EXHIBIT 2
---------
SHARE PURCHASE AGREEMENT
between
Sun HB Holdings, LLC, Boca Raton, Florida, United States of America
and
Harsco Corporation, Camp Hill, Pennsylvania/United States of America
dated September 20, 2005
regarding the sale and purchase of the issued share capital of
Hunnebeck Group GmbH, Ratingen, Germany
TABLE OF CONTENTS
TABLE OF CONTENTS.............................................................2
LIST OF EXHIBITS..............................................................5
RECITALS......................................................................6
ARTICLE 1 SALE AND PURCHASE OF THE SOLD SHARES................................7
1.1 Agreement to Sell and Purchase....................................7
1.2 Share Transfer....................................................7
1.3 Dividend Rights...................................................7
ARTICLE 2 PURCHASE PRICE......................................................7
2.1 Purchase Price....................................................7
2.2 Payments on the Closing Date......................................9
2.3 Mode of Payment; Default; Set-off.................................9
ARTICLE 3 CLOSING CERTIFICATE; POST-CLOSING ADJUSTMENTS......................10
3.1 Preparation of Draft Closing Certificate.........................10
3.2 Accounting Principles............................................10
3.3 Review of Draft Closing Certificate..............................10
3.4 Dispute Resolution...............................................11
3.5 Final Amounts....................................................12
ARTICLE 4 CLOSING............................................................14
4.1 Place and Time of Closing........................................14
4.2 Conditions to Closing............................................14
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4.3 Merger Control Proceedings; Other Regulatory Requirements........14
4.4 Seller's Deliveries on or prior to the Closing Date..............16
4.5 Actions on the Closing Date......................................16
4.6 Termination Right................................................17
ARTICLE 5 REPRESENTATIONS OF SELLER..........................................17
5.1 Legal Organization of Seller and the Hunnebeck Group.............18
5.2 Ownership of Shares; Shareholdings...............................19
5.3 Authorization of Seller..........................................20
5.4 Financial Statements.............................................20
5.5 Title to Assets; Encumbrances; Liability arising in
connection with ThyssenKrupp notes..............................20
5.6 Intellectual Property Rights.....................................21
5.7 Governmental Permits; Compliance with Laws.......................22
5.8 Litigation; Disputes.............................................22
5.9 Employee and Labor Matters.......................................23
5.10 Material Agreements..............................................24
5.11 Insurance Coverage...............................................25
5.12 Product Liability................................................25
5.13 Finders' Fees....................................................26
5.14 Conduct of Business since 30 September 2004......................26
5.15 Taxes .....................................................27
5.16 Environmental Matters............................................28
5.17 No Other Representations or Warranties...........................28
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF PURCHASER........................29
6.1 Authorization of Purchaser.......................................29
6.2 Finders' Fees....................................................30
6.3 Financial Capability; Solvency...................................30
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ARTICLE 7 COVENANTS..........................................................31
7.1 Conduct of Business Prior to Closing.............................31
7.2 Confidentiality..................................................32
7.3 Access to Information after Closing..............................33
7.4 Further Assurances; Cooperation..................................33
7.5 D&O Insurance Tail Coverage......................................33
ARTICLE 8 INDEMNIFICATION....................................................34
8.1 Indemnification by Seller and Purchaser..........................34
8.2 Losses Reflected in Financial Statements;Indemnification
by ThyssenKrupp.................................................35
8.3 Disclosed or Known Matters.......................................35
8.4 Thresholds and Aggregate Amounts of Seller's and
Purchaser's Liability...........................................36
8.5 Escrow Account...................................................36
8.6 Limitation Periods...............................................37
8.7 Indemnification Procedures.......................................37
8.8 No Additional Rights or Remedies.................................38
8.9 No Double Counting...............................................39
8.10 Indemnification Insurance........................................39
ARTICLE 9 MISCELLANEOUS......................................................40
9.1 Notices..........................................................40
9.2 Public Disclosure, Confidentiality...............................41
9.3 Costs and Expenses...............................................41
9.4 Entire Agreement; Amendments and Waivers.........................42
9.5 Assignments; Third Party Beneficiaries...........................42
9.6 Governing Law; Jurisdiction......................................42
9.7 Interpretation...................................................43
9.8 Definitions......................................................43
9.9 Severability.....................................................44
EXHIBIT 9.8: LIST OF DEFINITIONS.............................................45
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LIST OF EXHIBITS
EXHIBIT R Companies and other subsidiaries of the Group
EXHIBIT 3.2 2004 Financial Statements
EXHIBIT 4.4 Companies with security release evidence to be delivered
EXHIBIT 4.5(A) Form of share transfer agreement
EXHIBIT 5.1(C) Interests in other companies or entities
EXHIBIT 5.1(E) List of articles of association, partnership agreements, etc.
EXHIBIT 5.2(B) Pre-emptive, option and similar rights relating to certain
shares
EXHIBIT 5.4 Management Report as of 31 July 2005
EXHIBIT 5.5 Third party rights and encumbrances in assets
EXHIBIT 5.6 Intellectual Property Rights
EXHIBIT 5.7(A) Missing Governmental Permits
EXHIBIT 5.7(B) Non-Compliance with laws
EXHIBIT 5.8 Litigation
EXHIBIT 5.9(A) Material agreements with unions and worker's councils
EXHIBIT 5.9(B) Strikes and Labor Law Suits
EXHIBIT 5.9(C) List of Key Employees
EXHIBIT 5.9(D) Pensions
EXHIBIT 5.10(A) Material Agreements
EXHIBIT 5.10(B) Termination or breach of Material Agreements
EXHIBIT 5.11 Material insurance policies
EXHIBIT 5.12 Product liability
EXHIBIT 5.13 Finders' Fees
EXHIBIT 5.14 Conduct of Business since 30 September 2004
EXHIBIT 5.15 Tax representations
EXHIBIT 5.16 Environmental representations
EXHIBIT 7.1 Conduct of business until Closing
EXHIBIT 7.5 D&O insurances
EXHIBIT 8.3 Exception from Carve-out of disclosed documents
EXHIBIT 8.5 Escrow Agreement
EXHIBIT 9.6 ICC Arbitration Rules
EXHIBIT 9.8 Definitions
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This Share Purchase Agreement (the "AGREEMENT") is entered into on this 20th day
of September, 2005, by and between
(1) Sun HB Holdings, LLC, a limited liability company formed under the laws of
the State of Delaware, U.S.A. (hereinafter referred to as "SELLER"), and
(2) Harsco Corporation, a corporation incorporated under the laws of the state
of Delaware (hereinafter referred to as "PURCHASER").
RECITALS
1. Seller is the owner of 100% of the issued share capital of Hunnebeck Group
GmbH, registered in the commercial register of the local court of
Dusseldorf under HRB 48411 (hereinafter referred to as "HOLDCO"). Holdco
has a registered share capital of EUR 25,000, divided into two shares, in
the respective nominal amounts of EUR 24,000 and EUR 1,000, both of which
are owned by Seller. The shares mentioned in the preceeding sentence are
referred to herein as the "SOLD SHARES".
2. Holdco is the parent company of a group engaged in the rental, servicing
and sale of formwork systems and scaffolding systems. Holdco, directly or
indirectly, owns the interests in the subsidiaries set out in EXHIBIT R.
Holdco and the subsidiaries set out in EXHIBIT R are collectively referred
to herein as the "HUNNEBECK GROUP". All entities of the Hunnebeck Group are
referred to herein collectively as the "COMPANIES" and individually as a
"COMPANY".
3. Seller and all entities affiliated with Seller (at the relevant time)
within the meaning of Section 15 of the German Stock Corporation Act
(AKTG), other than any members of the Hunnebeck Group, are referred to
herein as the "SELLER'S GROUP".
4. Seller wishes to divest itself of the Hunnebeck Group and Purchaser wishes
to acquire the Hunnebeck Group. Therefore, Seller and Purchaser
(hereinafter referred to as the "PARTIES") agree as follows:
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ARTICLE 1
SALE AND PURCHASE OF THE SOLD SHARES
1.1 AGREEMENT TO SELL AND PURCHASE
Upon the terms and subject to the conditions set forth in this Agreement,
Seller hereby sells to Purchaser, and Purchaser hereby purchases from
Seller, all of the shares held by Seller in Holdco.
1.2 SHARE TRANSFER
At the Closing (as defined below in Article 4.1), Seller shall assign and
transfer to Purchaser the Sold Shares in accordance with ARTICLE 4.5.
1.3 DIVIDEND RIGHTS
The Sold Shares shall be sold and transferred to Purchaser with all rights
and obligations pertaining thereto.
ARTICLE 2
PURCHASE PRICE
2.1 PURCHASE PRICE
(a) The purchase price for the Sold Shares (the "PURCHASE PRICE") shall be
equal to:
(i) EUR 140 million (in words: Euro one hundred and forty million);
(ii) plus an amount equal to the Cash (as defined below);
(iii) minus an amount equal to the Financial Debt (as defined below);
(iv) minus an amount equal to the Capital Lease Obligations (as
defined below).
(b) For the purpose of this Agreement:
"CASH" means, as of the Closing Date, the aggregate amount (including
any accrued interest thereon) of any cash (KASSENBESTAND) and cash
equivalents of the Hunnebeck Group (excluding, for the avoidance of
doubt, the aggregate amount of monies received by the Companies from
account debtors and note debtors prior
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to Closing Date merely as administrator of such accounts receivable
and notes on the basis of the "Vendor Financed Business Collection
Agreement" entered into between Hunnebeck GmbH on the one side and
ThyssenKrupp AG and ThyssenKrupp Systems & Services GmbH on the other
side as of 14 March 2002, as amended as of 24 March 2005, and not
transferred before Closing Date to ThyssenKrupp AG and/or its
affiliates), all as determined on a consolidated basis for the
Hunnebeck Group as a whole in accordance with US GAAP (as defined
below); cash equivalents shall include, without limitation, cheques,
deposits with banks and other financial institutions and the Seller's
Group, highly liquid investments with a maturity of three months or
less from the Closing Date, money market funds; 40 % of the total
amount of security and other deposits of the Hunnebeck Group as of
Closing Date shall be considered Cash; for the avoidance of doubt,
accounts receivable being accounted for on the intercompany clearing
account (VERRECHNUNGSKONTO MIT SELLER'S GROUP) against the Seller's
Group shall be treated as Cash and for the further avoidance of doubt,
highly liquid claims of Companies against other Companies shall not
constitute Cash.
