Exhibit 99.1
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SHARE PURCHASE AGREEMENT
BETWEEN
The Initial Sellers Hereunder
on the one side (the "INITIAL SELLERS")
AND
COLGATE-PALMOLIVE COMPANY,
300 Park Avenue,
New York, New York 10022, USA
on the other side (the "PURCHASER")
REGARDING
GABA HOLDING AG
c/o Dr. Roland Strauss, Blumenrain 20, CH-4001 Basle
("GABA HOLDING")
Colgate / GABA Share Purchase Agreement
RECITALS
(A) GABA Holding is a Swiss joint-stock company (AKTIENGESELLSCHAFT)
registered with the Commercial Registry of the Canton of Basel-Stadt,
with a share capital of CHF 1'200'000 (one million two hundred thousand
Swiss Francs), divided in to 24'000 registered shares of a par value of
CHF 50 each, and registered office at c/o Dr. Roland Strauss, Blumenrain
20, CH-4001 Basle, Switzerland.
(B) GABA Holding is a holding company that controls directly or indirectly
various subsidiaries.
(C) The Purchaser is a corporation organized under the laws of Delaware, with
head offices at 300 Park Avenue, New York, New York 10022, USA. The
Purchaser is listed on the New York Stock Exchange.
(D) During June 2003 GABA Holding's board of directors learned that Purchaser
would be interested in the acquisition of the Shares. Following efficient
negotiations, the Parties entered into this Agreement.
(E) Prior to signing of this Agreement, the Purchaser had access to the
Information Provided.
(F) The Initial Sellers hold 18'313 Shares, representing approximately 80.25%
of GABA Holding's share capital and votes (i.e. of the aggregate of the
Shares minus the Treasury Shares) and are willing to sell all of these
Shares to the Purchaser, which is willing to acquire them in accordance
with the terms and conditions of this Agreement.
(G) The shareholders of GABA Holding other than the Initial Sellers shall be
offered the opportunity to accede to this Agreement in the capacity of
Sellers with the same rights and obligations as the Initial Sellers by
way of executing a Deed of Accession in accordance with the provisions of
Article 2.3 of this Agreement and thereby to sell their shares in GABA
Holding to the Purchaser as well.
IT IS AGREED AS FOLLOWS:
1. DEFINITIONS
2002 Net Cash shall mean the amount of CHF 140,883,000, being the consolidated
net cash position of GABA Holding as of December 31, 2002, which
has been determined in accordance with section A of SCHEDULE
3.3.1.1.
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Colgate / GABA Share Purchase Agreement
Acceding Sellers shall mean any person that is a party to this
Agreement in accordance with the accession procedure
provided for in Article 2.3.
Accession Term shall mean the term of accession as defined in Article
2.3(a).
Accounts shall mean the bank accounts as defined in Article
5.2(a).
Adjustment
Amount shall mean the amount as defined in Article 3.3.1.
Agents shall have the meaning set forth in Article 16.6(c).
Agreement shall mean this Share Purchase Agreement, including all
Schedules attached hereto.
Article shall mean any article contained in this Agreement.
Closing shall mean the completion of the purchase of the
Purchase Shares as further defined in Article 5.1.
Closing Date shall mean the date of completion of the purchase of
the Purchase Shares as further defined in Article 5.1.
Closing
Financial
Statements shall mean the financial statements as defined Article
in 3.3.2(a).
Closing
Net Cash shall mean the Swiss Franc amount equivalent to the
cash, cash equivalents and other current financial
assets held for trading, less interest and non-interest
bearing, short and long-term financial indebtedness and
all interest accrued thereon until the Closing Date, of
GABA Holding as of the Closing Date, all on a
consolidated basis, to be determined on the basis of the
Closing Financial Statements in accordance with the
methods and principles set forth in section B of
SCHEDULE 3.3.1.1.
Companies shall mean GABA Holding and the Subsidiaries and
"Company" shall mean any of them.
Competing
Transaction shall mean the transactions defined in Transaction
Article 6.1.3.
Damage shall mean the damages as defined in Article 9.1.
Data Room shall mean the data room open to the Purchaser during
business hours at the offices of Niederer Kraft & Frey,
Bahnhofstrasse 13, CH-8001 Zurich, Switzerland, from
October 28, 2003, 08:00 a.m. local time to November 4,
2003, 06:00 p.m. local time.
Deeds of
Accession shall mean the deeds of accession, duly executed in the
form set forth in SCHEDULE 1.1 and "Deed of Accession"
shall mean any of them.
Escrow Agent shall mean the escrow agent as defined in the Escrow
Agreement.
Escrow Agreement shall mean the escrow agreement as defined in Article
9.6(a).
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Colgate / GABA Share Purchase Agreement
Financial
Statements shall mean the audited consolidated financial statements
of GABA Holding for the financial years closed as of
December 31, 2001 and as of December 31, 2002, each of
which has been prepared in accordance with IFRS
(International Financial Reporting Standards, formerly
known as IAS, International Accounting Standards),
consistently applied, copies of which are contained in
SCHEDULE 1.2.
GABA Holding shall have the meaning as set out at the beginning of
this Agreement.
Independent
Auditor shall mean the independent auditor as defined in Article
3.3.2(e).
Information
Provided shall mean (i) the information memorandum on the
Companies, dated October 3, 2003, (ii) the documents
contained in the Data Room as per the Data Room index
contained in SCHEDULE 1.3 (iii) the additional documents
submitted by the Sellers or any of the Companies to the
Purchaser until the Signing Date according to the list
in SCHEDULE 1.4, and (iv) the Schedules to this
Agreement.
Information
Technology shall mean all computer systems, communications systems,
software and hardware, which belong to, are used by, or
have been licensed to, any of the Companies.
Initial Purchase
Price shall mean the initial purchase price as defined in
Article 3.2.
Initial Sellers shall have the meaning as set out at the beginning of
this Agreement.
Intellectual
Property shall mean all intellectual property rights and
applications for intellectual property rights, including
all patents (PATENTE), supplementary protection
certificates (ERGANZENDE SCHUTZZERTIFIKATE), utility
models (GEBRAUCHSMUSTER), trademarks (MARKEN), trade
names (UNTERNEHMENSKENNZEICHEN), trade dress
(AUSSTATTUNGEN), geographic-origin marks (GEOGRAFISCHE
HERKUNFTSANGABEN), patterns and designs
(GESCHMACKSMUSTER UND DESIGNMUSTER) including
unregistered community designs
(GEMEINSCHAFTSBENUTZUNGSGESCHMACKSMUSTER), copyrights,
topographies (TOPOGRAPHIEN), unregistered titles
(WERKTITEL), internet domain-names, Know-how, database
rights (DATENBANKRECHTE), inventions and all rights to
use inventions created by staff members and other
persons, and similar or related rights, whether
registered or not.
Know-how shall mean all confidential technical or business
information in any form (including on paper,
electronically stored data, magnetically stored data,
film and microfilm), in particular all confidential
information concerning customers and suppliers.
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Colgate / GABA Share Purchase Agreement
Material
Contracts shall mean the contracts as defined in Article 8.10.
Material Adverse
Effect shall mean an adverse effect, which (i) materially
impairs or hinders the assets, operations, condition
(financial or otherwise) or results of the Companies
taken as a whole or (ii) results or is more likely than
not to result in the consolidated net equity of the
Companies being less than as at December 31, 2002, or
(iii) which has or is more likely than not to have
compared to the Financial Statements as of December 31,
2002, a negative impact on the EBIT of the Companies as
a whole of more than 20% on a continuous twelve-month
period, being specified that any adverse effect
resulting from either the public announcement or
pendency of the transaction contemplated under this
Agreement or from general economic causes related to the
businesses run by the Companies (including seasonal
fluctuations) shall not be taken into consideration for
the determination of such material adverse effect to the
extent that the Companies are not disproportionately
affected as compared to their peer companies.
Notice of
Objection shall mean the notice as defined in Article 3.3.2(b).
Outstanding
Shares shall mean the Shares other than the Treasury Shares.
Parties shall mean the Purchaser, the Initial Sellers and the
Acceding Sellers and "Party" shall mean any of them.
Pre-Closing
Minutes shall mean the minutes as defined in Article 6.4.
Proposed
Adjustment shall mean the amount as defined in Article 3.3.2(a).
Amount
Purchaser shall have the meaning as set out at the beginning of
this Agreement or any successor or assignee as permitted
under this Agreement.
Purchase Shares shall mean the Shares as defined in Article 2.1
and "Purchase Share" shall mean any of them.
Representations
and
Warranties shall mean the representations and warranties made in
Article 8.
Sellers shall mean the Initial Sellers and the Acceding Sellers.
Sellers'
Knowledge shall mean any facts, risks, matters, circumstances or
other information which are or should be known by any of
Mr. Werner Degen, Dr. Peter Grogg, Mr. Hans Raber, Mr.
Dieter von Schulthess, Dr. Nora Schroer and Ms Rosmarie
Champion.
Sellers'
Representative shall mean the person appointed by the Sellers as their
representative in accordance with Article 16.6(b).
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Colgate / GABA Share Purchase Agreement
Share Price shall mean the price per Purchase Share as set forth in
Article3.2(b).
Shares shall mean all of the 24'000 registered shares in GABA
Holding of a nominal value of CHF 50 (fifty Swiss
Francs) each and "Share" shall mean any of them.
Signing shall mean the signing of this Agreement as per Article
4.1.
Signing Date shall mean the signing date as defined in Article 4.1.
Subsidiaries shall mean all of the companies listed in SCHEDULE 1.5
(i.e. all subsidiaries of which GABA Holding directly or
indirectly holds more than 50% of the outstanding shares
or votes) and "Subsidiary" shall mean any of them.
Swiss Companies shall mean all of the companies listed in SCHEDULE 1.6.
Tax Rulings shall mean the tax rulings contained in SCHEDULE 1.7.
Third Party
Claims shall mean claims by third parties as defined in Article
9.3(c).
Total Purchase
Price shall mean the aggregate purchase price for the Purchase
Shares as defined in Article 3.1.
Trade Business shall mean the non-oral care business activities of the
Companies and of the joint venture Johnson & Johnson /
GABA BV, Bolderweg 1, 1332, AX Almere, The Netherlands,
relating to the distribution of non-GABA products on
behalf of a number of partners in Benelux.
Trade Escrow Account shall mean the bank account as defined in
Article 5.2(c).
Trade Escrow
Amount shall mean the escrow amount as defined in Article
5.2(c) and as decreased in accordance with Article 10.
Treasury Shares shall mean the treasury Shares as defined in Article
8.2.
Warranty Escrow
Account shall mean the bank account as defined in Article
5.2(b).
Warranty Escrow
Amount shall mean the escrow amount as defined in Article
5.2(b) and as decreased in accordance with Article 9.6.
Welfare Fund shall mean the welfare fund of GABA AG as defined
in Article 13.3(b).
2. SALE AND PURCHASE
2.1 SALE OF PURCHASE SHARES
Subject to the terms and conditions set forth in this Agreement,
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Colgate / GABA Share Purchase Agreement
(a) the Initial Sellers hereby agree to sell and transfer at the
Closing Date to the Purchaser all, but not less than all, of the
Shares owned by them as set forth in SCHEDULE 2.1.1, and
(b) each of the Acceding Sellers agrees to sell and transfer on the
Closing Date to the Purchaser all, but not less than all, of the
Shares owned by her/him/it as set forth in the Deeds of Accession
signed by her/him/it
(all of the Shares of the Initial Sellers and the Acceding Sellers,
together the "PURCHASE SHARES").
2.2 PURCHASE OF PURCHASE SHARES
Subject to the terms and conditions set forth in this Agreement, the
Purchaser hereby agrees to purchase the Purchase Shares from the Sellers,
together with all rights now or hereafter attaching thereto, it being
understood that the Purchaser will be entitled to all dividends and other
distributions not paid at the Closing Date, together with such other
rights accruing by ownership of the Purchase Shares.
2.3 ACCESSION, ACCESSION TERM, EXCLUSIVITY AND EQUAL TREATMENT OF ALL
SHAREHOLDERS
(a) All of the holders of Shares who are not Initial Sellers shall be
given a period ending 10 (ten) calendar days before the Closing
Date (the "ACCESSION TERM") (i) to accede to this Agreement in the
capacity of Sellers by way of execution of a Deed of Accession and
(ii) for the delivery of such Deed of Accession (date of Swiss
postal mark) to the Purchaser and the Sellers' Representative.
