EXHIBIT 10.2
SHARE PURCHASE AGREEMENT
between
ILLBRUCK GMBH, SABINA ILLBRUCK, XXXXXXX ILLBRUCK
and
TREMCO GERMANY GMBH, RPOW UK LTD., RPM INTERNATIONAL INC.
Linklaters Oppenhoff & Xxxxxxx
Xxxxxxxxxxxxxxxxxx 00
00000 Xxxxxxx
Postfach 801520
81615 Munchen
Telefon (49-89) 41808-0
Telefax (49-89) 00000-000
Xxxxxxx L-095759 KRA/TET
TABLE OF CONTENTS
Index of Definitions.............................................................. 2
Index of Schedules................................................................ 8
PREAMBLE.......................................................................... 10
1 The Group Companies............................................................ 10
2 Agreement to Sell and Transfer the Shares and the Seller's Intellectual
Property Rights; Agreement re Assignment of Seller's Loans; Transfer
of Contracts................................................................... 16
3 Purchase Price; Preliminary Purchase Price and Purchase Price Adjustment....... 17
4 Effective Date Statement....................................................... 19
5 Termination and Clearing of Agreements, etc. Among Related Companies........... 21
6 Rights and Covenants between Signing and Closing............................... 22
7 Closing; Closing Conditions.................................................... 25
8 Seller's Guarantees; Seller's Best Knowledge................................... 27
9 Remedies for Breach of Seller's Guarantees..................................... 37
10 Taxation....................................................................... 42
11 Purchasers' Guarantees; Purchasers' Guarantor.................................. 45
12 Confidentiality; Press Releases; Public Disclosure; Covenants in the Case of
Non-Consummation of Closing ................................................... 46
13 Post-Closing Rights and Covenants; Non-Competition; Non-Solicitation........... 47
14 Payments and Interest.......................................................... 51
15 Notices........................................................................ 52
16 Miscellaneous.................................................................. 53
1
INDEX OF DEFINITIONS
"ACCOUNTS 2005" shall have the meaning given to it in Clause 13.3.1;
"AFFILIATE(S)"shall mean affiliated companies within the meaning of Sections 15
et seq. AktG;
"AKTG" shall mean German Stock Corporation Act (Aktiengesetz);
"BASE INTEREST RATE" shall mean the interest rate as applicable from time to
time pursuant to Section 247 BGB (Basiszinssatz im Sinne von Section 247 BGB);
"BGB" shall mean German Civil Code (Buergerliches Gesetzbuch);
"BIG" is illbruck Bau-Technik International GmbH with the particulars set forth
in Clause 1.1.1;
"BIG-SUBSIDIARY/IES" shall have the meaning given to it in Clause 1.2.1;
"BUSINESS" shall have the meaning given to it in Letter (F) of the Preamble;
"BUSINESS DAY" means a day other than a Saturday, Sunday or a public holiday in
Cologne;
"CASH" shall have the meaning given to it in Clause 3.2.1(ii);
"CET" shall mean Central European Time as of the relevant date;
"CLOSING" shall have the meaning given to it in Clause 7.1;
"CLOSING CONDITION(S)" shall have the meaning given to it in Clause 7.2;
"CLOSING DATE" shall have the meaning given to it in Clause 7.1;
"COMPANY/IES" shall have the meaning given to it in Clause 1.1.2;
"COMPETENT AUTHORITIES" shall have the meaning given to it in Clause 6.1.1;
"CONFIDENTIALITY AGREEMENT" is the agreement on confidentiality concluded
between the Seller and the Purchasers' Guarantor on 22 March 2005;
"CONSOLIDATED AUDITED ACCOUNTS" are the consolidated annual accounts of the
Group Companies as of 31 December 2004 prepared by the Seller and audited by the
respective Seller's Auditor;
"CONSOLIDATED EFFECTIVE DATE ACCOUNTS" shall mean the consolidated accounts of
the Group Companies as of the Effective Date, which, however, is not a legal but
a virtual consolidation prepared only for the purpose of the sale of the Group
Companies; the Consolidated Effective Date Accounts shall be based on audited
year end accounts or audited interim accounts each as of the Effective Date for
the individual Group Companies audited by the respective Seller's Auditor, to be
accompanied by a certification of Seller's Auditor issuing - to the extent
legally possible - an unqualified opinion (uneingeschraenkter
Bestaetigungsvermerk), and having a language being as close as possible to the
wording of an unqualified opinion as defined in Sec. 322 para. 1 HGB. With
regard to the execution of the audit and the preparation of the Consolidated
Effective Date Accounts, it shall be taken into account that the Group Companies
do not qualify as a group or a subgroup being subject to consolidated accounting
within the meaning of Sec. 390 HGB (Konzern oder Teilkonzern), the Consolidated
Effective Date Statements shall consist merely of a balance sheet and a profit
and loss account without footnotes (Anhang), or a management discussion and
analysis (Lagebericht). However, it is understood that the audit opinion will be
qualified on the belief that the opening balances as of January 1, 2005 will be
unaudited, as they will be derived from the Financial Statements as of December
31, 2004, which are unaudited (Saldovortrag).
2
"CONTAMINATION" shall be all air pollution, soil and/or groundwater
contamination, artificial deposits, fillings, Hazardous Materials, ammunition,
combat material;
"CONTRACTS" shall have the meaning given to it in Clause 2.8;
"CONTRACTUAL PARTIES" shall mean the Parties, SI, MI and the Purchasers'
Guarantor;
"CONTRACTUAL PARTY" shall mean any of the Parties, SI, MI and the Purchasers'
Guarantor;
"CORPORATE INCOME TAX REFUND CLAIM" shall mean "Koerperschaftsteuerguthaben"
within the meaning of Section 37 of the German Corporate Income Tax Act
(Koerperschaftsteuergesetz):
"COUNTERPARTY" shall have the meaning given to it in Clause 2.8;
"DEBT" shall have the meaning given to it in Clause 3.2.1(i);
"DE MINIMIS AMOUNT" shall have the meaning given to it in Clause 9.3.1;
"EFFECTIVE DATE" shall mean 00:00 hours (Central European Time) of the first day
of the calendar month following the month in which the Closing occurs;
"EFFECTIVE DATE STATEMENT" shall have the meaning given to it in Clause 4.1;
"EK02" shall have the meaning given to it in Clause 8.1.2(iv);
"ENCUMBRANCE" shall have the meaning given to it in Clause 8.1.3(i);
"ENVIRONMENTAL CLAIM" shall mean any and all administrative or judicial actions,
suits, orders, claims or proceedings pursuant to or relating to any
Environmental Law by any Person based upon, alleging, asserting, or claiming any
actual (I) violation of or liability under any Environmental Law or any permit
or approval there under, or (II) liability for investigatory costs, cleanup
costs, removal costs, remedial costs, property damage, personal injury, fines,
or penalties related to pollution, Contamination or any Hazardous Material at
any location;
"ENVIRONMENTAL COSTS" means any reasonable investigation, cleanup, remediation,
removal or other response costs, expenses, losses, liabilities or obligations,
payments, damages and disbursements resulting from environmental conditions and
any claim by any governmental authority under Environmental Laws, any private
party claim under Environmental Laws, or any act necessary to come into material
compliance with the Environmental Laws;
"ENVIRONMENTAL LAWS" shall mean all applicable laws (including common law),
ordinances, rules, regulations, permits, authorisations and orders relating to
Environmental Matters and either being applicable as at the Closing Date or
still having an impact on the Business as at the Closing Date, and applying in
jurisdictions in which any of the Group Companies operate;
"ENVIRONMENTAL LIABILITIES" means the clean up of the contamination in or near
Hall 1 and Hall 2 in Arkel pertaining to trichloroethylene, regardless whether
pertaining to land owned by the Group Companies or by neighbouring third
parties;
"ENVIRONMENTAL MATTERS" means any matter relating to pollution or Contamination
or protection of the soil, ground water, surface water, land surfaces or natural
resources;
"ESCROW ACCOUNT" shall have the meaning given to it in Clause 9.10;
"ESCROW AMOUNT" shall have the meaning given to it in Clauses 3.3.1 and 9.10;
"ESTIMATED EFFECTIVE DATE STATEMENT" shall have the meaning given to it in
Clause 3.3.1;
"EQUITY" shall have the meaning given to it in Clause 3.2.3;
3
"EXPERT" shall have the meaning given to it in Clause 9.6.2(i);
"FIXED AMOUNT" shall be the amount specified in Clause 3.1;
"GERMAN GAAP" shall mean German generally accepted accounting principles;
"GERMAN LOAN" shall have the meaning given to it in Clause 5.3;
"GERMAN PURCHASER" shall mean Tremco Germany GmbH; with the particulars given in
Letter (C) of the Preamble;
"GERMAN SHARE(S)" shall have the meaning given to it in Clause 1.1.1;
"GKV" shall have the meaning given to it in Clause 9.6.2(i);
"GROUP COMPANY/IES" shall have the meaning given to it in the last sentence of
Clause 1.2.2;
"GROUP SHARES" shall have the meaning given to it in Clause 1.2.2;
"HAZARDOUS MATERIAL(S)" shall mean any toxic, hazardous, infectious or
radioactive substance, including those substances defined in or regulated or
addressed by any Environmental Laws; petroleum and petroleum products including
crude oil and any fractions thereof and materials and/or substances which have
to be specially treated in the event of demolition work or removal (asbestos,
PCB, lindane, etc.);
"HGB" shall mean German Commercial Code (Handelsgesetzbuch);
"INFORMATION TECHNOLOGY" or "IT" shall mean all computer hardware, software,
configurations, and related equipment and service agreements which are used in
order to run the Business as run in the past, including but not limited to (I)
desktop computers, printers, scanners, data storage units, laptops and other
decentralised and/or portable units, etc., (II) mail servers, data servers, web
servers, other servers, proxies, cetrix systems, middleware, back-up units,
hubs, other central and semi-central units, internal network, infrastructure and
links between the different locations of the Group Companies, etc. (III) links
to Internet providers, Internet gateways, firewalls, virus walls, mx records, IP
addresses, denic, internic and similar entries, etc., (IV) web pages and their
content, including content management systems, (V) all the software which runs
on and/or which is used for the operation of the aforementioned components,
including operating systems and the source code which is in the possession of
any of the Group Companies, and (VI) all libraries and databases which are
related to and/or stored on and/or used by and/or created by the aforementioned
components;
"INTELLECTUAL PROPERTY RIGHTS" shall have the meaning given to it in Clause
8.1.5(i);
"INVENTORY" shall have the meaning given to it in Clause 8.1.4(iv);
"INVESTMENT" shall have the meaning given to it in Clause 6.2.1(ii);
"IT HARDWARE" shall mean the hard xxxx owned by the Seller and used by the Group
Companies as of the Signing Date, including, without limitation thereto, the
hardware listed in SCHEDULE 2.4;
"KEY EMPLOYEES" shall have the meaning given to it in Clause 8.1.6(vii);
"LEASED REAL PROPERTY" shall have the meaning given to it in Clause 8.1.3(ii);
"LEVERKUSEN LEASE AGREEMENT" shall have the meaning given to it in Clause 7.4.7;
"LICENSED INTELLECTUAL PROPERTY RIGHTS" shall have the meaning given to it in
Clause 8.1.5(iv);
"LOCATION" shall have the meaning given to it in Clause 13.6;
4
"MATERIAL ADVERSE CHANGE" shall have the meaning given to it in Clause 7.2.4(i);
"MATERIALLY ADVERSE EFFECT" shall have the meaning given to it in Clause
6.2.1(iv);
"MATERIAL ASSETS" shall have the meaning given to it in Clause 8.1.4(i);
"MATERIAL CONTRACTS" shall mean any contract with regular payment obligations of
either side of more than EUR 500,000 (in words: Euro five hundred thousand) per
year;
"MI" is Xxxxxxx Illbruck;
"MODIFICATION PROPOSAL" shall have the meaning given to it in Clause 7.2.4(ii);
"NEUTRAL AUDITOR" shall have the meaning given to it in Clause 4.4;
"NET WORKING CAPITAL" shall have the meaning given to it in Clause 3.2.2;
"NON-SBU-ENTITIES" and "NON-SBU-ENTITY" shall have the meaning given to it in
Clause 5.2.1;
"NOTICES" shall have the meaning given to it in Clause 15.1;
"OBJECTIONS" shall have the meaning given to it in Clause 4.4;
"OFFSETTING" shall have the meaning given to it in Clause 5.3;
"OWNED REAL PROPERTY" shall have the meaning given to it in Clause 8.1.3(i);
"PARTIES" shall be the Seller and the Purchasers;
"PARTY" shall mean any of the Parties;
"PERSON" shall mean any individual, legal entity or governmental body;
"PERSON(S) RELATED TO SI OR MI" shall mean any Person who is either a descendant
or a spouse of SI or MI or which is a legal entity which is controlled (in the
meaning of Sec. 00 Xxxxxx Xxxxx Xxxxxxxxxxx Xxx - XxxX) by SI and/or MI;
"PRELIMINARY PURCHASE PRICE" shall have the meaning given to it in Clause 3.3.1;
"PROVISIONAL SUPPLY AGREEMENTS" shall have the meaning given to it in Clause
13.1;
"PUBLIC LAW PERMITS" shall have the meaning given to it in Clause 8.1.9(i);
"PURCHASE PRICE" shall have the meaning given to it in Clause 3.1;
"PURCHASE PRICE ADJUSTMENT" shall have the meaning given to it in Clause 3.3.2;
"PURCHASER" shall mean either the German Purchaser or the UK Purchaser;
"PURCHASERS" shall mean the German Purchaser and the UK Purchaser;
"PURCHASERS' ACCOUNT" shall have the meaning given to it in Clause 14.1.2;
"PURCHASERS' GUARANTOR" shall be RPM International Inc. with the particulars
given in Letter (E) of the Preamble;
"PURCHASERS' SIDE" shall mean the Purchasers, the Purchasers' Guarantor and the
Purchasers' Guarantor's Affiliates (in the meaning of Sec. 15 et. seq. German
Stock Corporation Code - AktG -);
"REAL PROPERTY" shall have the meaning given to it in Clause 8.1.3(ii);
"RELEVANT ASSESSMENT PERIOD" shall have the meaning given to it in Clause
10.1.1;
5
"RELEVANT COMPANY" shall have the meaning given to it in Clause 9.5.1;
"RELEVANT EMPLOYEES" means the employees of the Group Companies who are employed
by the Group Companies as at Signing Date;
"REMAINING BUSINESSES" are the businesses described in SCHEDULE A;
"REVISED ACCOUNTS 2005" shall have the meaning given to it in Clause 13.3.4;
"REVISED EFFECTIVE DATE STATEMENT" shall have the meaning given to it in Clause
4.3;
"SELLER" is illbruck GmbH, with the particulars given in Letter (A) of the
Preamble;
"SELLER'S ACCOUNT" shall have the meaning given to it in Clause 14.1.1;
"SELLER'S AUDITOR" shall be such auditor appointed by Seller for such measures
and tasks as further specified in this Agreement;
"SELLER'S BEST KNOWLEDGE" shall have the meaning given to it in Clause 8.3;
"SELLER'S FINANCING PAYABLES" shall have the meaning given to it in Clause
5.2.1;
"SELLER'S FINANCING RECEIVABLES" shall have the meaning given to it in Clause
5.2.2;
"SELLER'S GUARANTEES" shall have the meaning given to it in Clause 8.1;
"SELLER'S INTELLECTUAL PROPERTY RIGHTS" shall mean the Intellectual Property
Rights listed in SCHEDULE B or in any other way comparable to such intellectual
property rights;
"SELLER'S LOANS" shall mean the UK Loan and the German Loan;
"SELLER'S SIDE" shall mean each of the Seller, the Seller's Affiliates other
than the Group Companies, SI and/or MI and affiliates of SI and/or MI;
"SENSITIVE INFORMATION" shall have the meaning given to it in Clause 6.1.4;
"SHARES" shall have the meaning given to it in Clause 1.1.2;
"SI" is Sabina Illbruck;
"SIGNING DATE" shall mean the date this Agreement is signed on;
"TAXATION" or "TAX" means all forms of taxation whether direct or indirect and
whether levied by reference to income, profits, gains, net wealth, asset values,
turnover, added value or other reference and statutory, governmental, state,
provincial, local governmental or municipal impositions, duties, contributions,
rates and levies (including without limitation social security contributions and
any other payroll taxes), whenever and wherever imposed (whether imposed by way
of a withholding or deduction for or on account of tax or otherwise). The term
"Taxation" or "Tax" shall also include any interest on Taxes and any amounts
assessed by the Tax Authorities for not complying with obligations imposed by
tax law (including but not limited to penalties for late filing and/or delay in
payment, surcharges and penalties for not preparing or not furnishing transfer
pricing studies or preparing or furnishing transfer pricing studies which do not
meet the required standards);
"TAX AUDIT" shall have the meaning given to it in Clause 10.2.1;
"TAX AUTHORITY/IES" means any tax or other authority competent to impose any
liability in respect of Taxation or responsible for the administration and/or
collection of Taxation or enforcement of any law in relation to Taxation;
6
"TAX CONTEST" shall have the meaning given to it in Clause 10.2.2;
"TAX SAVING" shall mean the net present value of reductions of any future tax
payments resulting from future depreciation or expenses related to past
depreciation or expenses not fully recognized in any tax audit. The net present
value shall be calculated with a deemed total tax rate of 35% (in words:
thirty-five per cent) and with an interest rate of 5% (in words: five per cent)
per annum on the basis of future depreciations or expenses that will lead to a
reduction of tax payments after the Effective Date;
"TERRITORY" shall have the meaning given in relation to each of the Remaining
Businesses in SCHEDULE A;
"THIRD PARTY/IES" shall mean any individual person, legal entity or other
subject having full or partial legal capacity ((Teil-)Rechtsfaehigkeit) which is
not a Contractual Party;
"THRESHOLD AMOUNT" shall have the meaning given to it in Clause 9.3.2;
"UK LOAN" shall have the meaning given to it in Clause 1.1.2;
"UK-HOLDING" is illbruck Holdings Limited, with the particulars set forth in
Clause 1.1.2;
"UK PURCHASER" is RPOW UK Ltd., with the particulars given in Letter (D) of the
Preamble;
"UK-SHARE(S)" shall have the meaning given to it in Clause 1.1.2;
"UK-SUBSIDIARY/IES" shall have the meaning given to it in Clause 1.2.2;
"ZPO" shall mean the German Civil Procedure Code (Zivilprozessordnung).