"FINANCIAL DEBT" means, as of the Closing Date, the aggregate amount
(including any accrued interest thereon) of all interest-bearing
indebtedness of the Hunnebeck Group arising out of borrowings
(DARLEHEN) from banks and other credit institutions and the Seller's
Group; all obligations evidenced by a note, bond, debenture or similar
instrument and any and all accrued interest on any of the foregoing
obligations; it being understood, for the avoidance of doubt, that,
notwithstanding any accounting principle, policy or practice to the
contrary, Capital Lease Obligations and all payables resulting from
supplies and services (VERBINDLICHKEITEN AUS LIEFERUNGEN UND
LEISTUNGEN) shall be deemed not to be Financial Debt, and that
unfunded, underfunded or contingent obligations such as, without
limitation, company pension plans, letters of credit or guarantees
shall not be or be deemed to be Financial Debt; and it being further
understood and agreed that the amount of any element of Financial Debt
with respect to which Seller provides a payoff letter from the lender
as of the Closing Date shall be fixed and determined to be the amount
shown on such payoff letter as due as of the Closing Date for all
purposes under this Agreement, including, without limitation, any
adjustment to the Purchase Price pursuant to this ARTICLE 2 or ARTICLE
3 of this Agreement; for the avoidance of doubt, payables being
accounted for on the intercompany clearing account (VERRECHNUNGSKONTO
MIT SELLER'S GROUP) vis-a-vis the Seller's Group shall be treated as
Financial Debt and for the further avoidance of doubt, interest
bearing indebtedness of Companies arising out of borrowings from other
Companies shall not constitute Financial Debt.
"CAPITAL LEASE OBLIGATIONS" means, as of the Closing Date, the
aggregate amount of all capital lease obligations of the Hunnebeck
Group (excluding any
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breakage or other similar costs unless actually incurred and becoming
effective as a result of a change of control provision at Closing),
all as determined on a consolidated basis for the Hunnebeck Group as a
whole in accordance with US GAAP (as defined below).
2.2 PAYMENTS ON THE CLOSING DATE
(a) Not less than two (2) Business Days prior to the Closing Date, Seller
shall deliver to Purchaser in writing Seller's good faith estimate of
the Purchase Price, calculated in accordance with ARTICLE 2.1 (the
"ESTIMATED PURCHASE PRICE"). The calculation of the Estimated Purchase
Price shall be based upon, and the written good faith estimate shall
show, Seller's estimates of the Cash (the "ESTIMATED CASH"), the
Financial Debt (the "ESTIMATED FINANCIAL DEBT"), and the Capital Lease
Obligations (the "ESTIMATED CAPITAL LEASE OBLIGATIONS"). The
calculation of the Estimated Purchase Price shall occur as set forth
in ARTICLE 2.1, except that the term "CASH" shall be replaced with the
term "ESTIMATED CASH", the term "FINANCIAL DEBT" shall be replaced
with the term "ESTIMATED FINANCIAL DEBT", and the term "CAPITAL LEASE
OBLIGATIONS" shall be replaced with the term "ESTIMATED CAPITAL LEASE
OBLIGATIONS". For the purposes of this Agreement, a "BUSINESS DAY"
shall be any day other than a Saturday, Sunday or any other day on
which banks in Frankfurt am Main, Germany, are generally closed.
(b) On the Closing Date, Purchaser shall pay to Seller the Estimated
Purchase Price.
2.3 MODE OF PAYMENT; DEFAULT; SET-OFF
(a) Any payments to be made under this ARTICLE 2 or ARTICLE 3 of this
Agreement shall be made in Euros by irrevocable wire transfer of
immediately available funds to a bank account specified by the
relevant Party to the other Party (provided that such specification
has been made at least two (2) Business Days prior to the relevant due
date). Any such payment shall be deemed to have been duly made only
upon the irrevocable and unconditional crediting of the amount payable
(without deduction of any costs or charges, other than those of
Seller's bank) to the relevant bank account on, and effective as of,
the relevant due date.
(b) Any failure by either Party to make any payment pursuant to this
ARTICLE 2 or ARTICLE 3 of this Agreement when it is due shall result
in such Party's immediate default (VERZUG), without any reminder by
the other Party being required.
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(c) No Party shall be entitled to exercise any right of set-off or
retention right with respect to its payment obligations pursuant to
this ARTICLE 2 or ARTICLE 3 of this Agreement.
ARTICLE 3
CLOSING CERTIFICATE; POST-CLOSING ADJUSTMENTS
3.1 PREPARATION OF DRAFT CLOSING CERTIFICATE
As promptly as practicable, but not later than 45 days after the Closing
Date, Purchaser shall prepare and shall deliver to Seller a certificate
(the "DRAFT CLOSING CERTIFICATE") setting forth the calculation of (i) the
Cash, (ii) the Financial Debt, (iii) the Capital Lease Obligations, and
(iv) the Purchase Price that would have been calculated using such amounts
pursuant to ARTICLE 2.1(A).
3.2 ACCOUNTING PRINCIPLES
The Draft Closing Certificate shall be prepared, to the extent applicable
according to the definitions in ARTICLE 2.1(B), in accordance with
generally accepted accounting principles in the United States of America
(as in force as of 30 September 2004), as applied on a basis consistent
with the principles used in the preparation of financial statements of
Holdco as of 30 September 2004 ("US GAAP"), (as audited by Xxxxx Xxxxxxxx
GmbH, attached hereto in EXHIBIT 3.2, and, for the avoidance of doubt,
being POST purchase price allocation with respect to the acquisition of the
Hunnebeck Group by Seller's Group in 2003) ("2004 FINANCIAL Statements").
Any amount not denominated in Euros shall be converted to Euros at the
exchange rate in effect one Business Day before the Closing Date using the
rate quoted on the Reuters Screen Page at 11.30 a.m. Frankfurt/Main.
3.3 REVIEW OF DRAFT CLOSING CERTIFICATE
Seller and its representatives shall have 45 Business Days after delivery
of the Draft Closing Certificate pursuant to ARTICLE 3.1 in which to review
the Draft Closing Certificate. Purchaser will cooperate with and assist
Seller and its representatives, and shall cause the relevant entities of
the Hunnebeck Group to cooperate with and assist Seller and its
representatives, in such review of the Draft Closing Certificate. Such
cooperation and assistance shall include making available all relevant
books and records of the Hunnebeck Group and any other relevant information
relating to the Hunnebeck Group including, if applicable, the working
papers of Purchaser's certified public accountants, providing reasonable
access during regular business hours to the Hunnebeck
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Group's premises, and allowing interviews with the Hunnebeck Group's
directors, officers and employees, provided, however, that such cooperation
and assistance will be provided only to the extent that such cooperation
does not unreasonably disrupt the business of the Hunnebeck Group, and only
to the extent beneficial for the performance of such review by Seller. If
Seller believes that the calculation of any item or amount contained in the
Draft Closing Certificate (as delivered to Seller pursuant to ARTICLE 3.1)
is not correct, then Seller may, at or prior to the end of such 45 Business
Day review period, deliver a notice to Purchaser disagreeing with the
preparation and/or calculation and setting forth Seller's calculation of
the relevant items or amounts. Any such notice of disagreement shall
specify, in reasonable detail, (i) those items or amounts as to which
Seller disagrees and, if and to the extent possible for Seller, (ii) the
items or amounts which should replace the disagreeable items or amounts. If
Seller does not deliver a timely notice to Purchaser in accordance with
this ARTICLE 3.3, the Draft Closing Certificate shall be conclusive and
binding on the Parties and shall not be subject to any appeal, unless such
failure is due to Purchaser's lack of cooperation and/or assistance (as
described above).
3.4 DISPUTE RESOLUTION
(a) If Seller has duly delivered a notice of disagreement in accordance
with ARTICLE 3.3, then the Parties shall, during the 30 calendar day
period following such delivery (or any other period of time mutually
agreed upon in writing between the Parties), use reasonable commercial
efforts to reach an agreement on the disputed items or amounts. If and
to the extent that, during such period, the Parties are unable to
reach such agreement, then either Party may refer the remaining
differences to KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprufungsgesellschaft, Dusseldorf/Germany (the "ACCOUNTING
FIRM"). If such firm refuses to act as the Accounting Firm and the
Parties cannot mutually agree upon another firm to be appointed as the
Accounting Firm within 10 Business Days, then the Accounting Firm,
which must be qualified to perform audits pursuant to US GAAP, shall
be appointed, upon request of either Party, by the Institute of
Chartered Accountants (INSTITUT DER WIRTSCHAFTSPRUFER) in Dusseldorf
(Germany).
(b) The Accounting Firm, acting as an expert (SCHIEDSGUTACHTER) and not as
an arbitrator, shall, based on the standards set forth in ARTICLES 2
and 3.2, decide whether and to what extent the Draft Closing
Certificate requires adjustment. The Accounting Firm, in making its
determination, shall only take into account any remaining differences
submitted to it and shall limit its determination to the scope of the
dispute between the Parties.
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(c) Purchaser and Seller shall cooperate with and assist, and shall cause
their respective accountants to cooperate with and assist, and
Purchaser shall cause the Companies to cooperate with and assist, the
Accounting Firm in the conduct of its review. Such cooperation and
assistance shall include, without limitation, the making available to
the Accounting Firm of all relevant books and records of the Hunnebeck
Group and any other information relating to the Hunnebeck Group
(including accountants' workpapers). If and to the extent that the
Accounting Firm cannot resolve the dispute on any item or amount on
the merits because it has not been provided with the relevant
documents or information, the Accounting Firm shall decide against the
Party who has failed to provide such documents or information.
(d) The Parties shall instruct the Accounting Firm to deliver its written
opinion (including reasons for the Accounting Firm's decision on each
disputed item) to them no later than 45 Business Days (or within any
other period of time mutually agreed upon in writing between the
Parties) after the remaining differences have been referred to it. The
decision of the Accounting Firm shall be conclusive and binding on the
Parties (within the limits set forth in Section 319 of the German
Civil Code (BGB)) and shall not be subject to any appeal. The fees and
disbursements of the Accounting Firm shall be borne by Purchaser, on
the one hand, and Seller, on the other hand, based upon the percentage
which the portion of the contested amount not awarded to each Party
bears to the amount actually contested by such Party. For example, if
Seller claims that the Closing Date Financial Debt is EUR 1,000
greater than the amount determined by Purchaser, and Purchaser
contests only EUR 500 of the amount claimed by Seller, and if the
Accounting Firm ultimately resolves the dispute by awarding Seller EUR
300 of the EUR 500 contested, then the costs and expenses of the
Accounting Firm will be allocated 60% (i.e., 300 / 500 x 100 %) to
Purchaser and 40% (i.e., 200 / 500 x 100%) to Seller. In connection
with its review, the Accounting Firm shall, pursuant to the terms of
this ARTICLE 3.4(D), also determine the allocation of its fees and
expenses between Purchaser and Seller, which determination shall be
conclusive and binding upon the Parties.
3.5 FINAL AMOUNTS
(a) The Draft Closing Certificate, incorporating the resolution of matters
in dispute (if any) pursuant to ARTICLE 3.4 above, or, in the
alternative, the Draft Closing Certificate as not objected to by
Seller, is referred to as the "FINAL CLOSING CERTIFICATE". The Final
Closing Certificate shall have the legal effect of an arbitral award
and shall be final, binding, and conclusive on the Parties.
