EXHIBIT 10.21
SALE AND PURCHASE AGREEMENT
between
Neptuno Verwaltungs- und Treuhand-Gesellschaft mbH, a company incorporated
under the laws of Germany, having its registered office in Cologne and
registered with the Commercial Register of Cologne under company number HRB
4847, acting as trustee for Xxxxxxxx & Xxxxxxx Holding International B.V.,
Eemnes, Netherlands
- hereinafter referred to as "Seller 1" -
and
Xx. Xxxxxxxx Xxxxx, a German citizen, acting in his capacity as administrator
in insolvency of FlowTex Holding GmbH & Co KG, a company incorporated in
Germany, having its registered office in Ettlingen;
- hereinafter referred to as "Seller 2" -
- Seller 1 and Seller 2 are hereinafter collectively referred to as "Sellers"
-
and
Xxxxxxxx & Xxxxxxx Holding International B.V., a company incorporated under
the laws of The Netherlands, having its registered office in Eemnes, The
Netherlands;
- hereinafter referred to as "Warrantor" -
- on the one hand -
and
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FriaNu GmbH (still registered as "Orion" Einundsiebzigste
Beteiligungsgesellschaft mbH), a company incorporated under the laws of
Germany, having its registered office in Frankfurt am Main and registered
with the Commercial Register of Frankfurt am Main under company number HRB
50957 (seat to be relocated to Munchen and company to be registered with the
Commercial Register of Munchen);
- hereinafter referred to as "Purchaser" -
and
Dentsply International Inc., a company incorporated under the laws of the
State of Delaware, USA;
- hereinafter referred to as "Guarantor" -
- on the other hand -
regarding the sale and purchase of all shares in Friadent GmbH
149
Index
Preamble....................................................5
S 1 Corporate Ownership.....................................6
1.1Share capital and Shareholders of Friadent.............6
1.2Particulars of Seller 1/The Trust......................6
1.3Particulars of Seller 2................................6
1.4The Main Share Pledge..................................7
1.5The Minor Share Pledge.................................7
S 2 Sale and Purchase of the Shares/Transfer of Shares Repayment of
Shareholder Loan............................................7
2.1Sale of the Shares.....................................7
2.2Transfer of Shares.....................................7
2.3Repayment of Shareholder Loan..........................8
S 3 Closing and Condition Precedent.........................8
S 4 Total Consideration.....................................9
4.1Total Consideration....................................9
4.2Due Date/Payment of the Total Consideration...........10
4.3Post-Closing Cash Price Adjustment....................10
4.4Definition of "Net Equity"............................11
4.5Period and Term of Escrow.............................12
4.6Bank Accounts.........................................13
4.7Allocation of Total Consideration.....................14
4.8No Right of Set-Off or Withholding....................14
S 5 Preparation and Audit of Financial Statements..........14
S 6 Liability of Sellers...................................16
S 7 Warranties.............................................17
S 8 Liability of Warrantor.................................21
8.1Rights of Purchaser for Breach of Warranty............21
8.2Provision and Compensation............................22
8.3Remedial Action and Mitigation........................22
8.4De minimis............................................23
8.5Limitation by amount..................................23
8.6Limitation Period.....................................24
8.7Right to rescind......................................24
8.8No other liabilities of and remedies against Warrantor25
S 9 Parent Company Guarantee...............................25
S 10 Antitrust Clearance...................................25
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S 11 Taxes and Costs.......................................26
11.1.................Cost of Preparation and Advisers' Fees 26
11.2................Transfer Taxes, Notarial and other Fees 26
S 12 Confidentiality.......................................27
12.1...........................Confidentiality of Agreement 27
12.2..........................................Announcements 27
S 13 Notices...............................................27
S 14 Miscellaneous.........................................29
14.1.........................................Applicable Law 29
14.2......................Jurisdiction/Jurisdictional Venue 29
14.3.............................................Amendments 29
14.4.........................................Interpretation 29
14.5...........................................Severability 29
14.6...............................................Language 30
151
Preamble
WHEREAS Friadent GmbH is a company incorporated under the laws of Germany,
having its registered office in Mannheim and registered with the
Commercial Register of Mannheim under company number HRB 7908
(hereinafter referred to as "Friadent" or the "Company").
WHEREAS Seller 1 holds one share in Friadent and intends to sell such share
to Purchaser.
WHEREAS FlowTex Holding GmbH & Co KG (formerly Xxxxxxx Xxxxxxxx und Dr. Ing.
Xxxxx Xxxxxxx Finanz Holding GbR, sometimes also called S & K
Finanzholding GbR) holds one share in Friadent and Seller 2 in its
capacity as administrator in insolvency of FlowTex Holding GmbH & Co KG
intends to sell such share for the account of FlowTex Holding GmbH & Co
KG to Purchaser.
WHEREAS Purchaser after conducting a legal, financial and business due
diligence of Friadent and its business intends to acquire from Seller 1
and Seller 2, respectively, their respective shares in Friadent.
WHEREAS Warrantor has agreed to join into this Agreement for the main purpose
of assuming certain warranties in connection with the sale of the shares
in Friadent pursuant to this Agreement.
WHEREAS Guarantor as the ultimate parent of Purchaser has agreed to join into
this Agreement for the sole purpose of giving certain guarantees with
respect to the obligations of Purchaser under this Agreement.
NOW, therefore, Purchaser and Seller 1 and Seller 2 (collectively hereafter
referred to as the "Parties" and each of them as a "Party") and Warrantor
and Guarantor hereby agree as follows:
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S 1
Corporate Ownership
1.1 Share capital and Shareholders of Friadent
The registered share capital of Friadent amounts to a nominal amount of
DM 200,000 and is divided and subscribed as follows:
(i) one share in the nominal amount ofDM 199,500,-
(ii) one share in the nominal amount ofDM 500,-
DM 200,000,-
The share of DM 199,500 (hereinafter referred to as the "Main Share") is
legally owned by Seller 1, and the share of DM 500,- (hereinafter
referred to as "Minor Share") is legally and beneficially owned by
FlowTex Holding GmbH & Co KG. The Main Share and the Minor Share are
hereinafter referred to as the "Shares".