7
INDEX OF SCHEDULES
SCHEDULE A Remaining Businesses and Territory
SCHEDULE B Seller's Intellectual Property Rights
SCHEDULE 2.2 UK Loan
SCHEDULE 2.4 IT Hardware
SCHEDULE 2.6 UK-Shares transfer form
SCHEDULE 2.8 List of contracts to be transferred with approval of contractual partner
SCHEDULE 5.1 Inter-company liabilities
SCHEDULE 5.2.1 Certain Inter-company loans
SCHEDULE 6.2.2 Claims which may be assigned to Seller
SCHEDULE 7.1 Group Companies to change business year
SCHEDULE 7.4.4 Statement on termination of inter-company liabilities
SCHEDULE 7.4.6 Cross-receipt
SCHEDULE 7.4.7 Leverkusen Lease Agreement
SCHEDULE 8.1.1(II) Pre-emptive Rights etc. in relation to Group Shares
SCHEDULE 8.1.3(I)-1 List of Owned Real Property
SCHEDULE 8.1.3(I)-2 Excerpts of the land registers relating to Owned Real Property
SCHEDULE 8.1.3(II) List of Leased Real Property
SCHEDULE 8.1.3(IV) List regarding condition of Owned Real Property
SCHEDULE 8.1.4(I) Repair/maintenance of Material Assets
SCHEDULE 8.1.4(III) Material Contracts
SCHEDULE 8.1.5(I) List of certain intellectual property rights
SCHEDULE 8.1.5(II)-(1) Dispute in relation to Intellectual Property Rights
SCHEDULE 8.1.5(II)-(2) Potential Third Party Disputes in relation to Intellectual Property Rights
SCHEDULE 8.1.5(IV) Licensed Intellectual Property Rights
SCHEDULE 8.1.6(II) Information on Relevant Employees
SCHEDULE 8.1.6(III) Labour disputes
SCHEDULE 8.1.6(VII) Key Employees
SCHEDULE 8.1.8(I) Legal Disputes Exceeding EUR 100,000
SCHEDULE 8.1.8(II) Product liability disputes
SCHEDULE 8.1.9(II) Proceedings in relation to Public Law Permits and Environmental Claims
SCHEDULE 8.1.10(I) Contingent Liabilities
8
SCHEDULE 8.3-(1) Persons whose knowledge is decisive for Seller's Best Knowledge
SCHEDULE 8.3-(2) Persons to be enquired by persons listed in Schedule 8.3-(1)
SCHEDULE 9.10 Escrow Agreement
SCHEDULE 13.1 Provisional Supply Agreements
SCHEDULE 13.4 IP-Agreement
9
PREAMBLE
(A) WHEREAS, the Seller is a limited liability company (Gesellschaft mit
beschraenkter Haftung) duly organized under the laws of the Federal
Republic of Germany, registered with the commercial register of the local
court (Amtsgericht) of Cologne under HRB 48451 ("SELLER");
(B) WHEREAS, Sabina Illbruck ("SI"), residing at Xxxxxxxxxxxxxxxx 00, 00000
Xxxxxxxxxx, and Xxxxxxx Illbruck ("MI"), residing at Xxxxxxxxxxxxxxxxx 0,
00000 Xxxxxx, are the sole shareholders of the Seller;
(C) WHEREAS, Tremco Germany GmbH is a limited liability company (Gesellschaft
mit beschraenkter Haftung) duly organized under the laws of the Federal
Republic of Germany, registered with the commercial register of the local
court (Amtsgericht) of Dusseldorf under HRB 52143 ("GERMAN PURCHASER");
(D) WHEREAS, RPOW UK Ltd. is a limited liability company duly organized under
the laws of England and Wales, registered with the Company's House, under
Company No 03205888 ("UK PURCHASER");
(E) WHEREAS, RPM International Inc., a company duly organized under the laws of
the US-State of Ohio with administrative headquarters at 0000 Xxxxx Xxxx,
Xxxxxx, Xxxx 00000, is the ultimate shareholder of the Purchasers
("PURCHASERS' GUARANTOR");
(F) WHEREAS, the Seller is the sole shareholder of illbruck Bau-Technik
International GmbH, Germany, and of illbruck Holdings Ltd., United Kingdom,
which both hold direct and indirect participations in companies specialised
in the development, production and distribution of, in particular, high
performance sealant and adhesive systems for construction, window and door
applications. illbruck Bau-Technik International GmbH, illbruck Holdings
Ltd. and their respective subsidiaries constitute the sealant business unit
of the Seller (such business unit, taken as a whole, hereinafter also
referred to as the "BUSINESS") forming one of the leading European
manufacturer of innovative and high quality sealant and adhesive products
and systems;
(G) WHEREAS, the Seller has determined to sell all shares in (I) illbruck
Bau-Technik International GmbH, which the German Purchaser wishes to
acquire, and in (II) illbruck Holdings Ltd., which the UK Purchaser wishes
to acquire;
(H) WHEREAS, the Seller has determined to assign the German Loan, the IT
Hardware and the Seller's Intellectual Property Rights to the German
Purchaser and to assign the UK Loan to the UK Purchaser;
(I) WHEREAS, the Contractual Parties wish to enter into a non-competition
agreement; NOW, THEREFORE, the Contractual Parties agree as follows:
1 THE GROUP COMPANIES
1.1 Particulars of the Companies
1.1.1 illbruck Bau-Technik International GmbH ("BIG") is a limited
liability company (Gesellschaft mit beschraenkter Haftung) duly
organized under the laws of the Federal Republic of Germany,
registered with the commercial register of the local court
(Amtsgericht) of Cologne under HRB 49216. The registered share
capital (Stammkapital) of BIG amounts to DEM 7,500,000 (in words:
Deutsche Xxxx seven million five hundred thousand). The
registered share capital of BIG is divided into the following
shares, all of which are held by the Seller (the "GERMAN SHARES",
and each a "GERMAN SHARE"):
10
(i) one German Share with a nominal value (Nennbetrag) of DEM
50,000 (in words: Deutsche Xxxx fifty thousand);
(ii) one German Share with a nominal value (Nennbetrag) of DEM
3,650,000 (in words: Deutsche Xxxx three million six hundred
and fifty thousand); and
(iii) one German Share with a nominal value (Nennbetrag) of DEM
3,800,000 (in words: Deutsche Xxxx three million eight
hundred thousand).
The Seller is the sole shareholder of BIG.
1.1.2 illbruck Holdings Ltd ("UK-HOLDING"; collectively with BIG: the
"COMPANIES"; either of BIG and UK-Holding: the "COMPANY"), is a
limited liability company duly organized under the laws of
England and Wales, registered with the Companies House, London,
under Company No. 4737161. UK-Holding has an authorised share
capital of GBP 5,000,000.00 (in words: British Pound five
million) and an issued share capital of GBP 3,800,000.00 (in
words: British Pound three million eight hundred thousand). The
issued share capital of UK-Holding is divided into 3,800,000 (in
words: three million eight hundred thousand) shares each with a
nominal value of GBP 1.00 (in words: British Pound one)
(collectively: "UK-SHARES" and each of them: "UK-SHARE"; the UK
Shares and the German Shares collectively: the "SHARES"). The
Seller is the sole shareholder of UK-Holding.
1.2 Particulars of the Companies' Subsidiaries
1.2.1 Subsidiaries of BIG
BIG directly or indirectly holds shares or interests in the
following subsidiaries (collectively: "BIG-SUBSIDIARIES"; each of
them: "BIG-SUBSIDIARY"):
(i) illbruck Bau-Technik GmbH, Germany
BIG holds 100% (in words: one hundred per cent) of the
registered share capital (Stammkapital) of illbruck
Bau-Technik GmbH, a German limited liability company
(Gesellschaft mit beschraenkter Haftung) registered with the
commercial register of the local court (Amtsgericht) of
Cologne under HRB 49826). The registered share capital of
illbruck Bau-Technik GmbH amounts to EUR 1,176,000.00 (in
words: Euro one million one hundred and seventy six
thousand) and is divided into one share with a nominal value
(Nennbetrag) of EUR 1,175,500.00 (in words: Euro one million
one hundred and seventy-five thousand five hundred) and one
share with a nominal value (Nennbetrag) of EUR 500.00 (in
words: Euro five hundred).
(ii) illbruck Sealant Systems B.V., The Netherlands
BIG holds 100% (in words: one hundred per cent) of the
shares in illbruck Sealant Systems B.V., a Dutch limited
liability company (Besloten Vennootschap) registered with
the commercial register of Rivierenland under B.V.-number
290 027. The share capital
11
(Geplaatst Aandelenkapital) of illbruck Sealant Systems B.V.
amounts to EUR 267,500 (in words: Euro two hundred
sixty-seven thousand and five hundred) and is divided into
5,350 (in words: five thousand three hundred and fifty)
shares with a nominal value (Nennbetrag) of EUR 50 (in
words: Euro fifty).
illbruck Sealant Systems B.V. directly or indirectly holds
shares or interests in the following BIG-Subsidiaries:
(a) Arkelveste B.V., The Netherlands
illbruck Sealant Systems B.V. holds 100% (in words: one
hundred per cent) of the shares in Arkelveste B.V., a
Dutch limited liability company (Besloten Vennootschap)
registered with the commercial register of Rivierenland
under B.V.-number 611 51. The share capital (Geplaatste
Aandelenkapital) of Arkelveste B.V. amounts to EUR
226,890.11 (in words: Euro two-hundred twenty-six
thousand eight hundred and ninety and Euro Cent
eleven).
(b) illbruck Sealant Systems Production S.A., Belgium
illbruck Sealant Systems B.V. holds 499 (in words: four
hundred and ninety-nine) shares in illbruck Sealant
Systems Production S.A., a Belgian stock company
(Societe Anonyme) registered with the commercial
register of Tournai under Company number 0427.432.577.
The share capital of illbruck Sealant Systems
Production S.A. amounts to EUR 125,000.00 (in words:
Euro one hundred and twenty-five thousand) and is
divided into 500 (in words: five hundred) shares. The
remaining share is held by Mr Xxxx van Gasteren.
illbruck Sealant Systems Production S.A. holds 100% (in
words: one hundred per cent) of the shares in Eurobond
S.A., a Belgian stock company (Societe Anonyme)
registered with the commercial register of Tournai
under company number 0460 460 879. The share capital of
Eurobond S.A.. amounts to EUR 285,077.55 (in words:
Euro two hundred eighty-five thousand and seventy-seven
and Euro Cent fifty-five) and is divided into 575 (in
words: five hundred seventy-five) A-shares and 575 (in
words: five hundred seventy-five) B-shares each with a
nominal value (Nennbetrag) of EUR 247,89 (in words:
Euro two hundred forty-seven and Euro Cent
eighty-nine).
(c) PDR Recycling GmbH + Co KG, Germany
illbruck Sealant Systems B.V. holds a limited partner's
interest (Kommanditanteil) in PDR Recycling GmbH + Co
KG, a German limited partnership
(Kommanditgesellschaft) registered with the commercial
register of the local court (Amtsgericht) of Bayreuth
under HRA 2539. illbruck Sealant
12
Systems B.V. holds an interest with a registered
nominal amount (Haftsumme) of EUR 58,901.00 (in words:
Euro fifty-eight thousand nine-hundred and one) out of
a total limited partners' capital (Gesamtsumme der
Kommanditanteile) of EUR 708,190.00 (in words: Euro
seven-hundred eight thousand and one-hundred ninety).
(d) PDR GmbH, Germany
illbruck Sealant Systems B.V. holds 9.214% (in words:
nine point two one four per cent) of the registered
share capital (Stammkapital) of PDR GmbH, a German
limited liability company (Gesellschaft mit
beschraenkter Haftung) registered with the commercial
register of the local court (Amtsgericht) of Bayreuth
under HRB 2084. The registered share capital of PDR
GmbH amounts to EUR 28,000.00 (in words: Euro
twenty-eight thousand). illbruck Sealant Systems B.V.
holds one share with a nominal value of EUR 2,580.00
(in words: Euro two thousand five hundred and eighty).
PDR GmbH is the sole general partner of PDR Recycling
GmbH + Co. KG without any participation in the capital
(ohne Kapitalbeteiligung).
(e) illbruck Sealant Systems B.V. holds 100% (in words: one
hundred per cent) of the shares in Asbiton AG, a Swiss
stock corporation registered with the commercial
register of the Kanton Zurich under company number
CH-020.3.901.815-6 and currently under liquidation with
the liquidation proceedings presumably completed prior
to Closing Date.
(f) illbruck Sealant Systems B.V. holds 100% (in words: one
hundred per cent) of the shares in Cocon Polska
Sp.z.o.o., a Polish limited liability company
registered with the commercial register of the district
court of Krakow under company number KRS 0000087578
currently under liquidation with the liquidation
proceedings presumably completed prior to Closing Date.
(iii) illbruck Building Systems s.r.o., Czech Republic
BIG holds 100% (in words: one hundred per cent) of the
shares in illbruck Building Systems s.r.o., a Czech limited
liability company (Spolecnost s rucenim omezenym) registered
with the commercial register of the city court of Prague
under number C 1682 and ID-number 158 908 13.The share
capital of illbruck Building Systems s.r.o. amounts to CZK
1,200,000.00 (in words: Czech Crowns one million and two
hundred thousand).
(iv) illbruck Systemy Uszcz. Sp.z.o.o., Poland
BIG holds 100% (in words: one hundred per cent) of the
shares in illbruck Systemy Uszcz. Sp.z.o.o., a Polish
limited liability company (Spolka z ograniczona
odpowiedzialnoscia) registered with the
13
commercial register of Krakow under number 96 230.The share
capital of illbruck Systemy Uszcz. Sp.z.o.o. amounts to PLN
3,202,000.00 (in words: Polish Zloty three million and two
hundred two thousand) and is divided into 3,202 (in words:
three thousand and two hundred two) shares with a nominal
value (Nennbetrag) of PLN 1,000.00 (in words: Polish Zloty
one thousand).
(v) illbruck Joints et Systemes S.A.S., France
BIG holds 100% (in words: one hundred per cent) of the
shares in illbruck Joints et Systemes S.A.S., a French stock
company (Societe par Actions Simplifiee) registered with the
commercial register of Strasbourg under TI-number 433 891
447 and under number 2000 B 1474. The share capital of
illbruck Joints et Systemes S.A.S. amounts to EUR
2,880,000.00 (in words: Euro two million eight hundred and
eighty thousand).
(vi) illbruck Sealant Systems N.V., Belgium
BIG holds 99.75% (in words: ninety-nine point seven five per
cent) of the shares in illbruck Sealant Systems N.V., a
Belgian stock company (Naamloze Vennootschap) registered
with the commercial register of Antwerpes under BTW-number
000 000 000 and HR-number 340 498. The share capital of
illbruck Sealant Systems N.V. amounts to EUR 100,000.00 (in
words: Euro one hundred thousand) and is divided into 400
(in words: four hundred) shares with a nominal value
(Nennbetrag) of EUR 250.00 out of which 399 (in words: three
hundred ninety-nine) are held by BIG and 1 (in words: one)
is held by Xx Xxxxx Xxxxxx Hillringhaus.
illbruck Sealant Systems N.V. holds 100% (in words: hundred
per cent) of the shares in Colymit Contractors N.V., a
Belgian stock company (Naamloze Vennootschap) registered
with the Commercial Register of Antwerp under company number
0406.409.016.
Colymit Contractors N.V. holds 100% (in words: one hundred
per cent) of the shares in Colymit N.V., a Belgian stock
company (Naamloze Vennootschap) registered with the
commercial register of Antwerpes under BE-number 403 812 285
and under HR-number 134 971. The share capital of Colymit
N.V. amounts to EUR 141,000.00 (in words: Euro one hundred
and forty-one thousand).