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(b) Subject to the other provisions of this ARTICLE 3.5:
(i) if the Cash reflected on the Final Closing Certificate (the
"FINAL CASH") is greater than the Estimated Cash, then Purchaser
shall be obligated to make a payment to Seller in an amount equal
to such excess; and
(ii) if the Final Cash is less than the Estimated Cash, then Seller
shall be obligated to make a payment to Purchaser in an amount
equal to such shortfall.
(c) Subject to the other provisions of this ARTICLE 3.5:
(i) if the Financial Debt reflected on the Final Closing Certificate
(the "FINAL FINANCIAL DEBT") is greater than the Estimated
Financial Debt, then Seller shall be obligated to make a payment
to Purchaser in an amount equal to such excess; and
(ii) if the Final Financial Debt is less than the Estimated Financial
Debt, then Purchaser shall be obligated to make a payment to
Seller in an amount equal to such shortfall.
(d) Subject to the other provisions of this ARTICLE 3.5:
(i) if the Capital Lease Obligations reflected on the Final Closing
Certificate (the "FINAL CAPITAL LEASE OBLIGATIONS") is greater
than the Estimated Capital Lease Obligations, then Seller shall
be obligated to make a payment to Purchaser in an amount equal to
such excess; and
(ii) if the Final Capital Lease Obligations is less than the Estimated
Capital Lease Obligations, then Purchaser shall be obligated to
make a payment to Seller in an amount equal to such shortfall.
(e) All payments, if any, made pursuant to ARTICLE 3.5(B) through (D)
shall be deemed to be further adjustments to the Estimated Purchase
Price, and the Estimated Purchase Price as so adjusted shall be the
"FINAL PURCHASE PRICE".
(f) The difference, if any, between the Estimated Purchase Price and the
Final Purchase Price, together with interest thereon from and after
the Closing Date up to and including the date of payment at a rate of
6 % (six per cent) PER ANNUM, shall be paid by Purchaser to Seller (if
the Final Purchase Price is greater than the Estimated Purchase Price)
or by Seller to Purchaser (if the Estimated Purchase Price is greater
than the Final Purchase Price) by wire transfer of immediately
available funds within five (5) Business Days after the Final Purchase
Price has been finally determined in accordance with this ARTICLE 3.
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ARTICLE 4
CLOSING
4.1 PLACE AND TIME OF CLOSING
The consummation of the transactions contemplated by this Agreement, as set
forth in ARTICLE 4.5 below (the "CLOSING"), shall take place at the offices
of Xxxxx Day in Frankfurt am Main at 10 a.m. on the third Business Day
after the day on which the conditions set forth in ARTICLE 4.2 below are
met, or at any other time or place as the Parties may mutually agree in
writing. The date on which the Closing is completed is referred to herein
as the "CLOSING DATE".
4.2 CONDITIONS TO CLOSING
(a) The obligations of Purchaser and Seller to consummate the Closing are
subject to the satisfaction of all of the following conditions
precedent:
(i) The Closing shall be permissible pursuant to Article 41 of the
German Act against Restraints of Competition (GWB);
(ii) The Closing shall be permissible in Poland, Norway and Slovakia
in accordance with applicable law;
(iii) No enforceable judgment, injunction, order or decree by any
court or governmental authority in the European Union or any
other applicable jurisdiction shall prohibit the consummation of
the Closing;
(iv) No Material Adverse Effect (as defined below in ARTICLE 5) has
arisen between the date hereof and the date on which all the
other conditions under this ARTICLE 4.2(A) have been satisfied.
(b) The conditions to Closing set forth in Articles 4.2(a)(i), (ii) and
(iii) may be waived only by both Parties jointly. The condition to
Closing set forth in Article 4.2(a)(iv) may be waived only by
Purchaser. Subject to any such waivers, all conditions to Closing
shall be deemed to have been satisfied upon completion of the Closing.
4.3 MERGER CONTROL PROCEEDINGS; OTHER REGULATORY REQUIREMENTS
(a) Purchaser (and Seller, to the extent any filing cannot be made by
Purchaser on behalf of Seller under applicable law) shall ensure that
any filings necessary in
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connection with any merger control clearance referred to in ARTICLE
4.2(A)(I) and (II) and any other filings with, or notifications to,
any governmental authority required in connection with this Agreement
will be made as soon as is practicable, in any event within three (3)
Business Days after the date hereof. Any filings and notifications
made by Purchaser shall require the prior written consent of Seller.
Such consent shall not be unreasonably withheld.
(b) In order to obtain all requisite approvals for the transactions
contemplated by this Agreement under merger control laws, Purchaser
and Seller shall (i) reasonably cooperate in all respects with each
other in the preparation of any filing or notification and in
connection with any submission, investigation or inquiry, (ii) supply
to any competent authority as promptly as practicable any additional
information requested pursuant to any applicable laws and take all
other procedural actions required in order to obtain any necessary
clearance or to cause any applicable waiting periods to commence and
expire, (iii) promptly provide each other with copies of any written
communication (or written summaries of any non-written communication)
in connection with any proceeding and (iv) contact any competent
authority only after consultation with the other Party and give each
other and their respective advisors the opportunity to participate in
all meetings and conferences with any competent authority unless such
participation would be not permitted by the competent authority or
would impose a significant delay on the merger control proceedings.
(c) Purchaser shall offer, consent to, and comply with, any obligations or
conditions (AUFLAGEN UND BEDINGUNGEN), commitments (ZUSAGEN) or other
agreements required by any competent merger control authority as a
condition to the clearance of the transactions contemplated hereby,
unless such obligation or condition, commitment or other agreement
would alter the character of the transaction contemplated hereby
materially or would materially affect the business operations of
Purchaser or the Hunnebeck Group, and as a result thereof, such
consent or compliance by Purchaser would have to be considered as
unreasonable (UNZUMUTBAR) to Purchaser.
(d) With respect to the conditions to Closing set forth in ARTICLE 4.2(A),
if the consummation of the Closing is prohibited by any governmental
authority or Court, the Parties shall use their reasonable commercial
efforts to cooperate in contesting such decision in order to seek to
effect the Closing as contemplated by this Agreement as timely as is
reasonably practicable.
(e) The Parties shall not be entitled to request or obtain from each other
any adjustment of the Purchase Price or other amendment to this
Agreement as a result of any divestiture (in the case of Purchaser) or
other action pursuant to this ARTICLE
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4.3 or of any decision by a competent authority after the Closing Date
prohibiting any transaction contemplated hereby, or any losses,
damages, costs or expenses associated therewith.
4.4 SELLER'S DELIVERIES ON OR PRIOR TO THE CLOSING DATE
On, or prior to, the Closing Date, Seller shall deliver to Purchaser
written evidence of the release of any pledge and other security interests
granted on any shares of each Company as set forth in EXHIBIT 4.4 in
relation with the financing agreement, dated 29 August 2003, among Holdco,
several other Companies, and Xxxxxxxxx L.L.C. (the "XXXXXXXXX FINANCING").
4.5 ACTIONS ON THE CLOSING DATE
On the Closing Date, the Parties shall take, or cause to be taken, the
following actions, which shall be taken simultaneously (ZUG UM ZUG):
(a) execution by Seller and Purchaser (or an entity to be designated by
Purchaser not later than 3 Business Days before Closing Date) of a
share transfer agreement regarding the Sold Shares, substantially in
the form as attached hereto as EXHIBIT 4.5 (A);
(b) payment by Purchaser of the Estimated Purchase Price (minus an amount
of EUR 5,000,000 which is to be paid into the Escrow Account pursuant
to ARTICLE 4.5(C)) in accordance with ARTICLE 2.3;
(c) payment by Purchaser of EUR 5,000,000 into the Escrow Account in
accordance with ARTICLE 8.5;
(d) execution by Seller and Purchaser of the Escrow Agreement in
accordance with ARTICLE 8.5; and
(e) execution by Sun Capital Partners Management III, LLC and Holdco of an
agreement providing for the termination of the management services
agreement dated 29 August, 2003 releasing with immediate effect Sun
Capital Partners Management III, LLC and any of its affiliates,
members, partners, managers, officers, employees and agents on the one
hand and Holdco on the other hand from any liabilities under said
agreement and without any indemnity being owed by either party to the
other party of said agreement.
If Seller should choose to provide Indemnification Insurance for the
benefit of Purchaser in accordance with ARTICLE 8.10, Purchaser must pay
the full Estimated Purchase Price on
16
Closing Date (i.e. without the deduction of EUR 5,000,000), and the actions
described above in ARTICLE 4.5(C) AND (D) shall not be taken.
4.6 TERMINATION RIGHT
Each Party shall be entitled to terminate (ZURUCKTRETEN) this Agreement by
giving written notice to the other Party, if Closing has not occurred on or
before 31 December, 2005.
ARTICLE 5
REPRESENTATIONS OF SELLER
Seller hereby represents to Purchaser in the form of an independent undertaking
(Section 311 of the German Civil Code) that, except as set forth in any of the
exhibits referred to in this ARTICLE 5 (which together compose the "DISCLOSURE
SCHEDULE") the statements set forth in this ARTICLE 5 are true and correct as of
the date when all of the Closing Conditions pursuant to ARTICLE 4.2(A) have been
met or waived except as otherwise provided for in this ARTICLE 5. The scope and
content of each representation of Seller contained in this ARTICLE 5 as well as
Seller's liability arising thereunder shall be exclusively defined by the
provisions of this Agreement (in particular the limitations on Purchaser's
rights and remedies set forth in ARTICLE 8 below), which shall be an integral
part of the representations of Seller, and no representation of Seller shall be
construed as a seller's guarantee (GARANTIE FUR DIE BESCHAFFENHEIT DER SACHE)
within the meaning of Sections 443 and 444 of the German Civil Code.
For the purpose of this Agreement, "SELLER'S KNOWLEDGE" means the actual
knowledge, as of the date hereof, of Xx. Xxxxx Xxxxxxx (Chief Executive Officer
of Holdco), Xxxxxx Xxxxx (Chief Financial Officer of Holdco), Xxxxxx Xxxxxxxxx
(Chief Executive Officer of Hunnebeck GmbH), Xxxxx-Xxxxx Teckentrup (Chief
Financial Officer of Hunnebeck GmbH), Xxxxx Xxxxxxx (Chief Executive Officer of
Hunnebeck France S.A.S.), Xxxxxxxx Xxxxxxx (Chief Financial Officer of Hunnebeck
France S.A.S.), Xxxxx Xxxxx (Chief Executive Officer of Hunnebeck Italia
S.p.A.), Xxxxx Xxx (Chief Financial Officer of Hunnebeck Italia S.p.A.), as well
as Xx. Xxxxxxx Xxxxxxxxxx (Chief Executive Officer of Hunnebeck Polska Sp. z
o.o.), and Xxxxxx Xxxxxxxxx (Chief Financial Officer of Hunnebeck Polska Sp. z
o.o.).