(b) The Purchaser shall until the Closing Date not initiate or
continue any negotiations nor enter into any agreement with any
holder of Shares in respect of the sale and purchase of Shares
other than in accordance with this Agreement. After the Closing
Date the Purchaser shall until the second anniversary of the
Closing Date not enter into any agreement with any holder of
Shares in respect of the sale and purchase of Shares that
provides in any material respect for terms and conditions
(including, without limitation, regarding price and escrow) more
favorable to the selling holder of Shares than the terms and
conditions of this Agreement; PROVIDED that, subject to the
provisions in Article 13.1, nothing contained in this Agreement
shall prevent the Purchaser and GABA Holding after the Closing
Date from implementing any corporate transaction involving GABA
Holding or the Subsidiaries (such as statutory mergers and the
like) at any such terms and conditions as the Purchaser may have
to offer in accordance with the law.
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Colgate / GABA Share Purchase Agreement
3. PURCHASE PRICE
3.1 THE TOTAL PURCHASE PRICE
The consideration to be paid by the Purchaser for the purchase of the
Purchase Shares (the "TOTAL PURCHASE PRICE") shall be the aggregate of
(a) the Initial Purchase Price which shall be determined in accordance
with Article 3.2 and be paid on the Closing Date in accordance with
Article 5.2, and (b) the Adjustment Amount which shall be determined and
paid in accordance with Article 3.3.
3.2 THE INITIAL PURCHASE PRICE
(a) The initial purchase price payable by the Purchaser for all of the
Purchase Shares on the Closing Date in accordance with Article 5.2
shall be the Swiss Francs amount resulting from multiplying (i)
the number of Purchase Shares by (ii) the Share Price (the
"INITIAL PURCHASE PRICE").
(b) The Share Price shall be:
(i) CHF 46'058.10 (forty six thousand fifty eight point ten
Swiss Francs) for each Purchase Share if the Purchase
Shares at the Closing represent 90% or more of the
Outstanding Shares; or
(ii) CHF 43'866.95 (forty three thousand eight hundred sixty six
point nine five Swiss Francs) for each Purchase Share if
the Purchase Shares at the Closing represent more than 80%,
but less than 90%, of the Outstanding Shares.
The applicable Share Price, the number of Purchase Shares and the
resulting Initial Purchase Price shall, upon expiry of the
Accession Term and prior to the Closing Date, be recorded by the
Sellers, represented for such purpose by the Sellers'
Representative, and the Purchaser in the Pre-Closing Minutes in
accordance with Article 6.4.
3.3 THE ADJUSTMENT AMOUNT
3.3.1 ADJUSTMENT AMOUNT
The adjustment amount shall be determined in accordance with Article
3.3.2 and shall be the Swiss Francs amount (positive or negative)
equivalent to (a) the Closing Net Cash less the 2002 Net Cash calculated
in accordance with SCHEDULE 3.3.1.1, divided by (b) the number of
Outstanding Shares, multiplied by (c) the number of Purchase Shares (the
"ADJUSTMENT AMOUNT"). The Adjustment Amount shall be payable by the
Purchaser (if posi-
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Colgate / GABA Share Purchase Agreement
tive) or the Sellers (if negative), provided that it exceeds CHF
1'000'000 (one million Swiss Francs), in accordance with Article 3.3.4.
3.3.2 DETERMINATION OF THE ADJUSTMENT AMOUNT
The Adjustment Amount shall be determined as follows:
(a) As soon as practicable but not later than on the 60th (sixtieth)
calendar day after the Closing Date, the Purchaser shall deliver
to the Sellers' Representative (i) the audited consolidated
financial statements of GABA Holding as of the Closing Date
prepared in accordance with the accounting principles as applied
for the Financial Statements and consistent with past practice,
audited by Ernst & Young, Basle, Messrs Jurg Zurcher and Philipp
Schaffter, (the "CLOSING FINANCIAL STATEMENTS"), and (ii) a
statement in writing setting forth the Adjustment Amount as
proposed by the Purchaser (the "PROPOSED ADJUSTMENT AMOUNT").
(b) If the Sellers wish to oppose the Closing Financial Statements or
the Proposed Adjustment Amount, the Sellers' Representative shall
give written notice to the Purchaser within 60 (sixty) calendar
days from the date of receipt by the Sellers' Representative of
the Closing Financial Statements and the Proposed Adjustment
Amount, stating in writing and in reasonable detail the reasons
for Sellers' objections (the "NOTICE OF OBJECTION").
(c) In the event that the Purchaser has not received the Notice of
Objection in accordance with Article 3.3.2(b), the Proposed
Adjustment Amount shall be binding upon the Parties for all
purposes, and the Adjustment Amount shall equal the Proposed
Adjustment Amount.
(d) In the event that the Purchaser has duly received a Notice of
Objection in accordance with 3.3.2(b), the Parties (the Sellers
represented for such purpose by the Agents) shall endeavor in good
faith to resolve any objection of the Sellers within 20 (twenty)
calendar days after receipt by the Purchaser of the Notice of
Objection.
(e) If the Parties fail to resolve all objections of the Sellers
within 20 (twenty) calendar days from the receipt by the Purchaser
of the Notice of Objection, the matter shall promptly be referred
to
(i) KPMG; or
(ii) in the event that KPMG is unable to accept such appointment
or if the terms of engagement have not been agreed upon
among the Parties and KPMG within 20 (twenty) calendar days
from such referral, to Deloitte & Touche; or
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Colgate / GABA Share Purchase Agreement
(iii) in the event that Deloitte & Touche is unable to accept
such appointment or if the terms of engagement have not
been agreed upon among the Parties and Deloitte & Touche
within 20 (twenty) calendar days from the referral to
Deloitte & Touche, to a Swiss accounting firm of national
repute as agreed upon by the Parties; or
(iv) if such agreement has not occurred within 10 (ten) calendar
days, to a Swiss accounting firm of national repute
appointed by the president of the Zurich Chamber of
Commerce upon application of the Sellers' Representative or
the Purchaser
(in each case the "INDEPENDENT AUDITOR"). The Independent Auditor
shall be independent from all of the Parties.
(f) The Independent Auditor shall independently consider the Closing
Financial Statements and the Proposed Adjustment Amount and the
respective objections of the Sellers and any responses to such
objections made by the Purchaser and, to the extent in dispute
between the Parties, determine the Adjustment Amount. The
Independent Auditor shall act as an expert in accordance
with ss.258 of the Zurich Code of Civil Procedure and not as an
arbitrator. The determination by the Independent Auditor shall be
final and binding on the Parties, except in the event of manifest
error on the part of the Independent Auditor or in the event that
the Independent Auditor is not independent from any of the Parties
or has not acted impartially in which case Article 17 shall apply.
The Parties shall procure that the Independent Auditor will be
provided with all documents and information relating to the
establishment of the Closing Financial Statements and the
Adjustment Amount as the Independent Auditor may reasonably
request. To the extent that the Parties do not agree otherwise,
the Independent Auditor shall determine its own procedure,
provided that: (i) the Independent Auditor shall make its
determination and deliver its written expert opinion thereon as
soon as reasonably practicable but if ever possible not later than
60 (sixty) calendar days from the date of its appointment; (ii)
the proceedings shall be conducted in English; and (iii) the
procedure of the Independent Auditor shall comply with the
principles of due process. The costs and expenses of the
Independent Auditor shall be borne by the Parties proportionate to
the deviation of the Parties' respective assertions from the
Independent Auditor's determination (such determination shall be
final and binding on the Parties).
3.3.3 INTEREST
If the Adjustment Amount (whether positive or negative) exceeds CHF
1'000'000 (one million Swiss Francs), interest shall accrue thereon from
the Closing Date through but not including the date of payment in
accordance with Article 3.3.4 (on the basis of actual days lapsed over
365) at the interest rate of one month LIBOR as per Reuters page LIBOR01
as at the Closing Date plus one per cent per annum.
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Colgate / GABA Share Purchase Agreement
3.3.4 PAYMENT OF THE ADJUSTMENT AMOUNT AND ACCRUED INTEREST
(a) If the Adjustment Amount is positive and exceeds CHF 1'000'000
(one million Swiss Francs), the Purchaser shall pay the Adjustment
Amount and the interest accrued thereon pursuant to Article 3.3.3
in full by wire transfer of immediately available funds to the
Accounts.
(b) If the Adjustment Amount is negative and exceeds CHF 1'000'000
(one million Swiss Francs), the Sellers shall pay the Adjustment
Amount and the interest accrued thereon pursuant to Article 3.3.3
in full by wire transfer of immediately available funds to a bank
account designated by the Purchaser 3 (three) business days in
advance. If such payment is not made within the period of time set
forth in paragraph (c) hereafter, the Purchaser shall have the
right to withdraw such amount from the Escrow Amount by unilateral
notice to the Escrow Agent at any time during the escrow period.
(c) Payment pursuant to Article 3.3.4(a) or Article 3.3.4(b) shall be
made by the Party in charge thereof with value of the 10th (tenth)
business day after:
(i) the expiry of the 60th (sixtieth) calendar day period if no
Notice of Objection has been served in accordance with
Article 3.3.2(b);
(ii) the date on which the Parties have come to an agreement on
the Adjustment Amount in accordance with Article 3.3.2(d);
or
(iii) the date on which the Sellers' Representative and the
Purchaser have received the Independent Auditor's
determination in accordance with Article 3.3.2(f).
3.4 ALLOCATION OF TOTAL PURCHASE PRICE AMONG THE SELLERS
The Total Purchase Price shall be divided and allocated amongst the
Sellers internally and such allocation shall not be governed by this
Agreement and shall not affect the Purchaser. For the avoidance of doubt,
the Purchaser shall, and shall be deemed to, have fully satisfied its
obligation towards each of the Sellers to pay the Initial Purchase Price
or the Adjustment Amount payable for the Purchase Shares sold by such
Seller, and each of the Sellers shall, and shall be deemed to, have no
claim whatsoever against the Purchaser to receive any portion of the
Initial Purchase Price or the Adjustment Amount payable for the Purchase
Shares sold by such Seller, if and immediately after the Purchaser has
paid the Initial Purchase Price in accordance with Article 5.2 and the
Adjustment Amount in accordance with Article 3.3.4, respectively.
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Colgate / GABA Share Purchase Agreement
4. SIGNING
4.1 SIGNING DATE
The signing of this Agreement (the "SIGNING") takes place at the offices
of Niederer Kraft & Frey, Zurich, and on December 18, 2003, (the "SIGNING
DATE").
4.2 DOCUMENTS TO BE DELIVERED AT THE SIGNING DATE
(a) At the Signing Date, the Initial Sellers delivered to the
Purchaser the following documents:
(i) duly executed powers of attorney of each of the Initial
Sellers authorizing Messrs. Werner Degen and Dr. Peter
Grogg to sign this Agreement, the powers of attorney are
attached in partly masked format to this Agreement as
SCHEDULE 4.2.1 and in unmasked format;
(ii) an excerpt of the Commercial Register of the Canton of
BASEL-LANDSCHAFT regarding Ingro Finanz AG that is attached
to this Agreement as SCHEDULE 4.2.2;
(iii) copies of the share certificates of the Shares to be sold
by the Initial Sellers as attached in partly masked format
to this Agreement as SCHEDULE 4.2.3 and in unmasked format;
(iv) an up-to-date extract of the shareholder's register
(AKTIENBUCH) of GABA Holding showing the number of Shares
of the Initial Sellers, as attached in partly masked format
to this Agreement as SCHEDULE 4.2.4 and in unmasked format.
(b) At the Signing Date, the Purchaser delivered to Messrs. Werner
Degen and Dr. Peter Grogg, on behalf of the Initial Sellers, the
following documents:
(i) a resolution passed by the board of directors of the
Purchaser approving the transactions contemplated by this
Agreement and authorizing Messrs. Ian M. Cook or Franck
Moison or such other persons as the Purchaser may deem
appropriate to sign this Agreement, the board resolution is
attached as SCHEDULE 4.2.5;
(ii) the draft version of the notifications to all of the merger
control authorities which have to approve this Agreement,
namely the notifications to be filed in Germany, Austria,
Czech Republic, the Netherlands, Slovakia and Portugal.
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Colgate / GABA Share Purchase Agreement
(c) At the Signing Date the Parties produced two complete and
exhaustive copies of the Information Provided, one copy to be
deposited with Purchaser's Swiss counsel on behalf of the
Purchaser and one with the Sellers' Representative.