Colymit Contractors N.V. holds 100% (in words: one hundred
per cent) of the shares in Caseko Sealants B.V., a Dutch
limited liability company (Besloten Vennootschap) registered
with the commercial register of West-Brabant. The share
capital of Caseko Sealants B.V. amounts to EUR 18,151.21 (in
words: Euro eighteen thousand one hundred fifty-one and Euro
Cent twenty-one).
14
It is intended to merge Colymit Contractors N.V. onto
Colymit N.V. prior to Closing Date.
(vii) illbruck Bau-Technik International GmbH holds 100% (in
words: one hundred per cent) of the shares in illbruck
Sealant Systems Inc., a company incorporated under the laws
of the US-State of Minnesota. illbruck Sealant Systems, Inc.
currently is under liquidation with the liquidation
proceedings presumably completed prior to the Closing Date.
1.2.2 Subsidiaries of illbruck Holdings Ltd
UK-Holding directly or indirectly holds shares or interests in
the following subsidiaries (collectively: the "UK-SUBSIDIARIES";
each of them: "UK-SUBSIDIARY"):
UK-Holding is the sole shareholder of Alfas Group Limited, a
limited liability company duly organized under the laws of
England and Wales, registered with the Companies House, London,
under Company No. 2448031. Alfas Group Limited has an authorised
share capital of GBP 400,000, divided into 120,000 A ordinary
shares of GPB 1 each, 20,000 B ordinary shares of GBP 1 each, and
260,000 ordinary shares of GBP 1 each. The issued share capital
of GBP 380,000.00 (in words: British Pound three hundred eighty
thousand) is divided in 260,000 (in words: two hundred sixty
thousand) ordinary shares each with a nominal value of GBP 1.00
(in words: British Pound one) and 120,000 (in words: hundred and
twenty thousand) shares classified "Ordinary A" each with a
nominal value of GBP 1.00 (in words: British Pound one).
Alfas Group Limited holds shares in the following subsidiaries:
(i) Alfas Group Limited is the sole shareholder of illbruck
Sealant Systems UK Limited, a limited liability company duly
organized under the laws of England and Wales, registered
with the Companies House, London, under Company No. 1583503.
illbruck Sealant Systems UK Limited. The issued share
capital of GBP 100,000.00 (in words: British Pound hundred
thousand) is divided in 100,000 (in words: hundred thousand)
ordinary shares each with a nominal value of GBP 1.00 (in
words: British Pound one).
(ii) Alfas Group Limited is the sole shareholder of Compriband
Limited, a limited liability company duly organized under
the laws of England and Wales, registered with the Companies
House, London, under Company No. 2802593. The authorised and
issued share capital of GBP 600,000.00 (in words: British
Pound six hundred thousand) is divided in 300,000 (in words:
three hundred thousand) shares classified "Ordinary A" each
with a nominal value of GBP 1.00 (in words: British Pound
one) and 300,000 (in words: three hundred thousand) shares
classified "Ordinary B" each with a nominal value of GBP
1.00 (in words: British Pound one).
15
The Companies, the BIG-Subsidiaries and the UK-Subsidiaries, except
for Colymit Contractors N.V., Asbiton AG, Cocon Polska Sp.z.o.o. and
illbruck Sealant Systems Inc., are hereinafter collectively referred
to as the "GROUP COMPANIES" and each of them as "GROUP COMPANY". The
shares of, including the partner's interest in, the Group Companies
are collectively referred to as the "GROUP SHARES".
2 AGREEMENT TO SELL AND TRANSFER THE SHARES AND THE SELLER'S INTELLECTUAL
PROPERTY RIGHTS; AGREEMENT RE ASSIGNMENT OF SELLER'S LOANS; TRANSFER OF
CONTRACTS
2.1 On and subject to the terms of this Agreement, the Seller hereby sells
in personam (schuldrechtlich) the German Shares to the German
Purchaser and the German Purchaser hereby accepts such sale of the
German Shares.
2.2 On and subject to the terms of this Agreement, the Seller hereby sells
in personam (schuldrechtlich) the UK-Shares and the UK Loan as further
specified in SCHEDULE 2.2 to the UK Purchaser and the UK Purchaser
hereby accepts such sale of the UK-Shares and the UK Loan.
2.3 On and subject to the terms of this Agreement, the Seller hereby sells
in personam (schuldrechtlich) the German Loan to the German Purchaser.
The German Purchaser hereby accepts such sale of the German Loan.
2.4 On and subject to the terms of this Agreement, the Seller hereby sells
in personam (schuldrechtlich) the Seller's Intellectual Property
Rights as well as the IT Hardware to the German Purchaser. The German
Purchaser hereby accepts the sale of the Seller's Intellectual
Property Rights as well as the IT Hardware.
2.5 The Seller hereby agrees to transfer in rem (dinglich) the German
Shares, the Seller's Intellectual Property Rights, the IT Hardware and
the German Loan to the German Purchaser, and the German Purchaser
hereby agrees to accept such transfer of the German Shares, the
Seller's Intellectual Property Rights, the IT Hardware and the German
Loan. The transfer of the German Shares, the Seller's Intellectual
Property Rights, the IT Hardware and the German Loan shall be
conditional (aufschiebend bedingt) to
2.5.1 the Closing Conditions having all occurred; and
2.5.2 the Preliminary Purchase Price having been received by the
Seller and the Escrow Agents as specified in Clause 3.3.1.
2.6 The Seller and the UK Purchaser agree that the UK-Shares are not
transferred by virtue of this Agreement but will be transferred with
effect in rem (mit dinglicher Wirkung) at the Closing by means of a
separate stock transfer deed substantially in the form as attached
hereto as SCHEDULE 2.6. The Seller hereby agrees to transfer in rem
(dinglich) the UK Loan to the UK Purchaser and the UK Purchaser hereby
agrees to accept such transfer of the UK Loan. The transfer of the UK
Loan shall be conditioned to Clause 2.5.1 and 2.5.2.
2.7 The Shares, the Seller's Intellectual Property Rights, IT Hardware and
the Seller's Loans shall be sold together with all rights and
obligations attaching to them as at the Closing Date (including,
without limitation, the right to receive all dividends or
distributions declared, made or paid on or after the Closing Date, and
profit
16
generated during the current business year, including the period up to
the Closing Date, and interest, etc.) except as contemplated otherwise
in Clause 13.3.6.
2.8 The Parties are aware that some contracts including, without
limitation thereto, the contracts listed in SCHEDULE 2.8 for the
provision of services, etc. (e.g. lease agreements, hardware and
software licence agreements, etc.) to the Business as it has been
operated in the past have been entered into by the Seller (the
"CONTRACTS"). The Parties hereby acknowledge that the transfer of
those Contracts requires the consent of the respective contractual
partner (the "COUNTERPARTY"). The Parties shall jointly make intensive
endeavours to obtain the consent of third parties if this is necessary
for the transfer of the Contracts and entry into the Contracts as of
Closing or without any undue delay thereafter. Should a Counterparty
to any Contract not consent to the assumption of such Contract by one
of the Purchasers, the Seller shall, upon request of the Purchasers,
continue the respective contract for the benefit and at the expense of
the Group Companies if legally possible.
3 PURCHASE PRICE; PRELIMINARY PURCHASE PRICE AND PURCHASE PRICE ADJUSTMENT
3.1 Purchase Price
The "PURCHASE PRICE" to be paid by Purchasers as joint and several
debtors to the Seller for the Shares, the Seller's Intellectual
Property Rights, the IT Hardware and the Seller's Loans as sold and
purchased hereunder shall be the aggregate of a fixed amount of EUR
115,000,000 (in words: Euro one hundred and fifteen million) ("FIXED
AMOUNT") subject to the adjustments specified in Clause 3.2.
3.2 Purchase Price Adjustments
3.2.1 The Purchase Price shall be decreased by the Debt as defined in
Clause 3.2.1 (i) below and increased by the Cash as defined in
Clause 3.2.1 (ii) below.
(i) "DEBT" shall be the aggregate consolidated nominal amount of
the following financial debt obligations
(Finanzverbindlichkeiten) of the Group Companies as of the
Effective Date:
(a) liabilities from borrowings within the meaning of
Section 266 para 3 C no 1 HGB;
(b) liabilities owed to credit institutions
(Verbindlichkeiten gegenueber Kreditinstituten) within
the meaning of Section 266 para. 3 C no 2 HGB);
(c) liabilities from the acceptance of drawn bills of
exchange (gezogene Wechsel) and the issue of own bills
of exchange (Austellung eigener Wechsel) within the
meaning of Section 266 para. 3 C no. 5 HGB;
(d) the amount payable pursuant to Clause 13.3.6 if BIG is
a debtor thereunder;
(ii) "CASH" shall be the aggregate consolidated amount of the
following items of cash and cash equivalents of the Group
Companies as of the Effective Date:
17
(a) cash, cash in banks and cash equivalents within the
meaning of Section 266 para. 2 (B) (IV) HGB as well as
the consolidated amount of securities (sonstige
Wertpapiere) within the meaning of Section 266 para. 2
lit. (B) (III) (3) HGB.
(b) The amount payable pursuant to Clause 13.3.6 if the
Seller is a debtor thereunder.
3.2.2 The Purchase Price shall be increased or decreased, as the case
may be, on a Euro-for-Euro basis, by any increase or decrease in
the Business' Net Working Capital as of the Closing Date from EUR
33,400,000 (in words: Euro thirty three million and four hundred
thousand). Such calculation is based on and derived from the
Consolidated Effective Date Accounts. As used in this Agreement,
"NET WORKING CAPITAL" shall mean the difference between the
aggregate book values of Trade Accounts Receivable (Forderungen
aus Lieferungen und Leistungen) within the meaning of section 266
paragraph 2 B II. No. 1 HGB, Inventory (Vorraete) within the
meaning of section 266 paragraph 2 B I. No. 1 to 4 HGB, and
Accrued Expenses (Rechnungsabgrenzungsposten) within the meaning
of section 266 paragraph 2 C. HGB, minus the aggregate book value
of Trade Accounts Payable (Verbindlichkeiten aus Lieferungen und
Leistungen) within the meaning of section 266 paragraph 3 C No. 4
HGB and Accrued Income (Rechnungsabgrenzungsposten) within the
meaning of section 266 paragraph 3 D HGB.
3.2.3 The Purchase Price shall be decreased on a Euro-for-Euro basis,
by any decrease in the Group Companies' consolidated Equity as of
the Closing Date from EUR - 10,000,000 (in words: Euro minus ten
million). Such a calculation shall be based on and derived from
the Consolidated Effective Date Accounts. As used in this
Agreement, "EQUITY" shall have the meaning as given in Section
266 (3) A of the HGB. For the avoidance of doubt, it is hereby
stated that if the Equity is negative (i.e. a capital deficit
(nicht durch Eigenkapital gedeckter Fehlbetrag) within the
meaning of section 268 para 3 of the HGB), a higher capital
deficit shall lead to a decrease and a lower capital deficit
shall lead to an increase in the Purchase Price Adjustment.
3.2.4 The Parties hereby agree that each event is to be taken into
consideration only once and in the following sequence: (1)
Purchase Price Adjustment and (2) Guarantees.
3.3 Preliminary Purchase Price
3.3.1 The Seller shall at least 10 (in words: ten) Business Days prior
to the Closing Date deliver to the Purchasers an estimate,
calculated in good faith, of the (1) Debt and Cash, (2) the
Seller's Loans, (3) Net Working Capital, and (4) the Group
Companies' consolidated Equity existing on the Effective Date
(the "ESTIMATED EFFECTIVE DATE STATEMENT"). The Fixed Amount
increased or decreased by the Debt, the Cash, the adjustment
amount of Net Working Capital and the adjustment amount of the
Group Companies' consolidated Equity as shown in the Estimated
Effective Date Statement, shall be the preliminary purchase price
to be paid at Closing
18
("PRELIMINARY PURCHASE PRICE"). On the Closing Date, the
Preliminary Purchase Price becomes due and payable and shall be
credited on the same day, as follows:
(a) 85% of the Preliminary Purchase Price shall be paid into the
Seller's Account;
(b) 15% of the Preliminary Purchase Price shall be paid into the
Escrow Account (the "ESCROW AMOUNT").
3.3.2 If on the basis of the Effective Date Statement, the Purchase
Price is higher than the Preliminary Purchase Price, the
Purchasers shall pay to the Seller an amount equal to the amount
by which the Purchase Price exceeds the Preliminary Purchase
Price. If on the basis of the Effective Date Statement the
Preliminary Purchase Price is higher than the Purchase Price, the
Seller shall pay to the Purchasers an amount equal to the amount
by which the Preliminary Purchase Price exceeds the Purchase
Price. Any such amount to be paid by either the Purchasers or the
Seller ("PURCHASE PRICE ADJUSTMENT") shall be paid within 10 (in
words: ten) Business Days after the Effective Date Statement has
become final and binding upon the Parties in accordance with
Clause 4.3 to the Seller's Account or the Purchasers' Account as
the case may be. Any Purchase Price Adjustment shall bear
interest as from Effective Date until the date of the actual
payment at a rate per annum of 4% (in words: four per cent) above
the Base Interest Rate. Interest shall be calculated on the basis
of actual days elapsed and a calendar year with 360 (in words:
three hundred sixty) days. Any Purchase Price Adjustment due by
Seller shall be paid in one amount to Purchasers; the
distribution between the Purchasers shall be dealt with
internally by them.
4 EFFECTIVE DATE STATEMENT
4.1 Preparation of the Effective Date Statement
The Purchase Price shall be bindingly determined in the Effective Date
Statement.
The "EFFECTIVE DATE STATEMENT" shall show (1) the Debt and the Cash
(2) the Seller's Loans, (3) the Net Working Capital, and (4) the Group
Companies' consolidated Equity, each existing as per the Effective
Date, as well as any Purchase Price Adjustment resulting there from.
The Effective Date Statement shall be prepared by the Seller by
applying the figures of the Consolidated Effective Date Accounts. The
Consolidated Effective Date Accounts shall be prepared by the Seller
in accordance with German GAAP, whereby the virtual character of the
consolidation has to be taken into account, using the accounting
principles used in preparing the virtual consolidated accounts of the
Business as of 31 December 2004. The virtual consolidated accounts of
the Business as of 31 December 2004 were based on the Consolidated
Audited Accounts. In the event of discrepancies between German GAAP
and the principles applied in the past, German GAAP shall prevail
taking the virtual character of the consolidation into account. The
aforementioned determination of the Consolidated Effective Date
Accounts shall include the following joint understanding of the
Parties,
19
which shall be binding for the Seller, Purchasers and Neutral Auditor,
even if they deviate from the principles set forth in this third
sub-paragraph of Clause 4.1.
4.1.1 The Seller's Loans shall be accounted for at nominal value.
4.1.2 No reserve shall be made for the costs mentioned in Clause
13.3.7
The Purchasers shall after the Closing Date instruct the management of
each Group Company to effectively assist the Seller in the preparation
of the Consolidated Effective Date Accounts and the Effective Date
Statement and give the Seller and the Seller's Auditor access to any
information reasonably requested by the Seller for this purpose.
4.2 Delivery of Effective Date Statement; Work Papers
The Effective Date Statement prepared by the Seller shall be delivered
by the Seller to the Purchasers no later than 60 (in words: sixty)
Business Days after the Closing Date. The Purchasers and its
representatives shall have the right to examine and make copies of the
work papers and other documents generated or reviewed in connection
with the preparation of the Consolidated Effective Date Accounts and
the Effective Date Statements.
4.3 Binding Effect; Revised Effective Date Statement
The determination of (1) the Debt and Cash, (2) Seller's Loans, (3)
the Net Working Capital, and (4) the Group Companies consolidated
Equity shall be based on the Effective Date Statement to the extent
that the Purchasers does not within 30 (in words: thirty) Business
Days after the receipt of the Effective Date Statement provide the
Seller with a written report asserting that the Effective Date
Statement received from the Seller does not meet the provisions of
this Agreement by way of stating specific objections to that effect.
In such event a revised Effective Date Statement shall be prepared by
the Purchasers and submitted to the Seller within a further 30 (in
words: thirty)-Business Day period which shall take into account the
changes that are necessary in the Purchasers' view ("REVISED EFFECTIVE
DATE STATEMENT"). At Seller's request Seller's Auditor shall receive
all necessary assistance and shall be given access to the management
of the Group Companies and to all documentation relevant for reviewing
the Revised Effective Date Statement, including the working papers of
the Purchasers. If no written objections are raised by the Seller
within 30 (in words: thirty) Business Days following the delivery of
the Revised Effective Date Statement by the Purchasers, then the
Revised Effective Date Statement shall be final and binding on the
Parties and the determination of (1) the Debt and Cash, (2) the
Seller's Loans, (3) the Net Working Capital, and (4) the Group
Companies consolidated Equity, each existing as per the Effective
Date, as well as any Purchase Price Adjustment resulting there from,
shall be based on the Revised Effective Date Statement.