1.2 Particulars of Seller 1/The Trust
Seller 1 is a wholly-owned subsidiary of Xxx. Xxxxxxxxx jr. & Cie. KGaA,
a company incorporated in Germany with its registered office in Cologne
("Xxx. Xxxxxxxxx"). Under a trust agreement (the "Trust Agreement") dated
14 March 2000 between Seller 1 and Warrantor, Warrantor has transferred
the legal ownership of the Main Share to Seller 1 for the purpose of
Seller 1 selling the Main Share in its own name but for the account of
Warrantor. Warrantor has retained beneficial ownership of the Main Share.
1.3 Particulars of Seller 2
Seller 2 is acting in his capacity as administrator in insolvency of
FlowTex Holding GmbH & Co KG. Xx. Xxxxxxxx Xxxxx has been duly appointed
as administrator in insolvency of FlowTex Holding GmbH & Co KG by court
order of the Lower Court of Karlsruhe dated 25 July 2000.
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1.4 The Main Share Pledge
Under a pledge dated 11 October 1999, Warrantor has pledged the Main
Share to Xxx. Xxxxxxxxx as security for a loan given by Xxx. Xxxxxxxxx to
Warrantor (the "Main Share Pledge").
1.5 The Minor Share Pledge
Under a pledge dated 11 October 1999, Xxxxxxx Xxxxxxxx und Dr. Ing. Xxxxx
Xxxxxxx Finanz Holding GbR has pledged the Minor Share to Xxx. Xxxxxxxxx
as security for a loan given by Xxx. Xxxxxxxxx to Warrantor (the "Minor
Share Pledge").
S 2
Sale and Purchase of the Shares/Transfer of Shares
Repayment of Shareholder Loan
2.1 Sale of the Shares
2.1.1 Seller 1 hereby sells and Purchaser hereby purchases, subject to
the terms and conditions of this Agreement, the Main Share.
2.1.2 Seller 2 hereby sells and Purchaser hereby purchases, subject to
the terms and conditions of this Agreement, the Minor Share.
2.1.3 The sale and purchase includes any and all rights and obligations
attached to the Shares including the right to receive dividends
(unter Einschlu(beta) des Gewinnbezugsrechts).
2.2 Transfer of Shares
The Parties agree that the Shares as sold and purchased hereunder are not
transferred by virtue of this Agreement. The Shares shall be transferred
subject to proper payment of the Total Consideration (as defined in
Section 4.1 below) by means of a separate notarial transfer document in
the form attached hereto as Annex A at the Closing Date (as hereinafter
defined).
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2.3 Repayment of Shareholder Loan
Purchaser undertakes to repay as a third party pursuant to S 267 German
Civil Code (BGB) for and on behalf of Friadent (im Auftrage von Friadent)
upon transfer of the Shares the shareholder loan in the amount of DM
82,742,000,- (the "Shareholder Loan") granted by Warrantor to Friadent
and Warrantor agrees that such repayment shall be made into the Escrow
Account (as hereinafter defined). The aforesaid repayment of the
Shareholder Loan shall be credited against the Total Consideration (as
defined in Section 4.1 below). In the letter a copy of which is attached
hereto as Annex B, Friadent has acknowledged and agreed that following
such repayment by Purchaser of the Shareholder Loan Purchaser shall have
a right to be reimbursed by Friadent for an amount equalling the
Shareholder Loan pursuant to S 670 German Civil Code (BGB) (hereinafter
referred to as the "Reimbursement Claim"). Purchaser undertakes to each
of Seller 1 and Warrantor, and in favour of Friadent (S 328 BGB) that it
will not claim any amount under the Reimbursement Claim and will not
charge any interest thereon as long as the Relevant Funds (as defined in
Section 4.5.3 below) on the Escrow Account (as defined in Section 4.2
below) have not been released in their entirety.
S 3
Closing and Condition Precedent
3.1 The Closing of the transactions contemplated by this Agreement shall take
place at the latest within three days on which banks are open for general
business in Switzerland following the fulfilment of the condition
precedent set out in Section 3.2, at the office of lic. iur. Xxxxxxx
Xxxxx, Aeschenvorstadt 55 in Basle/Switzerland or at such other time or
place as the Parties shall agree upon (heretofore and hereinafter
sometimes referred to as the "Closing"/"Closing Date").
3.2 The Closing shall only occur subject to the following condition precedent
having been fulfilled :
(i) Purchaser on the one side or Sellers on the other side having
received a written notice from the German Federal Cartel Office or
a certified copy thereof that it will not prohibit the acquisition,
or
(ii) the German Federal Cartel Office failing to notify Purchaser or
Sellers within one month after receipt of the pre-merger filing in
accordance with
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Section 40 para. 1 sentence 1 of the German Cartel Law (GWB) that
it has commenced a formal investigation of the proposed
acquisition, or
(iii) the German Federal Cartel Office failing to issue an order in
accordance with Section 40 para. 2 sentence 1 of the Cartel Law to
Purchaser or Sellers within four months after receipt by the
Federal Cartel Office of the pre-merger filing and no extension of
the four months period having been agreed with the Federal Cartel
Office. Neither Sellers nor Purchaser shall extend the
aforementioned four months period without prior written consent of
the other Parties.
3.3 On the Closing, the Parties shall simultaneously take the following
actions or cause such actions to be taken simultaneously:
(i) Seller 1 and Purchaser shall open the Escrow Account (as defined in
Section 4.2.(ii) below) with Xxx. Xxxxxxxxx jr. & Cie. KGaA (the
"Bank"), authorise the Bank to reinvest the funds contained in the
Escrow Account from time to time as set out in Section 4.5.2 below
and issue a standing order on the terms set out in Section 4.5.2
below;
(ii) Seller 1 shall transfer the Main Share and Seller 2 shall transfer
the Minor Share to Purchaser pursuant to a separate notarial
transfer document in accordance with Section 2.2 above;
(iii) Purchaser shall pay the Total Consideration (as defined in Section
4 below) by means of wire transfer as set out in Section 4 below;
and
( iv) Seller 1 shall procure the waiver, by Xxx. Xxxxxxxxx, of the Main
Share Pledge and the Minor Share Pledge.