"MATERIAL ADVERSE EFFECT" means an effect that is materially adverse to the
financial condition or results of operations of the Hunnebeck Group taken as a
whole, but shall exclude any prospects and shall also exclude any effect
resulting or arising from: (i) any change in any law; (ii) any changes, events,
facts or circumstances that existed, but only became known to Purchaser
following the date hereof although Seller performed fully its disclosure
obligations to Purchaser pursuant to this Agreement and applicable law, (iii)
any changes, events, facts or circumstances where the original cause of such
changes, events, facts or circumstances existed on the date
17
hereof, (iv) any changes, events, facts or circumstances where similar changes,
events, facts or circumstances have arisen and which have been reflected and, as
the case may be, reserved in the audited financial statements of the Hunnebeck
Group prior to the date hereof and were either known by Purchaser or were not
known to Purchaser although Seller performed fully its disclosure obligations to
Purchaser pursuant to this Agreement and applicable law, (v) any change in
interest rates or general economic conditions; (vi) any change that is generally
applicable to the industries in which any of the Companies operates; (viii) the
entry into this Agreement and/or the consummation of the transactions
contemplated hereby; (ix) any action taken by Purchaser or any of its
affiliates; (x) any omission to act or action taken with the express consent of
the Purchaser (including, without limitation, those omissions to act or actions
taken which are permitted by this Agreement); or (xi) any national or
international political or social conditions, including the engagement by any
country in hostilities, whether or not pursuant to the declaration of a national
emergency or war, or the occurrence of any military or terrorist attack upon any
country or any of its territories, possessions, or diplomatic or consular
offices or upon any military installation, equipment or personnel of such
country.
5.1 LEGAL ORGANIZATION OF SELLER AND THE HUNNEBECK GROUP
(a) Seller is a limited liability company duly organized and validly
existing under the laws of Delaware.
(b) Each entity of the Hunnebeck Group referred to in EXHIBIT R is an
entity of the type indicated in EXHIBIT R, duly organized and validly
existing under the laws of its jurisdiction of organization, in good
standing (insofar as such concept exists under the relevant
jurisdiction), and has all organizational or other power to conduct
its business as presently conducted, except as disclosed in EXHIBIT R.
(c) All entities of the Hunnebeck Group and their respective jurisdictions
of organization are identified in EXHIBIT R. No Company holds any
material interest in any company or other entity other than as set
forth in EXHIBIT R or EXHIBIT 5.1(C).
(d) No entity of the Hunnebeck Group is a party to any agreement which
would permit any third party (other than any entity of the Group) to
control such Company or obligate it to transfer its profits to any
such third party.
(e) EXHIBIT 5.1(E) contains a true and correct list of the articles of
association or partnership agreements or similar constituent documents
required in the relevant jurisdictions of each entity of the Hunnebeck
Group whose shares are (directly or indirectly) transferred pursuant
to this Agreement or in which any third party (other than any entity
of the Hunnebeck Group) holds any share or interest. True
18
and complete copies of such documents have been delivered to Purchaser
prior to the date of this Agreement.
(f) No bankruptcy or insolvency proceedings are pending with respect to
any entity of the Hunnebeck Group; there is no requirement to initiate
such proceedings and to Seller's Knowledge such proceedings are not
threatened.
5.2 OWNERSHIP OF SHARES; SHAREHOLDINGS
(a) Holdco's total share capital (STAMMKAPITAL) is EUR 25,000.00,
consisting of two shares, one of which with par value of EUR 1,000.00
and the other with par value of EUR 24,000.00. All of the Sold Shares
and all of the shares in the other entities of the Hunnebeck Group (as
set forth in EXHIBIT R) are directly or indirectly owned by Holdco
(collectively the "SUBSIDIARY SHARES"), are duly authorized and
validly issued, fully paid and non-assessable, and there are no other
issued, reserved for issuance or outstanding equity interests
(including silent participation (STILLE BETEILIGUNG)) in Holdco. None
of the paid in capital of the Sold Shares and the Subsidiary Shares
has, in full or in part, been paid back to the shareholders. There are
no options, offers, warrants, conversion rights, subscriptions, or
agreements or rights of any kind to subscribe for or to purchase, or
commitments to issue (either formal or informal, firm or contingent)
shares of capital stock or other equity interests in Holdco or in the
Companies other than Holdco (whether debt, equity or a combination
thereof) or obligating Holdco or such Companies to grant, extend or
enter into any such agreement or commitment except for those provided
under statutory law, under the organizational or other constituent
document or those disclosed in EXHIBIT R. Seller is the sole and
unrestricted owner of the Sold Shares, and the Subsidiary Shares are
owned as set forth in EXHIBIT R. At Closing, good, valid and
marketable title to the Subsidiary Shares which are purported in
EXHIBIT R to be owned will be held by each of Holdco and/or Hunnebeck
GmbH.
(b) At Closing, the Sold Shares and the Subsidiary Shares will be free and
clear of any liens, encumbrances or other rights of third parties, and
there are no pre-emptive rights, rights of first refusal, options or
other rights of any third party to purchase or acquire any of the Sold
Shares, in each case except for rights provided under statutory law or
under the organizational or other constituent documents listed in
EXHIBIT 5.1(E) (which will not become exercisable due to the change in
control resulting from the transactions contemplated herein) and
except as set forth in EXHIBIT 5.2(B).
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5.3 AUTHORIZATION OF SELLER
(a) The execution and performance by Seller of this Agreement are within
Seller's organizational powers, do not violate the limited liability
company agreement of Seller and have been duly authorized by all
necessary organizational action on the part of Seller.
(b) Assuming compliance with any applicable requirements under antitrust
control laws or any other regulatory requirements, the execution and
performance of this Agreement by Seller require no approval or consent
by any governmental authority binding on Seller and do not violate any
applicable law or decision by any court or governmental authority
binding on Seller.
(c) As of the date hereof, there is no lawsuit, investigation or
proceeding pending or, to Seller's Knowledge, threatened against
Seller before any court, arbitrator or governmental authority which in
any manner challenges or seeks to prevent, alter or materially delay
the transactions contemplated by this Agreement.
5.4 FINANCIAL STATEMENTS
The 2004 Financial Statements have been prepared in accordance with US
GAAP, on a basis consistent with those of prior years and present fairly,
in all material respects, in accordance with such principles, a true,
correct and fair view of the asset position (VERMOGENSLAGE), financial
position (FINANZLAGE), earnings position (ERTRAGSLAGE) and stockholder's
equity of Holdco as of 30 September 2004. The monthly management report of
Holdco as of 31 July 2005 as attached hereto for mere identification
purposes as EXHIBIT 5.4 which has been relied upon by Seller in the past
along with management reports of prior months as a management tool in
making management decisions with respect to the Hunnebeck Group, have been
prepared on a basis consistent with the monthly management reports of the
past twelve months and have not been modified or altered with respect to
the transactions contemplated by this Agreement or the sales process which
has preceded the entering into this Agreement.
5.5 TITLE TO ASSETS; ENCUMBRANCES; LIABILITY ARISING IN CONNECTION WITH
THYSSENKRUPP NOTES
(a) The Companies have good and valid title to, or, in the case of leased
or licensed property and assets, valid leasehold interests or licenses
in, all property and assets (whether real, personal, tangible or
intangible) reflected in the 2004 Financial Statements, except for
properties and assets disposed of since 30 September 2004
20
or where the failure to have such good and valid title or valid
leasehold interests or licenses would not have a Material Adverse
Effect.
(b) The (fixed and current) assets owned by the Companies are not
encumbered with any liens, pledges, mortgages, charges or other
security interests or encumbrances in favor of any third party, except
for (i) retention of title rights, liens, pledges or other security
rights in favor of suppliers, mechanics, workmen, carriers and the
like, (ii) security rights granted to banks and other financial
institutions over cash and other assets deposited with such banks or
financial institutions, (iii) encumbrances or rights of third parties
created under applicable law, including pledges and other security
rights in favor of tax authorities or other governmental entities,
(iv) easements and similar rights in real property which do not
materially impair any Company's ability to conduct its business as
presently conducted and (v) the liens, pledges, other rights and
encumbrances listed in EXHIBIT 5.5, all of which have arisen or been
granted in the ordinary course of business and which do not, or will
not, impair in any material respect any Company's ability to conduct
its business as presently conducted.
(c) The Companies are not exposed, as of the date hereof or in the future,
to any liability under the accounts receivable and notes sold to
ThyssenKrupp AG and/or its affiliates except for improper management
of the collection of monies received from the account and note
debtors. In particular, the Companies are under no obligation, as of
the date hereof or in the future, to buy back such accounts receivable
and notes under any circumstances, including non-payment by the
account or note debtors.
5.6 INTELLECTUAL PROPERTY RIGHTS
(a) EXHIBIT 5.6 contains a complete and accurate list of all intellectual
property rights which are owned by and registered on behalf of any
Company and are material for the Company to which such intellectual
property right relates as presently conducted (the "INTELLECTUAL
PROPERTY RIGHTS"), specifying as to each, as applicable: (i) the
nature of such Intellectual Property Right, (ii) the owner of such
Intellectual Property Right and (iii) the jurisdictions in which such
Intellectual Property Right has been registered, or for which an
application for issuance or registration has been filed, and (iv) the
registration or application numbers.
(b) Except as set forth in EXHIBIT 5.6, the Companies have paid all
registration fees to the extent necessary to validly maintain all
registrations with any regulatory authorities with respect to the
Intellectual Property Rights.
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(c) Except as set forth in EXHIBIT 5.6, as of the date hereof, none of the
Intellectual Property Rights is subject to any outstanding judgment,
injunction, order or decree issued against any Company which
materially restricts the use thereof by it and, to Seller's Knowledge,
no third party has challenged any Intellectual Property Right in
writing towards any Company.
(d) To Seller's Knowledge, (i) there are no third parties' rights
infringing the Intellectual Property Rights, and (ii) no Intellectual
Property Right is infringing any third parties' rights.
5.7 GOVERNMENTAL PERMITS; COMPLIANCE WITH LAWS
(a) Except as disclosed in EXHIBIT 5.7(A), the Companies have all
governmental permits, licenses, authorizations and consents (other
than those required by or relating to any Environmental Matters, which
are exclusively dealt with in ARTICLE 5.16) in order to operate their
businesses as presently conducted and are material for the conduct of
their businesses, as presently conducted (the "GOVERNMENTAL PERMITS").
To Seller's Knowledge, no Governmental Permit has been cancelled or
revoked by any competent authority and no Company has received any
written notice by any such authority that it intends to cancel or
revoke any Governmental Permit.
(b) The business of each of the Companies is conducted, in all material
respects, in compliance with applicable laws and all Governmental
Permits in each case as in effect, enforced and interpreted on the
date hereof in, including, without limitation, any European directive
and any laws in force in any of the member states of the European
Union (other than those applicable laws and Governmental Permits
relating to Intellectual Property Rights, product liability, Tax
matters or Environmental Matters, to which exclusively Articles 5.6,
5.12, 5.15, and 5.16 shall apply) to the extent applicable in the
relevant jurisdiction, as well as any court order or injunctions to
the extent binding upon the relevant Company, all except as disclosed
in EXHIBIT 5.7(B).
