quality guaranties concerning the object of the purchase (Garantien fur die
Beschaffenheit der Sache) within the meaning of Sections 443, 444 BGB,
respectively, that Section 444 BGB shall not and does not apply to the
guaranties contained in this Section 6.
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6.4 Management's Guaranties
6.4.1 Consolidated Financial Statements; Financial Statements
(1) Except as disclosed in Annex 6.4.1 (1), the statements relating to the
Consolidated Financial Statements contained in the Seller's Guaranty
under Section 6.2.2 (1) and the statements contained in the Seller's
Guaranty under Section 6.2.2 (3) are true and correct with respect to
the Domus Companies. The Management Accounts, having regard to the
purpose for which such Management Accounts have been prepared and
subject to such limitations as are inherent in the preparation of
management accounts, have been prepared in accordance with German GAAP
as used for the preparation of the Consolidated Financial Statements
and on a consistent basis therewith and correctly state in all
material respects the results, assets and liabilities for the period 1
January 2004 through 30 June 2004 on a cumulative basis.
(2) Except as disclosed in Annex 6.4.1 (1) and except for the registers,
books and other documentation relating to group internal transfer
pricing (Konzernverrechnungspreise) which may not be compliant with
Section 90 German Fiscal Code (Abgabenordnung) and the corresponding
ordinance (Gewinnabgrenzungsaufzeichnungsverordnung), the statutory
registers and account books of the Domus Companies have been kept
up-to-date and, if required, have been filed, in accordance with
applicable legal and regulatory requirements. No notice or allegation
that any such document is incorrect or should be rectified has been
received. All material formalities, declarations and other obligations
relating to the operation and/or the assets of the Domus Companies
have been duly carried out and made on the due date.
6.4.2 Real Property
(1) Annex 6.4.2 (1) contains a complete and correct list of real property
owned by the Domus Companies and rights equivalent to real property
(grundstucksgleiche Rechte), including, but not limited to, hereditary
building rights (hereinafter referred to as the "Owned Real
Property"). Annex 6.4.2 (1) further contains a set of copies of recent
excerpts of the land registers (Grundbucher) and similar registers for
all Owned Real Property, evidencing all land charges
(Grundpfandrechte) or other encumbrances under civil law which require
registration in such register (hereinafter each referred to as an
"Encumbrance"). With respect to the Swedish Owned Real Property the
Encumbrances are properly reflected in the competent Swedish Land
Register as of June 30, 2003. None of the Encumbrances serve as
security for obligations other than obligations of any of the
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Companies. No application for the registration of an Encumbrance in a
land register or similar register has been filed which is not yet
registered. The Domus Companies have not taken and will not take, nor
has any Third Party a right to cause the Domus Companies to take, any
steps to dispose of the Owned Real Property.
(2) Annex 6.4.2 (2) contains a complete and correct list of real property
leased or rented by the Domus Companies as of the Signing Date,
whether as lessee or as lessor with the respective lessee's payment
obligations under the lease agreements exceeding a net value of EUR
20,000 p.a. (hereinafter referred to as the "Leased Real Property",
together with the Owned Real Property the "Real Property").
(3) Any other real property used by the Domus Companies as of the Signing
Date but not listed in Annex 6.4.2 (1) and Annex 6.4.2 (2) is not
material for the operation of the Business.
(4) Except as set out in Annex 6.4.2 (4), there is no pending, nor
threatened in writing, expropriation or similar proceeding with
respect to the Owned Real Property and, to the Management's Knowledge,
there are no circumstances affecting any such real property pending,
or threatened, which might materially interfere with any present or
intended use of any such Real Property.
(5) To the Management's Knowledge, none of the structures on any Real
Property encroaches upon real property of another Person, and no
structure of any other Person substantially encroaches upon any of
such Real Property. No material capital expenditure relating to the
Real Property has been deferred beyond reasonable entrepreneurial
standards.
6.4.3 Material Assets
Each of the Domus Companies owns, or holds lawful possession of, all
material rights and assets which are necessary to carry on the
Business in substantially the same fashion and manner as it has been
carried on in the twelve months prior to the Signing Date (herein
collectively referred to as "Material Assets"). The Material Assets,
including for the avoidance of doubt any buildings and construction on
the Real Property, are in a reasonably usable condition
(gebrauchsfahiger Zustand) and in reasonable state of repair in order
to carry on the Business substantially in the same fashion as
conducted as of the Signing Date and the Closing Date; for the
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avoidance of doubt, the wording "carry on" shall not imply a guaranty
in relation to the condition of the Material Assets at any time after
the Closing Date. Except as disclosed in Annex 6.4.3, the Material
Assets owned by the Domus Companies are not charged with any right of
third parties or otherwise encumbered including the transfer for
security purposes (Sicherungsubereignungen) except for (i) customary
rights of retention of title (handelsubliche Eigentumsvorbehalte)
imposed by suppliers to the Domus Companies, liens, pledges or other
security rights in favor of suppliers, mechanics, workers, carriers
and the like liabilities incurred by the Domus Companies in the
ordinary course of business, (ii) statutory security rights in favor
of tax authorities or other governmental entities, (iii) security
rights in favor of financing institutions to the extent securing
Financial Debt.
6.4.4 Intellectual Property Rights / IT
(1) The Domus Companies own, have applied for, or lawfully use all
patents, design patents, trademarks, trade names, utility models, copy
rights, internet domain names and respective applications and all
other intellectual property rights which are material to carry out
their business as conducted on the date hereof (hereinafter referred
to as the "Intellectual Property Rights"). Annex 6.4.4 (1) contains a
complete and correct list of the registered Intellectual Property
Rights.
(2) Except as set out in Annex 6.4.4 (1), the Intellectual Property Rights
are, as of the Signing Date, not subject to any pending (rechtshangig)
proceedings for opposition, cancellation, revocation or rectification
which may negatively affect the operation of the Business and, to the
Management's Knowledge, no such proceedings are threatened. Section
6.4.3 last sentence shall apply accordingly. To the Management's
Knowledge, the Intellectual Property Rights are neither being
materially infringed by Third Parties nor do they materially infringe
intellectual property rights of Third Parties. All fees necessary to
maintain the Intellectual Property Rights have been paid, or necessary
renewal applications have been filed and all other material steps
necessary for their maintenance have been taken.
(3) Except as set out in Annex 6.4.4 (3), where licenses or any other
intellectual property rights (other than for the use of standard
software) are required for the use of the information technology by
any of the Domus Companies, these have been validly granted to such
Domus Companies and are fully paid and none of the Domus Companies
and, to the Management's Knowledge, none of the the Domus Companies'
counterparties thereto is in breach of its terms.
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6.4.5 Compliance with Laws and Permits
The Domus Companies hold all permits and licenses (1) which are required,
if any, under applicable public laws (offentliches Recht) to conduct the
Business as presently conducted and (2) which are material for the
Business. To the Management's Knowledge, there are no implications or
threats of any revocation or restriction or subsequent orders
(nachtragliche Anordnungen) relating to any such permits or licenses after
the Closing Date which would materially affect the Business as a whole. The
Domus Companies conduct their respective business in compliance with (i)
all applicable laws and regulations, (ii) all provisions of such permits
and licenses and (iii) judgments or orders imposed by any governmental or
regulatory body, in each case regarding nos. (i) through (iii) the
non-compliance with which could have a material adverse effect on the
Business taken as a whole.
Except as set out in Annex 6.4.5, (i) all products, all packaging
components and product information (such as handbooks, information
leaflets, expert information, technical leaflets, summary of product
characteristics, data sheets, and promotional materials), manufactured,
sold or delivered or distributed by any of the Domus Companies are
compliant with the applicable laws and regulatory requirements, and (ii)
none of the Domus Companies has manufactured, sold or delivered any product
which could give rise to material product liability or warranty claims, in
each case regarding nos. (i) and (ii) the non-compliance with which could
have a material adverse effect on the Business taken as a whole.
Except as set out in Annex 6.4.5, during the past three years before the
Signing Date, none of the Domus Companies has applied for, received and
used public grants, allowances or subsidies.
6.4.6 Material Agreements
Annex 6.4.6 contains a complete and correct list of material agreements as
described below to which any of the Domus Companies, as of the Signing
Date, is a party and of which the main obligations
(Hauptleistungspflichten) have not yet been completely fulfilled
(hereinafter referred to as the "Material Agreements"):
(1) agreements relating to the acquisition or sale of (i) interests in
other companies or businesses, (ii) fixed assets (Anlagevermogen) or
(iii) real property, in each case providing for a consideration in an
amount or with a book value of EUR 100,000 or more;
(2) rental and lease agreements relating to real estate (i) which,
individually, provide for annual payments of EUR 100,000 or more or
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(ii) which, individually provide for payments of EUR 5,000 or more and
cannot be terminated by the respective Domus Companies on twelve
months or less notice without penalty;
(3) loan agreements, bonds, notes or any other instruments of debt
involving any Third Party outside the Companies and, individually, an
amount of EUR 10,000 or more;
(4) guaranties, indemnities and suretyships issued for any debt of any
Third Party other than the Domus Companies for an amount of EUR 10,000
or more; and
(5) any continuing obligations (Dauerschuldverhaltnisse) other than
described in Sections 6.4.6 (1) through 6.4.6 (4) which cannot be
terminated by the Domus Companies with effect as of or prior to 31
December 2004 and which provide for annual obligations of the Company
or the Subsidiaries in excess of EUR 100,000.