5. CLOSING
5.1 CLOSING DATE
The completion of the purchase of the Purchase Shares by the Purchaser
(the "CLOSING") shall take place at the offices of Niederer Kraft & Frey,
Zurich. Unless otherwise agreed between the Purchaser and the Agents the
Closing shall occur as early as possible after February 20, 2004 and the
fulfillment (or waiver) of the last to be fulfilled (or, as the case may
be, waived) of the conditions precedent set out in Articles 7.1(a),
7.1(e) and 7.1(f) (and provided that the other conditions precedent set
forth in Article 7.1 are satisfied on the Closing Date or waived before
or on the Closing Date); Closing shall occur on the last business day of
the month, if practicable, following the fulfillment or waiver of the
conditions precedent set forth in Article 7.1 (the "CLOSING DATE").
5.2 PAYMENT OF THE INITIAL PURCHASE PRICE
The Purchaser shall pay the Initial Purchase Price at the Closing Date as
follows:
(a) 84% of the Initial Purchase Price minus the Trade Escrow Amount
shall be paid by means of wire transfer to the one or two bank
accounts (such accounts with UBS, Headoffice Basle or Zurich, to
be indicated by the Sellers not later than 6 (six) business days
prior to the Closing Date) (the "ACCOUNTS") for same day receipt;
and
(b) 16% of the Initial Purchase Price (the "WARRANTY ESCROW AMOUNT")
shall be paid by means of wire transfer in favor of the Escrow
Agent to the bank account (such account with UBS, Headoffice Basle
or Zurich, to be indicated by the Escrow Agent not later than 3
(three) business days prior to the Closing Date) (the "WARRANTY
ESCROW ACCOUNT") for same day receipt;
(c) an amount equivalent to CHF 12'400'000 (twelve million four
hundred thousand Swiss Francs) (the "TRADE ESCROW AMOUNT") shall
be paid by means of wire transfer in favor of the Escrow Agent to
the bank account (such account with UBS, Headoffice Basle or
Zurich, to be indicated by the Escrow Agent not later than 3
(three) business days prior to the Closing Date) (the "TRADE
ESCROW ACCOUNT") for same day receipt.
5.3 DOCUMENTS TO BE DELIVERED AT THE CLOSING DATE
At the Closing Date, the Sellers shall deliver to the Purchaser the
following documents:
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Colgate / GABA Share Purchase Agreement
(a) the share certificates representing all of the Purchase Shares,
duly endorsed to the Purchaser;
(b) the valid shareholder's register (AKTIENBUCH) of GABA Holding,
duly signed, up to date to record the transfer made in accordance
with the endorsement referred to in Section (a) above;
(c) a resolution passed by the board of directors of GABA Holding to
the effect that the acquisition of all of the Purchase Shares by
the Purchaser is approved in advance and the Purchaser will be
recognized as the shareholder of all of the Purchase Shares
subject to the occurrence of the Closing; and
(d) letters of resignation by the directors (MITGLIEDER DES
VERWALTUNGSRATES) of GABA Holding (and, upon the Purchaser's
request, to be made not later than 10 (ten) calendar days prior to
the Closing, of the Subsidiaries), effective as of the Closing
Date and subject to the occurrence of the Closing, each including
a confirmation of each such director that he does not have, and
will not raise, any claims against any of the Companies under any
legal title whatsoever; and
(e) a letter of the company's secretary of GABA Holding confirming
that i) the shareholder's register (AKTIENBUCH) is valid and up to
date, ii) the certificates of the Purchase Shares are validly
issued and duly endorsed to the Purchaser and iii) there is no
shareholder's agreement providing for purchase rights
(KAUFSRECHTE), rights of first offer (VORHANDRECHTE) or rights of
first refusal (VORKAUFSRECHTE) in respect of the Purchase Shares.
At the Closing Date, the Purchaser shall deliver to the Sellers the
following documents:
(f) an unconditional confirmation in writing by UBS, Headoffice Basle
or Zurich, evidencing the payment order as of the Closing Date of
(i) the Initial Purchase Price (minus the Warranty Escrow Amount
and minus the Trade Escrow Amount) to the bank designated by the
Sellers for crediting to the Accounts, (ii) the Warranty Escrow
Amount to the bank designated by the Escrow Agent for crediting to
the Warranty Escrow Account, and (iii) the Trade Escrow Amount to
the bank designated by the Escrow Agent for crediting to the Trade
Escrow Account.
5.4 APPOINTMENT OF THE NEW DIRECTORS
At the Closing Date the Sellers shall procure the holding of such board
and/or general shareholders' meetings of the Companies as the Purchaser
may have requested, to (i) effect the appointment of such persons as the
Purchaser may require as directors of any of the Companies and (ii) grant
discharge to the directors resigning from office and to the managers.
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5.5 RECIPROCITY
The Parties acknowledge that the above-mentioned closing transactions
shall take place simultaneously and that the sale of the Purchase Shares
shall only be completed if all said transactions have happened in
accordance with the provisions hereof.
6. ACTIONS PENDING CLOSING
6.1 UNDERTAKINGS OF THE SELLERS
6.1.1 CONDUCT OF BUSINESS OF THE COMPANIES
(a) Unless permitted otherwise in this Agreement and in particular
subject to Article 6.1.1(c), between the date of this Agreement
and the Closing Date, the Sellers shall procure that, except with
the prior consent of the Purchaser, such consent not to be
unreasonably withheld or delayed, the business of the Companies
shall be carried on in the ordinary course and in a prudent and
appropriate manner consistent with past practice and that the
current relationship of the Companies with their employees,
officers, customers, suppliers and business partners shall be
preserved and maintained on a satisfactory basis; and in
particular, the Sellers shall procure that:
(i) there shall be no modification of the share capital or
other change in the by-laws of any of the Companies, and
that no rights to a future capital increase or rights in
shares of any of the Companies shall be granted to any
person;
(ii) there shall be no acquisition, sale, lease, transfer,
pledge or encumbrance of any material tangible or
intangible assets (other than the sale of items of stock in
the ordinary course of business) nor any cancellation or
waiver of any material receivables;
(iii) no guarantee, surety, indemnity or letter of comfort in
respect of the obligations of third parties shall be
granted by any Company, other than in the ordinary course
of business consistent with past practice;
(iv) no lien, security interest, pledge, mortgage, easement, or
other charge shall be granted or created (other than
statutory liens) over any material tangible or intangible
assets of the Companies, other than in the ordinary course
of business consistent with past practice;
(v) there shall be no new financial indebtedness of the
Companies (other than the CHF 16'000'000 mortgage loan
shown in the Financial Statements), including no new loan,
issue of bonds, notes, debentures, loan stock or any
similar instrument;
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Colgate / GABA Share Purchase Agreement
(vi) no declaration or payment of any dividend or any other
distribution of profits or reserves shall be made by GABA
Holding;
(vii) none of the Companies shall terminate, discontinue,
materially vary or amend, or withdraw from any material
agreement, arrangement, partnership, consortium, joint
venture or other incorporated association;
(viii) no litigation, administrative or arbitration proceedings
involving any of the Companies shall be initiated,
discontinued or settled by the Companies other than
immaterial litigation or in the ordinary course of
business, including in respect of taxes, and no material
tax election shall be made by any of the Companies;
(ix) the terms of employment of any director, officer or
employee of any of the Companies shall not be changed,
except as required by law or agreements existing on the
date hereof and previously disclosed to the Purchaser, and,
except as expressly provided for in this Agreement, none of
the pension, welfare, benefit or incentive schemes or plans
of any of the Companies shall be amended or changed, and no
new such schemes or plans shall be established or
individual commitments be made;
(x) the Companies shall only enter into an obligation, pay,
discharge or satisfy any claim, liability or obligation or
make any capital expenditures
(aa) which is in the ordinary course of business and in
an amount of less than CHF 3'000'000 (three million
Swiss Francs) in the individual, or
(bb) which is out of the ordinary course of business and
in an amount of less than CHF 100'000 (one hundred
thousand Swiss Francs) in the aggregate;
(xi) the Companies shall not
(aa) change their practices with respect to the
accounting, collection or payment of its accounts
payable or accounts receivable,
(bb) pre-pay or delay the payment of invoices in an
amount exceeding CHF 500'000 (five hundred thousand
Swiss Francs) in the aggregate or outside the
ordinary course of business consistent with past
practice,
(cc) change their accounting principles or practices
except as required by changes of law or IFRS; or
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Colgate / GABA Share Purchase Agreement
(dd) reduce the level of their inventories of raw
material or other products or semi-finished products
supplied by third parties outside the ordinary
business consistent with past practice;
(xii) no new subsidiary shall be incorporated, and no legal
reorganization or liquidation or mergers or similar
transactions involving any Company shall be effected, and
GABA Holding shall not sell, transfer, pledge or encumber
any Treasury Share;
(xiii) no shareholders' agreement among the shareholders of GABA
Holding or any Company shall be executed, neither in
writing nor orally; and
(xiv) GABA Holding and the board of directors of GABA Holding
shall either not approve any transfer or encumbrance of
Shares by any person who is a holder of Shares at the
Signing Date or purchase such Shares.
(b) The Purchaser shall notify to GABA Holding the person authorized
to give consents in accordance with this Article (such person to
be Mr. Franck Moison or a person with a similar position within
the Purchaser) and shall make best efforts to procure timely
response (it being understood that timely usually is within 2
(two) business days).
(c) Notwithstanding anything else in this Agreement, the business and
transactions listed in SCHEDULE 6.1.1 are permitted and not in
violation of Article 6.1.1.
6.1.2 INFORMATION, DOCUMENTATION, ASSISTANCE AND BEST EFFORTS
(a) The Sellers shall procure that the Purchaser is provided with all
necessary information, documentation and assistance which may be
reasonably necessary to obtain any governmental authorizations
which may be required from the Purchaser with respect to the
execution of this Agreement and the acquisition of the Purchase
Shares.
(b) Between January 15, 2004 and the Closing Date, the Sellers shall,
and shall cause the Companies to, provide the Purchaser and its
representatives, after prior written approval by the Sellers'
Representative or the Agents, in connection with, and strictly
limited to the preparation of the Closing or the ensuring of the
smooth transition of the business to the Purchaser after Closing,
with reasonable access to the facilities, books, records and
personnel of the Companies during normal business hours, only in
compliance with all applicable laws.
(c) Between the Signing Date and the Closing Date, the Sellers shall,
and shall cause the Companies to, furnish promptly to the
Purchaser the financial statements of the Companies (as prepared
in accordance with their normal accounting procedures)
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Colgate / GABA Share Purchase Agreement
promptly after such financial statements are available, in
particular the financial statements as of December 31, 2003.
(d) The Agents shall use best efforts (excluding the period from the
Signing Date until the end of January 2004) that all holders of
Outstanding Shares accede to this Agreement.
6.1.3 EXCLUSIVITY
From the date of this Agreement (and for Acceding Sellers from the date
of signing their Accession Deed, respectively) until the Closing Date,
each Seller shall, and the Sellers shall cause the Companies and the
Sellers' and the Companies' affiliates and representatives to,
immediately cease any discussions or negotiations with respect to any
acquisition or sale of Shares or substantial business assets, any merger
or any similar extraordinary transaction regarding any of the Companies
with any third party (any of the foregoing, a "COMPETING TRANSACTION").
The Sellers and their representatives shall not and shall procure that
the Companies and their representatives do not, directly or indirectly,
(i) solicit, initiate or encourage (including by way of directly
furnishing any information for such purposes), or take any other action
designed to facilitate, any inquiries or the making of any proposal which
constitutes, or may reasonably be expected to lead to, a Competing
Transaction, (ii) participate in any discussions or negotiations
regarding any Competing Transaction, or (iii) approve or enter into a
letter of intent, term sheet or agreement relating to a Competing
Transaction or otherwise consummate a Competing Transaction.
6.2 ACTIONS BY SELLERS BEFORE CLOSING
The Purchaser acknowledges and agrees that the Sellers may procure,
effective before the Closing Date, that the Companies make available CHF
800'000 (eight hundred thousand Swiss Francs) for the purpose of an
increase of the pension payments made to employees of Swiss Companies
having retired prior to or upon the Closing Date. The cost of such payment
are borne by the Sellers by way of reduction of the Closing Net Cash.
6.3 BEST EFFORTS
The Parties shall use best efforts to procure that the conditions
precedent set forth in Article 7.1 will be fulfilled as soon as possible
and that all of the necessary governmental approvals will be granted
unconditionally (OHNE AUFLAGEN ODER BEDINGUNGEN); in particular, the
notifications to the competent authorities whose approval of this
Agreement is required shall be filed no later than January 12, 2004.