4.4 Arbitration Proceedings
If, after the Seller having raised in time and due form its objections
against the Revised Effective Date Statement ("OBJECTIONS"), the
Parties cannot agree on the changes to the Revised Effective Date
Statement within 30 (in words: thirty) Business Days following the
delivery of the Objections, each Party shall be entitled to request
the Institut der Wirtschaftspruefer in Deutschland e.V., Duesseldorf,
to appoint an auditor to act as an arbitrator (Schiedsgutachter)
("NEUTRAL AUDITOR") to
20
determine the correct amount of the Debt, the Cash, the Seller's
Loans, the Net Working Capital and the Group Companies' consolidated
Equity as at the Effective Date, if and to the extent such positions
are in dispute between the Parties. The Neutral Auditor shall decide
in accordance with the principles set out in Clause 4.1 on the issues
in dispute within 30 (in words: thirty) Business Days after being
appointed. The Neutral Auditor shall give the Parties adequate
opportunity to present their views in writing and at a hearing or
hearings to be held in the presence of the Parties and their advisors.
The Neutral Auditor shall give reasons for its decision and on all
issues, which are in dispute between the Parties. The Effective Date
Statement as determined by the Neutral Auditor shall be final and
binding (having the effect of a Schiedsgutachten within the meaning of
Sections 317 et seq. BGB).
4.5 Costs of Reviews
The direct, actual costs of the preparation of the Effective Date
Statement as well as of the Consolidated Effective Date Accounts shall
be borne by the Purchasers and all costs arising out of or in
connection with the review by the Purchasers shall be borne by the
Purchasers. In the case of arbitration proceedings referred to in
Clause 4.4 the Neutral Auditor shall decide upon the allocation of its
costs and expenses in accordance with Sections 91 et seq. ZPO.
5 TERMINATION AND CLEARING OF AGREEMENTS, ETC. AMONG RELATED COMPANIES
5.1 Termination
The Seller shall procure that with effect as of the Closing Date all
agreements, liabilities, contingent liabilities, etc. between the
Seller's Side, on the one hand and any of the Group Companies on the
other hand (such agreements, liabilities, contingent liabilities, etc.
listed - without limitation thereto - in SCHEDULE 5.1), except for
Seller's Loans, even though listed in SCHEDULE 5.1 and the amount
payable pursuant to Clause 13.3.6, are terminated in such a way that
no party to any of those agreements has a claim or a liability under
any of those agreements.
5.2 Assignment and Assumption
The Seller shall procure that prior to, or on the Closing Date
5.2.1 the outstanding balances (including interest accrued thereon)
payable to the Group Companies by the Seller's Side other than
the Group Companies ("NON-SBU-ENTITIES" or each individually the
"NON-SBU-ENTITY") under the intercompany financing agreements
including the respective loans listed in SCHEDULE 5.2.1 or for
goods delivered or for services provided or under any other
agreement, each of the outstanding balances existing as per the
Closing Date (herein "SELLER'S FINANCING PAYABLES") shall be
assumed by the Seller with full release of the respective
Non-SBU-Entity (befreiende Schulduebernahme), providing in each
case the consent of the respective Group Company to such change
of debtor (Zustimmung zum Schuldnerwechsel); and
5.2.2 the outstanding balances (including interest accrued thereon)
payable by the Group Companies to the Seller's Side under the
inter-company financing agreements including the respective loans
listed in
21
SCHEDULE 5.2.1 or for goods delivered or services provided or
under any other agreement each of the outstanding balances
existing on the Effective Date (herein "SELLER'S FINANCING
RECEIVABLES") shall be assigned (abgetreten) by the Seller's Side
to the Seller; and
5.2.3 the outstanding Seller's Financing Receivables existing as per
the Effective Date payable by any of the Group Companies other
than BIG to any Non-SBU-Entity shall be assumed by BIG for due
consideration with full release of the respective Group Company
(befreiende Schulduebernahme) providing in each case the consent
of the respective Non-SBU-Entity other than the Seller to such
change of debtor (Zustimmung zum Schuldnerwechsel); and
5.2.4 the outstanding Seller' Financing Payables existing as per the
Effective Date payable to any of the Group Companies other than
BIG by any Non-SBU-Entity shall be assigned by the respective
Group Company to BIG.
5.3 Offsetting
The Seller's Financing Payables as well as any outstanding balance
payable by the Seller to BIG shall be offset (aufgerechnet) against
the Seller's Financing Receivables as well as any outstanding payable
by BIG to the Seller, each as of Closing Date (herein "OFFSETTING").
Seller shall procure that the respective debtor and creditor agree
upon the balance being due at Closing Date.
Claims resulting from the profit-and-loss pooling agreement existing
between Seller and BIG shall be excluded from the offsetting. The
party liable for payment of such claim under the profit-and-loss
pooling agreement between Seller and BIG shall pay the due amount
without undue delay as soon as the Accounts 2005 or the Revised
Accounts 2005, as applicable, shall be final and binding on the
Parties. Should BIG be liable for such claim, Purchasers will procure
that the obligation of such payment will be fulfilled by BIG as
provided for in the prior sentence.
The Offsetting shall not result in any adjustment, positive or
negative, to any element included in the calculation of the Net
Working Capital or the Equity.
The amount owed by BIG to the Seller once the Offsetting has been
consummated shall be referred to as the "GERMAN LOAN".
5.4 Clauses 5.2 and 5.3 shall not apply to the UK Loan.
6 RIGHTS AND COVENANTS BETWEEN SIGNING AND CLOSING
6.1 Merger Control Proceedings
6.1.1 The Purchasers shall ensure that any filings to be made with the
Federal Cartel Office (Bundeskartellamt; "COMPETENT AUTHORITIES")
will be made at the latest within 10 (in words: ten) Business
Days after the Signing Date, unless the applicable laws and
regulations require an earlier filing. Such filings shall be made
by the Purchasers also on behalf of the Seller, provided,
however, that the contents of such filings shall require prior
written approval of the Seller, which shall not unreasonably be
withheld. Any filings with the Competent Authorities shall be
provided to the Seller at least 3 (in words: three) Business Days
prior to filing.
22
6.1.2 The Parties shall closely co-operate in the preparation of such
filings. Each Party shall without undue delay provide the other
Parties with copies of any correspondence with the Competent
Authorities and with copies of any written statement, order or
decision of the Competent Authorities. The Parties shall closely
co-operate in any discussions and negotiations with the Competent
Authorities with the objective to obtain clearance for the
transaction contemplated by this Agreement in the shortest time
period possible.
6.1.3 The Purchasers may withdraw (zuruecknehmen) filings with the
Competent Authorities or agree with them on the extension of any
examination period only with the express prior written consent of
the Seller.
6.1.4 Commercially or otherwise sensitive information on the Seller or
any of the Seller's Affiliates other than the Group Companies -
required for the merger control proceedings or other statutory or
regulatory requirements ("SENSITIVE INFORMATION") shall only be
provided by the Seller to the Purchasers' external advisors
directly involved in such proceedings, but not to the Purchasers
themselves. The Seller may refuse to provide Sensitive
Information if the respective external advisors do not confirm in
writing that they will keep Sensitive Information confidential
and, in particular, that they will not disclose Sensitive
Information vis-a-vis the Purchasers. This Clause 6.1.4 shall
apply mutatis mutandis to commercially or otherwise sensitive
information on the Purchasers or any of the Purchasers'
Affiliates.
6.1.5 If the Competent Authorities have not cleared the transaction
contemplated by this Agreement within 4 (in words: four) months
from the date of this Agreement, either Party shall be entitled
(in addition to and without prejudice to all other rights or
remedies available, including the right to claim damages) to
terminate (zuruecktreten) this Agreement without liability on its
part. After a termination in accordance with this Clause 6.1.5,
this Agreement shall cease to have force and effect and shall not
create any binding obligation between the Contractual Parties
except that Clauses 12, 15 and 16 shall remain in force and
effect.
6.2 Pre-Closing Rights and Covenants of the Seller
6.2.1 Between the Signing Date and the Closing Date, the Seller shall
procure, to the extent permissible under applicable law, that
(i) the Group Companies conduct their business operations in the
ordinary course of business and substantially in the same
manner as before;
(ii) any investment or business decision neither contained in the
respective Group Company's investment plan nor otherwise to
be regarded as falling within the ordinary course of
business which results (A) in annual payment obligations or
direct expenditures of more than EUR 250,000 (in words: Euro
two hundred and fifty thousand), or (B), in the case of the
signing of a contract, in annual payment obligations of
either contractual party of more than EUR 150,000 (in words:
Euro one hundred and fifty thousand) and a duration of more
than 1 (in words: one) year (each of these
23
investments or business decisions hereinafter referred to as
"INVESTMENT") shall only be taken/signed after the
Purchasers have approved such Investment. If the Group
Companies in relation to such Investment act in accordance
with the approval or non-approval of the Purchasers, this
shall neither directly nor indirectly lead to any liability
of the Seller vis-a-vis the Purchasers under this Agreement,
in particular on the basis of Clauses 8 to 10, unless the
Seller or the Group Companies retained information available
to it/them required for the assessment of the adverse
consequences of such Investment;
(iii) upon Purchasers' request, the management, employees and
advisors of the Purchasers shall get reasonable access to
information on the Group Companies, in particular on the
development of the Business in 2005, provided that the
respective persons are either bound by the Confidentiality
Agreement or subject to professional secrecy obligations.
(iv) the Purchasers are immediately informed of any change in the
Business that has a Materially Adverse Effect. "MATERIALLY
ADVERSE EFFECT" shall mean (A) any incident that leads, on
the basis of the relevant business plan, to a loss on the
part of any of the Group Companies in excess of EUR 250,000
(in words: Euro two hundred and fifty thousand), or (B) the
termination of a contract entered into by any of the Group
Companies with annual payment obligations of either
contractual party in excess of EUR 150,000 (in words: Euro
one hundred and fifty thousand);
(v) upon written request by the UK Purchaser, the Seller shall
procure that illbruck Sealant Systems UK Ltd. exercises its
termination right regarding its lease agreements for the
Coalville real estate with effect as of 31 January 2006,
provided that such written request is received by the Seller
by 28 July 2005 at the latest.
6.2.2 Until the Effective Date the Seller shall have the right to
procure that the Group Companies assign to him the claims
(Forderungen) listed in SCHEDULE 6.2.2.
6.2.3 The Seller shall use its reasonable best efforts (nach Kraeften
bemuhen) to obtain all Third Party approvals, consents and
authorisations which are necessary for the continuation by any of
the Group Companies, without breach or default as a result of
this Agreement, of all contracts containing a change of control
clause.
6.2.4 Seller shall procure that the profit and loss pooling agreement
(Ergebnisabfuehrungsvertrag) between Seller and BIG shall be
terminated as of Effective Date.
6.2.5 Seller shall inform the German Purchaser immediately after
having become aware of any breach of Seller's Guarantees between
the Signing Date and the Closing Date and start the remediation
of such breach irrespective of Purchasers' rights pursuant to
Clause 7.2.4.
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7 CLOSING; CLOSING CONDITIONS
7.1 Closing; Closing Date
Unless the Parties agree otherwise, the consummation of the
transaction contemplated in this Agreement ("CLOSING") shall take
place at 2.00 pm (CET) at the offices of Linklaters Oppenhoff &
Xxxxxxx, Xxxxxxxxxxxxxxxxxx 00, 00000 Xxxxxx and when the Closing
Conditions set forth in Clause 7.2 are satisfied (or are duly waived
by mutual agreement of the Parties) on the last Business Day of the
respective calendar month, provided that, in the event the amendments
of the respective business year (Geschaeftsjahr) of the Group
Companies listed in SCHEDULE 7.1 to commence on the Effective Date
have not been approved by or registered with effect with the competent
authorities (in particular the Tax Authorities and the Commercial
Register), the Seller may postpone the Closing by providing the
Purchasers with at least 2 (in words: two) Business Days written
notice prior to the otherwise scheduled Closing of such non-approval
or non-registration. In such case, Closing shall occur on the last
Business Day of the calendar month in which the Seller provides the
Purchasers with at least 2 (in words: two) Business Days written
notice prior to this last Business Day that the change of the business
year has been registered or will be registered prior to Closing.
The date on which the Closing shall occur in accordance with this
Clause 7.1 shall herein be referred to as the "CLOSING DATE".
7.2 Closing Conditions
The consummation of the transaction contemplated in this Agreement
shall be subject to the satisfaction of the following conditions to
Closing ("CLOSING CONDITIONS", each a "CLOSING CONDITION"):
7.2.1 Dresdner Bank AG and Sparkasse Leverkusen have confirmed in
writing that the pledge of the shares in illbruck Holdings Ltd.
has been terminated and that they no longer have any rights in
the shares in illbuck Holdings Ltd and the Dresdner Bank AG has
further released BIG and illbruck Bau-Technik GmbH from the
contingencies listed under No. 7 and 8 in Schedule 8.1.10.(i).
7.2.2 Merger control clearance by the Competent Authorities has been
obtained or is deemed to have been obtained pursuant to
applicable statutory law.
7.2.3 The consultation/information of the French works Council has
taken place.
7.2.4 If a Material Adverse Change shall have occurred, the Seller
shall have accepted the Purchaser's Modification Proposal.
(i) "MATERIAL ADVERSE CHANGE" shall mean the occurrence of any
one or more of the following after the Signing Date and
prior to the Closing Date:
(a) any damage to or destruction of assets of any of the
Group Companies, irrespective of cause, which assets
have a value of EURO 5 million (in words: Euro five
million) or more;
(b) except for tax audits (Betriebspruefungen) the
commencement of any governmental investigation into the
business of any
25
one or more of the Group Companies which, if adversely
determined, can reasonably be expected to result in a
financial cost or other adverse financial impact to the
Group Companies of EUR 5 million (in words: Euro five
million) or more;
(c) the occurrence of any event which if adversely
determined can reasonably be expected to expose one or
more of the Group Companies to an Environmental Claim
of EUR 5 million (in words: Euro five million) or more;
or
(d) if, at the Closing Date, any four or more of the
following six Key Employees are no longer employed by
the Group Companies for any reason: Xxxxxx Xxxxxxxx,
Xxxxxx Xxxxx, Xx. Xxxxxxx Xxxx, Xxxxx Xxxxxx
Hillringhaus, Xxxx van Gasteren and Xxxxxxxx Xxxxxx.
(ii) Upon the occurrence of Material Adverse Change, the
Purchasers shall be obligated, at their election, to: (A)
consummate the transaction contemplated herein on the terms
set forth in this Agreement or (B) propose to the Seller
reasonable adjustments to the terms of this Agreement,
including adjustments to the Purchase Price, generally
designed in so far as is practicable, to put the Purchasers
in the position they would have been in had the Material
Adverse Change not occurred (a "MODIFICATION PROPOSAL"). If
the Seller shall not have accepted the Purchaser's
Modification Proposal within 10 days of the date thereof,
the Purchasers may terminate this Agreement without any
liability to the Seller whatsoever.
7.3 Obligations with Respect to the Closing Conditions
The Parties undertake to use their best efforts and to cause the
Closing Conditions to be satisfied as soon as possible. With regard to
the merger control clearance, the obligations of the Seller and the
Purchasers are more specifically set out in Clause 6.1 above. The
Parties shall inform each other in writing within a period of 2 (in
words: two) Business Days of the fact that a Closing Condition has
been satisfied, by which act the due fulfilment of this Closing
Condition shall be deemed to have been satisfied.
7.4 Actions on Closing
7.4.1 On Closing, the Seller shall deliver or make available to the
Purchasers evidence that the person(s) acting in the name and on
behalf of the Seller is/are authorised to execute this Agreement.
7.4.2 On Closing, each Purchaser shall deliver or make available to
the Seller evidence that the person(s) acting in the name and on
behalf of the respective Purchaser is/are authorised to execute
this Agreement.
7.4.3 On Closing, after the performance of the Seller's obligations
set forth in Clause 7.4.1 the Purchasers shall pay the
Preliminary Purchase Price to the Seller in the way specified in
the last sentence of Clause 3.3.1.
26
7.4.4 On Closing, the Seller shall deliver to the Purchasers a
statement substantially in the form set out in SCHEDULE 7.4.4,
stating that all agreements, etc. (except for Seller's Loans) to
be terminated pursuant to Clause 5 have been terminated.
7.4.5 On Closing, simultaneously (Zug um Zug) with the payment of the
Preliminary Purchase Price the Seller shall transfer the
UK-Shares to the UK Purchaser by way of a separate stock transfer
deed as set out in Clause 2.6 and, further, the IP-Agreement as
described in greater detail in Clause 13.4 shall enter into
force.
7.4.6 On Closing, the Seller and the Purchasers shall sign a
cross-receipt, substantially in the form as set forth in SCHEDULE
7.4.6, evidencing (I) the fulfilment of the Closing Conditions
set forth in Clause 7.1, and (II) the receipt by the Seller of
the Preliminary Purchase Price.
7.4.7 Once the cross-receipt has been signed pursuant to Clause 7.4.6,
the agreement in the form set forth in SCHEDULE 7.4.7 (the
"LEVERKUSEN LEASE AGREEMENT") shall enter into force.