(6) in-license and out-license agreements of the Domus Companies relating
to Intellectual Property Rights (other than for standard software);
(7) any agreement with Seller or any of its Affiliates (other than the
Domus Companies);
(8) agreements which contain an undertaking not to compete (but excluding
employment, agency, distributorship and similar agreements in the
ordinary course of business) and all joint venture and cooperation
agreements; and
(9) agreements containing change of control provisions according to which
such agreements would terminate or could be terminated or pursuant to
which payments could become due, in each case as a result of the
consummation of the transactions contemplated under this Agreement and
in each case if the termination or payments could have a material
adverse effect on the Business taken as a whole.
To the Management's Knowledge, each of the Material Agreements is, as of
the Signing Date, in full force and effect. The respective Subsidiary has
received as of the Signing Date no written notice of termination and no
written threat of termination and none of the Subsidiaries nor, to the
Management's Knowledge, any of the contractual counterparties is in default
or otherwise in any material breach of any of the Material Agreements.
6.4.7 Employees, Pensions
(1) Annex 6.4.7 (1) contains, as of the Signing Date, a complete list of
collective bargaining agreements, and material agreements with unions,
workers' councils and similar organizations, and material collective
promises (Gesamtzusagen) by which any of the Domus Companies listed in
Sections 1.3.1 and 1.3.2 or, to the Management's Knowledge, any of the
Domus Companies listed in Section 1.3.3 are bound.
(2) Annex 6.4.7 (2) contains, as of the Signing Date, a list of employees
of the Domus Companies who (i) are entitled, as of the Signing Date,
to receive in the calendar year 2004 a gross annual base salary
(excluding fringe benefits, such as incentives, stock options or
appreciation rights, company car and other benefits) in excess of EUR
100,000 or (ii) are among the ten employees with the highest gross
annual base salary (such employees collectively hereinafter referred
to as the "Key Employees" and each of them as a "Key Employee").
Except as set forth in Annex 6.4.7 (2), as of the Signing Date, none
of the employees described in such Annex has given written notice of
termination of his or her employment.
(3) There are no benefit or incentive schemes or policies applicable to
employees of the Domus Companies (i) which are funded or paid for by
the Seller or an Affiliate of the Seller (other than the Companies)
and which would fall away as a consequence of the transactions
contemplated under this Agreement or which are or could become a
liability of the Purchaser and or the Companies, (ii) which refer to
the performance or results of other companies than the Domus
Companies, or (iii) which are equity based. Except for a direct
insurance scheme (Direktversicherung) for the employees of the Domus
Companies listed in Section 1.3.1 and a pension plan for the benefit
of Mr. Lennart Magnusson, there are no pension schemes applicable to
employees of the Domus Companies. With respect to the direct insurance
scheme and the pension plan mentioned in the preceding sentence, the
Domus Companies or the respective employees have taken out insurance
covering all payments under applicable pension schemes and all
premiums under such insurance have been duly paid by the Domus
Companies. Except as disclosed in Annex 6.4.7 (2), none of the Domus
Companies is subject to contractual arrangements with Key Employees
extending to the period post-termination of employment, including
undertakings not to compete, that could lead to payment obligations of
the Domus Companies.
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(4) None of the Companies listed in Section 1.3.1 is liable towards any
governmental or quasi governmental authority for repayment or
reimbursement of benefits paid to its current or former employees,
including, but not limited to, liabilities under ss. 147a SGB III.
6.4.8 Insurance
Annex 6.4.8 sets forth, as of the Signing Date, a complete and accurate
list of all material insurance policies maintained by or on behalf of any
of the Domus Companies and such policies are valid and in full force. All
premiums due on the above policies have been duly paid up to the Signing
Date and, to the Management's Knowledge, there are no circumstances due to
which any such policy might be voidable. As of the Signing Date there is no
material claim outstanding under any insurance policy maintained by or on
behalf of any of the Domus Companies and, to the Management's Knowledge, no
event has occurred which might give rise to such a claim.
6.4.9 Litigation
None of the Domus Companies is involved in any law suits, court actions or
similar proceedings before a court of justice, arbitration panel or an
administrative authority (to the extent relating to a monetary dispute
(vermogensrechtliche Streitigkeit) involving an amount in dispute
(Streitwert) exceeding EUR 50,000, in each individual case, or any material
non-monetary law suits, court actions or similar proceedings before a court
of justice, arbitration panel or an administrative authority, on the
Signing Date pending (rechtshangig) or threatened in writing to be filed
against any of the Domus Companies and, to the Management's Knowledge,
there are no circumstances which, according to the Management's reasonable
belief, provide a basis for such proceedings, except those disclosed in
Annex 6.4.9.
6.4.10 Ordinary Course of Operation
Except as set forth in Annex 6.4.10, from 1 January 2004 until the Signing
Date, the business operations of the Companies (other than the Company)
have been conducted in the ordinary course of business and substantially in
the same manner as before, and there has been no material adverse change
with respect to the Business taken as a whole. In particular the Domus
Companies, from 1 January 2004 until the Signing Date, have not:
(1) declared any dividend or made any other distribution to any
entity other than the Domus Companies;
(2) issued any share capital or similar interest to an entity which
is not part of the Companies;
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(3) undertaken to make any capital expenditure or entered into any
contract or commitment outside the ordinary course of business;
(4) acquired or disposed of any fixed assets relating to their
business (i) outside the ordinary course of business, (ii) for a
consideration or with a book value of EUR 20,000 or more or (iii)
other than at arm's length conditions or deferred any material
capital expenditure in respect of any fixed assets;
(5) incurred any indebtedness vis-a-vis Third Parties except as in
the ordinary course of business or cancelled or compromised any
debts of a material nature or waived any claims or rights of a
material nature;
(6) made any advance or extended any loan to any Third Party outside
the ordinary course of business; or
(7) made any material change in the terms of employment (including
compensation) of any Key Employees other than in the ordinary
course of business;
(8) reduced or terminated business relations with material customers
or suppliers or made or received in writing the threat of such
reduction or termination, in each case to the extent such
reduction or termination could have a material adverse effect on
the Business taken as a whole;
(9) made any change in accounting principles, practices or methods;
(10) accelerated the collection of accounts receivable or delayed the
payment of accounts payable or accrued liabilities as compared
with past practice in past periods and taking into account
Management's efforts to optimise the Domus Companies' cash
management vis-a-vis Working Capital; for the avoidance of doubt,
the Domus Companies have not (i) accelerated the collection of
accounts receivable not included in Working Capital or (ii)
delayed the payment of accounts payable or accrued liabilities
not included in Working Capital;
(11) amended their articles of association or partnership agreements
or other constitutional documents, as the case may be;
(12) agreed, whether or not in writing, to do any of the foregoing; or
(13) incurred any damage, destruction of property, liability or other
casualty loss with respect to the operations of the business of
the Domus Companies or any material asset owned or used by them
which, individually or in the aggregate, has had a material
adverse effect on the Business taken as a whole.
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6.4.11 Environmental
(1) There are no pending or threatened (in writing) Environmental
Claims against any of the Domus Companies and there are, to the
Management's Knowledge, no facts or circumstances which could
reasonably be expected to form the basis for any Environmental
Claim against any of the Domus Companies.
(2) None of the Domus Companies have transported or arranged for the
treatment, storage, handling, disposal, or transportation of any
Hazardous Material to any off-site location which could give rise
to an Environmental Claim against any of the Domus Companies.
(3) Except as set forth in Annex 6.4.11, (i) no release,
contamination, disposal, spilling, dumping, incineration,
discharge, emitting or leaching of Hazardous Materials has
occurred at, from, in, to, on, or under any Real Property and
(ii) no Hazardous Materials are present in, at, on or migrating
from any Real Property.
(4) There is no pollution or contamination of the environment by
Hazardous Materials caused by any of the Domus Companies relating
to any Real Property.
(5) None of the Owned Real Properties and, to the Management's
Knowledge, none of the Leased Real Property is listed or proposed
for listing on any list of sites requiring investigation or
cleanup, or is subject to any pending or threatened (in writing)
action, suit, proceeding, or investigation related to or arising
from any alleged violation of any Environmental Law.
6.5 No other Seller's or Management's Guaranties
6.5.1The Purchaser explicitly acknowledges to purchase and acquire the Shares
and the Business in the condition they are in on the Closing Date based
upon its own inspection, examination and determination with respect
thereto, and to undertake the acquisition based upon its own inspection,
examination and determination without reliance upon any express or implied
representations, warranties or guaranties of any nature made by the Seller
and/or the Management except for the indemnities, covenants and guaranties
explicitly given by the Seller or the Management under the Agreement.
6.5.2Without limiting the generality of the foregoing, the Purchaser
acknowledges that neither the Seller nor the Management gives any
representation, warranty or guaranty with respect to
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(1) any projections, estimates or budgets delivered or made available to
the Purchaser of future revenues, future results of operations (or any
component thereof), future cash flows or future financial condition
(or any component thereof) or the future business operations of the
Companies;
(2) any other information or documents made available to the Purchaser or
its counsel, accountants or advisors with respect to the Business or
the Companies, including, but not limited to, the Information
Memorandum and the information provided during the management
presentation delivered on 12 May 2004, except as expressly set forth
in the Agreement; or
(3) any Tax matter except as provided for in Section 8.