6.4 PRE-CLOSING MINUTES AND SIGNING OF ESCROW AGREEMENT
Upon expiry of the Accession Term and in no event later than 5 (five)
business days prior to the Closing Date, the Parties shall record in
minutes substantially in the form set forth
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Colgate / GABA Share Purchase Agreement
in SCHEDULE 6.4.1 (the "PRE-CLOSING MINUTES") for the purposes of the
preparation of the Closing:
(a) the total number of the Purchase Shares;
(b) the Share Price (in accordance with Article 3.2(b));
(c) the Initial Purchase Price (in accordance with Article 3.2(a));
(d) the Escrow Agreement, the Warranty Escrow Amount and the Trade
Escrow Amount;
(e) the names of those members of the boards of directors of the
Companies who in accordance with Article 5.3(d) shall resign from
such boards and those to be appointed at the Purchaser's request
in accordance with Article 5.4; and
(f) the Closing Date, time and place of the Closing.
The Escrow Agreement shall be signed by all of the parties thereto no
later than 5 (five) business days prior to the Closing Date.
7. CONDITIONS PRECEDENT TO THE CLOSING
7.1 CONDITIONS
The undertaking of the Purchaser to purchase the Purchase Shares in
accordance with Article 2 is subject to all of the following conditions
being met; whereby conditions (a), (b), (c) and (g) (except regarding
Article 11(b)) may be waived by the Purchaser without the consent of the
Sellers, condition (d) may be waived by the Party affected by such
judgment, injunction, other authoritative measure or action, conditions
(e) and (f) may be waived only by the consent of the Purchaser and of the
Sellers (represented for such purposes by the Agents) and condition (g)
(only regarding Article 11(b)) may be waived by the Sellers (represented
for such purposes by the Agents) without the consent of the Purchaser:
(a) Holders of Shares shall have acceded to this Agreement in the
capacity of Sellers in accordance with Article 2.3(a) to the
extent necessary so that the number of Purchase Shares exceeds 80%
of the Outstanding Shares.
(b) Between the Signing Date and the Closing Date, the business of the
Companies shall have been carried out in the ordinary course of
business in accordance with Article 6.1.1.
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Colgate / GABA Share Purchase Agreement
(c) Between the Signing Date and (including) the Closing Date, there
shall have been or be no Material Adverse Effect.
(d) The Closing shall not have been prohibited by a judgment or
injunction or other authoritative measure, and there shall be no
action pending or threatened in writing of any person other than
the Sellers or the Purchaser or their respective affiliates which
is reasonably likely to be successful and which (i) either seeks
to prohibit or materially interfere with this Agreement or the
Closing, or (ii), if it were successful, would result in a
Material Adverse Effect after the Closing.
(e) All the necessary authorizations shall have been obtained and/or
the competent authorities, with regard to competition issues,
shall have put an end to any waiting period, pursuant to the
applicable laws on merger control, or said waiting periods shall
have expired. For the avoidance of doubt, any authorizations not
prohibiting the transaction contemplated under this Agreement as a
whole shall be deemed to be a valid authorization under this
Article irrespective of the terms and conditions (BEDINGUNGEN UND
AUFLAGEN) of such authorization. Notwithstanding anything else in
this Agreement, the Purchaser shall have the right to terminate
this Agreement if the Purchaser, as a consequence of this
transaction, has an obligation to divest or terminate the business
relating to the production and/or distribution of a major
toothpaste brand in Germany as defined in SCHEDULE 7.1.1.
(f) The shareholders of GABA Holding which are not Initial Sellers
shall have been given the opportunity in accordance with Article
2.3(a) to accede to this Agreement.
(g) There shall be no breach of the Representations and Warranties
contained in Articles 8.1 (Corporate Existence and Capitalization
of the Companies), 8.3 (Purchase Shares), 8.4 (Authority Relative
to this Agreement) and 11(b) regarding authority relative to this
Agreement, and no other breach of Representations and Warranties
which has a Material Adverse Effect, and the Sellers shall have
complied with their obligations set forth in Article 6.1.3
(Exclusivity) and, in all material respects, with their other
obligations set forth in Article 6.1.
7.2 CONSEQUENCES
(a) The Sellers (represented for such purpose by the Agents) and the
Purchaser shall have the right to terminate this Agreement by
written notice to the other Party, if
(i) any of the conditions precedent set forth in Article 7.1 is
not satisfied or waived by the Party entitled thereto after
nine months from the Signing Date; or
(ii) the Closing is prohibited by a definite judgment or
injunction.
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Colgate / GABA Share Purchase Agreement
(b) If this Agreement is terminated, (i) all provisions of this
Agreement shall terminate and cease to be effective on the date on
which the written termination notice by the terminating Party is
delivered to the other Party (the Sellers in each case represented
by the Sellers' Representative) (the "TERMINATION DATE"), except
for this Article 7.2(b), Articles 14, 16 and 17 which shall
continue to be in effect, and (ii) such termination shall be
without liability of the Sellers to the Purchaser or VICE VERSA,
PROVIDED that, notwithstanding anything in this Agreement to the
contrary, if such termination results from the breach by any Party
of its obligations under this Agreement, such Party shall be
liable for all damages suffered by the other Party or Parties as a
result of any such breach. For the avoidance of doubt, in case of
an event giving rise to a termination right in accordance with
Article 7.2(a)(i), the Purchaser has the right to negotiate for a
price reduction instead of the termination right and the Sellers
have the right to refuse to accept such reduction, in which case
the Purchaser's termination rights shall not have been affected.
8. REPRESENTATIONS AND WARRANTIES
Each of the Sellers hereby makes the following representations and
warranties as of the Signing Date and the Closing Date:
8.1 CORPORATE EXISTENCE AND CAPITALIZATION OF THE COMPANIES
(a) GABA Holding is an joint-stock company (AKTIENGESELLSCHAFT) duly
organized and validly existing under the laws of Switzerland,
whose registered office is at Blumenrain 20, 4001 Basle,
Switzerland, registered with the commercial registry of the Canton
of Basle-City and whose registered capital is CHF 1'200'000 (one
million two hundred thousand Swiss Francs), divided into 24'000
(twenty four thousand) registered shares with a par value of CHF
50 (fifty Swiss Francs) each, and has the full corporate power and
authority to own and use its assets and to conduct its business as
the same is currently being conducted;
(b) the certified copy of an excerpt from the commercial registry
(HANDELSREGISTRAUSZUG) of the Canton of Basle-City regarding GABA
Holding (as attached as SCHEDULE 8.1.1 hereto) and the copy of the
share register (AKTIENBUCH) of GABA Holding (as attached as
SCHEDULE 4.2.4 hereto as well as the unmasked format delivered to
the Purchaser on the Signing Date) are accurate;
(c) the list of the share capital allocation of each Subsidiary as set
forth in SCHEDULE 8.1.2, together with a chart showing the
structure of GABA Group, is accurate; all the shares of the
Subsidiaries and all of the B-shares of Johnson & Johnson / GABA
B.V. are legally owned in accordance with the list in SCHEDULE
8.1.2, free of any pledge, encumbrance, lien or other third party
right; GABA Holding has no direct or indirect subsidiaries or
equity interests or investments in any entity other than as set
forth on SCHEDULES 8.1.2 and 8.1.3 or other than in marketable
securities;
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Colgate / GABA Share Purchase Agreement
(d) each Subsidiary and Johnson & Johnson / GABA B.V. is duly
organized and validly existing under the laws of the state of its
incorporation and has the full corporate power and authority to
own and use its assets and to conduct its business as the same is
currently being conducted; all corporate transactions effected by
the Companies have been made in full compliance with applicable
law and there has been and is no repayment, repurchase or
redemption of share capital; all shareholders and board
resolutions of the Companies are valid and do not infringe
applicable laws or the articles of association or other governing
documents of the Companies;
(e) the excerpts of the commercial registry of each Subsidiary and
Johnson & Johnson / GABA B.V., which are contained in SCHEDULE
8.1.4, accurately reflect the current composition of their board
of directors (or, as the case may be, of any other management
body), except for changes incurred in the ordinary course of
business;
(f) the Companies and Johnson & Johnson / GABA B.V. are duly existing
and not in a state of insolvency or in suspension of payments;
(g) there are no shareholders' agreements with respect to any
Subsidiary; to the extent that any Subsidiary is not wholly-owned
by GABA Holding or another Subsidiary, there are no (i) third
party rights (such as purchase rights (KAUFSRECHTE), rights of
first offer (VORHANDRECHTE) or rights of first refusal
(VORKAUFSRECHTE)) which could be triggered by or exercised upon
the execution of this Agreement or the Closing, and (ii) no third
party rights which could materially restrict GABA Holding directly
or indirectly in exercising sole control over or directing in its
discretion business decisions of such Subsidiary.
8.2 TREASURY SHARES
GABA Holding holds 1'181 (but not more) Shares (the "TREASURY SHARES")
and has full and valid legal title to the Treasury Shares, free from any
lien, charge or encumbrance or any other third party rights. All of the
Treasury Shares have never been issued to or purchased from third
parties.
8.3 PURCHASE SHARES
(a) The Purchase Shares are fully paid in and, as of Closing, are
freely transferable;
(b) there exists no agreement or undertaking pursuant to which any
person is or could become entitled to request the issue or
transfer of shares by GABA Holding. There exists no shareholders'
or similar agreement with respect to GABA Holding. GABA Holding
has not issued any securities which could give rise to a capital
increase or the issue of securities granting the right to any
amount which GABA Holding may distribute or voting rights or which
could result in any limitation of the rights attached to the
Purchase Shares and the Treasury Shares;
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Colgate / GABA Share Purchase Agreement
(c) the Sellers have full and valid title to the Purchase Shares, free
from any lien, charge or encumbrance or any other third part
rights (except for third party rights which will cease as of
Closing) and at the Closing Date such title shall be validly
transferred to the Purchaser. All the authorizations which must be
obtained prior to the transfer of the Purchase Shares, in
application of GABA Holding`s by-laws (STATUTEN) and the law, have
been or, at the Closing Date, will have been obtained;
(d) no dividends or interim dividends or other distributions have been
declared or paid by GABA Holding to its shareholders since
December 31, 2002, except for the dividend in the aggregate amount
of CHF 270 (two hundred seventy Swiss Francs) per Share
distributed following the ordinary shareholders meeting for the
business year 2002 and except for a dividend declared and paid in
accordance with Article 6.1.1(c);
(e) the extract of the shareholders register delivered to the
Purchaser on the Signing Date in accordance with Article
4.2(a)(iv) and the shareholders register to be delivered to the
Purchaser on the Closing Date in accordance with Article 5.3(b)
are true and accurate.
8.4 AUTHORITY RELATIVE TO THIS AGREEMENT
(a) The execution and performance of this Agreement by the Sellers do
not conflict with or result in any violation or breach of, or any
default under, any law or any obligations of the Sellers which
will prevent or hinder their execution and performance of this
Agreement;
(b) The Sellers have full power, authority and right to enter into
this Agreement and to consummate the transactions contemplated
under this Agreement. All necessary actions to duly authorize the
execution and performance of this Agreement have been taken by the
Sellers.
8.5 FINANCIAL STATEMENTS OF GABA HOLDING
(a) All the accounts, books and records of the Companies have been
fully, properly and accurately kept in full compliance with
applicable laws and regulations and are complete and in possession
of the Companies;
(b) the Financial Statements have been, and the financial statements
as of December 31, 2003 will be, established in accordance with
IFRS consistently applied, and they truly and fairly present the
consolidated financial position, the results of operations and the
cash flows of GABA Holding and its Subsidiaries as of their
respective dates;
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Colgate / GABA Share Purchase Agreement
(c) GABA Holding and the Subsidiaries do not have any material
liabilities or contingent liabilities, whether or not any such
liabilities or contingent liabilities are required to be reflected
in Financial Statements under IFRS (including any liabilities or
contingent liabilities towards any Seller or present or former
holder of Shares), other than those recorded in the balance sheet
as of December 31, 2002 included in the Financial Statements and
liabilities incurred since December 31, 2002 in the ordinary
course of business consistent with past practice;
(d) GABA Holding and the Subsidiaries have full ownership of all
assets included in the balance sheets of the Financial Statements
or the financial statements as of December 31, 2002 or used in
their business, and the receivables recorded (after provisions) in
such balance sheets are fully collectible, and the Financial
Statements and the financial statements as of December 31, 2002
include full provision for bad and doubtful debts;
(e) The consolidated net assets, excluding all components of the
Closing Net Cash of GABA Holding as of the Closing Date, as
reflected on the balance sheet included in the Closing Financial
Statements, are not lower than the consolidated net assets,
excluding all components of the 2002 Net Cash, as of December 31,
2002, as reflected on the balance sheet included in the Financial
Statements per December 31, 2002.