S 4
Total Consideration
4.1 Total Consideration
The total consideration for the Shares shall be DM 220,000,000,-- (say:
two hundred and twenty million Deutschmarks) (hereinafter referred to as
the "Total Consideration") of which:
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(i) an amount equal to DM 137,258,000,- (say: one hundred and thirty seven
million two hundred and fifty-eight thousand Deutschmark) shall be
allocated to the Shares (the "Cash Price"); and
(ii) an amount equal to DM 82,742,000,- (say: eighty-two million seven
hundred and forty-two thousand Deutschmark) shall be allocated to
the Shareholder Loan to be repaid by Purchaser pursuant to Section
2.3 above.
The Cash Price shall be subject to a post-closing adjustment as set out
in Section 4.3 below and the Total Consideration shall be adjusted
accordingly. For the avoidance of doubt, the Total Consideration as so
adjusted shall be construed as payment in full for the Shares.
4.2 Due Date/Payment of the Total Consideration
The Total Consideration shall become due and payable against transfer
(Zug-um-Zug gegen Ubertragung) of the Shares and shall be paid at Closing
by Purchaser free of any costs and charges in immediately available funds
by wire transfer as follows:
(i) an aggregate amount of DM 22,000,000,- (say: twenty-two million
Deutschmark) shall be paid to Seller 1; and
(ii) the remainder of the Total Consideration shall be paid into an
interest-bearing joint escrow account of Seller 1 on the one hand
and Purchaser on the other hand with the Bank (the "Escrow
Account") to cover and give security for any claims of Purchaser
(1) pursuant to Section 4.3.2 (ii) and/or (iii) (if any) for a
repayment in case of an adjustment to the Cash Price, and (2)
pursuant to Section 8 below (hereinafter referred to as a "Warranty
Claim"), in each case on the terms set out in Section 4.5 below.
4.3 Post-Closing Cash Price Adjustment
4.3.1 Within seven (7) days of the final determination under Sections
5.6, 5.7 or 5.8 of the Financial Statements (as defined in Section
5.1 below), the Parties shall make the adjustment (if any) set out
in Section 4.3.2 to the Cash Price.
4.3.2 In the event that:
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(i) the Net Equity as determined in the Financial Statements exceeds DM
11,900,000,- (say: eleven million nine hundred thousand
Deutschmark), the amount of the Cash Price shall be increased
Deutschmark by Deutschmark by such exceeding amount and such amount
shall be paid by Purchaser to Seller 1;
(ii)the Net Equity as determined in the Financial Statements falls
below DM 11,900,000,- (say: eleven million nine hundred
thousand Deutschmark), the amount of the Cash Price shall be
decreased Deutschmark by Deutschmark by such shortfall and such
amount shall be released from the Escrow Account pursuant to
Section 4.5.6 below to Purchaser; or
(iii)the intercompany profit made by Friadent in the
financial year 2000 through sales
of inventories to its Subsidiaries (as defined in Section 7.1.2
below) as determined in the Financial Statements exceeds DM
1,800,000,- (say: one million eight hundred thousand
Deutschmark), the amount of the Cash Price shall be decreased
Deutschmark by Deutschmark by such exceeding amount and such
amount shall be released from the Escrow Account pursuant to
Section 4.5.6 below to Purchaser.
4.4 Definition of "Net Equity"
4.4.1 For the purpose of this Agreement and the transactions contemplated
hereunder, "Net Equity" shall be defined according to Section 266
paragraph 3 A. German Commercial Code/Handelsgesetzbuch, and thus
includes (1) Subscribed Capital, (2) Capital Reserves, (3) Revenue
Reserves, including Legal Reserves, Reserves for own Shares,
Statutory Reserves and Other Revenue Reserves, (4) Retained
Profits/Accumulated Losses Carried Forward, (5) Net income/loss of
the year each as reflected in the Financial Statements.
4.4.2 For the avoidance of doubt, the Shareholder Loan shall not form
part of the Net Equity.
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4.5 Period and Term of Escrow
The funds in the Escrow Account shall be held on the following terms:
4.5.1 Any bank or other charges arising on the Escrow Account shall be
charged to the Escrow Account.
4.5.2 Any interest generated on the Escrow Account (subject to any
deduction of tax at source) (the "Interest") shall not form part of
the Escrow Account but shall be exclusively for the account of
Seller 1. Purchaser and Seller 1 agree that the interest periods
applying to the funds contained in the Escrow Account from time to
time shall be (i) the calendar month (Monatsgeld) or (ii) one day
(Tagesgeld), in each case as Seller 1 in its absolute discretion
shall instruct the Bank. Purchaser and Seller 1 shall at Closing
authorise the Bank to reinvest such funds at the expiry of an
interest period accordingly. Purchaser and Seller 1 shall at
Closing issue an irrevocable standing order to the Bank pursuant to
which the Interest shall be released to Seller 1 on the first
banking day of each calendar month.
4.5.3 Subject to Section 4.5.4 below, the funds in the Escrow Account
shall be retained for certain periods of time from Closing (each an
"Escrow Period") as follows:
(i) DM 22,000,000,- for a period of six months from Closing;
(ii)DM 22,000,000,- for a period of nine months from Closing;
(iii)DM 132,000,000,- for a period of twelve months from Closing; and
(iv)DM 22,000,000,- for a period of eighteen months from Closing.
each such amount being hereinafter referred to as "Relevant Funds".
At the end of the relevant Escrow Period (subject to Section 4.5.4
below) Seller 1 and Purchaser shall issue joint written
instructions to the Bank to release the Relevant Funds to Seller 1.
4.5.4 Purchaser shall not be obliged to issue written instructions
pursuant to Section 4.5.3 above to the extent that he has:
159
(i) notified Seller 1 prior to the expiry of the relevant Escrow Period
of any Warranty Claim under this Agreement (such notice to include
a detailed statement of the facts upon which the Warranty Claim is
based and the amount of the Warranty Claim); and
(ii)unless any such Warranty Claim has been agreed by Purchaser and
Seller 1, Purchaser has, within six (6) weeks of such
notification pursuant to (i) above, commenced legal proceedings
(Klageerhebung) to pursue such Warranty Claim.