Notwithstanding Section 7.8.1, claims and rights of the Purchaser
(whether contractual or statutory) existing otherwise in accordance
with the provisions of this Agreement, shall remain unaffected.
6.6 Seller's Knowledge; Management's Knowledge
In this Agreement, the knowledge of the Seller (heretofore and hereinafter
referred to as the "Seller's Knowledge") shall solely encompass the actual
knowledge as of the Signing Date of the individuals listed in Annex 6.6
after due inquiry with the Manager Wilhelm Kaiser and with the respective
general manager of Ulrich Alber GmbH & Co. KG (being Ralf Ledda), Aquatec
GmbH & Co. KG (being Marc Binder) and Dolomite AB (being Lennart
Magnusson). In this Agreement, the knowledge of the Management (heretofore
and hereinafter referred to as the "Management's Knowledge") shall solely
encompass the actual knowledge as of the Signing Date of each Manager after
due inquiry with the respective general manager of Ulrich Alber GmbH & Co.
KG, Aquatec GmbH & Co. KG and Dolomite AB.
SECTION 7
REMEDIES FOR BREACH OF SELLER'S GUARANTIES OR MANAGEMENT'S GUARANTIES
7.1 General/Recoverable Damages
7.1.1In the event of any breach or non-fulfillment by the Seller of any of the
guaranties pursuant to Section 6.2 or any breach or non-fulfillment by the
Management of any of the guaranties pursuant to Section 6.4, the Seller or
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the Management, as the case may be, shall put the Purchaser into the
position the Purchaser would have been in had the guaranty not been
breached (restitution in kind; Naturalrestitution). If the Seller or the
Management are unable to achieve this position within 60 days after having
been notified by the Purchaser of the breach, the Purchaser may claim for
monetary damages (Schadenersatz in Geld) from the Seller or the Management,
as the case may be. Such damages shall only cover actual damages incurred
by the Purchaser, including, for the avoidance of doubt, consequential
damages (Folgeschaden), loss of profits (entgangener Gewinn) with respect
to the Business as conducted on the Closing Date and reasonable lawyers'
fees, provided that the Purchaser may only claim reimbursement of the fees
of one law firm per matter, but excluding, for the avoidance of doubt, any
damages based on the argument that the Companies cannot pursue any business
expansion plans or business opportunities that the Companies have not
successfully pursued prior to the Closing Date (hereinafter referred to as
"Consequential Damages") due to the breach or non-fulfillment of guaranties
by the Seller or the Management. The damage compensation under this
Agreement shall in particular not cover internal administration or overhead
costs of Purchaser, or any arguments that the Purchase Price was calculated
upon incorrect assumptions. The Purchaser is excluded with any arguments
that the damage amounts shall be calculated by reference to the fact that
the Purchase Price was calculated taking into account a certain earnings
multiple ("Euro for Euro principle").
7.1.2The Seller or the Management shall not be liable for, and the Purchaser
shall not be entitled to claim for, any damages of the Purchaser under or
in connection with this Agreement if and to the extent that
(1) the matter to which the claim relates is provided for in the Financial
Statements or the Consolidated Financial Statements; or
(2) any damages of the Purchaser are recovered or in bad faith have been
failed to have been recovered from Third Parties, including, but not
limited to, through existing insurance policies.
7.1.3In case of any liability of the Management to the Purchaser under this
Agreement, such liability is several (Teilschuldner). For the avoidance of
doubt the Managers are not jointly or jointly and severally liable (keine
Gesamtschuld) and each Manager shall be liable to the Purchaser only for
that percentage of the total liability of the Management in respect of a
claim as is set out against his name in Annex 7.1.3. Any claim by the
Purchaser against the Management must be made against all Managers.
7.1.4In cases where the same set of facts constitutes, in accordance with the
terms of this Agreement, a breach of both Seller's Guaranties and
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Management's Guaranties, the fact that the Managements' Liability Cap is
lower than the Seller's Liability Cap shall not release the Seller from its
higher liability. The Seller's rights for recourse against the Management
in the event that the Seller has been held liable to the Purchaser for the
incorrectness of any of the Management's Guaranties shall be limited to
such amounts for which the Management had been directly liable to the
Purchaser, except for cases of intentionally wrong statements of the
Management leading ultimately to breaches of a Seller's Guaranty.
7.2 Overall Scope of Seller's and Management's Liability pursuant to this
Agreement
7.2.1The Seller's aggregate liability under this Agreement including, but not
limited to, any and all claims for breach of any of the guaranties pursuant
to Sections 6.2.1 shall be limited to 100% of the aggregate of the Purchase
Price and the Financial Debt and any and all claims for breach of any of
the guaranties pursuant to Sections 6.2.2, 6.2.3 and 8, shall be limited to
a maximum amount of EUR 18,000,000 (in words: eighteen million Euros)
(hereinafter referred to as the "Seller's Liability Cap").
7.2.2Each Manager's aggregate liability under this Agreement including, but not
limited to, any and all claims for breach of any of the guaranties pursuant
to Section 6.4, shall be limited to their respective net proceeds (after
taxes) from the transaction. This is reflected by the amount set out
against each of their name in Annex 7.1.3 (hereinafter individually
referred to as the "Manager's Liability Cap", collectively the
"Management's Liability Cap").
7.3 De Minimis Amount; Threshold
The Purchaser shall only be entitled to any claims under Sections 6 and 7
to the extent each individual claim exceeds an amount of EUR 75,000 (in
words: seventy five thousand Euros) (hereinafter referred to as the "De
Minimis Amount") and the aggregate amount of all such individual claims
exceeds EUR 3,000,000 (in words: three million Euros) (hereinafter referred
to as the "Threshold"). Where a series of claims arise out of a single
event, cause, circumstance, act or omission or a related or linked series
thereof such claims shall be aggregated and treated as a single claim for
the purposes of the De Minimis Amount. In case the De Minimis Amount and
the Threshold are exceeded, the Purchaser can claim the full amount of such
claims.
7.4 Exclusion of Claims due to Purchaser's Knowledge
The Purchaser shall not be entitled to bring any claim under Sections 6 and
7 if the underlying facts or circumstances to which the claim relates were
known, or are deemed to be known, by the Purchaser, taking into account
that the Purchaser, prior to entering into this Agreement, has been given
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the opportunity to a thorough review of the status of the Companies and the
Business from a commercial, financial and legal perspective and, inter
alia, to a review of the documents identified in Annex 7.4 and disclosed in
the data room (hereinafter referred to as the "Disclosed Documents"). Facts
and circumstances that could reasonably be concluded from the face of the
Disclosed Documents and which are not hidden by being fragmented in more
than one category of the data room index, as well as facts and
circumstances identified in the Information Memorandum, the Reports, or in
this Agreement or its Annexes are deemed to be known by the Purchaser. The
knowledge of the Purchaser's managing directors, advisors and those of its
employees who were engaged in carrying out the due diligence examination
undertaken with regard to entering into this Agreement shall be imputed to
the Purchaser.
7.5 Notification of Seller or Management; Procedure in Case of Third Party
Claims
7.5.1In the event of an actual or potential breach of guaranty pursuant to
Section 6 above, the Purchaser shall without undue delay from becoming
aware of the matter notify the Seller (in case of an actual or potential
breach of guaranty pursuant to Section 6.2) or the Management (in case of
an actual or potential breach of guaranty pursuant to Section 6.4), as the
case may be, of such alleged breach in writing, describing the potential
claim in reasonable detail and, to the extent practical, state the
estimated amount of such claim and give the Seller and/or the Management
the opportunity to remedy the breach within the period of time indicated in
Section 7.1 above.
7.5.2Furthermore, in the event that in connection with a breach of a guaranty
under Section 6 any claim or demand of a Third Party is asserted against
the Purchaser or any of the Companies (for the purposes of this Section
hereinafter referred to as the "Relevant Company"), the Purchaser shall
make available without undue delay to the Seller and the Management a copy
of the Third Party claim or demand and of all time-sensitive documents.
Within ten Business Days following such notice, the Seller and/or the
Management may elect at its own discretion, and at its own costs and at its
own risk to defend the Purchaser or the Relevant Company against such
claim. In such event, the Seller and/or the Management shall have the right
to defend the claim by all appropriate proceedings and shall have the sole
power to direct and control such defense, provided, however, that in such
case the Seller (only if the Seller elects to take up the defense) and/or
the Management (only if Management elects to take up the defense) have
undertaken in writing to the Purchaser to indemnify and hold harmless the
Purchaser and the Companies fully from and against such Third Party Claim,
and Seller's Liability Cap, De Minimis Amount and Threshold shall not apply
in these circumstances (it being understood that the Management's Liability
Cap remains applicable). Provided the indemnity undertaking has been made,
the Seller and/or the Management may, in particular, without limitation,
(i) participate in and direct all negotiations and correspondence with the
Third Party, (ii) appoint and instruct counsel acting, if necessary, in the
name of the Purchaser or any of the Companies, and (iii) require that the
claim be litigated or settled in accordance with the Seller's and/or the
Management's instructions. The Seller and/or the Management shall conduct
such proceedings in good faith with due regard to the legitimate interests
of the Parties and the Companies.