(f) none of the property, assets or undertakings of GABA Holding and
the Subsidiaries is subject to any encumbrance or any agreement or
commitment to give or create any of the foregoing;
(g) the assets of GABA Holding and the Subsidiaries comprise all the
assets necessary for continuation of their respective businesses
as currently carried on and all such assets are, subject to normal
wear and tear, in good order and condition;
(h) no Company has put in place, invested in, arranged or participated
in any off-balance sheet arrangement;
(i) as of December 31, 2002, there are no accrued claims for
compensation of overtime by the employees of the Companies other
than provisioned for in the Financial Statements as of December
31, 2002 and since December 31, 2002 there are no such claims
accrued other than in the ordinary course of business consistent
with past practice;
(j) Except as set forth in SCHEDULE 6.1.1, since December 31, 2002,
none of the Companies has taken or omitted any action which would
be material and outside the ordinary course of business, and no
event has occurred that has a Material Adverse Effect.
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8.6 TAXES
(a) The provisions for taxes and the provisions for social and
parafiscal charges (including, but not limited to, social security
contributions) which appear in the Financial Statements are
sufficient for the payment of all taxes (including fines and
interest), social and parafiscal charges due as of, or caused by
any business transactions or events occurred until, the dates of
the Financial Statements;
(b) The Companies have duly filed all federal, cantonal and local tax
and social declarations (including, but not limited to, in respect
of corporation tax, value added tax, business tax, registration
tax, land tax and customs duties) at the required time and have
kept copies of the originals filed, and all such tax and social
declarations were and are true, complete and accurate in all
material respects;
(c) All federal, cantonal and local taxes and duties (including, but
not limited to, corporation tax, value added tax, business tax,
registration tax, land tax and customs duties) and all social and
parafiscal charges owed by the Companies have been fully paid,
accrued or withheld at source (including source taxes for
commuters (GRENZGANGER)) within the legal time limits.
(d) The Companies have complied with and are in compliance with all
tax rulings applicable to them.
8.7 REAL ESTATE
(a) The Companies own the real estate (including building lease
(BAURECHTE)) set forth in SCHEDULE 8.7.1, free and clear of any
lien, except for the liens disclosed in SCHEDULE 8.7.1 and for
statutory liens (GESETZLICHE PFANDRECHTE).
(b) SCHEDULE 8.7.2 contains an accurate and complete list of all real
estate property leased in whole or in part by the Companies. All
such leases are in full force and effect and will not be affected
by the execution of this Agreement or the Closing. All such leases
provide for standard terms and conditions, substantially in
accordance with prevailing market practice.
8.8 CONDUCT OF BUSINESS
(a) The Companies have carried and carry on their business and have
used and use their assets in compliance with, and have not been
and are not in breach of, any and all applicable laws and
regulations, including any applicable competition laws,
environmental laws, health & safety laws or laws relating to the
production, marketing and distribution of the Companies' Products.
The Companies have not been and are not in default with respect to
any judgment or order of any court, arbitral tribunal or
government department or agency;
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Colgate / GABA Share Purchase Agreement
(b) the Companies have the corporate power and authority and hold all
governmental and other authorizations, registration, licenses and
permits to own all of their properties and other assets and to
carry on their business as it is currently being conducted, in
particular to manufacture and distribute the Companies' Products
and, except for cases which will not have a Material Adverse
Effect, the transfer of the Purchase Shares to the Purchaser does
not result in the cancellation or revocation of any permit,
authorization or license, necessary for the operations of the
Companies' business as it is currently being conducted.
8.9 INTELLECTUAL PROPERTY AND INFORMATION TECHNOLOGY
(a) The Companies either own or are entitled to use, with no
restrictions, all Intellectual Property that, except for the
Intellectual Property set forth in SCHEDULE 8.9.1, during the
twelve months-period preceding the Signing Date has been used by
any of the Companies for the operation of their respective
business, including the production, marketing, advertising and
sale of dental care products under the brands of ELMEX, ARONAL,
MERIDOL and GABA, and the Companies own or are entitled to use,
with no restriction, all Intellectual Property that is required
for their business as it is currently conducted. In particular,
without limiting the generality of the foregoing, each of the
following statements is true and accurate:
(i) The list set forth in SCHEDULE 8.9.2 contains a true,
accurate and complete list of all registered Intellectual
Property owned by and Intellectual Property licensed to the
Companies as described in SCHEDULE 8.9.2 (such Intellectual
Property except for the Intellectual Property set forth in
SCHEDULE 8.9.1, the "OWNED IP") indicating ownership or
license as well as the exact nature, country, scope and, if
applicable, maximum terms or expiration date as well as the
registered owner (if different, also the material owner) of
the Intellectual Property;
(ii) The Companies are the sole and exclusive holder, either
through ownership or through license, of all Owned IP,
unless this is explicitly represented otherwise in SCHEDULE
8.9.2;
(iii) With the exception of consideration and value explicitly
specified in SCHEDULE 8.9.2, there exists no present or
future obligation of the Companies to pay to third parties
any royalties, purchase prices or other consideration and
value for the Owned IP;
(iv) To the Sellers' Knowledge, all Owned IP is held
non-forfeitably (UNVERFALLBAR) by the Companies and has
been and is being, so far as legally required and to the
extent required for the conduct of business as it is
currently conducted, fully used, in particular in order to
uphold such rights within applicable grace periods
following registration (RECHTSERHALTENDE BENUTZUNG);
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Colgate / GABA Share Purchase Agreement
(v) All application, registration and renewal fees with regard
to the Owned IP have been paid and all other applications
or other measures necessary for the application,
registration or maintenance of protection for the Own IP
have been made or are being undertaken;
(vi) All Owned IP is free and clear of any Encumbrances, unless
this is explicitly represented otherwise in SCHEDULE 8.9.2.
The same applies also to all licenses granted to any of the
Companies. For the context of this Section 8.9,
"ENCUMBRANCES" means any and all licenses, sublicenses,
securities (SICHERUNGSRECHTE) or other comparable rights to
Intellectual Property or licenses. Similarly, there exists
no contractual or other obligation of any of the Companies
to grant or establish Encumbrances regarding the Owned IP.
To the Sellers' Knowledge, there are no circumstances on
which any Encumbrances could be based in the future;
(vii) The Companies, through the Owned IP or through the
operation of their businesses, do not infringe on any
Intellectual Property registered by third parties or
licensed to the Companies by third parties, and the
Companies have not received any written notice of
infringement. To the Sellers' Knowledge, there are no
circumstances on which any such claim or notice could be
based in the future;
(viii) Save for a case brief details of which are set out in
SCHEDULE 8.16.1, none of the Owned IP has been disputed in
court, in administrative proceeding or in any other similar
way in writing and there also is no court, administrative
proceedings or any other proceeding pending, threatened in
writing that jeopardizes the validity, maintenance, use or
enforceability of the Owned IP, and the Companies have not
received any written notice of such dispute. To the
Sellers' Knowledge, there are no circumstances on which any
such claim or notice could be based in the future;
(ix) None of the Owned IP will be affected by the execution of
this Agreement and the Closing.
(b) All licenses, intellectual property or other rights required for
the use of the Information Technology by the Companies are either
owned or have validly and effectively been issued to the Companies
and are in full existence and will not be affected by the
execution of this Agreement or the Closing.
8.10 MATERIAL CONTRACTS
(a) SCHEDULE 8.10.1 contains, but is not limited to, a complete, true
and accurate list of all Material Contracts, except for agreements
regarding research and development. "MATERIAL CONTRACTS" shall
mean all agreements that have a contract value of more
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Colgate / GABA Share Purchase Agreement
than CHF 1'000'000 (one million Swiss Francs) or a contract period
of more than 12 months, excluding inter-company agreements between
the Companies and agreements relating to the Trade Business . All
Material Contracts have been disclosed to the Purchaser prior to
the Signing Date;
(b) none of the Companies is in material breach of any of its
obligations under any Material Contract or, except where such
breach would not result in a Material Adverse Effect, under any
agreement;
(c) Except as disclosed in SCHEDULE 8.10.1, To the Sellers' Knowledge
the execution and performance of this Agreement (i) do not result
in the termination of any Material Contract (with or without
notice), (ii) do not conflict with or result in any violation or
breach by a Company under any Material Contract and (iii) do not
entitle any third party to claim the reimbursement of any subsidy
or grant or loan or advance;
(d) Except as disclosed in SCHEDULE 8.10.2, none of the Companies is
bound by any agreement, commitment or other arrangement directly
or indirectly with the Sellers or any corporate officers of the
Companies, or any of their spouses, parents or children or any
legal entity controlled by any of them, except for employment
agreements.
8.11 PERSONNEL
(a) The employment conditions for employees of the Companies comply
with industry standard. Except for the cases described in SCHEDULE
8.11.1 there exist no agreements (including any side agreements or
arrangements) with employees which provide for notice periods not
provided for by law of more than 6 (six) months, a yearly salary
of more than CHF 200'000 (two hundred thousand Swiss Francs) or
severance payments not provided for by law in excess of CHF
200'000 (two hundred thousand Swiss Francs);
(b) The Companies hold all necessary employment-related permits, such
as regarding shift work;
(c) There are no works' councils or other employees' representations
and no collective bargaining agreements to which any Company is a
party or any membership in employee associations other than listed
in SCHEDULE 8.11.2. The Companies have complied and comply in all
respect with all their duties and obligations in respect of any
applicable labor laws and regulations arising in connection with
this Agreement, including with the obligation to consult with
employees or works' councils, if any;
(d) There are no bonus, stock option or similar incentive plans,
schemes or commitments entitling any employee of the Companies to
any benefit other than the plans, schemes and the commitments
listed in SCHEDULE 8.11.3.
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Colgate / GABA Share Purchase Agreement
(e) The pension plans of the Companies comply with and have been and
are managed in compliance with all applicable laws and regulations
and fulfill the minimum legal requirements. The financial
statements of the pension plans of the Companies have been
established, and fairly present the financial position and the
results of operations, in full accordance with the applicable laws
and regulations and the accounting principles applied to them.
(f) All due pension and social security contributions (including
contributions to be made on benefits such as under stock option
plans and the like) have been fully paid or deducted in full when
due.
(g) Except as set forth in SCHEDULE 8.11.4, all pension schemes of the
Companies are fully and sufficiently funded to meet their
obligations now or in the future, and no pension commitments exist
other than as provided in the pension plans of the Companies.
(h) There is no obligation of any Company to make any contributions to
the Welfare Fund.
8.12 INSURANCE
The insurance policies set forth in SCHEDULE 8.12.1 are in full force for
the benefit of the insured parties mentioned therein and all due
insurance premiums for the maintenance of such insurances have been paid.
8.13 PRODUCTS LIABILITY
None of the products sold, distributed, manufactured or marketed by the
Companies (the "PRODUCTS") pose any threat to the health or safety of
consumers properly using the Products. The Products and their packaging
comply with all applicable laws and any applicable governmental or
quasi-governmental authority and, to the Sellers' Knowledge, all industry
guidelines generally followed by the industry relating to manufacturing
and packaging. The Products have been periodically tested for safety by
the Companies in accordance with the Companies' normal practices (which,
to the Sellers' Knowledge, are in accordance with reasonable industry
practices). During the past three years, there have been no recalls with
respect to the Products as a result of safety or health concerns or
noncompliance with applicable law; nor have the formulations changed in
the past twelve months due to any requirements of applicable law.
8.14 CRIMINAL LIABILITY
No criminal offence or misdemeanour has been committed by the bodies of
any of the Companies or their representatives. The Sellers are not aware
of any act likely to result in criminal sanctions against any of the
Companies.
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8.15 ENVIRONMENT
(a) The activities of the Companies have been and are being operated
in compliance with the applicable laws and regulations in force
concerning the protection of the environment, and no product
manufactured, assembled or sold or any service supplied by the
Companies is in violation of such laws and regulations;
(b) the Companies have obtained and complied and comply with all
authorizations, licenses and other approvals required by the laws
and regulations in force and have not received any notification
from any competent body to the effect that any such authorization,
license or approval has not been complied with or has been
withdrawn;
(c) the Companies are not obligated to clean up or otherwise remediate
any contaminated surface water, ground water or soil or other
environmental issues.