For the avoidance of doubt, Purchaser's right not to issue written
instructions pursuant to Section 4.5.3 above shall be limited, in
the case of (i) above, to the amount notified to Seller 1 and, in
the case of (ii) above, to the amount claimed in such legal
proceedings.
4.5.5 To the extent that any Warranty Claim shall have been agreed by
Purchaser and Seller 1 or determined by a judgement of the
competent court, Purchaser and Seller 1 shall immediately upon such
agreement or determination issue joint written instructions to the
Bank to pay the amount of such Warranty Claim from the Escrow
Account to Purchaser.
4.5.6 In the event of an adjustment to the Cash Price pursuant to Section
4.3.2 (ii) or (iii) above, any amounts to be so released shall be
released from the Relevant Funds set out in Section 4.5.3 (iii)
above, provided however that any such amounts shall be released
from the Escrow Account forthwith upon determination of the amount
of the adjustment to the Cash Price.
4.5.7 Each of Purchaser and Seller 1 undertake to issue instructions for
payment from the Escrow Account of the amounts due under the above
Sections without undue delay.
4.6 Bank Accounts
4.6.1 Any payments to be made under this Agreement to Seller 1 shall be
made into the following bank account of Seller 1: Bank: Xxx.
Xxxxxxxxx jr. & Cie. KGaA, Account number: 028.00.13215, Sort code:
370 302 00.
4.6.2 Any payments to be made under this Agreement to Purchaser shall be
made into the bank account of Purchaser communicated to Seller 1 in
writing no
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later than two days on which banks in Germany are open for general
business prior to Closing.
4.7 Allocation of Total Consideration
The allocation of the Total Consideration between Seller 1 and Seller 2
and Warrantor shall be the responsibility of Sellers and Warrantor.
4.8 No Right of Set-Off or Withholding
Any right of the Purchaser to set-off and/or withhold any payments due
under this Agreement to Seller 1 and/or Seller 2 is hereby expressly
waived and excluded.
S 5
Preparation and Audit of Financial Statements
5.1 Seller 1 and Purchaser will cause Xxxxxx Xxxx and Dr. Freimut Vizethum,
the Managing Directors of Friadent, to prepare financial statements
(balance sheet, profit and loss account and the annex thereto) of
Friadent as of December 31, 2000 or such other date as is agreed between
the Parties in writing (hereinafter referred to as " Financial
Statements") by no later than February 15, 2001. Seller 1 and Purchaser
shall further cause Xxxxxx Xxxx and Dr. Freimut Vizethum to procure that
the Subsidiaries prepare financial statements as of such date and within
the same period of time.
5.2 The Financial Statements shall be prepared in accordance with those
generally accepted accounting principles the Company is subject to
(German GAAP) and to be consistently applied maintaining full accounting
and valuation consistency. The financial statements of the Subsidiaries
shall be prepared in accordance with those generally accepted accounting
principles applicable to each of them, to be consistently applied.
5.3 The Financial Statements shall be audited by Friadent's appointed
auditor, Xx. Xxxxx, Konig und Partner GmbH (hereinafter referred to as
"Company's Auditor"). In addition, the Company's Auditor shall compute
the adjustment to the Cash Price pursuant to Section 4.3 above (if any).
5.4 Each of the Sellers and Purchaser shall have the right, at its own cost,
to review (uberprufen) the audited Financial Statements either itself or
by an auditor . Sellers and Purchaser shall have completed their review
of the audited Financial Statements no later than 4 weeks after receipt
of the audit report of Company's Auditor on the Financial Statements
(hereinafter referred to as "the Audit Report").
5.5 Each of the Sellers and Purchaser and/or their respective auditors shall
following the Closing Date have full access to management, employees,
accounts and other financial information of Friadent and working papers
of the Company's Auditor as is reasonably necessary for the purpose of
this Section 5. Each of Sellers and Purchaser shall procure that Friadent
gives such access and that the Company's Auditor will be released from
his professional secrecy obligation towards each of the Sellers and
Purchaser and their respective auditors and that Friadent authorizes and
instructs the Company's Auditor to grant unlimited access to the other
auditors with respect to his working papers and audit materials. The
Company's Auditor will grant unlimited access to the other auditors also
with respect to working papers and audit materials for the previous
fiscal years of Friadent.
5.6 If Sellers or their auditors on the one hand or Purchaser or his auditors
on the other hand do not notify the Purchaser or Sellers (as the case may
be) within 4 weeks from receipt of the Audit Report that any of them has
any objections against such report, specifying in writing each individual
item and the reasons for the objections thereupon, the Financial
Statements as audited by the Company's auditor shall become final for the
purpose of the computation of the adjustment to the Cash Price (if any)
in accordance with Section 4.3 above.
5.7 In the event that Sellers or their auditors on the one hand or Purchaser
or his auditors on the other hand notify Purchaser or Sellers (as the
case may be) within 4 weeks from receipt of the Audit Report that any of
them has any objections against such report, specifying in writing each
individual item and the reasons for the objections thereupon, the
auditors of Sellers on the one hand and the auditors of Purchaser on the
other hand shall then try to reach an agreement of the adjustments (if
any) required to the Financial Statements within seven (7) weeks from
receipt of the Audit Report. To the extent that the auditors of Sellers
on the one hand and the auditors of Purchaser on the other hand do not
reach any such agreement, the Sellers and the Purchaser shall use their
best efforts jointly to solve any possible differences of opinion between
the auditors within one (1) additional week.