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Should both the Seller and the Management elect to defend the Purchaser or
the Relevant Company against the Third Party Claim, in the internal
relationship (Innenverhaltnis) between the Seller and the Management the
Party with the higher exposure in case of a defeat has the lead in such
defense, and such lead of the defense shall be conducted taking into
account though the legitimate interests of the respective other Party.
The Purchaser or any of the Companies shall, subject to legitimate business
interests of the Purchaser or the Companies, reasonably co-operate with the
Seller and/or the Management in the defense of any Third Party claim,
provide the Seller and/or the Management and its respective representatives
(including, for the avoidance of doubt, its advisors) reasonable access
during normal business hours to all relevant business records and documents
and permit the Seller and/or the Management and its respective
representatives to consult with the directors, employees and
representatives of the Purchaser or any of the Companies.
7.5.3Should the Seller and/or the Management not elect to defend the Purchaser
or the Relevant Company against such Third Party claim, the Seller and/or
the Management shall have the right, at their option and expense, to
participate in the defense of such a claim and related proceedings, but not
to control the defense, negotiation or settlement thereof, which control
will in such case rest with the Purchaser. The Parties agree to cooperate
fully with each other in connection with the defense, negotiation or
settlement of any such proceeding or claim under this Section 7.5. Section
7.5.2 last sentence shall apply accordingly. For the avoidance of doubt,
the Seller and/or the Management is not excluded with any arguments that
the defense by the Purchaser or the Relevant Company was not adequate or
sufficient and the Seller and/or the Management can bring such argument
forward against any claims of the Purchaser under this Agreement, in
particular claims for breach of guaranties under Section 6 above.
7.5.4In no event shall the Purchaser or any of the Companies be entitled to
acknowledge or settle a claim or permit any such acknowledgement or
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settlement without the Seller's and/or the Management's prior written
consent to the extent that such claims may result in a liability of the
Seller and/or the Management under this Agreement, such consent not to be
unreasonably withheld or delayed, considering the legitimate interests of
the Parties and the Companies. In the event the Seller and/or the
Management does not, within ten Business Days after receipt of the notice
mentioned in Section 7.5.2 above, elect to defend the Purchaser, the Seller
and/or the Management shall be bound by any determination made in such
Third Party claim or any bona fide compromise or settlement effected by the
Purchaser.
7.5.5The failure of the Purchaser to fully comply with its obligations under
this Section 7.5 shall release the Seller and/or the Management from their
respective obligations under Sections 6 and 7, if and to the extent such
failure increases the Seller's and/or the Management's obligations under
Sections 6 and 7.
7.5.6Where this Agreement entitles the Management to make decisions, exercise
any rights or to take any other actions, the Managers shall use best
efforts to decide, exercise rights or take such other actions unanimously.
If the Managers cannot agree on a unanimous decision, the exercise of
rights or taking of other actions, the Manager Peter Schulz shall have
right to determine how Management will act in such case. For the avoidance
of doubt, the Manager Wilhelm Kaiser shall be bound by such decision. It
shall be the Management's sole responsibility to conduct the procedures
described in this Section 7.5.6 as timely as necessary to make all
decisions to be made timely and to comply with any limitation or similar
periods. Failure of the Management to do so shall in no way affect any
rights of the Purchaser or the Companies.
7.6 Mitigation
Section 254 BGB shall remain unaffected, i.e. the Purchaser is in
particular obliged to prevent the occurrence of any damages and to limit
the scope of any damages incurred in accordance with Section 254 BGB.
7.7 Limitation Periods
All claims for any breach of guaranties of the Seller pursuant to Section
6.2.2 or guaranties of the Management pursuant to Section 6.4.1 through
6.4.10 above shall become time-barred (verjahren) eighteen months after the
Closing Date. All claims for any breach of guaranties given by the
Management under Section 6.4.11 shall become time-barred three years after
the Closing Date. All claims based on a breach of the guaranties given by
the Seller under Sections 6.2.1 (1) through 6.2.1 (7) shall become
time-barred five years after the Closing Date. Claims with respect to Taxes
(Section 8) shall become time-barred in accordance with Section 8.8.
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Section 203 BGB shall not apply. With respect to any relevant claim, any
limitation of claims pursuant to this Section 7.7 shall not occur if the
Purchaser has given prior to the lapse of such limitation period written
notice of the relevant claim to the Seller and/or Management stipulating
the claim in reasonable detail, including the amount of the claim, provided
that the claim is afterwards either settled between the parties or court
proceedings are filed, in each case not later than six months after the
initial limitation period has lapsed.
7.8 Exclusion of Further Remedies, Effect of Payment
7.8.1To the extent permitted by law, any further claims and remedies of the
Purchaser other than explicitly provided for under this Agreement,
irrespective of which nature, amount or legal basis, are hereby expressly
waived and excluded, in particular, without limitation, claims under
pre-contractual fault (Section 311 para. 2 and 3 BGB), breach of contract
(Pflichtverletzung aus dem Schuldverhaltnis) and/or the right to reduce the
Purchase Price (Minderung) or to rescind this Agreement (Rucktritt), and
any liability in tort (Deliktshaftung); provided, however, that this
exclusion shall not apply to any claims or remedies of any nature
whatsoever which are caused by or based upon willful misconduct (Vorsatz)
(i) of the Management to the extent the Purchaser seeks claims against or
remedies from the Management, or (ii) of the Seller, any employee or
partner of the Seller, Freshfields Bruckhaus Deringer or Rothschild, to the
extent the Purchaser seeks claims against or remedies from the Seller.
7.8.2Further to the statements made in Section 6.1, the Seller, the Management
and the Purchaser agree that the provisions contained in Sections 6 through
8 of this Agreement are no quality guaranties concerning the object of the
purchase (Garantien fur die Beschaffenheit der Sache) within the meaning of
Sections 443, 444 BGB. In the unlikely event that the provisions of
Sections 6 through 8 setting out the scope and limitations of the Seller's
and the Management's liability are, contrary to the intention and explicit
understanding of the Parties, regarded and construed as quality guaranties
concerning the object of the purchase, and the limitations of the Seller's
and the Management's liability contained herein are therefore found wholly
or partially invalid, the Purchaser hereby waives the right to assert
claims going beyond the limits of limitations provided for herein. Each of
the Seller and the Management accepts such waiver.
7.8.3Payments made according to this Section 7 or under the indemnities
contained herein shall constitute in the relationship between the Seller,
the Management and the Purchaser a reduction of the Purchase Price and, to
the extent they are made directly to any of the Companies, in the
relationship between the Purchaser and the recipient a capital contribution
(Einlage).
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SECTION 8
TAXES
8.1 Definition of Tax
"Tax" or "Taxes" means any federal, state or local tax, including income,
value-added, sales, property or transfer tax, salary withholding tax/wage
tax, customs, dues or public social security payments under mandatory law
together with any interest, penalty or addition to tax imposed by any
governmental authority responsible for the imposition of such tax
(hereinafter referred to as a "Taxing Authority").
8.2 Seller's Tax Guaranties
The Seller guarantees to the Purchaser by way of an independent promise of
guaranty pursuant to Section 311 para. 1 BGB (selbstandiges
Garantieversprechen im Sinne des ss. 311 Abs. 1 BGB), within the scope of
and subject to the requirements and limitations contained in this Section
8:
8.2.1Except as disclosed in Annex 8.2.1, the Companies have duly and timely
made, and will duly and timely (taking into consideration extensions of
time allowed by the competent Taxing Authorities) make until the Closing
Date, all Tax filings due.
8.2.2The Companies have paid, and will pay until the Closing Date, all Taxes
when due and payable.
8.2.3Except as disclosed in Annex 8.2.1, there are no tax-related audits,
actions, proceedings, investigations, claims or assessments pending,
proposed or threatened against or with respect to the Companies. The
Companies are currently not under negotiations with any tax authority,
which would affect the Tax situation of any of the Companies in any period
after the Closing Date.
Section 7.8.2 shall apply mutatis mutandis.
8.3 Tax Indemnification
8.3.1The Seller agrees to indemnify the Purchaser from and against all Taxes
due and payable by the Companies for single taxable events that have been,
or should have been, accrued in the Effective Date Statements as well as
for Tax assessment periods (steuerliche Veranlagungszeitraume) ending on or
before the Effective Date or deemed to end on the Effective Date (Section
8.3.2), unless, and except to the extent, that such Tax liabilities
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(1) are shown or provided for in the Effective Date Statements; or
(2) are subject of a valid and enforceable claim for repayment or
indemnification against a Third Party; or
(3) are the result of a reorganization or other measures which by
operation of law have a retroactive effect affecting assessment
periods ending on or before the Effective Date and are initiated by
Purchaser; or
(4) can be offset against Tax loss carry backs incurred in any Tax
assessment periods ending on or before the Effective Date or loss
carry forwards that (prior to any reorganization or other measures of
the Purchaser as mentioned above in paragraph (3)) are available
(including as a result of subsequent tax audits) in the period to
which such taxes are allocable, whereby any use or reduction relating
to any Tax assessment periods ending on or before the Effective Date
caused directly or indirectly by Purchaser of such Tax loss carry back
or loss carry forward shall be disregarded; or
(5) can be offset against future Tax reductions (Steuerminderungen)
arising within six years after the Effective Date out of the
circumstance triggering the Tax indemnification claim, e.g. resulting
from the lengthening of depreciation periods or higher depreciation
allowances (Phasenverschiebung), such deductible future tax reductions
to be calculated with their discounted net present value at the time
the Taxes are due using a discount rate of 6% p.a.