5.8 LITIGATION; DISPUTES
Except as disclosed in EXHIBIT 5.8, as of the date hereof, no lawsuit or
other proceeding is pending against any Company before any state court,
arbitrator or governmental authority involving an amount in excess of EUR
50,000.00 (excluding costs and fees) and, to Seller's Knowledge, no such
lawsuit or proceeding has been threatened against any Company in writing.
As of the date hereof, no Company is subject to any decision by
22
a court or governmental authority that materially limits its ability to
operate its business in the ordinary course.
5.9 EMPLOYEE AND LABOR MATTERS
(a) EXHIBIT 5.9(A)(1) contains a true and correct list, as of the date
hereof, of all material agreements with unions, worker's councils and
similar employee organizations to which any of the Companies is bound.
True and complete copies of such agreements have been made available
to Purchaser prior to the date hereof. Except as disclosed in EXHIBIT
5.9 (A)(2), no Company made any commitment for job guarantees under
collective bargaining agreements or shop agreements other than the job
guarantee pursuant to Section 5 of the collective bargaining agreement
entered into between Holdco and Hunnebeck GmbH on the one side and
Industriegewerkschaft Metall on the other side as of 15 March 2004.
(b) Except as disclosed in EXHIBIT 5.9(B), as of the date hereof, no
Company is experiencing or experienced during the last two years (i)
any strike or lockout of its employees or (ii) any lawsuit or dispute
with any union, workers' council or other body of employee
representatives pending before any court, governmental authority or
arbitrator (including any proceedings pending before any conciliation
committee (EINIGUNGSSTELLENVERFAHREN)) and relating to labor relations
or employment matters of a general nature (including lay-offs,
restructurings or general working conditions).
(c) EXHIBIT 5.9(C) sets forth, as of the date hereof, a true and complete
list of all managing directors of the Companies and of all employees
of any Company whose annual base salary (excluding, for the avoidance
of doubt, performance-related payments, bonuses and any benefits)
exceeds EUR 100,000.00 (the "KEY EMPLOYEES"). Copies of all contracts
between any Company and any Key Employee, as in effect on the date
hereof, have been disclosed to Purchaser. As of the date hereof, none
of the Key Employees has given written notice of termination of his or
her employment or to Seller's Knowledge communicated the intention to
do so.
(d) Except as disclosed in EXHIBIT 5.9(D) or required under applicable
law, no Company has made any pension commitment to any of its current
or former employees.
(e) Each of the Companies has complied in all material respects with all
labor law obligations, has timely and in full amount paid all salaries
and wages to each of the Companies' employees and directors, have
complied with, in a material way,
23
all social security obligations and contribution payment obligations,
as well as with insolvency protection requirements.
5.10 MATERIAL AGREEMENTS
(a) Except for (i) the agreements listed in EXHIBIT 5.10(A) (the "MATERIAL
AGREEMENTS") and (ii) any agreements required to be disclosed pursuant
to any other provision of this Agreement, no Company is a party to any
of the following written agreements, provided that any primary
contractual obligation (PRIMARE HAUPTLEISTUNGSPFLICHT) thereunder has
not yet been fulfilled:
(1) agreements relating to the acquisition or sale of interests in
other companies, businesses or real estate providing, in each
case, for a consideration of EUR 250,000.00 or more;
(2) joint venture, partnership or shareholder agreements relating to
the conduct of a material part of the business of the Hunnebeck
Group;
(3) rental and lease agreements relating to real estate which,
individually, provide for annual payments of EUR 250,000.00 or
more;
(4) loan agreements (other than relating to any intercompany debt
towards any Company or member of the Seller's Group), bonds,
notes or any other instruments of debt issued by any Company and
involving, individually, an indebtedness of the Company of EUR
250,000.00 or more;
(5) guarantees, indemnities and suretyships issued by any of the
Companies for any debt of any third party (other than any other
Company) for an amount of EUR 250,000.00 or more per item;
(6) any agreement (excluding customary territorial restrictions in
supplier or reseller agreements) that materially limits the
freedom of the Hunnebeck Group (taken as a whole) to compete in
any line of business or with any third party;
(7) master agreements with the five major suppliers (based on the
aggregate purchases in the first ten months of the financial year
ending 30 September 2005);
(8) material agreements with Seller or any other member of the
Seller's Group, other than in connection with commercial
transactions made in the ordinary course of the Companies'
businesses;
24
(9) agreements or commitments not made in the ordinary course of
business which have, or would reasonably be expected to have, a
Material Adverse Effect;
(10) agency or distribution agreements corresponding to a yearly
turnover by any Company of more than EUR 250,000 (based on the
financial year ending 30 September 2004); and
(11) agreements individually providing for annual payment obligations
of more than EUR 250,000.
(b) To Seller's Knowledge, unless otherwise disclosed in EXHIBIT 5.10(B),
(i) no written notice of termination has been given with respect to
any Material Agreement nor has any third party to a Material Agreement
stated its intention to do so and (ii) neither any Company nor any
third party to any Material Agreement is in material default or
material breach under any Material Agreement. Neither the execution
nor the delivery nor the performance of this Agreement and the
transactions contemplated hereby will conflict with, result in the
breach of, constitute a material default under, or result in the
termination, cancellation or acceleration (whether after giving of
notice or the lapse of time, or both ) of any material right or
obligation of any of the Material Agreements, or cause a loss of any
material benefit to which any Company is entitled under any and all
Material Agreements.
5.11 INSURANCE COVERAGE
EXHIBIT 5.11 contains a true and complete list of all material insurance
policies relating to the assets, business or operations of the Companies.
To Seller's Knowledge, all such policies are in full force and effect and
there are no material claims by any Company pending under any of such
policies as to which coverage has been questioned, denied or disputed by
the insurer.
5.12 PRODUCT LIABILITY
Except as disclosed in EXHIBIT 5.12, as of the date hereof, to Seller's
Knowledge:
(a) no product liability claims relating to personal injury and exceeding
EUR 100,000.00 in any individual case have been asserted against any
Company in the last two years prior to the date hereof; and
(b) no Company has received any order from any governmental authority to
recall any of the products manufactured and delivered by it.
25
5.13 FINDERS' FEES
Except as disclosed in EXHIBIT 5.13, no Company has any obligation or
liability to pay any fees or commissions to any broker, finder or agent
with respect to this Agreement and the consummation of the transactions
contemplated hereby.
5.14 CONDUCT OF BUSINESS SINCE 30 SEPTEMBER 2004
Except as disclosed in EXHIBIT 5.14 and except for any transactions
contemplated by or any facts or events disclosed in this Agreement, in the
period between 30 September 2004 and the date hereof, to Seller's
Knowledge, there has not been:
(a) any recapitalization or reorganization which materially changes the
corporate structure of the Hunnebeck Group; any merger or similar
business combination between any Company and any third party (other
than another Company);
(b) any declaration or payment of dividends by any Company to any member
of the Seller's Group;
(c) any divestiture by any Company of a shareholding or business with a
value in excess of EUR 500,000.00 each;
(d) any borrowing made by any Company in excess of EUR 500,000.00 or any
guarantee granted by any Company for any third party's indebtedness in
excess of EUR 250,000.00, other than indebtedness incurred, or
guarantees granted by any Company in the ordinary course of business
and in amounts and on terms consistent with past practice;
(e) any investment by any Company in, or the making of any loan to, any
other company or entity (other than any entity of the Hunnebeck Group)
exceeding in each case EUR 500,000.00;
(f) any lay-off with respect to a significant part of the workforce of the
Hunnebeck Group;
26
(g) any change in, or commitment to change, any compensation or benefit of
any Key Employee pursuant to any severance or retirement plan or
agreement made by any Company in connection with this Agreement or the
transactions contemplated hereby;
(h) any change in any method of accounting or accounting practice or
policy by any Company, except as required due to a concurrent change
in generally accepted accounting principles;
(i) any transaction entered into by any Company outside the ordinary
course of business which has had, or would reasonably be expected to
have, a Material Adverse Effect; or
(j) any damage, destruction or other casualty loss (whether or not covered
by insurance) adversely affecting the business or assets of any
Company which has, or would reasonably be expected to have, a Material
Adverse Effect.
5.15 TAXES
(a) As of the date hereof and except as otherwise disclosed in EXHIBIT
5.15,
(i) all Tax Returns required to be periodically filed with any Taxing
Authority with respect to any Pre-Closing Tax Period by or on
behalf of any of the Companies were filed when due; and
(ii) no Company is involved in any Tax audit or investigation relating
to any Pre-Closing Tax Period; and
(iii) all due Taxes assessed as of the date hereof by a Taxing
Authority or payable because of a self-assessment and relating to
any Company for any Pre-Closing Tax Period have been paid or have
been contested in good faith.
(b) The following terms have the following meanings:
(i) "PRE-CLOSING TAX PERIOD" means any Tax assessment period (e.g.
VERANLAGUNGSZEITRAUM under German tax laws) or portion of it
ending on or before the Closing Date.
27
(ii) "TAX" means any tax (XXXXXX) within the meaning of Article 3 of
the German Tax Code (AO) or equivalent tax under the laws of any
other jurisdiction and any social security contribution
(including any withholding on amounts paid to or by any person),
together with any interest, penalty or addition thereto.
(iii) "TAX RETURN" means any return, declaration, report, claim for
refund, notice, form or information relating to any Tax,
including any schedule or attachment thereto.
(iv) "TAXING AUTHORITY" means any competent governmental authority in
charge of imposing any Tax.
5.16 ENVIRONMENTAL MATTERS
Except as disclosed in EXHIBIT 5.16 to Seller's Knowledge:
(a) no Company has received any written notice or order from any
governmental authority, and no administrative or governmental action,
suit, investigation or proceeding is pending and has been asserted in
writing against any Company which alleges a material violation of any
Environmental Law; and
(b) each Company has obtained all material permits required for its
operations (as presently conducted) in accordance with all applicable
Environmental Laws and is in compliance in all material respect with
the terms of such permits and with all other applicable Environmental
Laws.
The term "ENVIRONMENTAL LAW" means any law or regulation relating to or
imposing liability, or standards of conduct, for the protection of the
environment or the use, handling, generation, manufacturing, distribution,
collection, transportation, storage, disposal, cleanup or release of
Hazardous Materials, in each case as in effect on the date hereof and as
enforced and interpreted by the competent authorities on the date hereof.
"HAZARDOUS MATERIALS" means dangerous substances and preparations as
defined in Article 2 paragraph (2) of the European Community Council
Directive 67/548 EEC, as amended until the date hereof.
5.17 NO OTHER REPRESENTATIONS OR WARRANTIES
Subject only to those representations and indemnities expressly contained
in this Agreement, Purchaser agrees to accept the Sold Shares and the
Hunnebeck Group in the condition they are in on the Closing Date, based
upon its own inspection, examination and determination with respect thereto
(including the due diligence investigation
28
conducted by it), without reliance upon any express or implied
representations or warranties of any nature of Seller or any employee,
adviser, agent or other representative of Seller or any of its affiliates.