5.8 If no agreement can be reached, Sellers and Purchaser shall decide upon
the nomination of an expert arbitrator (Schiedsgutachter) whose opinion
shall be binding for all
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parties involved. If no mutual agreement can be reached regarding the
person of the expert arbitrator, the expert arbitrator who has to be a
German chartered accountant (Wirtschaftsprufer) and a member of a major
international accounting firm and whose appointment shall be subject to
such expert confirming that he will deliver his ruling within the time
period stated below, shall be appointed by the President of the Institute
of Chartered Accountants in Germany upon formal request by either Sellers
or Purchaser. The expert arbitrator shall be bound by the accounting and
valuation principles agreed upon in this Agreement and shall render its
written ruling on the disputed items of the Financial Statements which
shall in no event exceed the scope and limits set by the objections
raised under Section 5.7 to Sellers and Purchaser within not more than
six (6) weeks from nomination. The expert arbitrator shall, in his
equitably exercised discretion, decide on the distribution of the expert
arbitrators' expenditures and remunerations taking into account the
success or failure of the respective Party.
5.9 Any agreement reached by the auditors and/or by the Sellers and the
Purchaser in accordance with Section 5.7 and/or any ruling by the expert
arbitrator in accordance with Section 5.8 shall be incorporated in the
Financial Statements which shall upon such incorporation become final for
the purpose of the computation of the adjustment to the Cash Price (if
any) in accordance with Section 4.3 above.
S 6
Liability of Sellers
6.1 Neither Seller 1 nor Seller 2 give any representations and/or warranties
on their own behalf of whatsoever kind and/or of whatsoever nature
including, without limitation, any representations and/or warranties
relating to legal defects (Rechtsmangel) and/or defects in kind
(Sachmangel). In particular, neither Seller 1 nor Seller 2 gives any
representation and/or warranty as to the identity of Xxxxxxx Xxxxxxxx und
Dr. Ing. Xxxxx Xxxxxxx Finanz Holding GbR with S & K Finanzholding GbR.
Any rights and claims of Purchaser for legal defects or defects in kind
against Seller 1 and/or Seller 2 are hereby expressly waived and
excluded.
6.2 The same applies with respect to any other liability of Seller 1 and/or
Seller 2 in relation to this Agreement or the transactions contemplated
hereby; any claims against Seller 1 and/or Seller 2 including, without
limitation, any claims under precontractual fault (culpa in contrahendo)
or breach of contract (pVV) and/or the right to reduce the Total
Consideration or any part thereof (Minderung) and/or to
162
withdraw from this Agreement (Wandlung) and/or to rescind this Agreement
(Rucktritt) and/or any liability of Seller 1 and/or Seller 2 in tort
(Deliktshaftung) shall hereby be expressly waived and excluded, provided
however that this Section 6.2 shall not apply to the extent that
Purchaser can prove fraudulent behaviour or wilful misconduct of Seller 1
and/or Seller 2, respectively. The obligations of Seller 1 pursuant to
Section 4.5 shall remain unaffected.
6.3 Notwithstanding the aforesaid, any liability of Seller 1 and/or Seller 2
under this Agreement shall be several. In particular, any fraudulent
behaviour or wilful misconduct of Seller 1 and/or Seller 2 shall not be
invoked against the other Seller.
6.4 For the avoidance of doubt, any Warranties given for and on behalf of
Warrantor pursuant to Section 7.1 below cannot be invoked against and do
not create any liability against Sellers or any of them. For the
avoidance of doubt, the obligations of Seller 1 pursuant to Section 4.5
shall remain unaffected.
S 7
Warranties
7.1 Seller 1 hereby warrants for and on behalf of the Warrantor who hereby
agrees to be bound by such warranties (the "Warranties") the following
effective as of the signing of this Agreement and as of the Closing Date:
7.1.1 Friadent has been validly formed as a limited liability company
(GmbH) and exists under the laws of the Federal Republic of
Germany. The Articles of Incorporation of Friadent, shareholders'
resolutions and other corporate records which have been furnished
to Purchaser or made available for review to Purchaser comprise all
corporate records of a material nature of Friadent.
7.1.2 Sellers are the owners of all of the Shares in Friadent as
described in S 1 above; there are no rights of Sellers or third
parties to subscribe to new shares; except for the Main Share
Pledge and the Minor Share Pledge the Shares are free from all
liens, charges and encumbrances in favour of any of the Sellers or
any third party; there exist no rights of preemption, purchase
options or call options of third parties regarding the Shares; all
cash capital contributions have been made in their full amount;
repayments of subscriptions were not made. Sellers can freely
dispose of the Shares.
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Friadent owns the majority of the shares in the companies listed in
Exhibit 7.1.2, (hereinafter referred to as the "Subsidiaries") (the
shares owned by Friadent in the Subsidiaries are hereinafter
referred to as the "Subsidiary Shares"). To the best of Seller 1 s
knowledge there are no rights of Sellers or third parties to
subscribe to new shares in the Subsidiaries. The Subsidiary Shares
are free from all liens, charges and encumbrances in favour of any
of the Sellers or any third party; there exist no rights of
preemption, purchase options or call options of third parties
regarding the Subsidiary Shares; all cash capital contributions
regarding the Subsidiary Shares have been made in their full
amount; all capital contributions in kind regarding the Subsidiary
Shares, if any, have been made and had the full value at which they
were transferred and accepted; repayments of subscriptions were not
made.
Friadent and the Subsidiaries are hereinafter referred to as the
"Friadent Group".
7.1.3 The Financial Statements and the financial statements as of
December 31, 1999 of the companies of the Friadent Group are true
and correct in accordance with generally accepted accounting
principles consistently applied by the respective members of the
Friadent Group and fairly reflect the assets and liabilities of
such companies in accordance therewith. Friadent has not made any
dividend distributions after December 31, 1998.
7.1.4 To Seller 1's best knowledge the Friadent Group is entitled to use
and to continue to use the company name "Friadent" as such name is
presently used. After the Closing Date Sellers will not make any
use of this name.
7.1.5 Exhibit 7.1.5 contains all patents and trade marks which are
material to the operation of the business of the respective member
of the Friadent Group and which are owned by the Friadent Group or
licensed to it.
7.1.6 The Friadent Group has in the past been materially in compliance
with all material legal and regulatory provisions applicable to the
Friadent Group in connection with its business. To Seller 1's best
knowledge, and on the basis of the presently existing laws no
material additional conditions (gesetzliche Auflagen) are to be
expected in the near future in relation to such business as
presently conducted.