For the avoidance of doubt, with respect to paragraphs (3) and (4) above,
any tax audit that is conducted, either by the Seller or the Purchaser, in
accordance with this Agreement, is not deemed to be a reorganization or
other measure of the Purchaser and is not deemed to cause a reduction or
use of a Tax loss carry back or loss carry forward.
8.3.2With regard to Tax assessment periods or portions thereof beginning before
the Effective Date and ending after the Effective Date, the Seller shall
indemnify and hold harmless the Purchaser, or at the Purchaser's request
any of the Companies, as if such Tax assessment period had ended on the
Effective Date and as if a Tax assessment would have to be made on this
basis. The relevant data shall be derived to the extent possible from the
Effective Date Statements and as described in more detail in Section 3.1.2
(6). This indemnity shall not apply to the extent Taxes have been taken
into account in calculating the Purchase Price pursuant to Section 3.1.2
(6).
8.3.3Indemnification payments due by the Seller under this Section 8 shall be
made within 20 Business Days following written notice by the Purchaser,
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provided that the payment of such amounts to the Taxing Authority is due
and that the Seller shall not be required to make any payment earlier than
two Business Days before such Taxes are due to the Taxing Authority. In
case of any Tax being contested in accordance with Section 8.6.2, payment
of such Tax to the Taxing Authority will be considered due no earlier than
on the date a final (bestandskraftig) determination to such effect is made
by either the Taxing Authority or a court of proper jurisdiction, provided
that the Taxing Authority has granted relief from paying the assessed Tax
until such Tax becomes final and binding. If this is not the case, the
Seller shall make a respective advance indemnification payment to the
Purchaser. If any Tax is being contested in accordance with Section 8.6.2
below and payment of such Tax to the Taxing Authority is not yet due
because no final determination has been made, and if the expiration of the
limitation period in Section 8.9 would occur in not more than six months,
the Purchaser shall have the right to demand that the Seller shall do one
of the following (as the Seller may elect): (i) the Seller shall pay to the
Purchaser the amount of Tax being the subject of Tax Contest, or (ii) the
Seller shall extend the limitation period in respect of the Tax being the
subject of the Tax Contest until six months after the assessment of such
Tax becoming final and binding. If the final amount to be indemnified for
Taxes and to be paid is lower than the advance indemnification payment by
the Seller or a payment the Seller has made pursuant to the preceding
sentence, then the difference shall be reimbursed by the Purchaser,
including all interest earned thereon, if any.
8.4 Tax Filings after the Closing Date
The Companies shall prepare and make all Tax filings required to be filed
by or on behalf of the the Companies after the Closing Date, subject,
however, in the case of any Tax filings for periods including the periods
ending on or prior to the Effective Date as well as periods including
(einschliessen) the Effective Date, to the review and approval of the
Seller (which may not unreasonably be withheld or delayed). Tax filings for
periods including the period ending on or prior to the Effective Date shall
be prepared on a basis consistent with those prepared for prior tax
assessment periods. The Purchaser shall ensure that any Tax filing to be
reviewed and approved by the Seller will be furnished to the Seller no
later than 30 days prior to the due date of such Tax filing (taking into
consideration extensions of time allowed by the competent Taxing
Authorities).
8.5 Tax Covenants
The Purchaser covenants to the Seller that except as legally required by
any Taxing Authority or otherwise compelled by mandatory law and after
<page>
having given the Seller the opportunity to intervene, the Purchaser will
not cause or permit any of the Companies
(1) to take any action on or after the Closing Date that could give rise
to any Tax liability of the Seller or its Affiliates or reduce any of
their Tax assets;
(2) to make or change any Tax election (except that the Purchaser, or an
Affiliate of the Purchaser, (i) may make a United States Internal
Revenue Code (hereinafter referred to as the "Code") Section 338
election (other than a Section 338 (h) (10) election) only if such
election is made with respect to all Companies being acquired that are
treated as corporations for US federal income tax purposes and all the
assets of the Companies which are being acquired and (ii) to take any
action required to effectuate and to make an election or elections
pursuant to United States Treasury Regulations Section 301.7701 for
any or all Companies), amend any Tax return or take any Tax position
on any Tax return, take any action, omit to take any action or enter
into any transaction, merger or restructuring that results in any
increased Tax liability (including a Tax indemnification liability) of
the Seller or its Affiliates or reduction of any of their Tax assets.
If the Purchaser or its Affiliates do not make a Section 338 election
for any of the Companies that are treated as corporations for US
federal income tax purposes and all the assets of the Companies being
acquired, the Purchaser or its Affiliates shall not take any action
that would (i) increase the earnings and profits of those Companies
for their United States federal taxable year including the Closing
Date attributed to the shares of those Companies under Section 1248 of
the Code, above the amount that would be so attributable to such
shares if such taxable year had ended on the Closing Date other than
earnings and profits generated in the ordinary course of business, or
(ii) increase the amounts included in Seller's and its Affiliates'
gross income under Section 951 of the Code for Seller's taxable year
that includes the Closing Date. If the Purchaser or its Affiliates
undertake such action then the Purchaser shall indemnify the Seller
and its Affiliates against any adverse Tax effects resulting from and
to the extent of the action. With respect to (ii) mentioned in the
first sentence of this paragraph (2), the Purchaser shall ensure that
the effective date of any elections made pursuant to Unites States
Treasury Regulations Section 301.7701 will not occur before the second
day after the Closing Date;
provided that the Purchaser and the Companies shall have the right to
invite the tax authorities to conduct tax audits for the Companies as early
as possible and further provided that this Section 8.5 shall not restrict
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the Purchaser and the Companies from any actions that would cause any Tax
loss carry back or loss carry forward generated after the Effective Date to
be used, reduced or disregarded.
If and to the extent the Purchaser nevertheless does, or causes or permits
any of the Companies to do, any of the aforesaid actions or omissions,
except for the actions and elections pursuant to Section 338 of the Code
and Section 301.7701 of the United States Treasury Regulations in
accordance with paragraph (2) above, (i) the Purchaser will indemnify and
hold harmless the Seller from and against all Taxes due and payable by the
Seller caused or increased by any such actions or omissions and (ii), in
case any such Taxes were payable by the Companies, no liability of the
Seller will exist under this Section 8.
8.6 Indemnification Procedures
8.6.1Following the Closing Date, the Purchaser shall without undue delay
(unverzuglich) notify the Seller of any Tax audit or administrative or
judicial proceeding that is announced or commenced and that might
constitute a basis for indemnification by the Seller pursuant to this
Section 8. Such notice shall be in writing and shall contain full factual
information describing the object of the Tax audit or the asserted Tax
liability in reasonable detail and shall include copies of any notice or
other document received from any Taxing Authority in respect of any such
Tax audit or asserted Tax liability. The Purchaser shall further procure
that the Companies allow the Seller to fully participate in such Tax audit.
If the Seller is not given notice without undue delay (unverzuglich) as
required before, then the Seller shall not have any obligation to indemnify
the Purchaser for any damages arising out of such asserted Tax liability,
unless and to the extent such failure to notify the Seller has not
increased the damages.
8.6.2The Seller may elect to direct on its own or through counsel of its choice
and at its expense, any audit, claim for refund and administrative or
judicial proceeding in respect thereof (excluding tax audits) involving any
asserted Tax liability with respect to which indemnity may be sought under
this Section 8 (any such audit, claim for refund or proceeding relating to
an asserted Tax liability is hereinafter referred to as a "Tax Contest").
If the Seller elects to direct a Tax Contest, then the Seller shall within
ten Business Days of receipt of the Purchaser's written notice pursuant to
Section 8.6 above, notify the Purchaser of its intent to do so, and the
Purchaser shall cooperate and cause the Companies or the respective
successors to cooperate, at the Seller's expense in each phase of such Tax
Contest. In such event, the Seller shall not unreasonably utilize the
resources of the Companies, including financial staff, for the purposes of
directing a Tax contest. Furthermore, the Seller shall not take any
decision or reach any agreement with the Tax authorities which would change
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the accounting policies of the Companies with respect to the future without
prior consultation with the Purchaser and taking reasonably into account
the reasonable interests of the Purchaser and the Companies. The Purchaser
may participate, at its own expense, in any Tax Contest.
If the Seller does not elect to direct such Tax Contest or fails to notify
the Purchaser of its election as herein provided, the Purchaser, the
Company or the respective Subsidiary may pay, compromise or contest such
asserted Tax liability, provided that neither the Purchaser nor any of the
Companies may settle or compromise any asserted Tax liability in spite of
the objection of the Seller. In any event, the Seller may participate, at
its own expense, in any Tax Contest. If the Seller chooses to direct the
Tax Contest, the Purchaser shall promptly authorize, and shall cause the
respective Companies to authorize, (by power-of-attorney and such other
documentation as may be necessary and appropriate) the designated
representative of the Seller to represent the Purchaser, the Company and/or
the respective Subsidiary or their successors in the Tax Contest insofar as
the Tax Contest involves an asserted Tax liability for which the Seller
would be liable under this Section 8.
8.7 Tax Refunds
If the Company or any Subsidiary will receive a Tax refund relating to any
period ending on or before the Effective Date (to the extent not reflected
in the Effective Date Statements as an asset), the amount of the Tax refund
shall be paid by the Purchaser to the Seller which is not necessary to
cover future increases in Taxes resulting from such Tax refund. The
Purchaser shall duly notify the Seller of any Tax refund relating to any
period ending on or before the Effective Date.