Purchaser acknowledges that Seller makes no representations, warranties or
guarantees and assumes no disclosure or similar obligations in connection
with this Agreement and the transactions contemplated hereby, except as
expressly set forth in this Agreement.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows, in each case as
of the date hereof and the Closing Date:
6.1 AUTHORIZATION OF PURCHASER
(a) Purchaser is a Delaware corporation duly incorporated, validly
existing and in good standing under the laws of the state of Delaware
and has all corporate powers required to carry on its business as
presently conducted.
(b) The execution and performance by Purchaser of this Agreement are
within Purchaser's corporate powers, do not violate the articles of
association or by-laws of Purchaser and have been duly authorized by
all necessary corporate action on the part of Purchaser.
(c) Assuming compliance with any applicable requirements under merger
control laws and other regulatory laws as set forth in ARTICLE
4.2(A)(I) and (II), the execution and performance of this Agreement by
Purchaser require no approval or consent by any governmental body,
authority or official and do not violate any applicable law or
decision by any court or governmental authority binding on Purchaser.
(d) As of the date hereof, there is no lawsuit, investigation or
proceeding pending against, or to Purchaser's knowledge, threatened in
writing against Purchaser before any court, arbitrator or governmental
authority which in any manner challenges or seeks to prevent, alter or
materially delay the transactions contemplated by this Agreement.
29
6.2 FINDERS' FEES
Purchaser does not have any obligation or liability to pay any fees or
commissions to any broker, finder or agent with respect to any of the
transactions contemplated by this Agreement for which Seller could become
liable.
6.3 FINANCIAL CAPABILITY; SOLVENCY
(a) Purchaser has sufficient immediately available funds or binding and
unconditional financing commitments to enable it to make all payments
required to be made by it under this Agreement.
(b) Purchaser is not now insolvent, has not been insolvent during the past
24 months, and will not be rendered insolvent by any of the
transactions contemplated hereby. As used in this ARTICLE 6.3,
"insolvent" means that the sum of the debts and other probable
liabilities of Purchaser exceeds the present fair saleable value of
Purchaser's assets.
(c) Immediately after giving effect to the consummation of the
transactions contemplated hereby: (i) Purchaser will be able to pay
its liabilities as they become due in the usual course of its
business; (ii) Purchaser will not have unreasonably small capital with
which to conduct its present or proposed business; (iii) Purchaser
will have assets (calculated at fair market value) that exceed its
liabilities; and (iv) taking into account all pending and threatened
litigation, final judgments against Purchaser in actions for money
damages are not reasonably anticipated to be rendered at a time when,
or in amounts such that, Purchaser will be unable to satisfy any such
judgments promptly in accordance with their terms (taking into account
the maximum probable amount of such judgments in any such actions and
the earliest reasonable time at which such judgments might be
rendered) as well as all other liabilities of Purchaser. The cash
available to Purchaser, after taking into account all other
anticipated uses of the cash, will be sufficient to pay all such
liabilities and judgments promptly in accordance with their terms.
30
ARTICLE 7
COVENANTS
7.1 CONDUCT OF BUSINESS PRIOR TO CLOSING
From the date hereof to the Closing Date, except as disclosed in EXHIBIT
7.1 or contemplated by this Agreement:
(a) Seller shall procure that no Company undertakes:
(i) any transaction between any Company and any company of Seller's
Group (other than any financial transactions as long as such
financial transactions are reflected, or taken into account, in
the post-closing adjustments of the Purchase Price); or
(ii) any recapitalization or reorganization (including the transfer of
the German export business from Hunnebeck GmbH to Holdco) which
materially changes the corporate structure of the Hunnebeck
Group, or any merger or similar business combination between any
Company and any third party (other than another Company); or
(iii) any declaration or payment of dividends by any Company to any
member of the Seller's Group.
(b) Seller shall cause (to the extent permitted under applicable law) the
Companies to conduct their businesses, in all material respects, in
the ordinary course, consistent with past practice and not to take, or
commit to take, any of the actions set forth in the following CLAUSES
(I) - (IX) without Purchaser's prior written approval:
(i) any divestiture by any Company of a shareholding or business;
(ii) any borrowing by any Company in excess of EUR 500,000.00
individually or any guarantee granted by any Company for any
third party's indebtedness in excess of EUR 250,000.00, other
than (i) indebtedness incurred from, or guarantees granted to,
any other Company or (ii) indebtedness incurred, or guarantees
granted by any Company, in the ordinary course of business and in
amounts and on terms consistent with past practice, and other
than any additional incurrence or advance under any credit
facility to which any Company is a party or under which it may
borrow, in each case as of the date hereof;
31
(iii) any investment by any Company in, or the making of any loan to,
any other company or entity (other than any entity of the
Hunnebeck Group) exceeding in each case EUR 500,000.00;
(iv) any capital expenditure by any Company, by additions or
improvements to property, plant or equipment, in excess of EUR
500,000.00 each, except as provided in any plan or budget
disclosed to Purchaser prior to the date hereof;
(v) any lay-off with respect to a significant part of the workforce
of the Hunnebeck Group;
(vi) any change in, or commitment to change, any compensation or
benefit of any Key Employee pursuant to any severance or
retirement plan or agreement made in connection with this
Agreement or the transactions contemplated hereby;
(vii) any change in any method of accounting or accounting practice or
policy by any Company, except as required due to a concurrent
change in generally accepted accounting principles;
(viii) any transaction entered into by any Company outside the
ordinary course of business which has had, or would reasonably be
expected to have, a Material Adverse Effect; or
(ix) the entering into pooling agreements (UNTERNEHMENSVERTRAGE)
within the meaning of Sect. 291 ss. of the German Stock
Corporation Act.
(c) Seller shall procure that all Companies manage all working capital
accounts consistent with the normal course of business and its past
practices, including (but not limited to) (i) not accelerating
collections of accounts receivables out of the normal course
inconsistent with past practices, (ii) not delaying payments of
payables and other obligations beyond the normal course inconsistent
with past practices, and (iii) procuring inventory in reasonable
amounts needed for the current business as conducted as of the date
hereof.
7.2 CONFIDENTIALITY
For a period of three years after the Closing Date, Seller shall keep
confidential and not disclose to any third party any business or trade
secrets of the Hunnebeck Group, other than those which have become publicly
known through no fault of the Seller's Group or which the Seller's Group is
required to disclose in order to comply with any legal
32
requirements or stock exchange regulations. Such confidentiality obligation
shall be satisfied if Seller or the relevant members of the Seller's Group
exercise the same care with respect to such information as they would take
to preserve the confidentiality of their own similar information (SORGFALT
IN EIGENEN ANGELEGENHEITEN).
7.3 ACCESS TO INFORMATION AFTER CLOSING
After the Closing Date, Purchaser will promptly afford to Seller and its
representatives access, upon reasonable advance notice, to accounting,
financial and other records (and allow them to make copies thereof), as
well as to other information, management, employees and auditors of the
Hunnebeck Group to the extent necessary or useful to the Seller's Group in
connection with any audit, investigation, dispute or litigation or any
other reasonable business purpose of the Seller's Group. Purchaser shall
keep, and procure that the entities of the Hunnebeck Group will keep, all
books and records relating to any period prior to the Closing Date in
accordance with and during the periods required under applicable law, but
in any event for a period of not less than seven (7) years. Purchaser
agrees to cause the Companies to give Seller reasonable notice prior to
transferring, discarding or destroying any books or records of the
Companies relating to any matters which may be relevant with respect to any
indemnity obligation of Seller under this Agreement (in particular to any
tax matter relating to any period prior to the Closing Date) and, if Seller
so requests, to deliver such books or records to Seller.
7.4 FURTHER ASSURANCES; COOPERATION
Subject to the terms and conditions of this Agreement, the Parties will use
reasonable commercial efforts to execute, or cause to be executed, all
agreements and documents and to take, or cause to be taken, all other
actions necessary under applicable laws and regulations to consummate the
transactions contemplated by this Agreement; provided, however, that
(notwithstanding any other provisions of this Agreement) Seller shall not
have any liability arising from the failure to obtain any third party
consents in connection with the transactions contemplated hereby or from
any defections of suppliers, customers or employees after the date hereof.
7.5 D&O INSURANCE TAIL COVERAGE
Purchaser shall procure, at its expense, tail coverage for all the
Hunnebeck Group's directors and officers under existing director & officer
insurance policies (including those listed in EXHIBIT 7.5) covering at
least a damage in the aggregate amount of EUR 7,000,000.00 (Euro seven
million), for a period until the earlier of (i) the lapse of the applicable
statute of limitations, and (ii) the sixth anniversary after the Closing
Date.
33
ARTICLE 8
INDEMNIFICATION
8.1 INDEMNIFICATION BY SELLER AND PURCHASER
(a) Subject to the provisions contained in this ARTICLE 8, Seller shall
indemnify and hold harmless Purchaser from the amount of any Losses
(as defined below) asserted against, incurred or suffered by Purchaser
or the Hunnebeck Group as a result of a breach of any representation,
covenant or agreement of Seller contained in this Agreement, provided
that Seller has not remedied the breach within a reasonable time after
Seller has been notified of such breach pursuant to ARTICLE 8.7(A)
below. Indemnification under this ARTICLE 8 shall be the sole and
exclusive remedy for any breach of any representation, warranty,
covenant or agreement of Seller or any other provision of this
Agreement or otherwise, other than proven claims for intentional and
knowing fraud. For the purpose of this Agreement, "LOSSES" shall mean
all and only those liabilities, reasonable costs and expenses and
other damages within the meaning of Sections 249 et seq. of the German
Civil Code, excluding, however, any and all consequential or indirect
damages (FOLGESCHADEN, MITTELBARE SCHADEN), lost profits (ENTGANGENER
GEWINN), frustrated expenses (VERGEBLICHE AUFWENDUNGEN) within the
meaning of Section 284 of the German Civil Code, internal
administration and overhead costs, and specifically excluding any and
all damages and other amounts computed as or with reference to any
"multiple of profits" or "multiple of cash flow" or similar valuation
methodology. Any Loss shall be computed net of (i) any present
benefits (including avoided losses, tax benefits and savings as well
as increases in the value of any asset owned by the Hunnebeck Group,
provided that such benefit could have been realized in the same fiscal
year as the Loss) related to the relevant matter and (ii) any amounts
which are covered by insurance or would have been recoverable under
any insurance policy as existing on the Closing Date if the insurance
coverage had been continued without change (including reasonable
increases in the ordinary course of business, consistent with past
practice) but increased by any increase in insurance premium
exclusively resulting from such recovery and paid for in a three year
period after Closing or (iii) any amounts which have been otherwise
recovered from any third party (it being understood that Purchaser
shall not in bad faith refrain from pursuing claims against third
parties).
34
(b) Subject to the provisions contained in this ARTICLE 8, Purchaser shall
indemnify and hold harmless Seller from any Losses asserted against,
incurred or suffered by Seller or any member or affiliate of the
Seller's Group as a result of a breach of any representation,
warranty, covenant or agreement of Purchaser contained in this
Agreement. Without prejudice to any other indemnification obligations
of Seller and Purchaser contained in this Agreement, Purchaser shall
further indemnify and hold harmless Seller from any claims made by any
member of the Hunnebeck Group after the Closing Date relating to
Seller's shareholding or interest in, or any action taken as
shareholder or partner of, any such member of the Hunnebeck Group
prior to the Closing Date.