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7.1.7 Access to copies of all contracts material to the operation of the
Friadent Group existing as of the date of this Agreement and
pertaining to the business of the Friadent Group (hereinafter
referred to as "Material Contracts") has been given to Purchaser,
including license agreements. Neither the Friadent Group nor, to
the best knowledge of Seller 1, any of its contract partners is in
material breach of any of the Material Contracts.
7.1.8 Except as listed in Exhibit 7.1.8 the Friadent Group is and was in
the last 24 months prior to the signing of this Agreement not
involved in any kind of proceedings pending before courts or
administrative agencies or arbitration tribunals in which any
individual claim or any series of product liability claims asserted
exceed DM 100,000,00. To Seller 1's best knowledge there is also no
threat of such proceedings.
7.1.9 To Seller 1's best knowledge, except as listed in Exhibit 7.1.9
there are no circumstances in existence which could materially
affect the business of the Friadent Group as carried on as at the
date of this Agreement (save to the extent that the same would be
likely to affect to a similar extent generally all companies
carrying on similar businesses).
7.1.10All powers of attorney for individuals who are not employees of a
company of the Friadent Group shall expire on the Closing Date,
except for those listed in Exhibit 7.1.10.
0.0.00.Xx investment grants or subsidies shall be repayable as a
consequence of the performance of this Agreement or any events
or circumstances which were in existence on or before the
Closing Date.
7.1.12.The real property presently owned by the Friadent Group
(hereinafter referred to as "the Properties") is fully listed in
Exhibit 7.1.12. The Properties are free of any encumbrances
registered in the respective Land Register or in the process of
being registered except for the encumbrances registered in the
Second Division and the Third Division of the Land Register which
are identified in Exhibit 7.1.12. There are no pending registrations
being applied for.
7.1.13As a result of the change in ownership of Friadent resulting from
the acquisition by the Purchaser:
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(i) no other shareholder of the Subsidiaries has the right to terminate
the respective company, sell his shares to Friadent or acquire the
shares of Friadent in the respective company; no shares owned by
Friadent are subject to redemption;
(ii)no material license agreement of the Friadent Group includes a
change of ownership clause which would permit termination of
such agreement by the respective contract partner;
7.1.14As per the Closing Date all material records of Friadent (relating
to the Company in the period following its incorporation) and each
of its Subsidiaries will be held by the applicable member of the
Friadent Group or on behalf and to the order of any such company.
7.1.15Between the date of this Agreement and the Closing Date:
(i) the operations of the Friadent Group will continue to be
conducted in the ordinary course of business and consistent
with past practice;
(ii)the assets of the Friadent Group will not be disposed of,
except in the ordinary course of business;
(iii)no new share capital or other similar capital will be created
or issued; and
(iv)the Friadent Group will not extend existing financing
arrangements or enter into any new or additional financing
arrangements which cannot be terminated on a day to day basis
without cost.
7.2 Warrantor shall not be liable for a breach of any of the Warranties to
the extent that Seller 1 discloses to Purchaser in writing with a copy to
Warrantor between signing of this Agreement and the Closing Date any
facts, circumstances or events which could constitute a breach of any of
the Warranties. The same shall apply to those facts, circumstances and
events which are otherwise known by Purchaser as at the date of this
Agreement and/or as at the Closing Date.
7.3 Where any warranty herein is made at "Seller 1's best knowledge", the
knowledge of Seller 1 shall be limited to the knowledge of any of
Messrs. Xxxxxx Xxxx and Dr. Freimut Vizethum.
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7.4 Sellers, Purchaser and Warrantor acknowledge and agree that Purchaser
does not request any additional Warranties to those set out herein.
7.5 As used in this Agreement, the terms "warranty" and "guarantee" and the
verbs "to warrant", "to guarantee" refer to separate promises of
guarantee pursuant to Section 305 of the German Civil Code (BGB).
S 8
Liability of Warrantor
8.1 Rights of Purchaser for Breach of Warranty
8.1.1 In the event that any of the Warranties given above under Section 7
is partially or entirely incorrect, Purchaser shall be entitled to,
subject to the other provisions of this Section 8:
(i) in the case of a breach of any of the Warranties contained in
Section 7.1.1 and/or 7.1.2 as a direct consequence of which
title to the Shares does not pass to Purchaser on Closing, to
reclaim the Total Consideration against assignment to Warrantor
of its Reimbursement Claim, provided however that Purchaser
shall be entitled to withhold such assignment to the extent
that Purchaser's claim for repayment of the Total Consideration
is not satisfied; and
(ii)in the case of a breach of any of the other Warranties, to
reduce, subject to the limitations set forth in Section 8.5
(ii) the Total Consideration by an amount equal to the damages
resulting from the violation of the respective Warranty, the
amount equalling such damages bearing interest at a rate of 6
per cent. per annum from the day the respective Warranty Claim
is asserted by Purchaser against Warrantor by issuance of legal
proceedings (Klageerhebung) until the day of payment of such
Warranty Claim to the Purchaser with interest being due for
payment together with payment of the principal amount; any
reduction pursuant to this Sub-Section (ii) shall be made
against the amount set out in Section 4.1 (i) above.
8.1.2 If tax assessments for the Friadent Group are issued or amended
with respect to any period of time prior to the Closing Date, any
resulting
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additional tax liabilities allocable to the period of time prior to
the Closing Date including interest thereon falling due after the
Closing Date shall be borne by Warrantor. This shall not apply to
the extent that such tax liabilities had their origin in a mere
shifting of taxable profits to another taxable year and there is
correspondingly less tax in the following six years. However,
interest shall be computed on such additional taxes paid until the
dates of their recovery at the interest rate of 6 % and shall be
considered as damage.