7.5 Consequences of Non-Compliance/Failure of Closing
7.5.1 Rights in the Case of Non-Compliance
If the Seller or the Purchasers fail to comply with any
obligation set forth in this Clause 7, the Purchasers, in the
case of non-compliance by the Seller, or the Seller, in the case
of non-compliance by any of the Purchasers, shall be entitled (in
addition to and without prejudice to all other rights or remedies
available, including the right to claim damages) by written
notice to either the Seller or the Purchasers as the case may be:
(i) to fix a new date for Closing (not being more than 30 (in
words: thirty) Business Days after the initial Closing Date)
in which case the provisions of this Clause 7, in particular
Clause 7.5.1(ii), shall apply to Closing as so deferred but
provided such deferral may only occur once; or
(ii) to terminate (zuruecktreten) this Agreement without
liability on its part. After a termination in accordance
with this Clause 7.5.1, this Agreement shall cease to have
force and effect and shall not create any binding obligation
between the Contractual Parties except that Clauses 12, 15
and 16 shall remain in force and effect.
7.5.2 Right in the Case of Failure of Closing
If the Closing has not occurred within a period of 5 (in words:
five) months commencing with the Signing Date, either Party may
terminate (zuruecktreten) this Agreement. Any termination under
this Clause 7.5.2 shall be valid only if the recipient Party has
received such written notice of termination prior to the date on
which the relevant Closing Condition has been satisfied or
waived. The last sentence of Clause 7.5.1(ii) shall apply mutatis
mutandis.
8 SELLER'S GUARANTEES; SELLER'S BEST KNOWLEDGE
27
The Seller hereby guarantees to the Purchasers by way of an independent
promise of guarantee pursuant to Section 311 para. 1 BGB (selbstaendiges
Garantieversprechen im Sinne des Section 311 Abs. 1 BGB) within the scope
and subject to the requirements and limitations provided in Clause 9 hereof
or otherwise in this Agreement that the statements set forth in Clause 8.1
are complete and correct as of the Signing Date and on the Closing Date
(collectively: "SELLER'S GUARANTEES"). The Seller's Guarantees are not
granted, and shall not be qualified and construed as, quality guarantees in
relation to the object of the purchase (Garantien fuer die Beschaffenheit
der Sache) within the meaning of Sections 443, 444 2nd alternative BGB,
respectively, that Section 444 2nd alternative BGB shall not and does not
apply to the Seller's Guarantees.
8.1 Seller's Guarantees
8.1.1 Corporate Issues and Authority of the Seller
(i) The statements in Clause 1 hereof regarding the Group
Companies are complete and correct. The Group Companies have
been duly established and validly exist under the laws of
their respective jurisdiction.
(ii) The Group Shares have been validly issued, are fully paid
in, either in cash or in kind, have not been repaid and are
free from any in rem encumbrances (dingliche Rechte), they
are not subject to additional unilateral calls for capital
by the issuer (Nachschusspflichten) and there are no
pre-emptive rights, options or other direct or indirect
rights of Third Parties to acquire any of the Group Shares,
in each case except under statutory law or under the
articles of association of the respective Group Company or
except listed in SCHEDULE 8.1.1(II); the pledge of shares
listed under no. 1 in SCHEDULE 8.1.1(II) shall be terminated
prior to the Closing Date.
(iii) No insolvency proceedings concerning any of the Group
Companies have been applied for or been opened and, to the
Seller's Best Knowledge, no circumstances exist which would
require an application for any insolvency proceedings.
(iv) The Seller is entitled to freely dispose of the Shares
without such a disposal infringing any rights of a Third
Party. The only Third Party consents required for the
Signing and consummation of this Agreement are set forth in
Clause 7.2.
(v) The execution and performance by the Seller of this
Agreement and the consummation of the transaction
contemplated hereby are within the powers of the Seller and
have been duly authorized by all necessary company action on
part of the Seller.
(vi) The execution and performance by the Seller of this
Agreement and the consummation of the transaction
contemplated herein do not violate the Articles of
Association of the Seller or any applicable law, regulation,
judgment or injunction binding on the Seller, and there is
no action, lawsuit, investigation or proceeding pending
(rechtshaengig) against, or, to the Seller's Best Knowledge,
threatened in writing against, the Seller before any court,
arbitration
28
panel or governmental authority which challenges or seeks to
prevent the transaction contemplated herein.
8.1.2 Tax Filing and Payment; Financial Statements
(i) The Companies have duly and timely made all Tax filings due,
and have paid all Taxes due and payable.
(ii) The Seller has delivered to the Purchaser the unaudited
consolidated balance sheets, income statements, and cash
flow statements of the Group Companies at December 31, 2004
and May 31, 2005 (the "Financial Statements"). The Financial
Statements have been prepared from the books and records of
the Group Companies and present a true and fair view of the
financial position of the Business, and the results of
operations and cash flows of the Business at the respective
dates and for the respective periods then ended in
accordance with German GAAP, consistently applied.
(iii) All shares held by BIG in Group Companies having the legal
form of a corporation, except for the shares in Illbruck
BauTechnik GmbH, acquired by BIG in course of the conversion
of Illbruck Bau Technik GmbH & Co. KG into the legal form of
a GmbH, as of the Effective Date are not subject to capital
gains taxation pursuant to Section 8b paragraph 4 of the
German Corporation Income Tax Act
(Koerperschaftsteuergesetz).
(iv) As at the Effective Date, BIG is entitled to a Corporation
Income Tax Refund Potential (Koerperschaftsteuerguthaben)
within the meaning of Section 37 of the Corporation Income
Tax Act (Koerperschaftsteuergesetz) equal to or higher than
3/7 (in words: three sevenths) of the positive portion of
the retained earnings within the meaning of Section 30
paragraph 2 no. 2 of the Corporation Income Tax Act in the
version of Article 4 of the Act dated 14 July 2000 (herein
referred to as EK02).
8.1.3 Real Property
(i) SCHEDULE 8.1.3(I)-1 contains a list of real property owned
by the Group Companies and rights equivalent to real
property (grundstuecksgleiche Rechte), including, but not
limited to, hereditary building rights ("OWNED REAL
PROPERTY"). SCHEDULE 8.1.3(I)-2 contains a set of copies of
recent excerpts of the land registers (Grundbuecher) and
similar registers for all Owned Real Property, evidencing
all land charges (Grundpfandrechte) or other encumbrances
(beschraenkte dingliche Rechte) which require registration
in such register (each an "ENCUMBRANCE"). To the Seller's
Best Knowledge, there are no applications for registration
pending, nor are there any Third Party rights which are not
registered but which ought to be registered. There are no
pre-emptive rights, options or other direct or indirect
rights of Third Parties to acquire any of the Owned Real
Property, whether in whole or in part, however, in each case
except under statutory law
29
or except listed in SCHEDULE 8.1.3(I)-1 or shown in SCHEDULE
8.1.3(I)-2.
(ii) SCHEDULE 8.1.3(II) contains a complete and correct list of
real property leased or rented by the Group Companies, in
each case indicating (1) whether as lessee or as lessor, (2)
the respective lessee's lease payment obligations under the
lease agreements, (3) the duration of each lease, (4) the
notice periods, and (5) whether or not a renewal option (if
any) needs to be exercised prior to 31 December 2005 in
order to extend the lease (the "LEASED REAL PROPERTY",
together with the Owned Real Property the "REAL PROPERTY").
Each lease listed in SCHEDULE 8.1.3(II) is valid and binding
and in full force and effect and no party thereto is in
default therewith.
(iii) All of the buildings, structures, other improvements and
fixtures of the Real Property conform in all material
respects to applicable health, fire, safety, zoning and
building laws and ordinances and administrative regulations,
provided, however, that any non-compliance shall be regarded
irrelevant for the purpose of this Clause 8.1.3(iii) unless
such non-compliance has detrimental financial effects on the
respective Group Company exceeding EUR 10,000 (in words:
Euro ten thousand) in the individual case of non-compliance
or, in the case of a series of non-compliances arising from
substantially identical facts or circumstances, exceeding
EUR 100,000 (in words: Euro one hundred thousand) in the
aggregate.
(iv) All of the buildings, structures, other improvements and
fixtures of the Owned Real Property are in good working
condition and repair, normal wear and tear excepted, except
as provided for in SCHEDULE 8.1.3(IV).
(v) No subsidies have been received with regard to the Owned
Real Property since its acquisition by any of the Group
Companies, and the Owned Real Property is not subject to
monument protection. To the Seller's Best Knowledge this
applies mutatis mutandis to the Leased Real Property.
(vi) There are no unfulfilled requirements of supply companies
(electricity, gas, water and waste water or the disposal of
rubbish) addressed in writing or unfulfilled requirements of
a public-law nature imposed by the competent authorities in
writing regarding the present condition of the Owned Real
Property and, to the Seller's Best Knowledge, regarding the
present condition of the Leased Real Property.
(vii) All development measures under the pertinent construction
codes, the building planning and permit ordinances and
similar laws of the respective countries
(Erschliessungsmassnahmen) with regard to the Owned Real
Property have been fully paid for.
30
(viii) Each Real Property can be accessed by vehicles typically
used for the Business at least to the same extent this was
possible during the last 12 (in words: twelve) months prior
to the Signing Date; to the Seller's Best Knowledge there
are no indications that this will change after the Signing
Date.
8.1.4 Material Assets, Information Technology, Material Contracts
(i) Each of the Group Companies owns, or holds lawful possession
of, all material assets which are necessary to carry on the
Business in substantially the same manner as it has been
carried on in the 12 (in words: twelve) months prior to the
Signing Date ("MATERIAL ASSETS"). Except as set forth in
Schedule 8.1.4 (i), all Material Assets are in working
condition, in a good state of preservation corresponding to
normal use, have been properly maintained and - insofar as
is applicable - the necessary construction engineering and
safety inspections have always been carried out with regard
thereto.
(ii) Each of the Group Companies is in lawful possession of or
has a valid usage licence for, or has acquired lawful
ownership of all IT necessary to carry on the Business in
substantially the same manner in which it was carried on in
the 12 (in words: twelve) months prior to the Signing Date.
(iii) The contracts listed in SCHEDULE 8.1.4(III) constitute all
Material Contracts. Each of the Material Contracts is valid
and binding and in full force and effect and no party
thereto is in default therewith.
(iv) The inventory specified in accordance with Section 266 B.I.
HGB of the Group Companies which will be shown in the
Consolidated Effective Date Account ("INVENTORY") will have
been acquired in the ordinary course of business. The
Inventory is usable and saleable in the ordinary course of
business.
8.1.5 Intellectual Property Rights
(i) The patents, design patents, trademarks, trade names,
utility models, copy rights, internet domain names,
unpatented inventions, recipes and respective applications
which are listed in SCHEDULE 8.1.5(I), together with
formulae, processes, designs and know-how used by the Group
Companies in the last 36 (in words: thirty-six) months prior
to the Signing Date, constitute the intellectual property
rights of the Business ("INTELLECTUAL PROPERTY RIGHTS"). The
Intellectual Property Rights are lawfully owned or have been
applied for by the Group Companies or will be transferred
lawfully as of the Closing Date to the German Purchaser.
There are no licence agreements with Third Parties for the
licensing of any of the Intellectual Property Rights.
(ii) Except as set out in SCHEDULE 8.1.5(II)-(1), the
Intellectual Property Rights are not subject to any pending
(rechtshaengig) proceedings for opposition, cancellation,
revocation or rectification which may
31
negatively affect the operation of the Business taken as a
whole and, to the Seller's Best Knowledge, no such
proceedings are threatened in writing. To the Seller's Best
Knowledge, the Intellectual Property Rights are neither
being materially infringed by Third Parties nor do they
materially infringe intellectual property rights of Third
Parties, except for the Intellectual Property Rights listed
in SCHEDULE 8.1.5(II)-(2) in relation to which conflicts may
arise.
(iii) Except for employee inventions, none of the past or present
employees, officers or directors of any of the Group
Companies has any rights in any of the Intellectual Property
Rights, nor has any person made in writing any claim to any
of the Intellectual Property Rights.
(iv) SCHEDULE 8.1.5(IV) contains a complete list of all
intellectual property rights licensed by one or more of the
Group Companies from Third Parties ("LICENSED INTELLECTUAL
PROPERTY RIGHTS"), stating (1) the parties to such licence
agreement, (2) its commencement date and (3) its expiry
date. Each of the licence agreements listed in SCHEDULE
8.1.5(IV) is valid and binding and in full force and effect
and no party thereto is in default therewith.
(v) Together with the Licensed Intellectual Property Rights, the
Intellectual Property Rights comprise all intellectual
property used, held or necessary to operate the Business as
it is currently conducted and was conducted in the last 12
(in words: twelve) months prior to the Signing Date.
8.1.6 Employment
(i) There are no collective bargaining agreements
(Tarifvertraege) by which any of the Group Companies is
bound.
(ii) SCHEDULE 8.1.6(II) contains the following information with
regard to the Relevant Employees:
- surname,
- first name,
- date of joining,
- working full-time or part-time,
- forecast annual salary 2005 (without commission) based
on the salary in the first 5 months of 2005,
- bonus, commission sums received 2004,
- bonus, commission entitlements 2005,
- travel costs flat-rate monthly,
- disabled/maternity leave,
- pre-retirement part-time work (Altersteilzeit),
- member of Works Council,
- company car,
- notice period,
- pension entitlement;
(iii) There are no other labour disputes pending (rechtshaengig)
except as set forth in SCHEDULE 8.1.6(III).
32
(iv) There are no other pension plans except as set forth in
SCHEDULE 8.1.6(II).
(v) The Group Companies have claimed the rights in all notified
employee inventions within the time limits provided for by
law. All payments due under the respective employee
invention laws for used inventions have been made.
(vi) None of the Group Companies maintains a share option scheme
whereby an employee of any of the Group Companies is
entitled to acquire shares in any of the Group Companies,
nor has any current or former employee of any of the Group
Companies acquired any not yet fully satisfied claim under
such a share option scheme.
(vii) Except set forth otherwise in SCHEDULE 8.1.6(VII), no
current Key Employee of any of the Group Companies has
notified the Seller or the respective Group Company (being
the employer) in writing of his or her intention to
terminate his/her employment relationship, and the Seller
has no reason to believe that any Key Employee wishes to
terminate his/her employment relationship prematurely. For
the purposes of Clauses 8.1.6(vii) and 8.1.6(viii), "KEY
EMPLOYEE" shall mean any person listed in SCHEDULE
8.1.6(VII).
(viii) None of the Key Employees has been promised by any of the
Group Companies a stay bonus or a transaction bonus.
(ix) All employees transferred from the Seller to any of the
Group Companies in the last 6 (in words: six) months prior
to the Closing Date were working in the last 12 (in words:
twelve) months prior to being transferred predominantly for
the Business.
(x) The Dutch Companies do not have an agreement or other
arrangement with any trade union or other body representing
its employees or any of them and the Dutch Companies do not
have any dispute with any such body, and no such dispute is
anticipated.
(xi) The Dutch Companies are not involved in any industrial or
trade disputes (betriebsverfassungsrechtliche
Streitigkeiten) or any dispute or negotiation regarding a
claim of material importance with any trade union or
association or trade unions or organisations or body of
employees, and no such dispute is anticipated.
8.1.7 Insurance
The Group Companies maintain liability (Haftplichtversicherung),
product liability (Produkthaftpflichtversicherung), casualty
(Unfallversicherung), property loss (Sachversicherung) and
insurance cover against other material risks upon the Business.
With respect to the Group Companies and the operation of the
Business, in the 2 (in words: two) years prior to the Signing
Date, the Group Companies have not been refused any insurance nor
has their coverage been limited by any insurance company to which
they have applied for insurance or with which they have carried
insurance. All insurance premiums due and payable have been paid
(other than retroactive or retrospective premium adjustments
which are not yet, but
33
which may be, required to be paid with respect to any period
ending prior to the Closing Date), and, as of the Signing Date,
no notice of cancellation or termination has been received with
respect to any such policy which was not replaced on
substantially similar terms prior to the date of such
cancellation. For a period of 2 years after the Closing Date the
Seller shall maintain its D&O insurance coverage in the same form
as before the Closing Date.
8.1.8 Litigation, Product Claims, Compliance with Laws
(i) Except as disclosed in SCHEDULE 8.1.8(I), there is no
written and reasonably detailed statement of claim
(Anspruchsschreiben), action, suit, proceedings or
investigation (limited, in the case of investigations, to
investigations by or before any government department,
commission, board, bureau, agency or instrumentality
-domestic or foreign), other than product claims, which are
subject solely to Clause 8.1.8(ii) below, pending
(rechtshaengig) or, to the Seller's Best Knowledge,
threatened in writing against any Group Company involving
any matter of more than EUR 100,000 (in words: Euro one
hundred thousand) individually, not including, however,
collection matters in the ordinary course of business.