(c) No Party shall be liable under this Agreement for any Loss to the
extent that such Loss is attributable to a failure by the other Party
to mitigate the Loss (Section 254 of the German Civil Code).
8.2 LOSSES REFLECTED IN FINANCIAL STATEMENTS; INDEMNIFICATION BY THYSSENKRUPP
Seller shall not be liable to Purchaser for any Losses to the extent that:
(a) such Losses do not exceed the monetary amount reflected or accounted
for as a write-off, value adjustment, liability or provision,
including general adjustments (e.g. PAUSCHALWERTBERICHTIGUNGEN) or
provisions made for the relevant risk category, in the 2004 Financial
Statements; and
(b) Purchaser or any of the Companies have been indemnified from
ThyssenKrupp Systems & Services GmbH or ThyssenKrupp France SA or
ThyssenKrupp Serv Austria Ges.mbH (or any legal successor of such
entities) under the Umbrella Agreement between the above-mentioned
ThyssenKrupp entities and Sun HB GmbH dated 22 June 2003 (Deed-Roll
No. 441/2003 of the notary public Xx. Xxxxx Xxxxxxxxxx with seat in
Frankfurt am Main) (it being understood that Purchaser or any of the
Companies must first pursue any claims under the Umbrella Agreement).
8.3 DISCLOSED OR KNOWN MATTERS
Seller shall not be liable for a breach of a representation of Seller if
the underlying facts of the breach have been disclosed (in writing or made
available electronically) to Purchaser or its representatives or advisers
prior to the date hereof or made available otherwise (in writing or made
available electronically) for the purpose of the due diligence
investigation conducted by Purchaser. However, except for the documents
specifically listed in EXHIBIT 8.3, the appendices and schedules to the
Umbrella
35
Agreement between ThyssenKrupp Systems & Services GmbH, ThyssenKrupp France
SA and ThyssenKrupp Serv Austria Ges.mbH on the one side and Sun HB GmbH on
the other side dated 22 June 2003 (Deed-Roll No. 441/2003 of the notary
public Xx. Xxxxx Xxxxxxxxxx with seat in Frankfurt am Main) shall not be
deemed to have been disclosed or made available to Purchaser or its
representatives or advisers). Without limiting the generality of the
foregoing, Section 442 of the German Civil Code shall not apply.
8.4 THRESHOLDS AND AGGREGATE AMOUNTS OF SELLER'S AND PURCHASER'S LIABILITY
(a) Seller shall only be liable for any Losses arising from a breach of a
representation, warranty, covenant or agreement of Seller or any other
provision of this Agreement, and under all indemnities contained
herein (other than Seller's obligation to deliver the Sold Shares
against payment of the full Purchase Price), if and to the extent any
Loss with respect to an individual matter exceeds an amount of EUR
50,000 (the "DE MINIMIS AMOUNT") and then only if and to the extent
that all indemnifiable Losses above the De Minimis Amount exceed an
aggregate amount of EUR 500,000 (the "DEDUCTIBLE AMOUNT") (in which
case only the excess amount above the Deductible Amount shall be
recoverable).
(b) Seller's liability arising out of or in connection with this
Agreement, including for the breach of all representations,
warranties, covenants and agreements or any other provisions of this
Agreement, and under all indemnities contained herein, with the sole
exception of the representations given by Seller to Purchaser
according to ARTICLE 5.2 (Ownership of Shares; Shareholdings) and
ARTICLE 5.15 (Taxes), shall be limited to the respective amount to be
held in escrow in accordance with ARTICLE 8.5 (the "MAXIMUM AMOUNT").
Seller's liability arising out of the representations made in ARTICLE
5.2 shall be limited to an amount equal to 50% of the Purchase Price
and Seller's liability arising out of the representations made in
ARTICLE 5.15 shall be limited to an amount equal to 25% of the
Purchase Price.
(c) The thresholds and caps which apply to Seller's liability according to
ARTICLE 8.4 (A) AND (B) shall apply to Purchaser's liability as well.
8.5 ESCROW ACCOUNT
Subject to ARTICLE 8.10, Purchaser shall transfer at Closing an amount of
EUR 5,000,000 out of the proceeds of the Estimated Purchase Price being
paid from Purchaser to Seller into an escrow account (the "ESCROW
ACCOUNT"). One year after the Closing Date, EUR 2,500,000 plus the entire
interest accrued on the entire amount being held in the Escrow Account, and
two years after the Closing Date the remaining EUR 2,500,000 plus
36
the interest accrued thereon shall be released from the Escrow Account and
transferred to a bank account designated by Seller, except for (i) such
amounts having being released from the Escrow Account to Purchaser due to
claims made by Purchaser against Seller according to ARTICLE 8.7 and (ii)
such amounts being subject to claims made by Purchaser against Seller
according to ARTICLE 8.7 and not being resolved at the relevant time.
Details of the Escrow Account are set forth in the escrow agreement
attached as EXHIBIT 8.5 (the "ESCROW AGREEMENT") which will be, subject to
ARTICLE 8.10, executed at Closing substantially in the form as attached.
The Parties shall without undue delay after the date hereof inquire whether
XX Xxxxxx, at terms acceptable to both Parties, shall act as escrow agent.
If that is not the case, then the Parties shall agree in good faith upon
another escrow agent. If the Parties cannot agree upon another escrow
agent, the acting notary shall serve as escrow agent. The fees of the
escrow agent are borne by Purchaser.
8.6 LIMITATION PERIODS
All claims of Purchaser or Seller under any representation, warranty,
covenant or agreement of Seller or other provision of this Agreement, and
under all indemnities contained herein or otherwise, shall be time-barred
(VERJAHREN) upon expiration of a period of 24 months after the Closing Date
(the "LIMITATION PERIOD"), except for claims under the representations of
Seller contained in ARTICLE 5.2 (Ownership of Shares; Shareholdings) and
ARTICLE 5.15 (Taxes), which shall be time barred five years after the
Closing Date. The Limitation Periods shall be tolled (GEHEMMT), if
Purchaser delivers a notice pursuant to ARTICLE 8.7 (A) even if Purchaser
or a Company then first proceed to pursue the claim that is subject of such
notice against a third party.
8.7 INDEMNIFICATION PROCEDURES
(a) In the event of a breach of a representation, covenant or agreement of
Seller contained in this Agreement for which Purchaser is eligible to
be indemnified, Purchaser shall promptly notify Seller of any breach,
describe its claim in reasonable detail and, to the extent then
feasible, set forth the estimated amount of such claim (the "CLAIM
DESCRIBED"). Upon delivery of such notice of Purchaser to Seller, the
expiration, pursuant to ARTICLE 8.6, of the Claim Described shall be
tolled (GEHEMMT).
(b) In the event that any action, claim, demand or proceeding under this
Agreement is asserted or announced by any third party (including any
governmental authority) against Purchaser or the Hunnebeck Group (the
"CLAIM ADDRESSEE") (any such claim, a "THIRD PARTY CLAIM"), and in the
event Purchaser intends to demand Seller to indemnify Purchaser for
such Third Party Claim under this Agreement, Purchaser shall give, or
cause to be given, by means of a written notice Seller the
37
opportunity to defend the Claim Addressee against the Third Party
Claim. If Seller elects to defend the Claim Addressee against the
Third Party Claim, Seller shall notify Purchaser and the Claim
Addressee in writing of such decision in due course. Seller then shall
have the right to defend the Claim Addressee (in consultation with
Purchaser) by all appropriate actions and shall have, at any time
during the proceedings, the sole power to direct and control such
defense. In particular, Seller may (in consultation with Purchaser)
participate in and direct all negotiations and correspondence with the
third party, appoint and instruct counsel and request that the Third
Party Claim be litigated or settled in accordance with Seller's
instructions. No action by Seller or its representatives in connection
with the defense shall be construed as an acknowledgement (whether
express or implied) of Purchaser's claim under this Agreement or of
any underlying facts related to such claim. All costs and expenses
incurred by Seller in defending the Third Party Claim shall be borne
by Seller.
(c) Purchaser agrees, and shall cause each Claim Addressee, (i) to fully
cooperate with Seller in the defense of any Third Party Claim, (ii) to
diligently conduct the defense (to the extent that Seller is not in
control of the defense) in order to mitigate the Loss and keep the
amount thereof as low as possible, (iii) not to acknowledge or settle
the Third Party Claim without Seller's prior written consent, and (iv)
to provide Seller's representatives access, upon reasonable advance
notice and during normal business hours, to all relevant books and
records, other information, premises and personnel of the Hunnebeck
Group (it being understood that CLAUSES (II) - (IV) of this ARTICLE
8.7(C) shall apply, irrespective of whether or not Seller has elected
to defend the Third Party Claim). All costs and expenses incurred by
Purchaser in connection with the cooperation or defense in accordance
with this ARTICLE 8.7(C) shall be borne by Purchaser, except for any
Losses to be indemnified by Seller under this Agreement.
(d) The failure of any Claim Addressee to comply with any of its
significant obligations under this ARTICLE 8.7 shall release, remise
and forever discharge Seller from its indemnification obligations
hereunder, except if (and to the extent that) the Claim Addressee
proves that Seller is not materially prejudiced by such failure.
8.8 NO ADDITIONAL RIGHTS OR REMEDIES
(a) The Parties agree that the rights and remedies which Purchaser and
Seller may have with respect to the breach of a representation,
warranty, covenant or agreement or any other provision of this
Agreement, and under all indemnities contained herein (other than
Seller's obligation to deliver the Sold Shares against
38
payment of the full Purchase Price), are limited to the rights and
remedies explicitly contained herein.
(b) Any and all rights and remedies of any legal nature which Purchaser or
Seller may otherwise have (in addition to the claims for specific
performance (PRIMARE ERFULLUNGSPFLICHTEN) and the indemnity claims
explicitly set forth herein) against the other Party in connection
with this Agreement or the transactions contemplated hereby shall be
excluded and irrevocably waived. In particular, without limiting the
generality of the foregoing, each Party hereby waives any claims under
statutory representations and warranties (Sections 434 et seq. of the
German Civil Code), statutory contractual or precontractual
obligations (Articles 280 to 282, 311 of the German Civil Code) or
frustration of contract (Section 313 of the German Civil Code) or tort
(Sections 823 et seq. of the German Civil Code), and no Party shall
have any right to rescind, cancel or otherwise terminate this
Agreement or exercise any right or remedy which would have a similar
effect, except for the termination rights set forth in ARTICLE 4.6.
(c) The provisions of this ARTICLE 8.8 shall not affect any rights and
remedies of the Parties for fraud or wilful misconduct (VORSATZ) and
to any claims of Seller arising from a breach of Purchaser's
obligation to pay the Purchase Price in accordance with ARTICLE 2.