8.2 Provision and Compensation
Purchaser shall not be entitled to base any claims under Section 8.1
above on any facts, circumstances and events to the extent that:
(i) any provisions have been made in the Financial Statements for any
such facts, circumstances and events; and/or
(ii) such claims will be compensated by an insurance company under any
insurance policy of the Friadent Group; and/or
(iii) Purchaser has been compensated for any such facts, circumstances
and events by the adjustment of the Cash Price pursuant to Section
4.3 (if any).
8.3 Remedial Action and Mitigation
If any facts, circumstances or events occur giving rise to a claim for
breach of Warranty, then:
(i) Warrantor will be afforded a reasonable opportunity not exceeding
12 weeks to remedy the matter which is the subject of the claim to
the extent that the facts, circumstances or events are capable of
being so remedied; and
(ii) Purchaser shall, and shall procure that the members of the Friadent
Group shall, co-operate with Warrantor to ensure that all
reasonable steps are taken to mitigate any loss giving rise to the
claim.
Purchaser shall in particular inform Warrantor in writing without undue
delay in case third parties assert or threaten to assert claims of any
kind against the Friadent Group, Purchaser or companies related to
Purchaser which could result in a liability
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of Warrantor according to this Agreement. Purchaser shall cause the
Friadent Group to make available to Warrantor all appropriate documents
and supply all appropriate information and shall give Warrantor access to
the books and documents belonging to the business of the Friadent Group,
to the extent that this is necessary to defend or remedy any such
asserted claims.
8.4 De minimis
Purchaser shall be entitled to assert claims under this Agreement only if:
(i) an individual claim exceeds DM 75,000.00 (in words: German Marks
seventy-five thousand), and
(ii) the sum total of individual claims exceeds DM 1,000,000.00 (in
words: German Marks one million).
Where the limits set out in Section 8.4 (ii) are exceeded, Purchaser
shall be entitled to assert claims for the sum of the excess over (ii)
only. In any event, Purchaser shall be obliged in the first instance to
seek satisfaction of its claims out of the funds contained in the Escrow
Account from time to time and shall only be entitled to claim payments
from Warrantor to the extent that the funds contained in the Escrow
Account from time to time are insufficient to meet Purchaser's claims.
8.5 Limitation by amount
Claims asserted for breach of Warranties and/or for damages in lieu of
specific performance under this Agreement shall be limited as follows:
(i) claims under Section 7.1.1 and/or 7.1.2 affecting the transfer of
title to the Shares at Closing to 100 % of the Total Consideration
(as adjusted pursuant to Section 4.3 above); and
(ii) claims under all other Warranties to 25 % of the Total
Consideration (as adjusted pursuant to Section 4.3 above);
provided however that the sum of (i) and (ii) shall in no event exceed an
amount equal to 100 % of the Total Consideration (as adjusted pursuant to
Section 4.3 above).
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8.6 Limitation Period
All claims of Purchaser under this Agreement including, without
limitation, any Warranty Claims and/or claims for specific performance
shall become statute-barred (Verjahrung) within 18 months as of the date
of this Agreement except for the following claims:
(i) claims made under Section 7.1.1 and/or 7.1.2 to the extent that
they are for failure to transfer title to the Shares at Closing,
which shall become statute-barred within 10 years from the date of
this Agreement; and
(ii) claims relating to tax obligations, customs obligations and
obligations relating to levies and social security obligations of
the Friadent Group, which shall become statute-barred within 6
months from the date on which the respective assessment becomes res
iudicata.
8.7 Right to rescind
In the event that between signing of this Agreement and before the
Closing Date one or more breaches of Warranty are disclosed by Seller 1
to Purchaser in accordance with Section 7.2 above:
(i) which will not be fully compensated by the adjustment to the Cash
Price in accordance with Section 4.3; or
(ii) which Warrantor is not able to remedy (objektive Unmoglichkeit) nor
willing to be held liable for in accordance with Section 8 above
(the intention to being held so liable having to be communicated to
Purchaser in writing within 72 hours from the disclosure of the
breach having been made to Purchaser);
then Purchaser shall be entitled to rescind this Agreement by written
declaration of rescission to be received by Sellers no later than 48
hours after the expiry of the 72 hour period set out in (ii) above. In
addition, Purchaser shall be entitled to so rescind the Agreement if the
disclosure is such that a prudent business man as purchaser, in good
faith and notwithstanding the remedies set out in (i) and (ii) above,
could not reasonably be expected to proceed to Closing.
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8.8 No other liabilities of and remedies against Warrantor
Any further rights and claims of Purchaser of whatsoever nature and on
whatsoever legal basis, in particular, without limitation, any Warranty
Claims of Purchaser other than expressly agreed upon in this Agreement
are hereby expressly waived and excluded. This shall in particular apply
to any claims based on precontractual fault (culpa in contrahendo),
breach of contract (pVV) and/or the right to rescind this Agreement
(Rucktritt) and/or to withdraw from this Agreement (Wandlung). The right
to rescind set out in Section 8.7 shall remain unaffected.
S 9
Parent Company Guarantee
In consideration of the Sellers entering into this Agreement, Guarantor
unconditionally and irrevocably guarantees as a continuing obligation the
proper and punctual performance by Purchaser of all its obligations under or
pursuant to this Agreement.
S 10
Antitrust Clearance
10.1 The Parties acknowledge and agree that the transactions contemplated by
this Agreement shall be notified to the Federal Cartel Office on the date
of this Agreement or, at the latest, on the first day after the date of
this Agreement on which banks are opened for general business in Germany.
Purchaser undertakes in connection with the condition precedent set out
in Section 3.2 above to use its best endeavours to obtain consent from
the Federal Cartel Office to the transactions contemplated by this
Agreement as soon as possible after the date of this Agreement. The
Parties agree to promptly provide to each other such information and
assistance as any of them may reasonably request in connection with the
notification and filing and the progress thereof.
10.2 The primary responsibility for the necessary filings with the Federal
Cartel Office in relation to all matters contemplated by this Agreement
or arising therefrom shall lie with Purchaser rather than Seller 1 and/or
Seller 2; however Purchaser shall:
(i) before sending any communication and/or documentation to the
Federal Cartel Office consult with Seller 1 in relation thereto;
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(ii) promptly provide to the Federal Cartel Office such information as
the Federal Cartel Office may require in relation thereto to the
extent that it lies within the control of Purchaser to provide such
information without breaching any of Sellers' or third party rights
in relation to confidential information; and
(iii) provide to Seller 1 copies of all correspondence sent by Purchaser
to or received by Purchaser from the Federal Cartel Office in
relation thereto.