(ii) Except as disclosed in SCHEDULE 8.1.8(II), in the three-year
period prior to the Closing Date, none of the Group
Companies has received in connection with any product
manufactured, sold or distributed by any of them in writing
(a) any claim of personal injury or death; or
(b) any claim of property damage, any claim for punitive or
exemplary damages, any claim for contribution or
indemnification or any claim for injunctive relief, in
each case with an amount in dispute exceeding EUR
100,000 (in words: Euro one hundred thousand).
other than claims which were resolved at the business level
through credit or replacement of goods or allowance
therefor.
(iii) Each of the Group Companies is in compliance with all
applicable statutes, laws, ordinances, rules, orders and
regulations of any governmental entity of any jurisdiction
in which such Group Company operates (including
Environmental Laws) provided, however, that any
non-compliance shall be regarded irrelevant for the purpose
of this Clause 8.1.8(iii) unless such non-compliance has
detrimental financial effects on the respective Group
Company exceeding EUR 10,000 (in words: Euro ten thousand)
in the individual case of non-compliance or, in the case of
a series of non-compliances arising from substantially
identical facts or circumstances, exceeding EUR 100,000 (in
words: Euro one hundred thousand) in the aggregate.
34
8.1.9 Public Law Permits, Environmental; Subsidies
(i) The Group Companies possess all material public-law permits,
concessions and licences necessary to conduct its current
operations taken as a whole (including material permits,
concessions and licences necessary under any Environmental
Laws) ("PUBLIC LAW PERMITS"). To the Seller's Best Knowledge
no circumstances exist which could justify a revocation of
such Public Law Permits, and all material conditions in
connection with such Public Law Permits are being complied
with.
None of the Public Laws Permits or any of the conditions of
any of the Public Laws Permits are personal or dependent on
any companies other than the Group Companies.
(ii) Except as set forth in SCHEDULE 8.1.9(II),
(a) none of the Group Companies is subject to pending or,
to the Seller's Best Knowledge, threatened (in writing)
administrative (behoerdliche Verfahren) or court
proceedings (Gerichtsverfahren) on the grounds of
violating Public-law Permits or Environmental Laws,
including, without limitation, disposal and/or storage
of industrial effluent, sewage (Abwasser) and other
waste;
(b) no Environmental Claims are pending (rechtshaengig) or,
to the Seller's Best Knowledge, threatened (in writing)
with regard to the Business.
(iii) The products, particularly the raw materials, used by the
Group Companies in the production process are lawfully
permitted to be used in such a production process under the
applicable Environmental Laws.
(iv) None of the Group Companies has received any subsidies which
may be reclaimed by the granting authorities.
8.1.10 Contingent Obligations; Corporate Liability Arising From
Restructuring
(i) The Group Companies do not have any contingent obligation
(such as - without limitation thereto - Buergschaften,
gesamtschuldnerische Haftung, etc.) for the Seller's Side,
except those set forth in SCHEDULE 8.1.10(I).
(ii) The Group Companies will not be held liable for (1) any
liability not related to the Business of any liquidated
company in which they held a share or interest, or (2)
unassumed liabilities of companies whose assets were taken
over by any Group Company, or (3) any liability related to a
business other than the Business, formerly operated by any
of the Group Companies or any of their subsidiaries at that
time spun off or otherwise transferred prior to Closing from
any of the Group Companies, in each case provided that such
liability is neither reflected in the respective Group
Company's annual accounts nor partially or in whole
compensated
35
by a benefit any of the Group Companies avails of due to
circumstances covered by this Clause 8.1.10(ii). This Clause
8.1.10(ii) shall include the following companies:
- illbruck Sanitaer-Technik GmbH
- illbruck Akustiksysteme GmbH
- illbruck Sealant Systems Inc., USA
- Asbiton AG, Switzerland
- illbruck Bau AG, Switzerland
- Sealstrip Holdings Ltd., England
- Sealstrip Ltd., England
- Sealants Express Ltd., England
- Revac S.A., France
- Cocon Polska Sp. z.o.o., Poland
- Colymit Contractors N.V., Belgium
- illbruck s.r.l., Italy
- illbruck S.a.r.l., France.
(iii) The Group Companies will not be held liable by Third
Parties for any debt of legal entities which were merged
with any of the Group Companies prior to Closing, insofar as
such debt is not related to the Business as conducted by the
Group Companies as of the Closing Date or in the last 12 (in
words: twelve) months prior to the Closing Date.
(iv) The Group Companies will not be held liable for any
asbestos-related claims arising from the operation or
occupancy of the Coalville real estate or production and
sale of products from that site.
8.1.11 Ordinary Course of Operation Since the Accounts Date
Since 1 January 2005 the Business has been carried on in the
ordinary course substantially in the same manner as before.
8.2 No other Seller's Guarantees
The Purchasers explicitly acknowledge to purchase and acquire the
Shares and the Business in the condition they are in on the Closing
Date based upon the inspection, examination and determination with
respect thereto performed in their interest, and to undertake the
acquisition based upon the inspection, examination and determination
performed in their interest without reliance upon any express or
implied representations, warranties or guarantees of any nature made
by the Seller except for the Seller's Guarantees as well as
indemnities and covenants explicitly given by the Seller under this
Agreement.
8.3 Seller's Best Knowledge
36
For the purpose of this Agreement, "SELLER'S BEST KNOWLEDGE" shall
mean that the persons listed in SCHEDULE 8.3-(1) neither have actual
knowledge (positive Kenntnis) nor are they deemed to have knowledge
after having exercised reasonable care, and, after due inquiry of the
persons listed in SCHEDULE 8.3-(2) as can be reasonably expected of a
seller, acting prudently according to orderly business practice, that
the relevant statement in the Seller's Guarantees contained in this
Clause 8 is incorrect.
9 REMEDIES FOR BREACH OF SELLER'S GUARANTEES
9.1 Types of Remedies and Recoverable Damages
In the event of any breach or non-fulfilment by the Seller of any
Seller's Guarantee the Seller shall at its sole discretion either (I)
put the respective Purchaser into the position this Purchaser would
have been in had the Seller's Guarantee not been breached (restitution
in kind; Naturalrestitution), or (II) pay to the respective Purchaser
monetary damages (Schadenersatz in Geld).
9.2 Provision for Damage and Loss
The Seller shall not be liable for, and the Purchasers shall not be
entitled to claim for, any damage or losses of the Purchasers for a
breach of a Seller's Guarantee if and to the extent that
9.2.1 the matter to which the claim relates is provided for in the
Consolidated Effective Date Accounts; or
9.2.2 a valid and enforceable claim for repayment or indemnification
against a Third Party exists, including, but not limited to,
claims under existing insurance policies.
9.3 De Minimis Amount, Threshold Amount and Aggregate Liability
9.3.1 De Minimis Amount
The Purchasers shall only be entitled to any claims for breach of
any Seller's Guarantee to the extent each individual claim (or a
series of claims arising from substantially identical facts or
circumstances) exceeds an amount of EUR 50,000 (in words: Euro
fifty thousand) ("DE MINIMIS AMOUNT"). Where the liability agreed
or determined in respect of any such claim or series of claims
exceeds the De Minimis Amount, the liability of the Seller shall
be limited to the amount of the excess.
9.3.2 Threshold Amount
The Seller shall not be liable for breach of any Seller's
Guarantee in respect of any claim unless the aggregate amount of
all claims for which the Seller would otherwise be liable for
breach of any Seller's Guarantee exceeds EUR 500,000 (in words:
Euro five hundred thousand) ("THRESHOLD AMOUNT"). Where the
amount agreed or determined in respect of all claims referred to
in this Clause 9.3.2 exceeds the Threshold Amount the liability
of the Seller shall be for the entire amount and not only for the
excess.
9.3.3 Aggregate Liability
37
The aggregate liability of the Seller under this Agreement
including, but not limited to, any and all claims for breach of
any of the Seller's Guarantees other than the Seller's Guarantees
given in Clauses 8.1.1(i), 8.1.1(ii), 8.1.1(iv), 8.1.10 and 10
shall not exceed the Escrow Amount. The aggregate liability of
the Seller for breach of the Seller's Guarantees given in Clauses
8.1.1(i), 8.1.1(ii), 8.1.1(iv), 8.1.10 and Clause 10 shall be
limited to the Purchase Price.
9.4 Contingent Liabilities and Minority Shareholdings
9.4.1 The Seller shall also be liable for breach of any Seller's
Guarantee in respect of any liability which is contingent, but
the payment obligation shall only arise when the contingent
liability becomes an actual liability due and payable.
9.4.2 In relation to PDR Recycling GmbH + Co KG and PDR GmbH Clause 8
shall not apply except for Clauses 8.1.1(i) and 8.1.1(iv).
9.5 Notification of Seller; Procedure in the Case of Third Party Claims
9.5.1 In the event that in connection with a breach of a Seller's
Guarantee any claim or demand of a Third Party is asserted
against either Purchaser or any of the Group Companies (for the
purposes of this Clause 9.5: the "RELEVANT COMPANY"), the
respective Purchaser shall (I) make available to the Seller a
copy of the Third Party claim or demand, and a copy of all
documents necessary to defend the Relevant Company against such
claim and (II) inform the Seller whether the Relevant Company
intends to defend against the Third Party claim.
(i) If the Relevant Company defends against the Third Party
claim, the Seller shall throughout the whole proceedings be
entitled to all information related to the Third Party claim
and to be represented by its own counsel in the respective
proceedings. Prior to their filing with the respective court
or arbitration panel the Seller shall be provided with any
written submission. The Seller may require that the claim be
litigated in accordance with its instructions.
(ii) If the Relevant Company decides not to defend, the Seller
shall have the right to defend the Relevant Company against
the Third Party claim by all appropriate proceedings and
shall have the power to direct such defence. In particular,
the Seller may (I) participate in and direct all
negotiations and correspondence with the Third Party
relating to the Third Party claim, (II) appoint and instruct
counsel acting, if necessary, in the name of the Relevant
Company, and (III) require that the claim be litigated in
accordance with the Seller's instructions. The Seller shall
conduct such proceedings in good faith with due regard to
the concerns of the respective Purchaser and the Relevant
Company.
(iii) In no event shall the Relevant Company be entitled to
acknowledge or settle a claim or permit any such
acknowledgement or settlement without the Seller's prior
written consent to the extent that such
38
claims may result in a liability of the Seller under Clauses
8 through 10.
(iv) The respective Purchaser and the Relevant Company shall, at
their expense, fully cooperate with the Seller in the
defence of any Third Party claim, provide the Seller and its
respective representatives (including, for the avoidance of
doubt, its advisors) reasonable access during normal
business hours to all relevant business records and
documents and permit the Seller and its respective
representatives to consult with the directors, employees and
representatives of the Relevant Company.
9.5.2 To the extent that the Seller is in breach of a Seller's
Guarantee, all costs and expenses reasonably incurred by the
Seller and the Relevant Company (including advisors' fees) in
defending a Third Party claim shall be borne by the Seller. If it
turns out that the Seller was not in breach, any costs and
expenses reasonably incurred by the Seller and the Relevant
Company in connection with the defence (including advisors' fees)
shall be borne by the Purchasers.
9.5.3 The failure of the Purchasers to comply with their obligations
under this Clause 9.5 shall release the Seller from its
respective obligation(s) under Clauses 8 and 9 unless the
non-compliance of the Purchasers with their obligations under
this Clause 9.5 has not caused a loss to the Seller.
9.6 Maturity of Claims depending on further Precondition; Expert's
Decision
9.6.1 Precondition to Maturity (Faelligkeitsvoraussetzung)
The Seller's Guarantees contained in Clauses 8.1.3(iii) and
8.1.8(iii) shall only become due if one of the following events
occurs:
(i) a final (bestandskraeftig) and enforceable (vollziehbar) or
immediately enforceable (sofort vollziehbar) order, decree
or demand is issued by any governmental authority
(Behoerde), or
(ii) a court judgment or an amicable settlement (in court or
outside court, gerichtlicher oder aussergerichtlicher
Vergleich) is rendered in connection with a private party
claim provided that such settlement is binding upon the
Seller due to its consent; or
(iii) the Expert's decision has become final and binding on the
Parties pursuant to Clause 9.6.2.
In the case of Clauses 9.6.2(i) and 9.6.2(ii), Clause 10.2 shall
apply mutatis mutandis.
9.6.2 Expert's Decision
(i) If in the Purchasers' assessment a Seller's Guarantee
contained in Clauses 8.1.3(iii) or 8.1.8(iii) is breached
and within a period of 4 (in words: four) weeks commencing
with the delivery of a respective notice to the Seller the
Parties cannot agree upon how to resolve the matter in
dispute, an expert ("EXPERT") may be appointed by (A) the
Parties, or (B), if the Parties fail to agree on a person
within the
39
mentioned four-weeks-period, upon request of either Party by
the President of Gesamtverband der Kunsstoffverarbeitenden
Industrie e.V., Frankfurt am Main ("GKV").
(ii) The Expert shall be a person who, considering his/her
education and occupational experience, (A) is sufficiently
acquainted with the industrial standards and the
cost-benefit calculations usually applied in companies of
similar size and ownership structure to the Group Companies
and engaged in similar types of business and operations, (B)
has the expertise to decide on the matter in dispute, and
(C) legally and economically independent from both the
Seller's Side and the Purchasers' Side.
(iii) The Expert, acting as third party pursuant to Section 317
BGB, shall determine, independently and impartially from the
Seller's Side and the Purchasers' Side, whether and to what
extent the respective Seller's Guarantee is breached and
which actions are to be taken in order to remedy such breach
when the industrial standards and the cost-benefit
calculations usually applied in companies of similar size
and ownership structure to the Group Companies and engaged
in similar types of business and operations as of the
Closing Date are applied, regardless of whether such
standards satisfy the applicable laws in every respect. The
Expert shall deliver its decision to the Parties in writing
and in the English language. The Expert's decision shall be
final and binding on the Parties once all Parties have
received a copy thereof.
(iv) The Expert shall give the Parties the opportunity to provide
their illustration and assessment of the disputed matter in
writing or, in one or several hearings announced to all
Parties, verbally. Except to the extent the Parties agree
upon certain facts or conclusions therefrom, the Expert
shall not be bound by either Party's illustration or
assessment.
(v) The Parties shall closely co-operate with the Expert. In
particular, each Party shall without undue delay provide the
Expert any information in relation to the matter in dispute
which he/she in his/her discretion deems necessary for
his/her decision. The Purchasers shall procure that upon
his/her request the Expert is given access to the Group
Companies' premises and business papers, books and records.
(vi) Clause 9.5.2 shall apply mutatis mutandis.
(vii) The conducting of an Expert procedure as described in Claim
9.6.2(i) to (iv) shall not preclude the application of
Clause 9.6.1(i) or of Clause 9.6.1(ii). In the event of
discrepancies in the measures to be taken, the decisions
pursuant to Clause 9.6.1(i) or 9.6.1(ii)shall prevail.
(viii) Irrespective of the due date of any of the claims pursuant
to Clause 9.6.1, the Purchasers shall be free to raise a
declaratory
40
order (Feststellungsklage) against the Seller in order to
prevent such claims to become time-barred.
9.7 Mitigation
Section 254 BGB shall remain unaffected, i.e. the Purchasers are in
particular obliged to prevent the occurrence of any damage and loss
and to limit the scope of any damage and loss incurred in accordance
with Section 254 BGB.
9.8 Limitation Periods
All claims for any breach of a Seller's Guarantee pursuant to Clause
8.1.1(i), 8.1.1(ii) and 8.1.1(iv) shall not become time-barred. Claims
with respect to Taxation (Clause 8.1.2(iii) and (iv) and Clause 10)
shall become time-barred in accordance with Clause 10.4. Claims with
respect to Environmental Matters (Clause 8.1.9) and pursuant to Clause
8.1.10 shall become time-barred 5 (in words: five) years after the
Closing Date. All other claims of the Purchasers under this Agreement
shall become time-barred 18 (in words: eighteen) months after the
Closing Date. Section 203 BGB shall not apply.
9.9 Exclusion of Further Remedies, Effect of Payment
9.9.1 To the extent permitted by law, any further claims and remedies
of the Purchasers other than explicitly provided for under this
Agreement, irrespective of which nature, amount or legal basis,
are hereby expressly waived and excluded, in particular, without
limitation, claims under pre-contractual fault (Section 311 para.
2 and 3 BGB), breach of contract (positive Vertragsverletzung)
and/or the right to reduce the Purchase Price (Minderung) or to
terminate this Agreement (Ruecktritt), and any liability in tort
(Deliktshaftung); provided, however, that this exclusion shall
not apply to any claims or remedies of any nature whatsoever
which are caused by or based upon gross negligence (xxxxx
Fahrlaessigkeit) or wilful misconduct (Vorsatz) of the Seller in
the context of this Agreement. Sections 826, 123, 444, 2nd
alternative BGB shall not be affected.
9.9.2 Further to the statements made in Clause 8, the Parties agree
that the provisions contained in Clauses 8 and 9 of this
Agreement are no quality guarantees in relation to the object of
the purchase (Garantien fuer die Beschaffenheit der Sache) within
the meaning of Sections 443, 444, 2nd alternative BGB. In the
event that the provisions of Clauses 8 and 9 setting out the
scope and limitations of the Seller's liability are, contrary to
the intention and explicit understanding of the Parties, regarded
and construed as quality guarantees in relation to the object of
the purchase, and the limitations of the Seller's liability
contained herein are therefore found wholly or partially invalid,
the Purchasers hereby waive the right to assert claims going
beyond the limits of limitations provided for herein. The Seller
accepts such waivers.