8.16 LITIGATION
Save for the cases brief details of which are set out in SCHEDULE 8.16.1
there is no current, or pending, or, to the Sellers' Knowledge threatened
(in writing) litigation, arbitration, claim, administrative proceeding,
administrative or tax investigation or any other action or proceeding
pending or contemplated whether as plaintiff or defendant in relation to
the Companies or the pension funds of the Companies, in an amount higher
than CHF 100'000 (one hundred thousand Swiss Francs) or otherwise
material.
8.17 DISCLOSURE
Without limiting the Representations and Warranties contained in Articles
8.1 to 8.16, the Information Provided is to the Sellers' Knowledge
complete, true and accurate in all material respects.
9. REMEDIES OF THE PURCHASER
9.1 SELLERS' LIABILITY
Subject to the provisions of this Article 9, the Sellers severally (but
not jointly), each pro rata of her/his/its Purchase Shares to the
aggregate of all Outstanding Shares, shall indemnify the Purchaser for
the full amount of any damage, loss, liability, cost or expense of any
kind (including reasonable attorney's fees) incurred by any of the
Purchaser, the Companies, the pension funds of the Companies or their
respective affiliates and representatives (the "DAMAGE") which results
from any inaccuracy or omission in the Representations and Warranties or
breach of undertakings.
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9.2 FORFEITURE OF PURCHASER'S CLAIMS
Unless notified within the statute of limitations period in accordance
with Article 9.3, any claims based on Representations and Warranties or
undertakings of the Sellers are forfeited within 24 (twenty-four) months
after the Closing Date (Verwirkungsfrist), except that the
Representations and Warranties contained in Articles 8.1 (Corporate
Existence and Capitalization of the Companies) and 8.3 (Purchase Shares)
shall survive for ten years after the Closing Date and the
Representations and Warranties contained in Article 8.6 (Taxes) shall
survive for 5 (five) years after the Closing Date.
9.3 NOTIFICATION OF CLAIMS AND COOPERATION
(a) The Purchaser shall notify the Sellers within 90 (ninety) calendar
days after the Purchaser has detected a breach of Representations
and Warranties, describing in reasonable details such breach and
(to the extent possible at such time) any Damage suffered by the
Purchaser or the Companies or the pension funds as a consequence
of such breach. If the Purchaser fails to meet such deadline to
notify, the respective claim concerned shall be forgone and
unenforceable to the extent that the Sellers can demonstrate that
an irreparable damage has been caused or aggravated by such
failure.
(b) If the Purchaser has duly notified the Sellers of a breach of
representations and warranties, and if such claim is disputed by
Sellers, the Purchaser has to commence arbitration in accordance
with Article 17 not later than 90 (ninety) calendar days after
receipt of such notice of dispute, unless the claim raised by
Purchaser is settled before the expiry of such deadline; if the
Purchaser fails to meet such deadline to commence arbitration, the
respective claim concerned shall be forgone and unenforceable.
(c) The Purchaser shall as soon as reasonably practicable notify the
Sellers in writing of any third party claim or notice of violation
made or asserted for which the Purchaser wants to hold the Sellers
liable under this Agreement (the "THIRD PARTY CLAIMS").
(d) In case of litigation or other proceedings regarding Third Party
Claims the Purchaser shall defend such claims in consultation with
the Sellers' Representative and at the Seller's cost or, if and to
the extent legally permitted and if requested by the Sellers,
shall give the Sellers' Representative the opportunity to defend
such claims in consultation with the Purchaser and with counsel
reasonably acceptable to the Purchaser. The Purchaser shall have
the right to participate at its own expense with separate legal
counsel in the defence of such claims whose defence has been
assumed by the Sellers and, if the counsel chosen by the Sellers
to defend the action has a conflict of interest or the
representation of both the Purchaser and the Sellers by such
counsel would be inappropriate due to actual or potentially
differing inter-
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ests between them, then the reasonable fees and expenses of
Purchaser's separate counsel shall be borne by the Sellers. The
Purchaser's failure to notify or to consult with the Sellers'
Representative or give the Sellers the opportunity to defend Third
Party Claims shall be deemed as a waiver of any claim or right
against the Sellers in connection with such Third Party Claims,
unless the Purchaser reasonably demonstrates that the Sellers have
not been prejudiced as a result of such failure. The Purchaser
shall not (in part or in full) acknowledge or settle Third Party
Claims without the prior written approval of the Sellers'
Representative, which approval shall not be unreasonably withheld
or delayed; the Purchaser's failure to obtain such approval shall
be deemed as a waiver of any claim or right against the Sellers in
connection with such Third Party Claims. The Sellers shall not (in
part or in full) acknowledge or settle Third Party Claims without
the prior written approval of the Purchaser; the Sellers' failure
to obtain such approval shall be deemed as an acknowledgement of
their liability for such Third Party Claims.
(e) The Parties and the Companies and their respective directors,
officers and representatives shall cooperate fully with each
other, as to the extent reasonably requested by the other Party,
in connection with any tax audit or similar formal tax proceedings
the outcome of which could result in a breach of Representations
or Warranties, such cooperation including the obligation to fully
and timely inform the other Party of such proceedings, the
obligation to submit to the other Party all correspondence and
documents which a Party intends to submit to an authority in
connection with such proceedings and the taking into account of
all reasonable comments made by the other Party and the right, but
not the obligation, of the other Party to attend as observers in
meetings with an authority in connection with such proceedings.
9.4 QUANTIFICATION OF THE DAMAGE
If the Purchaser has notified the Sellers of an alleged misrepresentation
or breach of warranty or undertaking, the Sellers shall have the right to
remedy such breach. In the event that a breach is not, or to the extent
it is not, remedied by the Sellers within 60 (sixty) calendar days upon
receipt of notification, the Sellers shall indemnify the Purchaser as
follows:
(a) The Sellers shall be liable to the Purchaser for all Damages
suffered by the Purchaser, the Companies, the pension funds of the
Companies as a result of any breach, with the exclusion of profits
not made by the Purchaser due to the fact that this Agreement has
been entered into (ENTGANGENER GEWINN ALS TEIL DES NEGATIVEN
VERTRAGSINTERESSES).
(b) If and to the extent that a misrepresentation or breach of
warranty or undertaking results in a Damage of the Companies or
the pension funds of the Companies, the liability of the Sellers
shall be calculated as follows:
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Colgate / GABA Share Purchase Agreement
Damage * Number of Purchase Shares
-------------------------------------
Number of Outstanding Shares
(c) Alternatively, the Purchaser may elect to claim, subject to the
limitations set forth in this Article9, an amount equal to the
reduction of the Total Purchase Price resulting from the breach
(BETRAG EINER KAUFPREISMINDERUNG).
9.5 LIMITATIONS
Except for any willful or grossly negligent breach of Representations or
Warranties or undertakings, the liabilities of the Sellers under this
Agreement shall be limited as follows:
9.5.1 INDIVIDUAL THRESHOLD
There shall be liability of the Sellers only with respect to such claims
which, individually (whereby several claims based on the same set of
facts or origin are deemed to be one claim), exceed CHF 50'000 (fifty
thousand Swiss Francs) each.
9.5.2 AGGREGATE THRESHOLD
There shall be liability of the Sellers only with respect to such claims
as defined in Article 9.5.1 which, in the aggregate exceed CHF 5'000'000
(five million Swiss Francs). In such event the Sellers shall be liable
with respect to the whole amount of the claims as defined in Article
9.5.1.
9.5.3 MAXIMUM RECOVERY AND WARRANTY ESCROW ACCOUNT
Notwithstanding anything in this Agreement to the contrary, subject to
Article 9.5.4, the overall liability of the Sellers, meaning the maximum
indemnification payment by the Sellers under this Agreement, in
particular for misrepresentations or breaches of warranties, shall not
exceed the Warranty Escrow Amount (whether before or after the payment of
the Warranty Escrow Amount into the Warranty Escrow Account). The maximum
recovery available to the Purchaser against an individual Seller under
this Agreement shall not exceed the amount to be calculated as follows:
Warranty Escrow Amount * Number of Purchase Shares of individual Seller
----------------------------------------------
Number of Purchase Shares
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Colgate / GABA Share Purchase Agreement
9.5.4 LIABILITY REGARDING CERTAIN REPRESENTATIONS AND WARRANTIES
For claims involving a misrepresentation or breach of warranty of Article
8.3 (Purchase Shares) none of the limitations set out in Article 9.5.1 to
9.5.3 shall apply and the maximum liability of each Seller under Article
8.3 shall be the actual purchase price amount paid by the Purchaser for
such affected Sellers' Purchase Shares.
9.6 WARRANTY ESCROW ACCOUNT - DECREASE OF WARRANTY ESCROW AMOUNT
(a) The Warranty Escrow Account shall be established by the Escrow
Agent based on an escrow agreement substantially in the form of
SCHEDULE 9.6.1 (the "ESCROW AGREEMENT") in accordance with Article
5.2(b) prior to the Closing Date.
(b) The Warranty Escrow Amount shall be decreased as follows:
18 months after Closing Date to 8 % of the Total Purchase Price
24 months after Closing Date to CHF 40 million (forty million Swiss Francs)
36 months after Closing Date to CHF 27 million (twenty-seven million Swiss Francs)
48 months after Closing Date to CHF 13 million (thirteen million Swiss Francs)
60 months after Closing Date to CHF 0 (zero)
After 24 months after the Closing Date the Warranty Escrow Amount
shall secure exclusively claims for breach of Representations or
Warranties contained in Article 8.6 (Taxes). Irrespective of the
above schedule, the Warranty Escrow Amount for taxes shall, at any
time after 24 months from the Closing Date, be reduced to CHF 5
million (five million Swiss Francs) if and promptly after the
Companies have obtained final assessments (DEFINITIVE
VERANLAGUNGEN) for all direct taxes (including, without
limitation, taxes on earnings) in Germany, Switzerland and The
Netherlands for all periods up to Closing Date.
(c) On each of the dates referred to in Section (b) above any funds
standing to the credit of the Warranty Escrow Account in excess of
(i) the decreased Warranty Escrow Amount; and
(ii) the amount of claims for breach of Representations and
Warranties that qualified in accordance with Article 9.5.1
and 9.5.2 that have been notified and timely prosecuted by
the Purchaser in accordance with Article 9.3, any claims of
the Purchaser in accordance with Article 3.3.4(b) and any
claims of the Purchaser in accordance with Article 13.6,
shall be released in favor of the Sellers and transferred to the
Accounts.
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9.7 EXCLUSION OF LIABILITY
The liability of the Sellers hereunder shall be excluded, if and to the
extent that:
(a) facts or circumstances giving rise to claims for breach of
Representations or Warranties have been fairly and not
misleadingly disclosed in the Information Provided in a manner
which allows a reasonable business person to detect a breach of a
Representation and Warranty; subject to the foregoing, article 200
of the Swiss Code of Obligations shall not be applicable to this
Agreement.
(b) the breach of Representations or Warranties alleged by the
Purchaser has been remedied by the Sellers in accordance with
Article 9.4;
(c) the Purchaser has received or could have received by applying due
care recovery or compensation under any title whatsoever from a
third party (including, in particular, under any insurance policy,
and subject to reduction by the amount of any increase of
insurance premiums to be paid following such recovery), or, as a
result of a breach of Representation or Warranty, the Purchaser
has saved expenses (including taxes);
(d) such damage or loss arises from, or is increased by, or is a
result of the passing of, or any change in any legislation or any
change of court rulings with precedent nature, after the Closing
Date;
(e) if and to the extent that any damage or loss was caused or
increased (i) by any negligent act or omission of the Purchaser or
(after the Closing Date) of any of the Companies or any of their
representatives or employees, or (ii) by the fact that the
Purchaser or (after the Closing Date) any of the Companies have
failed to take the commercially reasonable steps to mitigate the
damage caused by a breach of Representation or Warranty, or (iii)
as result of a breach of Article 9.3(e) by the Purchaser or (after
the Closing Date) of any of the Companies or any of their
representatives or employees; or
(f) if and to the extent that any damage or loss are covered by
specific provisions created for the subject matter of the claim in
the Financial Statements as per December 31, 2002.