10.3 Each of Sellers shall have the right in its absolute discretion to join
the notification submitted by Purchaser to the Federal Cartel Office.
10.4 In the event that the condition precedent set out in Section 3.2 above
has not been fulfilled by February 15, 2001, Seller 1 shall for and on
behalf of Sellers be entitled to rescind this Agreement with immediate
effect by written declaration to Purchaser; provided however that Seller
1 shall not exercise such right if the delay is such that a prudent
business man in good faith could reasonably be expected to continue to be
bound by this Agreement. This shall be deemed to be the case if the
Federal Cartel Office has not indicated to any of the Parties that it has
serious concerns to clear the transaction contemplated by this Agreement.
S 11
Taxes and Costs
11.1 Cost of Preparation and Advisers' Fees
Each of the Parties and Warrantor and Guarantor shall bear its own costs
and expenses in connection with the preparation, execution and
implementation of this Agreement, including any and all professional fees
of its legal, tax and financial advisers including investment banks, as
well as all costs and expenses for granting and issuing any necessary
powers-of-attorney.
11.2 Transfer Taxes, Notarial and other Fees
Any transfer taxes, notarial costs and costs of the Federal Cartel Office
in connection with the execution of this Agreement and the transactions
contemplated hereunder, including registration costs, shall be borne by
Purchaser.
000
X 00
Confidentiality
12.1 Confidentiality of Agreement
The Parties, Warrantor and Guarantor agree to keep confidential and
secret the contents of this Agreement from third parties, except to the
extent that they are obliged to disclose and to give notice of the same
to any court or administrative authorities or otherwise or as set forth
in Section 12.2.1. They will use reasonable efforts even in such cases to
ensure that, notwithstanding any disclosure and notice to any courts or
administrative authorities, confidentiality is maintained to the maximum
extent possible.
12.2 Announcements
12.2.1Except as required by law or by any governmental or other
regulatory or supervisory body or authority of competent
jurisdiction to whose rules the Party making the announcement or
disclosure is subject, whether or not having the force of law, no
announcement or circular or disclosure in connection with the
existence or subject matter of this Agreement shall be made or
issued by or on behalf of any of the Sellers or Purchaser without
the prior written approval of the others, such approval not to be
unreasonably withheld or delayed. Notwithstanding the foregoing,
Seller 1 shall without the consent of any of the other Parties be
entitled to produce tombstones in relation to the transactions
contemplated by this Agreement and to distribute the same in its
absolute discretion.
12.2.2Where any announcement or disclosure is made in reliance on the
exception in Section 12.2.1, the Party making the announcement or
disclosure will consult with the other Parties in advance as to the
form, content and timing of the announcement or disclosure.
S 13
Notices
13.1 Notices in connection with this Agreement shall be addressed to the
following addresses:
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(i) Seller 1:
Unter Xxxxxxxxxxxxx 0
00000 Xxxxxxx, Xxxxxxx
Fax: + 000 000 0000
Attn.: Xx. Xxxxxx Xxxxxxxxxx
(ii) Seller 2
Xxxxxxxxxxxx 00-00
00000 Xxxxxx, Xxxxxxx
Fax: + 7841 - 708 301
Attn: Dr. Xxxxx de Bra
(iii) Warrantor
same as Seller 2
(iv) Purchaser:
x/x Xxxxxxxx Xx Xxxx XxxX
Xx Xxxx Xxx. 0
00000 Konstanz
Fax: + 7531 - 583 104
Attn: Xxxxxxx Xxxxxx Xxxxxx
With a copy to Guarantor
(v) Guarantor:
000 Xxxx Xxxxxx
X.X. Xxx 000
Xxxx, XX 00000-0000, XXX
Fax: + 000 000 0000
Attn.: Secretary
13.2 The aforesaid addresses shall remain valid and in force unless and until
the other Parties have been notified in writing by registered mail of any
other address.
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13.3 All notices in connection with this Agreement must be in writing and
shall become effective upon receipt. Notices by telefax, telegram or
telex must be confirmed by unregistered mail.
S 14
Miscellaneous
14.1 Applicable Law
This Agreement is subject to and construed in accordance with the laws of
Germany, provided however that any provisions of the UN Convention on
Contracts for the International Sale of Goods (CISG) or any other
international uniform law shall not be applied.
14.2 Jurisdiction/Jurisdictional Venue
Jurisdiction for any disputes, controversies and claims arising out of or
in connection with this Agreement and its performance shall exclusively
be with the competent courts of Germany. Exclusive venue for such
disputes, controversies and claims shall be Karlsruhe.
14.3 Amendments
All amendments to this Agreement, including, without limitation, a change
of this Section 14.3 itself, must be made in writing and with the express
reference to this Agreement, unless notarisation or any other form is
required.
14.4 Interpretation
In this Agreement, unless the context otherwise requires the headings are
inserted for convenience only and shall not affect the interpretation of
this Agreement or any of its Sections.
14.5 Severability
If any of the provisions of this Agreement shall become or be held
invalid, ineffective or unenforceable, all other provisions hereof shall
remain in full force and effect. The invalid, ineffective or
unenforceable provision shall be deemed to be
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automatically amended and replaced without further action by the Parties
hereto by such form, substance, time, measure and jurisdiction as shall
be valid, effective and enforceable and as shall accomplish as far as
possible the purpose and intent of the invalid, ineffective or
unenforceable provision. The aforesaid shall apply mutatis mutandis for
any situation not contemplated and covered by this Agreement.
14.6 Language
This Agreement shall be executed in the English language only provided
however that:
(i) the German legal terms of art shall prevail wherever used in this
Agreement, and
(ii) where no German legal terms of art are used, the English wording
shall be given the legal meaning adscribed to the equivalent German
legal terms.
(end of text)
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