9.10 Escrow, Escrow Agreement
As security for the fulfilment of the Seller's obligations under this
Agreement, the Escrow Amount shall be paid into the account set up in
mutual agreement by the Excrow Agents (the "ESCROW ACCOUNT"), free of
any costs and fees. Together with the Escrow Agents, the Parties have
entered into the Escrow Agreement attached
41
hereto as SCHEDULE 9.10. The Escrow Amount shall be released to the
Purchasers/Seller in accordance with the Escrow Agreement.
10 TAXATION
10.1 Tax Indemnification
10.1.1 The Seller agrees to indemnify the Purchasers from and against
all Taxes due and payable by the Group Companies for periods
ending on or before the Effective Date or which are assessed due
to events or circumstances that have occurred up to and including
the Effective Date ("RELEVANT ASSESSMENT PERIOD"), unless, and
except to the extent, that such Tax liabilities
(i) are shown or provided for in the Consolidated Effective Date
Accounts or the Accounts 2005 respectively the Revised
Accounts 2005 of the relevant Group Company, provided,
however, that (A) any Tax Saving related to the additional
Tax assessed shall be deducted from the amount to be paid by
the Seller and (B) any liabilities incurred for Taxes in a
BIG-Subsidiary not - directly or indirectly - 100%-owned
shall be taken into account only on a pro rata basis in
proportion to the respective shareholding (durchgerechnete
Beteiligung); or
(ii) are subject of a valid and enforceable claim for repayment
or indemnification against a Third Party; or
(iii) are caused by any reorganization initiated or by any other
acts (including any termination of the profit and loss
transfer agreement between BIG as organ parent and illbruck
Bau-Technik GmbH as organ company or any unduly fulfilment
of this profit and loss transfer agreement) committed by the
Purchasers other than the discontinuation of the business
which has been acquired by illbruck Bau-Technik GmbH under
the merger with Perennator GmbH.
10.1.2 In the event of the breach of the Seller's Guarantee contained
in Clause 8.1.2(ii), the Seller shall indemnify the Purchaser
against 95% (in words: ninety-five percent) of the Taxes
triggered by sale by BIG of shares in a Group Company in the
legal form of a corporation.
10.1.3 Indemnification payments due by the Seller under this Clause 10
shall be made within 30 (in words: thirty) Business Days
following written notice by the Purchasers, provided that the
payment of such amounts to the Tax Authority is due and that the
Seller shall not be required to make any payment earlier than 2
(in words: two) Business Days before such Taxes are due to the
Tax Authority. In the case of any Tax being contested in
accordance with Clause 10.2.2, payment of such Tax to the Tax
Authority will be considered due no earlier than on the date a
final (bestandskraeftig) determination to such effect is made
provided that tax suspension (Aussetzung der Vollziehung), is
granted by either the Tax Authority or the competent court.
10.2 Indemnification Procedures
42
10.2.1 Notification
Following the Closing Date, the Purchasers shall notify the
Seller without undue delay of any Tax audit or administrative or
judicial proceeding (including request for furnishing transfer
pricing studies) that is announced or commenced and that might
constitute a basis for indemnification by the Seller pursuant to
this Clause 10 ("TAX AUDIT"). Such notice shall be in writing and
shall contain full factual information describing the object of
the Tax Audit or the asserted Tax liability in reasonable detail
and shall include copies of any notice or other document received
from any Tax Authority in respect of any such Tax Audit or
asserted Tax liability. The Purchasers shall further procure that
the Group Companies allow the Seller to fully participate in such
Tax Audit. In particular, the Seller shall be given the
opportunity to review any reports or other measures and receive
copies of all relevant orders (Bescheide) of any Tax Authority as
well as copies of any filings to any Tax Authority. Unless the
Seller is given notice without undue delay as required before,
the Seller shall not have any obligation to indemnify the
Purchasers for any damages arising out of such asserted Tax
liability.
10.2.2 Tax Contest
The Seller may elect to direct on its own or through counsel of
its choice and at its expense, any audit, claim for refund and
administrative or judicial proceeding (including the preparation
and furnishing of transfer pricing studies) involving any
asserted Tax liability with respect to which indemnity may be
sought under this Clause 10 (any such audit, claim for refund or
proceeding relating to an asserted Tax liability is hereinafter
referred to as a "TAX CONTEST"):
(i) If the Seller elects to direct a Tax Contest, then the
Seller shall within 30 (in words: thirty) Business Days of
receipt of the Purchasers' written notice pursuant to Clause
10.2.1, but in any case no later than 3 (in words: three)
Business Days before the expiry of the period for filing for
the respective remedy, notify the Purchasers of its intent
to do so, and the Purchasers shall cooperate and cause the
Group Companies or the respective successors to cooperate,
in each phase of such Tax Contest. In particular, the
Purchasers shall promptly authorise, and shall cause the
respective Group Company to authorise, (by power-of-attorney
and such other documentation as may be necessary and
appropriate) the designated representative of the Seller to
represent the Purchasers or the respective Group Company or
their successors in the Tax Contest insofar as the Tax
Contest involves an asserted Tax liability for which the
Seller would be liable under this Clause 10. Further, the
Purchasers shall give and shall cause the Group Companies to
give reasonable information and assistance, including
reasonable access to premises and personnel and including
the right to examine and copy or photograph the relevant
documents and records for the purpose of avoiding,
disputing, denying, defending, resisting, appealing,
compromising
43
or contesting any tax liability of the Seller for Taxes for
the Relevant Assessment Period as the Seller or its
professional advisers may reasonably request.
(ii) If the Seller does not elect to direct such Tax Contest or
fails to notify the Purchasers of its election as herein
provided, the Purchasers or the respective Group Company may
pay, compromise or contest such asserted Tax liability,
provided that neither the Purchasers nor any of the Group
Companies may settle or compromise any asserted Tax
liability without prior written consent of the Seller. In
any event, Seller may participate, at its own expense, in
any Tax Contest. In such case Clause 10.2.2(i) sentence 3
shall apply mutatis mutandis.
10.3 Tax Refunds, Liquidation and Usage of Tax Provisions
If any Group Company (i) will receive a Tax refund relating to any
period ending on or before the Effective Date, to the extent not
reflected in the Consolidated Effective Date Accounts as an asset,
(ii) will liquidate a Tax provision contained in the Consolidated
Effective Date Accounts due to a non-realisation of the risks for
which the provision has been set-up (Rueckstellungsaufloesung) or
(iii) will use a Tax provision contained in the Consolidated Effective
Date Accounts due to a realisation of the risks for which the
provision has been set-up (Rueckstellungsinanspruchnahme) as far as a
corresponding valid and enforceable claim for repayment or
indemnification against a Third Party exists, (iv) or for Taxes paid
as far as a corresponding valid and enforceable claim for repayment or
indemnification against a Third Party exists the amount of the Tax
refund or the amount of the provision liquidated or used shall be paid
by the Purchasers to the Seller. The Purchasers shall duly notify the
Seller of any Tax refund relating to any period ending on or before
the Effective Date and of any liquidation and of any usage of a
provision contained in the Consolidated Effective Date Accounts.
Payments under this Clause 10.3 shall be made within 30 (in words:
thirty) Business Days following the receipt of the Tax refund,
liquidation or usage of a Tax provision contained in the Consolidated
Effective Date Accounts by the respective Group Company.
10.4 Limitation Period
Claims of the Purchasers or the Seller under this Clause 10 shall
become time-barred (verjaehren) 3 (in words: three) months after the
final and binding assessment (bestandskraeftige Veranlagung) of the
relevant Tax.
10.5 Payments
Payments by the Seller to the Purchasers pursuant to Clause 10.1 and
10.2 constitute a decrease of the Purchase Price. Payments by the
Purchasers to the Seller pursuant to Clause 10.3 constitute an
increase of the Purchase Price.
10.6 Tax Audits
If and to the extent the Seller requests, the Parties shall use their
best efforts and in any respect fully co-operate, and the Purchasers
shall procure that after the Closing Date the Group Companies use
their best efforts and in any respect fully co-operate with the Seller
in order to achieve that as soon as possible after the Effective Date
44
the competent Tax Authorities conduct tax audits covering all the
Group Companies' tax affairs up to and including the Effective Date.
For the avoidance of doubt it is hereby clarified that the Seller
shall be involved fully in accordance with the provisions of this
Clause 10.
10.7 Profit and Loss Pooling Agreement
The Purchasers shall procure that none of the Group Companies will
assert the invalidity of the profit and loss pooling agreement between
any of the Group Companies and the Seller.
11 PURCHASERS' GUARANTEES; PURCHASERS' GUARANTOR
11.1 Each Purchaser hereby guarantees by way of an independent promise of
guarantee pursuant to Section 311 para. 1 BGB (selbstaendiges
Garantieversprechen im Sinne des Section 311 Abs. 1 BGB):
11.1.1 The German Purchaser is duly incorporated and validly existing
under the laws of the Federal Republic of Germany. The UK
Purchaser is duly incorporated and validly existing under the
laws of England and Wales. Each Purchaser has all requisite
corporate power and authority to own its assets and to carry out
its business.
11.1.2 The execution and performance by the Purchasers of this
Agreement and the consummation of the transaction contemplated
hereby are within their powers and have been duly authorized by
all necessary company action on part of them except as set forth
in Clause 7.1.
11.1.3 The execution and performance by the Purchasers of this
Agreement and the consummation of the transaction contemplated
herein do not (A) violate the articles of association or by-laws
of the Purchasers or (B) violate any applicable law, regulation,
judgment or injunction on the Purchasers, and (C) there is no
action, lawsuit, investigation or proceeding pending
(rechtshaengig) against, or to the knowledge of the Purchasers
threatened against, the Purchasers before any court, arbitration
panel or governmental authority which challenges or seeks to
prevent, alter or delay the transaction contemplated herein.
11.1.4 The Purchasers do not have "actual and specific knowledge" of a
breach by the Seller of any of the guarantees in this Agreement.
As used herein "knowledge of a breach" means that not only do the
Purchasers have knowledge of the facts that may constitute a
breach, but additionally, also believe that such facts constitute
a breach. For purposes of determining the Purchasers' knowledge
of a breach by the Seller of the guarantees made hereunder, the
term "actual and specific knowledge", means the actual and
specific knowledge of Messrs. Xxxxx Xxxxxxxx, Xxxxxxx Xxxxx,
Xxxxxx Xxxx, Xxxx Xxxxxx and Xxxxx Xxxxxx or the following
advisors: Xxxxx Xxxxx, Xxxx Xxxxx, Xxxx Xxxx. While the
Purchasers have conducted a review of the business of the Group
Companies to meet the Purchasers' objectives, such review was not
intended to verify the accuracy of the Seller's guarantees and
Purchasers are relying on the Seller's Guarantees in entering
into this Agreement.
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11.2 In the event that a Purchaser is in breach of any Purchasers'
Guarantee pursuant to Clause 11.1, the respective Purchaser shall
indemnify and hold harmless the Seller from any damages incurred by
the Seller or any of the Group Companies.
11.3 The Purchasers' Guarantor as joint and several debtor
(Gesamtschuldner) hereby unconditionally and irrevocably guarantees
the proper fulfilment of all obligations pursuant to this Agreement of
any Purchaser or any Purchasers' Affiliate, in particular, but not
limited to, the payment of the Purchase Price. In the case of breach
of any such obligation the Purchasers' Guarantor shall indemnify and
hold harmless the Seller's Side from any damages incurred.
12 CONFIDENTIALITY; PRESS RELEASES; PUBLIC DISCLOSURE; COVENANTS IN THE CASE
OF NON-CONSUMMATION OF CLOSING
12.1 Prior to Closing, no announcement or circular in connection with the
existence or the subject matter of this Agreement shall be made or
issued by or on behalf of the Seller's Side, the Group Companies or
the Purchasers' Side without the prior written approval of the Seller
and the Purchasers.
12.2 The provisions of the Confidentiality Agreement shall cease to have
any force or effect from the Signing Date. Subject to Clause 12.1 and
Clause 12.3, the Seller's Side and the Purchasers' Side shall treat as
strictly confidential and not disclose or use any information received
or obtained as a result of entering into this Agreement which relates
to the provisions of this Agreement and the negotiations relating to
this Agreement. The Purchasers' Side shall treat as strictly
confidential and not disclose or use any information relating to the
business, financial or other affairs (including future plans and
targets) of the Seller's Side.
12.3 Clauses 12.1 and 12.2 shall not prohibit disclosure or use of any
information referred therein if and to the extent:
12.3.1 the disclosure or use is required by law or any regulatory body
(e.g. 8k under the US SEC rules);
12.3.2 the disclosure or use is required for the purpose of any
judicial proceedings arising out of this Agreement or any other
agreement entered into under or pursuant to this Agreement or the
disclosure is made to a Tax Authority in connection with the Tax
affairs of the disclosing Contractual Party;
12.3.3 the disclosure is made to professional advisers of the Seller's
Side or the Purchasers' Side who are under statutory obligations
of professional secrecy;
12.3.4 the information is or becomes publicly available (other than by
breach of the Confidentiality Agreement or of this Agreement);
12.3.5 the Contractual Party affected by the disclosure or use of
information has given prior written approval to such disclosure
or use; or
12.3.6 the information is independently developed after Closing;
provided that prior to disclosure or use of any information pursuant
to Clauses 12.3.1 and 12.3.2 the Contractual Party concerned shall
promptly notify the Contractual Party affected by such disclosure or
use of such requirement with a view
46
to providing that Contractual Party with the opportunity to contest
such disclosure or use or otherwise to agree the timing and content of
such disclosure or use.
12.4 Covenants in the Case of Non-Consummation of Closing
In the unlikely event that this Agreement is terminated without the
Closing having been consummated,
12.4.1 the Purchasers' Side undertake to keep confidential all
information received from the Seller's Side in connection with
the transactions contemplated by this Agreement, including but
not limited to the Disclosed Information, and to return all
documents and information embodied otherwise which they received
from the Seller's Side, together with any copies thereof and to
destroy all documents and information embodied otherwise they
produced based on information received from the Seller's Side,
unless such information is in the public domain without breach of
a confidentiality obligation towards the Seller's Side or unless
the Purchasers' Side is obliged by law to act otherwise. The
Purchasers' Side shall not be entitled to any retention right
with respect to such documents or information;
12.4.2 the Purchasers shall indemnify and hold harmless the Seller and
the Group Companies from any damage incurred due to them
complying with the Purchasers' non-approval pursuant to Clause
6.2.1(ii).
12.4.3 the Purchasers shall indemnify and hold harmless the Seller and
the Group Companies from any damage incurred due to the
termination of the lease agreements upon the UK Purchaser's
request pursuant to Clause 6.2.1(v).
13 POST-CLOSING RIGHTS AND COVENANTS; NON-COMPETITION; NON-SOLICITATION
13.1 The "PROVISIONAL SUPPLY AGREEMENTS" as set forth in SCHEDULE 13.1
shall be signed prior to or on the Closing Date.
13.2 After Closing the Purchasers shall procure that the Seller has access
to all information required in order to enforce the claims listed in
SCHEDULE 6.2.2.
13.3 Accounts 2005
13.3.1 The Seller shall prepare the accounts as of Effective Date
except for PDR GMBH and PDR GMBH & Co. KG for such Group
Companies listed in SCHEDULE 7.1 for the shortened business year
ending on Effective Date and for all other Group Companies, if
the Effective Date is 31 December 2005 and if it is another date
interim accounts (Zwischenabschluesse) for such Group Companies
("ACCOUNTS 2005"). These Accounts 2005 shall be prepared in
accordance with local GAAP, the accounting principles used in the
preparation of the respective accounts for the business year 2004
and such principles consistently applied with past practice and
subject to utilizing and continuing the same capitalization and
election rights, valuation and consolidation principles as used
in preparation of the respective accounts for the business year
2004. In the event of discrepancies between local GAAP and the
principles as applied in the past, local GAAP shall prevail.
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13.3.2 The Purchasers shall after the Closing Date instruct the
management of each Group Company to effectively assist the Seller
in the preparation of the Accounts 2005 in any respect and to
give the Seller, its tax advisors and Seller's Auditor access to
any information requested by the Seller, its tax advisor and
Seller's Auditor. The Seller shall be given access to the
management and to the premises of the Group Companies. The Seller
shall have the right to make photocopies of any documents
relevant for the preparation of the Accounts 2005.
13.3.3 The Accounts 2005 so prepared by the Seller shall be delivered
by the Seller to the Purchasers without undue delay. The Seller
shall arrange for an audit of the Accounts 2005 by Seller's
Auditor admitted to conduct the audit of the Accounts 2005 in the
jurisdiction in which the respective Group Company is
incorporated. Within 60 (in words: sixty) Business Days after the
Effective Date, the Seller shall deliver the Accounts 2005 to the
Purchasers, together with the reports by the respective auditors.