9.8 GERMAN TAXES
Notwithstanding anything in the foregoing, except that Articles 9.7(c) to
9.7(f) shall apply, the Parties agree that regarding representations and
warranties under Article 8.6 (Taxes) that arise from the BETRIEBSPRUFUNG
in Germany as described in Schedule 8.16.1, (i) no limitation regarding
disclosure to or actual or deemed knowledge of the Purchaser shall apply
(and that article 200 of the Swiss Code of Obligations shall be waived
accordingly)
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Colgate / GABA Share Purchase Agreement
and (ii) no limitations set forth in Articles 9.5.1 and 9.5.2 shall
apply, and that the Sellers shall indemnify the Purchaser for any such
additional taxes to the extent that they exceed an amount of CHF
3'000'000 (three million Swiss Francs) (and that there shall be no
indemnification up to an amount of CHF 3'000'000).
9.9 EXCLUSIVE REMEDIES
(a) Subject to Article 9.9(c) or any other provision in this Agreement
explicitly providing otherwise, the remedies provided in this
Article 9 shall be the exclusive remedies of the Purchaser under
this Agreement.
(b) Subject to Article 9.9(c), the Purchaser expressly waives the
right to rescind this Agreement pursuant to article 205 of the
Swiss Code of Obligations (Wandelungsrecht) or - to the extent
legally permitted - due to error (Irrtum) or clausula rebus sic
stantibus. Subject to Article 9.9(c), this waiver shall apply (i)
in cases where the remedies in accordance with this Article 9
apply and (ii), in particular, in cases where the Purchaser has no
such remedies.
(c) Nothing contained in this Agreement shall exclude, limit or
time-bar any claims or remedies that the Purchaser may have
against any of the Sellers under any legal title in the event of
fraud on the part of any of the Sellers. Nothing in this Agreement
shall exclude the right of the Purchaser to claim from the Sellers
specific performance of undertakings.
10. TRADE ESCROW
(a) If the Purchaser, because of termination(s) or discontinuation(s)
of material agreement(s) with third parties by such third parties,
discontinues before December 31, 2005 the Trade Business or any
material part thereof and as a result of such discontinuation
incurs due to (i) mandatory applicable law or (ii) the provisions
of collective or individual employment agreements as they are in
effect on the Closing Date or (iii) adherence to local market
practice, any cost for severance payments to more than 5 employees
of the Trade Business ("SEVERANCE COST") the Sellers shall
reimburse the Severance Cost to the Purchaser severally (but not
jointly), each pro rata of her/his/its Purchase Shares to the
aggregate of all of the Purchase Shares. In no event shall each
Sellers' liability for the reimbursement of Severance Cost exceed
the aggregate amount of the Trade Escrow Amount multiplied by the
number of her/his/its Purchase Shares divided by the aggregate
number of Purchase Shares. Article 9 shall not apply to this
Article 10.
(b) Unless notified before December 31, 2005, any claim of the
Purchaser for reimbursement of Severance Cost is forfeited
(VERWIRKUNGSFRIST).
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Colgate / GABA Share Purchase Agreement
(c) Subject to pending claims in accordance with Article 10(a)
notified in accordance with Article 10(b), after December 31, 2005
any amount standing to the credit of the Trade Escrow Account
shall be paid to the Sellers.
11. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Sellers that:
(a) It is a US corporation listed on the New York Stock Exchange duly
existing under the laws of the State of Delaware;
(b) It has taken all actions required by law and its corporate
documents and, except for merger control clearances, obtained all
necessary approvals and consents, that neither the execution nor
the performance of this Agreement by the Purchaser will result in
a breach of a governmental permit or authorization or of a
material contract, and that therefore this Agreement and the
transactions contemplated under this Agreement will constitute
valid and binding obligations of the Purchaser enforceable in
accordance with its terms.
(c) There are no actions, suits or proceedings pending against the
Purchaser or any of the Purchaser's affiliates before any court or
administrative board, agency or commission which involve a claim
by a governmental or regulatory authority, or by a third party,
which would operate to hinder or substantially impair the
consummation of the transactions contemplated under this
Agreement. The Purchaser is not aware of any actions, suits or
proceedings in accordance with the preceding sentence which have
been threatened in writing to be filed or instituted against the
Purchaser or any of the Purchaser's affiliates.
12. EXCLUSIVE REPRESENTATIONS AND WARRANTIES
Each Party acknowledges that, other than as expressly provided for in
this Agreement, the other Party/Parties has/have not made and does/do not
make, and each Party has not relied and does not rely on, any
representation or warranty, express or implied, pertaining to the subject
matter of this Agreement. In particular, and without limitation to the
foregoing, the Purchaser acknowledges that the Sellers are not making any
representations as to budgets, business plans, forward-looking statements
and other projections of a financial, technical or business nature
relating to the business of the Companies other than those expressly set
forth in Article 8 above. The provisions contained in Article 9 shall
supersede the provisions of articles 201 and 210 of the Swiss Code of
Obligations which shall not be applicable to this Agreement. The Parties
expressly waive the notification and examination requirements under
article 201 and the statute of limitations under article 210 of the Swiss
Code of Obligations.
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Colgate / GABA Share Purchase Agreement
13. UNDERTAKINGS
13.1 UNDERTAKINGS IN FAVOR OF THE SELLERS REGARDING AVOIDANCE OF NEGATIVE TAX
CONSEQUENCES
(a) The Purchaser has access to the funds necessary to finance the
transactions contemplated under this Agreement.
(b) Unless there is a prior written confirmation of the competent
Swiss tax authorities stating that such actions and measures will
not trigger any income tax consequences to any of the Sellers
(including the Tax Rulings), the Purchaser and its related persons
and affiliates undertake to avoid any actions and measures which
could lead to a re-qualification of the private capital gain
resulting from the sale of the Purchase Shares into taxable income
to any of the Sellers tax resident in Switzerland on the Signing
Date (and for each such Seller in the Canton she/he/it is tax
resident on the Signing Date) under Swiss Federal or cantonal laws
and the relevant court practice on the basis of the concept of (i)
an "Indirect Partial Liquidation" ("Indirekte Teilliquidation"),
or "Indirect Total Liquidation" ("Indirekte Totalliquidation"),
(ii) tax avoidance or (iii) other concepts that would result in
such a re-qualification; it is agreed that any relocation of the
tax residence after the date of such tax rulings by any Seller
shall be at the risk of such Seller.
In particular, with respect to one, several or all of the
Companies, the Purchaser shall not undertake any of the following
actions and measures unless there is a prior written confirmation
of the competent Swiss tax authorities stating that such actions
and measures will not trigger any income tax consequences to any
of the Sellers (including the Tax Rulings), it is agreed that any
relocation of the tax residence after the date of such tax rulings
by any Seller shall be at the risk of such Seller:
(i) any distribution of retained earnings or reserves of the
Companies already existing on the Closing Date,
(ii) merger of the Companies with any entity of the Purchaser's
group,
(iii) lending funds of the Companies in order to directly or
indirectly finance the Total Purchase Price,
(iv) pledging assets of the Companies in order to directly or
indirectly secure the Total Purchase Price financing,
(v) pledging the Purchase Shares in order to directly or
indirectly secure the Total Purchase Price financing,
(vi) liquidation of any of the Companies,
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Colgate / GABA Share Purchase Agreement
(vii) any other measure which could be considered as direct or
indirect financing or securing of the Total Purchase Price
by any of the Companies.
(c) At the Signing Date, the Initial Sellers have their tax domicile
as provided for on the cover page of this Agreement.
(d) The Purchaser undertakes to fully comply with the tax rulings, if
any, issued by the competent Swiss tax authorities (in particular
the Tax Rulings);
(e) The Purchaser undertakes to fully cooperate with the Sellers, and
the Sellers undertake to fully cooperate with the Purchaser, in
order to optimize the tax position of the Sellers in connection
with the transactions contemplated under this Agreement. The
Sellers undertake to cause their tax representatives to support
the Purchaser in connection with, and to file for, additional tax
rulings before or after the Closing Date. After the Closing Date,
any costs associated therewith shall be borne by the Purchaser.
(f) Any breach of the undertakings contained in Article 13.1(b) and
(d) by the Purchaser shall entitle each Seller to an
indemnification payment in the amount of the personal income
taxes, late payment interest, penalties and reasonable attorneys
and advisory fees to be paid by such Seller as a result of the
re-qualification of the tax-free capital gain into taxable income.
13.2 UNDERTAKINGS REGARDING SWISS EMPLOYEES
13.2.1 LIMITATIONS ON TERMINATIONS OF SWISS EMPLOYMENT AGREEMENTS
The Purchaser shall procure that, for a period of
(a) 12 months after the Closing Date, the Swiss Companies will not
terminate any employment agreements with employees having an
employment agreement with any of the Swiss Companies at the
Closing Date;
(b) 24 months after the Closing Date, the Swiss Companies will not
terminate more than 20% of the total of employment agreements with
employees having an employment agreement with any of the Swiss
Companies at the Closing Date; and
(c) 24 months after the Closing Date, in addition to Article 13.2.1(a)
to (b), the Swiss Companies will not terminate any employment
agreements with the employees having an employment agreement with
any of the Swiss Companies at the Closing Date (a) above the age
of 50 at the Closing Date or (b) a work, service or employment
relationship with any of the Swiss Companies exceeding 10 (ten)
years, as set forth in SCHEDULE 12.3.1.1.
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Colgate / GABA Share Purchase Agreement
13.2.2 SUBSTITUTION TO TERMINATIONS OF EMPLOYMENT AGREEMENTS WITH SWISS
COMPANIES
A termination of an existing employment agreement with any of the Swiss
Companies shall not be deemed to be a termination for the purposes of
this Article 13.
(a) if it is a termination by the respective Swiss Company for cause
in accordance with article 337 of the Swiss Code of Obligations;
or
(b) if before the termination becoming effective the Purchaser offers
to the respective employee a severance package corresponding to
the salary based on the employment agreement as in force as of the
Signing Date, including bonuses (BONI, GRATIFIKATIONEN) in
accordance with the budget 2003 of the Companies as set forth in
SCHEDULE 12.3.2.1, and equal to the aggregate amount of salary
that the respective employee would have received, had his
employment agreement not been terminated before 24 months after
the Closing Date.
13.2.3 REMEDIES
Any breach of the undertakings contained in this Article 13.2 by the
Purchaser shall entitle the Sellers to an indemnification payment in the
amount equal to the amount(s) which the Purchaser were to pay to the
respective employee(s) of the Swiss Companies in accordance with Article
13.2.2(b) to be in compliance with Article 13.2. The Sellers shall pay
such amounts received to the respective employee(s).
13.3 UNDERTAKINGS REGARDING SWISS PENSION SCHEMES
(a) The Purchaser shall procure that, for a period of 3 (three) years
after the Closing Date, the pension schemes Pensionskasse der GABA
AG and Personalvorsorgestiftung der GABA Holding AG for the
benefit of existing employees and former employees of the Swiss
Companies having or having had an employment agreement on or
before the Signing Date shall not be amended, diminished or
otherwise altered to the detriment of any of such existing or
former employee, subject to and to the extent of changes of the
law.
(b) The Purchaser shall procure that the foundation board
(STIFTUNGSRAT) of the welfare fund of GABA AG (WOHLFAHRTSFONDS DER
GABA AG, the "WELFARE FUND"), the deed of foundation of the
Welfare Fund is attached hereto as SCHEDULE 12.4.1, shall continue
to consist of Messrs Werner Degen, Hanspeter Ludin, Urs Senn, Dr.
Peter Grogg and Ueli Winzenried for a period of 3 (three) years
after the Closing Date. The Parties shall use best efforts to
amend the purpose of the deed of foundation of the Welfare Fund so
that the beneficiaries of the Welfare Fund will exclusively
consist of persons who are either employees or retired employees
of the Swiss Companies on the Signing Date.
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Colgate / GABA Share Purchase Agreement
(c) It is understood that any surplus remaining in the Welfare Fund
shall be used for the benefit of all employees of Swiss Companies
reflecting each employee's age of service for the respective Swiss
Company when determining the specific benefit.
13.4 BONUS PAYMENT TO EMPLOYEES
(a) The Purchaser shall in the name of the Sellers make the necessary
provisions for a bonus payment (ANERKENNUNGSPRAMIE) to be paid
within 1 (one) month after the Closing Date, the exact point of
time within such period to be determined by the Agents, to the
employees, who are employees of a Company at the Closing Date
according to the written instructions by the Agents. The aggregate
gross amount of such bonus payment (including LOHNNEBENKOSTEN such
as social security duties or source taxes), shall amount to CHF
5'500'000 (five million and five hundred thousand Swiss Francs)
and be deducted from the Closing Net Cash.