8.8 Tax Threshold
The Purchaser shall only be entitled to any claims under Section 8 to the
extent the aggregate amount of all claims under this Section 8 exceeds an
amount of EUR 50,000 (in words: fifty thousand Euros). In case such amount
is exceeded, the Purchaser can claim the full amount of such claims.
8.9 Limitation
Claims of the Purchaser or the Seller under this Section 8 shall become
time-barred six months after the final and binding assessment of the
relevant Taxes, at the latest, however, six years after the Closing Date.
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SECTION 9
PURCHASER'S GUARANTIES
9.1 Guaranties
Purchaser hereby guarantees by way of an independent promise of guaranty
pursuant to Section 311 para. 1 BGB (selbstandiges Garantieversprechen im
Sinne des ss. 311 Abs. 1 BGB):
9.1.1The Purchaser is duly established and validly existing under the laws of
Germany and has all requisite power and authority to own its assets and to
carry out its business.
9.1.2The execution and performance by the Purchaser of this Agreement and the
consummation of the transaction contemplated hereby are within the
corporate powers of the Purchaser and have been duly authorized by all
necessary corporate action on part of the Purchaser.
9.1.3The execution and performance by the Purchaser of this Agreement and the
consummation of the transaction contemplated herein do not (i) violate the
articles of association or by-laws of the Purchaser or (ii) violate any
applicable law, regulation, judgment, injunction or order binding on the
Purchaser, and (iii) there is no action, law suit, investigation or
proceeding pending against, or to the knowledge of the Purchaser threatened
against, the Purchaser before any court, arbitration panel or governmental
authority which in any manner challenges or seeks to prevent, alter or
delay the transaction contemplated herein.
9.1.4Based on its due diligence and as of the Signing Date, the Purchaser is
not aware of any facts or circumstances that could give rise to claims
against the Seller pursuant to Sections 6 and 7 of this Agreement. For the
avoidance of doubt, this guaranty in Section 9.1.4 does not limit the
Purchaser's rights under this Agreement if such facts or circumstances
become known to the Purchaser after the Signing Date.
9.2 Indemnification
In the event that the Purchaser is in breach of any guaranty pursuant to
Section 9.1, the Purchaser shall indemnify and hold harmless the Seller
from any damages incurred by the Seller. All claims of the Seller arising
under this Section 9 shall be time-barred five years after the Closing
Date.
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SECTION 10
COVENANTS
10.1 Merger Control Proceedings; Other Regulatory Requirements
The Purchaser shall ensure that any filings to be made with the competent
merger control authorities or other governmental authorities, to the extent
they have not already been made prior to the Signing Date, will be made
within five Business Days after the Signing Date, unless the applicable
laws and regulations require an earlier filing. Such filings shall be made
by the Purchaser, provided, however, that the contents of such filings
shall require prior written approval of the Seller, which shall not
unreasonably be withheld or delayed. The Seller and the Purchaser shall
closely cooperate in the preparation of such filings. Each Party shall
without undue delay provide all other Parties with copies of any
correspondence with the merger control or other governmental authorities
and with copies of any written statement, order or decision of such
authorities. All parties shall closely cooperate in any discussions and
negotiations with the competent authorities with the objective to obtain
clearance for the transaction contemplated by this Agreement in the
shortest time period possible; however, if the competent authorities are
prepared to grant their approval only subject to compliance with specific
conditions or obligations to be imposed upon the Purchaser, the Purchaser
shall accept the imposition of such conditions and obligations if they are
reasonably acceptable to the Purchaser taking into account its commercial
objectives in pursuing the transactions contemplated in this Agreement. The
Purchaser may waive (zurucknehmen) filings with the competent authorities
or agree with such authorities on the extension of any examination period
only with the express prior written consent of the Seller, such consent not
to be unreasonably withheld or delayed.
10.2 Pre-Closing Covenants of the Seller
Between the Signing Date and the Closing Date, the Seller shall procure, to
the extent permissible under applicable law, that the Companies shall
conduct their business operations in the ordinary course of business and
substantially in the same manner as before. Section 6.4.10 (1) through (12)
shall apply mutatis mutandis. In addition, in the period between Signing
Date and Closing Date Seller shall ensure that the Companies shall
10.2.1 give Purchaser reasonable access to the management of the Companies and
to the records and information of the Companies to the extent Purchaser
requires such access in connection with the implementation of this
Agreement;
10.2.2 provide the Purchaser with the monthly management accounts of the
Companies as soon as they are available and in any event within 14 calendar
days after the relevant month's end; and
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10.2.3 in the period between the Effective Date and the Closing Date not
increase Financial Debt other than interest accrued and Tax liabilities
incurred in the ordinary course.
10.3 Exoneration (Entlastung) of Supervisory Board Members
The Purchaser undertakes to hold an extraordinary general shareholders'
meeting (ausserordentliche Hauptversammlung) of DH AG within ninety days
after the Closing and to vote for a shareholders' resolution granting
exoneration (Entlastung) to each of the supervisory board members of DH AG
mentioned in Section 5.5.1 above for the time period from 1 January 2004
through the date their resignations become effective.
10.4 Access to Financial Information
The Purchaser shall procure that after the Closing Date, the Seller and its
representatives are given reasonable access to, and are allowed to make
copies of, (i) the annual books of accounts for the fiscal year 2003 and
(ii) the books of account for the first and second quarter of the fiscal
year 2004 as well as any other financial information required to achieve
the deconsolidation on the Closing Date or, if the Closing does not occur
on the last day of a month, on the end of month following the Closing Date,
and (iii) any information the Seller requires to prepare the Tax filings as
mentioned in Section 8.4 of the Agreement, all at the Seller's expense,
except for internal costs of the Purchaser and the Companies.
10.5 Insurance Coverage
The Seller shall procure that the Companies and the Business remain insured
until the Closing Date in substantially the same way as they are on the
Signing Date and that all premiums due for such insurances are duly and
timely paid.
10.6 Indemnification
10.6.1 To the extent that after the Closing Date a Third Party raises a claim,
other than (i) claims under statutory law, (ii) claims under agreements
which have not been disclosed to the Purchaser, or (iii) claims in relation
to any matter that constitutes a breach of a Seller's Guaranty or from
which the Seller agreed to indemnify the Purchaser and/or the Companies
under this Agreement, against the Seller which is due to a legal
relationship between such Third Party and the Company or a Subsidiary, the
Purchaser shall hold harmless and indemnify the Seller from any such claim
as well as any costs and expenses incurred in connection therewith. The
Parties agree by way of an agreement for the benefit of Third Parties
(Vertrag zugunsten Dritter) in the sense of Section 328 BGB that Sentence 1
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of this Section 10.6.1 shall apply accordingly in the event that the Third
Party raises a claim against a company which is an Affiliate of the Seller.
10.6.2 The Seller shall, and shall procure that its Affiliates (other than the
Companies) shall, waive as from the Closing Date any rights that they may
have against any of the Companies. The Seller further undertakes to the
Purchaser that, subject to the provisions in Section 7.1.4, immediately
following Closing neither the Seller nor any of its Affiliates (other than
the Companies) will have any claim whatsoever against any of the Companies
or any claims in relation to this transaction and its implementation
against any of their respective employees, secondees or officers, and none
of the Companies will have any liability to the Seller or any of its
Affiliates (other than the Companies), or any obligation of any notice, in
respect of any act, event, omission or circumstance which has occurred
before the Effective Date or which will arise before the Closing Date. If
after the Closing Date any such claim or liability arises, the Seller
agrees to waive, and to procure its Affiliates (other than the Companies)
shall waive, on demand all rights against any of the Companies in respect
of that claim or liability. The Purchaser shall procure that the Companies
shall waive as any rights that they may have against the Seller at the
Closing Date other than (i) claims under statutory law, (ii) claims under
agreements which have not been disclosed to the Purchaser, or (iii) claims
in relation to any matter that constitutes a breach of a Seller's Guaranty
or from which the Seller agreed to indemnify the Purchaser and/or the
Companies under this Agreement. For the avoidance of doubt, the provisions
set forth in this Section 10.6.2 do not apply to existing business
relationships between the Seller or any of its Affiliates and the Companies
including, without limitation, the Distribution Agreement between Bison
Bede Limited and Aquatec GmbH & Co. KG dated 29 January/3 February 2004.
10.6.3 The Seller shall indemnify and hold harmless the Purchaser, or, at the
election of the Purchaser, the Companies concerned from and against any
loss or damage, including without limitation Consequential Damages, which
may be suffered by the Purchaser or any of the Companies relating to the
business operated by Bison Bede Limited or resulting from the divestiture
of Bison Bede Limited.
10.6.4 The Seller shall further indemnify and hold harmless the Purchaser, or,
at the election of the Purchaser, the Companies concerned from and against
any loss or damage (Schaden within the meaning of Sections 249 et seq. BGB,
e.g. recall or field correction costs, or product liability), including
without limitation Consequential Damages, which may be suffered by the
Purchaser or any of the Companies relating to (i) the claim made by Donna
Starcher in May 2003 and all claims related to that matter, (ii) faults of
the e-fix E19/20 which gave rise to the current field correction and (iii)
any infringement or alleged infringement by Dolomite AB of a patent
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allegedly owned or lawfully used by ETAC which infringement was claimed by
letter of ETAC's advisors dated 11 September 2003 (the claims under nos.