13.3.4 The Accounts 2005 shall be final and binding on the Parties,
unless and to the extent that the Purchasers do not within 30 (in
words: thirty) Business Days after the receipt of the Accounts
2005 provide the Seller with a written report asserting that the
Accounts 2005 received from the Seller do not meet the provisions
set forth in Clause 13.3.1 by way of stating specific objections
to that effect. In such event revised Accounts 2005 shall be
prepared by the Purchasers' Auditor and submitted to the Seller
within the further 30 (in words: thirty) Business Days which
shall take into account the changes that are necessary in the
Purchasers' Auditor's view ("REVISED ACCOUNTS 2005"). At Seller's
request Seller's Auditor shall receive all necessary assistance
and shall be given access to the management of the Group
Companies and to all documentation relevant for reviewing the
Revised Accounts 2005, including the working papers of the
Purchasers' Auditor. If no written objections are raised by the
Seller within 30 (in words: thirty) Business Days following the
delivery of the Revised Accounts 2005 by the Purchasers' Auditor,
then the Revised Accounts 2005 shall be final and binding on the
Parties.
13.3.5 If, after the Seller having raised in time and due form its
objections against the Revised Accounts 2005, the Seller and the
Purchasers cannot agree on the changes to the Revised Accounts
2005 within 30 (in words: thirty) Business Days following the
delivery of the Seller's objections, Clause 4.4 shall apply
mutatis mutandis.
13.3.6 The Purchasers shall procure that within 30 (in words: thirty)
Business Days after the Accounts 2005 or the Revised Accounts
2005, as the case may be, have become final on the Parties
shareholders' resolutions of each Group Company will be adopted
by which the Accounts 2005 or respectively the Revised Accounts
2005 will be approved in any respect in the form as has become
final on the Parties. With no undue delay after the approval of
the Accounts 2005 respectively the Revised Accounts 2005 Claims
resulting from the profit and loss pooling agreement existing
between the Seller and BIG shall be paid by the party liable.
Should BIG be
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liable for such claim, the Purchasers will procure that the
obligation of such payment will be fulfilled by BIG as provided
for in the previous sentence.
13.3.7 The costs for the preparation of the Accounts 2005 and their
audits shall be borne by the respective Group Company. Clause 4.5
sentences 2 and 3 shall apply mutatis mutandis.
13.4 The Seller and the German Purchaser have entered in accordance with
Clause 7.4.5 into an agreement on the assignment, transfer and
delimitation of intellectual property rights (IP-Uebertragungs- und
Abgrenzungsvereinbarung; "IP-AGREEMENT") attached as SCHEDULE 13.4,
entering into effect on the Effective Date.
13.5 Non-Competition and Non-Solicitation
13.5.1 Seller's Side
(i) For the period of 3 (in words: three) years commencing with
the Closing Date the Seller, SI and MI shall not, and the
Seller shall cause its Affiliates not to, and SI and MI
shall use reasonable efforts to cause the Persons Related to
SI or MI not to,
(a) develop, produce, market, sell or render (or assist any
other Person in developing, producing, marketing,
selling or rendering) products or services in
competition anywhere in the world with the products and
services sold or provided by the Business on the
Closing Date, or
(b) engage in business with, serve as an agent or
consultant to, or become a partner, member, principal
or stockholder (other than a holder of less than 5% (in
words: five percent) of the outstanding voting shares
of any publicly held company) of or be engaged by, any
person whose business competes anywhere in the world
with the Business as conducted on the Closing Date;
The Seller, SI and MI hereby agree that the Purchase Price
as set forth in Clause 3 of this Agreement includes
consideration for their agreement not to compete as set
forth in this Clause 13.5.1(i).
(ii) The Seller, SI and MI hereby undertake for a period of 2 (in
words: two) years commencing with the Closing Date not to
actively solicit directly or through Affiliates or Third
Parties any employee of the Business.
13.5.2 Purchasers' Side
(i) For the period of 3 (in words: three) years commencing with
the Closing Date the Purchasers and the Purchasers'
Guarantor shall not, and the Purchasers' Guarantor shall
cause its Affiliates not to,
(a) develop, produce, market, sell or render (or assist any
other Person in developing, producing, marketing,
selling or rendering) products or services in
competition in the Territory with the products and
services sold or provided by the Remaining Businesses
on the Closing Date, or
49
(b) engage in business with, serve as an agent or
consultant to, or become a partner, member, principal
or stockholder (other than a holder of less than 5% (in
words: 5 per cent) of the outstanding voting shares of
any publicly held company) of or be engaged by, any
person whose business competes in the Territory with
the Remaining Businesses as conducted on the Closing
Date; except (1) if the business which competes in the
Territory with the Remaining Businesses is acquired
through the acquisition of a company or a group of
companies and if the competing business makes up not
more than 10% (in words: ten percent) in balance sheet
value, of the balance sheet or consolidated balance
sheet of the acquired company or the acquired group of
companies as of the date of the closing of the
acquisition; (2) the Purchaser's Side is as of the
Signing Date already active in such business.
Clause 13.5.1, last sentence, applies mutatis mutandis.
(ii) The Purchasers hereby undertake for a period of 2 (in words:
two) years commencing with the Closing Date not to actively
solicit directly or through Affiliates or Third Parties any
employee of the Seller and the Remaining Businesses.
13.6 Without prejudice to Purchasers' rights to make claims under the
Seller's guarantees, Seller will indemnify Purchasers and the Group
Companies and hold them harmless against all Environmental Costs
arising from the Environmental Liability in connection with the
property in Arkel, Holland ("LOCATION"). Environmental Costs shall be
pro rated on the following basis:
(i) the first EUR 800,000 (in words: Euro eight hundred
thousand) of Environmental Costs per Location will be paid
by Seller;
(ii) Environmental Costs from EUR 800,000 (in words: Euro eight
hundred thousand) to and including EUR 2,000,000 (in words:
EURO two million) shall be paid 90 % (in words: ninety per
cent) by the Seller and 10 % (in words: ten per cent) by the
Group Companies;
(iii) Environmental Costs from EUR 2,000,000 (in words: EURO two
million) to and including EUR 3,000,000 (in words: EURO
three million) shall be paid 85 % (in words: eighty five per
cent) by Seller and 15 % (in words: fifteen per cent) by the
Group Companies; and
(iv) Environmental Costs in excess of EUR 3,000,000 (in words:
Euro three million) shall be paid 83 % (in words: eighty
three per cent) by Seller and 17 % (in words: seventeen) by
the Group Companies.
Environmental Costs shall be determined on an after-tax basis
provided, however, that Seller's maximum liability pursuant to this
Clause 13.6 shall be limited by Clause 9.3.3.
The Group Companies shall have the right to control the manner and
method of all remediation work using consultants and advisors of their
choice. The Group Companies and the Purchasers undertake to implement
any remediation program in
50
a manner that is designed to effectively and efficiently restore the
contaminated property to a condition that is in compliance with
applicable Environmental Law. Purchasers and the Group Companies shall
cause the remediation work to be effected in accordance with practices
that are customary in the industry and shall use reasonable efforts to
avoid the incurrence of costs in excess of such amounts as are
reasonable in order to effect the objectives of the remediation
program(s).
Until the Environmental Liability at the Location has been remediated
and is in compliance with Environmental Law, in each December the
Purchasers and/or any Group Company (each, a "CLAIMANT") may submit a
Reimbursement Certificate together with invoices for costs incurred or
contracts evidencing obligations to third parties, in each case solely
for costs of remediating the Environmental Liability at the Location.
The Remediation Certificate shall be a certificate of the Claimant and
shall provide as follows: (i) the Claimant has either paid, or
incurred obligations to third parties to pay, costs for the
remediation of the Environmental Condition at the Location (including
consulting and engineering costs), (ii) the amount of unreimbursed
costs that Claimant has paid ("UNREIMBURSED COSTS"), and (iii) the pro
rata portion of the Unreimbursed Costs that Claimant is entitled to be
paid pursuant to Clause 13.6, first paragraph, of the Agreement. Not
later than January 10 of the following year, Seller will pay Claimant,
by wire transfer to an account designated by Claimant, the amount set
forth in (iii) of the previous sentence.
13.7 The Seller hereby grants to the respective Group Company that owns the
real estate specified under no. 5 in SCHEDULE 8.1.3(I)-(1) in the form
of a true contract in favour of a third party (echter Vertrag
zugunsten Dritter) the unconditional and irrevocable right, to sell
the Belgian real Estate to the Seller at book value. This offer is
limited in time until 31 January 2006 (the "BELGIAN REAL ESTATE"). In
the event of such a transfer the Group Company shall be entitled to
request a lease agreement for the Belgian Real Estate at arms' length.
14 PAYMENTS AND INTEREST
14.1 Seller's Account; Purchasers' Account
14.1.1 All payments owed by the Purchasers to the Seller under this
Agreement shall be paid by the Purchasers free of any costs and
fees by wire transfer or other electronic means. Except for the
Escrow Amount, all payments shall be paid to the Seller's bank
account kept with Dresdner Bank AG,
51
SWIFT-code DRES DE FF, IBAN XX00 0000 0000 0000 0000 00, bank
code (Bankleitzahl) 370 800 40, account number 889 59 34
("SELLER'S ACCOUNT") or any other account to be nominated by the
Seller to the Purchasers in compliance with Clause 15 with at
least 5 (in words: five) Business Days prior to the Closing Date.
14.1.2 All payments owed by the Seller to either of the Purchasers
under this Agreement shall be paid by the Seller free of any
costs and fees by wire transfer or other electronic means to the
German Purchaser's bank account kept with Deutsche Bank AG
Duesseldorf, SWIFT-code DEUTDEDD, IBAN DE22 3007 0010 0320 0177
00, sort code (Bankleitzahl) 300 700 10, account number 320 0177
00 ("PURCHASERS' ACCOUNT") or any other account to be nominated
by the Purchasers to the Seller in compliance with Clause 15 with
at least 5 (in words: five) Business Days prior to the Closing
Date. Purchasers may only nominate one account for the purposes
of this Agreement. Any payments made to any of the Purchasers
under this Agreement shall be made to the specified account. The
allocation of any amounts paid to the accounts of the Purchasers
by the Seller shall be dealt with internally between the
Purchasers.
14.2 Default Interest
If a Contractual Party defaults in the payment when due of any amount
payable under this Agreement, its liability shall be increased to
include interest on such amount from the date when such payment is due
until the date of actual payment at a rate per annum of 4% (in words:
four per cent) over the Base Interest Rate. Interest shall be
calculated on the basis of actual days elapsed and a calendar year
with 360 (in words: three hundred sixty) days.
15 NOTICES
15.1 Form of Notice
All declarations, notices or other communications hereunder
("NOTICES") shall be done in writing in the English language and
delivered by hand, registered mail, courier or by facsimile to the
person at the addresses set forth below, or such other addresses as
may be designated by the respective Contractual Party to the other
Contractual Parties in the same manner. Any notice to Seller's Side or
Purchasers' Side, as applicable, shall be served and received
(zugestellt) if given to the addresses as specified in Clause 15.2 and
15.3 or any other address designated in accordance with this Clause
15. However, neither Seller's Side nor Purchasers' Side may designate
more than one recipient and at a maximum two recipients receiving
copies of any Notice.
15.2 Notices to Seller's Side
Any Notice to be given hereunder to any Person of the Seller's Side
shall be addressed as follows:
ILLBRUCK GMBH
MANAGING DIRECTOR
BURSCHEIDER STRAssE 454
51381 XXXXXXXXXX
00
XXXXXXX
Fax: x00 (0)0000-000-000
with a copy to:
LINKLATERS OPPENHOFF & XXXXXXX
XX. XXXXXXXX XXXXXX
XXXXXXXXXXXXXXXXXX 00
00000 XXXXXX
XXXXXXX
Fax: x00 (0)00-00000-000
15.3 Notices to Purchasers' Side
Any Notice to be given hereunder to any Person of the Purchasers' Side
shall be addressed as follows:
ATTN: XX X. XXXXXX
TREMCO INCORPORATED
0000 XXXXX XXXX
XXXXXXXXX, XXXX 00000
XXX
with a copy to:
XX XXXXX XXXXX
RPM INTERNATIONAL, INC.
0000 XXXXX XX., XXX 000
XXXXXX, XX 00000
XXX
and a copy to:
XX XXXX XXXX
PPR & PARTNER
XXXXXXXXXXXX 00
00000 XXXXXXXXXXX
XXXXXXX.
15.4 Change of Address
The Seller and the Purchasers are to, without being legally obliged
to, communicate any change of the respective addresses set forth in
this Clause 15 as soon as possible in writing to the respective other
side. Until such communication, the address as hitherto shall be
relevant.
16 MISCELLANEOUS
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16.1 Whole Agreement, Schedules and Variation
16.1.1 This Agreement constitutes the full understanding of the
Contractual Parties and the complete and exclusive statements of
the terms and conditions of the Contractual Parties' agreements
relating to the subject matter hereof and supersedes any and all
prior agreements and understandings, whether written or oral,
that may exist between the Contractual Parties with respect to
the subject matter of this Agreement or parts thereof. Side
agreements to this Agreement do not exist.
16.1.2 All Schedules attached hereto form an integral part of this
Agreement.
16.1.3 No variation of this Agreement, including this Clause 16, shall
be effective unless in writing and signed by or on behalf of the
Contractual Parties, unless a stricter form (e.g. notarization)
is required under applicable law.
16.2 Definitions and Language
16.2.1 In this Agreement defined terms shall have the meaning as so
defined throughout the entire Agreement, unless a different
meaning is expressly attributed to the respective term in respect
of any single Clause of this Agreement.
16.2.2 Legal terms used in this Agreement shall have the meaning
attributed to them under German law, when translated into German.
If a German translation is given in italic such translation shall
be decisive. This Clause 16.2.2 shall apply mutatis mutandis to
any legal concept associated with any such legal term.
16.2.3 Legal terms under German law shall extend to any corresponding
or identical legal terms under foreign law to the extent that
relevant facts and circumstances must be assessed under such
foreign law. Where no corresponding or identical legal terms
under foreign law exist, such legal terms shall be introduced as
functionally come closest to the legal terms under German law.
16.3 No Assignment
Except as otherwise expressly provided in this Agreement, neither
Contractual Party may without the prior written consent of the
respective other Contractual Parties, assign, grant any security
interest over, hold on trust or otherwise transfer the benefit of the
whole or any part of this Agreement. Any assignment to Affiliates of
either the Seller or the Purchasers shall be permitted without written
consent of the respective other Contractual Parties, in which case the
assigning Contractual Party shall remain jointly and fully liable for
any obligation under this Agreement.
16.4 No Right to Set-off/Withhold
Unless expressly stated otherwise in this Agreement, any right of the
Purchasers' Side to set-off and/or to withhold any payments due under
this Agreement is hereby expressly waived and excluded except for
claims which are undisputed (unstreitig) or have become res iudicatae
(rechtskraeftig festgestellt).
16.5 Costs
54
Unless provided otherwise in this Agreement including its Schedules,
each Contractual Party shall bear all costs incurred by it in
connection with the preparation and negotiation of this Agreement. Any
transaction fees, except for the fees, etc. covered in Clause 16.6,
arising at any of the Group Companies, including, but not limited to,
broker fees, transaction bonuses, advisors fees, etc. shall be borne
by the Seller.
16.6 Notarial Fees, Registration, Tax
All transfer Tax, costs for the notarisation of this Agreement, stamp
fees and any other charges and costs which result from this Agreement
and the Closing of the transaction considered hereby shall be borne by
the Purchasers. All charges, costs and fees which result from the
filings under the merger control laws, including, but not limited to,
the charges, costs and fees of the Competent Authorities, shall also
be borne by the Purchasers. The Purchasers shall be responsible for
arranging the payment of all such Tax, costs charges and fees,
including fulfilling any administrative or reporting obligation
imposed by the applicable laws in connection with the payment of such
Taxes and costs. The Purchasers shall indemnify the Seller's Side
against any damages and losses suffered by the Seller's Side as a
result of the Purchasers failing to comply with their obligations
under this Clause 16.6. Notwithstanding the above, each Contractual
Party shall bear the costs of its own advisors.
16.7 Governing Law and Exclusive Jurisdiction
16.7.1 This Agreement shall be governed by and construed in accordance
with the laws of the Federal Republic of Germany.
16.7.2 In the event of any dispute between the Contractual Parties
arising out of or in connection with this Agreement, exclusive
jurisdiction shall be with the competent courts of Cologne.
16.8 Severability
Should any provision of this Agreement be or become invalid,
ineffective or unenforceable as a whole or in part, the validity,
effectiveness and enforceability of the remaining provisions shall not
be affected thereby. Any such invalid, ineffective or unenforceable
provision shall be deemed replaced by such valid, effective and
enforceable provision as comes closest to the economic intent and the
purpose of such invalid, ineffective or unenforceable provision as
regards subject-matter, amount, time, place and extent. The aforesaid
shall apply mutatis mutandis to any gap in this Agreement.
IN WITNESS thereof this Agreement has been duly executed.
***
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