8.9 NO DOUBLE COUNTING
For the avoidance of doubt, matters which have been taken into account for
the benefit of Purchaser in the calculation of the Purchase Price pursuant
to Article 2.1 in connection with Article 3, shall in no case form the
basis for a claim for indemnification under this ARTICLE 8.
8.10 INDEMNIFICATION INSURANCE
At Seller's option, Seller may, in the time between the date hereof and the
Closing, purchase one or more policies of representations and warranties
insurance for the benefit of Purchaser, including the Maximum Amount and
for the duration of the Limitation Period, with a deductible equal to the
Deductible Amount, where any and all out-of pocket expense incurred under
the insurance policy pursuant to the Deductible Amount will be borne by the
Purchaser ("INDEMNIFICATION INSURANCE"). All provisions of the
Indemnification Insurance (including, without limitation, the sole and
exclusive nature of the remedy, the threshold, carve-outs, off-sets, tax
implications and the exclusion of consequential damages) shall be
consistent in all respects with this ARTICLE 8. In the event that
Indemnification Insurance is secured as contemplated by this ARTICLE 8.10,
then
39
notwithstanding anything in this Agreement or elsewhere to the contrary,
such Indemnification Insurance shall be the sole and exclusive remedy of
the Purchaser for any and all claims arising under this Agreement or
otherwise, including, without limitation, for any misrepresentation, or any
breach of any representation, warranty, covenant or agreement or any other
provision of this Agreement (other than proven claims for intentional and
knowing fraud), and such Indemnification Insurance shall be in lieu of, and
not in addition to, any and all indemnities of Seller hereunder. However,
if the Indemnification Insurance does not cover Seller's liability arising
out of representations made in ARTICLE 5.2 or ARTICLE 5.15, Seller shall
remain liable as provided for in ARTICLE 5.2 and ARTICLE 5.15 in connection
with ARTICLE 8.4 (B) and ARTICLE 8.6.
ARTICLE 9
MISCELLANEOUS
9.1 NOTICES
All notices, requests and other communications hereunder shall be made in
writing in the English language and delivered by hand, by courier or by
telefax (provided that the telecopy is promptly confirmed in writing) to
the person at the address set forth below, or such other address as may be
designated by the respective Party to the other Party in the same manner:
To Seller:
Xxxx X. Xxxxx, Xxxxxx X. Xxxxxx and C. Xxxxx Xxxxx
Sun HB Holdings, LLC
c/o Sun Capital Partners, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
U.S.A.
with a copy to:
Hengeler Xxxxxxx
Xx. Xxxxx Xxxxxxxx
Benrather Stra(beta)e 00 - 00
00000 Xxxxxxxxxx
Xxxxxxx
40
To Purchaser:
HARSCO CORPORATION
Xxxxxxxxx X. Xxxxxxxxx and Xxxx X. Xxxxxx
000 Xxxxxx Xxxxxx Xxxx
X.X.Xxx 0000
Camp Hill, PA 17001-8888
U.S.A.
with a copy to:
Xxxxx Day
Xxxxxxxxxxx X. Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
U.S.A.
9.2 PUBLIC DISCLOSURE, CONFIDENTIALITY
No Party shall make any press release or similar public announcement with
respect to this Agreement, and each Party shall keep confidential and not
disclose to any third party any confidential information regarding the
other Party disclosed to it in connection with this Agreement or its
implementation, except as expressly agreed upon with the other Party and
except as may be required in order to comply with the requirements of any
applicable laws or the rules and regulations of any stock exchange upon
which any securities of the relevant Party or any of its parent companies
are listed; provided, that Seller shall be entitled to communicate with its
and its affiliates' investors relating to this Agreement and the
transactions contemplated herein.
9.3 COSTS AND EXPENSES
(a) All transfer taxes (including real estate transfer taxes), stamp
duties, fees (including notarial fees), registration duties or other
charges in connection with any regulatory requirements (including
merger control proceedings) and other charges and costs payable in
connection with the execution of this Agreement and the implementation
of the transactions contemplated hereby shall be borne by Purchaser.
41
(b) Each Party shall pay its own expenses, including the costs of its
advisors, incurred in connection with this Agreement, and no such
costs shall be borne by the Companies.
9.4 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS
(a) This Agreement (including all Exhibits hereto) contains the entire
agreement between the Parties with respect to the subject matter
hereof and supersedes all prior agreements and understandings with
respect thereto, except for the Confidentiality Agreement dated 10 May
2005 which will remain in full force and effect until the Closing Date
or, if this Agreement is terminated pursuant to ARTICLE 4.6, beyond
the date of such termination.
(b) Any provision of this Agreement (including this ARTICLE 9.4) may be
amended or waived only if such amendment or waiver is (i) by written
instrument executed by all Parties and explicitly refers to this
Agreement or (ii) by notarized deed, if required by law.
9.5 ASSIGNMENTS; THIRD PARTY BENEFICIARIES
(a) No Party may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement without the consent of the other
Party, except as expressly set forth in this Agreement, and except for
assignments, delegations or other transfers to an affiliate of the
respective Party provided that the transferring Party shall remain
jointly and severally liable with respect to any such right or
obligation to the other Party.
(b) Neither this Agreement nor any provision contained in this Agreement
is intended to confer any rights or remedies upon any person or entity
other than the Parties.
9.6 GOVERNING LAW; JURISDICTION
(a) This Agreement shall be governed by, and construed in accordance with,
the laws of Germany (excluding conflict of laws rules and CiSG).
(b) Any dispute arising out of or relating to this Agreement, or the
validity thereof, shall be exclusively and finally settled under the
Rules of Arbitration of the International Chamber of Commerce, as
attached hereto as EXHIBIT 9.6, by three arbitrators appointed in
accordance with said rules, at least one of whom shall be a lawyer
admitted to the practice of German law before the courts in Germany.
The
42
language of the arbitral proceedings shall be English and all
submissions, briefs and documents shall be in English. The place of
arbitration shall be Frankfurt am Main.
9.7 INTERPRETATION
(a) The headings of the Articles and of the clauses in this Agreement are
for convenience purposes only and shall not affect the interpretation
of any of the provisions hereof.
(b) Terms to which a German translation has been added shall be
interpreted as having the meaning assigned to them by the German
translation.
(c) The term "affiliated company" shall have the meaning assigned to it in
Article 15 of the German Stock Corporation Act (AKTG).
(d) For the purpose of any disclosure thresholds or the like in any
representations and warranties contained in this Agreement, any
reference to Euros (EUR) shall include the equivalent in any foreign
currency at the exchange rate officially determined in Frankfurt am
Main on the date hereof.
(e) Words such as "hereof", "herein" or "hereunder" refer (unless
otherwise required by the context) to this Agreement as a whole and
not to a specific provision of this Agreement. The term "including"
shall mean "including, without limitation".
(f) The Exhibits to this Agreement are an integral part of this Agreement
and any reference to this Agreement includes this Agreement and the
Exhibits as a whole. The disclosure of any matter in this Agreement
(including any Exhibit thereto) shall be deemed to be a disclosure for
all purposes of this Agreement. The fact that a matter has been
disclosed in an Exhibit shall not be used to construe the extent of
the required disclosure (including any standard of materiality)
pursuant to the relevant representation or other provision of this
Agreement.
9.8 DEFINITIONS
EXHIBIT 9.8 sets forth a list of the capitalised terms used in this
Agreement, indicating the Pages where such terms are defined. Terms defined
in the singular have a comparable meaning when used in the plural, and vice
versa.
43
9.9 SEVERABILITY
Should any provision of this Agreement, or any provision incorporated into
this Agreement in the future, be or become invalid or unenforceable, the
validity or enforceability of the other provisions of this Agreement shall
not be affected thereby. The invalid or unenforceable provision shall be
deemed to be substituted by a suitable and equitable provision which, to
the extent legally permissible, comes as close as possible to the intent
and purpose of the invalid or unenforceable provision. The same shall
apply: (i) if the Parties have, unintentionally, failed to address a
certain matter in this Agreement (REGELUNGSLUCKE); in this case a suitable
and equitable provision shall be deemed to have been agreed upon which
comes as close as possible to what the Parties, in the light of the intent
and purpose of this Agreement, would have agreed upon if they had
considered the matter; or (ii) if any provision of this Agreement is
invalid because of the scope of any time period or performance stipulated
herein; in this case a legally permissible time period or performance shall
be deemed to have been agreed which comes as close as possible to the
stipulated time period or performance.
44
EXHIBIT 9.8: LIST OF DEFINITIONS
2004 FINANCIAL STATEMENTS....................................................11
ACCOUNTING FIRM..............................................................12
AGREEMENT.....................................................................7
BUSINESS DAY.................................................................10
CAPITAL LEASE OBLIGATIONS.....................................................9
CASH..........................................................................8
CLAIM ADDRESSEE..............................................................38
CLAIM DESCRIBED..............................................................38
CLOSING......................................................................15
CLOSING DATE.................................................................15
COMPANIES.....................................................................7
COMPANY.......................................................................7
DE MINIMIS AMOUNT............................................................37
DEDUCTIBLE AMOUNT............................................................37
DISCLOSURE SCHEDULE..........................................................18
DRAFT CLOSING CERTIFICATE....................................................11
ENVIRONMENTAL LAW............................................................29
ESCROW ACCOUNT...............................................................37
ESCROW AGREEMENT.............................................................38
ESTIMATED CAPITAL LEASE OBLIGATIONS..........................................10
ESTIMATED CASH...............................................................10
ESTIMATED FINANCIAL DEBT.....................................................10
ESTIMATED PURCHASE PRICE.....................................................10
FINAL CAPITAL LEASE OBLIGATIONS..............................................14
FINAL CASH...................................................................14
FINAL CLOSING CERTIFICATE....................................................13
FINAL FINANCIAL DEBT.........................................................14
FINAL PURCHASE PRICE.........................................................14
FINANCIAL DEBT................................................................9
GOVERNMENTAL PERMITS.........................................................23
HAZARDOUS MATERIALS..........................................................29
HOLDCO........................................................................7
HUNNEBECK GROUP...............................................................7
INDEMNIFICATION INSURANCE....................................................40
INTELLECTUAL PROPERTY RIGHTS.................................................22
KEY EMPLOYEES................................................................24
LIMITATION PERIOD............................................................38
45
XXXXXXXXX FINANCING..........................................................17
MATERIAL ADVERSE EFFECT......................................................18
MATERIAL AGREEMENTS..........................................................25
MAXIMUM AMOUNT...............................................................37
PARTIES.......................................................................7
PRE-CLOSING TAX PERIOD.......................................................28
PURCHASE PRICE................................................................8
PURCHASER.....................................................................7
SELLER........................................................................7
SELLER'S GROUP................................................................7
SELLER'S KNOWLEDGE...........................................................18
SOLD SHARES...................................................................7
SUBSIDIARY SHARES............................................................20
TAX..........................................................................29
TAX RETURN...................................................................29
TAXING AUTHORITY.............................................................29
THIRD PARTY CLAIM............................................................38
US GAAP......................................................................11
46