(i) through (iii) hereinafter collectively referred to as the "Indemnified
Litigation").
The Seller shall not be liable for, and the Purchaser shall not be entitled
to claim for, any damages of the Purchaser under or in connection with the
Indemnified Litigation if and to the extent that
(1) the matter to which the claim relates is provided for in the
Consolidated Financial Statements or in the Management Accounts, for
the avoidance of doubt in each case regardless for which case of the
Indemnified Litigation they are used; or
(2) any damages of the Purchaser are recovered or in bad faith have been
failed to have been recovered from Third Parties, including, but not
limited to, through existing insurance policies.
With respect to the Indemnified Litigation the Purchaser shall only be
entitled to a claim to the extent the aggregate amount of claims hereunder
exceeds EUR 500,000 in which case the Purchaser can only claim the amount
in excess of EUR 500,000; for the avoidance of doubt, this EUR 500,000
threshold shall be applied to claims that exist after deduction of
provisions or recovery of damages in accordance with the previous
paragraph.
The provisions in Section 7.5 and 7.6 relating to the defence of the
Purchaser or the Relevant Company shall apply mutatis mutandis.
10.6.5 The indemnities under this Section 10 shall become time-barred five years
after the Closing Date.
10.7 Further Assurance
10.7.1 The Parties shall cooperate in good faith and use reasonable endeavors to
do all such things as are necessary to implement the transactions
contemplated herein.
10.7.2 The Seller is aware that the Purchaser intends to replace the existing
Facility Agreement by new bank financing as from the Closing Date. The
Seller shall provide information to, and shall use commercially reasonable
efforts to assist, the Purchaser to the effect that the financing and
security documentation will come into place so as to allow the replacement
of the Facility Agreement directly from the new facilities.
10.7.3 The Seller and the Management shall use their reasonable efforts to
ensure that the Companies provide their consent to include the necessary
historical financial information (audited and unaudited), and they shall
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use their reasonable efforts to cause the Companies' independent public
accountants to consent to the inclusion of their related audit opinions, in
any filings of the Purchaser's Guarantor with the SEC in order to help
satisfy the reporting obligations of the Purchaser's Guarantor in
accordance with applicable SEC rules and regulations. The Seller and the
Management shall also use their reasonable efforts to ensure that the
Companies provide access to the necessary historical accounting records,
and corresponding access to the appropriate financial accounting personnel
(including their independent public accountants), in order to
develop/prepare any additional information required by the SEC, including
but not limited to interim financial data, pro forma combined information
and related pro forma adjustments and the identification of significant
differences between German and U.S. GAAP in the financial statements of the
Companies. Such access is granted at the expense of the Purchaser's
Guarantor (except for internal costs of the Seller and the Companies), to
the extent required for the purposes described in the preceding sentences,
to both Ernst & Young and the Purchaser's Guarantor, and the Seller and the
Management shall use their reasonable efforts that the consent, access and
support described in the preceding sentences will be provided on a timely
basis, in order to help satisfy the deadlines for reporting such data in
accordance with applicable SEC requirements.
10.8 Seller's Certificate and Purchaser's Verification in Respect of Material
Adverse Change
The Seller shall deliver to the Purchaser a written certificate that no
Material Adverse Change has occurred after the expiry of the five weeks
period mentioned in Section 5.2.3, but in any event before the Closing
Date. Notwithstanding Section 10.2 the Seller shall use its reasonable
efforts that within three weeks upon receipt by the Purchaser of the
written certificate in accordance with the preceding sentence the Companies
give the Purchaser access to the management of the Companies and to the
premises, records and information of the Companies as will be required by
the Purchaser to verify that a Material Adverse Change has not occurred. In
particular, the Seller shall use its reasonable efforts to give the
Purchaser the opportunity to meet with the Management and each of the
general managers of Ulrich Alber GmbH & Co. KG, Aquatec GmbH & Co. KG and
Dolomite AB and to discuss with them any issue that may be relevant to
determine whether a Material Adverse Change has occurred or not.
Provided that the Seller has in all material respects complied with his
obligations under the preceding paragraph, the Purchaser shall within three
weeks upon receipt of the written certificate acknowledge to the Seller in
writing that the Closing Condition in Section 5.2.3 has been fulfilled
unless a Material Adverse Effect has occurred..
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SECTION 11
CONFIDENTIALITY / PRESS RELEASES
11.1 Confidentiality; Press Releases; Public Disclosure
The Parties mutually undertake to keep the contents of this Agreement
secret and confidential vis-a-vis any Third Party provided, however, that
the Purchaser shall be entitled to provide any information necessary to the
financing banks for financing and syndication purposes if such banks agree
to be bound by confidentiality obligations to the same extent as the
Purchaser is bound under this Section 11. The confidentiality undertakings
set out in the preceding sentence shall not apply to the extent that the
relevant facts are publicly known or disclosure is required by law, stock
exchange or SEC requirements. In such case, the Parties shall, however,
inform each other prior to such disclosure and shall limit any disclosure
to the minimum required by statute or the authorities. No press releases or
other public announcement concerning the transactions contemplated by this
Agreement shall be made by either Party unless the form and text of such
announcement shall first have been approved by the other Parties except
that - if the other Party is required by law, stock exchange or SEC
requirements to make an announcement or other public filing - it may do so
after first consulting with the other Parties.
11.2 Seller's Confidentiality
Without prior consent of the Purchaser or any of the Companies, for a
period of three years after the Closing Date, the Seller shall, and shall
procure that its affiliates will, keep confidential and not disclose to any
Third Party and not use, any business or trade secrets of the Companies and
the Business, other than those which have become publicly known through no
fault of the Seller or which the Seller is required to disclose as
necessary to comply with any legal requirements.
Without prejudice to any of the rights of the Purchaser under this
Agreement:
The Purchaser acknowledges that the Seller or its Affiliates (for the
purposes of this Section 11.1 collectively referred to as the "Seller")
make investments in companies in the ordinary course of their business and,
as a result of such investments, such companies may be deemed to be
affiliated or associated with the Seller. In addition, certain persons and
entities that may be deemed to be affiliated or associated with the Seller
represent large institutions over which the Seller has no control. The
<page>
Seller has taken appropriate steps and will continue to take appropriate
steps to assure that it does not make the confidential information
available to such companies, persons or entities. To the extent the Seller
does not make the confidential information available, the terms of this
Section 11 shall not apply to such companies, persons or entities,
notwithstanding anything to the contrary set forth therein.
Under the regulatory rules which apply to the Seller, it is required to
make it clear that neither Warburg Pincus International LLC nor any other
member of the Warburg Pincus group (together referred to as "Warburg
Pincus") will be acting for the Purchaser or any Party in any way in
relation to the transaction referred to herein. In particular Warburg
Pincus will not provide any investment services to any Party or advise any
Party or any Party's shareholders on the merits of, or make any
recommendation to them in relation to, the terms of any transaction.
Warburg Pincus is not therefore responsible for providing any Party with
the protections afforded to its own investors and such Party should seek
its own independent legal, investment and tax advice as it sees fit. No
representative of Warburg Pincus has authority to behave in any way which
would contradict the statements made above.
11.3 Purchaser's Confidentiality; Return of Documents
In the unlikely event that this Agreement is terminated without the Closing
having been consummated, the Purchaser undertakes to keep confidential all
information received from the Seller in connection with the transactions
contemplated by this Agreement and to return all documents and information
embodied otherwise which they received from the Seller, together with any
copies thereof and to destroy all documents and information embodied
otherwise it produced based on information received from the Seller, unless
such information is in the public domain without breach of a
confidentiality obligation towards the Seller or unless Purchaser is
obliged by law to act otherwise. The Purchaser shall not be entitled to any
retention right with respect to such documents or information.
SECTION 12
ASSIGNMENT OF RIGHTS AND UNDERTAKINGS
This Agreement and any rights and obligations hereunder may not be assigned
and transferred, in whole or in part, without the prior written consent of
the other Parties hereto. However, the Purchaser shall be entitled to
assign certain rights and obligations under this Agreement (i) to the
bank(s) acting as financier(s) of the Purchaser's obligations under this
Agreement or (ii) to a wholly-owned Affiliate of the Purchaser's Guarantor
provided that such Affiliate shall only be entitled to exercise such rights
as long as it remains to be an Affiliate of the Purchaser's Guarantor and
<page>
provided that the Purchaser informs the Seller in writing before such
assignment of claims. For the purpose of clarification, Purchaser's
obligation to pay the Purchase Price in accordance with Section 3 hereunder
shall not be affected by such assignment.
SECTION 13
PURCHASER'S GUARANTOR
13.1 GUARANTY
The Purchaser's Guarantor hereby guarantees by way of an independent
promise of guaranty pursuant to Section 311 para. 1 BGB the proper
fulfillment of all of the obligations pursuant to this Agreement of the
Purchaser or the Nominee or an Affiliate of the Purchaser's Guarantor to
whom the rights and obligations under this Agreement have been assigned in
accordance with Section 12, in particular, but not limited to, the payment
of the Purchase Price together with interest on the Closing Date.