(b) The Purchaser undertakes that as of the Closing Date all legal
obligations of an employer in connection with this Article 13.4
shall be duly met, e.g., that the Companies, in particular, but
without limitation, will in their capacity as employers issue
salary certificates (LOHNAUSWEISE), and report, deduct, and pay
social security contributions and source tax.
13.5 NO CLAIMS AGAINST DIRECTORS AND EXECUTIVE OFFICERS
(a) The Purchaser shall not make, and shall procure that after the
Closing Date GABA Holding shall not make, any claim against any
director or executive officer of GABA Holding who is a Seller in
connection with their acts or omissions as directors or executive
officers of GABA Holding in the period prior to Closing in
accordance with article 752 et seq. of the Swiss Code of
Obligations except for fraud, criminal or wilful misconduct.
(b) At the first shareholders' meeting of GABA Holding following the
Closing Date, the Purchaser shall procure that such meeting grants
unconditional discharge to the directors and executive officers of
GABA Holding in connection with their acts or omissions as
directors and executive officers of GABA Holding in the period
prior to the Closing Date except for fraud, criminal or wilful
misconduct.
13.6 DIVESTURE OF BUSINESS
(a) If a condition imposed or commitment requested by a competent
authority should include or result in a divestment in full or in
part of the business relating to the production and/or the
distribution of Dentagard branded toothpaste in Germany (the
"-BUSINESS") or Meridol branded toothpaste in Germany (the "OTHER
BUSINESS"), the following shall apply:
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Colgate / GABA Share Purchase Agreement
(i) The Parties shall use their respective best efforts, if
necessary supported by a jointly appointed investment bank
of international repute, to effect the divestment at the
best price and other terms and conditions as can reasonably
be obtained in compliance with the conditions or
commitments imposed by the competent authorities.
(ii) The Total Purchase Price shall be reduced by an amount (the
"REDUCTION AMOUNT") that is equivalent to:
(1) in the event of a divestment of the Business, the
revenues of the Business (or the divested part
thereof) during the fiscal year 2003 multiplied by
the factor 2, less the BONA FIDE net consideration
received for such business and, if any, 50% of the
investment bankers' fees; and
(2) in the event of a divestment of the Other Business,
the revenues of the Other Business (or the divested
part thereof) during the fiscal year 2003 multiplied
by the factor 3.6, less the BONA FIDE net
consideration received for such business and, if
any, 50% of the investment bankers' fees, divided by
the number of Outstanding Shares and multiplied by
the number of Purchase Shares.
Under no circumstances shall the Reduction Amount exceed
CHF 50'000'000. Article 9 shall not apply to this Article
13.6.
(b) If the divestment of the Business and/or the Other Business has
been closed to the satisfaction of the competent competition
authorities prior to the Closing Date, the Initial Purchase Price
payable by the Purchaser at the Closing shall be reduced by the
Reduction Amount.
(c) If the divestment of the Business and/or the Other Business has
not been closed to the satisfaction of the competent competition
authorities prior to the Closing Date, the Parties shall instruct
the Escrow Agent to pay the Reduction Amount from the Warranty
Escrow Account to the Purchaser as soon as the divestment of the
respective business has been closed to the satisfaction of the
competent competition authorities.
(d) The Parties shall fully and in good faith consult and co-operate
with each other in respect of any merger clearances, the related
proceedings and the actions set forth in this Article 13.6, in
particular, (i) none of the Parties shall contact any competent
competition authorities without prior consultation with the other
Party, (ii) the other Party shall have the right, but not the
obligation to participate in meetings with any competent
competition authorities, and (iii) the Parties shall have the
obligation to submit to the other Party all correspondence and
documents which a Party intends to submit to an authority in
connection with such proceedings and to take into ac-
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Colgate / GABA Share Purchase Agreement
count all reasonable comments made by the other Party. If and to
the extent that the Purchaser failed to comply with the
obligations under this Article 13.6 and cannot demonstrate that
the Sellers have not been prejudiced by such failure, the
Reduction Amount shall be reduced accordingly.
(e) The Sellers shall be represented by the Agents or the Sellers'
Representative for all purposes under this Article 13.6.
13.7 CONFIDENTIALITY AND RELEASE
(a) Each Seller shall not, directly or indirectly, before the fifth
anniversary of this Agreement, disclose to any unauthorized person
or, for his own account or the account of a third party,
commercially exploit, any information which is not publicly known
with respect to the business, assets, customers, suppliers,
rights, and operations of the Companies, unless and to the extent
that such confidential information is or becomes generally known
to and available for use by the public other than as a result of
the breach by any Seller.
(b) Each Seller (other than under employment agreements) hereby
unconditionally and for the direct benefit of the Purchaser and
each Company releases each Company from, waives, and undertakes
not to raise, any claim against any Company, under whatever legal
title and whether due or future, actual or contingent.
14. CONFIDENTIALITY - PRESS RELEASES
(a) The Parties agree to keep confidential the existence and contents
of this Agreement including the Schedules, as well as any
documents exchanged between the Parties regarding this Agreement,
as of the Signing Date, unless the Parties are legally obliged to
provide any documents to third parties, in which case the Party
concerned shall inform the other Party beforehand.
(b) However, the Parties agree that they may provide information to
any consultants, independent accountants and auditors, investors
and financial institutions with whom they may wish to work with
regard to the acquisition of the Purchase Shares and the financing
of such acquisition, provided that the Parties obtain from said
persons undertaking to keep this Agreement confidential to the
extent that it is confidential at such time.
(c) Moreover, as an exception to the above, information or documents
may be provided to bodies representing the employees for
consultation and for information purposes, and in order to obtain
administrative authorizations or within the context of legal or
arbitration proceedings.
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Colgate / GABA Share Purchase Agreement
(d) The Sellers and the Purchaser shall consult each other and obtain
the other Party's written approval (whereby the Sellers authorize
Mr. Werner Degen and Dr. Peter Grogg to jointly give such approval
on behalf of the Sellers) before publishing any press releases,
announcements or advertisements concerning the transactions
contemplated under this Agreement, as well as on the dates for
such publication.
(e) Notwithstanding the foregoing, the Sellers acknowledge that the
Purchaser is subject to various securities and disclosure
requirements under U.S. securities laws and New York Stock
Exchange rules and will have to comply with such laws and rules
after prior consultation with the Agents.
15. NATURE OF THE LIABILITY OF THE SELLERS
The Sellers' liability under this Agreement shall be personal and several
(EINZELSCHULDNER) not joint and several (KEINE SOLIDARHAFTUNG) and any
one Seller shall only be liable to the Purchaser pro rata to its Purchase
Shares to the aggregate of all of the Shares minus the Treasury Shares.
16. MISCELLANEOUS
16.1 INVALIDITY - SEVERABILITY OF THE PROVISIONS
If any provision of this Agreement is held to be invalid or unenforceable
for any reason, such provision shall, if possible, be adjusted rather
than voided, in order to achieve a result which corresponds to the
fullest possible extent to the intention of the Parties. The nullity or
adjustment of any provision of this Agreement shall not affect the
validity and enforceability of any other provision of this Agreement,
unless this is commercially unreasonable to any of the Parties.
16.2 WAIVERS
Failure to exercise, in part or in full, any of the rights under the
provisions of this Agreement shall not result in the waiver of the
benefit of such right in future or of any other right under this
Agreement.
16.3 EXPENSES
The Purchaser shall pay its own expenses and the expenses of its counsel
and advisers in relation to this Agreement. To the extent permissible
under relevant tax laws, GABA Holding shall pay the expenses of the
Sellers and the expenses of their counsel and advisers in relation to
this Agreement. Besides and subject to Article 13.1, each Seller shall
pay its own taxes and expenses.
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Colgate / GABA Share Purchase Agreement
16.4 ASSIGNMENT
No Party shall assign or transfer in any other way, in part or in full,
any of its rights or obligations under this Agreement without the prior
written consent of the other Parties. The Purchaser may substitute for
itself any legal entity belonging to the Purchaser group, in full or in
part, provided that the Purchaser shall in such case remain jointly
liable with the new party for all obligations of the Purchaser under this
Agreement.
16.5 ENTIRE AGREEMENT; AMENDMENTS
This Agreement constitutes the entire agreement between the Parties
concerning the transactions contemplated by it and supersedes in all
respects all previous agreements or arrangements, negotiations,
correspondence, undertakings and communications, oral or in writing, in
particular the Term Sheet dated October 25, 2003 and, subject to the
Closing (AUFSCHIEBENDE BEDINGUNG) the Confidentiality Agreement dated
September 25/30, 2003. This Agreement, including this Article 16.5 may
only be amended in writing, signed by the Purchaser and on behalf of the
Sellers by the Agents.
16.6 COMMUNICATIONS AND NOTICES - SELLERS' REPRESENTATIVE
(a) Any notice, request or instruction to be made under or in
connection with this Agreement to any Seller shall be made to the
Sellers' Representative. Any notice, request or instruction to be
made under this Agreement shall be made in writing and be
delivered by registered mail or courier or by facsimile (to be
confirmed in writing delivered by registered mail or courier) to
the following addresses (or such other addresses as may from time
to time have been notified according to this Article 16.6):
(i) If to any Seller or:
the Agents: Dr. Peter Honegger
Niederer Kraft & Frey
Bahnhofstrasse 13
CH-8001 Zurich
Switzerland
Fax: +41 58 800 8080
(ii) If to the Purchaser: Colgate-Palmolive Company
Attn. of General Counsel
300 Park Avenue New York,
New York 10022
United States of America
Fax: +1 212 310 2374
with copies to:
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Colgate / GABA Share Purchase Agreement
Dr. Rudolf Tschaeni
Lenz & Staehelin
Bleicherweg 58
CH-8027 Zurich
Switzerland
Fax: +41 1 204 12 00
Wachtel, Lipton, Rosen & Katz
Attn. Patricia A. Vlahakis
and Joshua R. Cammaker
51 West 52nd Street
New York, New York 10019
United States of America
Fax: +1 212 403 2000
(b) The Sellers hereby appoint Dr. Peter Honegger, Bahnhofstrasse 13,
8001 Zurich (or, in the event of his inability to act, another
partner at Niederer Kraft & Frey, in Zurich) as their joint
representative (the "SELLERS' REPRESENTATIVE") for the receipt of
notices and communications and for the delivery of such notices
and for any other act or performance provided for in this
Agreement and within the scope of this Agreement. This power of
attorney shall not terminate in the event of the loss of capacity
to act or death of one of the Sellers but shall remain in full
force and effect. Each Seller hereby waives the right to revoke
this power of attorney.
(c) The Sellers hereby appoint each of Mr. Werner Degen and Dr. Peter
Grogg (the "AGENTS") as their attorneys in determining whether to
agree to any and all amendments of this Agreement and waivers in
relation to this Agreement and with respect to any disputes or
settlements regarding the Closing Financial Statements or the
Adjustment Amount, the indemnification provided herein or any
other provisions contained in this Agreement. Each Seller
(excluding Mr. Degen and Dr. Grogg) hereby waives the right to
revoke this power of attorney.
(d) Notices shall be effective as of the business day following the
their date of receipt (by fax or courier).
17. GOVERNING LAW - ARBITRATION
(a) This Agreement shall be governed, construed and enforced in
accordance with the laws of Switzerland excluding the CISG (United
Nations Convention on the International Sale of Goods) and its
rules regarding the conflicts of laws.
(b) The Parties hereby irrevocably submit to exclusive jurisdiction of
the court of arbitration under the rules of the International
Chamber of Commerce in Paris, such arbitration to be conducted in
Zurich, in the English language, with a panel of three arbitrators
in connection with any disputes or claims arising in connection
herewith.
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Colgate / GABA Share Purchase Agreement
18. SIGNED COUNTERPARTS
(a) 4 (four) original counterparts of this Agreement shall be signed. 2 (two)
copies of the Schedules shall be made, two of which shall be initialed.
(b) Two of these original counterparts must be initialed on each page by a
representative of the Purchaser and of the Sellers. The Purchaser, each
Initial Seller and the Sellers' Representative shall each receive an
original counterpart.
19. SIGNATORIES
Place, Date: Zurich, 18 December 2003 On behalf of the Initial Sellers:
/S/ WERNER DEGEN /S/ PETER GROGG
---------------------------------------
Werner Degen Dr. Peter Grogg
Place, Date: Zurich, 18 December 2003 Colgate-Palmolive Company
/S/ FRANCK MOISON
---------------------------------------
Franck Moison,
President Colgate Europe
47