13.2 INDEMNIFICATION
The Purchaser's Guarantor shall indemnify and hold harmless on first demand
the Seller from any rights and claims brought by the Purchaser against the
Seller in excess of the limitations of the Seller's liability set out in
Sections 6 through 8 above; the Purchaser's Guarantor hereby expressly
waives by way of a contract for the benefit of the Company (Vertrag
zugunsten Dritter) any recourse against the Company.
SECTION 14
COSTS AND TAXES
14.1 TAXES
All transfer taxes (including real estate transfer taxes), stamp duties,
costs for the notarisation of this Agreement and any other charges and
costs which result from this Agreement and the Closing of the transaction
considered hereby shall be borne by the Purchaser. All charges, costs and
fees which result from the filings under the merger control laws and in
compliance with other regulatory requirements, including, but not limited
to, the charges, costs and fees of the competent merger control
authorities, shall be borne by the Purchaser.
<page>
14.2 COSTS
Each Party shall bear the costs and fees of its own advisors.
SECTION 15
NOTICES
15.1 Form of Notice
All declarations, notices or other communications hereunder (hereinafter
referred to as the "Notices") shall be done in writing in the English
language and delivered by hand or by courier or by facsimile to the person
at the addresses set forth below, or such other addresses as may be
designated by the respective Party to the other Parties in the same manner:
15.2 Notices to Seller
Any Notice to be given to the Seller hereunder shall be addressed as
follows:
Warburg Pincus
Attn.: Nick Lowcock
Almack House, 28 King Street
St. James's, London SW1Y 6QW, UK
Fax: +44 20-7306-0444;
with a copy to:
Freshfields Bruckhaus Deringer
Attn.: Dr. Anselm Raddatz
Freiligrathstrasse 1
D-40479 Dusseldorf
Fax: +49 211 4979 65 224
15.3 Notices to Management
Any Notice to be given to the Management hereunder shall be addressed as
follows:
with respect to the Manager Peter Schulz:
Josef-Ritz-Weg 88
D-81673 Munich
Fax: +49 89 178051 96;
<page>
with a copy to:
Baker & McKenzie LLP
Attn.: Dr. Lutz Zimmer
Theatinerstrasse 23
D-80333 Munich
Fax: +49 89 55 23 8 199
with respect to the Manager Wilhelm Kaiser:
Breitenbachstrasse 13
D-82515 Wolfratshausen
Fax: +49 89 178051 96;
with a copy to:
Baker & McKenzie LLP
Attn.: Dr. Lutz Zimmer
Theatinerstrasse 23
D-80333 Munich
Fax: +49 89 55 23 8 199
15.4 Notices to Purchaser
Any Notice to be given to the Purchaser hereunder shall be addressed as
follows:
Invacare GmbH & Co. KG
Attn.: Gregory C. Thompson
One Invacare Way, P.O. Box 4028
Elyria, OH 44036-2125
USA
Fax: +1 (440) 366 9008;
with a copy to:
Linklaters Oppenhoff & Radler
Attn.: Peter Erbacher
Mainzer Landstrasse 16
D-60325 Frankfurt am Main
Fax: +49 69 71003 333
and
Calfee, Halter & Griswold LLP
Attn.: Doug Neary
<page>
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, OH 44114-2688
USA
Fax: +1 (216) 241 0816
15.5 Notices to Purchaser's Guarantor
Any Notice to be given to the Purchaser's Guarantor hereunder shall be
addressed as follows:
Invacare Corporation
Attn.: Gregory C. Thompson
One Invacare Way, P.O. Box 4028
Elyria, OH 44036-2125
USA
Fax: +1 (440) 366 9008;
with a copy to:
Linklaters Oppenhoff & Radler
Attn.: Peter Erbacher
Mainzer Landstrasse 16
D-60325 Frankfurt am Main
Fax: +49 69 71003 333
and
Calfee, Halter & Griswold LLP
Attn.: Doug Neary
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, OH 44114-2688
USA
Fax: +1 (216) 241 0816
15.6 Change of Address
The Parties are to, without being legally obliged to, communicate any
change of their respective addresses set forth in Sections 15.2 through
15.5 as soon as possible in writing to the respective other Parties. Until
such communication, the address as hitherto shall be relevant.
15.7 Copies to Advisors
15.7.1 The receipt of copies of Notices by the Parties' advisors shall not
constitute or substitute the receipt of such Notices by the Parties
themselves.
<page>
15.7.2 Any Notice shall be deemed received by a Party regardless of whether any
copy of such Notice has been sent to or received by an advisor of such
Party or the acting notary, irrespective of whether the delivery of such
copy was mandated by this Agreement.
SECTION 16
FINDERS' FEE
The Seller hereby guarantees that none of the Companies has any obligation
or liability to pay any fees or commissions to any broker, finder or agent
with respect to this Agreement and its implementation.
SECTION 17
MISCELLANEOUS
17.1 Governing Law
This Agreement shall be governed by, and construed in accordance with, the
laws of Germany, excluding the United Nations Convention on Contracts for
the International Sale of Goods (CISG).
17.2 Jurisdiction; Process Agents
17.2.1 In the event of any dispute between the Parties arising out of or in
connection with this Agreement, exclusive jurisdiction shall be with the
competent courts in Munich.
17.2.2 The Seller hereby irrevocably appoints Warburg Pincus International
Limited, Almack House, 28 King Street, St. James's, London SW1Y 6QW, United
Kingdom as its agent to accept service of process in any legal action or
proceedings arising out of or in connection with this Agreement, service
upon whom shall be deemed completed whether or not forwarded to or received
by the Seller.
The Seller agrees to inform the Purchaser in writing of any change of
address of such process agent within ten Business Days of such change.
17.2.3 The Purchaser's Guarantor hereby irrevocably appoints Invacare
International SARL, Route de Cite Ouest 2, 1196 Gland, Switzerland as its
agent to accept service of process in Germany in any legal action or
proceedings arising out of or in connection with this Agreement, service
<page>
upon whom shall be deemed completed whether or not forwarded to or received
by the Purchaser's Guarantor.
The Purchaser's Guarantor agrees to inform the Seller and the Management in
writing of any change of address of such process agent within 14 days of
such change.
17.2.4 Nothing in this Agreement shall affect the right to serve process in any
other manner permitted by law or the right to bring proceedings in any
other jurisdiction for the purposes of the enforcement or execution of any
judgment, arbitration award or other settlement in any other courts.
17.3 Business Day
Heretofore and hereinafter, "Business Day" means a day (other than a
Saturday or Sunday) on which banks are open for business in Frankfurt am
Main.
17.4 Amendments, Supplementations
Any amendment or supplementation of this Agreement, including of this
provision, shall be valid only if made in writing, except where a stricter
form (e.g. notarization) is required under applicable law. Section 14.1
Sentence 1 and 14.2 shall apply mutatis mutandis.
17.5 Language
17.5.1 This Agreement is written in the English language (except that Annexes
may be partly in the German language). Terms to which a German translation
has been added shall be interpreted throughout this Agreement in the
meaning assigned to them by the German translation.
17.5.2 Any reference made in this Agreement to any types of companies or
participations, proceedings, authorities or other bodies, rights,
institutions, regulations or legal relationships (hereinafter collectively
referred to as the "Legal Terms") under German law shall extend to any
corresponding or identical Legal Terms under foreign law to the extent that
relevant facts and circumstances must be assessed under such foreign law.
Where no corresponding or identical Legal Terms under foreign law exist,
such Legal Terms shall be introduced as - functionally - come closest to
the Legal Terms under German law.
17.6 Headings
The headings and sub-headings of the sections contained herein are for
convenience and reference purposes only and shall not affect the meaning or
construction of any of the provisions hereof.
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17.7 Annexes
All Annexes attached hereto form an integral part of this Agreement.
17.8 Definitions
In this Agreement defined terms shall have the meaning as so defined
throughout the entire Agreement.
17.9 Entire Agreement
This Agreement constitutes the full understanding of the Parties and the
complete and exclusive statements of the terms and conditions of the
Parties' agreements relating to the subject matter hereof and supersedes
any and all prior agreements and understandings, whether written or oral,
that may exist between the Parties with respect to the subject matter of
this Agreement or parts thereof. Side agreements to this Agreement do not
exist.
17.10 Severability
Should any provision of this Agreement be or become invalid, ineffective or
unenforceable as a whole or in part, the validity, effectiveness and
enforceability of the remaining provisions shall not be affected thereby.
Any such invalid, ineffective or unenforceable provision shall be deemed
replaced by such valid, effective and enforceable provision as comes
closest to the economic intent and the purpose of such invalid, ineffective
or unenforceable provision as regards subject-matter, amount, time, place
and extent. The aforesaid shall apply mutatis mutandis to any gap in this
Agreement.
The foregoing notarial deed were read aloud to the persons appeared by the
deputy notary. Part of the annexes were also read aloud to the parties;
regarding the other part the parties have waived their right of reading aloud by
the notary, in which case they are presented to them who have acknowledged the
presentation by their signatures.
The notarial deed including all annexes were approved by the appeared parties
and the notarial deed has been signed by them and the deputy notary as follows:
signature of Markus Florian Stephanblom
signature of Peter Schulz
signature of Dr. Markus Kapplinger
signture of Fabian Ehlers
Notary-Seal signature of Dr. Hubertus Kolster
as officially appointed Deputy of the Notary
Prof. Dr. Alexander Riesenkampff